Guest v Guest
Citations:  UKSC 27,  3 WLR 911.
The defendants were husband and wife. They had a partnership farming the land they owned. The claimant was the couple’s eldest son. For 30 years, the claimant worked full-time on the farm for very low wages. During this time, he lived with his wife in a cottage on the farm. The claimant argued that he worked and lived on the farm in reliance on the defendants’ assurances that he would inherit part of the farm.
Relationships between the parties deteriorated. The claimant moved away and the defendants cut him out of the will. The claimant sued the defendants in response. He argued that he was entitled to a share of the farm under the principles of proprietary estoppel.
The High Court (affirmed by the Court of Appeal) agreed that proprietary estoppel arose. The judge granted the claimant a lump sum equivalent to 50% of the market value of the farm, along with a life interest in the cottage. The defendants appealed the remedy.
- What remedy should the claimant be awarded to satisfy the proprietary estoppel?
The Supreme Court allowed the appeal. The High Court’s award enforced the defendants’ promise fully without accounting for the unexpected benefit this would give the claimant: getting his inheritance before his parents died. The court should have made a deduction from the award to reflect this. This deduction could be achieved in one of two ways:
- Awarding the claimant a reversionary interest in the farm, to take effect when the defendants died; or
- Reducing the compensatory payment by an appropriate amount.
The Supreme Court allowed the defendants to choose which option they preferred, and remitted the issue for the High Court to implement.
This Case is Authority For…
There was previously contention as to how judges should approach granting a remedy for proprietary estoppel. There are three possibilities:
- The court should aim to fulfil the assurance, unless it would be disproportionate.
- The court should try to compensate the individual for the detriment they have suffered (minus any benefits).
- The remedy should try to achieve something in between approaches 1 and 2.
Lord Briggs and Ladies Rose and Arden endorsed the first approach. The presumption was that the defendant should fulfil the assurance, unless this was impossible or ‘out of all proportion to the cost of the detriment to the promisee’. If fulfilling the promise is disproportionate, the extent of the detriment constrains the remedy.
This does not mean that the remedy should solely compensate the detriment or fully enforce the promise with no flexibility, however. The result should be pragmatic to the circumstances. For example, in the present case, the judges thought it was equitable to impose a reduction on the award to reflect the fact that the claimant was essentially getting his inheritance early. Additionally, this case was one where a ‘clean break’ might be desirable since the claimant had left the farm – so the court gave the defendants the option of paying money equivalent to the value of the promise instead of directly enforcing it.
Lords Leggatt and Stephens disagreed with the majority’s approach to remedy. They thought that the court should normally opt for the remedy which imposes the least burden on the promissor while also preventing the promisee from being in detriment. They therefore concluded that the claimant should be award a lump sum payment, assessed by reference to his lost earnings (comparing his actual wages to market wages).