Estoppel: Where Are We Now?

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Case: Guest v Guest [2022] UKSC 27

1. The latest guidance provided by the Supreme Court in relation to proprietary estoppel is contained in a Judgment handed down on 19 October 2022 in Guest v Guest1. This was the first time that the highest Court has considered estoppel since the decision in Thorner v Major2. That in turn followed in the wake of the earlier decision of the House of Lords in Cobbe v Yeomans Row Management Limited3. Whether the Guest decision will be revered in the same was as that in Thorner, or treated with the same circumspection as the decision in Cobbe, time will tell. However, Guest was a majority decision of the Court, in which Lord Briggs gave the leading Judgment (endorsed by Lady Arden and Lady Rose). Lord Leggatt gave a powerful dissenting Judgment (endorsed by Lord Stephens). Another decision of the House of Lords which was by a 3/2 majority was that in Mannai Investment Co Limited v Eagle Star Assurance Co Limited4, a well known case in relation to errors in notices, which has recently been considered in O G Thomas Amaethyddiaeth Cyf v Turner5.

2. There was nothing unusual about the nature of the claim in Guest. The first sentence of the Judgment of Lord Briggs reads: “One day my son, all of this will be yours”. However, the central tenet of the Guest decision was to consider in detail the issue of satisfying the equity where promises had been made by the promisor and relied upon to the detriment of the promisee.

3. Guest reflects the fact that, over the last 15 years or so, there has been a noticeable change in the nature of proprietary estoppel cases. Previously, most arose following the death of the promisor. There is now a considerable body of case authority dealing with the issue of where the promisor is still alive and the farming operation continues. These cases are often inextricably linked to farming partnership disputes.

4. The cases relating to lifetime promises have two distinct strands. There are those where the promisee continues to be part of the farming operation and there are those where the promisee has ceased to be part of the farming business.

5. During the course of a long career, I have acted in many farming estoppel cases, several of which have been fought out in either the High Court or the County Court, and three reached the Court of Appeal. Two of those concerned lifetime promises and how the Court should satisfy the equity.

6. The first case was that of Davies v Davies6. I had acted for many years of the owners of a substantial farming operation in West Wales, Tegwyn and Mary Davies. They were part of the group of farmers who I represented successfully in the European Court when we challenged milk quota legislation. However, importantly, in the context of the issue which had to be dealt with by the Court in the Davies v Davies case, the dispute started as a claim for possession of a farmhouse occupied by Eirian, one of the daughters of Tegwyn and Mary. Initially one of my former colleagues, Ben Sharples, acted.

7. When I took over running the case, there had been two important set backs for my clients. First, a split trial had been ordered, so that the question as to whether representations were made which were relied on to the detriment of Eirian was taken first. The logic was that if she succeeded in the part of the case, the Court would go on to the second stage to determine how the equity should be satisfied. That approach of a split trial was subsequently criticised by the Court of Appeal.

8. Secondly, HHJ Jarman KC had found in favour of Eirian as to the promises, reliance and detriment. He went on to decide that the equity should be satisfied by a payment to her of £1.3 million.

9. It is important to note in the context of the overall analysis that, although Eirian remained in one of the farmhouses, she was no longer working with her parents at the farm at the time of the claim. Therefore, while she sought to have a share of the farms, there was always an inexorable logic that the equity would be satisfied by the payment of a lump sum.

10. We took the case to the Court of Appeal where the Court reduced the lump sum to be paid to £500,000.

11. In giving the leading Judgment in the Court of Appeal, Lewison LJ set out the following principles in respect of a claim for proprietary estoppel:

(1) Deciding whether an equity has been raised and, if so, how to satisfy it is a retrospective exercise looking backwards from the moment when the promise falls due to be performed, and asking whether, in the circumstances which have actually happened, it would be unconscionable for a promise not to have been kept either wholly or in part7.

