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Informal promises and inheritance battles – what the Supreme Court has to say

Informal promises and inheritance battles – what the Supreme Court has to say

A bitter and long running inheritance battle between a son and his elderly parents, who are both still alive, has at last been brought closer to a conclusion.

The Supreme Court has given its verdict on how this acrimonious dispute, which revolves around a claim known as proprietary estoppel, should finally be resolved.

Andrew Guest maintained that his parents, David and Josephine, always promised him a significant share of the family farm when they died but years later, after a huge fallout, changed their Wills to exclude him.

And while the High Court agreed he’d been unfairly treated, as did the Court of Appeal, the Supreme Court ruled that ordering the sale of the family farm was a step too far in terms of compensation.

Lord Briggs, who gave the leading judgment, said Andrew’s parents were “spared, if they so choose, the injustice of having to sell up and leave early” and given the opportunity “of a completely clean break at a considerably lower price” than that ordered by the original judge.

What is proprietary estoppel?

Proprietary estoppel is a legal concept that can be used to stop someone reneging on a promise or assurance, however informally made, when that assurance was relied upon by the other person to their detriment.

It hinges on being able to prove the person bringing the claim had reasonable grounds for believing they would one day inherit property. As a result of relying on this assurance, and making life choices accordingly, they were left at a disadvantage.

What is the background to this proprietary estoppel case?

The origins of the dispute date back to 2017 when Andrew first brought a claim in the High Court.

He argued that he had worked hard for 30-plus years on the farm in return for merely a basic wage because he was encouraged by his parents to believe that he would one day inherit a significant share.

Judge Jonathan Russen QC accepted Andrew’s evidence that his parents had promised he would inherit at least a portion of the farm and that it was morally unacceptable for them to go back on this.

He said Andrew and his parents had ‘fallen out so badly’ it would be impossible for him and his wife to move back to the farm and that the ‘level of mistrust’ between Andrew, his father and brother would make it impossible for them to farm together. The only option therefore, was a financial clean break.

Observing that it would probably be necessary for the farm to be sold, at least in part, he awarded Andrew 50% of the value of the dairy business and 40% of the freehold value of the land and buildings.

Mr and Mrs Guest appealed to the Court of Appeal, which upheld the High Court’s decision, and then to the Supreme Court.

What did the Supreme Court decide about how this proprietary estoppel claim should be assessed?

This case is unusual because both Andrew’s parents are still alive; usually such claims are brought after the death of the person who made the promise.

At issue was the High Court judge’s decision to award a clean break solution.

This meant the farm would almost certainly have to be sold and as a result, Andrew’s inheritance would be accelerated – possibly resulting in him receiving more than he’d been promised – even though he’d only ever expected to inherit after his parents’ death.

The Supreme Court allowed the appeal – but only in part – finding that Mr and Mrs Guest should have been able to choose whether to put the farm in trust, so that Andrew would inherit on their deaths, or whether to sell it while they were alive.

It has directed the parties to agree the terms of the trust and for the High Court to step in if they can’t.

Why is specialist legal advice so important in proprietary estoppel claims?

This case highlights the need to avoid informally made assurances and take specialist legal advice to make sure any arrangements are put in writing in a properly drawn Will to avoid lengthy, costly and stressful disputes like this one.

This is particularly important because although claims of this type are common in farming families, they can also arise in other family scenarios.

What’s more, you don’t have to be a family member to bring a proprietary estoppel claim – anyone promised something in a Will, and to whom this promise is later broken, could have a claim depending on the circumstances.

Get in touch

The number of people disputing a loved one’s Will is rising fast.

If you would like to contest or defend a Will, the help of a specialist lawyer is vital as every case needs to be looked at on an individual basis. Time limits also apply.

For help and advice, please contact Wards Solicitors’ Contentious Trusts and Probate Team.

Our lawyers are members of the Association of Contentious Trusts and Probate Specialists (ACTAPS), the Society of Trust and Estate Practitioners (STEP), Solicitors for the Elderly (SFE) and the Law Society’s Probate Panel. All demand a high level of expertise and up to date knowledge from their members.

Wards Solicitors’ team is praised by the Legal 500 Guide for 2023 for its broad contentious trusts and probate practice with a particular emphasis on Inheritance Act and Court of Protection matters.

Head of the team, Elizabeth Fry, is highlighted as a key lawyer specialising in high value and multi-jurisdictional matters.

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