Long awaited decision of the Supreme Court – Guest -v- Guest

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The long-awaited judgment was handed down, on the 19th October 2022 at the Supreme Court in relation to the case of Guest -v- Guest which has provided clarity as to how awards in claims for Proprietary Estoppel should be assessed.

The case was instigated by Andrew Guest, the eldest son of a dairy farming family. Andrew argued that he had been promised a significant proportion the family farm by his father, upon his father’s death. Acting on that promise, Andrew worked on the farm for 33 years for a basic wage believing that one day a large proportion of the farm would be his.  Sadly, Andrew and his parents fell out resulting in his parents disinheriting him.

Initially, Andrew’s claim was successful, and the Court accepted that Andrew had worked on the farm for a lengthy period of time for a basic wage on the understanding that he would be rewarded for this upon his father’s death and that a large proportion of the farm would be left to him.  Andrew was awarded a lump sum based on 50% of the net market value of the dairy farm business, and 40% of the net market value of farm, despite it being made clear that such award would inevitably mean that the farm would have to be sold.

Andrew’s parents appealed the decision of the lower Court on the basis that the award given to Andrew had been incorrectly assessed. They argued that the award granted, accelerated Andrew’s expectations by providing him with a lump sum whilst they were still alive rather than upon their deaths, as previously expected by Andrew. The appeal was rejected, and Andrew’s parents referred the case to the Supreme Court. The hearing took place on 2 December 2021.

The Supreme Court allowed the appeal by a 3-2 majority giving the parents a choice of either (i) paying a lump sum to Andrew now but reducing the sum awarded to compensate for early payment or (ii) for the lump sum to be paid to Andrew upon his parents deaths, as previously expected by Andrew, with the farm being placed in trust for Andrew and his brother and sister with a lifetime interest granted to their parents. This option would provide Andrew with protection and security but at the same time avoid the farm having to be sold during his parents lifetime.

This long-awaited judgment has given clarity on the basis of how awards in such claims should be assessed. The Supreme Court was of the view that a claimant cannot expect to be given an award which would be over and above his expectations. Andrew wasn’t expecting to receive a share in the farm until after his parents’ deaths. Should he receive his share in the farm earlier than expected and during his parents lifetime, the Supreme Court was of the view that a reduction in the award would be appropriate. Should the award be given to him upon his parent’s deaths, as expected, protection should be given to Andrew and also to his parents to avoid sale of the farm, which remained their home, during their lives.

For Specialist advice on the implications of this case in individual cases please contact our expert team of Solicitors, Llio Phillips, Karen Anthony, Elin Owen or Melissa Charles Davies at advisor@agriadvisor.co.uk