(2) The ingredients necessary to raise an equity are:

(a) an assurance of sufficient clarity8;
(b) reliance by the claimant on that assurance9;
(c) detriment to the claimant in consequence of his reasonable reliance10.

(3) No claim based on proprietary estoppel can be divided into watertight compartments. The quality of the relevant assurances may influence the issue of reliance; reliance and detriment are often intertwined, and whether there is a distinct need for a ‘mutual understanding’ may depend on how the other elements are formulated and understood11.

(4) Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial12. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances13.

(5) There must be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. The question is whether (and, if so, to what extent) it would be unjust or inequitable to allow the person who has given the assurance to go back on it. The essential test is that of unconscionability14.

(6) The essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result15.

(7) In deciding how to satisfy an equity, the court must weigh detriment suffered by the claimant in reliance on the defendant’s assurances against any counter-veiling benefits he enjoyed in consequence of that reliance16.

(8) Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application17. In particular, there must be a proportionality between the remedy and the detriment which is its purpose to avoid. This does not mean that the court should abandon expectations and seek only to compensate detrimental reliance, but, if the expectation is disproportionate to the detriment, the Court should satisfy the equity in a more limited way.

(9) In deciding how to satisfy the equity, the Court has to exercise a broad judgemental discretion. However, the discretion is not unfettered. It must be exercised on a principled basis18.

12. In 2016, when we had Davies before the Court of Appeal, I also had the case of Moore v Moore19 before the High Court. In that case Stephen farmed in partnership with his father and his uncle. His uncle decided to retire and took a modest payment in respect of his interest in the partnership assets, including a substantial freehold farm. There was then a falling out between Father, Roger, and Stephen, resulting in Roger giving notice of dissolution of the partnership and seeking to eject Stephen from the business. It quickly became plain that Roger was not well, and shortly after the commencement of the proceedings by him, he was diagnosed as suffering from Alzheimers. The dispute was effectively between Stephen on the one hand and his Mother and Sister on the other.

13. Importantly, and in contrast to the Davies case, despite Roger’s dissolution of the partnership, at all times Stephen remained working on the farm, which was still the position by the time of the Trial in July 2016.

14. The Trial Judge found that the promises had been made to Stephen by his Father. Not least having regard to Roger’s health, the Judge accelerated Stephen’s interest, which would otherwise have arisen on Roger’s death, so that Stephen received the farm and the partnership business.

15. When I first read the Judgment in 2016, I considered that we had won too well. It included having an Order for costs on the indemnity basis for part of the proceedings. Unsurprisingly the other side sought permission to appeal to the Court of Appeal.

16. In 2016 the old Court of Appeal procedure applied, so that if permission to appeal was sought on paper, but refused, the applicant had a right to an oral hearing. That is what happened in Moore. On paper, Lord Justice Patten refused permission. At the oral hearing, with no new matters raised, Lord Justice Henderson gave permission to appeal. For my part, I did not disagree with that.

17. Henderson LJ formed part of the constitution of the Court, and gave a Judgment, when the matter then came before the Court of Appeal in 2018. Of the 13 grounds on which the appeal was based, only one succeeded. That was to cause the case to be remitted to the Trial Judge to consider a greater financial provision for Stephen’s Mother during her lifetime. That aspect was subsequently settled, so there was no further decision.

18. Comparing the two decisions, Eirian Davies received £500,000 for the breach of the promises made to her. Stephen Moore received the substantial freehold farm and partnership business immediately for the breach of the promises made to him, on condition that he made some provision for his Mother for the rest of her life.

19. Turning to the facts of Guest (in which I did not act), the parents promised one of three siblings, Andrew, that he would inherit a substantial but unspecified share of the farm. They later changed their Wills and removed Andrew from inheritance. They then dissolved the farming partnership with Andrew and gave him notice to quit the farm where he and his family lived. Andrew asserted proprietary estoppel.

