[2025] EWHC 2054 (Ch)

The defendants submit that the primary relief sought by Richard on his proprietary estoppel claim, which is a transfer of 50% of the interest in Alan’s estate, should be rejected because the court found that Alan and Margaret’s promises were to the effect that he would inherit North Cowton, not that he would inherit half of Alan’s estate or half of the estate of the second to die [194] to [215]. Accordingly, the court’s starting assumption (but not presumption) is to hold Alan’s estate to the promise which related to North Cowton and not 50% of his estate.

In order to arrive at the provisional remedy, and the reasonable expectation it has found that promise gave rise to, the defendants submit that it cannot be suggested the promise had the effect of giving rise to a reasonable expectation that Richard would inherit North Cowton free from any debt. This is for two reasons. First, during Alan’s lifetime (in 2017), Richard accepted that North Cowton would be burdened with debt of at least £625,000 [206]-[207]. Second, Richard’s acceptance that he would be personally liable for this debt is an element of his reliance detriment giving rise to the proprietary estoppel in his favour [219].

The defendants say that Richard was aware when the division of the businesses took place in 2017 that the portion of debt notionally allocated to North Cowton was a small proportion of the pre-split liabilities. This is confirmed by his witness statement dated 7 March 2025 where he refers to Mr Thomas’s October 2017 notes and to the fact that it was expected at that time that the Armstrong family was due to receive around £2.7 million as golf course monies which was to be used to repay the debts of both farms of around £2 million.

The defendants submit that, even if Richard is right that there was a mutual belief that the golf course monies would allow all the bank liabilities to be discharged, that has not come to pass. It cannot have been the case that Richard expected that, come what may, North Cowton would only take such a small proportion of the joint liabilities which (if it happened) would have had the effect of rendering the farming enterprise at Allerton Grange unviable.

Accordingly, the defendants submit that the court’s starting assumption should be that the fulfilment of Alan’s promise to Richard requires North Cowton to be allocated with a reasonable proportion of the debts of the two farms. If that is wrong, and the court considers it should start with the assumption that the fulfilment of the promise to Richard would require North Cowton to be allocated only the level of debt with which it was allocated the time of the 2017 split, then that provisional remedy requires revision when it is looked at in the round against all the relevant circumstances.

The circumstances on which the defendants rely are the following:

Accordingly, the defendants submit that the appropriate remedy on the proprietary estoppel claim is one which provides for the transfer of North Cowton to Richard with a proportionate share of the debts of the two farms being assumed by Richard. They ask the court to apply the following reasoning:

The defendants accept that achieving a clean break between Richard and Simon (so that neither is dependent upon the other) will not be straightforward in view of the fact that Lloyds has an all monies charge over North Cowton. They submit that the court should direct the parties to use their best endeavours to procure from relevant third parties the necessary consents so that the debt can be apportioned in accordance with the above proportions and that, should this not prove possible, the parties should have liberty to apply for further orders on notice to all relevant parties.

As regards the written submissions made by Richard following the remedy hearing (see paragraph 39 above), the defendants accept that if the court considers Alan’s estate’s share of the golf course monies to be potentially relevant to the determination of the remedy on the proprietary estoppel claim, then the uncertainty about when and how much of the nearly £4 million held in the Santander escrow account will be released to Alan’s executors places the court in a difficult position.

However, the defendants submit that it is not uncommon for the court to be faced with the prospect of having to fashion a remedy in circumstances which were not contemplated at the time that the promises or assurances were made or the detriment was suffered. One such scenario is where the promise is repudiated before it was due to be performed: see Guest v Guest at [64]. Guest v Guest itself was concerned with that scenario. The Supreme Court’s approach left the defendants in that case with the ability to satisfy the claimant’s equity for a sum which the court acknowledged (at [104]) was of less financial value to the claimant than had the promise been fulfilled (because a discount had to be given for early receipt of financial compensation by the claimant). That was despite the fact that the defendants had acted unconscionably in seeking to repudiate their promise and no blame was ascribed to the claimant.

The defendants submit that, if the court finds it was intended that the golf course monies would be available in short order to discharge all the debts of North Cowton and Allerton Grange, the circumstances in this case are similar to cases in which the promise is repudiated prior to the time of its performance. As in that category of case, the court is required to fashion a remedy against circumstances very different from those which were contemplated when the promises were made and the detriment suffered, namely, that (i) Alan’s estate’s share of the golf course monies will not be sufficient to discharge the debts of the operations at North Cowton and Allerton Grange and (ii) those monies have now become subject to an intractable dispute with third parties for many years and it is impossible to know when that dispute will be resolved or how much will be received.

In response to Richard’s suggestion made after the remedy hearing that the court could award Richard a 50% interest in the estate’s share of the golf course venture proceeds subject to a cap of the amount of debt above £600,000, the defendants submit that this is an unattractive solution for the following reasons: