Guest and another v Guest

Intrinsic to any system of private property is the owner’s right to choose what to do with his or her property. To ensure that dispositions of property are made in accordance with, and only with, the owner’s authority, rules are required to determine when legally valid consent to a disposition of property has been given. In English law consent to dispose of an interest in property in the future is valid only if the authorisation is given in a contract or, if the intended future disposition is a gift, in a deed or will. To be valid, a deed or will must comply with specific formal requirements. The reason for requiring such formality is to make sure that the consent was genuine and intended to create a legal obligation. In relation to land, given its importance as a form of property formality is also required to make a valid contract. Thus, under section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, a contract for the sale or other disposition of an interest in land must be made in writing in a document that incorporates all the terms expressly agreed and is signed by each party.

In recent years, however, a potent legal doctrine has developed under which a court may order interests in land and other property to be transferred, including on death, even though the requirements for a valid disposition of property have not been satisfied. The doctrine has been called “proprietary estoppel” (although, as I will explain later, the label is inapt). In Thorner v Major [2009] UKHL 18; [2009] 1 WLR 776, the House of Lords confirmed that a claim based on “proprietary estoppel” has three main elements: an assurance by A to B that B has been or will be given an interest in property; reasonable reliance by B on the assurance; and consequent detriment to B if A resiles from it. Where these three elements are present, an “equity” may arise which the court may satisfy by compelling A to grant an interest in property to B or to pay monetary compensation.

A fundamental question which was not, however, raised on the appeal in Thorner v Major and which has still not been clearly resolved is: what is the nature of this “equity”? Why, when the elements of a “proprietary estoppel” claim are proved, does or may the law afford the claimant a remedy of any kind? Without an answer to that question, it is impossible for a court to decide in a way that is rational and not merely arbitrary what remedy should be awarded in any particular case. If the court is to award a remedy which is capable of being justified, it is necessary to know what the remedy is for.

Another, more specific question is what the approach to remedy should be where an assurance consisting of an informal promise is revoked before it is capable of being fulfilled. In Thorner v Major the event upon which the claimant had been promised that he would be given property (the death of his cousin) had happened. Should the approach be the same where a person who has promised to make a will leaving property to the claimant later revokes the promise after the claimant has detrimentally relied on it? To grant an immediate remedy in such a case gives the claimant something that was never promised. What was promised was a gift upon the promisor’s death. When and how, if at all, is it justifiable to grant a remedy in such a case when the promisor is still alive?

The present case is a case of this kind. For many years the claimant worked long hours for low pay on the family farm relying on promises from his father that he would inherit the farm (or a substantial share of it) on the death of his parents. After his relationship with his parents broke down and the son was disinherited, he brought this claim against them based on “proprietary estoppel”. At trial the claim succeeded. The remedy awarded by the judge was to order the parents to make an immediate lump sum payment to their son, calculated as a proportion of the current value of the farm and farming business. The judge’s order was upheld by the Court of Appeal. The further appeal to this court requires us to consider what principles should guide the grant of a remedy for a claim of this kind.

Before considering those principles, I will give a fuller summary of the facts.

Tump Farm is located near the confluence of the River Wye and the River Severn, not far from Chepstow. It consists of around 197 acres of land: mainly pasture, with some woodland. There is a farmhouse with a semi-detached cottage (called Granary Cottage) and other buildings. Tump Farm has primarily been a dairy farm, though 32 acres are now leased to a commercial operator as a solar energy park. It has been farmed by members of the Guest family since 1938. David Guest’s parents originally farmed the land as tenants. In 1964, when he was only 19, David’s father died, and David and his mother bought Tump Farm with a mortgage. They were partners in the farm business until 1992, when David’s mother died. David then carried on the farm business in partnership with his wife, Josephine.

David and Josephine Guest are the defendants to this claim. The claimant is their son, Andrew Guest. He is the oldest of their three children. Andrew was born in 1966; his sister, Jan, in 1968; and a younger brother, Ross, in 1977.

In 1981 David and Josephine Guest made wills providing for Andrew and Ross to inherit Tump Farm and its business in equal shares upon the second death of their parents, subject to a pecuniary legacy to Jan equal to one fifth of the value of the estate. Andrew was never told about the terms of these wills but was aware of his father’s intention to leave the farm to the next generation.

From when he left school in 1982, Andrew worked full time at Tump Farm. He did so for 32 years before he and his parents fell out. Until 1989, Andrew lived in the farmhouse with his parents and paid his mother for board and lodging. In 1989 Andrew married his wife, Tracey, and an old granary attached to the farmhouse was converted into a cottage (Granary Cottage) for them to live in. They have two children.

Over time Andrew took on various responsibilities on the farm and played an increasing role in the farm business. After 1982 he quickly took over sole responsibility for calf rearing; after 1984 he took responsibility for artificial insemination of cattle; and after 1985 (having undertaken two part-time courses in farm management) he took on more responsibility for paperwork, progressing to financial management and administration. In 2006, Andrew obtained a postgraduate diploma in Agricultural Business Management. Outside his work on the farm, Andrew has taken on various roles in bodies representing dairy farmers and the interests of farmers generally, in particular the Northern Milk Partnership and the National Farmers’ Union.

Ross, who is 11 years younger than Andrew, has also become a farmer. From 1997 until 2005, Andrew and Ross operated an outdoor activity centre at Tump Farm as a partnership (offering quad biking, then also paintballing). But it did not work out. Since 2002 Ross has been working full-time on the farm.

For most of the time that he worked on the farm, Andrew was paid only a basic wage. Until 1996, Andrew’s wages (excluding overtime) were in line with the minimum rate set by the Agricultural Wages Board; but after that they fell behind. In 2008 Andrew raised a complaint with the Board about the level of his wages. In response his father wrote a letter to Andrew saying that he was “somewhat saddened that you wish to be regarded as an ordinary employee rather than a valued member of the family.” The parents maintained that, in assessing what he was paid, the value of various benefits (such as his rent-free occupation of Granary Cottage) should be taken into account. There was disagreement about the value of such benefits, but in June 2009 a compromise was reached under which Andrew’s wages were increased, though by less than he had requested.

In 2007 the parents’ farming partnership took a farm business tenancy of a neighbouring farm, Dayhouse Farm, and farming operations there were integrated with those on Tump Farm. In 2012, the tenancy of Dayhouse Farm came up for renewal, with the opportunity to rent the farmhouse and not just the land. This enabled Ross with his wife and young children, who had previously been living with the parents at Tump Farmhouse, to move to Dayhouse Farm. By that stage it was clear that, for various reasons, Andrew and Ross could not continue to farm together. Two new family partnerships were formed: one between the parents and Andrew to run Tump Farm; and the other between the parents and Ross to run Dayhouse Farm. Each son was to be the principal farmer of “his” farm. In each partnership the son was to have a 50% share of profits, with the other 50% being split equally between the parents. The judge found that an express promise of equal inheritance by Andrew and Ross was made at that time, with the land at Tump Farm to be split between them.

These arrangements did not continue as planned because relations between Andrew and his father soon broke down. The reasons for their falling out do not matter but, on the judge’s findings, they stemmed largely from disagreement about the direction of the farming business and the extent to which Andrew should now have control over it. Another point of contention was Andrew’s belief that “his” branch of the farming business was being treated unfairly in comparison with the part allocated to Ross.

In May 2014 the parents made new wills, which cut out Andrew from inheritance except for a right to occupy Granary Cottage. By this time David was threatening to dissolve the parents’ farm partnership with Andrew. Negotiations took place in late 2014 and early 2015 over the possibility of Andrew taking a farm business tenancy of Tump Farm, but he regarded the terms offered to him as not commercially viable. In April 2015 David and Josephine Guest dissolved their farm partnership with Andrew and gave him notice to quit Granary Cottage. Andrew and his wife and children accordingly left the farm. (David and Josephine subsequently made further new wills excluding him entirely.)

Andrew instructed solicitors, who in June 2016 sent a letter of claim relying on the doctrine of proprietary estoppel. In August 2017 these proceedings were begun. The trial took place over six days in November and December 2018 before HHJ Russen QC sitting as a judge of the High Court.

At the time of the trial, Andrew Guest was aged 52 and his father, David, was aged 77. Andrew had by then got a job on another farm, near Tewkesbury, as a senior herdsman.

Since the trial, and as matters stand: the dairy herd at Tump Farm has been sold; but Tump Farm is still farmed by the parents and they wish to continue to make use of it, whether for themselves or ultimately for the use of the Dayhouse Farm Partnership.

In his judgment at [2019] EWHC 869 (Ch) the judge made careful and detailed findings of fact leading to the conclusion that, until they fell out in 2014, Andrew was consistently led to believe by his father, with the tacit support of his mother, that he would succeed to the farming business and inherit a substantial share of Tump Farm. Until the late 1990s, Andrew was assumed within the family to be the sole successor to the farming business; but from 1997, when Andrew and Ross launched their outdoor activity business, the family’s expectation, which Andrew accepted, was that he and Ross would farm side-by-side. The extent of Andrew’s promised inheritance was not specified, but the judge found that “David’s statements were clear enough to amount to an assurance that Andrew would inherit a sufficient stake in Tump Farm as to enable him to carry on farming after his parents’ deaths” (para 242).

The judge was satisfied that Andrew had reasonably relied on this assurance. This could be seen from the fact that Andrew worked hard on the farm for many years for little financial reward, even taking into account the provision of accommodation at Granary Cottage and the payment of certain living expenses. He would not have done so if his father had not encouraged the idea of an inheritance. While the judge could not say exactly what would have happened if Andrew had gone to work elsewhere, he described Andrew as “a hard-working, accomplished and forward-thinking farmer” and considered that his current position as a herdsman, starting afresh in his 50s, provided “no real indication of his true worth in his 20’s, 30’s and 40’s” (paras 270-271).

When he came to consider remedy, the judge described his task as being to exercise a “broad judgmental discretion in an endeavour to do what is necessary to avoid an unconscionable result or, alternatively, to identify the minimum equity to do justice” (para 282).

The judge rejected a suggestion that the equity in this case was based on an assurance of a “quasi-contractual” nature because the promised extent of Andrew’s inheritance was too uncertain for that (para 283). He reminded himself that the assurance concerned an inheritance after the deaths of both parents who “may expect to live for many more years yet, in their home at Tump Farmhouse” (para 284). Even though Andrew had expected to take on the farming business (and thought that he had effectively done so in 2012), he did not expect to acquire any proprietary interest in the land and buildings before his parents died. But the judge considered that the extent to which Andrew had fallen out with the other members of the family made it appropriate to grant a remedy which would achieve a clean break between them (para 286). As a result, the parents would almost inevitably have to sell Tump Farm, resulting in loss of the tax advantages that would occur if the farm was passed on through inheritance. Although Andrew was not to blame for the failure of the succession arrangements, the judge considered it fair that he should bear his share of the taxes (actual or notional) which were the price of satisfying the equity (para 287).

The judge decided that the appropriate remedy was to order David and Josephine Guest to make an immediate lump sum payment to Andrew, comprising:

Joint experts’ reports in evidence at the trial valued the dairy farming business at that time at £496,704 and Tump Farm (including the farmhouse and Granary Cottage) at around £2,855,000. The farmhouse was valued on a freehold basis at £286,520 but there was no evidence of the amount by which a life interest in favour of the parents would reduce this figure. On these valuations, before taking account of the life interest and the impact of taxation, the amount payable to Andrew would be around £1.3m.

The judge’s order has been stayed while it is under appeal.

The decision of the Court of Appeal

Permission to appeal to the Court of Appeal was granted only on the question of remedy. The parents argued that the judge was wrong to fashion a remedy based on Andrew’s expectation of inheritance and should instead have awarded compensation based either on the extent to which the value of the farm had increased as a result of Andrew’s contribution or on Andrew’s loss of opportunity to work elsewhere. For reasons given by Floyd LJ, with whom Newey and Arnold LJJ agreed, the Court of Appeal rejected this contention and dismissed the appeal: [2020] EWCA Civ 387; [2020] 1 WLR 3480.

The Court of Appeal held that the judge was entitled to take Andrew’s expectation as “a strong factor in deciding how to satisfy the equity” (para 86). A remedy based on any increase in the value of the land would not reflect the nature of the assurances given - which were not that Andrew’s efforts would be rewarded by reference to any increase in value if they bore fruit but that he would inherit a sufficient interest in the farm to enable him to farm himself. Such a remedy would also be “completely out of kilter with the nature of the cause of action” and “more appropriate to an action in unjust enrichment, which this is not” (para 81). The court similarly rejected an approach based on valuing Andrew’s loss of opportunity to work elsewhere (para 82). They did so on the basis that:

“The loss or detriment suffered by a claimant who is persuaded to take a poorly remunerated position on the strength of a promise of some interest in land is not limited to the quantifiable difference in wages. There is a large but unquantifiable element attributable to loss of opportunity which will, in many cases, make it just to award sums far greater than any sum based on the wage differential. In a case where the claimant has largely performed his side of the bargain, it is fair to take what the claimant was promised as a rough proxy for what he has lost.”

In the view of the Court of Appeal, the judge was entitled to decide that this was such a case.

The Court of Appeal also rejected a submission that the judge wrongly accelerated Andrew’s expectation, which as regards the land and buildings was only ever that he would inherit a substantial proprietary interest when his parents died. The court held that, in circumstances where there was no prospect of the parties continuing to work and live in close proximity, the judge did not err in principle nor exceed “the wide bounds of his discretion” in devising a clean break solution. The judge was entitled to conclude that the consequent near inevitability of a sale of the farm “was a sad consequence of the breakdown in relations, and was part of what was, in all the circumstances, necessary to avoid an unconscionable result” (paras 88-89).

This appeal

The issue of general importance raised on this further appeal is what are the correct principles to apply in awarding a remedy in cases of proprietary estoppel. Both parties agree that it is necessary for this court to consider, in particular, the proper approach to remedy in cases where the expectation is of a future inheritance rather than an immediate benefit. In addition, counsel for the parents have asked the court to address “the solution to the ‘lively controversy’ between a reliance-based approach and an expectation-based approach to the question of relief in proprietary estoppel cases in general.”

Before I come to this “lively controversy”, I will briefly describe how the doctrine of “proprietary estoppel” has developed.

The name “proprietary estoppel”

Although the origins of the doctrine can be traced back to cases in the nineteenth century and before, the name “proprietary estoppel” appears to have been first used in Snell’s Equity, 26th ed (1966), pp 629-633, which was cited by Danckwerts LJ in E R Ives Investment Ltd v High [1967] 2 QB 379, 399. It is an irony that, soon after the name “proprietary estoppel” was invented, the doctrine developed in a way which made this name inapt. Estoppel is a negative and essentially defensive legal principle. The very words “estoppel” and “estop” are simply an archaic form of the word “stop”. To say that a party is estopped or subject to an estoppel means that the party is stopped by law from asserting or denying something. Detrimental reliance is a requirement of many forms of estoppel. For example, an estoppel by representation may arise where A makes a representation on which B relies in a way which would cause detriment and hence injustice to B if A were permitted to resile from the representation. In such a case, A may be estopped from denying the truth of the representation.

In most of the early cases which can be seen as cases of proprietary estoppel, the “estoppel” was based, not on a promise, but on A’s acquiescence in, or encouragement of, a mistaken belief by B that A had given B a property right. In Dillwyn v Llewelyn (1862) 4 De G F & J 517 a father signed a memorandum “presenting” his son with a plot of land on which to build a house, which the son then did at his own expense. After the father died, the son claimed that he was entitled to have the legal estate conveyed to him. Lord Westbury LC upheld the claim, saying, at pp 522-523, that:

“it was the plain intention of the testator to vest in the son the absolute ownership of the estate. The only inquiry therefore is, whether the son’s expenditure on the faith of the memorandum supplied a valuable consideration and created a binding obligation. On this I have no doubt; and it therefore follows that the intention to give the fee-simple must be performed …”

Lord Westbury appears to have analysed the memorandum as creating an offer of a unilateral contract, which the son accepted by building on the land. An alternative explanation is that the son’s expenditure, incurred with the father’s knowledge and encouragement, enabled equity to perfect an imperfect gift: see Pascoe v Turner [1979] 1 WLR 431; Voyce v Voyce (1991) 62 P & CR 290; Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55; [2008] 1 WLR 1752, para 49. Neither the language nor the reasoning of estoppel was used.

