Family farming disputes and The Court of Appeal

11 June 2019

While there are many factors that can lead to business disputes, miscommunication amongst families can be one of the most common issues, particularly in the farming community. 

What is proprietary estoppel and why do such disputes arise?

The notion of proprietary estoppel, or an individual going back on their word, forms the basis for many contentious cases in the farming industry.

What factors are taken in to account by the court in a case of proprietary estoppel?

A good example of how the High Court deals with such cases is Habberfield v Habberfield (2018). In this case, the claimant, Lucy, left school to work with her father on the family business, Woodrow Farm, helping to manage their dairy business for over 30 years.

Lucy claimed that her father had assured her that she would take over the farm when he retired, which is why she worked very long hours for low wages. However, when he died in 2014, his will, executed in 1998, left everything to his wife. As a result, Lucy brought a claim based on proprietary estoppel, alleging that both parents had promised her ownership of the farm when they retired, something that her mother, Jane, denied.

Jane appealed the decision of the High Court on the following bases:

  • Lucy’s refusal to accept the partnership offer whilst her father was alive meant that it had not been unconscionable for her father to resile from his assurances
  • the size of the award was disproportionate to the detriment Lucy had suffered
  • it was inappropriate to order the payment of a cash sum during Jane’s lifetime as she was an elderly woman who was going to have to leave her home.

Can proprietary estoppel claims be prevented?

Ultimately, proprietary estoppel claims are difficult to prevent, but easy to foresee. Taking steps to involve a legal team at the earliest stage is likely to be the best approach. In Lucy’s case, the High Court dismissed Jane's arguments, stating that Lucy’s rejection of the partnership offer did not defeat her claim and the award of £1.17m simply equated to the cost of reinstating a working dairy unit. As a result, the family farmhouse (left to Jane) was sold to provide Lucy with the funds she needed to begin farming independently. 

If you are involved in a proprietary estoppel case please contact Bernadette Baker on 01603 756 406 or a member of the Contentious Trust and Probate Team who would be happy to assist.