The ownership of a farm was at the centre of a dispute between three (of four) siblings after the death of their parents, Mr & Mrs Williams. The reasons for the dispute were depressingly familiar – the partnership agreement was at odds with their father’s will, with one brother claiming that assets gifted under the will were actually partnership assets and thus rightfully his. He also employed a backstop argument, that of proprietary estoppel, on the rather flimsy premise that his father had promised him the farm some forty odd years ago.
Desire to be fair failed
The farm in South Wales totalled around 200 acres across two holdings. Previously tenant farmers, the Williams had purchased adjacent holdings, Crythan and the main farm, Cefn Coed, in the 1980s. A partnership agreement was drawn up in 1985 between Mr & Mrs Williams and their second son, Dorian, although the motivation appeared to be primarily financial.
Described in court as a close family, it was clear from Mr & Mrs Williams’ wills that their overriding desire was to be fair to all their children, farming and non-farming alike. Both brothers had worked on the farm; Gerwyn, the elder, had also run a sub-contracting business for a period, whereas Dorian had always been involved full-time. The youngest sibling, Susan, had also worked from time to time on the farm. The eldest daughter was not party to this dispute having married and left home. Mrs Williams pre-deceased her husband and her share in both the farm and the partnership passed to her husband. After his death, his will specified that Dorian had to undertake a number of actions to secure his interest in the farm and a house he was building, and also take his brother into the partnership as tenants in common.
Partnership agreement and wills not aligned
Dorian’s failure to do so meant that default provisions prevailed: Gerwyn and Susan stood to inherit the Cefn Coed farmhouse in equal shares and Gerwyn to inherit his father’s interests in both Cefn Coed and the partnership. Dorian countered that these were all partnership assets as per the 1985 agreement and, as such, were vested in him by dint of him being the only surviving partner. He also claimed those assets on the basis of proprietary estoppel due to promises made to him by his father. His older brother counterclaimed that promises had also been made to him.
In court, the judge determined that neither Cyrthan nor Cefn Coed were partnership assets, not least as Mr & Mrs Williams’ respective wills gifted their share in the partnership to Gerwyn and their share in Cefn Coed to Dorian. Likewise, Gerwyn’s claim that he became a partner in 2013 by inference rather than an express agreement was also discounted. Furthermore, the evidence suggested that the partnership dissolved on the death of Mr Williams meaning that the assets were to be divided between Dorian and Mr Williams’ estate. Finally, the judge dismissed Dorian’s claim for proprietary estoppel on the basis that his claim failed to meet the underlying principles.
This is another sad example of farming families falling out because of lack of clarity and understanding of the interaction between wills and partnership agreements. It is also a cautionary tale about the drafting of the partnership agreement and the use to which it is put; in this case, the inclusion of Dorian in the agreement was more to do with ‘enhancing the balance sheet value of the partnership’ than any long term plan for the farm.