20. HHJ Russen KC (sitting as a Judge of the High Court) held that Andrew had worked for little financial reward because he reasonably relied, to his detriment, on various assurances made to him by his parents as to his future inheritance. The Judge ordered the parents to make an immediate payment of £1.3 million (subject to certain adjustments) to Andrew to satisfy his expectation as to what he would have inherited. This was calculated as 50% of the value of the dairy farming business plus 40% of the freehold land and buildings at the farm. The parents failed in their appeal to the Court of Appeal.

21. In the Supreme Court, Lord Briggs identified that the purpose of proprietary estoppel is to prevent or compensate for the unconscionability of a person going back on a promise upon which another person has relied to their detriment. Lord Briggs rejected the idea that the aim of a remedy for proprietary estoppel ever has been (or should be) based on compensating for the detriment suffered by the promise. He held that the remedy should not be out of proportion to the detriment suffered without good reason, but this only serves as a useful cross-check for potential injustice. Lord Briggs held that the Court should start by determining whether going back on the promise is unconscionable at all in the circumstances. If it is, then the Court should then proceed on the assumption that the simplest way to remedy that unconscionability is to enforce the promise to transfer the property in question, but it may have to consider alternatives, such as providing a monetary equivalent, for example, if the property has been sold or if a transfer would cause injustice to others. This does not mean that the Court should seek precisely to compensate for the detriment to the promisee. If the remedy involves acceleration of a future promise to benefit, it will generally require a discount for accelerated receipt.

22. Applying those principles, Lord Briggs determined that the parents should be entitled to chose between putting the farm into a trust for their children, subject to a life interest for themselves, or making an immediate payment of compensation, similar to that ordered by the Judge, but with a discount to reflect early receipt.

23. In his dissenting Judgment, Lord Leggatt held that the core principle underpinning relief for proprietary estoppel is to prevent a party going back on a promise without ensuring that the party who relied on that promise will not suffer a detriment as a result of that reliance. In order to achieve this the Court may either (a) compel performance of the promise or order equivalent payment to put the promisee in the position he or she would have been in if the promise had ever been performed or (b) award compensation to the put the promisee into as good a position as if they had not relied on the promise. Applying that analysis, Lord Leggatt would have awarded Andrew £610,000 to compensate for the detriment that he had suffered as a result of working on the farm in reliance on his parents’ assurances. This reflected the estimated additional amount that Andrew would have earned by working elsewhere.

24. That last element of Lord Leggatt’s dissenting Judgment is perhaps alien to the way in which farming families operate. In my experience, as indeed was the case in the Moore litigation, Stephen came into the partnership as a salaried partner on a modest income, reflecting the fact that one day the business would be his.

25. In the context of farming partnership disputes it has sometimes been necessary to consider payment for those partners who continue a business during the course of its dissolution. Evidence may be obtained as to payments which would be made to farm managers brought in to run such a business. Such evidence may be relevant to understanding the benefit to the business of having the person continue to run it. However, the reverse of that coin, namely assessing what the rejected promisee would have earned by working elsewhere, is not necessarily straightforward or necessarily fair.

26. There is also the issue which flows from the decision of Lord Briggs as to how the rejected promisee finds a home and a living pending the vesting of an interest consequential upon the creation of a trust. It is the reverse of the acceleration principle, which was identified by the Court of Appeal in Moore. Had the promise not been resiled upon, the rejected promisee expected to have a home and a farming operation until the right to have the farm/business vested in him were to arise upon the death of parents.

27. In the 11th Edition of Scammell Densham & Williams Law of Agricultural Holdings, I suggest that the following principles might be considered in relation to the issue of satisfying the equity:

(1) Satisfying the equity may be a negative or a positive effect. A negative effect arises, for example, in relation to the defence of possession proceedings. A positive effect may be the grant of an interest in land or an award in money.

(2) In relation to registered land, the equity is an interest in land from the time that it arises, regardless of how it is eventually satisfied.

(3) The aim of the remediable discretion is to ascertain the minimum equity necessary to do justice.

