Thompson v Thompson [2018] EWHC 1338 (Ch)

[2018] EWHC 1338 (Ch)

Case No C30NE015

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS IN NEWCASTLE UPON TYNE

PROPERTY, TRUSTS AND PROBATE LIST

The Law Courts

The Quayside

Newcastle-upon-Tyne

Tyne & Wear

NE1 3LA

Date 01/06/2018

Before

HIS HONOUR JUDGE DAVIS-WHITE QC

(SITTING AS A JUDGE OF THE HIGH COURT)

Between

GILBERT OLIVER THOMPSONClaimant

DOREEN THOMPSONDefendant

Mr Stephen Fletcher (instructed by Gibson & Co Solicitors Limited) for Claimant

Ms Stephanie Jarron (instructed by Womble Bond Dickinson) for Defendant (other than 21 December 2017)

for The Defendant did not appear and was not represented on 21 December 2017

Hearing Hearing dates: 13-16 November 2017, 21 December 2017

Judgment Approved

If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.

His Honour Judge Davis-White QC :

Introduction

[1]In broad terms, the question in this case is whether a proprietory estoppel operates in favour of the claimant such as to give him an interest in a family farm and, if so, what interest. The claim arises from a family inheritance dispute in relation to the family farm and, in effect, a breakdown in relations between a mother (the defendant) and her son (the claimant).

[2]The family in question is the Thompson family. Mr Norman Thompson and his wife, Mrs Doreen Thompson, the defendant, (together the “Parents”) married in 1955. Sadly, Mr Norman Thompson (“Mr Thompson” or “Father”) died in August 2012. The Parents had five children. The children are Gilbert (the claimant) and his four older sisters: Elaine, Norma, Pauline, and Karen. For convenience I will refer to each of the children by their first names.

[3]The farm in question is Woody Close Farm, Iveston near Consett in County Durham (the “Farm”). The core of the Farm was acquired in about 1989. It is currently farmed under a family partnership governed by the terms of a deed dated 25 April 1994. The Farm comprises both freehold land and certain land held under agricultural tenancies. As I understand it, the core of the farm comprises a farmhouse and outbuildings with approximately 115 acres of freehold land registered under 5 different titles. In addition, there is a bungalow in which the Parents lived and in which Mrs Doreen Thompson (“Mrs Thompson” or “Mother”) continues to live (the “Bungalow”). Gilbert lived there at various times with his Parents. That Bungalow was transferred into Mrs Thompson’s name in 1992 in circumstances in which I will have to consider. It is registered under a separate title. In addition, there are approximately 120 acres held under various tenancies (both Agricultural Holdings Act tenancies and farm business tenancies).

[4]The partnership operating the Farm has not reported significant profits. In the accounts for the years ended 31 July 1995 to that ending 31 July 2016, the relevant accounts show that the highest annual reported profits were in the order of £34,282 but that in three of those years losses were made. The average annual profit is in the region of just under £14,000.

[5]Land values have, however, increased substantially over the years. The core of the Farm was acquired in 1989 for some £255,000 or so. The precise value of the Farm land plus the Bungalow are not agreed but are, I think, agreed to be in the region of £1.2 million to £1.4 million.

[6]Gilbert’s case, in summary, is that throughout his working life representations, promises and assurance have been made to him by his Parents that, on their death, the Farm (including the Bungalow) would be his. He says that in reliance on the same, he has, to his detriment, worked on the farm all his life at a very low wage, never buying his own property, and in effect giving up the possibility of any independence and any life outside the Farm. It would now be unconscionable, he says, that his mother should be free to dispose of her interest in the Farm (and Bungalow) other than to him, thus limiting his interest to his one-third share in the Farm (excluding the Bungalow) through the partnership. In other words, he says that she should not be free to decide the future of the farm and distribute the two-thirds proceeds that would be hers through the partnership and the entirety of the Bungalow (or its value) to members of the family as she feels fit.

[7]Mrs Thompson’s essential case is that no representations or assurances were made to Gilbert about any inheritance. Further, there is no inequity or unfairness in the position: Gilbert is entitled to a one third share in the Farm through the partnership and that more than makes up for the lifestyle choice that he made in working on the Farm. Perhaps more significant is that a major part of the evidence of Karen and her mother was directed at assertions that Gilbert is incompetent and recklessly negligent in the manner that he has looked after the Farm and that he is, in short, unfit to be a farmer and that that (among other reasons) is why no promises, assurances or representations, as he alleges were made, would ever have been made to him. This was described by Counsel for Gilbert as “attempted character assassination” and, as I will go onto explain, I consider that that is a fair judgment.

[8]As is, perhaps, not surprising, these proceedings have brought forward strings of allegations and counter-allegations, not least the attempted character assassination of Gilbert that I have mentioned. The family is sadly very divided. On the one hand is Mrs Thompson and Karen. On the other side are the other children of the Parents.

[9]Counsel for each party took great pains to limit cross-examination in the case to focus on the legally relevant matters rather than to extend the trial and increase costs by covering every allegation and counter allegation made. I am grateful to them for so doing. Some matters that were touched upon undoubtedly assisted me, not only in assessing the credibility of witnesses but also more directly in assessing the probabilities of the key material facts alleged on each side as having taken place or not. Nevertheless, and although of course I never met Mr Thompson, having heard all the evidence I am sure that he would have been devastated by the internecine warfare that has broken out in the family. It is a very sad reflection that his and his wife’s life work, both in working and family terms, should have been brought to the sorry state that it is now in.

Representation

[10]Mr Stephen Fletcher of Counsel represented Gilbert throughout. Ms Stephanie Jarron of Counsel represented Mrs Doreen Thompson during openings and oral evidence. There was then an adjournment to allow written submissions to be filed and addressed at a further short hearing. In the meantime, Mrs Doreen Thompson dispensed with the services of lawyers. She wrote a letter to the Court in which she explained that this was due to financial constraints. The result was that the further oral hearing regarding closing submissions took a full day. There was no written closing on behalf of Mrs Doreen Thompson to assist in narrowing any issues. Mrs Doreen Thompson was neither represented nor did she attend such hearing, though I understand a friend attended to observe on her behalf. Further, Mr Fletcher, in the best traditions of the bar, took on the mantle of raising any points that might be made on Mrs Thompson’s behalf.

[11]Having had the very helpful written opening skeleton argument of Ms Jarron, I am satisfied that Mrs Thompson was not unduly disadvantaged by the absence of legal representation for the closing and that the trial as a whole was fair. Not surprisingly this case largely turns upon the facts. During the process in which the facts and evidence were tested Mrs Thompson was represented by Counsel and solicitors. Although Mrs Thompson made the point in her letter to the court that her legal team for the trial had had to be changed very close to trial, I am also satisfied that that legal team was fully on top of the case and that it conducted the case with all proper competence and efficiency. Further, I note that Ms Jarron was Counsel who settled the defence and counterclaim in its original and amended forms and there has therefore been more continuity than the change of solicitors might suggest. As I have said, I am grateful to Mr Fletcher and Ms Jarron for their assistance and for the manner in which they conducted their respective cases.

The Evidence

[12]Mr Thompson was born in 1926. Mrs Thompson was born in 1931. At the time of the trial she was some 86 years old. Physically, she is naturally not as mobile, and is frailer, than once she was. A letter from Dr Davidson, whom I understand to be her general practitioner, dated 23 October 2017 confirmed that she was suffering from anxiety and depression and required regular anti-depressant medication. In addition, he said that she was suffering from hypertension and atrial fibrillation. Nevertheless, having heard evidence from her, I was fully satisfied that she was well able to give oral evidence. She was firm in her evidence and recollections. In my judgment, she remains the formidable woman that she has doubtless always been and needed to be to support her husband and family in establishing and running the Farm. One telling comment, when put to her that a salary of £70 per week was derisory for a full time working man in his 50s (Gilbert), her tart reply was to the effect of “why would he need anything more?”.

[13]I heard oral evidence from four of the siblings, that is each of them apart from Norma. Elaine and Pauline gave evidence on behalf of Gilbert. Karen gave evidence on behalf of her mother.

[14]For Gilbert I also heard evidence from his partner, Susan Imerson. Also giving evidence for Gilbert were:14.1 Mr Michael Fleming, a director of Straughan’s accountants, the partnership accountants from at least the early 1990s and who produced the partnership annual accounts up to and including the year ending 2012;

14.2 Mr Malcolm Billings, a nephew of Mr and Mrs Thompson and cousin to Gilbert and the other siblings;

14.3 Mr Duncan Wiles, a longstanding friend of Gilbert since they were both in their late teens or early twenties;

14.4 Mr Terence Harrison, another close friend of Gilbert since they were about 14 or 15;

14.5 Mr Christopher Bainbridge, a friend of Gilbert since about 2014 whom Gilbert employed to do some work on the farm.

[15]For Mrs Thompson, in addition to Karen I heard evidence from:14.1 Mr Neil Afleck, who was in a relationship with Karen between about 2003 and 2012 but who has remained friends with her.

14.2 Mr Bibby, a retired solicitor who had been involved in advising Mr and Mrs Thompson over many years, initially as partner and then as a consultant at Swinburne, Snowball and Jackson (“SSJ”).

14.3 Mr William Leslie Brown, usually known as “Les Brown”, a solicitor at SSJ but who moved, in 2011 to a new firm Swinburne & Jackson LLP (currently Jacksons Law Firm). Mr Bibby seems to have retained a connection with him after the move.

[16]I consider the evidence of the witnesses in more detail after I have outlined the contemporaneous documents which are the most reliable guide to the events in this case. I also refer to certain dates and events that are agreed or not disputed.

The Early Years up to about 1995

[17]Farming was very much in Mr Thompson’s blood. He came of a line of farmers. All his life he worked on farms. Initially, he lived and worked on his own father’s farm, New Houses Farm in Lanchester, with his siblings. Whilst there he met and married Mrs Thompson. All of the Parents’ children were born whilst the Parents were living at New Houses Farm. Gilbert was the first boy, born 5 years after the last girl. The evidence shows that Mr Thompson was extremely proud of his son. Gilbert says that he was told by his Mother that the reason that she and her husband had so many children was because they were determined to have a son to be a farmer and take over the family farm they anticipated acquiring. I accept that evidence.

[18]When Gilbert was coming up to a year old, in about 1964, the Thompson Parents left New Houses Farm and went to live at West Billingside Farm in Leadgate. They then farmed a number of family farms with Mr Thompson’s siblings. This situation continued for about 13 years or so.

