Successful Lifetime Proprietary Estoppel Claim

Posted by Olivia Shenton-Taylor, 26th July 2019
In Guest v Guest [2019] the High Court dealt with a proprietary estoppel claim, brought whilst the parties were still alive.

The claimant, Andrew Guest, brought an action against his parents in respect of Tump Farm, the family farm that was owned and occupied by the defendants. The claimant had worked on Tump Farm since finishing school in 1982 and had lived in a cottage on the grounds with his own family up until 2017. Originally, the claimant’s father (David) had left a will in 1981, which divided the farm equally between Andrew and his brother, and left a pecuniary legacy to their sister. However, a new will was executed by David in 2018 whereby Andrew was disinherited due to a breakdown of the relationship with his parents.

The claimant relied on the fact that he had worked on the farm at a reduced wage for 30 years on the basis of assurances made by his parents, that he would one day inherit the farm. He therefore made a claim for proprietary estoppel (see our previous blog for the principles of such claims).  In this case, Andrew claimed entitlement to a significant portion of his parents’ assets, including the farming business and the rest of the land and buildings on the farm. The court held that David had made numerous assurances that Andrew would take over the running of the farm business and in turn, Andrew acted in reliance on these assurances, by enduring long hours and low wages. The court was satisfied that if the claimant had sought alternative employment he would have obtained higher wages which would have enabled him to purchase his own property.

The claimant was awarded a lump sum payment of 50% (after tax) of the market value of the farming business and 40% (after tax) of the market value of the freehold land and buildings on the farm, as an advancement of his inheritance. The total estimated value of the award is around £2.7 million.

Whilst Judge Russen QC acknowledged that the defendants had the testamentary freedom to divide their property as they wished, equity was established in the claimant’s favour. This serves as an important reminder that, whilst it is at your discretion as to who to leave your property to upon death, it is imperative to determine whether there are any other parties that may make a claim to entitlement to your property. Understanding your assets and being aware of any potential disputes that may arise is vital when legacy planning. Further, it is important to acknowledge that a breakdown in relationship may result in a claim being brought, even before death and if successful, could potentially result in an award to the Claimant.

In making his judgment, the judge highlighted that the time limits identified in McDonald v Rose [2019] for a proposed appeal shall apply. You can read our blog post on the decision in McDonald v Rose here.

This article has been co-written by Olivia Shenton-Taylor and Natalie Powers.

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