Mishcon de Reya page structure
Site header
Main menu
Main content section
Blurred figure walking in Mishcon de Reya offices

The expectation of benefit in Guest v Guest - remedies in proprietary estoppel

Posted on 28 November 2022

The Supreme Court recently gave judgment in the landmark proprietary estoppel case of Guest v Guest, giving detailed consideration to the proper basis for awarding remedies in such cases, the first Supreme Court case on this issue.

A proprietary estoppel arises when:

  • A person gives a promise or assurance to another person (the promisee) that they will be given an interest in a property or land;
  • That promise is not legally binding;
  • The promisee relies on that promise, and
  • The promisee suffers a significant detriment when the promisor resiles or fails to keep that promise
  • The doctrine is one based on achieving fairness and equity between the parties.

This case involved a dispute between members of a farming family. The claimant, Andrew, was the oldest child of the defendants, who still own the farm which was central to the case. Andrew had worked on the family farm, with his parents, for over thirty-two years after leaving school. He was paid, but low wages, and his parents had promised that he would receive a substantial share of the farm after his father's death. The exact share had not been specified, but in 1981, his parents made wills leaving the farm equally between Andrew and his brother, subject to provision being made for their sister (who was not a farmer).

Unfortunately, the relationship between Andrew and his parents broke down and in 2014 they made a new will removing Andrew's inheritance. This led to Andrew bringing his claim in proprietary estoppel.  At First Instance his parents were ordered to make an immediate payment of £1.3 million. The basis of this was to satisfy Andrew's expectation as to what he would have inherited. The Court of Appeal upheld this decision and his parents appealed to the Supreme Court.

The decision of the Supreme Court was split, but the leading judgment was given by Lord Briggs (with whom Lady Arden and Lady Rose agreed) who considered in detail all the relevant cases in this area, from the more recent authorities such as Thorner v Major, to its antecedents from the nineteenth century. 

The central issue was considering the oft-quoted dictum of Scarman LJ in Crabb v Arun District Councili of the "minimum equity to do justice" and whether the correct approach is to apply an expectation-led approach (as had been applied at trial) or a detriment-led approach.  Lord Briggs rejected the idea that the aim of a remedy for proprietary estoppel was to compensate for detriment suffered by the recipient of the promise. The starting point is whether it would be unconscionable to go back on the promise. It is necessary to consider whether the enforcement of the promise would be out of proportion to the detriment to the promisee (Andrew). If out of proportion, the court may limit the remedy with a view to achieving justice between the parties.

In this case, Lord Briggs accepted that an approach based on expectation was correct, but that the trial judge had not adequately discounted for Andrew receiving the compensation earlier than he would have expected to inherit. The defendants were offered a choice between either putting the farm into trust for their children (subject to a life interest in their favour) or making an immediate payment of compensation, significantly discounted to take account of Andrew receiving this earlier than expected (the sum was yet to be agreed). The dissenting judges were led by Lord Leggatt who gave a lengthy dissenting judgment, also reviewing the case law and principles in detail. Lord Leggatt would have allowed the appeal but applied a more detriment-led approach and calculated the equitable compensation to be in the sum of £610,000.

The case serves to provide clarity on the correct approach when assessing how to satisfy the equity in such cases, namely that one considers the expectation of the promisee, not the detriment that they suffered. Proportionality is a key consideration when determining the appropriate remedy. The effective choice of remedy offered to the defendants in this case is a shift in approach and offers flexibility, whilst taking account of the benefit attached to the accelerated receipt of the compensation.

Such cases involving farming families are, perhaps surprisingly, not uncommon. We will watch with interest how the principles in this case are applied in future proprietary estoppel cases and whether flexibility brings further clarify or increased uncertainty.

How can we help you?

How can we help you?

Subscribe: I'd like to keep in touch

If your enquiry is urgent please call +44 20 3321 7000

I'm a client

I'm looking for advice

Something else