[19]The family then moved, in about 1977, to Fen Hall Farm, Greencroft Lanchester. Initially this was rented by Mr Thompson’s family. In 1981 Mr Thompson farmed under a tenancy agreement in his own name. Later, in about 1982, Mr Thompson purchased the farm “steading” comprising the farmhouse and buildings and a field of about 2 acres.

[20]In 1979, Gilbert left school at 15 to work full time on the Fen Hall Farm, He was paid about £20 a week and worked with his father. There was a dispute as to how much he worked, but I accept Gilbert’s evidence that, in reality, he with (until his death) his father worked full time on the farm, 7 days a week and up to an 18 hour day (though of course not every day would involve 18 hours’ work). As is common in farms, the work load differed at various times, being particularly busy, for example, at lambing time and hay making time. It is also clear that holidays away from the Farm were few and far between.

[21]I also accept Gilbert’s evidence that the path of him working on the Farm was one encouraged by both parents and fulfilled an expectation that had always been there from his earliest days.

[22]So far as Gilbert’s salary is concerned, it went up to about £40 a week when he was about 19 or 20 and then, over the years rose to a sum of approximately £70 a week. It never exceeded that level. On top of this, Gilbert received board and lodging. As I understand it, at some point he also received benefits as a carer. There was a dispute as to whether Gilbert’s salary was topped up by his mother and/or other partnership drawings and how and when and whether and which holidays were paid for, but in reality these finer points of detail do not really change the overall picture nor any equities that may exist.

[23]In about 1989 part of what is now Woody Close Farm came up for sale. Mr Thompson sold the relevant part of Fen Hall Farm that he owned to a developer and with the proceeds bought the farm steading (house and buildings) of Woody Close Farm with some 30-35 acres for a sum of about £255,000. Included among the buildings was a farmhouse, which was not in a good state of repair, and the Bungalow which is where the family then lived.

[24]By this time, Gilbert’s sisters had, over time and at various stages, each left the family home to live elsewhere.

[25]Elaine moved out in the 1970’s, before the move to Woody Close Farm. Nevertheless, initially she lived nearby. At her father’s request she took over the bookwork for the Farm which took up about one full day of time over a month. She later moved, with her husband, to Canada to live in about 1998.

[26]Pauline also moved away in the 1970’s. She married. She became involved with horses and had a business breaking in horses. She too lived nearby and would help out on the Farm from time to time. She was divorced in the early 1990’s and for many years lived in the Farmhouse on the Farm. After her father’s death she was prevailed upon to leave in circumstances that I shall come on to describe.

[27]Karen also moved out. In about 1977 she started a relationship with a Mr Bob Young. They ran a stud farm producing show jumping horses. Mr Young acquired Woody Close Farm in about 1984 or 1985 and later sold the steading and the acres that I have mentioned to Mr Thompson in 1987.

[28]The profits of the Farm were ploughed back into the business and into acquiring more land. Over time first a further approximately 49 acres were purchased (1992) and then later (1995) a further 10 acres or so. In 2006 further land to the south west side of Roman Road, Consett was purchased by the partnership from a local coal mining company for a consideration of £77,000. (This was part of a more complicated settlement with UK Coal Mining Ltd). In all cases the relevant land comprised within the expanding Farm was shown in the accounts of the farming business as an asset. In addition to the freehold land the Farm comprised various pieces of tenanted land.

[29]The farmhouse was not in a good state and required repair and renovation. The Parents always lived in the Bungalow. Gilbert too has lived lived there for most of his life.

[30]In about 1992, the beneficial interest in the Bungalow was transferred, or treated as being transferred, to Mrs Thompson. This was done with advice from Mr Bibby. The primary purpose was to attempt to insulate the Bungalow from any farming debts. The Bungalow ceased to be an asset of the farm business or of Mr Thompson, when he was sole proprietor of the business, or of the business when carried on in partnership. The partnership was later said to have commenced in August 1992 and it was not clear on the evidence whether the change in ownership of the Bungalow was connected with this or not.

[31]On 24 December 1992 the Parents each made mutual wills leaving all their estate and interest to the other.

[32]For the financial year ended 31 July 1993, the prepared accounts for the farm moved from being accounts solely in Mr Thompson’s name to being partnership accounts in the name of the Parents and Gilbert. Those accounts showed a joint capital account in the name of the Parents representing just over £122,000 and a capital account in the name of Gilbert representing just over £61,000. The accounts show each of the Parents and Gilbert bearing a one-third share of the reported loss for that financial year. In addition, they show that there had been a reduction in the freehold property comprising the Farm from £260,000 to £160,385 (before the acquisition of the further 49 acres that year). The relevant note to the accounts states “N.B. The bungalow at Woody Close Farm, Iveston is not incorporated in Freehold Property as it is owned solely by Mrs D Thompson”. This note was repeated in subsequent partnership year end accounts.

[33]On 19 April 1994, a partnership deed was entered into between the Parents (described as the “Original Partners”) of the one part and Gilbert, of the other part. The deed refers to the Parents agreeing, as from 1 August 1992, to take Gilbert into the partnership that had been carried on by them “for some years past”. The deed recites that its purpose was to record more fully the applicable terms on which the partnership had been carried on from 1 August 1992. Under the partnership deed, Gilbert was to devote his full time and attention to the business whereas the Parents had a discretion as to how much time and attention they would devote to the business. In the event that the partnership was determined by death or resignation of a partner the continuing partners had the option to wind up the partnership or to buy out the departing partner’s share.

[34]This deed seems to have been replaced by one, as regards ongoing terms largely the same, dated 25 April 1994. The chief difference is that it recites that Mr Thompson hitherto carried on the business on his own account and that he was in effect now forming a partnership with both his wife and Gilbert (as from 1 August 1992). This deed reflects the accounts of the farming business and the evidence before me as to the historic position. Mr Thompson had farmed as a sole trader but then brought his wife and Gilbert into the business as partners. Although I am sure that tax considerations may in part have motivated this change I also find that part of the reason for the change was to recognise Gilbert’s position and importance within the Farm. I am also satisfied that this “gift” was a partial implementation of a promise that Gilbert would, in due course, inherit the Farm

[35]I am satisfied that when the partnership was set up, the trading name of the business was changed to “Thompson & Son”. As well as oral evidence to this effect there is in the papers before me (for example) correspondence with Natural England (in 2010) reflecting this trading name and headed paper used by Karen in 2012, the heading being “N B Thompson & Son” with the address of the Farm underneath. This reflects the pride of Mr Thompson in working with Gilbert and is a pointer to the future as he saw it, namely that Gilbert would take over from him.

[36]On 25 April 1995, Gilbert appears to have made a will leaving all his estate and interest to whichever of his Parents should survive him, in equal shares if both survived him.

[37]On 28 April 1995, title to the Bungalow was registered in the name of Mrs Thompson. I am satisfied that this was done so as to insulate, or attempt to insulate, the Bungalow from any liabilities of the partnership, at least so that it ceased to be a partnership asset. 2001-3

[38]In about 2001 Gilbert began a relationship with Susan Imerson (“Sue”), his now long -term partner. At this stage he had returned to live at the Bungalow having earlier been staying with his previous partner Sally with whom he lived for a number of years. By about 2003 he had moved in permanently with Sue at her home in Consett. 2004

[39]By 2004 Mr Thompson was (or was about to be) 78, Mrs Thompson, 73 and Gilbert 40. Straughans, the partnership accountants, had a meeting with the Thompsons in May 2004. An attendance note of Mr Sedman of Straughans prepared in relation to that meeting starts by saying that at the meeting:

“….it became evident that the Partners should be offered advice on Inheritance tax and Will Planning. They had asked questions on the taxation liabilities expected if the farm etc. were sold for certain figures and from this it emerged that they are in a bit of a quandry with regard to sorting out their financial matters.”

It went on to refer (among other things) to the fact that the Bungalow was owned by Mrs Thompson and that the three partners, the Parents and Gilbert, had all made wills leaving their estates to each other. He referred to the fact that there were possibly some insurance policies in place for the benefit of the four daughters. Mrs Thompson was recorded as being:

“very strongly of the view that Gilbert is the one who must be looked after and that as long as he wishes to farm he should be allowed to do so.”

The Parents were “obviously very worried in case anything should happen to Gilbert who is not married.”

[40]This note is entirely inconsistent with Mrs Thompson’s evidence to me that she and her husband had serious doubts as to Gilbert’s abilities as a farmer or that he should in due course inherit the farm.

[41]A further meeting on 25 May 2004 was held between Mr Fleming of Straughans and the Parents and Gilbert and Karen. At this time, Karen was not living at the Farm but she was working on the Farm unpaid, particularly in relation to paper work matters. At that stage the belief seemed to be (relevant copies of wills apparently not being immediately available) that the Farm would go to Gilbert on the death of the surviving spouse of the Parents. The Parents told Mr Fleming that “they were anxious to keep everyone equal”. The idea seemed to be that the insurance policy(ies) (then thought to be worth approximately £26,000) would provide an asset for the daughters but it was obviously not going to enable equality because Gilbert would be getting the Farm, then thought to be worth about £1.2 million. The Farm was then said to comprise a range of buildings, 85 acres owned and 154 acres rented and generating minimum profit in the region of £10-20,000 pa.

[42]This Note seems to me to be some evidence that the Bungalow was not treated as being something that Mrs Thompson would dispose of separately whether in her life or on her death. In effect the then intention was that it too would go to Gilbert.

[43]The Note records that it was said that equality would only be possible by giving the daughters some form of share of or in the Farm. Two concerns are noted:

“Mr Thompson seemed particularly concerned not to take this route and he thought the farm should be kept and run by his son without potential interference from any third party members of the family. Mr Thompson was also concerned at the possibility of Gilbert marrying and the assets passing out of the family in marriage break up.”

[44]As seems to be fairly common in family farming positions, it was the concern to treat the children equally but at the same time to pass the main asset, the Farm, unbroken to one child that caused the problems in this case: the aims were divergent and, on the facts, not capable of both being achieved.

[45]Mr Fleming gave evidence about this meeting. It was entirely consistent with the Note. He said that the Thompson Parents were no different to other farming families who may be considered, by some, to have old fashioned views on how assets should be passed on following the death of the father. He stressed that they both held the view that Gilbert was to inherit the farm on the death of his parents even though this might mean a disparity between the value of what he inherited and the value of what his sisters might individually (and collectively) inherit. Mr Thompson, he said, was particularly stuck in his ways and his attitude was that the daughters had moved off the farm and made their own way whereas Gilbert had to and was to stay on the Farm and work it and inherit it in full in the fullness of time. Mr Thompson, he says, was adamant that Gilbert was to inherit the Farm in full. Mrs Thompson is described by Mr Fleming as playing a “full and active part” in the meeting, not only not demurring from her husband’s expressed views but expressly confirming to Mr Fleming that she agreed that Gilbert was to inherit the Farm and that she wanted him to have the Farm: a view she expressed “on a number of occasions”. I accept his evidence.