(4) The concept of ‘minimum equity’ recognises that the object of the equity is not to fulfil the assumption or expectation but to avoid detriment. Proprietary estoppel is not a means of undermining established formal rules to create new property rights. The basis of the estoppel is the inter position of equity: hence the requirement of unconscionability.

(5) In proprietary estoppel, the emphasis should be on detriment.

(6) Expectation is not the correct measure. An assumption that the relevant promise should be enforced ‘betrays a fundamental misconception as to the nature and purpose of the doctrine of proprietary estoppel… Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application’20.

(7) The relief granted must be proportionate to the detriment. Proportionality is fundamental and is the most important factor for the Court to consider.

(8) Considerations that may be taken into account when exercising the discretion include:

(a) The parties conduct

(b) The likely effect of taxation

(c) The other claims (legal or moral) on the benefactor or his or her estate.

(9) In addition to the above, an important consideration is “…the Courts recognition that it cannot compel people who have fallen out to live peaceably together, so that there may be a need for a clean break”. This factor is relevant to the relief21.

(10) In deciding how to satisfy the equity, the Court should also take into account any counter veiling benefits received by the party invoking the equity.

28. What is clear is that, notwithstanding the decision in the Supreme Court, there will remain uncertainty as to how precisely the equity is to be satisfied in the context of these lifetime promises being broken. The fact that two very different outcomes were appropriate in the Davies and Moore cases reflect that. Andrew Guest would appear to be doing rather worse than Eirian Davies or Stephen Moore until such time as his trust interest crystallises or his parents decide to buy him off.

29. One thing is certain and that is that the law of proprietary estoppel will continue to form part of the diet of those practising in the area of agricultural property.

© P R Williams

12 November 2022

P R Williams, Ebery Williams – Author of Scammell, Densham & Williams Law of Agricultural Holdings


1 [2022] UKSC 27.

2 [2009] UKHL 18.

3 [2008] UKHL 55.

4 [1997] AC 747.

5 [2022] EWCA Civ 1446. See separate Article on the Ebery Williams website.

6 [2016] EWCA Civ 463.

7 Thorner v Major [2009] UKHL 18, [2009] 1 WLR at [57] and [101].

8 Assurance includes acquiescence:  Ramsden v Dyson [1866] LR 1 HL 129 at 140 per Lord Cranworth LC.

9 See Taylor’s Fashions Limited v Liverpool Victoria Trustees Co Limited [1982] QB 133, CA 1t 156.  The promise   need not be the sole reason for the particular action: it is sufficient if it is an inducement:  Campbell v Griffin [2001] EWCA Civ 990 at [29] per Robert Walker LJ.

10 Thorner v Major [2009] UKHL 18, [2009] 1 WLR at [29].

11 Gillett v Holt [2001] Ch 210 at 225; Henry v Henry [2010] UKPC 3.

12 Davies v Davies [2014] EWCA Civ 568, [2014] 2 P&CR D31.  Also see Creasey v Sole [2013] EWHC 1410 (Ch) [2013]. All ER (D) 37 (Jun); Gillett v Holt [2001] Ch 210; and Henry v Henry [2010] UKPC 3, [2010] 1 All ER 988.

13 Gillett v Holt [2001] Ch 210 at 232; Henry v Henry [2010] UKPC 3 at [38].

14 Gillett v Holt [2001] Ch 210 at 232.

15 Jennings v Rice [2002] EWCA Civ 159; [2003] 1 P&CR 8 at [56].

16 Henry v Henry [2010] UKPC 3 at [51] and [53].

17 Henry v Henry [2010] UKPC 3 at [65].

18 These principles were adopted and followed in Moore v Moore [2016] EWHC 2202 (Ch). The principles were not affected by the decision in the same case in the Court of Appeal [2018] EWCA Civ 266.  See paragraph 55.23(k).

19 [2016] EWHC 2202 (Ch).

20 Henry v Henry [2010] UKPC 3, Sir Jonathan Parker at [65].

21 Jennings v Rice [2002] EWCA Civ 159 at [52].

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