Promises should be kept – Court of Appeal speaks on farming family dispute

This case involved a claim by the youngest daughter in a farming family for a share of the farm on the death of her father. This was despite a will whereby he left everything to his wife, the claimant’s mother. The basis of the claim was that the daughter has acted to her detriment on the basis of assurances that she would inherit the farm, working for years for low wages and long hours. She founded her claim on the doctrine of proprietary estoppel. 

The High Court found for the daughter, awarding her £1.17million. The result was that her 82 year-old mother would need to sell her home of 40+ years.

The Defendant appealed, but the Court of Appeal rejected this, upholding the High Court award. The Court discussed proportionality, and the discretion afforded to judges in such cases. 

The Court also rejected the argument that Mrs Habberfield could rely on her impecuniosity, where this was as a result of legal costs in defending (albeit unsuccessfully) the litigation.

This case is interesting because the range of outcomes can be dramatic, from awarding precisely the expectation (farm or business), to merely covering the detriment suffered (which might be a few thousand pounds). 

It also underlines the need for all those involved in such disputes, perhaps especially in family businesses, to document and plan for succession, factor in promises made and potential claims. I always hark on about it, but these disputes are particularly ripe for mediation – an opportunity to both listen and be heard, and have an independent voice to guide towards a positive resolution. 

The case: Habberfield v Habberfield [2019] EWCA Civ 890 (23 May 2019)

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However, this argument was rejected by both the High Court and by the EWCA: 'Underpinning the whole doctrine of proprietary estoppel is the idea that promises should be kept', said Lewison LJ in the EWCA judgment. 'We were not shown any case [law] in which the rejection of an offer meant that the claimant, who had kept her side of the bargain, received nothing...If Lucy is to be taken to have waived whatever rights she might have had by 2008, it would have been necessary for her to have known that she had such rights; and to have communicated the fact that she was giving them up. None of that happened on the facts.'