[46]By letter dated 26 May 2004, Mr Fleming set out his advice as to the Inheritance Tax and Capital Gains Tax position. He recorded that there were not sufficient other assets, outside the Farm, that on the death of the last parent, the four daughters could individually receive assets of an equal value to that of the Farm to be inherited by Gilbert. The option of giving the daughters an interest in the Farm, which Gilbert could then buy out was not economically realistic. This was because the low profit generated by the Farm business would not enable him to service the loan that he would require to do this. Another option of developing the farm buildings or land about then without disrupting the Farm business was also raised.

[47]Although Mr Fleming chased the position by letter dated 14 June 2004 it appears matters were not taken further at that stage. 2006

[48]In 2006 under a series of transactions, Mr Thompson gave up certain tenanted land to UK Coal Mining Limited for a payment of £30,000 in compensation, The partners purchased certain land from Harworth Mining International Limited for £77,000 and UK Coal Mining Limited granted a farm business tenancy of certain land (47.62 acres) to the partners at an annual rent of £143. In about 2007, Karen lent the partnership £40,000 to pay off bank borrowings used to finance the purchase of the land by the partners. 2009-2011

[49]In 2009 Karen seems to have got in touch with Mr Les Brown about possible wills for her parents. Nothing seems to have happened until 2011.

[50]In 2010 SSJ were in correspondence with another firm about a proposal that Gilbert should take over a successor tenancy to the 1981 tenancy in his father’s name at Fenhall Farm. It seems clear that Karen and her Parents were all agreed on this course. The matter seems to have been completed in about August 2011.

[51]In 2011 two different forms of wills seem to have been drafted. Under one version each of the Parents gifted the life assurance policy to the four daughters in equal shares. As regards the farm and the farming partnership the whole interest was to go to Gilbert with a provision that each daughter would receive 2.5% of the net sale proceeds in the event of a sale or that Gilbert ceased to farm the same. In addition, during her lifetime Pauline was to live in the farmhouse rent free for so long as the Farm was unsold (the 90/10 Draft Will)

[52]Under the other form of draft the Parents left their estate and interest to the other but so that the surviving Parent directed that after payment of debts and tax etc. the estate was to be held on trust with 80% of the proceeds to be paid to Gilbert and 20% to be divided among the daughters (the 80/20 Draft Will)

[53]What both these drafts show, in my assessment, is the intention (or at least proposal) that Gilbert would receive 80% or 90% of the value of the Parent’s interest in the Farm and partnership and the Bungalow. Given he already had a one-third interest in the partnership and Farm this would mean that he would have owned, once the wills were given effect, approximately 93% or 86% of the Farm and Partnership and 90% or 80% of the Bungalow and any other assets.

[54]Neither form of will appears to have been executed by either Mr Thompson or Mrs Thompson.

[55]The background to these drafts is explained in attendance/internal memos of SSJ. Apparently on 10 February 2011 Les Brown and Mr Bibby met with Mr and Mrs Thompson, Gilbert and Karen. Mr Thompson’s concern is recorded as being “to look after Pauline who lives rent free in the “Farm House”. That was the property that “had always been intended for Gilbert….” but Pauline, then in financial difficulties, had been permitted to move in on a rent-free basis but also on the basis that she paid the bills (except for water). Mr Thompson wanted Pauline to live in the farm house for as long as she wants it but also “wants Gilbert to have the majority benefit from the farm as he has worked all his life on it”. Gilbert is recorded as getting no salary, which, although not entirely accurate reflects the very small sum he did in fact receive. As regards the Bungalow, “The intention is for Gilbert to have the Bungalow”. The note records the intention that in the event of a sale the daughters would receive (each) 5% of the net proceeds. There was discussion as to whether this should occur in the event that the proceeds were rolled into another farm by Gilbert but the thinking seems to have been that in that event Pauline would lose her ability to occupy the farm so that the 80:5:5:5:5 split would remain appropriate.

[56]On 14 February 2011 Les Brown sent a memo to another member of his firm asking them to draft wills for the Parents. The proposals reflect the position set out in the draft 80/20 Will. The intention is recorded as being “the business to end up in Gilbert’s hands (subject to the 80/20 split if he decides to sell”).

[57]By letter dated 29 March Mr Les Brown informed the Thompsons of his move to a new firm. Thereafter matters seem to have been dealt with at SSJ by, at least primarily and until she left the firm, Joanne Cowie.

[58]A later memo of 14 April 2011 records Richard Biby as not being satisfied with the drafts produced by the colleague (on the basis that they did not carry out his instructions to Les Brown) and himself producing further drafts “borrowing a book from the library” for the purpose.

[59]In October 2011 Gilbert made a will in which he left his one third share in the Farm and partnership between Karen (51%) and Elaine (49%). The residue was split into three to be distributed as to one third each to Karen her daughter Katie and his partner Susan Vivers. An attendance note records that he appreciated that he would need to reconsider matters in the event that he inherited more of the farming partnership business on his parent’s death.

[60]An attendance note of Joanne Cowie dated 8 December 2011 shows that Mrs Thompson attended SSJ with her daughter Karen to discuss her will and inheritance planning. She is recorded as feeling guilty that she had come without telling her husband but that he was not in the best of health and was “fretting about various matters within the family”. The note records (among other things):

“The farm Woody Close Farm has always been meant for Gilbert….The farmhouse was always meant for Gilbert [though Pauline lives there now] They would dearly like Pauline to vacate the farmhouse..so that Gilbert could move in and farm the farm as a true farmer would from the land rather than having to travel in and out every day from his girlfriend’s house….Mr Thompson is very concerned at the prospect of upsetting Pauline or any of his family come to think of it. Mrs Thompson, however, is getting very anxious about her own Will and feels that if anything is to happen to her she would want to make sure that Gilbert gets whatever she has meaning both her share in the business and any property.”

It was agreed that tax advice would be sought from the accountants. Mrs Thompson was to return on 14 December but “would like an interim Will leaving everything she has to her son”.

[61]On 15 December 2011 Mrs Doreen Thompson executed a will leaving the insurance policy to her daughters and the residue of her estate to Gilbert. 2012

[62]On 10 January 2012 a meeting was held at the offices of SS&J. SS&J were represented by Ms Cowie. Straughans were represented by Mr Fleming. The Parents and Karen attended. There are detailed notes of the meeting prepared by Ms Cowie and Mr Fleming. The basic facts were established. Some tax advice was given and the meeting moved on to consider what it was the Parents wanted to happen when they died. Mr Thompson is recorded as indicating that he wanted his wife to keep the Bungalow. He wanted the land to go to Gilbert and to ensure Pauline was not put out of the farmhouse. As far as Mrs Thompson was concerned, she confirmed that the farm had always been for Gilbert, the insurance policy for the girls. Ms Cowie’s note records that they did intend to prefer Gilbert over the girls and that Gilbert had given up a huge amount to work on the farm, receiving very little in the way of wage, working round the clock 7 days a week, having to live in Consett as Pauline lived in the farmhouse and his parents living in the Bungalow and that he had given up “a huge amount in order to deal with the farm. Karen Thompson interjected at this point and said nobody in the family would object to that as it was always known that the farm was for Gilbert and he is the one who has worked it”. It was recorded that wills would be prepared giving effect to the following proposals. As regards the Farm, on the date of the first Parent’s death, their one-third share would go to Gilbert. On a sale by Gilbert, the daughters would receive a share of the proceeds (the size of which, to be considered further). There would however be no income or capital rights of the daughters in relation to the Farm. As regards the Farmhouse, on the death of the first parent, the farmhouse would pass to Gilbert but with a lifetime interest in Pauline to enable her to live there but subject to conditions regarding e.g. re-marriage etc. So far as the Bungalow was concerned, on the death of Mrs Thompson her husband would have a right to live there for life but then the Bungalow would go to Gilbert absolutely. The insurance policy would, on the second death, be divided equally among the daughters. Mr Fleming raised the question of Gilbert having an estoppel claim if he did not get the farm based in his working there for years on the basis of promises made to him. The Parents are recorded as indicating that the farm “was always for him”. It was agreed that draft wills would be prepared to give effect to these proposals and intentions and that the drafts would then be gone through with the parents.

[63]Mr Fleming gave evidence about this meeting. He confirmed that he remembers the remark attributed to Karen in Ms Cowie’s note (but not in his) and that Ms Cowie’s note was an accurate record of the principle points. I accept his evidence.

[64]Draft wills were prepared but, according to Mr Fleming, not for some time and in May the matter had to be chased. It appears that Ms Cowie had left SS&J. This is evidenced by an attendance notes on both Straughan’s files and SS&J’s files.

[65]Drafts were sent to Straughans by letter dated 13 May 2012. In the letter it was said that no condition had been imposed with regard to the daughters receiving a share of the proceeds on a sale because the Parents only owned 2/3 of the Farm and not all of the Farm. Another suggestion was that Mr Thompson left it to his wife to dispose of the estate after he died.

[66]On 16 May 2012 a Mr Alan Brown of SS&J attended Karen and Mrs Thompson. According to the attendance note, Mrs Thompson wanted her husband to have a right of residence in the Bungalow for life but eventually for that property to go to Gilbert. She wanted the interest in the Farm, land and Partnership business to go to Gilbert. She did not want a specific right of residence for Pauline, who had stayed there much longer than expected and whose occupation might affect the tax position for Gilbert. The residue of her estate was to go to her husband and then to her four daughters. A re-drafted will was proposed for Mrs Thompson to consider. The question of taking instructions from Mr Thompson was also raised and it was suggested that one possibility was that he would be content with his wife’s will dealing with matters because “she would provide basically what he would want to provide for”. Another alternative was a more complex will for Mr Thompson.

[67]A dispute over bills was raised with Straughans. They dropped out of the picture not long afterwards. After the death of Mr Thompson, Elaine wrote them a letter on behalf of the partnership saying that the decision had been taken to pass accounting matters to another firm. The matter eventually ended up in proceedings over the payment of Straughans’ bill. The case was won by Straughans in February 2013.

[68]By letter dated 27 July Karen wrote to SS&J saying that the partners had decided to return to Mr Les Brown.

[69]Sadly, on 14 August 2012 Mr Thompson died.