A case which can straightforwardly be viewed through the spectacles of subsequent jurisprudence as one of estoppel (see Thorner v Major, para 20, per Lord Scott) is the decision of the House of Lords in Ramsden v Dyson (1866) LR 1 HL 129. Lord Cranworth LC (with whom Lord Wensleydale and Lord Westbury agreed) laid down the principle, at pp 140-141, that:

“If a stranger begins to build on my land supposing it to be his own, and I, perceiving his mistake, abstain from setting him right, and leave him to persevere in his error, a court of equity will not allow me afterwards to assert my title to the land on which he had expended money on the supposition that the land was his own.”

The result of the case turned on whether a tenant, when he built on the demised land, believed, to the knowledge of the freehold owner, that he had a right at any time to convert his annual tenancy into a long lease which could be perpetually renewed; or whether the tenant believed only that he would in practice be granted such a right if he asked for it. The tenant lost, as the majority of the House of Lords (Lord Kingsdown dissenting) held that he had failed to establish either (1) that he believed, when the building took place, that he had any existing right greater than a tenancy from year to year, or (2) that the freeholder knew or believed that the tenant was spending his money in the mistaken belief that he had such a right.

Another classic statement of the requirements which must be met to give rise to an estoppel of this kind is that of Fry J in Willmott v Barber (1880) 15 Ch D 96, 105-106:

“In the first place the plaintiff must have made a mistake as to his legal rights. Secondly, the plaintiff must have expended some money or must have done some act (not necessarily upon the defendant’s land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. … Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights. … Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do.”

These “five probanda”, as they became known, like Lord Cranworth LC’s statement of the law in Ramsden v Dyson, confine the principle to a mistaken belief in an existing right. In his dissenting judgment in Ramsden v Dyson, Lord Kingsdown suggested that the principle might also apply where A had encouraged B to believe that B would be granted an interest in land and A then stood by knowing that B was acting in reliance on this belief. The decision of the Privy Council in Plimmer v Wellington Corpn (1884) 9 App Cas 699 was such a case (although it has also been explained as based on a contract: see Canadian Pacific Railway Co v The King [1931] AC 414 at p 428). So was the more modern case of Inwards v Baker [1965] 2 QB 29. There a father encouraged his son to build a bungalow on the father’s land. The son did so in the expectation that he would be allowed to live there for as long as he wished. The father left the land in his will to others, who later sought to evict the son. The Court of Appeal held that they were not entitled to do so. Lord Denning MR, at p 37, said that the son had acquired:

“an equity well recognised in law … [that] arises from the expenditure of money by a person in actual occupation of land when he is led to believe that, as the result of that expenditure, he will be allowed to remain there.”

Danckwerts LJ, agreeing, used the language of estoppel. He said, at p 38:

“It is not necessary, I think, to imply a promise. It seems to me that this is one of the cases of an equity created by estoppel, or equitable estoppel, as it is sometimes called, by which the person who has made the expenditure is induced by the expectation of obtaining protection, and equity protects him so that an injustice may not be perpetrated.”

The same principle was applied in E R Ives Investment Ltd v High in which the label of “proprietary estoppel” was first judicially used. Neighbouring landowners had in that case acted for many years on the basis of an informal agreement whereby Mr High was promised a right of way across his neighbours’ yard in return for withdrawing his objection to a small encroachment on his land when they built the foundations of their block of flats. Mr High relied on this right of way when building a garage on his land. The neighbours later sold their land expressly subject to the right of way, but it was never registered as a land charge. Their successor in title brought an action for damages for trespass and an injunction to restrain Mr High from trespassing on their yard. The judge dismissed the claim, and that decision was upheld by the Court of Appeal.

All three members of the Court of Appeal reasoned that the neighbours’ inaction in standing by when Mr High built his garage with access only over the yard, knowing that he was relying on the existence of a right of way across the yard, gave rise to what Lord Denning MR described, at p 394, as an “equity arising out of acquiescence”. Danckwerts and Winn LJJ analysed this equity in terms of estoppel. Winn LJ, at p 405, explained the nature of the estoppel in this way:

“Estoppels arising from representations made by owners of land that rights exist affecting their land will, unless in form they are limited to the duration of the interest of the representor, bind successors to his title. It is no anomaly that a person should have a legally valid answer to a claim and yet be estopped from asserting that answer against the claimant … Where estoppel applies, the person entitled to wield it as a shield has, ex hypothesi, suffered a past detriment or other change of position; he is not asserting any positive right but is invoking law or equity to afford him procedural protection to avert injustice.”

Thus, Mr High had no right of way across his neighbours’ yard, but his original neighbours and their successors in title were estopped from denying that he had such a right and from asserting their right to exclude him from their property.

In these cases the equitable doctrine operated as an estoppel properly so called. The doctrine was not treated as an independent basis for acquiring legal rights, let alone one which might justify compelling A to transfer an interest in land to B. It operated negatively and defensively to prevent A (or A’s successors in title) from exercising a pre-existing property right against B. Where the relevant conditions were satisfied, A was estopped from asserting this right against B.

This understanding of the doctrine in negative and defensive terms, however, subsequently evolved into a conception of “proprietary estoppel” as a positive cause of action. The critical step was taken by the Court of Appeal in Crabb v Arun District Council [1976] Ch 179. Mr Crabb owned land next to a road owned by the council. His land had the benefit of a formal right of way along the road to one access point (A). Mr Crabb reached an agreement in principle with the council to have a further right of access at a second point (B). The council built a fence along the road but left gaps in the fence and installed gates at the two access points. Mr Crabb then sold part of the land with the right of access to point A, relying on his ability to get access at point B to the land which he retained. When the council blocked off Mr Crabb’s access at point B and demanded more money than he was willing to pay for a formal right of access, he sued, relying on the doctrine of proprietary estoppel. Mr Crabb failed at first instance but succeeded on appeal. The relief granted by the Court of Appeal went beyond holding that the council was estopped from asserting its right to prevent Mr Crabb having access to his property across its land. The court granted Mr Crabb a right of way binding not only on the council (and any successor in title) but in the form of an easement binding on other people generally.

Lord Denning MR admitted that, when counsel for Mr Crabb said that he put his case on an estoppel, “it shook me a little: because it is commonly supposed that estoppel is not itself a cause of action” (p 187). But Lord Denning recovered his composure by accepting that “there are estoppel and estoppel”, that some do give rise to a cause of action, and that:

“In the species of estoppel called proprietary estoppel, it does give rise to a cause of action.”

Lord Denning recalled that the early cases did not speak of the basis for the court’s intervention as an “estoppel” but of the dealings between the parties as “raising an equity” in favour of the claimant (p 187). He said that “it is for a court of equity to say in what way the equity may be satisfied” (p 188). Scarman LJ (at pp 192-193) identified the court’s task as being to answer three questions:

“First, is there an equity established? Secondly, what is the extent of the equity, if one is established? And, thirdly, what is the relief appropriate to satisfy the equity?”

Scarman LJ also used a phrase, at p 198, which has often been repeated since when he described the grant of an easement as “the minimum equity to do justice” to the claimant in that case.

The understanding of proprietary estoppel as a genuine estoppel, negative and defensive in its operation, did not disappear all at once. It can be seen in a number of later cases. An example is Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd (Note) [1982] QB 133, in which Oliver J reviewed many of the earlier authorities. Two tenants of the defendant landlord had served notices to exercise options contained in their leases to renew the lease for a further term. In each case the option was held to be void because it had not been registered as a land charge. The issue then arose whether the defendant had encouraged the tenants to incur expenditure or otherwise alter their position in the belief that the option was valid, with the result that the landlord was estopped from denying that the tenant had a right to renew the lease. Oliver J held that in one case such an estoppel arose and in the other case it did not.

It was common ground in argument (see p 144) that:

“if under an expectation created or encouraged by B that A shall have a certain interest in land, thereafter, on the faith of such expectation and with the knowledge of B and without objection by him, [A] acts to his detriment in connection with such land, a court of equity will compel B to give effect to such expectation.”

This proposition was derived from Lord Kingsdown’s speech in Ramsden v Dyson at p 170. It was not suggested, however, that the claimant’s expectation when acted on to his detriment could itself create a right to acquire an interest in property. The argument advanced was a conventional one that an expectation encouraged by the landlord, on which the claimant had detrimentally relied, gave rise to an estoppel which barred the landlord from asserting that the option to renew the lease was invalid.

The traditional conception of proprietary estoppel resurfaced strongly in dicta of Lord Scott of Foscote in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55; [2008] 1 WLR 1752. He said, at para 14:

“An ‘estoppel’ bars the object of it from asserting some fact or facts, or, sometimes, something that is a mixture of fact and law, that stands in the way of some right claimed by the person entitled to the benefit of the estoppel. The estoppel becomes a ‘proprietary’ estoppel … if the right claimed is a proprietary right, usually a right to or over land but, in principle, equally available in relation to chattels or choses in action.”

The revival of the traditional view, however, was short-lived. When “proprietary estoppel” involving a promise to grant an interest in property was considered again by the House of Lords in the following year in Thorner v Major, its status as an independent cause of action and basis for acquiring new property rights was established beyond question.

Thorner v Major

David Thorner was aged 26 when he began to work on the farm of his father’s cousin, Peter. He continued to do so, for no pay, until Peter’s death 29 years later. David lived with his parents and received pocket money from them but, as time went by, became more and more involved in helping Peter on his farm. By various indirect statements and actions, Peter led David to believe that he would inherit the farm on Peter’s death. A key incident occurred when Peter handed David a bonus notice relating to two life insurance policies and said: “that’s for my death duties”. The judge found that, by this gesture, Peter meant to, and did, convey to David that David would inherit the farm on Peter’s death. When Peter died without leaving a will, David claimed the farm relying on proprietary estoppel. His claim succeeded at first instance and, although the judge’s decision was reversed by the Court of Appeal, it was ultimately upheld by the House of Lords.

The relief claimed and granted in Thorner v Major did not just bar Peter’s personal representatives from asserting property rights: it comprised a declaration that they held the farm and assets of the farming business on trust for David. David had no contractual or other independent basis for claiming ownership of this property which Peter’s personal representatives were estopped from denying. The only basis for his claim was “proprietary estoppel”. The decision of the House of Lords that the claim had been established therefore demonstrated conclusively that this form of “proprietary estoppel” is not merely negative and defensive in its operation but provides an independent basis for acquiring new property rights which are valid against other persons generally.

Once “proprietary estoppel” came to be seen, not simply as an estoppel, but as capable of giving rise to an independent cause of action, the need arose to identify the constituent elements of the cause of action and the basis on which they “raise an equity” in favour of the claimant. In Thorner v Major it was held that there are three essential elements, which are, in short, an assurance, reliance and detriment: see paras 15 (Lord Scott), 29 (Lord Walker) and 72 (Lord Neuberger). The assurance may be either a representation as to an existing interest or (as in Thorner v Major itself) a promise of a future interest in property. Lord Walker observed, at para 55, that Thorner v Major was not a case of acquiescence but said that:

“if all proprietary estoppel cases (including cases of acquiescence or standing-by) are to be analysed in terms of assurance, reliance and detriment, then the landowner’s conduct in standing by in silence serves as the element of assurance.”

It is an open question whether these three strands of the doctrine - in which the “assurance” consists, respectively, of a representation, a promise or acquiescence - are best understood as resting on a single underlying principle or on different legal principles. It is unnecessary to address that question on this appeal as, like most recent cases in which the doctrine has been invoked, the present case involves only its promissory form. It should, however, be noted that it is only the promissory strand which has taken on a life of its own and emerged as an independent basis for acquiring property rights. To avoid confusion, it seems to me that, where the doctrine operates in this way, it would be better to shed the label “estoppel” and adopt a name which reflects, at least broadly, the nature of the claim. Without pre-judging the controversy to which I am about to turn, I would suggest the description “property expectation claim”.

In Jennings v Rice [2002] EWCA 159; [2003] 1 P & CR 8, para 42, Robert Walker LJ posed the question “whether the fundamental aim of this form of estoppel is to fulfil the claimant’s expectations, or to compensate him for his detrimental reliance on the defendant’s non-contractual assurances, or is some intermediate objective.” He observed that “the range of English authorities provides some support for both theories and for a variety of intermediate positions.” The judgment of Robert Walker LJ in that case remains the most important judicial discussion of this question to date, and I will come back to it. But in a lecture given in 2008 to the Chancery Bar Association Lord Walker (as he was by then) acknowledged that “the principles governing the exercise of the remedial discretion are still far from clear” and repeatedly emphasised that the development of the relevant legal principles has “some way to go” and that “there is still a lot of ground to be covered” and “important questions of principle to be answered” to establish that proprietary estoppel “is indeed a principled doctrine and not a matter of palm-tree justice, or the individual judge’s intuition as to which side ought to win”: see “Which side ‘ought to win’?: Discretion and certainty in property law” (2008) Sing J Legal Studies 229 at pp 230, 231, 239-240.

In Cobbe v Yeoman’s Row Management Ltd [2006] EWCA Civ 1139; [2006] 1 WLR 2964, para 121, in the Court of Appeal, Dyson LJ referred to the two “alternative theoretical bases of relief”, based on vindicating the claimant’s expectation or compensating the claimant’s detrimental reliance on an assurance, and commented:

“The difficulty with this area of the law is that the two approaches are fundamentally different. The cases are replete with examples, but short on analysis of the reason why one approach is adopted rather than another.”

Ten years later when the point was raised again in Davies v Davies [2016] EWCA Civ 463; [2016] 2 P & CR 10, para 39, no progress had been made in resolving this fundamental question. Before saying that in a case based on proprietary estoppel the court has to exercise a “broad judgmental discretion”, Lewison LJ referred to what he called the “lively controversy” about the essential aim of this discretion. As he described it:

“One line of authority takes the view that [the] essential aim of the discretion is to give effect to the claimant’s expectation unless it would be disproportionate to do so. The other takes the view that the essential aim of the discretion is to ensure that the claimant’s reliance interest is protected, so that she is compensated for such detriment as she has suffered. The two approaches, in their starkest form, are fundamentally different …”

Lewison LJ observed that much scholarly opinion favours the second approach and that “logically, there is much to be said for [it]”, but that it was unnecessary to resolve the controversy on that appeal.

In the Court of Appeal in the present case, at para 48, Floyd LJ referred once more to the controversy about whether the aim of the court in deciding on a remedy should be to give effect to the claimant’s expectations or to protect the claimant’s reliance interest and said:

“That controversy is much ventilated in academic writings of great scholarship, but the courts have shown a marked reluctance to answer a question posed in such stark terms. The courts have preferred to identify its aim or task as the fashioning of a remedy that is appropriate in all the circumstances of the case to satisfy the equity that has arisen, and so to avoid an unconscionable result.”

In my view, English law needs to do better than this. It is true that many statements can be found in the cases that the aim of the court is to avoid an unconscionable result and, in words often quoted from Plimmer v Wellington Corpn (1884) 9 App Cas 699, 714, to “look at the circumstances in each case to decide in what way the equity can be satisfied”. Such statements are unexceptionable but by themselves are of little help. They provide no principled basis for identifying the “equity” that arises when a claim is established or what the law regards as an unconscionable result.

Although equity jurisdiction was originally administered according to the conscience of the Chancellor, that long ago ceased to be the case and modern equity is governed by principle just as much as the law in general. As Harman LJ said in Campbell Discount Co Ltd v Bridge [1961] 1 QB 445, 459:

“Since the time of Lord Eldon the system of equity for good or evil has been a very precise one, and equitable jurisdiction is exercised only on well-known principles.”

Likewise, on appeal in the same case, Lord Radcliffe observed that:

“‘Unconscionable’ must not be taken to be a panacea for adjusting any contract between competent persons when it shows a rough edge to one side or the other, and equity lawyers are, I notice, sometimes both surprised and discomfited by the plenitude of jurisdiction, and the imprecision of rules that are attributed to ‘equity’ by their more enthusiastic colleagues.”

See Bridge v Campbell Discount Co Ltd [1962] AC 600, 626.

