Another day, another proprietary estoppel claim!
- AuthorCaroline Dowding
These days in the farming world, I wonder if I’ll read anything other than proprietary estoppel claims being brought against the farm.
In the latest case, the High Court has granted the daughter of a Yeovil farmer a substantial cash payment in lieu of her rightful share of the farm.
The farm itself consisted of 220-acres, currently valued at £2.5m, and was owned by Frank Habberfield and his wife, Jane. They ran the farm as a partnership, with the property being held as beneficial joint tenants. They had four children, and the youngest of them, Lucy, had worked on the farm since childhood. Since 2007, her partner has also worked full time on the farm.
Frank died in 2014, aged 74 and before his retirement, and the property held passed by survivorship to Jane, as the surviving joint tenant. He had also left his entire estate to his spouse under his will.
Now for those of you who have read my previous blogs on this, we can probably already anticipate where this claim is going.
Lucy was unhappy with how her father’s estate was divided, and brought two claims at court, one for proprietary estoppel and one under the Inheritance (Provisions and Family Dependants) Act 1975 as a fall-back position.
Lucy claimed that she devoted her working life to the farm, and that her father had assured her that she would eventually take over the farm when he retired. Her mother, Jane, disputed this claim, and argued that she was not aware of any promise and therefore could not be bound by them, especially as the property passed to her as the surviving joint tenant. She also claimed that Lucy had exaggerated her work on the farm and her contribution, and minimised the work completed by her siblings and other employees. Lastly, she confirmed she has received benefits, such as a home and childcare, which more than compensated her for her work.
The courts relied upon a witness statement from Andrew Robinson, who is a chartered surveyor and became involved in 2008 to discuss a possible plan for succession at the farm. His advice included a proposal for a new limited partnership to run the business, and refers to Frank and Jane having made clear that it was their desire that Lucy should end up being the owner of the overall farming unit, including the farm house and farming stock. This would only happen on the latter of the deaths of Frank and Jane. The couple also wished to provide for their other children and the proposal refers to passing a barn and agricultural occupancy building plot to their son during their lifetime, and bequests for their other two daughters in the form of amounts of money raised against the value of the farm.
Because of this, the judge concluded that Lucy had proved her claim, and whilst her claim was for the whole farm, she was awarded a 45% share equating to approximately £1.17m. This is in spite of the fact that she and her husband had left the farm in 2013 following an argument with her sister in the milking parlour.
Jane was ordered to pay the cash equivalent of Lucy’s interest in the farm, rather than ordering a split of property on the farm, partially for business reasons but partly because Jane needs somewhere to live.
This once again highlights the importance of proprietary estoppel claims, as well as ensuring succession planning is done at an early stage, whilst trying to minimise the risk of such a claim being made. However, whether you need assistance with securing your future, or find yourself in the middle of such claim, there are lawyers here at Birkett Long that can assist.
If you have a proprietary estoppel concern, or would like to discuss this matter further, please do not hesitate in contacting one of our agriculture specialists on 01206 217394 or alternatively email me at email@example.com.