Home Information Cases Roger Moore v Stephen Moore (2018)

Skip to content. | Skip to navigation

Roger Moore v Stephen Moore (2018)

Summary

Where a son had established his entitlement by way of proprietary estoppel to his father's share in the assets and business of a farm they had previously run as a partnership, the court gave guidance on how the son's equity should be satisfied. Although it was possible to adopt a solution which accelerated the son's entitlement, that was not to be done at the expense of proper provision for the parents during the remainder of their lives

Facts

A father appealed against an order that he had promised his share in a farm and partnership business to his son and ordering satisfaction of the son's equity based on proprietary estoppel.

The father and his brother (G) had owned and run the farm in equal partnership since 1966. The father and his wife occupied the farmhouse and the son occupied a bungalow on the farm. The son had worked on the farm since childhood and became an equity partner in 2003. In 2007, the parents executed mirror wills appointing the son as one of the executors and creating discretionary nil-rate band trusts, the potential beneficiaries being the parents and their children and grandchildren, but with each spouse named as the beneficiary having the greatest claim on the capital. On the death of the survivor of the parents, the son was to inherit all the father's interest in the farm. In 2009, the relationship between parents and son broke down. In 2011, the parents executed new wills removing the son as executor and making no provision for discretionary trusts. Instead, there was an absolute gift of residue to the survivor of the parents and a specific gift to the son, on the second death, of the father's share in the farming business and partnership assets. In 2012, the father purported to dissolve the partnership. The son disputed the validity of the notice, contending that the partnership was for the joint lives of himself and the survivor of his parents. The father sought a winding-up order. The son served a defence and counterclaim on the basis that it had been envisaged and promised from his childhood that he would inherit his father's interest in the farm, subject only to adequate provision for his mother. The promises were said to have been made orally and repeated on many occasions. The son claimed to have relied on those promises to his detriment, in that he had committed himself to the farm since childhood, without taking any steps to explore alternative careers, and had worked for low rates of pay. The judge found in the son's favour, holding that he had an equity by way of proprietary estoppel extending to his father's interest in the farm, the partnership and the farm assets. He concluded that the son was to take over the business and that the assets were to be transferred into his sole name, including the properties. The parents were to remain in the farmhouse for as long as it met their needs and the son was to pay them a weekly sum from partnership funds. The father challenged the judge's findings of fact and the conclusion that the son had established an equity. By the time of the instant appeal, the father was suffering from dementia and living in a care home.

Held

Factual findings - The judge's findings as to the parents' underlying intentions when executing the 2007 wills could not be impugned. It was clearly the intention of both parents that the father's share of the farm and the business should devolve on the son, whether by operation of the gift on the death of the survivor or by means of an appointment out of the discretionary trust. The absence of the discretionary trust in the 2011 wills increased the significance of the absolute residuary gift to the survivor of the parents. Although the judge did not appear to have appreciated the potential significance of that change, he had been entitled to find that the 2011 wills did not betoken any significant alteration to the parents' underlying intention that the son would in due course inherit the farming business. The question whether the assurances found to have been made by the father to the son were objectively intended to be acted upon, or whether the son should reasonably have regarded them as no more than statements of intention, were a matter of fact and evaluation for the trial judge, as were the questions of reliance and detriment (see paras 62, 70, 86 of judgment).

Satisfaction of equity - On his pleaded case, the son's expectation was a future one. The assurances on which he relied envisaged that the partnership would continue until his father's death or retirement. Moreover, the wills showed a clear intention that the mother should have access to both capital and income after the father's death. In view of the breakdown of the family relationships, the need for a clean break solution was compelling, whereas under the judge's disposition the mother would continue to live in the farmhouse and be dependent on her son, Jennings v Rice [2002] EWCA Civ 159, [2003] 1 F.C.R. 501, [2002] 2 WLUK 603 followed. Although it was in principle open to the judge to adopt a solution which accelerated the son's entitlement, that should not be done at the expense of proper provision for the parents during the remainder of their lives. The judge's solution attempted to replicate what would have happened on the wholly unrealistic assumption that no dispute had arisen. Instead, he should have focused on the minimum provision required to satisfy the son's equity. Moreover, the judge had said nothing about the tax consequences of his order and there was no expert evidence in that regard; nor were there any up-to-date valuations of the partnership land and business before him. Accordingly, the judge's order could not stand. Although the case had to be remitted for a further hearing on how the equity should be satisfied, the following guidance could be given. First, in view of the father's incapacity, his share in the land and partnership assets should be transferred to the son. Second, the son was to provide the mother with a lump sum, raised within a matter of months, to enable her to rehouse herself appropriately and live comfortably. The son was to continue being responsible for the father's care costs and to continue making weekly payments to the mother. Third, the son was to bear any tax liabilities arising from the transfer of assets and the raising of the lump sum. The lump sum was to be assessed without regard to any costs liabilities in the son's favour (paras 91-106).

Appeal allowed in part

Court of Appeal (Civ Div)
Floyd LJ, Henderson LJ, Leggatt LJ
Judgment date
27 November 2018
References
[2018] EWCA Civ 2669