The highly anticipated Supreme Court decision in Guest v Guest
This appeal concerns the proper basis for awarding remedies in cases of proprietary estoppel. Proprietary estoppel arises when a person gives a clear assurance to another person that they have or will be given an interest in property, that other person reasonably relies on the assurance to their detriment, and it would be unconscionable to go back on the assurance.
The case concerns a dispute between members of a family over the future of the family farm. Andrew, the eldest son, had worked on the farm for long hours with low pay on the basis of a promise by his parents that he would inherit a substantial (but unspecified) share of the farm on their death. However, the relationship between Andrew and his parents began to deteriorate and his parents made new wills, removing Andrew's inheritance. Andrew issued proceedings and the judge at trial ordered the parents to make an immediate payment of £1.3 million which amounted to 50% of the value of the farming business and 40% of the value of the farm itself. This award meant that his parents would be required to sell the farm.
The parents appealed initially to the Court of Appeal (where their appeal was dismissed) and then to the Supreme Court, stating that the award went beyond what was necessary. Andrew's expectation was that he would inherit the farm on their deaths and the immediate lump sum was therefore more than he was promised.
The appeal was allowed and permitted the parents to choose between either putting the farm into trust in favour of their children or, if a clean break was preferred, paying compensation to Andrew now but with a reduction properly to reflect his earlier-than-anticipated receipt.