Courts have frequently emphasised the importance of ensuring that the doctrine of “proprietary estoppel” is governed by principle, and not just the conscience or sense of fairness of the individual judge. As Deane J said in Muschinski v Dodds (1985) 160 CLR 583, 615-616 (a decision of the High Court of Australia), in a passage quoted by both Lord Scott and Lord Walker in Cobbe [2008] 1 WLR 1752, paras 17 and 46:

“proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion, subjective views about which party ‘ought to win’ and ‘the formless void’ of individual moral opinion …” (citations omitted)

Lord Walker made the same point in Cobbe in his own words when he said, at para 46, that:

“[proprietary estoppel] is not a sort of joker or wild card to be used whenever the court disapproves of the conduct of a litigant who seems to have the law on his side. Flexible though it is, the doctrine must be formulated and applied in a disciplined and principled way. Certainty is important in property transactions.”

To similar effect Lord Neuberger in a lecture on proprietary estoppel emphasised that “equity is not a sort of moral US fifth cavalry riding to the rescue every time a claimant is left worse off than he anticipated as a result of the defendants behaving badly, and the common law affords him no remedy”: see Lord Neuberger of Abbotsbury, “The stuffing of Minerva’s owl? Taxonomy and taxidermy in equity” (2009) 68 CLJ 537, 540. But perhaps the point was best put by HH Judge Weeks QC when he said in Taylor v Dickens [1998] 1 FLR 806, 820, that:

“there is no equitable jurisdiction to hold a person to a promise simply because the court thinks it unfair, unconscionable or morally objectionable for him to go back on it. If there were such a jurisdiction, one might as well forget the law of contract and issue every civil judge with a portable palm tree. The days of justice varying with the size of the Lord Chancellor's foot would have returned.”

In a valuable article Professor Simon Gardner formulated three conditions, endorsed by Lord Walker in his 2008 lecture, which need to be satisfied if the exercise of a judicial discretion is not to “resemble ancient priests interpreting birds’ entrails” but is to be consistent with the rule of law: see S Gardner, “The Remedial Discretion in Proprietary Estoppel - Again” (2006) 122 LQR 492, 505; Lord Walker, “Which side ‘ought to win’?: Discretion and certainty in property law” (2008) Sing J Legal Studies 229, 239. The first and foremost condition is that the aim which the court is seeking to achieve in exercising the discretion must be fixed by the law itself, not left to the choice of the judge in the individual case. This condition is of fundamental importance. To give judges no clearer mandate than to do what they think just or necessary to avoid unconscionability is a recipe for inconsistent and arbitrary decision-making. That is itself a source of injustice.

The second condition is that giving judges a discretion must be necessary. It seems clear that, in view of the wide variety of factual situations capable of giving rise to a property expectation claim, deciding on the appropriate remedy cannot be a matter of applying a rigid or automatic rule. An exercise of judgment is inevitably required. But that is often the case with remedies. For example, an injunction is a discretionary remedy which the court has power to grant whenever “it appears to the court to be just and convenient”: see section 37(1) of the Senior Courts Act 1981. But this does not mean that the court’s discretion is unstructured. On the contrary, there are well-established principles, albeit principles which require judgment in their application, that govern when an injunction should or should not be granted.

The third condition is that the judge’s decision must be susceptible to audit. This requires judges to give reasons explaining why they consider the remedy granted to be the best way of achieving the aim of the doctrine. Such reasons serve at least three purposes. First, the discipline of formulating them helps the judge to approach the task in a principled way, focusing on the law’s aim. Second, giving reasons enables the parties (and others) to understand how the outcome has been reached and to see that the decision is the judge’s best attempt to fulfil the law’s aim. Third, giving reasons allows an appeal court to check that the outcome reached is a genuine and reasonable attempt to achieve the law’s aim, taking account of relevant factors and not based on irrelevant ones.

Before proceeding further, I should say a word about terminology. I have already noted that the term “proprietary estoppel” is a misnomer and liable to mislead. Although I will continue to use it, the term “expectation” is also potentially misleading. The term could be taken to refer to what the claimant subjectively expects. It clearly could not be right, however, to grant a remedy aimed at fulfilling a subjective expectation that was not justified by the content of the promise made to the claimant. When I refer to the claimant’s “expectation”, I therefore mean an expectation which is not only subjectively held but also objectively justified by the statements or actions of the promisor. Finally, whether action or inaction in reliance on a promise constitutes a “detriment” depends on what the claimant would otherwise have done. I will use the term “reliance loss” as a shorthand to describe the extent, measured in money, to which the claimant is worse off as a result of relying on a promise (ignoring for this purpose any benefit that the claimant would gain from its performance).

Counsel for the parents requested this court to provide a clear and “much needed” statement of principle and to do so by resolving the “lively controversy” between a reliance-based and an expectation-based approach to the grant of relief in favour of a reliance-based approach. They submitted that the proper place to start is by assessing the claimant’s reliance loss. The detriment which the claimant has suffered by relying on the defendant’s promise(s) may be so great that the court might decide in its discretion to order the defendant to transfer the property promised to the claimant; but in general the just approach is to remove the detriment by awarding financial compensation for it. They further submitted that the judge was wrong not to adopt that approach in the present case.

On Andrew’s behalf, the opposite contention was advanced that the doctrine of proprietary estoppel is “animated” by expectation, not detriment, and that, although satisfying expectations is not the end of the matter, it should be the starting point. Counsel submitted that the authorities establish that, where the ingredients of a claim are present, the claimant’s expectations should be fulfilled unless they are out of all proportion to the detriment suffered. They further submitted that the judge in this case gave appropriate primacy to Andrew’s expectations based upon the nature of the promises made to him and that, given the substantial and largely unquantifiable detriment that Andrew incurred over so many years, granting a remedy aimed at satisfying his expectations cannot be said to be out of all proportion to the detriment suffered.

In addition to the written and oral submissions of counsel, we have also been much assisted by their citation of academic writing. Work that I have found particularly helpful includes: A Robertson, “The reliance basis of proprietary estoppel remedies” [2008] Conv 295; J Mee, “The Role of Expectation in the Determination of Proprietary Estoppel Remedies” in M Dixon (ed), Modern Studies in Property Law: Volume V (2009), chapter 16; I Samet, “Some Strings Attached: The Morality of Proprietary Estoppel” in J Penner and H Smith (eds), Philosophical Foundations of Property Law (2013), chapter 6; B McFarlane and P Sales, “Promises, detriment, and liability: lessons from proprietary estoppel” (2015) 131 LQR 610; A Robertson, “The Form and Substance of Equitable Estoppel” in A Robertson and J Goudkamp (eds), Form and Substance in the Law of Obligations (2019), chapter 11; and Professor Ben McFarlane’s impressive book on The Law of Proprietary Estoppel, 2nd ed (2020).

A criticism levelled by some commentators is that the law of proprietary estoppel, in its promissory form, has become unprincipled and consequently unpredictable. The point is made that such unpredictability makes it harder for parties to reach a sensible compromise and generates additional litigation: see eg Wilken and Ghaly, The Law of Waiver, Variation and Estoppel, 3rd ed (2012), para 11.02; J Mee, “Proprietary estoppel and inheritance: enough is enough?” [2013] Conv 280, 296-297 (“it is not in the public interest for the legal system to tolerate an indulgent and confused proprietary estoppel jurisdiction”); Snell’s Equity, 34th ed (2020), para 12-047.

Given the controversy and lack of clarity that continues to surround the essential aim of the doctrine, this criticism seems to me to be justified. At the same time the volume of litigation has been snowballing. In an article published since the hearing of this appeal, Professor Martin Dixon has identified 21 property expectation claims which have gone to trial in the last four years, of which 17 (including the present case) have involved family farms. Looking at this gallery of cases, Professor Dixon sees neither the fine classical lines of a painting by Titian nor the broad brushstrokes of Howard Hodgson. Instead, he sees a Jackson Pollock:

“A splattering of unpredictable colour on a canvas, where a sense of objective form and predictability has been lost.”

See M Dixon, “Painting proprietary estoppel: Howard Hodgkin, Titian or Jackson Pollock?” [2022] Conv 30. Some degree of unpredictability is the inevitable price of a flexible remedial discretion. But there is an urgent need to continue the search for principle which some 20 years’ ago Lord Walker (in Jennings v Rice, para 44) accurately forecast was “unlikely to be a short or simple search”.

Detrimental reliance does not justify enforcing non-contractual promises

It is now well established that the elements of the cause of action that I am calling a property expectation claim are a (non-legally binding) promise to transfer an interest in property, reasonable reliance on the promise and detriment to the claimant (see para 154 above). But what is the principle that justifies awarding a remedy when these elements are proved? And what role does each of the three elements play in giving rise to a claim for relief?

One theoretically possible approach would be to view detrimental reliance as, in the words of a famous article by Lon Fuller and William Perdue, a factor which serves “to unlock the impulse to compel men to make good their promises”: see L Fuller and W Perdue, “The Reliance Interest in Contract Damages: I” (1936) 46 Yale Law Journal 52, 69. If this view were correct, a property expectation claim would be based on the same foundational principle as the law of contract that promises should be kept. For a promise to give rise to a legally binding contract, it must be “supported by consideration” - that is to say, the promisee must do or agree to do something in exchange for it. An approach which has sometimes been suggested is to regard detrimental reliance as an alternative to this requirement and hence a factor which can transform a promise that is not legally binding into one that binds the promisor. On this view what the law regards as unconscionable conduct is failing to keep a promise to make a gratuitous transfer of property on which the promisee has detrimentally relied.

Such a rationale for a property expectation claim, however, is not consistent either with legal principle or with precedent. Even if detrimental reliance could be seen as a substitute for consideration, consideration is not the only requirement which must be met for a promise to create a legal obligation. Two further requirements of the law of contract are that the promise must be: (1) intended to be legally binding; and (2) sufficiently certain to be enforceable. The principle that promises should be kept cannot justify enforcing a promise which was not intended (objectively) to create a legally binding obligation. Nor on settled legal principle is it legitimate for the court to enforce a promise if its content is so vague or uncertain that it would, in effect, be the court and not the promisor which is creating the legal obligation. As mentioned at the beginning of this judgment, in order for a promise to dispose of an interest in land or to dispose of any property on death by will to be legally valid and enforceable, English law also requires compliance with specified formalities.

None of these requirements is satisfied when a remedy is awarded for a property expectation claim. The promise which gives rise to such a claim may be oral and entirely informal. Its content may be vague. Even more fundamentally, there is no requirement that the promise must be an utterance which would reasonably be understood as intended to create a legal obligation. Typically, it is obvious from the domestic context in which the statement was made that it was not objectively intended to do so. In Thorner v Major, for example, there was no suggestion that, when Peter handed David the policy bonus notice saying “that’s for my death duties”, David understood or would reasonably have understood Peter to be making a legally enforceable promise to leave him the farm. Yet this did not prevent Peter’s words, in context, from amounting to a promise capable of supporting a successful claim.

The present case is another example. The judge found that David Guest led his son Andrew to believe during conversations over a number of years that Andrew would inherit a substantial, but unspecified, share of Tump Farm. The statements made were vague and indirect, to the effect that, one day, Andrew would take over the farm. Such promises of succession (as the judge found them to be) would be too uncertain to give rise to any legal obligation - quite apart from the fact that, by reason of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, no such obligation could arise because nothing was put in writing. Nor could Andrew reasonably have thought when the promises were made that they were intended to be legally enforceable. That precludes enforcement of the promises in equity no less than at common law: see eg Ramsden v Dyson (1866) LR 1 HL 129, 145-146 (Lord Cranworth LC); Cobbe, para 53 (Lord Walker). Yet it has not been suggested that this means that Andrew’s claim could not succeed. Any such argument would be doomed to fail in the light of Thorner v Major and the many other cases in which informal promises of this kind have given rise to successful claims.

There is no justification for bypassing the requirements for the creation of a legal obligation just because the promisee has acted to his or her detriment in reasonable reliance on the promise. Still less is there any justification for doing so where the subject matter of the promise is the disposition of an interest in land - a realm in which legal certainty is particularly important and the law insists on formality. Detrimental reliance might perhaps be regarded as an alternative to the need for consideration. But if a promise is too uncertain to create a legal obligation, no amount of reliance on it can alter that fact. Even more fundamentally, if the understanding of a reasonable addressee would be that the promise was not intended to create a legal obligation, it would be contrary to principle if the promisee could make it enforceable by relying on it. In any case, the statutory provisions which require a valid disposition of an interest in land or authority to transfer property on death to be in writing and comply with other formal conditions of validity contain no exception for informal promises on which detrimental reliance has been placed. Describing failure to keep such a promise as “unconscionable” cannot justify disregarding law laid down by Parliament.

A theory of proprietary estoppel which views detrimental reliance as capable of making an informal promise legally enforceable is also inconsistent with how the doctrine has been applied in what is now a large body of case law. A property expectation claim does not operate in a binary way. The approach of the courts is not that, provided there has been substantial reliance, the promise will be enforced. There are many cases in which the remedy granted to a successful claimant has not been to order the transfer of the promised interest in property or to award its financial value, but has instead been to award the claimant a sum of money which does not reflect, and was not intended to reflect, the value of what was promised. To mention just a few of these cases, they include (at appellate level): Campbell v Griffin [2001] EWCA Civ 990; Jennings v Rice [2002] EWCA 159; [2003] 1 P & CR 8; Ottey v Grundy [2003] EWCA Civ 1176; [2003] WTLR 1253; Powell v Benney [2007] EWCA Civ 1283; Henry v Henry [2010] UKPC 3; [2010] 1 All ER 988; Southwell v Blackburn [2014] EWCA Civ 1347; [2014] HLR 47 and Davies v Davies [2016] EWCA Civ 463; [2016] 2 P & CR 10.

As an example, take Henry v Henry. The claimant in that case (B) lived for more than 30 years on a plot of agricultural land in St Lucia which was owned by two individuals in equal shares. One of the owners (A) had promised B that she would leave her share in the plot to him on her death if he cared for her until her death and cultivated the plot. B did so. Shortly before she died, A sold her share of the plot. B brought a claim based on proprietary estoppel against the purchaser maintaining that he was entitled to A’s half share. The ultimate decision of the Privy Council was that, although the claim had been established, the appropriate remedy was not to award B the promised share of the plot but only one-half of A’s share.

This and the other cases mentioned cannot be explained on the basis that it is considered unconscionable not to keep an informal promise to make a gift of property to someone if they have made sacrifices or otherwise acted to their detriment in reliance on the promise and that such “unconscionability” somehow authorises enforcement of the promise even though this is inconsistent with statutory and other rules of law. In each of the cases mentioned at para 179 above the court neither sought to enforce the promise nor awarded compensation measured as the value of what was promised. Nor can a rationale based on upholding promises be salvaged by saying that it is subject to an exception that the court will not enforce the promise or award its financial value if or in so far as resiling from the promise is not considered unconscionable in the circumstances. That simply raises the question of what makes it unconscionable to resile from a non-binding promise on which detrimental reliance has been placed in some circumstances but not in others. A principle that promises should be kept or that promises should be kept if they have been detrimentally relied on cannot provide an answer to that question. Nor can such a principle explain when or why disproportion (or disproportion of some particularly high degree) between the value of the promise and the claimant’s detriment makes some other remedy appropriate. If the remedial aim is to prevent or put right the “unconscionability” of breaking a non-binding but detrimentally relied on promise, then the law provides no yardstick for deciding when it is appropriate to award something other than what was promised (or its value) or for deciding what that something else should be. The decision whether to enforce the promise and, if not, what alternative remedy to grant is arbitrary. Legal principle has been replaced by the portable palm tree.

There is a yet further reason why a rationale of holding people to their promises cannot explain or justify the doctrine of “proprietary estoppel” as it has been applied by the courts. As I will discuss later, the award of a remedy does not depend on showing that in failing or refusing to fulfil the promise the promisor was at fault. The relationship between the parties may have broken down through no fault on either side or through what might, if it were necessary to decide the question, have been mainly the fault of the claimant. To speak of a “wrongful repudiation” of the promise in such cases is not an apt description. Furthermore, it is often a fair inference that, when A made informal promises to leave property to B in her will, she did so on the unspoken assumption that they would remain on good terms until she died. If a rift later occurs between them for which she is not to blame, it is hard to see why it should be regarded as wrong let alone unconscionable for A to decide to leave her property to somebody else. Yet save in exceptional cases, the courts do not treat responsibility or lack of responsibility for a breakdown in relations as affecting the claimant’s equity.

