Long-running farming family inheritance dispute sets new precedent
The Supreme Court has determined the correct approach to framing a remedy
A Supreme Court judgment has been handed down in the long-running and significant inheritance dispute case between farmer Andrew Guest, 56, and his parents, David, 81, and Josephine, 80.
In this high-profile proprietary estoppel case, following a High Court trial and an appeal to the Court of Appeal, the Supreme Court has determined the correct approach to framing a remedy is based on the appellant’s expectation of inheritance, rather than the detriment-based approach put forward by his parents.
The Supreme Court did, however, partially allow the parents’ appeal on the High Court’s overall remedy, on the basis this otherwise accelerated their son’s inheritance during their lifetimes.
The earlier High Court trial was brought by Andrew Guest after he was disinherited by his father. Guest was repeatedly made assurances by his parents that he would inherit a large part of the family farm, which he had worked long hours on, for less than the minimum wage stipulated by the Agricultural Wages Board, since the age of 16.
The family has farmed at Tump Farm, near Chepstow, for three generations. Andrew, and later his wife and children, lived in a converted cottage on the farm. Andrew has two younger siblings, Ross, 45, and Janice, 54.
In 2012, the family created two separate farming partnerships: one between Andrew and his parents at Tump Farm and another between Ross and his parents at a rented, neighbouring farm.
Regrettably, in April 2015, the relationship between Andrew and his father broke down and the partnership was dissolved. Andrew was told to find another job, move out of the cottage and Andrew was disinherited completely.
Andrew brought a claim in the High Court against his parents on the basis of the doctrine of proprietary estoppel, which allows a person to ask the court to intervene if the following (often overlapping) conditions are present:
- There has been a promise or assurance made by a person (A) to another (B) which creates an expectation that B has or would become entitled to a right or interest in A’s land;
- That promise or assurance was relied on by B;
- B has suffered detriment as a result of relying on the promise or assurance;
- It would be unconscionable, in all the circumstances, to allow A to go back on their promise or assurance.
His Honour Judge Russen QC accepted Andrew’s evidence that his parents repeatedly led him to believe he would inherit a significant part of the farm. The judge further held it was unconscionable for the parents to go back on this promise.
The judge ordered the Guests to pay Andrew a sum of money calculated by reference to:
- 50 per cent of the post-tax market value of the farming business carried on at Tump Farm;
- 40 per cent of the post-tax market value of Tump Farm.
This order, in effect, awarded Andrew what his parents had promised him he would inherit. The judge recognised this would almost certainly mean the farm would need to be sold in order to satisfy the judgment.
Andrew’s parents were then granted permission to appeal to the Court of Appeal solely on the question of remedy, i.e. what sum of money or other remedy they should pay to Andrew as a result of their unconscionable conduct.
The Court of Appeal roundly rejected Andrew’s parents’ arguments and upheld the High Court’s award. However, the Guests were granted permission to appeal to the Supreme Court on the question of whether an expectation-based approach is the correct approach to formulate relief and if the relief granted by the High Court which would result in the sale of the farm went beyond what was necessary to do justice.
As to ground one, Andrew’s parents submitted the detriment-based approach to calculating a remedy was the correct approach. The Guests maintained that if the court found relief should be granted, that relief should be calculated based on the detriment he has suffered in reliance on the assurances made and not by reference to his expectation of inheritance.
The Supreme Court firmly rejected the theory that the remedy for proprietary estoppel cases is to compensate for detriment suffered. The court warned the detriment-based approach forms no part of proprietary estoppel because it is the repudiation of the promised expectation which is the unconscionable wrong (harm caused).
The court ruled Andrew was entitled to his inheritance because his parents had repudiated on their promise that he would one day inherit the farm. The Supreme Court confirmed the aim of proprietary estoppel is to remedy the unconscionable conduct of the promisor by satisfying the expectation of the promisee who had relied on that assurance to his/her detriment.
In the judgment handed down on 19 October, the appellant’s parents lost the appeal on this ground, and the decision sets a significant precedent on how to frame relief.
As to ground two, the Supreme Court allowed the parents’ appeal on the ground of accelerated receipt of inheritance during their lifetimes (something they had never promised to do). The Supreme Court found the High Court judge had exceeded the ambit of the court’s discretion by failing to adequately discount the sum awarded to reflect accelerated receipt.
The Supreme Court held the parents now have two choices to fulfil Mr. Guest’s expectation. To:
- pay a reduced sum to Andrew now (based on an early receipt discount to be agreed or determined); or
- hold Andrew’s share of the farm on trust for him during their lifetimes.
Agriculture law specialists Polly Ridgway, Daniel Gill and Esther Woolford, of Clarke Willmott represented Andrew Guest at the High Court trial, the Court of Appeal hearing and the Supreme Court appeal.
Ridgway said: “Andrew’s parents put in place a series of measures which were designed to leave Andrew, in his 50s, with no home, no job, no savings, and no pension, despite a lifetime of hard work.
“Thankfully, the Supreme Court was prepared to use its powers to prevent this clear injustice and, as a result, Andrew will receive his inheritance promised to him either now (as an accelerated sum) or on his parents’ deaths. We are delighted to have helped Andrew achieve this result.
“Aside from being a significant decision in this area of law, the case also highlights the need for those involved in or contemplating bringing inheritance disputes to get expert legal advice as soon as possible so as to avoid the situation Andrew’s parents now find themselves in.”