Yet another farm and yet another proprietory estoppel claim

In the modern world in which we live with farm land becoming more and more valuable it seems that the courts have an endless stream of family cases involving disputes as regards ownership of farms. Yet this was the very issue that the court had to decide in the recent case of Shaw V Shaw [2018] EWHC 3196 (Ch).

The court proceedings

Mr and Mrs Shaw, Walt and Gill, had four children, Clive, Theresa, Cheryl and Leanne. Clive issued these proceedings in June 2017. He alleged that as the eldest child and only son of his parents he had worked on the farm since he was at school, often for long hours in hard conditions for little or no pay on the basis of assurances made to him by his parents that the farm would one day be his. By disinheriting him, as they have, Clive alleged that his parents had resiled from their promises.

One factor in this case which differed from other cases involving proprietory estoppel claims relating to farms is that from about 2001 Clive had worked away from the farm as a lorry driver and then currently as an engineer in Norway only returning to the farm every other month in conjunction with his shift patterns.

Clive maintained that during this period his parents continued to tell him that the farm would be his. In reliance on those assurances he worked on the farm unpaid in his spare time, spent money on the farm and did not purchase a property in Norway where he mainly works.

The above arrangements continued until about 2001 when, Clive alleges, he was told by his parents to leave the farm because there was insufficient work for him and Walt as a result of the reduction in farm land and farming stock – see below. Despite being told to leave the farm, Clive alleges that his parents told him the farm would be there for him when he returned upon Walt’s retirement.

Walt and Gill, on the other hand, said they never promised Clive the farm unconditionally; he had to work on it and in particular commit to the farm by working consistently and diligently which, they said, Clive did not do. Further, they said they had not surrendered their rights to change their minds as to inheritance of the farm. They denied detriment and unconscionability and say their actions were reasonable in all the circumstances.

The purchase of the farm

Walt’s father, John bought land at Wildmore in about 1930 before Walt was born and then purchased Whaley Farm in 1954. John and Walt became partners in 1965 and Walt acquired about 18 acres at Wildmore Fen.

John and Walt took on the tenancies of two more farms in the early 1970s – Duddles Farm (45 acres) and Cortons Farm (42 acres).

John died in 1979. In 1981 Walt took over John’s tenancy of Chapelry Farm (65.76 acres) and in the same year acquired a further 17 acres from his father’s estate. He also sold a couple of acres to a third party but then added an extension to the farmhouse and built the current yard which exists at Whaley Farm.

In 1989 a further three parcels of land totalling 54 acres were transferred to Walt as a gift from his mother bringing the total acreage of the farm to about 250 acres. By this time, Clive was 27 years old.

The Chapelry Herd of British Friesians (“the Herd”)

The Herd was started by John in 1950. It was run collectively from Chapelry and Whaley farms as the sheds and milking parlour on each farm were too small. The Herd was very well regarded and often topped the charts at the annual agricultural show competition. Unfortunately, Clive (alleged Walt) had no interest in the Herd and by 1998 it became clear that significant investment was necessary to continue with the dairy business. As a result, Walt made the decision to sell the Herd which he did for £220,000.00 together with an additional £150,000.00 for the milk quota.

The disposal of farm land and valuation

In 2006 (or earlier according to Clive) Walt began to sell off parcels of land. Walt did so on the basis that he had no-one to leave the land to, a fact disputed by Clive. By December 2006, Walt had surrendered the tenancies of both Chapelry and Duddles farm. He did, however, purchase some more land (40 acres) at Wildmore which was tenanted. However, he subsequently sold some of this land in September 2007 together with a further piece in February 2008.

In July 2018, a year after the issue of proceedings by Clive, a valuation report was obtained on the balance of the farm which by this time consisted of the farmhouse, yard, paddock and runway totalling about 29 acres together with two arable fields of some 33 acres, being a total of 62.24 acres. The entirety of the farm was valued at £866,000.00.

The parents’ Wills

Walt and Gill made three wills, in 1993, 2012 and 2017. All were mirror wills and provided in each instance for the entirety of the estate to pass to the other. If that failed, the will in 1993 provided, in the main, for the majority of the estate to go to Clive with some financial provision being made for Cheryl and Leanne and an additional income for Leanne until she reached the age of majority as well as a right of occupation in relation to the farmhouse for both daughters for the same period.