It does not follow that what was promised has no role to play in determining the appropriate remedy for a property expectation claim. On the contrary, as I will discuss shortly, it is clear that it does. But the notion that it is from a legal point of view unconscionable (or sometimes unconscionable) for A to break an informal promise to make a future gift of property to B if B has detrimentally relied on the promise is not a coherent explanation of the doctrine of “proprietary estoppel”. The doctrine does not and could not sensibly have as its aim the enforcement of promises which do not satisfy the requirements for the creation of legal obligations. A property expectation claim is not a form of contract lite.

It might be argued that, if a promise is not legally enforceable, a person who chooses to rely on it necessarily does so entirely at their own legal risk. Such an argument, if accepted in this stark form, would leave no room at all for property expectation claims. Either such a claim would be unnecessary because the promise satisfies the conditions for the creation of a legal right or, if the promise does not satisfy those conditions, any reliance placed on it by the promisee could not give rise to any legal liability on the part of the promisor.

Reasoning of this kind gained support from the decision of the House of Lords in Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55; [2008] 1 WLR 1752. In that case a property developer relied on an oral agreement with a landowner that, if the developer managed to obtain planning permission, the owner would sell the land to him at an agreed price. The developer succeeded in obtaining planning permission, but the owner then withdrew from the arrangement. A claim based on proprietary estoppel failed in the House of Lords. The developer did not believe and could not reasonably have believed that the agreement was legally binding. It was held that, in the circumstances, in choosing to rely on a promise binding in honour only the developer was acting at his own risk.

Some commentators feared that the effect of the decision in Cobbe would be to abolish the doctrine of “proprietary estoppel” as a positive source of rights: see B McFarlane and A Robertson, “The Death of Proprietary Estoppel” (2008) 4 LMCLQ 449; T Etherton, “Constructive trusts and proprietary estoppel: the search for clarity and principle” [2009] Conv 104. As already indicated, however, reports of the doctrine’s demise proved to have been greatly exaggerated when Thorner v Major was decided the following year. Lord Scott and Lord Walker who sat on both appeals did not directly address in Thorner v Major the distinction between the two cases. But Lord Neuberger did. He emphasised, at paras 96-97, that in Cobbe the relationship between the parties was such that they could well have been expected to enter into a contract; however, although they discussed contractual terms, they had consciously chosen not to do so and intentionally left their legal relationship to be negotiated on the understanding that neither of them was legally bound. By contrast, in Thorner v Major the relationship between Peter and David was familial and personal and, in the context of their relationship, no contract as to the ownership of the farm after Peter’s death could have been reasonably expected even to be discussed between them.

The main issue on the appeal to the House of Lords in Thorner v Major was how clear and certain a promise needs to be to found a cause of action. It was held that the promise need not be express. It may consist of any words or conduct which are reasonably understood as intended to be taken as a commitment which can be relied upon. The leading speeches emphasised the importance of assessing the relevant words or actions in their context: see paras 56-59 (Lord Walker) and para 84 (Lord Neuberger). In a commercial setting, parties typically (though not invariably) deal with each other on the understanding that, if a party chooses to rely on a promise that is not legally binding, it does so at its own legal risk. But in some contexts such an approach does not match social reality. Promises are made, particularly in domestic situations, that are reasonably understood as commitments in which trust is invited and can reasonably be placed, even though the promise is not legally enforceable. To ask for the commitment to be embodied in a legally enforceable written contract would be regarded as at best superfluous and at worst offensive (because implying rejection of the trust which has been invited). In such cases, even though reliance on the promise cannot make it legally enforceable, the reliance may still be reasonable and give rise to an “equity” which a court should protect.

What then is the nature of this equity? As I see it, the key to understanding this lies in understanding the basis of the doctrine of estoppel out of which the cause of action that I am calling a property expectation claim evolved. The object of reliance-based forms of estoppel is to protect a person (B) who has been induced by another person (A) to act in reliance on a particular assumption from detriment that B would suffer if A were afterwards permitted to assert rights against B inconsistent with the assumption. The classic explanation of the principle and of the concept of detriment which is central to it was given by Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1938) 59 CLR 641, 674-675 (a decision of the High Court of Australia). Dixon J noted that “it is often said simply that the party asserting the estoppel must have been induced to act to his detriment”. He continued:

“Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice.”

This passage has repeatedly been adopted as representing the law of England and Wales: see Spencer Bower: Reliance-Based Estoppel, 5th ed (2017), para 1.6; and the numerous cases cited in KR Handley, “Unconscionability in estoppel by conduct: triable issue or underlying principle?” [2008] Conv 382, 383, fn 5. In Gillett v Holt [2001] Ch 210, 233, the passage was specifically approved by Robert Walker LJ as applicable to proprietary estoppel as well as to other forms of estoppel. Robert Walker LJ observed that “the point made in the passage may be thought obvious, but sometimes it is useful to spell out even basic points.” The key point made in the passage is that “the basal purpose of the doctrine” is to protect B against a detriment which will flow from B’s change of position in reliance on an assumption induced by A if A does not adhere to the assumption. Where the assumption is based on a promise that A will give a property right to B, the purpose is therefore to avoid detriment to B which will result from B’s reasonable reliance on the promise if B is not given this right.

This remains the basal purpose of proprietary estoppel when transposed, as it has been, from a defensive doctrine to an affirmative cause of action. As discussed above, the equity that arises from B’s reasonable reliance on a non-binding promise by A to give B an interest in property is not a right or claim that the promise should be kept. Ex hypothesi B has no legal right to performance of the promise because the conditions required to create a legal obligation have not been satisfied. The equity is to be protected from detriment that B will suffer if the promise is not kept. By making a promise on which, although it is not legally enforceable, B has reasonably relied, A comes under a responsibility to ensure that B’s change of position does not operate as a detriment to B.

Expressed in terms of unconscionability, what the law regards as unconscionable is not A’s failure to keep a non-binding promise. It is A’s failure to accept responsibility for the consequences of B’s reasonable reliance on the promise and for ensuring that B does not suffer detriment as a result of such reliance.

The most obvious way of preventing such detriment is for the court to compel performance of the promise. A variant of this approach, if specific performance of the promise is impossible or undesirable, is to award monetary compensation aimed at putting B into as good a position as if A’s promise had been performed. Where either of these remedies is granted, it may appear as though the promise is being treated as legally binding. That is not, however, the basis for equitable intervention. As it was put in the majority judgment of the High Court of Australia in Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505, para 58:

“It is not the breach of promise, but the promisor’s responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise.”

In principle, and sometimes in practice, there is another way of achieving the law’s aim. This is to prevent the detriment that would otherwise flow from the failure to perform the promise by awarding compensation which puts B into as good a position, as best money can do it, as if B had not relied on A’s promise: in other words, to grant a remedy which compensates B’s reliance loss.

To illustrate this approach, consider, for example, Southwell v Blackburn [2014] EWCA Civ 1347; [2014] HLR 47. Ms Blackburn gave up a secure tenancy of a house which she had spent money on improving to live with Mr Southwell, with whom she was in a relationship, on the strength of his promises that she would have a home for life. Ten years later the couple split up. The judge found that a proprietary estoppel claim was established and made a monetary award which was designed to enable Ms Blackburn to set herself up in much the same way as she was before she gave up her own house to move in with Mr Southwell. The Court of Appeal upheld the decision and approved the judge’s remedial approach. That approach was calculated to prevent Ms Blackburn from suffering detriment as a result of her reliance on the promises made to her, not by enforcing those promises, but by seeking to put her into as good a position as if she had not relied on them.

It is important to recognise that both remedial approaches are ways of preventing B from suffering detriment from reasonably relying on A’s promise. Such detriment is avoided either if A performs the promise (or pays B the value of the promised performance) or if A pays an amount of money which makes B as well off as if B had not acted in reliance on the promise. As Professor Robertson put it in an article mentioned earlier, both expectation loss and reliance loss are essential elements of the equity, and, once either the expectation is fulfilled or reliance loss is prevented, there is no further reason for the court to intervene: see A Robertson, “The reliance basis of proprietary estoppel remedies” [2008] Conv 295, 303.

It follows that the existence of two lines of authority - one comprising cases where the relief granted has been designed to fulfil the claimant’s expectation and the other comprising cases where it has been designed to compensate the claimant’s reliance loss - is not itself a sign of any incoherence in the law. Each remedial approach is a means of achieving the “basal purpose” of the equitable doctrine of avoiding detriment to the promisee. But the question which then arises is: how is the court to decide in any particular case which of the two alternative approaches should be preferred?

At a theoretical level the answer to this question is straightforward. Where there is more than one means of avoiding detriment to the claimant, the court should in principle adopt whichever remedial approach imposes the least burden on the defendant. To paraphrase Mason CJ in Commonwealth of Australia v Verwayen (1990) 170 CLR 394, 412, equity permits a court to do what is required, but no more than is required, to prevent detriment to the party who has relied on the promise. When in Crabb v Arun District Council, at p 198, Scarman LJ referred to “the minimum equity to do justice” to the claimant, he was addressing the facts of that case and it seems unlikely that he was intending to lay down any general principle. But the phrase “minimum equity” has been used in many subsequent cases and the approach which it denotes is one of general application: see eg Clarke v Swaby [2007] UKPC 1; [2007] 2 P & CR 2, para 18; Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432, para 37 (Lord Walker). In Jennings v Rice, para 48, Robert Walker LJ observed that:

“Scarman LJ’s reference to the minimum does not require the court to be constitutionally parsimonious, but it does implicitly recognise that the court must also do justice to the defendant.”

Doing justice to the defendant requires that the court should not award a remedy which is more generous to the claimant and more burdensome for the defendant than is necessary to achieve the underlying purpose for which the remedy is granted.

Difficulty in quantifying reliance loss

In some cases there is no difficulty in quantifying the claimant’s reliance loss, where for example it consists in spending money on improving property. Often, however, the detriment to the claimant does not consist in, or is not limited to, the expenditure of money or other financial damage. The cases contain many examples of reliance involving what have been described as “life-changing decisions with irreversible consequences of a profoundly personal nature”: Donis v Donis [2007] VSCA 89: 19 VR 577, para 34 (Nettle JA). Those consequences may include loss of educational or career opportunities and other non-pecuniary detriment of a kind which it is intrinsically difficult, and in one sense impossible, to value in terms of money.

It is important not to overstate the difficulty. As Lord Stephens pointed out in oral argument, courts routinely place a monetary value on lost earning opportunities and on non-pecuniary harm. In personal injury cases, for example, it may be necessary where the claimant has been permanently disabled to estimate what she would have earned over the rest of her lifetime if she had not been deprived of the opportunity to work. Damages in personal injury cases are also awarded for pain, suffering and loss of amenity. To take another example, damages are awarded in breach of privacy and defamation cases for non-pecuniary harm caused by wrongful invasion of a person’s privacy or damage to their reputation. Damages in these and many other types of case are not capable of arithmetical computation. No sum of money is comparable to physical or psychiatric injury. Nevertheless, given the ubiquity of money as a measure of value in modern society, awarding a sum of money is the best that a court can do by way of compensation. The aim is to award a sum which will be perceived as fairly reflecting the gravity of the injury suffered by the claimant.

At the same time, the principle that courts will not allow difficulty in quantifying loss to deprive the claimant of a remedy sits alongside, and sometimes in tension with, another principle. This is the principle that, where there is a choice between two possible remedies one of which is an award of money that would be difficult to quantify, such difficulty of quantification may be a good reason to prefer the other remedy.

A familiar situation in which this principle is applied is where a court is faced with a choice whether to order specific performance or grant an injunction compelling a party to perform a contract of which that party is (or is about to be) in breach; or whether instead to award damages for loss caused by the breach. For policy reasons courts do not generally specifically enforce contractual obligations and will usually only award financial compensation. But there is an exception where damages “would not be an adequate remedy”. It is well established that the reasons why damages may not be adequate include the fact that they would be hard to quantify. That might be either because the loss is non-financial in nature or because the loss, although financial, would be uncertain in amount and difficult to estimate or prove: see eg Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361, 371-372, 378; Chitty on Contracts, 34th ed (2021), vol I, para 30-021.

It seems to me that a similar approach is justified where a property expectation claim has been made out and the court is faced with a choice between preventing detriment by compelling the defendant to perform his promise or by awarding financial compensation to the claimant for her reliance loss. Difficulty of quantifying the reliance loss may be a good reason to prefer the remedy of compelling the defendant to grant the property right which the claimant was promised. Granting the property right ensures that the claimant receives a remedy which is adequate and not one which is inadequate to prevent the claimant from suffering harm as a result of reasonably relying on the defendant’s promise.

Thorner v Major provides an illustration. As found by the trial judge, David was at Peter’s beck and call for most of his adult life, without any material countervailing benefits, and in consequence lived without a social life and in modest financial circumstances throughout the period of 29 years that he worked on Peter’s farm. The judge considered that on those facts attempting to place a monetary value on David’s contribution, and on what he sacrificed in order to make it in terms of lost opportunities in life, would be “to take on a virtually impossible task”: see [2007] EWHC 2422 (Ch) [2008] WTLR 155, paras 139 and 142. There was, on the other hand, no corresponding difficulty in preventing detriment to David by the alternative remedy of giving effect to the promises made and requiring Peter’s personal representatives to transfer ownership of the farm to David.

There is, however, a limit to the circumstances in which the difficulty of quantifying reliance loss can justify giving effect to the defendant’s promise. The limit derives from the minimum equity principle. In accordance with that principle, it is not just and equitable to require the defendant to fulfil his promise (or to pay its monetary value to the claimant) if the court thinks it clear that detriment to the claimant could be prevented at less cost. The fact that the claimant has made sacrifices or lost opportunities to which it is hard to assign a monetary value is not a good reason to award a remedy which the court considers would be out of proportion to the detriment suffered.

The trial judge applied this principle of proportionality in Thorner v Major: see para 143. He limited the property awarded to David to the farm and the assets of the farm business at the time of Peter’s death and did not include other property owned by Peter. The judge did so on the ground that, even if David’s expectation was to inherit the whole of Peter’s estate, it would be disproportionate for David also to receive Peter’s non-agricultural assets.

After the promissory form of “proprietary estoppel” evolved into a cause of action, it took some time before both the possibility of awarding monetary compensation as a remedy and the principle of proportionality came to be recognised. This was a natural consequence of continuing to view the doctrine as an estoppel. In cases of genuine estoppel, awarding monetary compensation, whether calculated on an expectation basis or on a reliance basis, is not an available option. That is because, as discussed earlier, estoppel is a negative and defensive legal doctrine which operates in a binary way. Either A is estopped from asserting a legal right against B or he is not. There is no intermediate possibility. Nor is there any cause of action for which monetary compensation or any other remedy can be awarded. Hence although the “basal purpose” of the doctrine is to prevent a detriment to the party who raises the estoppel, it is settled law that the detriment is not the measure of the relief and need not be commensurate with the loss that the claimant would suffer if the defendant were to resile from the assumption on which the claimant has acted. It is enough that the detriment is substantial and such as to make it unjust for the defendant to resile: see Avon County Council v Howlett [1983] 1 WLR 605, 620-625; Kelly v Fraser [2012] UKPC 25; [2013] 1 AC 450, para 17. If this approach is carried over to “proprietary estoppel” as a cause of action, it leads to compelling the defendant to grant a property right which will give effect to the claimant’s expectation.

Such an approach ceases to be justifiable, however, when estoppel is no longer operating as a defence. Then the question is not the binary, all-or-nothing one of whether a party is or is not estopped from asserting a legal right. It is: what remedy should be awarded where a cause of action is established? Once “proprietary estoppel” came to be conceived as a basis for acquiring new property rights, the possibility arose that granting a right which gave effect to the claimant’s expectation might go further than was necessary to avoid detriment. At the same time the flexibility of equitable relief gave the court the ability to fashion a remedy which would fulfil the aim of protecting the claimant from detriment in a targeted way, including by making a monetary award.

