Guest v Guest [2022]
1. Facts
• David Guest owned a farm and promised his son, Andrew, that he would inherit it.
• Andrew worked on the farm for 30 years, receiving little pay despite being able to earn significantly more elsewhere.
• After a family fallout, David and his wife changed their will and decided not to leave the farm to Andrew at all.
• Notably, the parents are still alive, and Andrew’s expected inheritance was based on the promise, not an immediate transfer.
2. Remedy Options
1. Compensate for Detriment: This approach focuses on compensating Andrew for the financial detriment he suffered by working on the farm for low pay. The estimated detriment was around £400,000, which represents what Andrew could have earned had he worked elsewhere.
2. Fulfil the Expectation: This approach considers what Andrew was promised—the farm, which had a market value of £1.3 million.
3. UK Supreme Court Decision
• The Supreme Court was split 3:2, with the majority ruling in favor of Andrew receiving his expected inheritance.
• The court awarded him 50% of the value of his parents’ business and 40% of the market value of the farm.
• The majority decided that a lump sum should be paid to ensure a clean break between the parties.
• The court gave the parents a choice: either give Andrew the legal title to a portion of the farm upon their death or pay him the market value of that portion now, with a discount for early receipt.
4. Impact and Analysis
• Defendant’s Choice of Remedy: Unusually, the decision allowed the defendants (David and his wife) to choose the remedy for Andrew. They could either transfer a portion of the farm's legal title or pay the market value upfront. The court also allowed the parties to return if they could not agree, aiming to avoid prolonged legal disputes.
• Lord Briggs’ Majority Opinion:
1. Rejection of Detriment Approach: Lord Briggs argued that the primary aim of proprietary estoppel (PE) is not to prevent detriment but to remedy the unconscionability of breaking a promise. The court should focus on fulfilling the promise and addressing the emotional and psychological impact of non-fulfilment.
2. Proportionality: While Briggs emphasised enforcing the expectation, he maintained that proportionality remains key. The remedy should be proportional to the promise, though the expectation would usually be satisfied.
3. Three-Step Test: To determine the appropriate remedy:
▪ Identify the promise.
▪ Consider why the defendant believes enforcing the promise would be disproportionate.
▪ Evaluate whether the remedy is proportional to the detriment suffered, starting with the assumption of enforcing the promise.
• Lord Leggatt’s Dissent:
1. Preference for Detriment Approach: Lord Leggatt argued that proprietary estoppel should focus on the detriment suffered by the claimant. He emphasised that PE has evolved to give rise to a cause of action, distinct from contract law, which deals with expectation.
2. Preserving Distinction: He cautioned against blurring the lines between PE and contract law. While contracts aim to fulfil expectations, PE should protect against the detriment caused by reliance on a promise. He suggested that courts adopt the least burdensome remedy for the defendant.
• Expectation vs. Detriment: The case underscores the ongoing debate about whether proprietary estoppel should focus on fulfilling the promise (expectation) or compensating for the loss suffered (detriment). The majority leaned towards enforcing the expectation, while the dissent stressed the importance of addressing detriment, particularly to maintain the distinction between proprietary estoppel and contract law.