In the recent High Court decision in Guest -v- Guest and another, HHJ Russen QC found in favour of the claimant Andrew Guest against his parents in respect of the family farm.
The Guest family had owned and farmed Tump Farm for three generations since 1938. The parents, David and Josephine lived at the dairy farm. The land and agricultural business together was valued at around £3.35 million. David and Josephine had three children: two sons, Andrew and Ross, and a daughter, Jan. Both sons worked on the farm, with Andrew working from the age of 16 in 1982 until 2015, where he worked 60-80 hours per week for little financial reward, having been paid at or below the minimum wage set by the Agricultural Wages Board. During this time, Andrew resided on farm property with his family, at Granary Cottage.
David Guest, Andrew’s father, had made a will in October 1981 leaving Tump Farm to his two sons in equal shares upon them reaching the age of 25 and subject to them both raising funds to pay a pecuniary legacy to their sister equal to one fifth of the value of the residuary estate. In 1999, David Guest took advice on the succession of his estate. Two farming partnerships were formed between the parents and each of the sons. However, following a disagreement between David and Andrew in 2014, David dissolved their partnership and made a will which disinherited Andrew from receiving any share in the farm.
Andrew left Tump Farm in 2015, but he continued to reside at Granary Cottage. In July 2017, his parents served him and his family with a notice to quit Granary Cottage. Andrew sought alternative employment and residence elsewhere and obtained a job as a herdsman at a salary of £33,000 per annum plus rent on a property near his new place of work.
Andrew brought proceedings against his parents for an interest in Tump Farm and its business based on the principles of proprietary estoppel. He contended that his father had given him assurances throughout the 30 years he had worked at Tump Farm for little reward that he would inherit the farm or a substantial interest in it. Andrew claimed:
- a declaration of entitlement to occupy Granary Cottage
- a declaration of entitlement to the entire beneficial linterest of Tump Farm and the business carried on there
- an alternative claim to an equity over the farm and business
In January 2018, David Guest executed a new will which completely disinherited Andrew and provided only for Ross and Jan to benefit from his estate; with Ross receiving Tump Farm along with his father’s share of the business and Jan to receive a legacy of £120,000 plus a two and a half-acre field. The will was accompanied by a letter of wishes explaining David’s reasons for excluding Andrew from his 2018 will: ‘because over the years I have lost all trust in him’, and ended with a brief history that David had not inherited Tump Farm from his own parents and David had ‘never promised any of [his] children any sort of inheritance’.
The Court had to consider whether the key ingredients for a proprietary estoppel had been me - i.e. that:
- there had been a promise or assurance by the parents that created an expectation that Andrew would become entitled to an interest in the farm
- the promise had been relied on by Andrew
- Andrew had suffered da detriment by relying on the assurance
- it would be unconscionable to allow the parents to go back on that promise
It was considered by the Court that the claimant’s understanding of his inheritance changed in 2012 when his brother was included in the succession planning and the two farming partnerships were established. Although Andrew’s expectations were altered in 2012, this was not held to be a bar to the first limb of his proprietary estoppel claim. Rather the Court considered that up until 2014, David Guest had led Andrew to believe he would inherit the farm and its business in equal shares with his brother. The assurances, which were supported by the 1981 will and were communicated to Andrew during his life up until 2014, were held to be clear assurances that he would inherit a good portion of Tump Farm, which he would be able to continue to farm after his parents’ deaths. The Court considered that Andrew had relied on these assurances to his detriment having worked for over 30 years on a low wage and would not have done so had he not believed, and been incentivised by his belief, that he would inherit the farm and its business. This was supported by his training and qualifications obtained in the agricultural industry.The arguments raised by the parents in relation to Andrew’s part in the disputes with his father and his ability to obtain alternative employment were not enough to get over the final hurdle, to say that it would not be unconscionable to go back on any promise.
Andrew’s claim succeeded and he was awarded and it was ordered that a lump-sum payment be awarded to Andrew amounting to 50% of the market value of the dairy farming business and 40% of the value of the Tump Farm buildings.
The judge decided that on the basis of the evidence before it, a clean break between Andrew and his parents was necessary. Proprietary estoppel claims are usually brought after the death of the promisor, at a time when the full extent of what is to be inherited by any given party is clear. Despite Andrew’s expectation being that he would inherit the farm after his parents’ death (although his entitlement to run the farming business fell in earlier on his father’s retirement) the judge considered it proportionate to bring forward Andrew’s entitlement to an interest in the land to effect a clean break between the parties as this was the most equitable remedy.
This case makes it clear that the Court, in determining a claim for proprietary estoppel, will not be deterred by a claimant’s shifting expectations and a lack of certainty over the specific interest that was to be acquired. The Court was also willing to give effect to the claimant’s expectation prior to his anticipated receipt of any specific interest, i.e. before his parents’ death. This issue is not confined to farms and land but could equally apply to other assets including family-owned businesses.