The recognition that monetary compensation could be awarded as an alternative to granting a property right and that granting the claimant a property right matching what was promised might go further than was necessary to do justice emerged gradually in the decades after Crabb v Arun District Council was decided. Lord Briggs has traced this development in his judgment. The first case in which monetary compensation for reliance loss was awarded as a remedy appears to be Dodsworth v Dodsworth (1973) 228 EG 1115. Another such case was Burrows v Sharp (1991) 23 HLR 82.

In Baker v Baker (1993) 25 HLR 408 such an award was overturned by the Court of Appeal in favour of an expectation-based remedy. The claimant in that case was a 75 year old man who contributed a large capital sum towards the purchase of a house for his son and daughter-in-law on the strength of their promise that he could live in a room rent-free for the rest of his life. After only a few months the relationship between the parties broke down and the father moved out. The judge found that a proprietary estoppel claim was established and ordered the son and his wife to repay the money which the father had contributed towards the purchase. The order was therefore aimed at compensating the father’s reliance loss. The Court of Appeal allowed an appeal on the ground that the award was much greater than the value of what was promised, which was rent-free occupation of a room for the rest of the claimant’s life. As the claimant had been re-housed by the council and was receiving housing benefit, his expectation loss appeared to be modest and the claim was remitted to the judge to assess the relevant amount. This was a case, therefore, in which the value of the claimant’s expectation was less than his reliance loss and so the remedy was properly limited to the value of the expectation.

The critical development of identifying the need for the remedy to be proportionate to the detriment occurred at the beginning of this century through a trilogy of decisions of the Court of Appeal. In each case the lead judgment was given by Robert Walker LJ.

The first of these cases was Gillett v Holt [2001] Ch 210, which I discuss in more detail below. For now it is enough to note that, although the concept of proportionality was not used, Robert Walker LJ, at p 237, identified the court’s aim as being “to form a view as to what is the minimum required to satisfy the [equity]”. The remedy awarded was to order Mr Holt to transfer only a portion of the land and farming business that he had promised to give Mr Gillett, along with a sum of monetary compensation said to take account of numerous matters.

This case was followed shortly afterwards by Campbell v Griffin [2001] EWCA Civ 990. The claimant, Mr Campbell, had moved in with a couple, initially as a lodger but afterwards without paying rent, and cared for them as they became increasingly infirm in their old age, relying on assurances that he would “have a home for life”. After they had both died intestate, he stayed on in the house and claimed a right to occupy it based on proprietary estoppel. The claim failed at first instance, but the Court of Appeal reversed the judge’s decision on the facts. Robert Walker LJ (with whom the other members of the court agreed) rejected the proposal that Mr Campbell should be granted a life interest in the house on the ground that “such an order would be disproportionate” (para 34). Instead, the Court of Appeal required Mr Campbell to give up possession of the property and awarded him a sum of money which “will assist him with rehousing himself” (para 36).

In the following year the seminal case of Jennings v Rice [2002] EWCA 159; [2003] 1 P & CR 8 was decided, in which the principle of proportionality was fully articulated.

Mr Jennings spent a considerable amount of his time over many years looking after Mrs Royle before she died, despite the fact that for around the last ten years of her life she paid him nothing. He did so partly from compassion and partly because she led him to believe that he would receive all or part of her property on her death. When Mrs Royle died without leaving any will, Mr Jennings brought an action against her estate. The trial judge found that the promises made by Mrs Royle were too vague to be contractual but held that Mr Jennings had established a cause of action based on proprietary estoppel. The judge awarded him compensation of £200,000, which represented an estimate of what full-time nursing care would have cost over the last eight years of Mrs Royle’s life.

Mr Jennings appealed, contending that he should have been awarded, if not Mrs Royle’s entire estate, then at any rate the value of her house and furniture, which was assessed at £435,000. The Court of Appeal dismissed the appeal, holding that the judge was entitled to grant the remedy that he did. The essential reason was that to award the value of what was promised would be disproportionate to the detriment suffered by Mr Jennings. Aldous and Robert Walker LJJ gave substantive judgments and Mantell LJ agreed with both.

Aldous LJ, after reviewing cases from Crabb v Arun District Council onwards, concluded that it is an essential requirement that “there must be proportionality between the expectation and the detriment” (para 36). This statement cannot be read literally since whether the expectation and the detriment are proportionate to one another clearly depends upon the facts of the case and is not within the control of the court. But I think it plain from the context that what Aldous LJ meant was that it is not appropriate to grant a remedy which reflects the claimant’s expectation where such a remedy would not be proportionate to the detriment suffered (see Habberfield v Habberfield [2019] EWCA Civ 890, para 55).

Robert Walker LJ likewise, at para 56, endorsed “the need for proportionality” and “the principle of proportionality (between remedy and detriment)”, agreeing with the previous affirmation of this principle by Hobhouse LJ in Sledmore v Dalby (1996) 72 P & CR 196, 208-209. Hobhouse LJ had in turn cited with approval a passage “of particular value” from the judgment of Mason CJ in Commonwealth of Australia v Verwayen in the High Court of Australia, who said in relation to equitable estoppel at p 413:

“A central element of that doctrine is that there must be a proportionality between the remedy and the detriment which is its purpose to avoid. It would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption.”

(Aldous LJ had also referred to this statement of the law with approval at para 30.)

Earlier in his judgment Robert Walker LJ had stressed the importance of taking a principled approach to the exercise of the court’s remedial discretion and outlined some relevant principles. He summarised these, at para 50, as follows:

“To recapitulate: there is a category of case in which the benefactor and the claimant have reached a mutual understanding which is in reasonably clear terms but does not amount to a contract. I have already referred to the typical case of a carer who has the expectation of coming into the benefactor’s house, either outright or for life. In such a case the court’s natural response is to fulfil the claimant’s expectations. But if the claimant’s expectations are uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered, the court can and should recognise that the claimant’s equity should be satisfied in another (and generally more limited) way.”

This passage and the earlier discussion which it summarises have rightly been regarded as authoritative, but they require some unpacking.

Robert Walker LJ’s first category of case is one where the claimant and the person whom he referred to as “the benefactor” have reached a reasonably clear understanding, but not one amounting to a contract, that if the claimant resides with and cares for the benefactor, the claimant will receive a property right in return. Robert Walker LJ considered that, in such a “quasi-bargain” type of case, “the court’s natural response is to fulfil the claimant’s expectations”.

It is important, however, to appreciate why Robert Walker LJ considered this to be the court’s “natural response”. The reason was not that the benefactor has made a promise which, even though not legally binding, nevertheless ought to be kept. As explained at para 45, the reason was that, in this category of case:

“the consensual element of what has happened suggests that the claimant and the benefactor probably regarded the expected benefit and the accepted detriment as being (in a general, imprecise way) equivalent, or at any rate not obviously disproportionate.”

In other words, it is fair to treat the value of what was promised as broadly equivalent to the value of what the claimant has sacrificed by relying on the promise where it can be inferred that the parties themselves regarded the two as broadly equivalent.

I would accept that there can be cases where the relations between the parties have a transactional character which may support such an inference. There may have been such an element to the parties’ relationship in Thorner v Major. The decision of the Supreme Court of Canada in Cowper-Smith v Morgan [2017] SCC 61; [2017] 2 SCR 754 is another example. But it would seem dubious to draw an inference of this kind in most cases involving close family members. As counsel for the parents in this case observed, parents and children do not generally strike quasi-contractual bargains. In cases where a child works for many years on a family farm which the parents have promised to pass on to their child, it is unlikely that either party will weigh the opportunity cost of working for low pay for a given number of years against the value of the land. Rather, the parents wish their children to inherit out of natural love and affection and may also want the farm to stay in the family, if possible, when they retire or die. Children who commit themselves to such a life are also likely to regard the farm as a source of livelihood to be preserved and passed on to the next generation rather than as a realisable asset whose market value has any financial relationship with what they would or might have earned if they had chosen a different career.

A second point to note about the passage quoted at para 218 above is that the contrast drawn by Robert Walker LJ is not one between opposites. The converse of the “quasi-bargain” category of case comprises cases where the parties have not reached a mutual understanding of the relevant kind. Such cases may or may not be cases where the claimant’s expectations are “uncertain, or extravagant, or out of all proportion to the detriment which the claimant has suffered.” It is easy to see why in cases of the latter kind “the court can and should recognise that the claimant’s equity” should not be satisfied by fulfilling the claimant’s expectations but “in another (and generally more limited) way”. But the judgment does not directly address whether, or when, the court should aim to fulfil the claimant’s expectations if (a) they are not uncertain or extravagant etc but also (b) the case does not fall in the “quasi-bargain” category.

I have no doubt that this omission was deliberate and that Robert Walker LJ did not intend to suggest a general rule in such cases. But he made the point, in para 51, that in many cases the detriment suffered by the claimant may be very difficult to quantify in money terms. He gave the example of “the detriment of an ever-increasing burden of care for an elderly person, and of having to be subservient to his or her moods and wishes”. That described the facts of Jennings v Rice itself: see paras 6-7 of the judgment. He also pointed out the need to take into account any countervailing benefits that the claimant may have received (such as free bed and board). Nevertheless, the remedy awarded by the judge and approved by the Court of Appeal was a sum of money aimed at compensating Mr Jennings for his reliance loss. I do not think it right to interpret the decision as based on any finding that Mr Jennings’ expectation was “extravagant” or that the value of the house and furniture promised was “out of all proportion” to the detriment. It was sufficient that the judge was satisfied that, notwithstanding the difficulty of quantification, detriment could fairly be prevented by awarding a lower sum.

Some commentators have criticised the notion that, in a case of this kind, it is appropriate to take account of the difficulty of quantifying the claimant’s reliance loss: see J Mee, “The Role of Expectation in the Determination of Proprietary Estoppel Remedies” in M Dixon (ed), Modern Studies in Property Law: Volume V (2009) 389, 403-404; B McFarlane, The Law of Proprietary Estoppel, 2nd ed (2020), para 7.50. Thus, Professor McFarlane poses the question of what the position would have been in Jennings v Rice if Mrs Royle’s house and furniture had been worth only £250,000 (instead of £435,000). He makes the point that, on such facts, it might not have been possible to conclude that enforcing the promise would be disproportionate to the detriment (for which Mr Jennings was awarded compensation of £200,000). On that basis Mr Jennings would have received £250,000 or property with that value. Yet, ex hypothesi, this sum exceeds the extent of his reliance loss by £50,000. Professor McFarlane argues that it is illogical that a higher expectation (property worth £435,000 rather than £250,000) should lead to a lower remedy (compensation of £200,000 rather than £250,000).

This logic would be compelling if it were possible to value precisely the loss that Mr Jennings had suffered through relying on the promises of inheritance made to him. Had that been the position - had, for example, his loss consisted solely in wasted expenditure or lost earnings which could be quantified with reasonable precision - there would be no justification for awarding a higher sum. On the facts of Jennings v Rice, however, that was not the case. There was no ready way to put a monetary value on what Mr Jennings had lost. The trial judge awarded a sum of £200,000 arrived at by estimating what Mrs Royle would have had to pay for full-time care. That was necessarily a crude measure, not least because it seems unlikely that Mr Jennings would have been paid that sum if he had not relied on Mrs Royle’s promises. Had the value of her house and furniture been only £250,000, the judge might well have concluded that Mr Jennings’ reliance loss could not confidently be quantified as less than this and that the fair way of preventing detriment in those circumstances was to enforce the promise. There is nothing illogical about such an approach. It takes account of the practical difficulties and limitations of putting a monetary value on what the claimant has sacrificed in a case of this kind and the principle that the remedy awarded must be adequate to achieve the law’s aim of protecting the claimant from harm.

Other cases of disproportionate expectations

The principle of proportionality endorsed in Jennings v Rice has been applied in many other subsequent cases, including those mentioned at para 179 above.

For example, in Ottey v Grundy [2003] EWCA Civ 1176; [2003] WTLR 1253 the claimant lived with the deceased as his girlfriend and interrupted her acting career to care for him in reliance on a written promise to leave her property worth around £250,000. Their relationship ended after around two and a half years and a few months later he died. The judge found that a proprietary estoppel claim was established but that to fulfil the claimant’s expectations would be out of proportion to the detriment which she had suffered. He made an award with a total value of £100,000. This was upheld by the Court of Appeal.

In Powell v Benney [2007] EWCA Civ 1283 a couple looked after a friend and incurred some expenditure on two properties that he owned in reliance on his promise that he was going to leave those properties to them when he died. When he died leaving only a statement of his wish that they should have the properties and no will, the couple advanced a claim to the properties (which were valued at £280,000) on the basis of proprietary estoppel. The Court of Appeal affirmed the decision of the trial judge that the couple’s expectations of receiving the properties were out of all proportion to the detriment which they suffered and that their equity should be satisfied by a monetary award of £20,000.

In Henry v Henry, discussed at para 180 above, the Privy Council held that to award B the share of the plot promised to him by A on her death would be disproportionate to the detriment suffered and that the appropriate relief in order to achieve the minimum equity required to do justice to B was to award him one-half of A’s share of the plot. Sir Jonathan Parker, who delivered the judgment of the Board, expressed the view, at para 65, that “proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application”.

In Cowper-Smith v Morgan, para 47, the Supreme Court of Canada has also endorsed the principle that:

“Since the equity aims to address the unfair or unjust detriment the claimant would suffer if the owner were permitted to resile from her inducement, encouragement, or acquiescence, ‘there must be a proportionality between the remedy and the detriment which is its purpose to avoid’.”

As I have indicated, this principle has its origins in the seminal Australian cases of Grundt and Verwayen. Since the decision of the High Court in Giumelli v Giumelli (1999) 196 CLR 101, courts in Australia appear to have moved towards treating the claimant’s expectation as the prima facie basis for relief. However, according to a recent review of the Australian case law, no Australian court has expressly said that the importance of detriment has diminished or resiled from the view that proportionality lies at the heart of the doctrine: see YK Liew, “The ‘Prima Facie Expectation Relief’ Approach in the Australian Law of Proprietary Estoppel” (2019) 39 OJLS 183. Indeed, in the most recent case in which the High Court of Australia has considered a claim based on proprietary estoppel, Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505, the fundamental aim of the doctrine as identified in the earlier authorities was affirmed.

Thus, in Sidhu v Van Dyke the lead judgment (given by French CJ, Kiefel, Bell and Keane JJ, with Gagler J agreeing separately) begins by citing Mason CJ’s description in Verwayen (1990) 170 CLR 394, 409, of the “fundamental purpose” of proprietary estoppel as being to give “protection against the detriment which would flow from a party’s change of position if the assumption (or expectation) that led to it were deserted” (see para 1). Later, the judgment also cites with approval the passage from Dixon J’s judgment in Grundt quoted at para 188 above stating that “the basal purpose of the doctrine … is to avoid or prevent a detriment” (see para 80). The lead judgment goes on to note, at para 82, that the majority in Giumelli accepted that “the fundamental purpose of equitable estoppel is to protect the plaintiff from ... detriment”.

On the facts of Sidhu the appellant had promised to transfer to the respondent, which whom he was having an affair, a cottage on his land in which she was living as gift once the land had been subdivided. In reliance on those promises, the respondent gave up the opportunity to seek a property settlement from her husband on their divorce and continued to live in the cottage with her child for over eight years, paying some rent and also carrying out unpaid work to maintain and renovate the cottage as well other properties owned by the appellant and his wife. During this period the respondent also lost the opportunity to earn wages from full-time employment. The Court of Appeal, reversing the decision of the trial judge, had awarded compensation to the respondent to be assessed by reference to the value of the cottage. (Transfer of the property was not ordered, as the parties’ relationship had broken down and she had moved away.) This decision was upheld by the High Court. The lead judgment stated, at para 85, that, while “there may be cases where ‘[i]t would be wholly inequitable and unjust to insist upon a disproportionate making good of the relevant assumption’ [a quotation from Verwayen]; but in the circumstances of the present case, as in Giumelli v Giumelli, justice between the parties will not be done by a remedy the value of which falls short of holding the appellant to his promises”.

Given the nature and extent of the detriment suffered by the respondent in Sidhu and the absence of evidence quantifying the disadvantages she had suffered, which were clearly substantial, I have no doubt that an English court would have reached a similar conclusion applying the principles I have discussed above. There was no reason to suppose that the value of the cottage was disproportionate to the detriment or that awarding any lower sum of money would have been adequate compensation for the respondent’s reliance loss.

