Guest v Guest
What is the appropriate basis for granting a remedy in
proprietary estoppel cases?
1. Facts of Guest v Guest:
Family run farm, owned by C’s parents.
C had worked on farm for over 30 years, living rent-free but receiving a very low
wage.
His parents had made various assurances to him, which left him with the expectation
that he would inherit a significant (but unspecified) proportion of the farm on their
deaths.
After breakdown in familial relations, C brought claim against his living parents for a
share of the farm or a lump sum equivalent to market value.
2. Outcome of Guest v Guest:
3:2 split in SC
Majority –
Starting point = expectation.
Minority –
Starting point = detriment.
Both judgements focused on the proper interpretation of the term “minimum equity
to do justice” coined by Scarman LJ in Crabb v Arun DC
Majority – was about fine tuning the fulfilment of the expectation of the
promise.
Too claimant centred.
Minority – to do justice requires the court not to award a remedy which is
more generous to C and more burdensome for D than is necessary to achieve
the underlying purpose for which the remedy is granted.
This is the natural meaning of the phrase.
3. Critique of the Majority Approach:
Wants to protect the expectation interest but this is not reflected in the remedy
actually awarded.
Gives C’s parents the option to choose from two appropriate remedies.
Either they could put the farm into a life interest trust for C to inherit on their
deaths or they could sell the farm during their lifetimes to pay C a lump sum.
This choice is strange, specifically the latter choice. The extent of the
expectation is that he would inherit the farm after their deaths – so
why would he get a remedy while his parents are still alive?
The court did recognise that any sum awarded (under the second option)
would be significantly discounted to take account of C’s accelerated receipt –
i.e., to reflect the benefit gained by C in receiving the sum sooner than he
otherwise would have done.
BUT – if the court was truly protecting C’s expectation, why was this
an option in the first place?
Effect of the majority decision is that, in proprietary estoppel cases, the law now
awards a remedy based first and foremost on expectation loss, as is the case in
contract law.
This is a problem – gives the claimant the same protection as a contractual
claim, even though a proprietary estoppel claim has more relaxed
requirements.
For contract, need clear and certain terms, an intention to create legal
relations and consideration – in other words, not just any promise can become
a contract.
Contrast with the requirement in proprietary estoppel:
What is the appropriate basis for granting a remedy in
proprietary estoppel cases?
1. Facts of Guest v Guest:
Family run farm, owned by C’s parents.
C had worked on farm for over 30 years, living rent-free but receiving a very low
wage.
His parents had made various assurances to him, which left him with the expectation
that he would inherit a significant (but unspecified) proportion of the farm on their
deaths.
After breakdown in familial relations, C brought claim against his living parents for a
share of the farm or a lump sum equivalent to market value.
2. Outcome of Guest v Guest:
3:2 split in SC
Majority –
Starting point = expectation.
Minority –
Starting point = detriment.
Both judgements focused on the proper interpretation of the term “minimum equity
to do justice” coined by Scarman LJ in Crabb v Arun DC
Majority – was about fine tuning the fulfilment of the expectation of the
promise.
Too claimant centred.
Minority – to do justice requires the court not to award a remedy which is
more generous to C and more burdensome for D than is necessary to achieve
the underlying purpose for which the remedy is granted.
This is the natural meaning of the phrase.
3. Critique of the Majority Approach:
Wants to protect the expectation interest but this is not reflected in the remedy
actually awarded.
Gives C’s parents the option to choose from two appropriate remedies.
Either they could put the farm into a life interest trust for C to inherit on their
deaths or they could sell the farm during their lifetimes to pay C a lump sum.
This choice is strange, specifically the latter choice. The extent of the
expectation is that he would inherit the farm after their deaths – so
why would he get a remedy while his parents are still alive?
The court did recognise that any sum awarded (under the second option)
would be significantly discounted to take account of C’s accelerated receipt –
i.e., to reflect the benefit gained by C in receiving the sum sooner than he
otherwise would have done.
BUT – if the court was truly protecting C’s expectation, why was this
an option in the first place?
Effect of the majority decision is that, in proprietary estoppel cases, the law now
awards a remedy based first and foremost on expectation loss, as is the case in
contract law.
This is a problem – gives the claimant the same protection as a contractual
claim, even though a proprietary estoppel claim has more relaxed
requirements.
For contract, need clear and certain terms, an intention to create legal
relations and consideration – in other words, not just any promise can become
a contract.
Contrast with the requirement in proprietary estoppel:
