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In the recent case of Moore v Moore & Till Valley Contracting Limited 2016, the son of a mentally incapacitated farmer persuaded the High Court that the family farm had been promised to him many years ago and was therefore awarded his father's interest in the farming business by virtue of the doctrine of proprietary estoppel.
Stephen Moore had worked on his family's 650 acre farm in Wiltshire for minimal pay since his childhood (he is now 48 years old). He became a salaried partner in 1998 and in 2003 he became an equity partner, taking a share of the profits.
However, by 2008 his father (Roger) began to show signs of early-onset Alzheimer's Disease, forcing him to take a step back in the business. Stephen took over the running of the farm.
Roger's health continued to decline and he found it hard to adjust to his reduced role on the farm. His relations with Stephen became difficult. In 2012 he made a will disinheriting him. Roger (by his wife Pamela as Litigation Friend) issued proceedings for the dissolution of the partnership. As at the time proceedings were issued Roger did not have capacity, the 2012 will was referred to as evidence that he had changed his mind about Stephen's right to inherit the farm.
In defence to the claim, Stephen argued that from a young age, and on numerous occasions, his father had told him the farm would one day be his, creating an expectation on Stephen's part that he would inherit it.
In the context of farming families, it is not uncommon to find a claim being prosecuted where promises were made by the farm owner that others working on the farm would inherit the farm or part of it. In such circumstances, a claim may be able to be brought to require the farm owner to make good those alleged promises. This is known as proprietary estoppel.
In order to bring a successful proprietary estoppel claim, the following must be shown:
- That a promise to a right over something was made
- That the person who was promised the right relied upon that promise and acted to their detriment
- That it would be unjust and/or inequitable to allow the person to go back on that promise
If the court determines that the claimant has satisfied the requirements of proprietary estoppel, it must then consider what remedy to award. The court has wide and flexible powers when determining what equitable remedy is appropriate.
The court adopts a cautious approach to ensure that the relief is appropriate and proportionate. The Court must only award the minimum equity needed to do justice. There is usually a difference between the claimant's expectation or what they were promised (for example ownership of a property or a substantial lump sum payment) and the actual detriment they have suffered (for example loss of opportunity or working for low pay).
In this case, the Court accepted the evidence put before it by Stephen and held that 'he has equitable interest in Roger's share in the Farm and the Farm Assets, which includes Roger's current and capital accounts, Roger's share of the Company cash and profits and Roger's director's loan account'
The Court also ordered that the farming partnership should be dissolved, with Stephen taking over the farm for all practical purposes, because of Roger's Alzheimer's. It was, however, further ordered that Roger and Pamela are to continue occupying the farmhouse (at Stephen's expense), and receive an income from the business, for as long as they need.
You can read the full judgment here.
While this case has not evolved the law of proprietary estoppel, it is a very good example of the application of settled principles and serves as a useful reminder of the ingredients required for such a claim.
Please contact our Disputed Wills and Trusts Team by telephone on freephone 0800 0931336, or by email at firstname.lastname@example.org for a no obligation chat to see how we can help you.