Proprietary Estoppel Update – Guest and Another V Guest [2022]

This case sought to quell uncertainty over the proper approach to granting relief under the doctrine of proprietary estoppel.

Tump Farm, the dairy farm owned by the Guest family for generations, became the subject of a legal battle between David and Josephine Guest and their son, Andrew.

Andrew had worked at the farm sporadically throughout childhood but took on full-time work from the age of 16, often working 60-hour weeks. He worked and lived on the farm, growing his family in its own Granary Cottage.

After 30 years of him working the farm, the relationship between Andrew and his parents deteriorated. His father, David, sought to change his will in response. Where it previously left Tump Farm and the associated dairy farming business to Andrew and his brother, it was now restructured to remove Andrew entirely.

In 2015, David and Josephine offered Andrew a farming business tenancy that Andrew deemed unaffordable. In 2017, they gave Andrew notice to leave the cottage that had become his home over 28 years. At this point, Andrew brought proceedings to establish his entitlement to a beneficial interest in Tump Farm under the principles of proprietary estoppel.

At first instance, the judge ruled in his favour, finding that Andrew had worked hard on the farm for little financial reward, in reliance on the assurances made to him that he would one day inherit a substantial share of the farm. The judge ordered David and Josephine to make a lump sum payment of 50% of the market value of the farming business and 40% of the market value of Tump Farm. In doing this, David and Josephine would have undoubtedly been forced to sell the farm. The appeal of this was dismissed.

David and Josephine therefore sought the judgement of the Supreme Court on whether the correct approach in proprietary estoppel cases involves compensation based on detriment or based on the claimant’s expectation of the promise.

The Justices ruled that placing a value on detriment was incorrect, and expectation ought not to be the sole focus either. Instead, the reward should seek to prevent or remedy any ‘unconscionability’ or unfair conduct of the promisor.

As such, David and Josephine were offered two choices, being mindful that they had never intended to sell the farm and that Andrew would otherwise have been receiving an accelerated inheritance. Their first option was to provide a reversionary interest under a trust of the farm to Andrew, or secondly to provide Andrew with a discounted monetary value as a result of receiving his expected inheritance early.

Did this judgement simplify the approach in proprietary estoppel cases by eliminating the disparity of ‘detriment’ vs ‘expectation’? Or did it simply replace the two with something altogether more vague? Time will tell.