Other factors

In Jennings v Rice, at para 52, Robert Walker LJ listed a number of additional factors which may be relevant to the exercise of the court’s discretion. He said that they include, but are not limited to, misconduct of the claimant or particularly oppressive conduct by the defendant - to which “can safely be added”:

“the court’s recognition that it cannot compel people who have fallen out to live peaceably together, so that there may be a need for a clean break; alterations in the benefactor’s assets and circumstances, especially where the benefactor’s assurances have been given, and the claimant’s detriment has been suffered, over a long period of years; the likely effect of taxation; and (to a limited degree) the other claims (legal or moral) on the benefactor or his or her estate.”

As regards the first of these factors, courts have rightly been wary of investigating the parties’ conduct and, in cases where their relationship has broken down, of making judgments about who was to blame. As Simon Gardner says in the article mentioned earlier commenting on Jennings v Rice, analysing relationship breakdowns in terms of fault is at best a tasteless, and generally an inept, undertaking: see S Gardner, “The Remedial Discretion in Proprietary Estoppel - Again” (2006) 122 LQR 492, 496; cited in Davies v Davies, para 62. It seems to me that it would only be in an extreme case that misconduct by the claimant could justify exempting a defendant from the responsibility to prevent the claimant from suffering detriment as a result of reasonably relying on the defendant’s promise. Further, since the remedial aim is to prevent detriment to the claimant and not to punish the defendant, the only relevance of particularly oppressive conduct by the defendant, so far as I can see, would be in so far as such conduct is found to have increased the detriment which the claimant suffered.

The judgment of the trial judge in the present case records that a significant part of the cross-examination of Andrew was devoted to showing that he was at fault in his dealings with his father and brother - a line of argument which the judge described as “he had his chance and he blew it”: see paras 276-277 of the judgment. The judge found very little merit in the points raised, and certainly none that had any adverse impact on Andrew’s equitable claim: see paras 278-280. In my view, the judge’s reluctance to apportion blame was well founded. A court will seldom be assisted in deciding a property expectation claim by attempts to debate the rights and wrongs of family disputes.

Cases where the promise is conditional on a future event

Most of the cases that I have so far discussed (in particular, the leading cases of Jennings v Rice and Thorner v Major) were cases where the promise was conditional on an event (the benefactor’s death) which had already occurred when the claim was made. In each case the result of relying on the promise was to make the claimant worse off, unless the promise was fulfilled, to an extent that was hard to quantify. The primary factor which determined what form of remedy to grant was whether the benefit conferred by giving effect to the promise would be disproportionate to the detriment. Different considerations arise, however, where the benefactor resiles from a promise conditional on a future event which has not yet occurred. The typical case of this kind is one where the promise relied on is that the claimant will inherit property on the benefactor’s death and the promise is later revoked during the benefactor’s lifetime.

Gillett v Holt [2001] Ch 210 was a case of this kind. The facts were in many ways similar to those of Thorner v Major. Mr Gillett had from a young age worked for Mr Holt on his farm, giving up educational opportunities to do so. Mr Holt made repeated promises over many years that Mr Gillett would inherit his farming business. Some of the promises also extended to Mr Holt’s non-farming assets. After almost 40 years Mr Holt resiled from his promises and Mr Gillett brought a claim based on proprietary estoppel. Carnwath J dismissed the claim, but Mr Gillett successfully appealed. The Court of Appeal awarded Mr Gillett the freehold of the farm on which Mr Gillett and his wife and children had lived for many years together with a sum of £100,000 to compensate him for his exclusion from the rest of the farming business (which comprised two other, larger farms).

The notable difference from the facts of Thorner v Major was that Mr Holt, although elderly, was not dead. The result of the judgment was therefore that Mr Gillett was granted a property right during Mr Holt’s lifetime, which was not something that Mr Holt had ever promised him. Such a remedy could not therefore have been granted if, instead of making informal promises, Mr Holt had entered into a legally binding contract with Mr Gillett to leave the farm on which he was living (or other property) to Mr Gillett in his will. If the purpose of the equitable doctrine were to hold the promisor to his promise, this would be a fatal objection to the remedy granted. It could not be justifiable, in the name of enforcing a promise by A to transfer property to B upon A’s death, to order A to transfer the property to B during A’s lifetime. The objection is not fatal, however, since, as discussed, the object of relief in a property expectation claim is not to require the promisor to do what he promised to do but to prevent detriment to the promisee if the promise is not performed. There may sometimes be no other effective way of preventing such detriment than by compelling the defendant to transfer property to the claimant sooner than was promised.

Nevertheless, there is clearly a need for great caution before adopting such an approach. An order of this kind is a substantial interference with the freedom of an owner of property to dispose of it in the way they choose. In Gillett v Holt, at p 237-238, Robert Walker LJ (with whom Waller and Beldam LJJ agreed) emphasised that the approach adopted in that case represented the court’s view as to what was “the minimum required to satisfy [Mr Gillett’s equity]” and took account of (amongst other things) “the element of acceleration” involved. It is clear that the value of the award made by the court was far less than the value of the entire farming business which Mr Holt had repeatedly promised that Mr Gillett would inherit.

Minerva’s owl

A further difficulty which arises in cases of this kind is that promises of a future inheritance are often, as Hoffman LJ put it in Walton v Walton (unreported) 14 April 1994, para 19, “subject to unspoken and ill-defined qualifications”. In Thorner v Major, para 19, Lord Scott posed the question whether if, before Peter’s death, he had required full-time nursing care which needed to be funded by selling the farm or some part of it, to do so would have been inconsistent with the promises made to David. Lord Scott doubted that it would. In a commentary on the case Professor John Mee raised other hypothetical scenarios, such as whether David would reasonably have expected Peter’s promise to leave his property to David to be performed (or to be performed in full) if David had married, or if Peter had married again (Peter had been married twice but had no children), or if Peter had decided that he wanted to give up farming, or in the event that David were to assault Peter in the course of a row or to humiliate him in front of members of the local farming community: J Mee, “The Limits of Proprietary Estoppel: Thorner v Major” [2009] CFLQ 367, 375. Another, more obvious implied condition must have been that David would not die before Peter.

Such hypothetical possibilities caused no difficulty on the actual facts of Thorner v Major because none of them had in fact come to pass. When Peter died, nothing had happened which arguably qualified the promise that David would inherit Peter’s farm. Accordingly, as Lord Walker said at para 65, it was “unprofitable, in view of the retrospective nature of the assessment which the doctrine of proprietary estoppel requires, to speculate on what might have been.” The retrospective nature of the assessment was clearly explained in a passage which Lord Walker quoted, at para 57, from the judgment of Hoffman LJ in Walton v Walton. Hoffman LJ there observed, at para 21, that, in contrast to the law of contract, proprietary estoppel:

“does not look forward into the future and guess what might happen. It looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.”

In his judgment in Thorner v Major, at para 8, Lord Hoffmann expressed the backwards-looking nature of the assessment more poetically with a metaphor drawn from the preface to Hegel’s Elements of the Philosophy of Right (1820):

“The owl of Minerva spreads its wings only with the falling of the dusk.”

Where the promise is revoked before it falls due to be performed, however, the owl of Minerva has not yet flown. In this situation the court is not looking backwards from that moment and asking whether it would be unconscionable for the promise not to be kept or whether detriment can be avoided by a monetary award. In fashioning a remedy, the choice is between seeking to compensate the claimant’s reliance loss and giving effect or partial effect to a promise which has not yet fallen due to be performed. Evaluating the second of these alternatives necessarily requires the court to look forward into the future and guess what might happen. Any such assessment must in principle seek to take account of such “unspoken and ill-defined qualifications” as were implicit in the promise made and how they bear on what might happen in the future (or on what might have happened in the future in a counterfactual world in which the promise had not been revoked when it was). That may be a difficult and speculative exercise to attempt to undertake, potentially more so than quantifying the claimant’s reliance loss.

Moore v Moore

A recent case in which such difficulties arose is Moore v Moore [2018] EWCA Civ 2669; [2019] 1 FLR 1277, which bears some similarities to the present case. The claimant, Stephen Moore, had worked all his life for long hours and low pay on the family farm. He had repeatedly been promised by his father that it “would be his one day”. Stephen reasonably understood these promises to mean that he would inherit his father’s share of the farm and the farming business upon the death of the survivor of his parents. When his father retired, Stephen took over the running of the farm, although his father, Roger, continued to own a half share of the farm and the farming business. Relations between Stephen and his parents subsequently broke down and Roger purported to dissolve their partnership. Roger was by this time suffering from Alzheimer’s Disease and, by the time of the trial, was living in a care home needing permanent care.

The trial judge found that all the elements of a property expectation claim had been established. He approached the question of remedy on the basis that he should aim to mirror as closely as possible the arrangements which would have obtained had the dispute not arisen. The order made involved an immediate transfer of Roger’s share of the farm and the farming business to Stephen, subject to a licence granted to the parents to live in the farmhouse for so long as they wished or could. Stephen was required to pay the outgoings for the farmhouse, the reasonable costs of care for his parents and £200 a week for the rest of their lives.

The Court of Appeal (of which I was a member), in a judgment given by Henderson LJ, held that the judge’s approach was incorrect for two main reasons. First, it was an error to seek to replicate what would have happened on the wholly unrealistic assumption that no dispute had arisen and, in particular, to adopt a solution which forced the parties to remain financially dependent on each other when relations within the family had completely broken down (see paras 95, 98). Second, although it was in principle open to the judge to direct an immediate transfer to Stephen of all his father’s interest in the partnership land and business, it was necessary to reflect the very significant acceleration which this entailed and the fact that Stephen’s expectation was always subject to such expenditure as his parents might reasonably need or choose to make during the remainder of their lives (see paras 95, 103). The case was remitted to the judge with directions to make a remedial award which would, among other things, provide “full and generous protection” for the parents. Henderson LJ indicated that the appropriate figure for this purpose would probably be somewhere between £1m and £2m (out of assets probably worth in the region of £5m): see paras 95-96 and 104.

Three points may be made about this decision. First, it was not argued by the parents that the appropriate remedy was to compensate Stephen for his reliance loss and no attempt was made to quantify this - although the judge had expressed himself satisfied that the remedy which he granted was proportionate to the detriment (see para 34). Second, ordering the transfer of property before the condition for the promised transfer had been met was considered the appropriate remedy only because of the (unusual) circumstances: in particular, the fact that Stephen was still living on the farm and running the farming operations as he had in practice already been doing for a number of years; the fact that his father was incapable of taking any further part in the business; the fact that Stephen already owned the other half of the farm and farming business; and the imperative need to achieve a clean break between Stephen and his parents. Third, the Court of Appeal emphasised the importance of making full and generous allowance for the acceleration involved and the contingencies to which the promise was subject.

Remedial offers

Where A, for whatever reason, decides to revoke a promise on which B has relied that A will transfer property to B on A’s death (or some other event) before the event has occurred, A may satisfy such equity as has arisen by making a gift or offer of compensation to B sufficient to prevent B’s change of position from operating as a detriment.

This was what happened in Uglow v Uglow [2004] EWCA Civ 987. The owner of a farm had encouraged his nephew to go into partnership with him to farm the land on the understanding that he would leave the farm to the nephew in his will. The nephew took up the offer, thereby abandoning an existing farming partnership with his own father, mother and brothers. After eight years relations between the uncle and nephew broke down and the uncle then granted the nephew a transmissible tenancy of about three-quarters of the farmland. When he died, the uncle left the farmhouse and land that he had retained to another relative. The nephew claimed that he should be entitled to this property, as it was part of what he had been promised and he had suffered substantial detriment in relying on the promise and giving up the opportunity to stay in his own family partnership.

The judge dismissed the claim, and his decision was affirmed by the Court of Appeal. Mummery LJ (with whom Jonathan Parker and Waller LJJ agreed) held that the judge had been entitled to infer that the promise of inheritance was made on the unexpressed assumption that the two men would remain in partnership for the rest of the uncle’s lifetime. When that assumption proved not to be correct, it was not unconscionable for the uncle to revoke the promise and replace it by a different arrangement, provided this satisfied the equity that had arisen in favour of the claimant before the change of circumstances. The arrangement made by the uncle had satisfied the nephew’s equity at that time, and the uncle therefore did not act unconscionably when he made a will leaving the farm to another member of the family.

When a prospective benefactor changes his or her mind, as the uncle did in the Uglow case, there is a clear interest, which the courts should encourage, in the benefactor voluntarily providing or offering an arrangement which will prevent previous reliance on the original promise from causing detriment to the promisee. A fair offer made at this stage may avert litigation which all too often ends up being ruinously expensive for all involved; or, if the offer fails to achieve that result, it should at least give the defendant some protection against an adverse order for costs. To that end, it seems to me that, provided the prospective benefactor has endeavoured to treat the promisee fairly and has made a genuine and reasonable alternative arrangement or offer of amends, a court should be slow to find fault with it and to order more extensive relief.

In the present case, however, the only offer made by the parents when their relationship with Andrew broke down was an offer of an agricultural tenancy of Tump Farm (excluding the farmhouse and the land leased as a solar energy park) at a rent which was significantly higher than the rent paid for Dayhouse Farm. Andrew took the view that he could not make the farm profitable at that rent. The judge found that the offer made to Andrew had no negative significance for his claim (see para 280 of the judgment). That conclusion was clearly right: it could not be said that the offer represented fair compensation for the opportunities that Andrew had lost by relying on the promises made to him.

Before considering whether the remedy granted by the judge in this case was justified, I will seek to distil the points discussed above into a summary of the key principles and their practical application. In doing so I would emphasise that these are principles and not rules. We are concerned with a situation where: (1) A makes an informal promise to give B an interest in land or other property (typically, as here, on A’s death); (2) the promise is not (and would not reasonably be understood to be) legally binding; (3) B nevertheless reasonably relies on the promise and, in doing so, acts in a way which will operate as a substantial detriment to B if the promise is not kept; and (4) A later resiles from or fails to keep the promise for reasons which are assumed to be neither party’s fault (or no more the fault of one party than the other).

In such cases the core principle underpinning the grant of relief is that equity will not allow A to go back on the promise made without ensuring that B does not suffer detriment as a result of B’s reliance on it. The aim of the remedy is thus to prevent detriment to B in the circumstances which have arisen.

In principle, there are two methods of achieving this aim. One is to compel A to perform the promise (or to award a sum of money calculated to put B into as good a position, as best money can do it, as if A’s promise had been performed). The other is to award a sum of money calculated to put B into as good a position, as best money can do it, as if B had not relied on A’s promise: in other words, to compensate B’s reliance loss. Since both methods will in principle achieve the aim of preventing detriment to B, if on the facts both are practicable the court should adopt whichever method results in the minimum award necessary to achieve that aim.

In deciding what remedy to grant, there is a distinction between cases where the promise has already fallen due for performance and cases where performance was conditional on an event (typically, the promisor’s death) which has not yet occurred.

In the former type of case where the promise has fallen due for performance, a remedy designed to give effect to the promise is likely to be appropriate if (as eg in Thorner v Major): (1) B’s reliance loss is of a kind which is very difficult to quantify in money terms; and (2) the value of the interest in property promised by A is not clearly disproportionate to B’s reliance loss. But where, even though B’s reliance loss is difficult to quantify, the value of the interest in property appears clearly disproportionate to it (eg Jennings v Rice), the court should generally make the best estimate that it can of B’s reliance loss, approximate as it will inevitably be, to avoid granting a remedy which is unjust to A because it goes beyond what is necessary to avoid detriment to B.

In the second type of case where the promise has not yet fallen due to be performed but A has resiled from it, the court should see whether A has made an offer of compensation to B. Where A has made an offer which represents a genuine and reasonable attempt to prevent B from suffering detriment as a result of the changed circumstances (as eg in Uglow v Uglow), the court should be slow to order relief which goes beyond the offer made.