[70]That same day Mr Flynn of SS&J wrote to Karen. It appears that Mr Bibby had been taking forward the question of Mrs Thompson’s will. It was noted that of course this was a very stressful time but that the writer’s understanding from Karen was that her mother was anxious to finalise her will as soon as she was able.

[71]An attendance note of SS&J of a meeting on 30 August 2012, prepared by Mr John Flynn of SS&J, is also reflected in various letters dated the same date sent to Mrs Thompson by SS&J. Karen and Mrs Thompson attended at SS&J’s offices where they met Mr Allen Brown and Mr John Flynn. On that occasion Mrs Thompson executed a new will. The will was very short and in broad terms provided that the entirety of her estate went to Gilbert. The insurance policy was apparently removed from the will because it had since been found that it had already been written in trust for the four daughters. One of the letters records, in the context of possible Inheritance tax savings, that she “felt ultimately” that she preferred the certainty of Gilbert being her “sole beneficiary in order to have complete control of the farm and its assets”.

[72]The attendance note records that in Mr Flynn’s judgment, having seen her alone, Mrs Thompson was:

“lucid and clear in her own mind that she wanted to leave the whole of the farming business and property and her personal property including the bungalow to her son Gilbert….At the last meeting [on 16 May] and at the meeting on 30 August it was quite apparent to me that she knew exactly what she wanted to do and there was no evidence of any pressure being placed upon her.”

[73]A letter of explanation was also prepared and sent to Mrs Thompson to sign, though it does not seem to have been. The statement, to explain the disposition under her will, includes paragraphs stating that she and her husband always wanted the farm to go to Gilbert after they both died, that they didn’t want to see the farm broken up nor to have complicated trust provisions in their wills, that one reason they wanted the farm, business and all their assets to go to Gilbert was because he had worked hard on the farm with very little return, that (other than in relation to the life policy) no promises had been made to any of their family, except Gilbert, that they would benefit under her will and that it was very important that Gilbert have a completely free hand to manage and run the farming business.

[74]On 14 November 2012 a draft partnership deed was sent out by SS&J to Karen for Mrs Thompson and Gilbert to sign. This was described as being a “temporary measure” to enable the business to continue along the same lines as the previous partnership. There appear to have been two connected reasons why the position was regarded as “temporary”. First, it was felt by the advisers that a modern up to date agreement needed to be put in place. Secondly, there was some question of possible changes in the partnership legal structure but, in my assessment, none of this fundamentally undermined the general proposition that the Farm would be Gilbert’s in due course, indeed the issues raised if anything would have given Gilbert a greater interest in the Farm during Mrs Thompson’s lifetime (see below). This was the context in which possible changes were being discussed. The Deed was signed on 20 November 2012. It essentially varied the original partnership deed so that Mr Thompson’s share was attributed to Mrs Thompson as at the date of his death and the profits and losses were to belong to and be borne by the remaining two partners in the proportions of Mrs Thompson:Gilbert being 2:1. The deed made clear that Murray and Lamb were the new partnership accountants and indeed that firm prepared the partnership accounts for the year ended 31 July 2012, which were signed off by them on 23 November 2012. 2013

[75]The situation of Pauline living in the farm house was clearly causing family tensions in the latter part of 2012 and early 2013. On 6 February 2013 Karen sent an email to John Flynn at SS&J expressing her concerns about the bad relations between Gilbert and Pauline over this issue and the effect that it was having on Mrs Thompson. Among other things she notes that her mother spoke to Pauline a few weeks before and told her that she wanted Gilbert to live in the farmhouse and that Pauline would have to leave. Mr Flynn replied saying that he had spoken to Gilbert the week before and that he was going to draft a letter to be sent to Pauline on behalf of Gilbert and his mother. That letter was sent under cover of a letter dated 12 February 2013 where, among other things, Mr Flynn refers to advice that he gave about getting Pauline out of the farmhouse and the difficulties involved in August (to Mrs Thompson) and October (to Gilbert).

[76]On 4 March 2013 Mr Flynn met with Gilbert. Karen and Mrs Thompson. The meeting was primarily about the form of the letter to be sent to Pauline to encourage her to leave the farmhouse and the question of whether she should be approached to alter the trust of the insurance policy so that grandchildren could take if any of the daughters predeceased Mrs Thompson. The attendance note refers to various other matters including Mrs Thompson’s wish to “avoid breaking up the farm if she can which is why in the first place she continues to want Gilbert to inherit the whole of the farm and her bungalow.” The partnership was also considered and whether there should be a substantive change (perhaps to a 50:50 relationship). It is noted that Mrs Thompson “was considering whether or not it was appropriate to hand over to Gilbert her share in the farm but she indicated that the last accountants had said that for the purposes of tax this might not be a good idea”.

[77]Matters between Pauline and the rest of the family were still difficult. It appears from e-mails between Karen and Elaine that in May 2013 Pauline was sent a letter asking her to leave the farmhouse and setting a deadline. Elaine suggested the possibility that each of the daughters might be given a small parcel of the farmland that Gilbert wouldn’t be likely to miss and which would not affect the running of the farm business and which might placate Pauline and asked Karen whether they dare suggest it. Karen’s response was that she didn’t think it would work. The further Pauline and Gilbert were away from each other the better. It would also be complicated. “At the end of the day the farm was for Gilbert and that(sic) girls have got the insurance”.

[78]There is evidence in the contemporaneous documents that in about June 2013 Gilbert “flipped” one day when Pauline was cutting the grass outside the farmhouse and didn’t work on the farm on one day because of Pauline’s continued presence. An attendance note of Mt Flynn dated 21 June 2013 notes that Gilbert told him that Gilbert “is not on the farm as he can not be near Pauline”. By 23 June 2013, when Gilbert was making arrangements with Elaine to pick her up from the airport on a visit to the UK, Gilbert had obviously put things into perspective:

“I did know Mam and Karen where [sic] on my side. What they don’t realise that I was so down and when I saw Pauline cutting the grass I flipped. I have told them that if she didn’t go I would not be responsible for my actions but nobody seemed to listen. I couldnt take any more so I had to leave. Sue thinks I am also grieving for father cause I had to be strong for everybody else at the time. I hope everyone understands and I didn’t mean to put Mam and karen through anything.”

[79]By early July Pauline moved out of the farmhouse, Mrs Thompson paying her some £8,000 to ease the situation. Works were then carried out on the farmhouse to get it ready for Gilbert to move in. When he moved in, he did so with his partner, Sue, who herself contributed to various works to the Farmhouse.

[80]At the end of December 2013 Mrs Thompson executed a lasting power of attorney in favour of Karen as her attorney, with Elaine as possible replacement attorney. 2014

[81]Christmas and New Year 2013/14 was obviously a stressful time. An exchange of e-mails in early to mid-January shows that Elaine was furious with Karen and, to some extent her mother, and regarded them as interfering with how Gilbert and Sue arranged the farmhouse and the furniture within it, as not wanting Sue there and as refusing to speak to her and refusing to visit them at the farmhouse when invited. Karen was now also apparently caught up in the prospect of issuing proceedings against the hospital authorities in negligence for the manner in which her father had been treated before his death.

[82]During May 2014, the available contemporaneous documentation shows the continued breakdown in relations between Gilbert and his partner Sue on the one hand and Karen and Mrs Thompson on the other. Sue wrote an email to Elaine on 9 May explaining how she felt she had been cut off since Christmas in that Karen and her mother had not spoken to her since then, that Karen had said that the family should be able to come in and out of the farmhouse as they liked and that Karen had said that everything had gone wrong since Sue had moved to the farm. Sue explained that Gilbert and she were packing up to move back to Consett. The ill-feeling is also manifested in emails between Karen’s daughter and Elaine and in an attendance note of Mr Flynn of a meeting that he had with Gilbert on May 2014, in connection with Gilbert’s will.

[83]On 15 May Mr Flynn met with Karen and Mrs Thompson. Again, the family tensions were discussed and a number of examples given. Things were perceived by Mr Flynn as “deteriorating badly”” at that time. Mrs Thompson is recorded in the attendance note as liking all the members of the family to benefit from a sale of the farm “sooner rather than later” and that in achieving this she felt that she would be “putting into effect in large measure her husband’s wishes that the whole family should benefit”. At that stage her intention was that Norma and Karen should get 50% of her two thirds share of the Farm and that the remaining 50% would be split equally between the remaining 4 children. Apparently, Mrs Thompson: “felt that there were good reasons to depart from the earlier will leaving everything to Gilbert. The rationale was clear although she found it a difficult decision to make. She had obviously come to the conclusion that the farm would have to be broken up on her death if the children were going to be able to benefit from it sooner rather than later”.

[84]There are various drafts of wills for Mrs Thompson that were prepared. The drafts provide that Gilbert was to get simply a proportion of Mrs Thompson’s residuary estate: in the case of one draft only one sixth (16.66%), and in the case of another draft, 45%.

[85]By July 2014, Gilbert had approached Mr Flynn to see if he could reach out to Mrs Thompson and Karen to try and resolve the differences that had arisen between them. Mr Flynn wrote what he described as an initial “ice breaking” letter to Mrs Thompson on this front.

[86]According to Mrs Thompson, from July 2014 and in breach of the partnership obligations, Gilbert has failed to work on the Farm. Gilbert’s case, in summary, is that he has been prevented from working on the Farm because he was effectively excluded from doing so by Karen and/or Mrs Thompson and because he has been ill. In slightly more detail, his case is that he worked on the farm until he went on a holiday to visit Elaine in Canada in September 2014. On his return he was excluded from the Farm and working there was made extremely difficult (for example by alleged actions of cancelling his credit card and stopping paying transport related costs). He tried to sort these matters out without success until about May 2015 when he did return to work on the Farm. However, between July 2015 and January 2017 he was too ill to work on the Farm. On recovery, he attempted to return to work on the Farm in January 2017 but he was not permitted to so do.

[87]By 9 September 2014 Mrs Thompson had written a note setting out her intentions regarding her will in which she refers to the then current situation of her family being “torn apart”. The note says that Gilbert has not spoken to her in 6 months, that he has left an “18 year old lad…a complete stranger to this family with responsibility for the livestock” and that he was currently on holiday in Canada. This person is Mr Bainbridge who gave evidence before me. Having referred to the situation of Pauline and saying that she should have made a greater effort to move out “knowing the farm house was for Gilbert when he wanted to be married and start his own family-which has not happened”, the note goes on to state that watching Pauline move out “only then to have a strange family move in has been unbearable. To then hear that Gilbert’s girlfriend’s family was now “his family” and his own family was his extended family was unacceptable”. She refers to the risk of “losing OUR farm”. I should note at this point that earlier in the year Sue had given re-assurance (explained by John Flynn to Mrs Thompson and Karen as being something that could be made binding) that she did not want to acquire any interest in the Farm and would enter into documentation to that effect.

