Estoppel Remedies: Switching to Expectation When It Is Difficult to Quantify Detriment

Inconveniently, it was Albus Dumbledore, rather than a leading philosopher, who said: “Soon, we must all face the choice between what is right and what is easy.” The Supreme Court in Guest v Guest has the opportunity to provide guidance as to the correct approach to be adopted when determining the extent of a right arising through proprietary estoppel – a set of equitable principles that, as in Guest itself, can give the claimant (C) a successful claim against the defendant (D) where C has relied on D’s promise that C will acquire an interest in D’s land, and that reliance means C would now suffer a detriment as a result of D’s failure to honour the promise. A perceived difficulty with the logically plausible argument that the remedy in such a case should reverse the detriment incurred by C is that the quantification of non-financial detriment can be difficult. Consider, for example, the following revealing exchange in the course of oral argument in Guest:

Lord Leggatt: “You are trying to put

This exchange is, of course, inconclusive but nonetheless illustrates the temptation to reason that, because it can be difficult to quantify C’s detriment, it is permissible to switch to focusing on C’s expectation. It is true that granting an expectation remedy, which represents in logical terms the highest possible remedy, ensures that C will not be undercompensated. However, why is it solely D’s problem that it is difficult to quantify the detriment which forms an essential part of C’s claim? In other legal contexts, it might be thought that the person making a claim based on actual or potential harm would need to establish the extent of that harm and that, therefore, a court might be reluctant to grant relief that went beyond the extent of the harm proven.

Andrew Robertson attempts to justify the approach of switching to an expectation remedy when it is difficult to quantify the detriment “on the basis of the overriding need to ensure that no harm is suffered.”. Robertson takes the view that “the purpose of the remedy is to prevent the claimant from suffering harm as a result of his or her reliance”. He goes on to argue that when choosing to enforce an expectation and thus risk over-compensating C, a court is  “in effect, holding the representor responsible for the factual uncertainty brought about by his or her inconsistent conduct.” The argument thus proceeds in three stages: (i) D is at fault; (ii) therefore any evidential uncertainty should be resolved against D; (iii) therefore C’s expectation should be protected.

We agree with Robertson’s central point as to the purpose of proprietary estoppel remedies, and also that in some cases (e.g. where detriment is particularly extensive) an expectation remedy is necessary in order to ensure that no detriment is suffered. The purpose of this post, however, is to challenge the view that a court should be free to move to an expectation remedy simply because it is impossible precisely to quantify C’s detriment. Each aspect of the three stage argument will be questioned.

First, even if it is accepted that D is at fault, and that as a result any evidential uncertainty should be resolved against D, this does not explain why C’s expectation should be enforced. So stage (iii) does not follow from stages (i) and (ii). Rather than giving C the benefit of the doubt on specific evidential issues relating to the extent of C’s detriment, the proposed approach gives up entirely on seeking to quantify the relevant harm and, instead, switches to an alternative measure. Whatever view is taken as to the aim of proprietary estoppel remedies, it is generally accepted (as it was by counsel on both sides in Guest) that, in all cases, an expectation remedy would be inappropriate if it would be disproportionate to the detriment suffered. This also presupposes that it must always be possible to reach an estimate of the value of the detriment, since otherwise it would not be possible to compare it to the value of the expectation for the purpose of judging proportionality. If it is possible to make this estimate, then why should it not indicate the extent of a remedy that is calculated on the basis of the detriment (subject to an upper limit on the remedy based on the extent of the expectation)?

Second, even if it is accepted that D is at fault, it is not clear that this justifies resolving any evidential uncertainty against D. So stage (ii) of the argument does not follow from stage (i). There are circumstances (see e.g. Armory v Delamirie , or the tracing rules applying where a trustee makes an unauthorised use of trust assets) where D’s wrong is the cause of a factual uncertainty resolved against D. In contrast, in a case such as Guest, and contrary to Robertson’s analysis, D’s inconsistent conduct is not the cause of the factual uncertainty; the fact that D has resiled from his promise is not the reason why it is difficult to put a monetary value on the detriment that C has incurred. The most that can be said is that by making the promise and then not keeping it, D has caused the harm; it is, in this sense, “his fault”.

But in what sense is D at fault? D’s failure to honour a promise made to C may occur against the background of a breakdown in the relationship between the parties, for which D may not be any more to blame than C. This breakdown may create practical obstacles to the fulfilment by D of the promise, as e.g. in Guest where the promised arrangement included C’s farming the land alongside his father or brother and living in close proximity to his parents. In the Court of Appeal in Guest, Floyd LJ accepted that it was necessary to achieve a ‘clean break’ between the parties. It is not obvious that D would be at fault for refusing to fulfil his promise when this would be inconsistent with the necessity of achieving a ‘clean break’. He would be at fault for not offering some alternative recompense to C but, in these circumstances, D is not to blame for the uncertainty surrounding the calculation of such recompense, which is attributable instead to the breakdown in relations between the parties. It is thus also possible to challenge stage (i) of the three stage argument.

Proprietary estoppel, unlike contract and tort, does not involve enforcing, or responding to a breach of, a pre-existing duty of D. Rather, it determines what is necessary to prevent D unconscionably exercising a liberty not to keep a particular type of promise. In a case such as Guest, that unconscionability, in our view, consists in leaving C to suffer a detriment as a result of C’s reasonable reliance on D’s promise that D would exercise a particular legal power in C’s favour. On this vision of proprietary estoppel, there is a problem with invoking a moral obligation to keep one’s promises for the purpose of categorising D as a wrongdoer against whom all uncertainty must be resolved. Why is the moral obligation to keep one’s promises relevant in one subset of cases (those cases where the detriment is difficult to quantify) but irrelevant in other cases (where there is no difficulty in quantifying the detriment)?

It must be accepted that, in some cases, the quantification of C’s detriment will involve complexity. In the course of argument in Guest, counsel for the claimant suggested that it would be “impossible” to compensate the claimant for “the lost years”, including the loss of the ability to build up a career and to buy property, and having his “status” taken from him in his fifties. Lord Stephens responded by pointing out that, while he was not aware that these issues had been addressed before in the proprietary estoppel context, they were “meat and drink” in the personal injuries context. While it is important to bear in mind the essential differences between proprietary estoppel claims and claims in the law of tort, it is hard to see why the courts should not, metaphorically speaking, roll up their sleeves and grapple with the quantification of the type of detriment that arose in Guest. Proprietary estoppel is an equitable doctrine whose modern function is to deal, in a fact-sensitive way, with some of the risks arising from the existence of legal powers, such as the power to transfer property to another, whether by will or inter vivos. The doctrine must respond to the specific facts of the case at the remedial stage, as much as at the earlier stage of determining whether a valid claim has arisen. It is not acceptable to pretend that proprietary estoppel is a heavily disguised branch of contract law, and to enforce D’s promise, however easy that might be.

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How to cite this blogpost (Harvard style):

Mee, J. and McFarlane, B. (2022). Estoppel Remedies: Switching to Expectation When It Is Difficult to Quantify Detriment. Available at: https://www.law.ox.ac.uk/research-and-subject-groups/property-law/blog/2022/03/estoppel-remedies-switching-expectation-when (Accessed: [date])