Williams v Williams and others

Agricultural land – Partnership assets – Proprietary estoppel – Claimant carrying on farming business in partnership with parents – Following death of parents, dispute arising between claimant and defendant siblings about ownership of farms and business – whether farms being assets of partnership – Whether claimant entitled to rely on principle of proprietary estoppel – Claim dismissed The claimant’s parents farmed at Cefn Coed, Neath, comprising some 144 acres, and adjoining accommodation land at Crythan, comprising about 50 acres, as one holding. The mother died in October 2013 and left her estate to the father who died in June 2018 aged 97. Three of their four children (the claimant and the first and second defendants) were in dispute as to the ownership of the farms and the business carried on there since 1985 in partnership. The third defendants were the professional executors and administrators of the father’s estate, which had not yet been fully administered. Under the default provisions in his will, the father’s interest in the two farmhouses at Cefn Coed were left to the first and second defendants in equal shares. His interests in the remainder of Cefn Coed and in the partnership were left to the first defendant. Since 1991, Crythan had been vested in the name of the second defendant. The claimant claimed that both farms were assets of the partnership which carried on the farming business there under a deed of partnership dated 1 April 1985 between himself and his parents, and that following their deaths, those assets vested in him. Alternatively, he relied on proprietary estoppel based on promises he said his parents made when the farms were purchased and subsequently, that the properties and the business would belong to him after their deaths. Held: The claim was dismissed. (1) In a farming partnership, it was not necessary to imply that the farm on which crops grew or animals were grazed was an asset of the partnership. Such a partnership could work perfectly well on the basis of the land-owning partners making the land available to the partnership for the use of a partnership business so long as it continued and that could happen without any change in the ownership of a farm. The accounts of a partnership might provide evidence whether there was an express agreement to make land a partnership asset. If one partner said there was such an express agreement and the other denied it, the accounts might help the court to decide whose recollection was more reliable: Ham v Bell [2016] EWHC 1791 (Ch) followed. However, practitioners had to be wary of relying on the accounts as evidence of the intention of the parties, as often such an inclusion was made at the behest of the partnership accountants who included the item solely in order to get tax relief and without addressing the consequent ownership issues. That was a particular problem with agricultural partnerships. The inclusion of an asset in the partnership accounts was an indication of such intention, but was not conclusive. (2) In the present case, there was no express agreement that the farms would become partnership assets. Accordingly, other indications of the intention of the parties had to be considered and weighed. The indications that the farms were not intended to be partnership assets outweighed those that indicated they were, by some margin.  Accordingly, neither farm was an asset of the partnership. Following the deaths of both parents, Crythan remained vested in the second defendant. In the absence of any declaration of the beneficial interests of Cefn Coed, the purchase of it for business purposes and the parents’ treatment of their shares as separate suggested a tenancy in common. On the father’s death, his share and that which he inherited from his wife, formed part of his estate and passed under his last will to the first and second defendants. After the death of the mother, the surviving partners were the father and the claimant. Section 33(1) of the 1890 Act provided that subject to any agreement between the partners, every partnership was dissolved as regards all the partners by the death of any partner. The 1985 deed provided for the continuation of the partnership between partners, in the plural. That did not apply where there was only one surviving partner, and the partnership had to be dissolved. The net assets should be divided between the estate of the father and the claimant. (4) As regards proprietary estoppel, deciding whether an equity had been raised, and how to satisfy it was a retrospective exercise looking backwards from when the promise fell due to be performed and asking whether it would be unconscionable for a promise not to be kept either wholly or in part. The necessary requirement to raise an estoppel were: an assurance of sufficient clarity; reliance by the claimant on that assurance; and detriment to the claimant in consequence of his reasonable reliance: Thorner v Major [2009] UKHL 18; [2009] 2 EGLR 111 and Davies v Davies [2016] EWCA Civ 463; [2016] PLSCS 148 applied. However, no claim based on proprietary estoppel could be divided into watertight compartments. The quality of the relevant assurances might influence the issue of reliance; reliance and detriment were often intertwined, and whether there was a distinct need for a mutual understanding might depend on how the other elements were formulated and understood: Gillett v Holt [2001] Ch 210 and Henry v Henry [2010] UKPC 3 considered. Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it was something substantial. There had to be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment had to be judged at the moment when the person who had given the assurance sought to go back on it. Proportionality lay at the heart of the doctrine of proprietary estoppel and permeated its every application: Jennings v Rice [2002] EWCA Civ 159; [2003] 1 P & CR 100 considered. (5) On the findings in the present case, the claimant could not reasonably have believed that he would inherit the farms. Nor was it clear that he had suffered detriment. The farms had provided him with a living for over 40 years. Although the financial rewards were not great, at least initially, he was provided with board and lodge. Given his father’s wish to be fair to all his children, the outcome was proportionate. Guy Adams (instructed by Redkite LLP) appeared for the claimant; James Pearce-Smith (instructed by Michelmores LLP) appeared for the first and second defendants; The third defendants did not appear and were not represented. Eileen O’Grady, barrister Click here to read a transcript of Williams v Williams and others