In 2012, by which time Cheryl and Leanne had both also now reached the age of majority, revised wills were made. In this case if neither survived the other, the daughters were to receive three separate blocks of land comprising approximately 14 acres each. Clive was to have a block of fields comprising 19 acres together with 50% of the net proceeds of sale of the farmhouse (together with an option to purchase the same) with the other half passing to Leanne. Clive still therefore retained the lion’s share of the estate, albeit at a reduced value but this reflected the reduction in the land and sale of the Herd.

In 2017, three days after the issue of these proceedings, further revised wills were made. These wills provided on the death of the survivor for Cheryl to have approximately 20 acres of land with the farm being divided equally between her and Leanne. A granddaughter and great grandson were bequeathed specific legacies of £5,000.00 each. Leanne inherited the residuary estate. No provision at all was made for Clive.

Matters for consideration

In order to consider the same it was necessary for the court to determine two factors, namely Clive’s interest in farming and his work and remuneration in respect thereof.

Having considered the witness evidence (given by both parents, Clive, his three siblings, two friends and a vet) the court concluded that Clive had little or no interest in farming and did not work substantial, long or anti-social hours.

The court also held that Clive was paid as an employee at a rate consistent with other members of the family and/or employees. The frequency of wages paid to Clive depended upon the hours worked by him throughout the year; when he was employed on a full-time basis he was paid as such but on other occasions he would be paid on an ad hoc basis according to the number of hours worked.

Having regard to the above factual matters, it was common ground that the issues to be determined by the court thereafter were whether Clive’s parents had made any assurances to him, if so, what they were, when they were made and what it was reasonable for Clive to have understood they meant. Finally, if assurances had been made, the court would need to determine whether Clive had acted on them to his detriment and it was unconscionable for his parents to go back on their word.

Were assurances made?

The court found that assurances had been made by Walt and Gill at various times whilst Clive was still working at the farm. It also accepted that they were assurances intended to be relied upon by Clive. They were serious representations made in circumstances where Walt, in particular, wanted Clive to dedicate his life to farming with a view to succeeding him as a farmer and continuing the family business.

However, unlike other recent cases that have been considered regarding assurances made in relation to inheritance of farms, these assurances, the court held, had (save for one assurance made by Gill) been made on a conditional basis, namely that Clive would work on the farm in a reliable, competent and consistent manner. Clive had to be committed rather than just working on the farm. In the court’s view it was improbable that Walt would have accepted working as any employee paid by the day or week as sufficient for Clive to inherit. Clive’s actions mattered to demonstrate him taking on the role of a committed and long term farmer.

The court did not accept that Clive’s parents has told him to leave the farm in 2001 nor that any representations had been made to him that it would be waiting for him when he returned upon Walt’s retirement, even if he no longer worked there.

It also considered that Clive had not acted to his detriment in relying upon his parents’ assurances as it found Clive would have acted in the way in which he did in any event by divorcing himself from farm work and moving more towards full-time employment as a lorry driver and diesel engineer and more latterly, his growing business involving American trucks.

Conclusion

The Court held that Clive was never going to be the farmer Walt thought and hoped he would be and take over the running of the farm. Accordingly, even if the assurances made by his parents had been on an unconditional basis (which the court held they were not) Clive did not act to his detriment in reliance upon the same. The court also found that to the extent Walt and Gill had done so it was not unconscionable for them now to change their minds as regards the assurances made.

As to the one unconditional assurance made by Gill, this related to an assurance that Gill made at a time when a new kitchen was being fitted by Clive (amongst others) at the farmhouse. Gill had indicated to Clive that he could choose the kitchen and fittings as the farm would be his one day. However, this was made on the basis of the terms of the will which existed at the time which gave Clive a right to purchase the farmhouse and based on Clive’s indication that he would wish to do so.

Having regard to the circumstances, the court found that, even if it was wrong about it not being unconscionable for Gill to go back on her assurance, Clive should not receive any monetary award as he wanted to do the kitchen work himself. Furthermore, even if there was detriment the court considered Clive had been more than compensated by the benefits he had received over the period concerned, namely free board and lodgings, free diesel, free insurance etc.

In the circumstances, the court dismissed Clive’s claim.

Walt and Gill had issued a counter-claim for possession in relation to the farm which as a result succeeded. Clive was therefore ordered to vacate the farm.