At a recent remedy hearing in the High Court to determine the award for a proved proprietary estoppel claim, the judge reinforced the principle outlined in the Supreme Court ruling in Guest v Guest, which focused on the ‘prevention or undoing of unconscionable conduct, not expectation fulfilment or detriment compensation.’ At the original hearing of Armstrong v Armstrong, the judge, Mr Andrew Sutcliffe KC, ruled that it would have been unconscionable for Richard Armstrong’s proprietary estoppel claim to have failed after being left out of his father’s Will in the light of promises made, and detriment caused. Accordingly, at the subsequent remedy hearing he determined that Richard should receive North Cowton farm (with caveats), as he had originally been promised by his father.
At the original hearing, Richard had also brought a parallel claim against his father’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act), in case his proprietary estoppel claim failed. Although this claim also succeeded, the judge ruled that any remedy would only be relevant if his decision regarding the proprietary estoppel claim was overturned at appeal.
Background to the case
Richard Armstrong, the second son of Alan and Margaret Armstrong, discovered after his father’s death that he had been disinherited. This meant that he would not inherit North Cowton farm, which he had been promised all his adult life, nor would he receive any additional financial or housing provision, potentially leaving him and his family destitute. The court case revealed that not only had Richard agreed to pass a substantial inheritance from his mother to his father for tax reasons (with the expectation he would eventually receive this inheritance after his father died), but also his younger brother, Simon, appeared to have manipulated his father to change his Will shortly before he died, disinheriting Richard, and gifting the farm Richard had been promised to Simon’s son, George,
At trial in November 2024 the judge found that Richard had proved both his proprietary estoppel claim and his claim under the 1975 Act. A further hearing to determine the remedy for the proprietary estoppel claim was held in March 2025 after further evidence relating to both North Cowton and Allerton Grange farms had been filed. This was limited to (1) the value of the land and business and (2) the nature and extent of the liabilities, with the judgment handed down in July 2025.
Issues before the remedy hearing
From the additional evidence provided prior to the remedy hearing, it transpired that when Alan Armstrong died in 2020, North Cowton was valued at £2.8m and Allerton Grange at £2.84m; by 2025, North Cowton was valued at £3.13 and Allerton Grange at £3.03m. However, it was the liabilities accruing to both farm businesses, and how they should be apportioned, on which the judge focused.
In total, £2.7m of bank loans, overdrafts, and outstanding suppliers’ invoices were secured against both farms. However, Richard argued that he was only responsible for £625,000 secured on North Cowton, the amount agreed in 2017 when he agreed to ‘walk away from the business.’ To accept his argument meant that North Cowton would be responsible for 23% of the outstanding liabilities, and Allerton Grange 77%, which, the judge noted was manifestly unfair given that both farms were similarly valued and that the debts were secured against both farms.
In his counterargument, Richard noted that Simon had taken out loans secured across both farms without his knowledge or agreement, and that the money Simon had raised from selling parcels of land, had given him ‘every opportunity to reduce or even extinguish the debt that existed over Allerton Grange in 2017 even without the golf course monies.’ The golf course monies referred to an amount held in escrow following a golf course venture with a neighbouring farmer that had closed in 2015 and was now the subject of an ongoing dispute. The judge decided that the golf monies were not to be considered in the settlement of this case as there was no sign that the ongoing issues with the golf course were likely to be settled any time soon.
The proprietary estoppel remedy: what was decided
The judge rejected Richard’s claim that he should only be responsible for a small proportion of the debts that had accrued to the overall farming business and ruled that the debts should be apportioned to each farm according to their respective values (which were broadly equal). He noted that Alan had not promised North Cowton to Richard unencumbered with debt, or even subject to any particular level of debt. If the court was to accept Richard’s argument, Allerton Grange would be saddled with 80% of the overall debt, with a net value of £618k, potentially making the farm unviable, whereas North Cowton’s net value would be £2.5m. Therefore, he ruled that a fair outcome was for Richard to take on North Cowton with the equivalent debt in proportion to its value. The only issue at stake was whether Lloyds Bank (the principal creditor) would be able and willing to apportion their debt accordingly between the farms.
Decision relating to the 1975 Act claim
At the original hearing, the judge ruled that Richard’s 1975 Act claim succeeded because he had proved that he had been financially dependent on Alan, and his Will failed to make reasonable provision for him. It was also relevant that Richard did not receive his mother’s inheritance after being persuaded to sign the deed of variation passing it to his father. Although the judge did consider what reasonable provision under the Act might look like, he noted that it would only be relevant if his decision relating to the proprietary estoppel claim was overturned at appeal. Nonetheless, in principle only, he concluded that a total of £650k from Alan’s estate would allow Richard to buy a suitably sized house and meet his future income needs.
In summary
This case clearly demonstrates the fact-sensitive nature of proprietary estoppel claims, balancing the need for fairness between family members while ensuring that ‘unconscionable conduct’ is rectified. In acknowledging the fine balancing act this requires, the judge mentioned several times that his decision could be referred to appeal and, if so, there was a chance it could be overturned. To date, we are not aware that his decision is being appealed but we will continue to monitor the case.
Although the outcome appears, on the face of it, to be a fair division of assets and liabilities, another court may interpret the available documentary evidence and witness statements differently and arrive at a different conclusion. Because every proprietary estoppel case is unique, this underlines the importance of consulting lawyers who have considerable experience of exploring the options before (and after) a claim is issued. We have dealt with many similar claims and would be happy to discuss your options with you in confidence.
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