Loose lips sink ships …

Dec 4, 2023

So goes the older saying. But it is one farmers might want to take particular heed of in the light of a recent court case.  

In Spencer vs Spencer, Lincolnshire farmer Michael Spencer recently won his case against the estate of his late father, John Spencer, leading to him successfully inheriting the family farming business.  

The court heard that John had promised to leave the farming business to Michael but had changed his mind and in the third iteration of his will, he instead opted to put the farmland into a trust. 

This was a change from a previous will that bequeathed the land to Michael and prompted him to dispute the new will.  

This type of claim is known as “proprietary estoppel” and requires that the claimant demonstrates that a promise was made to them, that it is a promise they relied on, and that it had been to their detriment to do so.  

As Michael had left school at 15 to work on the farm and John’s previous will had listed Michael as the beneficiary of the farmland, Mr Justice Rajah, who presided over the case, accepted Michael’s claim that his father had promised him that one day all of the farm would be his.  

The judge added that this had been John’s way of mollifying Michael and ensuring he remained committed to the farm.  

Summing up the case, Mr Justice Rajah said:

From 1993 to 2018 John’s wills did indeed leave Michael the farmland and it is therefore likely that in his conversations with Michael about succession to the farm that John intended to communicate, and did communicate, to Michael that Michael would inherit the farmland.” 

Commenting on the case, Ian Parker said:

“Farmers must be careful what they say to family members who work on the farm if they want to avoid future claims. Proprietary estoppel claims can tear families apart after the death of the farm owner, he added, despite such damage being the last thing they would have wanted to cause. It can be very tempting to hint or suggest the next generation will inherit a farm outright as a way to ensure they remain committed to the business, or as a reward for hard work,” Ian said. “But unless you are 100% sure you are going to do that, making such claims can be very dangerous. As the case of Spencer vs Spencer demonstrates, making promises to a family member and then reneging on them could well end up in court and with the farm not going to who the owner intended it to. As the defendants in this case were Michael Spencer’s sisters, you can imagine the damage it has done to the family.” 

Ian added:

“That farm succession should be carefully planned well ahead of the time it is likely to occur. The best way to avoid situations like this is to have transparent conversations about what will happen to a family farm and why,” he said. Although this can be difficult, it could avoid a far more painful outcome in the future.” 

To discuss succession planning, contact Ian on (01295) 270200 or email ianp@whitleystimpson.co.uk. 

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