[88]In my assessment the note sent by Mrs Thompson reflects her desire to control her family and decide who is within the family and who is not and it supports the evidence itself supporting the view that she took against Sue and made life so uncomfortable that Sue felt forced to move out. This is also consistent with a note in Gilbert’s medical records from as long ago as March and April 2000 when he is reported as visiting the doctor in a “suicidal” state and that he wanted to “give up the farm” and a letter from NHS Trust to Dr Clarke referring to Gilbert’s “problems relating to past issues about his upbringing…His mother was overprotective and would never accept any of his girlfriends, his father has always been anxious”.

[89]On 23 September 2014 Mrs Thompson executed a will broadly implementing her wishes set out in her note of 9 September 2014. Thereafter title to the various parcels of land was investigated by Mr Flynn and notices to sever joint tenancies so that they became tenancies in common were served on Gilbert. Mr Flynn’s correspondence promoted mediation but unfortunately despite a mediation in January 2015, matters were not resolved.

[90]By June 2016 matters reached a new low when Elaine was accused by Karen of having stolen personal papers of their mother. It appears that these may be papers that ended up with Gilbert’s then solicitors but which they returned to Mrs Thompson’s solicitors on the basis that they were or might be subject to legal professional privilege.

The Claim and the scope of the trial

[91]As I have said, the main claim is that by way of proprietory estoppel arising in his favour, Gilbert is entitled to an interest in the Farm larger than that from the Partnership Agreement (broadly being a one third share). The interest asserted is in effect that on the death of his last surviving parent, he is entitled to the entirety of the Farm and any interest of Mrs Thompson in the partnership. In addition (or alternatively) there are also claims that the partnership has or should be dissolved and that there should be orders for winding up and for sale. There are, by way of counterclaim, similar claims for dissolution, winding-up and sale by Mrs Thompson.

[92]By Order of District Judge Kramer dated 3 April 2017 the trial was to be of two issues. In very broad terms they were, first whether Gilbert had any interest, and if so what interest, in the Farm beyond his third partnership share and secondly whether the partnership has been validly dissolved.

[93]The evidence and submissions before me so far have been directed solely at what I have described as being the main claim, the first issue directed to be tried by DJ Kramer. Further directions will need to be given in relation to the remaining relief sought on each side. I can see that the partnership may well have to be wound up and accounts taken given the complete breakdown between the parties, whether or not it has already validly been dissolved.

[94]In the event that I do find an estoppel as asserted by Gilbert, there may also be added complications and points of detail as to how the same is to be given effect to in relation to the Partnership (and Gilbert and Mrs Thompson’s interest therein) as regards the position prior to Mrs Thompson’s death.

The oral evidence

[95]I consider Gilbert to be an honest and reliable witness. His evidence is entirely consistent with the contemporaneous documents and the evidence of others whose evidence I also found to be reliable. He was prepared to agree with his mother’s evidence in places and did not deny everything that she and Karen said, even in relation to matters that might, on one view, not necessarily been to his advantage to agree to.

[96]Gilbert gave evidence that he had always been destined to be a farmer. That this was at an early stage, even before the Farm was acquired and when the Thompsons were farming other land. He had left education with no qualifications and had not concentrated on his academic work because of his knowledge he was destined to be a farmer on the family farm. His parents were, he said, both proud of him and he referred to an occasion when his mother had said he had been marked out to work on the family farm before he was born.

[97]He explained the long hours that he worked on the farm and what he did. He also explained his more limited role regarding the paperwork, accounts, disputes side of matters which were initially handled by Elaine and in later years by Karen.

[98]As regards assurances made to him he was clear that the Farm had always been promised to him (and the insurance policy to the girls) and those promises/assurances to him was the reason why he worked on the Farm (and previous farms farmed by the Thompsons) all his life at wages that were so low and had not pursued other job opportunities and not worked harder to obtain qualifications. Although, not surprisingly when matters are assumed over time, it was difficult to identify precise occasions and precise words used on precise occasions. However, he was clear and I accept his evidence, that both parents made very clear that he would get the Farm after their death and that he had worked so hard for it that he deserved it.

[99]I am also satisfied that his evidence is correct when he says that the Bungalow was always seen as an integral part of the Farm even though title had been separated off and the Bungalow put in his mother’s name (legally and beneficially) in the circumstances that I have already described. The Bungalow was, at all material times, occupied by his Parents as the farmhouse of the farm and was treated as such. Though it would no doubt be legally possible to split title (and accessways) so that the Bungalow could be created as a separate property from the Farm, this was not the intention and the Bungalow was always treated as something that would come to Gilbert in due course with the Farm.

[100]I heard a certain amount about family quarrels. I have adverted to the ill-feeling caused by Pauline staying on so long at the farmhouse. There were also disputes between Karen and Pauline, in which Gilbert got involved. I also heard about the grass cutting incident leading to Gilbert disappearing for a day. I also heard about the more recent years, the circumstances in which he and Sue left the farmhouse after little more than five months of living there and the later period in which Gilbert had been ill and/or felt excluded from the Farm such that he had not been working there. None of these matters, even if resolved against Gilbert, would in my view affect the questions of whether representations, assurance or promises had been made to Gilbert; he had reasonably acted to his detriment in reliance on such promises by working all his life on the Farm (and earlier farms farmed by the Thompsons); whether it is unconscionable that he now be denied the Farm and how any equity arising as a result is to be satisfied.

[101]I am however satisfied that Gilbert’s evidence is correct when in more recent times Karen said things to him along the lines that the farm is her mothers and that he is just a shepherd. I am also satisfied that he has not simply walked away from the farm but rather he has been effectively excluded by the actions of Karen and her mother.

[102]In short, his evidence on the main issues in the case is supported strongly by the contemporaneous documentary evidence. The farm (including the bungalow) was always to be his and the insurance policy was the girl’s inheritance. This reflected at least in large part the sacrifices that he had put into working on the farm over the years. This inheritance was always made plain to him and was well recognised and accepted within the family. Although at various times the Parents considered slightly changing the position (for example by protecting Pauline’s occupation of the Farm House or giving a small part of any proceeds of sale to the daughters in the event of a sale) these minor points came and went and the real constant was, in effect, that Gilbert would inherit the Farm. I am also satisfied that although occasionally there were thoughts about what would happen in the event that Gilbert sold the Farm, at the end of the day the Parents were prepared to leave the fair treatment of the rest of the family up to Gilbert. This general position also chimes with other oral evidence. The evidence against these propositions I do not accept.

[103]I should also add that although Gilbert’s medical records indicate that he has not been as fortunate as many with his health, both physical and mental, his health has never been a reason put forward for his unfitness to be a farmer or to inherit the Farm.

[104]Elaine also gave evidence. She was clear that she could remember being told when her parents took out the insurance policy that Gilbert would get the farm and the girls would get the benefit of the insurance policy. She said the matter was not discussed very frequently but it was a situation where everyone knew what was going to happen, namely that Gilbert was to inherit the Farm. She also denied any suggestion that Gilbert was not a good worker or that he was not competent or that such suggestions had surfaced prior to the more recent falling out in 2014 between Gilbert on the one hand or his mother and Karen on the other. I found her evidence to be reliable and to be consistent with the contemporaneous written records.

[105]Pauline gave evidence for Gilbert. I found her evidence to be reliable and to be consistent with the contemporaneous records. She too explained how it had always been understood and accepted that Gilbert would acquire the Farm. She denied the suggestion made by her mother that her father never talked about such matters though she accepted that her mother was more reserved on the matter. Nevertheless, she considered the position was clear and one that her mother agreed with and was party to. She confirmed that for the purpose of inheritance, the Bungalow was always treated as part of the Farm in the sense that it was clear that Gilbert would inherit that too when he inherited the Farm. She confirmed the sort of statements that Mr Wiles, a friend of Gilbert, gave evidence that he had been told by Mr Thompson. These included matters such as Gilbert’s life being mapped out from the day he was born; Gilbert was going to take over the Farm, the girls would have lives of their own and hopefully each meet someone and so on, She was frank that she was not really able to assist with what had gone on at or over the Farm in 2014 onwards as she hadn’t been there. She also denied any suggestion that Gilbert did not work hard or that he was not up to the job.

[106]Mr Billings is a nephew of Mrs Thompson, being the son of her sister. He gave evidence of his visits to the farm (less frequent since he moved to the South of England) and his understanding that the Farm would always be Gilbert’s. This understanding was gained from general conversations and it was difficult to be precise but he did remember two specific conversations, the first one being before Elaine left for Canada. In a conversation he witnessed, Mr Thompson commented how it was a good thing that Elaine was looking to her future and making plans of her own as Gilbert was to inherit and take over the Farm. The other was in about 2009, which he could date from photographs, when Mr Thompson commented to him how glad he was that Gilbert would take over the Farm and inherit it after his death. Mr Thompson told him that he had made alternative provision for his daughters but that Gilbert would have to work long hours and continue to work very hard on the Farm after his, Mr Thompson’s, death. I found his evidence to be truthful and and entirely credible.

[107]Sue gave evidence for Gilbert. She explained how hard Gilbert worked on the Farm, how both he and Mr Thompson told her in terms that Gilbert would inherit the Farm, that it was "his" farm and that he would have to continue to work hard on it. She explained how Mrs Thompson would agree with her husband and how she once said something along the lines of Gilbert’s life being mapped out for him before he was born. She also explained that it was made clear to her that the Bungalow would be Gilbert’s too. One example of this was in the context of Gilbert asking where he would live now that Pauline had moved into the farmhouse and being told by his father, in her (Sue’s) presence, that Gilbert would get the Bungalow along with the Farm.

[108]She explained how hard Gilbert worked on the Farm, his absence of financial resources and how she made financial contributions to their life together including such matters as paying for their holidays away and helping with the move to the farmhouse and getting it ready by investing about £5,000.

[109]She also explained how relations between her and Karen and between her and Mrs Thompson began to deteriorate, almost from the time she moved into the farm house with Gilbert, when Karen seemed to want to control what furniture was brought into the farmhouse where it was put and how the farmhouse was decorated. She put the deterioration in relations down to a fear on the part of Karen and/or her mother that she wanted or would want to get some sort of interest in the Farm, in Gilbert’s lifetime or on his death. She explained that this wasn’t the case and that she was prepared (and still is) to sign a legal document to make this clear, a fact corroborated in the contemporaneous solicitor notes. She explained what happened over Christmas and New Year 2013/14. She also explained events thereafter, how she and Gilbert moved out of the farmhouse in May 2014; how they were in Canada for two weeks to see Elaine in September 2014 and how Mr Bainbridge had been left looking after things and how he had telephoned them while they were in Canada as a result of being upset by his treatment by Karen. I found her evidence to be credible, truthful and reliable.