Where no such offer has been made, the court will have to decide between (1) awarding a remedy assessed by reference to the prospect of a future gift and (2) awarding compensation for B’s reliance loss. Where A’s promise is to give B property on A’s death and B’s reliance on that expectation consists in working on A’s farm or caring for A, it will often be an unspoken condition of the promise that the work or care will continue until A dies. If the parties fall out during A’s lifetime, that condition may well become impossible to fulfil because the parties can no longer be expected to live or work together. In such cases any expectation-based remedy would need to take account of the fact that an immediate remedy gives B property or money sooner than was promised and without fulfilling all the conditions of the promise. If such a remedy is contemplated, the award will therefore need to be discounted to allow for the contingencies to which performance of the promise was subject (including A’s freedom to use her property for her own purposes during her lifetime) and the acceleration involved. Although there may be exceptions (eg Moore v Moore), in many cases - especially where A is in reasonable health and may live for many years yet - awarding compensation for B’s reliance loss, even if difficult to quantify, is likely to be less uncertain and to produce a fairer result.

The court has a flexible discretion to fashion a remedy which does justice in the circumstances of the particular case. But, in exercising this discretion, the aim is to award a remedy which does all that is necessary, but no more than is necessary, to prevent B from suffering detriment as a result of having relied on a promise of a gift of property which A no longer intends to make.

I turn to the remedy awarded by the judge in this case, summarised at para 130 above. Although the judge did not say so in terms, his order was clearly aimed at seeking to compensate Andrew for the loss of his expectation of acquiring a substantial proprietary interest in the land and buildings at Tump Farm and in the farming business. The judge recognised that Andrew had not expected to acquire such an interest in the land and buildings until his parents died. Nevertheless, because of the level of falling out and mistrust between Andrew and the other members of his family, the judge thought it necessary to achieve a clean break between them. The way in which the judge sought to achieve this was by ordering the parents to make an immediate payment to Andrew of a lump sum calculated as a proportion of the values of the farming business and the freehold land and buildings.

Lack of reasons

I have sympathy for the judge who, quite understandably, found this to be the most difficult aspect of the case (see para 282 of his judgment) and appears to have received hardly any assistance on the question of remedy from the parents’ (then) counsel, who focused almost exclusively on issues of liability (see para 161 of the judgment). The fact of the matter is, however, that the judge did not give adequate reasons for the remedy that he awarded. He made impeccable findings of fact justifying his conclusion that the necessary elements of a property expectation claim had been established. In his discussion of the question of remedy, he identified a number of factors (summarised at para 129 above) which he took into account. But he did not say why he had chosen to award the percentages (50% and 40%, respectively) of the value of the farming business and of the land and buildings that he did. Nor (although this was perhaps more obvious) did he give any reason for deducting from the sum awarded the value of a life interest in the farmhouse in favour of the parents. More fundamentally, the judge in his discussion of the law had identified the need to check, before granting a remedy aimed at satisfying the claimant’s expectation, that the remedy granted would not be out of proportion to the value of the detriment suffered by the claimant (see para 165). But when he came to discuss the appropriate remedy, the judge said nothing about why he was satisfied that the sum of money awarded was not disproportionate to the detriment suffered by Andrew.

It is possible to infer what the judge’s reasons for the conclusions that he reached on these matters probably were. But this should not have been left to inference. The reasons should have been stated, even if only briefly. As discussed earlier, the exercise of the remedial discretion in a case of this kind needs to be as transparent as possible. There are inevitable limits to this where judges are required to put monetary values on matters which cannot be quantified mathematically or by reference to any clear benchmark. In such cases judges have to bring to bear their sense of what amount of money would be and be perceived to be fair compensation. But, so far as they can, judges should show their workings so that the parties, the public and any court reviewing the decision on appeal can understand how the judge has arrived at the result reached.

In this case no explanation of the figures chosen was given. This, in itself, is a ground on which an appeal court is entitled to interfere with the judge’s order. A failure to give any reasons for an exercise of discretionary judgment deprives it of the leeway for reasonable disagreement which it would otherwise deserve.

In the absence of express reasons, the assumption that I would make is that the percentage figures of 50% of the value of the farming business and 40% of the value of the land and buildings were based upon the wills made by the parents in 1981 (see para 115 above). At para 17 of his judgment, the judge recorded that these percentages were proposed by Andrew’s counsel in his closing submissions and commented that this submission “was no doubt made with the provisions of the earlier 1981 will well in mind”. Although he found that Andrew did not know the terms of his parents’ 1981 wills, the judge evidently considered that Andrew’s expectations were consistent with those wills and that the terms of the parents’ wills are likely to have informed what David led Andrew to expect (see paras 245, 249 and 262 of the judgment). The deduction of the value of a life interest in Tump Farmhouse in favour of the parents from the lump sum award was presumably intended to give effect to the judge’s finding that Andrew expected the farmhouse to remain his parents’ home for as long as they, or the survivor of them, wished (see para 284).

No allowance for acceleration

On these assumptions there is, however, a serious problem with the approach adopted in valuing Andrew’s expectation. The judge recognised that the order he was making involved an acceleration in the receipt of an interest in property which Andrew had expected to inherit upon the deaths of both his parents. But the only allowance made for this fact appears to have been the deduction of the value of a life interest in their home.

The fact that, as the judge observed, “David and Josephine may expect to live for many more years yet,” carried with it the possibility that they might need or choose to use some of their wealth for their own purposes - for example, if one of them became ill or incapacitated. Andrew could not reasonably have expected that, if for example, one of his parents needed care services (as happened in Moore v Moore), the promises of an inheritance made to him would preclude them from using some of their assets to pay for this, perhaps by selling part of their property or borrowing against it. Even if no such contingency arose, David and Josephine would need to be supported in their old age beyond having somewhere to live. There is no evidence that they had any private pension. It is reasonable to expect that they would have continued to receive some financial support for the rest of their lives from the profits of the farming business. The order made by the judge in effect relieves Andrew’s expected share of the family assets from that future burden and places it entirely on the share of the farming business (and of the land and buildings) retained by his parents.

Failure to analyse detriment

However, the flaws in the approach adopted in my view go much deeper than this. Key questions which needed to be addressed were: whether or to what extent it was in fact possible to fulfil Andrew’s expectation; what detriment he would suffer in so far as his expectation was not fulfilled; and what was the minimum equitable remedy necessary to protect Andrew from such detriment.

The judge treated what Andrew had been promised as, in effect, that he would succeed to an equal share of the farming business and of the land and buildings at Tump Farm with his brother, Ross, subject to making provision from the parents’ estate for their sister, Jan, in an amount quantified at 20% of the value of the land and buildings. Whether it would actually have been viable for Andrew to continue farming at Tump Farm after his parents died on this basis is unclear to me, given the relatively small size of the farm, the equal proprietary expectation of Ross and the fact that Andrew and Ross had proved unable to work together. But whether it would or not, in the events which happened it is plain that Andrew’s expectation could not possibly be fulfilled.

The judge rejected as unrealistic any notion that Andrew, having been evicted by his parents in 2015, might return to farming at Tump Farm. That conclusion seems inevitable and has not been challenged. It meant that there was no question of granting a remedy which sought to implement - albeit prematurely - what Andrew had been informally promised. In these circumstances attention ought to have turned to considering what harm Andrew had suffered by relying on promises of succession that were not now on any view going to be fulfilled. No attempt, however, was made to do this.

The rationale put forward by Andrew's counsel for basing the award on the financial value of what was promised was that “a payment of that order would enable Andrew to set himself up again as a farmer elsewhere” (see para 17 of the judgment). The thinking may have been that, even though Andrew would not now be able to carry on farming at Tump Farm after his parents’ deaths, he could at least have his expectation satisfied that he would be farming on his own account rather than as an employee of someone else. No consideration seems to have been given, however, to whether Andrew would in fact be likely at this stage of his career to try to set himself up elsewhere, nor to what sum of money would be needed to do this - let alone to how that sum compared with Andrew’s reliance loss. I note that in their written case for this appeal Andrew’s counsel have accepted that it is unclear that the value of the judge’s award would allow him to set himself up in farming again and that, in his mid-50s, he may have to be “satisfied with being an employee in someone else’s business”. This suggests that the remedy awarded by the judge was in fact incapable of achieving its own object.

The Court of Appeal thought that the judge was entitled to take the view that, in circumstances where “the claimant has largely performed his side of the bargain, it is fair to take what the claimant was promised as a rough proxy for what he has lost” (see para 134 above). The judge, however, had specifically rejected the notion that this is a quasi-bargain type of case where it can fairly be inferred that the parties themselves regarded the expected benefit and the accepted detriment as broadly equivalent (see para 283 of his judgment). For the reasons given at para 221 above, he was right to do so. There is no reason to assume that the value of the land which Andrew was promised bore any correspondence, even a rough one, to the amount of his reliance loss. Indeed, the reverse is true. As Lord Briggs has pointed out, modern capital values of farmland are typically so high that the land will almost inevitably be worth far more than any valuation of the detriment in a case of this kind.

In these circumstances the order made by the judge cannot stand and it is necessary to consider afresh how the equity raised in this case should be satisfied.

Re-exercising the remedial discretion

Approaching the matter afresh, I start from the point discussed above that it is impossible in this case to procure the fulfilment - or anything approximating to the fulfilment - of the informal promises made to Andrew that he would succeed to part of the family farming business and inherit a sufficient stake in Tump Farm to enable him to carry on farming there after his parents die. Andrew and his parents (and brother) have irreversibly parted ways. There is no going back to Tump Farm and Andrew’s hopes of carrying on the farming business (or part of it) there, or indeed of having his own farm at all, have been permanently disappointed. The only practicable remedy is an award of money, which will almost certainly have to be funded by selling the farm, either now or following the parents’ deaths (assuming of course that Andrew does not pre-decease them). The only question is how the sum awarded should be calculated and when it should be payable.

As discussed earlier, the aim of the remedy is to prevent Andrew from suffering detriment as a result of his reliance on the promises made to him by his father. As enforcing those promises is not an option, the only practicable way of seeking to achieve that aim is to make an award of compensation calculated to put Andrew, so far as money can do it, in as good a position as if he had not built his career on those promises. As already mentioned, this is not a case in which it is reasonable to treat the market value or proceeds of sale of Andrew’s promised share of the farm and farmland as a rough equivalent or proxy for what he would otherwise have earned. The appropriate course is therefore to estimate his reliance loss.

Basing the award on Andrew’s reliance loss also conclusively answers the argument made by counsel for the parents that no immediate order for payment is appropriate in this case. As opposed to Andrew’s expectation which lay in the future, the loss suffered by working at Tump Farm for low pay until 2015 rather than in a better paid job elsewhere had already been incurred by the time of the trial. Basing a remedy on an expectation which was conditional on an event which has not yet happened is open to the objection already mentioned that it gives the claimant a transfer of property (or its monetary value) which he was never (even informally) promised. That objection does not apply where the approach adopted is to award compensation aimed at putting the claimant into as good a position as if he had not acted in reliance on the promise. The latter approach is entirely backward-looking. Furthermore, the remedy is appropriate as soon as it becomes clear that the promise will not be performed. At that point the claimant’s past change of position becomes a detriment: see Gillett v Holt [2001] Ch 210, 232-233. An immediate payment of compensation is therefore justified.

Estimating Andrew’s reliance loss

The judge was satisfied that, if David had not encouraged him to believe that he would one day benefit substantially from Tump Farm, Andrew could and would have found better financial reward elsewhere. Although the judge said that he could only speculate on what Andrew might have done instead of working on Tump Farm, it seems fair to assume that he would have pursued an alternative career in the dairy farming business. Andrew was born into a farming family and grew up on a dairy farm. He clearly took to dairy farming from a young age. He said in his witness statement that, when he left school at 16, he was not keen to continue in full-time education and that he “wanted to work on the farm as farm work was the type of work I could do and it seemed like the natural progression.” The various agricultural courses that he attended, as well as the area representative roles that he took on through what the judge referred to as “his wider interest in the dairy business” (para 270), are consistent with the vocational element in his choice of career.

The judge made no findings about how much Andrew would be likely to have earned if he had left Tump Farm at a younger age. That is understandable given the way the case was argued. The result would ordinarily be that the case would now have to be sent back to the High Court to carry out the necessary assessment. It is not part of this court’s normal role - nor for that matter that of the Court of Appeal - to undertake an assessment of this nature. Nor do we have all the information that would be desirable for this purpose.

Despite this, both parties have asked this court, if we conclude that compensation should be assessed on a reliance basis, to fix the amount of the award ourselves. Both parties plainly recognise that any such assessment, which can only be based on the limited material before us, will inevitably be more approximate than the assessment which would be undertaken by the High Court at a further hearing. But another hearing in the High Court would add yet more cost and delay to proceedings which have been going on for several years already and must have taken a heavy toll, both financially and psychologically, on all involved. Moreover, it is one of the tragedies of this type of litigation that, one way or another, the legal costs incurred by both sides will diminish the assets about which they are arguing, and the more so the longer the litigation goes on.

In view of the overwhelming interest in finality, we agreed to the parties’ joint request that, if compensation is to be assessed on a reliance basis, this court should decide on the amount of the award. In the event, this remedial approach has not found favour with the majority of the court. But I have explained in the Appendix to this judgment how I have calculated what I consider would be a just award of compensation in this case.

I would allow the appeal and substitute for the remedial order made by the judge an order requiring David and Josephine Guest to pay a sum of £610,000 to Andrew as equitable compensation.

To quantify Andrew’s reliance loss, four matters need to be addressed:

I will consider these in turn.

The starting date

The judge did not make an express finding about when Andrew began to act to his potential detriment in reliance on his father’s assurances that he would in due course inherit Tump Farm (or a substantial share of it). His counsel submitted that it is implicit in the judge’s findings that the reliance spanned Andrew’s entire working life on Tump Farm and that the appropriate starting date to take in estimating Andrew’s reliance loss is 1982 when Andrew left school. Counsel for the parents, in contrast, submitted that the appropriate starting date is 1997, when Ross announced that he wanted to work on the family farm. Andrew gave evidence at the trial, which the judge accepted, that this had pleased their father who “said that Ross and I would have to learn to work together as he intended to leave the farm to us jointly to run after his death” (judgment para 238).

On the judge’s findings, however, that occasion was not the first time when promises of succession were made. It was Andrew’s evidence, also accepted by the judge, that on a number of occasions in the period before 1997 his father had shut down discussions where they disagreed over a farming decision by saying that one day the farm would be Andrew’s but for the moment it was his. Andrew gave two particular examples - one an occasion in 1993 and the other in 1995 or 1996. What changed in 1997 was that Andrew adjusted his expectation downwards by accepting that he would not inherit the whole farm but would share it with his brother. The thrust of the judge’s findings is that, even though his expectations were scaled down by his parents in 1997, his father had consistently led Andrew to believe that he would succeed to the farming business and inherit a sufficient interest in the land to enable him to carry on the business after his parents died (see paras 171-175, 241). Later assurances merely confirmed “what had always been assumed, and sufficiently communicated, within the family” (para 244).

Nevertheless, even on the footing that promises of eventual succession were made to Andrew from when he first started working full-time on the farm in 1982, I do not think it right to infer that he has suffered detriment from that time. Andrew was only 16 when he left school. In his first few years of working on the farm, he attended part-time courses and was rapidly given significant responsibilities, while continuing to live at home (see para 117 of the main judgment). It seems unlikely that he would have got a more favourable apprenticeship in farming elsewhere. There is no clear point at which it can be said that it would have been to Andrew’s advantage to have left Tump Farm - or that he would probably have done so - had he not been led to believe that one day it would be his. But I consider that a reasonable date to take is a date shortly after he got married and then moved into Granary Cottage in late 1989.

Work had been done, funded mainly by his parents’ farming partnership, to convert the old granary into a home for Andrew and his wife Tracey to live in. Andrew gave evidence in his witness statement, which I see no reason to doubt, that, to afford a house, he would otherwise have had to leave Tump Farm to get a higher paid job. He also said that it “made sense for Tracey and me to live on the farm as this is where we all expected our lives to be.” Tracey gave evidence at the trial, which the judge accepted, that, if she had known what was to come, then she would have put pressure on Andrew to get a better paid job, which would probably have involved him working less hours, away from Tump Farm (judgment, para 187).

On this basis it seems to me fair to treat the start of 1990 as the date when Andrew began to rely to his detriment on the promises made to him.

