English High Court finds son entitled to family farm based upon proprietary estoppel

In Thompson v Thompson [2018] EWHC 1338, the High Court in London ruled in favour of a son who sought a declaration based on proprietary estoppel that would entitle him to inherit the family farm upon the death of his mother. We discuss this case further below.

Background

Gilbert Thompson (the "Claimant") is the son of Norman Thompson (deceased) and Doreen Thompson (the "Defendant"). Encouraged by his parents, the Claimant had worked on his family farm (the "Farm") for a low wage for all his life, in doing so foregoing opportunities to build a life outside of the Farm. According to the Claimant, his parents made representations or promises to him on various occasions that he would inherit the Farm, and a bungalow on the Farm grounds, upon their death. In 1992, the Claimant and his parents signed a partnership agreement under which the Claimant received a one third interest in the Farm.

In 2014, following a deterioration in familial relations, the Claimant was excluded from working on the Farm by the actions of the Defendant and one of the Claimant's sisters. The Claimant argued that despite this, due to the promises made to him his entitlement to an interest in the Farm remained larger than the third to which he was entitled under the partnership agreement. He therefore claimed that it would be unconscionable for the Defendant to deal with the Farm without regard to his interest.

The Defendant denied that any promises regarding inheritance of the Farm had been made to the Claimant. She argued that the Claimant's one third share in the Farm was sufficient in representing the sacrifices he made in working on the Farm. She also claimed that the Claimant was incompetent and recklessly negligent in managing the Farm.

Judgment

Judge Davis-White QC (sitting as a judge of the High Court) summarised the legal principles relating to proprietary estoppel and held that in order to make out his claim the Claimant had to prove the following requirements:

• that there was a representation, promise or assurance made to him that the Farm would be his;
• that he acted reasonably in reliance on that representation, promise or assurance;
• that the reliance would be to his detriment if the promise was not given effect to; and
• that it would be unconscionable for the Defendant now to insist that he will not inherit the farm.

The Court adopted a holistic approach in evaluating whether these requirements were met and if so, how equity should be satisfied. The Judge considered evidence from each of the parties and relied heavily on contemporaneous attendance notes of meetings with lawyers and advisors. On the facts, the Court found that there were multiple clear promises given to the Claimant that the Farm and the bungalow, which should be treated as part of the Farm, would pass to him upon the death of the last remaining parent. It was further found that the Claimant reasonably relied on the promise by dedicating his whole life to the Farm, which had affected his personal and financial independence, particularly his ability to buy a property of his own.

The Court was satisfied that detriment had been established by the time the Claimant was prevented from working on the Farm in 2014. The Court rejected the Defendant's submissions that there was no detriment to the Claimant because:

• he was given a one third share of the Farm; and/or
• the profit generated by the Farm was insufficient to pay the Claimant a higher wage than that which he received.

The Judge disagreed and held that on one view, detriment is to be measured by what the Claimant had potentially given up as a result of the promise, and not by looking at the financial means available to the Defendant. The Court also held that it would be unconscionable for the Claimant not to receive the Farm and the bungalow after the Defendant's death. The Court was not convinced by the oral evidence given by the Defendant or her witnesses (including one of the Claimant's sisters), and described her claim that the Claimant was incompetent in managing the farm as "attempted character assassination.”

The Claimant therefore succeeded in his claim and was held to be entitled to the Farm and the bungalow on the death of the Defendant.

Comments

Whilst the case turned largely on the facts, it demonstrates the importance of contemporaneous written evidence in a fact-sensitive case, especially when there are competing accounts of events. On this occasion, the Judge found the Claimant's account to be more reliable because it was supported by the contemporaneous attendance notes taken at meetings between the Thompson family and professionals involved in the arrangement of the Farm business.