[110]Mr Wiles is an old friend of Gilbert. The land farmed by Mr Thompson at Lanchester was very close to Mr Wiles’ mother’s house and they often passed Mr Wiles when he was living there. He became friends with Gilbert in about 1989 when Gilbert and the family moved to Woody Close Farm. The land near to Mr Wiles’ mother’s house continued to be farmed by the Thompsons. Mr Wiles referred to frequent conversations with Mr Thompson. Mr Thompson, he said, would frequently talk about matters such as how Gilbert could modernise the Farm when it became his and how he (Mr Thomspon) wanted the Farm to develop and progress after his death under Gilbert’s care and the like. Generally, the clear impression was given by Mr Thompson to Mr Wiles that the farm would be Gilbert’s in due course.

[111]He also gave evidence about how hard Gilbert worked on the Farm with his father, gradually taking over more of the day to day running of the farm as his father aged and became of ill health. Finally, he also addressed an occasion when he visited Gilbert in the farmhouse with other friends and Karen suddenly entered and seemed displeased to see them and how she seemed annoyed that there were people in the farmhouse without her permission which he thought was odd. He also gave evidence as to how at the time of moving into the farmhouse, Gilbert had told him there had been problems over furniture and carpets at the farmhouse where Karen had tried to control the furniture Sue brought into the farmhouse and the colour of the carpets ordered.

[112]I consider that Mr Wiles was a straightforward, honest witness and I hold that the evidence that he gave was reliable and true.

[113]Mr Harrison is an old friend of Gilbert. They have known each other since they were about 14 or 15 and are contemporaries in age terms. He described his visits to the Farm and how Mr Thompson would point things out on the Farm and say things like “Gilbert can develop this” or “Gilbert can do that” when he takes over the Farm. The references to Gilbert taking over the Farm were so frequent that he was unable to recall specific conversations or specific incidents. However, he made clear that Mr Thompson’s constant refrain was that “this farm is Gilbert’s” and that Mr Thompson was apparently proud that he could hand the Farm onto Gilbert and that Gilbert would take it over one day. I found his evidence to be entirely credible and reliable. He also confirmed his perception of the hard work that Gilbert put in on the Farm and his dedication to it: instancing as an example of the latter, an occasion when Gilbert cut short an evening’s night out to check on the animals at the Farm.

[114]Mr Bainbridge gave evidence about his involvement in the Farm and more particularly about the time he was left in charge by Gilbert while Gilbert and Sue visited Elaine in Canada for about two weeks in September 2014. Gilbert had worked hard to get things up to date before he left and Mr Bainbridge (who was about 18 at the time but who had helped Gilbert before this with handy work as and when required, such as putting up fences, worming the sheep etc), had little to do beyond feeding the dogs, checking on the livestock and generally walking around the farm to check all was in order. He explained how he sought and obtained Gilbert’s permission to take his girlfriend with him. He then explained how Karen told him that he should not have brought his girlfriend onto the Farm. When he explained he had asked for and obtained Gilbert’s permission the answer given was along the lines that the Farm belonged to Karen and her mother and that Gilbert is “just a shepherd”. Of course, leaving aside any promises and assurances, Gilbert was a partner in the Farm and its business. I find that Mr Bainbridge’s evidence was truthful, and credible and I have no hesitation in accepting it. Indeed, the somewhat surprising reaction to his involvement on the part of Karen and or her mother is confirmed by Mrs Thompson’s note to the solicitors in September 2014.

[115]I regret to say that I was not impressed with the evidence of each of the witnesses called on behalf of Mrs Thompson.

[116]So far as Mr Affleck is concerned I consider that his evidence was constructed unfairly to present the worst possible light on Gilbert. In effect it was attempted “character assassination”. Thus, he suggested that Gilbert was not “self-sufficient” and “lacked initiative”. As example of this he said Gilbert followed his father around a lot and took the lead from him in things that needed doing on the Farm. This however was natural given the relationship between them and the fact that until he died Mr Thompson wished to keep as fully involved in the Farm as he could and would not relinquish the reins to Gilbert.

[117]Similarly, Mr Affleck referred to dinner always being prepared for Gilbert by his mother or Sue. The same apparently applied to Mr Thompson, yet that did not apparently detract from his abilities, initiative or self-sufficiency in Mr Affleck’s eyes (though in the case of Gilbert a different standard was applied). In oral evidence he was adamant that Gilbert’s failings were exhibited by the fact that, on an occasion when he, Mr Affleck, was with Gilbert, the latter suggested they go the Bungalow where his Mum would get them a sandwich for lunch rather than he, Gilbert, himself making a sandwich.

[118]He even went so far as to suggest that both Parents had concerns about whether Gilbert could handle running the Farm on his own. This flatly goes against the contemporaneous written evidence and the oral evidence. True it is that Karen and Mrs Thompson now raise this case but this is well after Mr Thompson sadly died in the context of family feuds that I have outlined. Mrs Thompson’s position in reality seems that she doubts Gilbert’s commitment to the Farm because of what she views as his abdication of responsibility from 2014 onwards.

[119]The supporting matter that Mr Affleck relies upon in his assessment of the Parent’s views of Gilbert’s capabilities was the example that Mr Thompson continued to work hard well into his 80’s. However, as I find, that was because he was that sort of committed farmer not because of any doubt about his son’s capabilities and there is simply no credible evidence that he had doubts about Gilbert’s capabilities. Mr Affleck suggested that Gilbert had no involvement in any “big” decisions regarding the farm but in cross examination it became clear that he had no basis for making that assertion.

[120]Mr Affleck confirmed he had never been a farmer. His job is with the environmental agency where he works as an environmental officer. An example of Gilbert’s alleged lack of capability was the suggestion that he (Gilbert) was not fully conversant with all aspects of the Water Resources (Control of Pollution) (Silage, Slurry and Agricultural Fuel Oil (England) Regulations 2010. This point (not put to Gilbert in cross-examination) is one that I regard as unfair. Mr Thompson himself needed assistance with bookkeeping and the like and it is no reflection of a farmer to say that they can call and do call on professional assistance when required.

[121]Another point made against Gilbert by Mr Affleck was that he, Gilbert, had a poor work ethic and often watched television when he should have been working. I find that this is again an unsubstantiated allegation which is refuted by the other evidence in the case.

[122]Again, Mr Affleck asserted that Gilbert “deserted the farm again” in September 2014 when he went to visit Elaine for two weeks. I find this use of language inappropriate, emotive, unfair and unjustified but wholly in keeping with the main parts of Mr Affleck’s evidence. Another example is a wholly gratuitous reference to having seen Gilbert “on two different occasions on nights out in Consett drinking” in the last few years, this somehow suggesting some implied criticism of an unspecified nature.

[123]At the end of the day I regret to say that Mr Affleck’s evidence was largely based on Mrs Thompson’s case and on what Karen had told him. It is unfortunate that he was not more careful in what he was prepared freely to assert.

[124]One point that I did find telling in his evidence was his suggestion that the fallout in early 2014 may have been as a result of Karen “helping to organise and furnish the farmhouse at Gilbert’s request” and him (Mr Affleck) getting “the feeling that Gilbert had to run everything past Sue (his partner”). This would hardly be surprising. The suggestion appears to be that Sue should not have been consulted, yet it was going to be the house that she was going to move into with her partner. To me this is reminiscent of the attitude displayed in Mrs Thompson’s note to her solicitors in September 2014.

[125]Mrs Thompson gave evidence on her own behalf. I regret to say that I consider that she has become so convinced of Gilbert’s wrongdoing in recent years that it has clouded her judgment and memory as to the history of the Farm, her and her husband’s wishes regarding the Farm and Gilbert and the contribution that Gilbert has made to the Farm over the years.

[126]Her initial position in cross-examination seemed to be that Gilbert used to (implicitly, just) ride round and do odd jobs and that there was never any discussion between her and her husband about Gilbert eventually inheriting the farm or that that was her husband’s wish. She then moved to the position that she “supposed” that her husband was proud of Gilbert and wanted him to take over the Farm. However, she then denied she ever wanted Gilbert to have the Farm. She then moved to accepting that she wanted him to take over the Farm one day BUT only if he ran it properly. She eventually accepted that she and Mr Thompson wanted Gilbert to take over the farm, and that that had always been the expectation.

[127]Mrs Thompson denied that anyone else knew her and her husband’s intentions regarding the farm and asserted that Elaine, for example, had told a “whole load of lies”. Pauline too was accused of lying in this area. However their evidence is entirely consistent with contemporaneous notes of meetings at which Mr and Mrs Thompson expressed precisely these views and in the presence of Karen and/or Gilbert.

[128]When the attendance notes which I have described above were put to Mrs Thompson, her reaction was to say that she and her husband were simply “going along” with what the professionals were saying (for example, as regards the 13 May 2004 meeting). This was simply disingenuous and entirely out of keeping with the picture that I have formed of a very firm and proud matriarch and a proud father anxious and proud that his son should inherit. Mrs Thompson’s evidence on this point of being led by the professionals does not fit with the contemporaneous notes and letters. The most that can be said is the professionals were trying to push the Parents to reach decisions on issues that they recognised were important to them, not what those decisions should be. The professionals can only have got the information recorded in the attendance notes from the members of the Thompson family that were present.

[129]Eventually in cross-examination she tended to agree, “Yes, I suppose so” that the intentions and wishes and views attributed to her and her husband in the attendance notes were correct and reflected their intentions, wishes and views at the times in question. On a large number of occasions, she resorted to dealing with points in contemporaneous documents that were clearly flatly contradictory to her evidence by saying that she did not recall what had happened at the relevant meeting or (for example) that she had never met Ms Cowie and did not know who she was. A similar line was to deny her recorded intention that in the event of her predeceasing her husband, the Bungalow should be lived in during his lifetime and thereafter pass to Gilbert. The line she initially took was that she had never said this but was unable to explain why it was recorded in the relevant attendance note.

[130]Mrs Thompson’s explanation about the terms of the will executed not long after Mr Thompson’s death was that she had been rushed into this and was in no situation to be making a will. I am satisfied that this is wrong. The only person who could have been forcing to take her to the solicitors was Karen and I am sure that Karen would not have forced her mother to do this if she felt her mother was not up to it. Further, it is clear to me from the solicitors’ note that it was not them that was pushing for action at that very sensitive and difficult time, but in fact Mrs Thompson herself.