Lost earnings

There are several good indications of what remuneration Andrew could reasonably have expected to earn in alternative employment. One is the fact that, since leaving Tump Farm, Andrew has secured a job as a senior herdsman earning an annual salary of £33,000 plus payment of the rent on a house near his workplace. This is significantly more than he was paid at Tump Farm. I see no sufficient reason to infer that, if he had left Tump Farm at a younger age, Andrew’s current earnings would be higher than they in fact are. In the absence of evidence of a career ladder that he might have climbed, I think it reasonable to proceed on the assumption that the skills and experience that Andrew acquired working at Tump Farm were as valuable in the job market as if he had pursued a career in farming elsewhere and that, in his present job, he is not suffering any continuing prejudice.

This is supported by Andrew’s own view of the detriment he has suffered, as expressed in a conversation with his parents in April 2014 which they secretly recorded. At the time of this conversation David had begun to threaten to dissolve their farming partnership although it was not until a year later that he did so. As quoted in the judgment at para 266, Andrew was recorded as saying:

“What I’m saying is that I gave you the best 30 years of my life … If I’d gone to work for somebody else, I’d have £30,000 a year, plus a house to live in, council tax paid, plus a car.”

A few years earlier, in a letter dated 27 March 2009 to his father’s solicitor during the negotiations which followed Andrew’s complaint about his wages to the Agricultural Wages Board (“AWB”), he had written:

“The going rate for a herd manager, which best describes the job that I do, is £30-35,000 per year plus a house rent-free with council tax paid. Source: LKL recruitment services.”

More detailed figures are contained in a schedule annexed to Andrew’s particulars of claim. This schedule sets out his actual wages and other benefits received each year from 1982 (when he began working on the farm) until 2012 (when he went into what proved to be the short-lived farming partnership with his parents). The schedule compares those figures with the wages which, on Andrew’s case, he would have received during the same period if he had been paid at the minimum rates set by the AWB. The total difference claimed is £360,467.

So far as appears, no issue was taken at the trial with the figures given in this schedule for Andrew’s actual wages nor with the additional sums included for council tax, car insurance, health insurance and heating for Granary Cottage - all of which were paid for by the farming partnership. The point was made, however, that the figures shown for Andrew’s actual wages are net of tax and national insurance, whereas those calculated using the AWB rates are gross. In this respect the comparison is therefore not like for like.

Issue was also taken in two respects with the figures given in the schedule for the wages that Andrew would or should have been paid applying the AWB rates. First, David disputed the number of hours a week on average that Andrew worked. Second, David said that the rates used in preparing the schedule were those for Grade 6, the highest grade of agricultural worker, and that this was higher than Andrew’s true level of responsibility. The parents produced a counter-schedule, to which David referred in his witness statement, containing various alternative calculations. These all use Grade 3 agricultural worker rates until 1998, Grade 5 rates for the period 1998 to 2007 and Grade 3 rates for 2008 onwards.

The judge did not resolve the conflict about how many hours Andrew worked and this court is not in a position to do so. Nor can we judge ourselves which agricultural worker grade applied at any given time. However, while these issues were relevant in the context of Andrew’s complaint in 2008 about how much he was paid at Tump Farm, they are not directly relevant in estimating how much he would have earned in another job. The AWB rates are, after all, the minimum legal rates of pay for agricultural workers and Andrew might well have earned more than the minimum legal rate. More specifically, it seems inherently unlikely that his pay would in reality have fallen in 2008 as implied by the figures used in the counter-schedule.

The basis for using Grade 5 rates for the decade to 2007 but then lower Grade 3 rates from 2008 onwards in the counter-schedule is correspondence with the Agricultural Wages Team at DEFRA in early 2009 when Andrew made his wage complaint. Based on the information he had provided, they classified Andrew for the period 2005-2007 as a Grade 5 worker but indicated that he would only be classified as a Grade 3 worker for 2008 because the AWB had changed its definition of Grade 5 to include responsibility for disciplining staff as a requirement, which was not one of Andrew’s responsibilities at Tump Farm. I see no reason to think that this change in the AWB definition would have affected the amount that Andrew was paid if he had followed an alternative career path.

The best way to test which figures are the most realistic to use seems to me to be to cross-check them against the evidence indicating what Andrew could have been earning at another farm, at least by around 2009.

In Andrew’s schedule his estimated annual pay at AWB rates climbs steadily year by year to reach £30,000 for the first time in 2004. For 2007 the figure is £34,020 and for 2009 it is £36,288. For the first quarter of 2012 (the last period included in the schedule) the figure is £10,264, equivalent to £41,056 on an annualised basis. The fact that the figures shown in the schedule for the later years are higher than the salary which, based on the evidence referred to at paras 7-8 above, Andrew believed that he could have been earning elsewhere, and was in fact earning at the time of the trial in 2018, suggests that they are somewhat overstated. The same may therefore also be true for the earlier years - particularly as the AWB rates for the same grade (Grade 6) are used for every year included in the schedule, when it seems reasonable to assume that there would in fact have been some progression in pay grade early on in alternative employment as Andrew gained more experience.

Tested against the available evidence of what Andrew could have been earning as a senior herdsman from 2009 onwards, the comparable figures given in the parents’ counter-schedule at what are described as “corrected rates” for the years up to and including 2007 (for which the estimated amount is £31,500) seem to me reasonable. But the reduction to Grade 3 rates for the period 2008 to 2011 does not. In the absence of information about the Grade 5 rates for those years, I would propose to use the figures given in the counter-schedule for the years up to and including 2007, and then to increase the 2007 figure of £31,500 by £500 a year until 2012. This results in a projected salary of £33,500 for 2011 and £8,500 for the first quarter of 2012.

I also think it appropriate to make two adjustments to the (undisputed) amounts of actual wages and benefits received. The first is to exclude council tax from these figures, as the evidence indicates that an employer would be expected to pay council tax in addition to providing a house rent-free. The second is to gross up the actual remuneration for tax and national insurance. By reference to published tax tables, an uplift of 15% seems appropriate.

After making these adjustments, I calculate that Andrew’s actual gross earnings (excluding the benefit of accommodation) during the period from 1990 to the end of March 2012 amounted in total to £299,426. This compares with a total estimated amount that he would have earned during this period if employed on another farm of £546,938. The difference between these figures is £247,513.

The end of March 2012 was when Andrew went into partnership with his parents. According to the draft partnership accounts which were in evidence at the trial, his drawings were: £16,737 in the year ended 31 March 2013; £23,996 in the following year; and £28,032 in the year ended 31 March 2015. The partnership was then dissolved. Although there were no doubt some expenses charged to the partnership from which Andrew benefited, it seems unlikely that, at least in 2013 and 2014, these would have bridged the gap between his drawings and the salary that he would have been earning in another job at that stage of his career. In the circumstances I would propose to “top up” Andrew’s earnings during the period that he was in partnership with his parents by including in the calculation amounts which would bring his earnings up to an annual salary of £30,000 during the period. This leads to the inclusion of lost earnings of around £13,000 for 2012, £7,800 for 2013, £3,000 for 2014 and £500 for the first quarter of 2015.

There is no information about how much money Andrew managed to earn during the period of some three and a half years from April 2015 until October 2018, when (according to the agreed chronology) he began work in the job near Tewkesbury in which he was employed at the time of the trial (and I assume is still employed). In so far as his earnings during this period may have been less than he could have expected to earn in full-time employment, the point can be made that he might have encountered one or more periods of unemployment between jobs if he had worked away from Tump Farm from 1990. I will assume no further lost earnings during this period.

The result is that on my calculation the total principal amount of Andrew’s lost earnings over the entire period from 1990 onwards is £267,748.

Interest

Next it is necessary to add compensation for the delay in receiving this sum. If Andrew had left Tump Farm at the beginning of 1990, the relevant earnings would have been received between seven and 32 years ago. Counsel for the parents made the unreasonable submission that no allowance at all should be made for the delay in receipt. They sought to justify this on the ground, first, that this is not a case in which the parents have profited from Andrew’s low wages. They make the point that, as the judge found (at para 60), over the period from 2000 to 2012 David drew out from the farming business even less than he was paying Andrew. Secondly, they submit that it is necessary to balance competing factors of justice to the other persons who also worked on the farm at a low wage, namely, David and Ross.

Contrary to the submission made, it is clear that David and Josephine have indeed profited from Andrew’s low wages, as their partnership has had the benefit of his labour without paying a commercial rate for it. Further, by paying the members of the family who have worked on the farm below market wages, the parents have been able to preserve and enhance the value of their capital investment (including by servicing the mortgage loans taken out to buy Tump Farm and build Granary Cottage). This has enriched them (and Ross, assuming he inherits a share of the farm and farming assets). Andrew, by contrast, will never receive his promised share. I cannot see any competing factors of justice there. But in any event, the relevant question in fixing the amount of compensation is not what others have gained or lost but what financial harm Andrew has suffered as a result of staying at Tump Farm instead of leaving to get a job elsewhere. To award Andrew only the lost pay which, on the relevant hypothesis, he would have received many years ago without compensating him for the delay in receipt would be grossly unfair.

It is not possible to know what Andrew would have done with the additional sums that he would have earned over the period from 1990 to 2015. No doubt he might have spent some of the money. In the light of Tracey’s evidence that another job would probably have involved him working fewer hours, he might also have enjoyed more leisure time. In circumstances where Andrew has been denied those opportunities, however, I can see no better way of measuring the value of such loss than to estimate what his additional earnings, if not spent but invested, would be worth now.

The two questions which then arise are: (1) what rate of return on such investment (expressed as a rate of interest) should the court apply; and (2) should the returns be compounded (and, if so, with what rests)? Counsel for Andrew proposed that the court should apply the Bank of England base rate of interest, compounded annually; they also provided an alternative calculation based on simple interest at 1.5% above the base rate. The parents’ case is that only simple interest should be awarded, at no more than the base rate.

Taking the question of compounding first, counsel for the parents argued that only simple interest is appropriate as this case does not fall within one of the limited categories in which compound interest may be awarded in equity and, otherwise, the court only has power under section 35A of the Supreme Court 1981 to award simple interest on damages. (The term “damages” in section 35A includes equitable compensation: see BP Exploration Co (Libya) Ltd v Hunt (No 2) [1983] 2 AC 352, 373.) I agree that this is not a case in which the court has power to award compound interest on damages awarded to the claimant. But the parents’ argument, as I see it, fails to distinguish between interest on damages and interest as damages. It has been clear at least since the decision of the House of Lords in Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Comrs [2007] UKHL 34; [2008] AC 561, that there is no legal impediment to the recovery of compensation for loss which is properly measured by interest calculated on a compound basis. That is the nature of the loss suffered here.

In any long-term investment which generates a return on capital, unless profits are withdrawn, they are added to the capital sum which will accumulate on a compound basis. Simple interest therefore does not reflect the real value of money. The annual compounding proposed by Andrew’s legal representatives is a conservative measure to adopt, as in many forms of investment (including many interest bearing accounts) returns are reinvested more frequently.

As for the appropriate rate of return, the parents’ counsel submitted that this should be no more than the Bank of England base rate, on the footing that this is roughly equivalent to the return that Andrew could have achieved if he had placed the money on deposit. I do not think it reasonable, however, to suppose that, if Andrew had saved the additional sums earned, he would have done so by keeping the money in a bank deposit account (particularly at the negligible rates of interest payable in the period since the financial crisis in 2008, when the base rate has mostly been at 0.5%). It is more realistic to assume that Andrew would have invested the money in a financial product which was relatively low risk but aimed to achieve some capital growth - for example, a with profits endowment life assurance policy. There is no evidence of the return that such an investment would have generated. But it would undoubtedly have been well above the 1% or 1.5% over the Bank of England base rate posited in the calculations provided by Andrew’s legal representatives. Those rates are also significantly less than standard variable mortgage rates for most of the relevant period which would have applied to money borrowed to fund a house purchase.

In the circumstances I would propose to adopt a rate of 2% above base rate, which is still a very conservative rate of return to assume.

Using the spreadsheet which Andrew’s legal representatives have helpfully provided, I calculate that, at this rate of return, the additional loss attributable to Andrew being kept out the money that he would have earned in another job is £342,162 at the date of handing down this judgment. Adding this to the principal sum of £267,748 and rounding the result to avoid a spurious impression of precision, yields an estimated total financial loss of £610,000.

Overall assessment

The final question is whether it is appropriate to add to (or reduce) this figure in arriving at the overall award.

I have already considered, and rejected, the submission made on behalf of the parents that their own low drawings from the farming partnership or the low wages paid to their other son, Ross, give rise to any countervailing equity. For their part, counsel for Andrew submitted that, in addition to financial loss, Andrew suffered substantial non-pecuniary harm by relying on his parents’ assurances that he would succeed to Tump Farm which should be reflected in the compensation awarded. They cited a statement of Lewison LJ in Habberfield v Habberfield [2019] EWCA Civ 890, para 60, that: “one must not lose sight of the fact that, as the judge found, the three decades of her life that [the claimant] spent on the farm are not susceptible of quantification.” They submitted that the same is true for Andrew in the present case.

Although in one sense undoubtedly true, statements that detriment has been incurred which is not susceptible of quantification do not seem to me helpful in a case such as this where the remedy being granted is a purely monetary one. In such a case, if it really is the position that a form of detriment cannot be assigned any monetary value, then the consequence must be that no money can be awarded for it. More in point, in my opinion, is the observation of Lewison LJ in Davies v Davies, para 67, that:

“… since it is now common ground that the ultimate award will be a purely monetary one, we must do the best that we can. In different situations the court is often called upon to award compensation for non-pecuniary losses, and the difficulty of assessment is no bar to an award.”

In this case there seem to me to be two main forms of non-pecuniary loss suffered by Andrew. One, which I have already mentioned, is that in another job he would not only have had more money to spend but probably also more leisure time. In so far as that is true, however, it is taken into account in the calculation made, which rewards what might be called delayed gratification through a compound return on the principal sums awarded. The second form of non-pecuniary detriment is emotional harm from having built his life on an expectation of inheriting Tump Farm which has been disappointed.

The object of the present assessment is to work out what compensation is required to put Andrew, so far as money can do it, into as good a position as if he had made a career away from Tump Farm from a much younger age. In that event, he would not have had to undergo a fundamental change of situation at this stage of his life. I accept the submission made on Andrew’s behalf that his sense of who he is and where he belongs must have been profoundly shaped by living and working at Tump Farm for 25 years between 1990 and 2015 in the expectation that it would become his farm and would always be his home. Having to rebuild his life when he was nearly fifty years old is likely to have caused corresponding feelings of dislocation and distress.

This is a detriment which in principle a court can take into account in assessing compensation. I would not, however, increase on this basis the amount of money awarded in this case. This is for four reasons.

First, it is inherently difficult to separate feelings of dislocation and distress at having to rebuild his life from other harm for which no compensation can be recovered - for example, the anger and sense of betrayal that must have accompanied the disappointment of Andrew’s expectations and breakdown in relations with his parents and brother and the stress and anxiety involved in this litigation: both of these are adversities for which the law offers no remedy.

Second, unlike the trial judge who was immersed in the facts of the case and heard the witnesses give evidence, an appeal court is poorly placed to evaluate the extent to which Andrew has suffered feelings of dislocation and distress at having to rebuild his life. People differ widely in their response to major life changes of this kind. In any such evaluation it would also be relevant to consider whether Andrew may have enjoyed some non-financial benefits from living and working at Tump Farm over the relevant period which would not have been replicated in another job and which would need to be weighed on the other side of the scales. Again, this court is not in a position to assess this.

My third reason for not attempting such an assessment is that the feelings of dislocation and distress which Andrew must have suffered should be seen in the context that he has managed to rebuild his life away from Tump Farm.

Fourth, awarding £610,000 in financial compensation can be expected to go a long way towards alleviating feelings of dislocation and distress at having to rebuild his life. It should give Andrew and Tracey enough money to buy their own home and enjoy reasonable financial security when they retire. Counsel for the parents emphasised evidence given by Andrew in his witness statement that:

“I worked incredibly long hours at Tump Farm for 32 years … I have nothing to show for that. If I had left the farm at 16 by now Tracey and I would probably own our house outright and we would probably have savings. As things stand, we have no house or savings.”

An award of £610,000 should be enough to repair that loss. Doing so should bring with it the satisfaction for Andrew of knowing that at least he has not laboured in vain.