GUEST V GUEST

General principle:

Claims based on proprietary estoppel may be filed to enforce a promise made to a claimant in regard to property or land that has not been honoured or that has been reneged on at a later date. In order to effectively make a claim, it is necessary to satisfy the following three requirements:

1. The person making the allegation is given unequivocal reassurance.

2. The claimant has placed their faith in that guarantee.

3. Because they reasonably relied on the assurance, the claimant has been harmed as a consequence of the reliance.

Name:

Guest v. Guest [2022] UKSC 27

Facts:

The parents of the claimant, Andrew Guest, owned a family-run farm that was at issue of the claim. The claimant lived without paying rent while working on the farm for more than 30 years while earning a pitiful salary. He expected to inherit a sizeable (but undetermined) share of the property once his parents passed away because of several promises they had made to him. After an awful family relationship breakdown in 2014, the Claimant fled the farm and was subsequently completely disinherited from their estates. In 2017, the claimant sued his surviving parents for proprietary estoppel in exchange for a portion of the land or a lump payout of equal market value. He said that by spending his life to working on the farm and earning little pay, he had relied to his disadvantage on his parents' assurance that he would inherit a sizable portion of the land.

Ratio of the High Court:

The first instance judge ruled in the claimant's favour. The contents of past Wills and partnership agreements, according to the Judge, supported explicit guarantees that had been provided over a long period of time. Although the precise inheritance split had not been decided, it was obvious that the Claimant's part would be significant. The Claimant expected to eventually take over managing certain components of the farm and fully inherit those components, and the Judge based his decision on those expectations. The judge mandated that the claimant's parents provide him a lump sum payment of £1.3 million, which is equal to 50% of his agricultural company and 40% of the farm's after-tax market worth in terms of land and structures. Notably, this decision compelled the Claimant's parents to sell the property, but the judge decided that, given the breakdown in relationships, a "clean break solution" was needed.

Ratio of the Court of Appeal:

The appeal was filed by the Claimant's parents on the grounds that the award:

1. had been inappropriately judged as relief based on the claimant's anticipation;

2. went above and beyond what was required to prevent an unjust outcome; and

3. It was improper to award when the parents were still living.

The Court of Appeal rejected the appeal. After that, the parents filed an appeal with the Supreme Court.

Ratio of the Supreme Court:

It was decided that the law of proprietary estoppel serves to halt or reverse unconscionable conduct. Holding the promisor to the promise and fulfilling the claimant's reasonable expectation should be the starting point for deciding the remedy, unless doing so would be "out of all proportion to the detriment" experienced. The burden of proof rests with the defendant, who may then suggest a different or smaller award in light of their findings.

However, the Court reaffirmed that the Court's involvement is only necessary if the rejection of the commitment would otherwise be unconscionable. This could not always be the case, for instance, in cases where the promisor's financial situation has altered or in situations where doing so would seriously harm another recipient.

The Claimant's parents should have been given the choice to choose one of two suitable remedies, according to the Court: either they could have sold the farm while they were still alive to give the Claimant a lump sum payment or they could have placed the land into a life interest trust for the Claimant to receive upon their passing. The Court does not have the authority to award a claimant more than they have been promised or expected to receive.

Application:

The much-anticipated verdict in Guest v. Guest [2022] UKSC 27, which was handed down by the Supreme Court, is without a doubt an outstanding case on proprietary estoppel. Its 108 pages will pay off in the form of extended treatment in subsequent cases and scholarly commentary, both of which are very certain to happen. When it comes to claims of proprietary estoppel, both the majority judgement and the dissenting judgement include a lot of information that has to be processed. It is a very significant judgement, especially in what it has to say about the purpose of remedies and the process that should be used when finding remedy to satisfy a valid estoppel claim. This opinion has a lot to say about both of those things.