[131]Similarly Mrs Thompson denied that she had ever said that Gilbert had worked hard, despite what the attendance notes said.

[132]Another line that Mrs Thompson took in evidence was that she and her husband never talked about “these sorts of things” that is inheritance of the Farm etc. Whilst I accept that they would not necessarily sit down and have a structured discussion about such matters I am entirely satisfied that they communicated sufficiently to reach the views and wishes set out in the attendance notes. I am also satisfied that Mr Thompson was the sort of man that would make the sort of remarks attributed to him by e.g. Mr Harrison and Mr Wiles. Although these broad statements by themselves might be consistent with the sort of thing a father may say without making any promise or giving rise to any legitimate expectation, the terms in which the witnesses gave their evidence made clear to me that Mr Thompson was going beyond the sort of general remarks about intentions and inheritance that can later be found to confounded when the relevant will made is finally brought into operation.

[133]Having heard Mrs Thompson give evidence and having seen her reaction to the points being put to her, I am entirely satisfied that she is a formidable woman. There was a dispute as to precisely how much financial benefit Gilbert obtained from the Farm and whether Mrs Thompson topped it up. Where there is a dispute I prefer the evidence of Gilbert and Sue. Even on Mrs Thompson’s version of events the rewards for a man in his 50’s running the Farm as Gilbert was, were very small and he was more or less obliged to live with his Parents or a partner at her address, with no means to rent or buy his own home. Mrs Thompson’s response to questioning at one point, along the lines of why should he want or expect to receive any more, summed up, in my judgment, her attitude and steely character.

[134]Just as Mrs Thompson was able to go ahead with a will shortly after her husband died, just as she regards herself as the arbiter of what it was reasonable for Gilbert to receive from the farm, just as she decided whether or not she approved of his choice of stockman while he was away in Canada, and was horrified that she did not know the man employed by Gilbert and that that man brought his girlfriend, possibly a hairdresser, onto the farm while he was working, just as it was her judgment as to whether Sue was a suitable partner for Gilbert and a suitable resident of the farmhouse able to invite members of her family to stay with her at the farmhouse, so it is that it is in her mind for her to decide what should happen to the Farm. In short, I am satisfied not only that Karen did say to Mr Bainbridge, as his evidence confirmed, that the Farm was her mother’s and that Gilbert was just a shepherd but that this reflected her mother’s attitude.

[135]Similarly, I am satisfied that although Gilbert wanted Pauline to vacate the farmhouse the moving force in terms of wanting Pauline to leave and ensuring that that happened was his mother.

[136]I am also satisfied that in late 2014 onwards Gilbert was effectively excluded from the Farm and that steps were taken in agreement with Karen to stop paying his mobile phone, for the running expenses of the car and stopping his credit card provided through the partnership.

[137]Having decided that Gilbert is not compliant with her wishes and no longer deserves the Farm, whether that view is justified or not, Mrs Thompson has re-written history and finds it difficult even to recognise that until 2014 her position, and that of her husband, was entirely different. For these reasons I prefer the evidence of Gilbert and his witnesses wherever there is a conflict between their evidence and Mrs Thompson’s evidence, the latter being inconsistent with the contemporaneous documents. My views in this respect are strengthened by my assessment of Karen’s evidence.

[138]Karen’s position was to confirm that her mother had topped up Gilbert’s wages and that he was paid £150 a week on top of the £70 a week and/or from drawings form the partnership. This, she said at one point, was something that she “just knows” to be the case. I found her evidence and her mother’s wholly unconvincing on these points and prefer Gilbert’s evidence as to what he received from the Farm and his mother. As I have said, and in any event, it makes little difference to my assessment of the overall equities at the end of the day.

[139]Karen too took up the stance of belittling the work that Gilbert had done on the Farm and denying that he was ever promised the Farm, this despite the attendance note recording her own views that I have referred to above. When asked if he had carried out building work she asserted he paid someone else to do it and when finally, she accepted that he possibly did some construction work she still asserted that she could not remember who had done it.

[140]Although I accept that Karen helped out at the Farm, especially regarding bookkeeping and the setting up of various systems I do not accept the implication that Gilbert was or would have been incapable of dealing with such matters, if necessary by hiring in outside assistance.

[141]Karen suggested that the only bad relations in the family were between Pauline and Gilbert. However, she accepted in oral evidence that she and Pauline had had a dispute over use of buildings by the respective number of horses that each owned. I consider that her written evidence was, like that of Mr Affleck’s, directed at an unfair character assassination of Gilbert. Everything was painted in a manner to put Gilbert in the worst possible light. This conclusion is reached having heard her seek to justify the position she took in cross examination. One example was to suggest that there was an extremely serious serial failure by Gilbert to keep up to date the medicines book and that this put the whole Farm at risk for breach of regulations. There is no contemporaneous evidence of such serious breach or that she took any steps to do anything about it (which she would have done had the breach really been as serious as she suggested) further the breaches seem to have dated back to when her father was alive. My suspicion is that there were failings from time to time but they were not as serious as made out to be by Karen nor were they the sole responsibility of Gilbert. Further there is no suggestion that such behaviour or any behaviour of Gilbert was such that prior to 2014 the Parents were thinking of anything other than Gilbert inheriting the Farm.

[142]Further, Karen’s attempted reconstruction of the contemporaneous documents to say that they were “not accurate” and that her parents settled intention was that the survivor of them would have a free hand to do whatever they wanted with the Farm and that Gilbert had no settled expectation of inheriting was wholly unpersuasive.

[143]Mr Brown also gave evidence on behalf of Mrs Thompson. He gave that evidence carefully. In broad terms he was unable to recall very much other than what was in the attendance notes. Nothing he said persuaded me that my assessments of the evidence and the witnesses are incorrect.

[144]Mr Bibby also gave evidence for Mrs Thompson. I consider that his long relationship with her and loyalty to her has resulted in him making assessments that are not justified. In his first witness statement he asserted that “with the advantage of hindsight” he now believes that the indecision of Mr Thompson in the sense that many wills were prepared for him but never executed, lay in the fact that Mr Thompson doubted that Gilbert had the ability or was suitable to carry on a modern farming business. He also asserted that he believed that Mr Thompson’s intense loyalty to the family prevented him from sharing his doubts with (in effect) Mr Bibby. I am satisfied that Mr Bibby’s beliefs are of no value in assisting me. He accepted that his assessment was not based on anything that Mr Thompson said to him. He also accepted that he had been in constant touch with Mrs Thompson during the lead up to the hearing. I am satisfied that his views are really founded on what Mrs Thompson and/or Karen have told him and that he has persuaded himself of the truth of that case.

[145]In his second witness statement Mr Bibby dealt with the Bungalow and how it had been separated from the Farm in terms of beneficial interest and title but was not able to gainsay what the contemporaneous attendance notes reveal regarding the intention that Gilbert should acquire the Bungalow too. He also made the point that he did not consider that he would have been happy taking instructions from Gilbert on business matters and that he did not regard Gilbert as being able contribute to meetings when he was involved which was why Gilbert was not there. At the end of the day I do not accept this evidence on these points either. I find that this witness statement was made at the behest of Karen and/or her mother and that, as with his first witness statement, although Mr Bibby believes it to be true he has unconsciously adopted the views and thoughts of Karen and her mother.

The law

[146]The legal principles that I should apply were agreed. The agreed list of issues that it was agreed that I should determine were: i) Was a representation, promise or assurance made to Gilbert that the Farm would be his? ii) Did Gilbert reasonably act in reliance on that representation, promise or assurance? iii) Has that reliance been to Gilbert’s detriment if Mrs Thompson is not held to that representation, promise or assurance? iv) If so, is it unconscionable for Mrs Thompson now to insist that Gilbert will not have the Farm? v) If (i) to (iv) are answered affirmatively, how is the equity to be satisfied? vi) What is the correct approach in principle to satisfying an equity? vii) Applying that approach, is C entitled to declarations as to how the Farm is to be held other than in strict accordance with the partnership deed of 2012? viii) What are those declarations to be (including whether such declarations relate to the Bungalow?) Lifetime interests with reversionary interests to Gilbert outright or for his life on terms etc?

[147]As the cases make clear, these questions cannot be put into watertight compartments: a more holistic approach is required. I was referred to a number of cases on the subject including Gillet v Holt

[2001] Ch 210

; Jennings v Rice

; Uglow v Uglow

; Thorner v Major

; Henry v Henry

; Suggitt v Suggitt

; Davies v Davies

; Davies v Davies

; Moore v Moore

[2016] EWHC 2202 (Ch)

. I have the principles set out in these cases well in mind.

[148]In my judgment a convenient short summary of the relevant principles is to be found in the judgment of Lewison LJ in Davies v Davies [2016] P. & C.R. 10 at paragraph 38: “[38] Inevitably any case based on proprietary estoppel is fact sensitive; but before I come to a discussion of the facts, let me set out a few legal propositions: i) Deciding whether an equity has been raised and, if so, how to satisfy it is a retrospective exercise looking backwards from the moment when the promise falls due to be performed and asking whether, in the circumstances which have actually happened, it would be unconscionable for a promise not to be kept either wholly or in part: Thorner v Major

[2009] UKHL 18

[2009] 1 WLR 776

at [57] and [101]. ii) The ingredients necessary to raise an equity are(a) an assurance of sufficient clarity

(b) reliance by the claimant on that assurance and

(c) detriment to the claimant in consequence of his reasonable reliance: Thorner v Major at [29]. iii) However, no claim based on proprietary estoppel can be divided into watertight compartments. The quality of the relevant assurances may influence the issue of reliance; reliance and detriment are often intertwined, and whether there is a distinct need for a "mutual understanding" may depend on how the other elements are formulated and understood: Gillett v Holt

[2001] Ch 210

at 225; Henry v Henry

[2010] UKPC 3

;

[2010] 1 All ER 988

at [37]. iv) Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances: Gillett v Holt at 232; Henry v Henry at [38]. v) There must be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. The question is whether (and if so to what extent) it would be unjust or inequitable to allow the person who has given the assurance to go back on it. The essential test is that of unconscionability: Gillett v Holt at 232. vi) Thus the essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result: Jennings v Rice

[2002] EWCA Civ 159

;

