Family court disputes highlight inheritance issues

Several cases in the High Court in 2013 illustrate the rise in the number of farm ownership and inheritance disputes between family members. Russell  Reeves examins the implications for succession planning

These disputes tend to be quite similar. They typically involve farmland, both farming and non-farming family members, and tend to occur when the issue of succession has to be dealt with.

There are perhaps a number of reasons for this, including the fact that many farmers are coming to the end of their working lives, which means the question – “what will happen to the farm?” – naturally arises. With the continued high value of farmland the stakes are frequently high.

One recent dispute (the Jenkins case) on the Isle of Wight took place between six siblings (four boys and two girls). Their parents were farmers at East Ashey Manor Farm House.

The estate totalled about 210 acres, including an orchard, farm buildings and yards, while the couple also owned a further 150- plus acres across the island and ran a haulage business.

The parents died leaving what I would call typical farming wills. They made provision to pass most of the farm to any of the six children “who were employed by the farm or who managed the farm at the date of the parents’ death”.

Terms of will

However, if no child was employed by or managed the farm at the date of the parents’ death, then the wills stated the farm would pass to the six children in equal shares. The father died in 1995 and the mother died in 2005, changing her will shortly beforehand.

One of the issues for the court to consider was whether any of the siblings were “employed by the farm or managing the farm at the date of the parents’ death”. The four boys had all become involved in farming to greater or lesser degrees over various time periods.

For example, one had carried out a farming enterprise on part of his parents’ land (but did not pay a rent) and did some paid work on the farm. The second worked for his parents on their farm for about four years but no longer worked there.

The third worked on his parents’ farm for about eight years but no longer did so, and the fourth son worked on his parents’ farm for about nine years before having an argument and leaving.

Importantly, however, the fourth son continued to keep about 60 cattle on the land, some of which were given to him by the parents together with some farm machinery. The fourth son also grew hay on the land and had one employee.

It was the fourth son who made a variety of claims on his parents’ estate. First, he claimed his work on the farm at the date of the parents’ death qualified him to inherit the farm under the terms of the will.

Second, he claimed a tenancy under the Agricultural Holdings Act 1986. Third, he claimed that outside the scope of the wills he was “promised” the farm by his father and that therefore he was entitled to the farm under an old legal doctrine called “proprietary estoppel”.

Finally, he said he was entitled to occupy some of the land under the Trusts of Land and Appointment of Trustees Act 1996.

These facts are by no means unusual and they illustrate typical arguments which a court must consider. The case was heard in the High Court in May 2013 and the court needed to carefully consider the interpretation of the wills, the intentions of the parents, the alleged “promise” made by the father to the fourth son, various tenancy issues and also the exact boundaries and definitions of various parcels of land referred to within the wills.

One particular difficulty for the judge was the alleged “promise” of the farm to the fourth son because this was not in writing or in either parent’s will. Judges have considered these sorts of promises in many cases. The leading case that did so was another farming dispute in 2009 (Thorner versus Major).

In that case a judge, Lord Walker, explained that for a promise to be upheld the person making the claim (in this case the fourth son) must show that:

a) a promise was made to him;

b) he relied upon it; and

c) he acted to his detriment upon his (reasonable) reliance upon it.

Lord Walker also explained that in these cases judges need to subject the evidence put forward to “careful and sometimes sceptical scrutiny”. This is particularly important when there is only one witness to the alleged promise or where (as with the alleged promise made to the fourth son) the person who allegedly made the promise (in this case Mr Jenkins) had died.

Therefore the judge in the Jenkins case spent a great deal of time setting out his reasons, which ran to 27 pages. In the end the fourth son lost his “promise” claim.

Unfortunately for the fourth son, he lost his other arguments too. The effect of this was that the court split the value of the farm between all the siblings, albeit for various other reasons, in unequal shares.

What this Jenkins case does is highlight the number of different legal arguments that a person may bring in relation to ownership or occupation of farmland. It also shows that even if farmers make wills, it does not guarantee those wills will necessarily be effected as they are intended. This is because some of the arguments raised can operate outside of the scope of the wills.

Facts of case

In order to reach his or her conclusion a judge will typically need to consider all of the facts of a case very carefully. Even small facts can be very important (as happened in the Jenkins case) such as which person claimed the single farm payment which people appeared in a census at a particular address at a particular time and whether a farming son was an employee – as opposed to someone who merely carried out contractual work for his parents, or a partner.

This case is merely one example of the sorts of farming disputes which the courts are dealing with.Every case depends upon its own facts and legal arguments so the outcome of one cannot be relied upon as a guide to another.

But it is important to have a thorough knowledge of how these legal arguments interplay with one another.

One thing that is clear, however, is that these farm ownership and inheritance disputes are continuing to reach court.

Russell Reeves is an agricultural litigator and regulatory specialist based at Thrings solicitors’ Bristol office

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