ARTICLE
18 September 2023

Did You Miss? Spencer v Spencer

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Gatehouse Chambers

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Gatehouse Chambers (formerly Hardwicke) is a leading commercial chambers which specialises in arbitration and all forms of ADR, commercial dispute resolution, construction, insolvency, restructuring and company, insurance, professional liability and property disputes. It also has niche specialisms in clinical negligence and personal injury as well as private client work.
Father and son had farmed land together for decades; they had formed a successful partnership in 1983.
UK Family and Matrimonial
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Proprietary estoppel-farm – detrimental reliance – appropriate remedy

The facts

Father and son had farmed land together for decades; they had formed a successful partnership in 1983. By 1996 the son's profit share of the partnership was 95%. The father wished for the farm to stay in the family and, according to the son, assured his son that he would inherit all the farmland as long as he devoted his time to it and did not take on other ventures. The father made wills in 1993 and 2003 that left the farmland to the son; the rest of his estate was left in equal shares to his two daughters.

In 2018 the son was diagnosed with multiple sclerosis. The father became convinced that the son was going to die early. He then changed his will so that all his estate, including the farmland, was left in equal shares to the son and daughters. The father passed away.

The son's made a claim against his father's Estate claiming that he had relied on the father's promise to his detriment, and it was unconscionable for that promise to be reneged on by the father in his will.

The daughters submitted that the son was exaggerating any assurances made by the father and that in any event he had suffered no detriment as he had received substantial financial benefits from the farming partnership. Alternatively, they submitted that if he was to receive the farmland, it should not include a section that the father had been in the process of repurposing as quarry land.

The Judgment

The Court accepted that there had been assurances and that these had been relied upon by the son. The Court rejected the argument that the fact that the son had enjoyed substantial benefits, such as rent-free accommodation and paid living expenses, outweighed any detriment. Where a parent promised a child a farm if they worked on it until the parent died, and the child did as asked, giving up the possibility of other options and positioning their working life based on the assurances, that was likely to amount to detrimental reliance. It was not possible to put a monetary value on the unquantifiable detriment of committing a life to a farm and not building a life elsewhere, nor to create a world without the assurances. In the circumstances it was unconscionable for the father's assurances to be repudiated.

The key issue was the appropriate remedy. The Court held that the son's exceptions should be fulfilled and that the farmland should therefore be transferred to the son. However, this should not include the (very valuable) quarry land. The son's expectation had been to inherit the land to farm: there was no expectation that he should obtain the land from which the father had been in the process of unlocking non-agricultural value. The quarry revenue was not part of the farming partnership. It would be an unintended windfall if the extra value of that land passed to the son. Rather, he should receive its agricultural value only. The rest of the quarry land's value would remain part of the father's estate, to be distributed in accordance with his testamentary wishes.

Lesson learnt

The case is a helpful illustration of how the "minimum equity" is fulfilled following the Supreme Court's decision in Guest v Guest. The starting point is that the promise or expectation be fulfilled. The Court will however be astute to ensure that this this does not yield an unintended windfall which had not been part of the "bargain". The Court will then have to fashion an alternative remedy to fulfil the expectation, being the agricultural value of the quarry land in this case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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