Family business succession
Written by Charlie Palmer on 10/08/2018

A farmer’s son has won a multi-million pound proprietary estoppel case in the High Court to stop the farm being given to another.

The claimant is one of three children and the only child to have dedicated his life to the family farm.  He had been promised the ‘lion’s share’ of the business for a number of decades.  So when his father handed his interest in the farm and company to another brother – a developer – in 2014, he decided to challenge the decision.

The farming son was backed by his mother who had also understood the intentions of her spouse, and her own, to be that he would be the primary inheritor.  Deeming her husband‘s decision unjust, the mother handed her share of the business to the son who had worked for low wages on the farm for 38 years. The farming son had also been ‘on call’ and clocked up significant overtime – which went unpaid – for those four decades.

Despite this dedication and repeated indications from his father that he was to take on the business, the father and brother denied that any such promises were made.  Examining family members, business partners and family friends over a week-long trial, Mr Justice Birss ruled in favour of the farming son. The exact division of the farming assets will be decided in a second hearing later this summer.

Challenging succession plans while one or two parents are still alive can be difficult. A lot can depend on the evidence and how this interplays with what is an evolving body of technical case law within the agriculture sector- but the test can prove worthwhile.

If you have adult children – whether or not they are working in your business, be careful what you promise them – because they might hold your feet to the fire later on when you change your mind.

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