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Sucessful proprietary estoppel claim on Somerset dairy farm

A recent case involving a Somerset farming family provides an example of a successful claim of proprietary estoppel and is a stark reminder of the court’s ability to step in to correct wrongs where promises between family members are waived at the eleventh hour.

 

In order to establish a proprietary estoppel the following elements must be present:

  • There must be an assurance. That is, the defendant or their predecessor in title must represent to the claimant that they will acquire an interest in property.
  • There must be reliance on the assurance given. That is, the claimant must rely on the defendant’s representation.
  • There must be detriment to the claimant as a result of their (reasonable) reliance on the representation given by the defendant.

Habberfield v Habberfield [2018] EWHC 317 (Ch)

The facts of the case surround Woodrow Farm near Yeovil in Somerset which was owned by Frank and Jane Habberfield. They had four children and their youngest daughter, Lucy, worked on the farm full time from leaving school in 1983.

Background:

Lucy worked at the farm for 30 years for long hours, on low wages and with few holidays. The basis of Lucy’s eventual claim was that she did so in reliance of her parents’ representations to her that she would eventually inherit the farm.

Throughout the period that Lucy worked at the farm, she had been told by her father that the cows were her responsibility and that if she wanted the farm she had to stay long hours and work weekends to ensure the work was done. Her mother also told her that by working on the farm Lucy was securing the eventual benefit of her children who would succeed the farm after her.

In 2006 Lucy, and her partner Stuart, prepared to submit a tender for another farm in Taunton. They did not proceed after her parents’ persuaded her that her future was at Woodrow.

In 2007 Frank and Jane looked into the option of transferring the farm to Lucy but concluded there were inheritance tax issues if the farm was transferred without the farmhouse.

In 2008 Frank and Jane offered Lucy a partnership in Woodrow.  She refused on the basis that an interest in a partnership is not what her parents had previously promised, as it failed to grant Lucy control of the farm. It also meant that her siblings could continue to indirectly interfere. 

Lucy and Stuart continued farming at Woodrow until a family argument in October 2013 when Lucy and one of her siblings had a row. Lucy and Stuart subsequently left the farm.

Frank died in 2014 and Jane became the sole owner of the farm. Frank and Jane’s other daughter Sarah (along with her family) assumed responsibility for farming at Woodrow.

Claim:

Lucy claimed that she should be entitled to the farm as she had devoted her life to it in reliance of her father’s assurance that  she would take it over on his retirement.  Her claim did not include  any of the farm property which was occupied by her mother.

Lucy’s mother Jane refuted this and claimed that no such promises or assurances were ever made by her or her husband. Jane also argued that even if Frank had made these promises she was unaware of them and so could not be bound by them. Jane also claimed that Lucy had exaggerated her commitment to the farm and understated both the role of her siblings in running the farm and the benefits she received from the farm, which included accommodation and child care. As a result there was no detriment.

Decision:

The High Court held in Lucy’s favour.  They felt strongly that Jane should be bound by an estoppel, as assurances had been given to Lucy and she had kept to her side of the bargain in reliance upon those assurances. This had been to her detriment, as evidenced by her years of work at the farm, on low wages and with few holidays. Lucy’s decision not to offer on the farm in Taunton in 2006 also added to the evidence of her detrimental reliance on her parents’ promises. The Court also held that Jane was bound by the assurances given, as although not all of them were made by her, she knew that her husband was making representations, she was aware of what they meant and she knew that Lucy took them seriously. Accordingly, any representations made by Frank when Jane was not present were deemed to be made with her authority. It was ordered that Jane must pay a cash sum equivalent to the value of the farmland and farm buildings, excluding the farmhouse and other land farmed separately. At 2017 this was £1,170,000.

If you require advice on any family, property, estate planning or dispute matter please contact Maitland Walker Solicitors on 01643 707777, Minehead or 01823 745777, Taunton.