A recent High Court case and Supreme Court appeal decision may have an important impact on testamentary freedom - the freedom for people to leave their estate to whoever they choose.
The Supreme Court handed down its judgement on the Guest v Guest case on 19 October 2022.
The case concerned the Guest family and their working dairy farm, Tump Farm.
David and Josephine Guest have three children, Andrew, Ross and Janice. The eldest son, Andrew, had worked full time on the farm for 32 years from the age of 16, living in one of the farm cottages and working for a basic wage.
He did so because of a promise made by his parents that the farm would one day be his, following his parents’ death.
There was a family breakdown and the parents made new Wills, writing Andrew out of their Wills.
Andrew brought a claim based on proprietary estoppel - a legal claim that can be made when someone has been given a clear assurance that they will acquire a right over property and they have relied on that promise to their detriment.
Andrew succeeded in the High Court and was awarded 50% of the net market value of the dairy business and 40% of the net market value of the farm. The court found that his parents had provided assurances over a period of 30 years and that Andrew had relied, to his detriment, on those promises by taking only a basic wage.
His parents appealed to the Court of Appeal arguing that the High Court had not properly considered their interests and that the award made to Andrew was excessive. They argued that Andrew should have been awarded a remedy based on his contribution as opposed to his expectation.
The Court of Appeal did not accept the parents’ arguments and dismissed the appeal. A further appeal was then launched to the Supreme Court.
The questions for the Supreme Court were whether the claimant’s expectations were the appropriate starting point when considering a remedy, and whether the remedy granted was beyond what was necessary.
The appeal was upheld and the Supreme Court provided an alternative remedy – either putting the farm in trust or paying a lump sum to Andrew now with a reduction to reflect that he would be receiving the benefit earlier than anticipated.
Arguably this case is a further restriction on testamentary freedom. An important principle in law, testamentary freedom grants people freedom to leave their estate to whoever they choose in their Will. The judgement may not sit well with those who believe that testamentary freedom should not be subject to challenge.
While this is a debate to be had among lawyers, perhaps the most important impact of this case is that it serves as a reminder that court proceedings over claims to an estate can cause distress, uncertainty and a large amount of legal fees to those involved.
At Wilkin Chapman, we seek a collaborative approach to reach sensible resolutions to conflict, keeping everyone on board and involved. However, we are not afraid to stand up for our clients and we take our role for you seriously.