Dividing the land, defining the legacy: farming partnerships in divorce

The role of farming businesses in sustaining livelihoods and contributing billions to the UK economy is undeniable. Agriculture uses 70% of the UK’s land, and home-grown produce is the largest source of the UK’s food. However, the legal framework surrounding farming can be complex, especially when there is a divorce on the cards. Unlike many other industries, farming is deeply personal. Family ties, generational promises and lifestyle sacrifices blur the line between business and tradition.

In this article, we explore the case of Julie Annette Merryman v Alex Raymond Merryman v Elizabeth Lawson, Katie Ann Merryman, Scott Merryman, Robert Paul Merryman [2024], which concerns farming partnership assets and proprietary estoppel.

Proprietary estoppel is a legal principle that can give someone rights to property if they were promised a share, relied on that promise, and would be unfairly harmed if the promise wasn’t honoured.

Background

Alex and Julie’s marriage broke down in 2021. Julie brought financial remedy proceedings against Alex. Alex’s four adult children (Julie’s stepchildren) intervened in the proceedings.

All six parties accepted that they were equal partners in the farming business. However, they disagreed as to ownership of four properties. Alex’s children (the “Intervenors”) asserted that they were each entitled to one-sixth of the properties by virtue of them being partnership property or alternatively by reason of proprietary estoppel. Alex agreed. By contrast, Julie’s pleaded case was that the Intervenors had no interest in any of the properties.

Two of the properties (Border View Farm and Dunston Farm) were integral to the farming business. The third property (Heavygate Road) was a student buy to let. The fourth property (Smugglers) was purchased by Alex in 2021 as a home for Julie following separation. All four properties were included in the partnership accounts.

The issues for the judge to determine were:

• if any of the four properties were partnership assets
• if any were not partnership assets, whether Alex and/or Julie were prevented from relying on their rights to those non-partnership properties by proprietary estoppel.

Partnership assets

The judge was disappointed that the partnership agreement that all six people signed in 2020 didn’t clearly say what property belonged to the partnership. Had it done so, the need for expensive and stressful litigation could probably have been avoided. Since the agreement wasn’t clear, the judge had to look at the other facts and try to work out what a reasonable person – knowing what everyone knew at the time – would think the document meant.

The judge found there was a common understanding that Border View Farm and Dunston Farm was partnership property. The Intervenors had all worked hard on the farm without pay after finishing school, and it would not make much sense for them to do that unless they were meant to be part-owners. But the judge did not think Heavygate Road or Smugglers were part of the partnership. Those properties had nothing to do with the farm, and even though they were included in the partnership accounts, the judge did not see that as definitive. The accounts were never signed, and the tax returns on Heavygate Road contradicted the accounts.

Proprietary estoppel

There are three key elements to a proprietary estoppel claim:

1. Assurance – a promise or understanding given by the legal owner, either in words or through their actions.
2. Reasonable reliance – where someone relies on that promise, such as the Intervenors did.
3. Detriment – where the person relying on the promise suffers a disadvantage as a result.

Julie accepted that the Intervenors had acted to their detriment. The main dispute was over whether clear assurances had ever been made, and whether it was reasonable for the Intervenors to rely on them.

The judge found that Alex and Julie had made clear enough promises about both Border View Farm and Dunston Farm, and that the Intervenors had relied on those promises by devoting their working lives to the farm.

As a result, the judge ruled that each Intervenor was entitled to a one-sixth share of Border View Farm and Dunston Farm, but had no ownership interest in Heavygate Road or Smugglers, which were not connected to the farming business.

The Birketts view

Where a marriage involving farming partnership breaks down, disputes about who owns what can become especially complicated – particularly when third parties (such as adult children) claim a stake in the farm. These disputes often involve:

• whether certain land or property forms part of the partnership assets
• how clearly any partnership agreement sets out ownership
• whether promises were made – and relied on – by third parties
• the nature and extent of each person’s work or financial contribution.

In cases involving third-party claims, early, tailored legal advice is crucial – especially in farming cases where business and family life are closely intertwined.

Birketts’ Home Ownership Disputes and TOLATA practice has significant experience in advising on intervenor claims and farming-related disputes. Our Family Team works closely with our TOLATA specialists to develop clear, coordinated strategies that reflect each client’s individual goals and circumstances.