Richard Gordon Armstrong v Simon James Armstrong & Anor

When proprietary estoppel is established, relief is directed to preventing or undoing unconscionable conduct. Fulfilment of the promise is usually the starting assumption, but not an inflexible presumption. The court may make a reduced or different award where full enforcement would be out of all proportion to the detriment, or where the promise and detriment are insufficiently defined. The provisional remedy must be assessed in the round against practical justice, fairness to third parties and all relevant circumstances. The remedy should go no further than is necessary to make the promisor’s conduct non-unconscionable. A claim under the Inheritance (Provision for Family and Dependants) Act 1975 may support a clean-break award for housing, income and partnership liabilities.

The claimant had succeeded in an earlier liability judgment on proprietary estoppel and had also established an alternative claim under the Inheritance (Provision for Family and Dependants) Act 1975. This judgment concerned remedy.

The claimant sought North Cowton free of debt, or its unencumbered value. The defendants argued for a transfer subject to a fair proportion of the farming businesses’ bank debt. The court also had to determine the alternative statutory award if the proprietary estoppel decision were overturned.

1. The court applied Guest v Guest [2024] A.C. 833. The repudiation was unconscionable, so the starting assumption was that the estate should be held to the promise that the claimant would inherit North Cowton. The promise did not include an assurance that the farm would be debt-free or subject to a particular level of debt.
2. The 2017 allocation of liabilities was not a definitive division of the borrowing. The court declined to treat it as defining the promised inheritance. It was also inappropriate to take account of uncertain golf-course proceeds, which were subject to unresolved disputes and were not part of the promise.
3. Transferring North Cowton free of debt would be unfair to the defendants and would leave Allerton Grange commercially unviable. A fair allocation by reference to comparative farm values was appropriate. The claimant was to assume 50.81% of the relevant bank debt, excluding the outstanding balance of the later £250,000 loan taken out for works at Allerton Grange without his knowledge or consent.
4. The court declared that the Marton land belonged to the defendants and that the claimant had no legal or beneficial interest in it. The parties were directed to use their best endeavours to obtain the necessary third-party consents to apportion the Lloyds debt and achieve a clean break, with liberty to apply if necessary.
5. If the proprietary estoppel decision were overturned, the claimant would receive £650,000 under the Inheritance (Provision for Family and Dependants) Act 1975. An indemnity for partnership liabilities could be ordered under section 2(4). Lump sums were appropriate for housing and future income needs because a life interest would not achieve the required clean break.
6. The parties were invited to agree the implementing order and, failing agreement, to make written submissions on outstanding matters including costs.

First-instance remedy judgment following the earlier liability judgment in the same proceedings, [2024] EWHC 2989 (Ch).