Analysis
The respondent (who had been the claimant at first instance) was the eldest son of the two appellants. He had worked on the family farm full-time for some 33 years, until his relationship with his parents deteriorated. The respondent then brought proceedings against the appellants seeking a declaration of his entitlement to a beneficial interest in the farm on the basis of an alleged proprietary estoppel. At first instance, the court found in his favour, concluding that the first appellant had consistently and over time led the respondent to believe that he would inherit a sufficient stake in the farm to enable him to carry on farming after his parents’ deaths. The respondent had relied on these representations to his detriment by working hard on the farm for years for little financial reward. It would have been unconscionable for the appellants to go back on their assurances and therefore the judge awarded the respondent a lump sum payment reflecting 50% after tax of the market value of the dairy farming business and 40% after tax of the market value of the land and buildings at the family farm (or such proportions of the actual value realised upon sale pursuant to the court’s order), subject to a life interest in favour of the appellants (or the notional value of such on a sale). It was inevitable that the family farm would have to be sold in order to realise the lump sum payable to the respondent by virtue of that order.
The appellants were granted permission to appeal only as to the issue of the appropriate remedy. They appealed on the basis that
- the judge was wrong to base the remedy on the respondent’s subjective expectation, and should instead have considered the question of the extent of any equity that had arisen separately, and considered what the appellants must have been taken to have intended in order to avoid an unconscionable result;
- the order went further than was necessary to satisfy the equity and should instead have taken the form of an order for a charge on the farm or business for the value either of the amount by which the respondent’s work on the farm had increased the value of the business, or else to compensate him for his loss of opportunity; and
- the judge ought not to have accelerated the respondent’s expectation, given that he only ever expected to inherit on the death of his parents.
The appeal would be dismissed. The judge had not been wrong to give weight to the respondent’s expectation, this being a case the overall outcome of which came close to the reciprocal performance of acts requested in return for the assurance. There was nothing wrong in principle in omitting to consider the extent of any equity separately, nor was there any requirement to consider what the owners must have intended to avoid an unconscionable result. In fact the latter proposed test risked skewing the exercise in a manner unsupported by authority. To compensate the respondent in the amount by which his work had increased the value of the business would ignore the fact that such remuneration was not what he had been assured of, and, in focusing on the appellant’s gain rather than the respondent’s loss, would be out of kilter with the nature of the cause of action. Moreover, the detriment suffered by the respondent was not limited to the quantifiable difference in wages etc. The judge had been entitled to take the view that what the respondent was promised was a rough proxy for what he had lost. The judge had not exceeded the wide bounds of his discretion in accelerating the interest of the respondent. He had done so in order to achieve a clean break, and was entitled to take the view, as he did, that such acceleration was necessary in order to avoid an unconscionable result.
JUDGMENT LORD JUSTICE FLOYD: Introduction [1] Tump Farm (‘the Farm’) is a working dairy farm in Sedbury, near Chepstow in Monmouthshire. It has been farmed by members of the Guest family for three generations. Initially it was leased to the parents of the first appellant, David Guest, but when his father died in 1964 David …Continue reading "Guest & anr v Guest WTLR(w) 2021-05"