[2003] 1 P & CR 8

at [56]. vii) In deciding how to satisfy any equity the court must weigh the detriment suffered by the claimant in reliance on the defendant's assurances against any countervailing benefits he enjoyed in consequence of that reliance: Henry v Henry at [51] and [53]. viii) Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application: Henry v Henry at [65]. In particular there must be a proportionality between the remedy and the detriment which is its purpose to avoid: Jennings v Rice at [28] (citing from earlier cases) and [56]. This does not mean that the court should abandon expectations and seek only to compensate detrimental reliance, but if the expectation is disproportionate to the detriment, the court should satisfy the equity in a more limited way: Jennings v Rice at [50] and [51]. ix) In deciding how to satisfy the equity the court has to exercise a broad judgmental discretion: Jennings v Rice at [51]. However, the discretion is not unfettered. It must be exercised on a principled basis, and does not entail what HH Judge Weekes QC memorably called a "portable palm tree": Taylor v Dickens

[1998] 1 FLR 806

(a decision criticised for other reasons in Gillett v Holt). i) Deciding whether an equity has been raised and, if so, how to satisfy it is a retrospective exercise looking backwards from the moment when the promise falls due to be performed and asking whether, in the circumstances which have actually happened, it would be unconscionable for a promise not to be kept either wholly or in part: Thorner v Major

[2009] UKHL 18

[2009] 1 WLR 776

at [57] and [101]. ii) The ingredients necessary to raise an equity are (a) an assurance of sufficient clarity (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of his reasonable reliance: Thorner v Major at [29]. iii) However, no claim based on proprietary estoppel can be divided into watertight compartments. The quality of the relevant assurances may influence the issue of reliance; reliance and detriment are often intertwined, and whether there is a distinct need for a "mutual understanding" may depend on how the other elements are formulated and understood: Gillett v Holt

[2001] Ch 210

at 225; Henry v Henry

;

;

[1998] 1 FLR 806

(a decision criticised for other reasons in Gillett v Holt). Findings (1). Promises, expectations, assurance

[149]I am satisfied that the Farm (which included for these purposes the Bungalow) was promised to Gilbert on the death of the last of his two Parents. Although this is not a case where it is possible to pinpoint a specific occasion on which this promise or assurance was given, I am satisfied that it is a very long standing promise or assurance, repeated within the family and to Gilbert, (and others) on many many occasions from when he was fairly young and starting to work full time on the Farm. I am satisfied that these promises or assurances were made by both Parents consistently over time. These promises or assurances were clear and definite. I reject the submission made in opening that the assurances were not clear enough to found an estoppel or that it was unclear whether they were limited to (or that they were in fact limited to) a promise that he could farm the Farm as long as he liked but nothing more than that.

[150]I am also satisfied that the promises and assurances were not mere expressions of intention or indications of intention but were definite promises and assurances.

[151]I am also satisfied that the promises and assurances were made not as a promise/assurance bare of any commitment expected from Gilbert. They were part of an overall understanding and expectation that Gilbert would work on the Farm and devote his time and effort to it and that in that capacity his eventual reward would be the Farm, any financial reward (and any board and lodging) and lifestyle in the meantime being way lower than he could expect to earn or enjoy otherwise.

[152]Although the overall understanding was that Gilbert would work on the Farm, it was common ground that any equity had crystallised by 2014 and that events after that could not affect it. In any event, I am satisfied that Gilbert was effectively prevented from working on the Farm, other than on terms that were intolerable, and that the position after 2014 when it is asserted that he abandoned the Farm does not affect the position. This begins to shade into issues of detriment and unconscionability. However, even if I am wrong about the position after 2014 in terms of the factual responsibility or Gilbert not working on the Farm, the situation is very different to that considered by Lewison LJ in the Davies case at paragraph [43] of his judgment. I am satisfied that by 2014 the relevant detriment had been established and that it would be unconscionable were the promises and assurances now not to be given effect to.

[153]Although at various times the Parents, to the knowledge of Gilbert, considered making wills under which e.g. Pauline’s occupation of the farm house would be protected or the daughters (in the event of a sale) would get something, I am satisfied that these intentions or considerations of possibilities did not alter the actual promises and assurances made to Gilbert either prior to those dates or afterwards and that they do not impinge upon the assurance that he would get the Farm. The intention was that he would be relied upon to look after his sisters financially if that became necessary and possible.

[154]I am also satisfied that the promises/assurances were not dependent or conditioned on Gilbert always farming at the Farm. It was always envisaged that a time might come when he might not Farm the land but that was considered to be likely to be at a time (if ever) after his Parents’ respective deaths.

[155]I have referred to the promises and expectations as including the Bungalow. I am satisfied that the Bungalow was always viewed as part of the Farm in terms of inheritance and geography. Title to it was hived off to try and protect it from partnership debts. However, that did not change the basic position. In addition, it was always understood that the Parents (or the survivor) would have the right to live in it as their home.

[156]I am also satisfied that the assurance and promise was not one that he would receive a one third share in the Partnership nor that the promise or assurance changed when that one third share was given. Effectively that can be regarded as an advance on what he would be entitled to but it was not regarded by anyone at the time as changing the promise or assurance that the Farm would be Gilbert’s on the death of both Parents. Nor were such promises or assurances varied or withdrawn after the one third share was established. (ii). and (iii) reasonable reliance and detriment

[157]I find that Gilbert did reasonably rely on the promises/assurances that I have found to have been made to him and that, were the promises/assurances not to be given effect to he would suffer detriment. In effect he has dedicated his whole life to the Farm which has had an effect on his lifestyle in terms of working hours, financial independence and ability to buy or live in his own house. He has been the recipient of very low wages and even on Mrs Thompson’s account dependent on her for money to live on. I reject the submission made in opening submissions on behalf of Mrs Thompson that Gilbert would have acted the same way anyway and that he lacked initiative and therefore there is no reliance at all.

[158]I also reject the submission that there is no detriment in that the profits of the Farm were too small to permit any greater remuneration. The detriment is to be measured (on at least one view) by what he gave up not by the means of the maker of the promise.

[159]In short, as was found to be the case in Moore v Moore

[2016] EWHC 2202 (Ch)

, (at paragraph [148]:

“The fact is that promises were made, and in reliance on them he devoted his entire working life to the Farm and the business. As did the Applicant in Sugitt v Suggitt [2012] EWCA Civ App 1140, [he] positioned his whole life on the basis of the assurances given to him and which were reasonably believed by him. [His] whole-hearted commitment to the Farm and the business precluded him from pursuing any alternatives.”

[160]I also reject the submission that Gilbert has suffered no detriment because he has been given a one third share in the partnership. This begins to shade into the issues of unconscionability and how to satisfy the equity. However, and again as was found to be the case in Moore v Moore (see paragraph [158]), “this was the beginning of the fulfilment of the promises” (and in my view probably the result of tax reduction objectives, though I make no finding to that effect).

(v) , (vi) unconscionability, equity and satisfying the same

[161]I consider that this case falls squarely within the principle referred to by Lewison LJ in the Davies case at paragraph 40 of his judgment:

“[40] InJennings v Rice at [45] Robert Walker LJ referred to a class of case in which the assurances and reliance had a consensual character not far short of a contract. In such a case “both the claimant’s expectations and the element of detriment will have been defined with reasonable clarity”

. In that kind of case the court is likely to vindicate the claimant’s expectations. Although Robert Walker LJ does not say so in terms, it is implicit that in such a case the claimant will have performed his part of the quasi-bargain….”.

[162]I am satisfied that it would be unconscionable were Gilbert now to be denied the Farm on Mrs Thompson’s death and that the equity that arises must be satisfied by giving him the Farm after her death. The following outlines in principle how I consider that he equity should be satisfied.

[163]As regards the Farm and the Partnership, the matter could be dealt with by giving Mrs Thompson a life interest in her (effective) two third share in the Partnership with a gift over to Gilbert of her share on her death. There might be questions as to how her contractual/legal rights as partner might be restricted by any equity that operates. However, given that it appears to be common ground that the Partnership has been (or should be) dissolved then these potential complications may not arise. Any interest in the assets after winding up would be held for Mrs Thompson for life and thereafter, on her death, for Gilbert.

[164]As regards the Bungalow, there would be a similar arrangement but with an express right to reside for life at the Bungalow, subject to any question of sale. Unless the Bungalow and Farm would realise more as two units I would anticipate that any sale of the Farm would include sale of the Bungalow but with the sale proceeds of the Bungalow being available to buy a substitute home for Mrs Thompson but again with a right for her to reside there for life.

Conclusions

[165]I have concluded that Gilbert has made out his case of proprietory estoppel in relation to both the Bungalow and the Farm. On the death of Mrs Thompson, he will enjoy the benefit of those properties as well as Mrs Thompson’s interest in the Farming Partnership.

[166]I was not addressed in detail about the specific form of relief to give effect to the equity and will hear further submissions upon this in the light of this judgment. I will also have to hear further submissions (and possibly evidence) as to the partnership matters in dispute. The hope however is that the parties will now be able to engage in sensible discussions to resolve all outstanding matters between them, the main issue in contention having been decided by me.

[167]This judgment was handed down with no need for attendance, to give the parties an opportunity to consider it. I also directed that Mrs Thompson could share the draft of this judgment provided to the parties for the purposes of identifying corrections with members of her family for the purposes of considering her position but neither she nor they were to circulate it or publicise it or the result of it any further.

[168]Not having heard any further submissions following circulation of the draft of this judgment, I make the following directions as I indicated that I would in the draft. I direct that a further hearing is set for half a day. That hearing will be set allowing for the timetable below to operate prior to the hearing date. I reserve the question of the final order and all consequential matters (including without limitation costs and appeals) to the further hearing. I extend the time for lodging a notice of appeal until 21 days after the sealing of the form of order giving effect to my judgement and setting out the detailed interest of Gilbert.

[169]The timetable for the purposes of the further hearing is as follows. Not less than 21 days before the hearing, the Claimant should serve a draft form of Order that it would seek on the Defendant. Not less than 7 days thereafter the Defendant should indicate what aspects of the draft are agreed and not agreed and put forward any alternative wording. The parties are to endeavour to agree the form of order. Not less than 7 days before the hearing the Claimant is to serve and lodge a document showing clearly what parts of the draft Order are agreed and, where there is disagreement, which party advocates which of the alternative versions put forward. The claimant shall lodge and serve a hearing bundle by no later than 7 days before the hearing. Skeleton arguments and any authorities bundles are to be lodged and served not less than 2 clear days before the hearing. There will be liberty to apply. The claimant will prepare and lodge a draft order giving effect to the above directions and will serve the ordee, once sealed, on the defendant.

Cited in 1 later judgment

Guest v Guest & Anor 2019