How are the courts enforcing broken promises?

Writing in an article for eprivateclient, partner Lucinda Brown analyses the recent case of Teasdale v Carter & Anor (2023), in which the proprietary estoppel claim focused on the ownership of a converted barn, Cow House, on Burne Farm in Todwick, near Sheffield. The judgement is the latest in a string of decisions from the High Court on proprietary estoppel claims over the past months.

‘The decision in Teasdale can be said to follow the guidance of the Supreme Court in Guest as to how the Courts should approach identifying the remedy for this type of claim. Guest makes clear that the court will look to enforce a promise-based remedy based on expectation, that is giving the claimant that which they have established they were promised, rather than compensating for detriment, unless specific enforcement of the full promise would be out of all proportion to the cost of the detriment suffered by the promisee, in which case the court may be constrained to limit the extent of the remedy. In Teasdale, the cost of the detriment broadly corresponded to the value of Cow House which perhaps made the Court’s decision on remedy more straightforward. There are however circumstances where it may be disproportionate to enforce a promise in full, for example if the length of the detrimental reliance is short or performance of the promise is not due until the future. In all cases, the Court will have a wide discretion as to remedy, but following Guest there appears to be a move towards giving a claimant what they were promised where possible. Remedies fashioned on a claimant’s expectation may have wide-reaching consequences, and where a family member’s expectations have been raised, uncertainty as to how a Court might give effect to those expectations has the potential to interfere with tax-efficient estate planning. A court order giving effect to equity can have IHT, CGT and income tax consequences.’

Read the full article on the eprivateclient website.

Discover how our trust law services team may be of service to you by visiting our homepage.