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Guest v Guest [2022] UKSC 27: Redefining Proprietary Estoppel


Source: https://www.stephens-scown.co.uk/disputes-with-individuals/supreme-court-decision-in-guest-v-guest/

By: Matthew Lee


“One day my son, all of this will be yours”. This line has been repeated countless times on the silver screen from King Ban in Monty Python to Mufasa in the Lion King. According to Lord Briggs [1], this same line is also said by farmers to their sons; the promise of inheriting the family farm an incentive for the younger man to spend his best years working for the older at lower wages. Far too often, however, the younger man grows impatient and resentful as he too grows old, the death of his father and the consequent inheritance of great wealth coming far too slowly for his liking. In the end, the younger man leaves his father for better wages, only to discover that he has been written out of the will at the end of the old man’s life.


In fairy tales, the story often ends there. The prodigal son left with neither family nor wealth upon the death of his old man. However, the law sees such a situation differently. Surely the younger man is entitled to some form of compensation for sacrificing his best years for the sake of his father. Or is the father entitled to change his will as he pleases to renege on the promise made to his son?


Any good law student will tell you that the son can make a claim of proprietary estoppel. The word “proprietary” refers to the interest in the property the son had when his father made the promise to him. The word “estoppel” encapsulates the notion that the repudiation of the promise would be so unconscionable as to constitute an equitable wrong that the court has a duty to prevent it. Often, the remedy may come in the form of the courts compelling the promisor to fulfil his promise to the promisee or compensate the promisee for his effort, so that he is in the position he would have been in had the promise been fulfilled.


The notion that equity regards as done that which ought to be done is a long-established principle of English law. However, Guest v Guest breaks new ground in measuring the quantum of compensation the promisee ought to receive. Prior to Guest v Guest, the quantum of compensation afforded to the promisee was measured by the extent to which the promisee had relied on the promise to his detriment. The use of reliant detriment also serves as a useful balancing factor in preventing the blind enforcement of a promise so disproportionate to the reliant detriment to the promisee that it goes far beyond the unconscionability of the repudiation of the promise.


Guest v Guest sets out a new yardstick to measure the quantum of compensation a promisee ought to receive in equity: the unconscionability of the repudiation. In most cases, the unconscionability of the repudiation of the promise is the promisee’s very detrimental reliance on the promise. After all, the degree to which the repudiation of a promise is unconscionable is the degree to which the promisee suffers as a result. However, the use of reliant detriment alone to measure the quantum of equitable compensation fails to take into account the promisor’s side of the story. While the repudiation of a promise by the promisor for no good reason should indeed see the promisee compensated for his reliant detriment, it should be remembered that the whole purpose of equitable remedies is to right what the court sees as unconscionable wrong. Using only reliant detriment to quantify the equitable compensation the promisee ought to receive fails to take into account how the promisor also has a say in the unconscionability of the repudiation. If the promisor had to renege on his promise to get life-saving medical treatment, it does nothing for the reliant detriment suffered by the promisee but greatly reduces the unconscionability of the repudiation, the promise being repudiated for an ostensibly far more important purpose.


The use of unconscionability to measure the quantum of equitable compensation better reflects the aim of equity law. While the law of tort is concerned only with compensating the claimant for the damage caused by the tortfeasor, the law of equity adopts a more holistic approach and gives the hypothetical defendant a say in the unconscionability of the wrongdoing the court seeks to right. The common law practice of monetising all damage attributable to the defendant has seen the courts attempt to pursue as precise a formulation as possible to measure the quantum of damages. However, it should be remembered that the law of equitable remedies is more of an art than science as it deals with inherently subjective issues of morality and unconscionability. The courts should consequently have the flexibility to adjust the quantum of compensation on a case-by-case basis to achieve a fair result in righting the wrong of the hypothetical defendant, as opposed to blind compliance with an underinclusive formulation that strives for precision at the expense of fairness.


Guest v Guest admittedly raises more questions than it answers. Lawyers are now in the unenviable position of having to place a dollar value on the unconscionability of a repudiated promise. Perhaps, a future court may find the unconscionability requirement too vague or too subjective a concept to be practically workable when it comes to the measurement of damages. Or perhaps a new formulation may be crafted by a future court to better reflect the dollar value of unconscionability. Whatever the case may be, Guest v Guest represents a step in the right direction for the law of equity, prioritising fairness and justice over blind mathematical precision in the calculation of damages.






References

[1] Guest v Guest [2022] UKSC 27

1 Comment


Joseph Khaw
Joseph Khaw
Jan 08, 2023

some rather questionable statements of law here...

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