Lincoln-based Knights PLC consultant looks at the thorny issue of rights of succession
In his latest column Andrew Fearn, consultant at Lincoln-based Knights PLC, looks at the thorny issue of rights of succession.
I have been trying to work out why a particular area of law continually causes problems for farming families. The area is known as proprietary estoppel, writes Mr Fearn.
It will not be found in Acts of Parliament but, rather, is a body of case law developed under the principles of equity. Thus it is continually evolving and therein lies the problem.
What is proprietary estoppel? Basically, it is when someone makes a promise or gives an assurance that is relied on by another to his or her detriment and then the promise is not kept.
The classic farming example is when a father promises his son that he will inherit, the son works for a pittance and then the father’s will leaves the farm elsewhere.
It is general law that applies to everyone but, for some reason, most reported cases involve farmers.
I think it is something to do with the reality that many farming families have difficulty in confronting succession issues and making a satisfactory will is shunted down the list of priorities.
A case which has been refused permission to appeal is a perfect example of what can go wrong, although with a slightly unusual set of circumstances.
It is called Wills v Sowray and was originally decided a couple of years ago.
The landowner, Tony, farmed near Harrogate and had handed over the running of the farm to his long-time friend, Matthew. Matthew did absolutely everything and was told by Tony that, one day, it would all be his.
To complicate matters further, Matthew’s brother, James, lived in a log cabin situated on a one-acre plot on the farm, which he had planted with trees.
This is where it all started to go wrong!
Tony had a daughter, Claire, from whom he had been estranged for some years but a better relationship had happily evolved before Tony’s death.
However, critically, Tony died without making a will. Under the rules relating to intestacy, Claire was due to inherit the whole estate.
Almost inevitably, Matthew and James made a claim based on Tony’s promise to them and their reliance on that assurance.
Litigation duly followed and the case was given a full hearing.
As is often the case in this sort of dispute, the two brothers were unable to produce any written or documentary evidence to support their claim.
However, their honesty and integrity obviously shone through and the judge believed them. James was awarded his plot and Matthew, the land and farm buildings but not the farmhouse.
The moral of the case is, as ever, make a will to ensure that your wishes are carried out.
A failure to do so is inevitably costly in terms of money and stress!