A tale of everyday farming folk & estoppel

 In Probate

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FARMING FOLK & ESTOPPEL

An interesting case on the power of estoppel and its effect on an estate where other family members were pursuing family provision claims is the case of Suggitt v Suggitt [2011] EWHC 903 (Ch).

The facts

In this case Frank was a farmer and had one son John, by his marriage. John was reared to be a farmer, and sent to agricultural college. For a decade John worked only on a sporadic basis on the farm, and contractors were employed. Frank had reservations as to his son’s commitment to the life and made a Will reflecting those concerns. Frank left all his farming enterprise, valued at approximately £4 million, to one daughter. He included the following in the Will;

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“AND I EXPRESS THE WISH (without imposing a trust) that if at any time my son John .. shall in the absolute opinion of Caroline show himself capable of working on and managing my farmland that she shall transfer my farmland to him”

Following Thorner v Major [2009] UKHL 18 Kaye J identified the essential features for an estoppel to be established:

  • A clear enough representation of an interest in identifiable land
  • Reasonably relied upon by the claimant
  • Detriment in consequence of his reasonable reliance
  • That the holistic effect of the above meant it was unconscionable (at the point of the crystallisation of the equity) for the testator to have gone back on his lifetime representations.

Decision

On the facts the Judge concluded that Frank had made some sort of repeated promise to John, eg “that no farmer pays their son, as it will all be theirs one day” . Such a promise led John to reasonably expect that the farmland would be his. Whilst the expression in the Will was clearly subject to John satisfying the criteria of having proved himself as a good candidate, the Judge concluded that the promises made in lifetime had not been conditional in their nature. There was some evidence that John had relied upon those promises.

The evidence as to detriment was somewhat equivocal. Whilst there was no direct wage paid for the limited assistance offered by John, Frank had rewarded him with free board and lodging, and latterly with housing for his family. John had access to 50 plus acres, which he farmed on his own account. Whilst he had not earned as much as an agricultural labourer, he had benefits to offset against those losses. The time frame in question was at most 10 years, and John was still a young man in his early thirties.

John was an unimpressive witness but despite his misgivings the Judge concluded that it would be unconscionable to allow Frank to renege upon his life time promises.

Thus the court embarked upon an assessment of the remedy that was required to satisfy the equity.

Proportionality

The process that the court should be engaged upon is to remedy the unconscionability that has arisen. There is minimal discussion of the conflict between and expectation led remedy versus a quantification based on detriment. The English courts have sought to reconcile the conflict between the two principles of expectation and detriment. This resolution is achieved by the principled application of the concept of proportionality.

 

In the case of Jennings v Rice [2002] EWCA Civ 159 LJ Aldous in seeking to define proportionality states:

“This is to say little more than that the end result must be a just one having regard to the assumption made by the party asserting the estoppel and the detriment he has experienced”

In Thorner the claimant had worked unpaid for 30 years, relying on the promise of inheritance, and he secured the transfer of the whole estate including the farm. In this case John’s detriment was limited in quantum and time. The Judge concluded that the promises had extended to the farmland, and implicitly to somewhere to live. He awarded John the entirety of the farmland (valued at £2,125m) together with a valuable farmhouse (£760k). Thus he gave him the maximum remedy he could secure ie the fulfilment of his expectation.

Comments

In the light of John’s equivocal detriment and the limited time frame involved, the very generous award appears to go beyond that which was necessary to avoid an unconscionable result. There is no explicit weighing in the balance of the detriment and the expectation. A lesser award, eg. of a modest property and a proportion only of the land, could have reflected the limited detriment.

The application of the principle of estoppel, overrode Frank’s testamentary provision. John had issued a secondary cause of action, pursuant to the Inheritance (Provision for Family and Dependants) Act 1975. That secondary cause of action would also curtail Frank’s testamentary disposition, but the remedy would have been limited to provision for his maintenance and produced a substantially lesser award.

The estoppel binds the estate of the deceased, and thus the Estate was markedly diminished. Frank left a partner and further children, who had issued proceedings under the Inheritance (Provision for Family and Dependants) Act 1975. Their prospects of securing substantial provision from the estate were reduced by reason of the estoppels.. Had the estoppel cause of action failed, a family provision court would have been able to balance all the competing claims against the Estate.

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