Appeal Court upholds farm business buyout in partnership case

A Court of Appeal judgment confirming an earlier High Court decision creates a precedent allowing an order to be made that in certain partnership dissolution circumstances, one partner can buy out the other.

This departs from the normal practice of ordering the assets of a dissolved partnership to be sold on the open market with each party allowed to bid.

The case concerned farming brothers Matthew and Daniel Cobden and their partnership dissolution.

See also: Court decides one farming brother to buy out the other

In 2024 the High Court granted what is known as a Syers order, usually applicable only in very narrow circumstances, which said Matthew could buy out Daniel.

Matthew had claimed that he was entitled to an order through proprietary estoppel, a legal term referring to a promise having been made and where a person has relied on that promise to their detriment.

Daniel appealed this and in December 2025 the Court of Appeal upheld the original decision, widening the scope for Syers orders.

Background

The brothers’ relationship broke down in 2022 and the partnership was dissolved.

They had 50:50 shares in a large dairy farm but no formal agreement, meaning they had what is known as a partnership at will, governed by the Partnership Act 1890, which usually dictates a sale on dissolution.

Cobden v Cobden is the only reported case in England and Wales in which a buyout has been directed between equal partners, says Stephen Jourdan KC, who acted for Matthew in responding to Daniel’s appeal and was instructed by Peter Williams of Ebery Williams.

“These orders are exceptional,” says Stephen, adding that this is a new category of case where one person is encouraged to think they might be able to buy out another and the person who has signalled this encouragement has then refused to carry it through.

Law firm Stephens Scown took Daniel’s case to appeal. Stephen Wray and Helen Prince, of the firm’s dispute resolution team, appealed on the grounds that the facts of the case did not fulfil the exceptional circumstances criteria for a Syers order, and that relying on valuation evidence rather than allowing an open market sale would be unfair financially to both partners.

Precedent

The Court of Appeal has created a precedent, says Stephen Wray.

“While Syers set out some initial guidelines, and a handful of subsequent cases reiterated or further defined the law in this area, the ruling opens up matters as to when discretion should be applied,” he says.

“Cobden v Cobden impacts any business partnership that has no agreed process for dissolution and the outcome has widened the scope for the dissolution of partnerships.

“The trial judge has much wider discretion than previously thought; there is massive onus on the evidence and how it is presented by individuals and witnesses. It creates a lot of uncertainty and a great reliance on experts and in particular on expert valuations.” In such cases, a single joint valuation expert is agreed upon.

“All of this is avoidable with a well-drafted agreement and regular collaboration and honest conversations between those running the business, their accountants, lawyers and bankers,” says Stephen Wray.

Commenting on the Cobden appeal judgment, Cora Hardy, of law firm Charles Russell Speechlys, says: “Sales for value have long been seen as problematic, not least because they are based on valuations whose accuracy may be difficult to test.

“Markets tend to regularise prices themselves – and a price obtained at auction ‘tests’ what buyers are willing to pay.”

Son wins back farm after broken promises case succeeds

In a separate case, Richard Armstrong was successful in a proprietary estoppel claim, after having been cut out of his father Alan’s will despite inheritance promises having been made to him over many decades.

Alan and his wife Margaret bought two farms during their marriage, owning them in equal shares – the 49ha Allerton Grange Farm near Knaresborough, North Yorkshire, and 108ha North Cowton Grange Farm, near Northallerton. The farms are about 40 miles apart.

After agricultural college Richard worked with his parents in the farming business, moving to North Cowton in 1987 when he was 23, overseeing the farming there and, with his wife, moved into the farmhouse at North Cowton in 1988, where they have lived ever since. They have three sons.

Richard’s youngest brother Simon also joined the family farming business after leaving school. He worked mainly at Allerton Grange and lived nearby. The business was a family partnership between the parents and their sons Richard and Simon.

In Armstrong v Armstrong, the judge, Mr Andrew Sutcliffe KC, accepted Richard’s evidence that when he was a teenager both Alan and Margaret assured him that he would inherit North Cowton and that this influenced his decision to forgo a university education (where he would probably have studied engineering) and instead to study agriculture at Askham Bryan agricultural college.

It was also found that Richard relied on the promises and assurances made to him by Alan and Margaret, and then by Alan alone after Margaret’s death, that he would inherit North Cowton when his parents died.

“I also find that Richard’s reliance on those promises was reasonable and that, in so relying, he acted to his substantial detriment,” said the judge. 

Unconscionable

Alan made a new will in January 2020, a few months before his death, which cut Richard out of his anticipated inheritance.

“Given the nature and extent of the promises made to Richard by Alan over a period extending for more than 35 years (from about 1983 to 2019), it was plainly unconscionable for Alan to act as he did by making a new will in those terms,” said the judgment.

As a result of Alan’s 2020 will, Richard has not been involved with the farming business at North Cowton since Alan’s death.

Detriment

It was found that Richard had suffered substantial detriment by executing a deed of variation to his mother’s will, which meant he gave up assets to which he was entitled from Margaret’s estate and allowed Alan to inherit them instead, relying on a promise by his father that he would inherit North Cowton. 

Richard brought an alternative claim under the Inheritance (Provision for Family and Dependants) Act 1975.

The judge found in his favour on this, saying that Richard was financially dependent upon Alan (not least because Richard was living in the farmhouse owned by Alan) and that Alan failed to make reasonable financial provision for Richard in his will.

In a subsequent hearing to decide what remedy should be made, Richard was awarded North Cowton, valued at £3.128m and representing 50.81% of the combined value of the farms.

Richard had to take on 50.81% of the combined debts of the two farm businesses, after a deduction to account for the outstanding balance of £200,000 on a loan his brother Simon and Simon’s son George had obtained to build a shed or sheds at Allerton Grange.

This would result in Richard assuming a bank debt of about £1.35m, leaving a net value of the transfer of North Cowton of about £1.75m.

Barrister Duncan Heath of Enterprise Chambers was instructed by Rob Minors of Wilson Bramwell Solicitors, and acted for Richard.

“This remedy hearing is the first known case of its type where the judge has split the debt between two farming businesses using the doctrine of proprietary estoppel, which shows the flexibility of that area of law,” says Duncan.

Additional land at Marton-cum-Grafton, farmed with Allerton Grange, was declared to belong to Simon and George, and in no part to Richard.

Under Richard’s Inheritance Act claim, which would take effect if the proprietary estoppel claim was successfully appealed by Simon, Richard was awarded discharge from any partnership debts, plus £350,000 to buy a house, and a lump sum of £300,000.