In a widely-reported dispute worthy of a P G Wodehouse novel, David Gladstone – descendant of a prime minister, former High Commissioner of Sri Lanka and owner of Wotton House, a £15 million pile in Buckinghamshire – is seeking possession of the house from Mrs Leigh White, a former city solicitor, who moved in a few years ago and is now reluctant to leave.
Mrs White claims that she became “successor and heiress” to Mr Gladstone through his repeated assurances that Wotton House and two other properties would go to her when he died, moving in at his request to assist him in managing the estate. Relying upon these assurances, she ceased her legal practice and now argues it would be “unconscionable” for Mr Gladstone to now go back on his promises, which he must have forgotten due to his old age.
Mr Gladstone retorts that he has forgotten nothing: the promises were never made. He wishes to live out his days at Wotton House but cannot do so while Mrs White remains there, together with her husband and son. He has made a will leaving his estate to family and nothing to Mrs White and has brought possession proceedings against her.
Mrs White’s defence raises a concept known as ‘proprietary estoppel’. Typically, past cases in this field have involved farms and arisen after the death of the owner, whose will has failed to properly benefit someone, often a son, who worked on the farm for years, for little or nothing, in reliance on a promise along the lines of “one day, all this will be yours.”
Such are the facts underlying the recent Supreme Court decision in Guest v Guest which has clarified the law. Relying on the assurance of an inheritance from his father, son Andrew spent most of his working life on the family farm for low wages, accommodated in a farm cottage, in the expectation that he would succeed his father as owner of the farm, be able to continue farming there, and in due course pass it on to his own children. Unfortunately, the relationship deteriorated and his parents made new wills excluding Andrew, then dissolved the farming partnership and gave him – and his family – notice to quit the cottage.
Andrew’s proprietary estoppel claim was upheld by the Supreme Court. In his judgment, Lord Briggs emphasised that the aim of proprietary estoppel is to satisfy expectations where it would be unconscionable not to do so, not to compensate for the detriment suffered by the breach of a promise.
In some cases, the two are not very different and the court underlined that the remedy should not be out of all proportion to the detriment suffered without good reason. Lord Briggs then set out a series of principles to be applied, which can also be applied to Gladstone’s case:
1. The court should start by determining whether going back on the promise is unconscionable at all in the circumstances. Crucially, did Mr Gladstone make a promise and what was it? If not, Mrs White’s case falls at this first hurdle. If he did, much will depend on what detriment Mrs White suffered in reliance upon whatever the promise was. Andrew devoted 33 years to the farm, missing out on the opportunities to obtain qualifications, work elsewhere for a higher wage and to buy a property of his own. In contrast, Mrs White has spent 5 years living on a £15 million country estate. Is it plausible that a successful city solicitor would have worked for Mr Gladstone for nothing, without any guarantees?
2. If it is unconscionable, then the simplest way to remedy that unconscionability is to enforce the promise to transfer the property in question…which means Mrs White receiving a £20 million
estate upon Mr Gladstone’s death and, arguably, being entitled to remain at Wotton House in the meantime.
3. …or to provide monetary equivalent where the promisor requires it for personal occupation. This would imply Mr Gladstone being permitted to return to Wotton House but being obliged to fund Mrs White’s accommodation elsewhere pending his own death, whereupon the property would become hers.
4. But if that would be out of all proportion to the detriment, then the court may need to limit the remedy…
5. …however, this does not mean it should seek precisely to compensate for the detriment. So the court will not assess her detriment by conducting a detailed, forensic, analysis of exactly what income from her legal practice Mrs White has foregone by reason of her reliance on Mr Gladstone’s promise.
6. Finally, the court should consider in the round whether its own proposed remedy would do justice in the circumstances, by considering whether the promisor would be acting unconscionably if he were to confer the proposed benefit on the promisee.
So what will be the result? So much hangs on the court’s findings of fact. If it accepts Mrs White’s case that a promise was given, on which she relied to her detriment, she will emerge with substantial value from Mr Gladstone. But his entire £20 million estate? The court will surely regard that as being so wildly out of proportion to any detriment she can demonstrate as to limit her recovery. It is hard to see her inheriting the estate.
And what, on any outcome, is the lesson to be learnt? Don’t allow people to move into your home, or to work for you, or care for you, free of charge or for obviously very low pay. Be clear as to what they are to do and what they are to be paid. Don’t make rash promises, even in jest. Most importantly, put it all in writing.
It appears that Mrs White had no employment contract or consultancy agreement entitling her to be paid by Mr Gladstone for her services. Its absence now allows her to argue that what was agreed was that she be paid £20 million upon his death.
By John Melville-Smith, Partner in the Dispute Resolution team at London law firm Seddons.
