In the context of a dispute that tore apart a farming family, the Supreme Court has considered how best to compensate a son who was disinherited despite having given his best years to working his ancestral land for relatively low pay.
The case concerned a dairy farm that had been in the same family since 1938. The couple who owned it promised their eldest son that he would inherit a substantial part of it. Given that assurance, he left school at the age of 16 and, for 32 years, devoted himself to the farming business for modest pay.
Following a deterioration in his relationship with his parents, however, they changed their wills, removing his inheritance. They further dissolved their farming partnership with him and gave him notice to quit a property on the farm where he and his family lived. After he launched proceedings, a judge found that he had reasonably relied on his parents’ promise to his detriment and that it would be unconscionable not to hold them to their word.
The couple were ordered to pay him, subject to certain adjustments, a lump sum of £1.3 million to satisfy his expectation of what he would have inherited. In order to raise that sum, the couple would have to sell the farm. Their subsequent challenge to the judge’s order was dismissed by the Court of Appeal.
Ruling on the couple’s appeal against that outcome, the Supreme Court rejected their argument that the judge was wrong to base the son’s award on the value of his expected inheritance, rather than by reference to his contribution to the farming business or the loss of his opportunity to work elsewhere. The lump sum award was both the usual and simplest means of enforcing the couple’s promise.
In upholding their appeal in part, however, the Court found that the judge failed adequately to discount the sum awarded to reflect the fact that the son would receive his compensation earlier than he had expected to receive an inheritance. Given that the parents would otherwise have to sell the farm to satisfy the son’s award, an alternative remedy was required in order to achieve a just result.
The Court concluded that the couple should have the opportunity to choose between putting the farm in trust for all three of their children – subject to the couple being permitted to stay on the farm for life – or making an immediate payment to the son with sufficient discount to reflect its accelerated receipt. The amount of any such payment would be the subject of a further hearing, if not agreed.