The High Court’s recent decision in the Armstrong v Armstrong case has put agricultural inheritance disputes in the spotlight, highlighting the potential issues that can arise among farming families when it comes to succession planning.
In this article we define proprietary estoppel, provide a background on the Armstrong v Armstrong case and reveal the High Court's decision, highlighting key takeaways for farming families to consider when succession planning.
Disputes can arise after a person's death if a will does not reflect a promise made by the deceased before their death – such as a promise to transfer land or property. It may be possible to enforce a promise that is not subsequently fulfilled in a will.
Proprietary estoppel is an equitable remedy and requires the claimant to show:
If the promise has been broken and these elements of the claim can be proven, the court will decide what remedy should be provided to the claimant.
This case involved a farming family from North Yorkshire and the estate of the late Alan Armstrong who died on 5 October 2020 and his wife Margaret Armstrong who predeceased him on 26 September 2018. Alan and Margaret had five children including Richard and Simon.
Alan and Margaret had purchased two farms, North Cowton and Allerton Grange. Two of their sons Richard and Simon had worked on the farms. Richard had moved into North Cowton aged 23 and had overseen the farming operations having worked in the business after leaving agricultural college. Simon joined the family farm business after leaving school. He worked at Allerton Grange and lived nearby. The other children did not have direct involvement with their parents’ farming business.
Richard’s son Thomas later began working at North Cowton when he turned 18. There were tensions between the two brothers as well as incidents involving Thomas, which caused Alan and Simon to have fraught relations with Richard and Thomas. The two farm businesses were separated in 2017.
Alan made a will in January 2020 leaving Allerton Grange to Simon but North Cowton, the land Richard occupied and farmed, to Simon’s son George. Richard was to receive nothing under this will as the residue was to be divided equally between Simon and George.
Alan died in October 2020 and Richard brought claims against his father’s estate claiming proprietary estoppel and under the Inheritance (Provision for Family & Dependants) Act 1975.
The court decided that Richard’s claim for proprietary estoppel should succeed. The court addressed the following issues:
Issue one: were promises made to Richard by Alan that he would inherit North Cowton and were those promises of sufficient clarity to found a claim in proprietary estoppel?
The court decided that it was more likely than not that Alan promised Richard he would inherit North Cowton when his parents died. There had been numerous discussions between Richard and his parents over the years which caused Richard 'reasonably to expect that he would inherit North Cowton.' In addition, there were various notes of meetings with solicitors suggesting this was Alan’s intention.
Issue two: did Richard rely on those promises to his detriment and, if he did, was his reliance reasonable?
The court decided that Richard did rely on the promises made by his parents to his detriment. He chose not to study engineering at university and instead attended agricultural college with a view to working on the farm. He relied on their continuing promises and as a result only received a modest income.
By the time Richard discovered he would be disinherited in 2020, he was unable to change his affairs to cater for that outcome. He had been working on the farm for 34 years and would not be able to easily find alternative employment. Richard had also assumed liability for farm debts and agreed to a deed of variation in respect of Margaret’s estate which he may otherwise not have entered into.
Issue three: did Alan renege on his promises and, if he did, was it unconscionable for him to do so?
The court decided that Alan had broken the promises made to Richard over the course of 35 years. It was unconscionable for Alan to make a new will to cut Richard out of his anticipated inheritance.
Our private wealth division at Ashfords has extensive knowledge and experience to assist private individuals, trust corporations and charities both in the south west and nationally in a variety of inheritance disputes involving rural and agricultural property and enterprises.
If you are experiencing difficulties with family members in relation to an inheritance dispute, get in touch with our disputed wills and trusts team today.
Our trusts and estates team can assist with advice about succession planning and how best to plan for the future for your farm or business. For more information, please contact Kirstin Cook or Mike Westbrook.
