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Be careful about inheritance promises
In Moore (by his litigation friend) v Moore and another [2018] EWCA Civ 2669, the Court of Appeal (“CoA”) referred a proprietary estoppel case back to the High Court (the “Court”) for the judge to change his ruling to award a lump sum between £1 and £2 million; instead of the £200/week initially granted.
Stephen Moore lived with his father Roger, mother Pamela, and sister Julie on Manor Farm. Roger and his brother Geoffrey were initially equal partners until Stephen joined the partnership and Geoffrey later retired.
In 2008, Roger developed dementia and Stephen, to his father’s dismay, reduced his father’s workload. In 2012 Roger wanted to dissolve the partnership but there was a dispute about whether it could be dissolved as there was no written partnership agreement. Stephen brought a counterclaim in estoppel in the Court, on the basis that Roger had promised he would inherit the farm. He had worked there 50 hours/week since he left school and 100 hours/week during harvest time. He had relied on his father’s promise to his detriment by not pursuing another career or working elsewhere.
Pamela became Roger’s litigation friend due to his declining health. The Court decided equity should be satisfied by accelerating Stephen’s inheritance of the farm and farming partnership assets so he could continue farming; which the court found to be Roger’s intention. It was inequitable for Roger and Pamela to not be provided for and so they would also have somewhere to live for life, the farmhouse running costs and care home fees would be covered, and Pamela would receive £200/week.
Pamela appealed to the CoA and challenged every aspect of the Court’s decision. The CoA found a clean break was in her best interests and ordered that the Court should decide on a sum between £1 and £2 million for Stephen to pay to her.
You need to be very careful when making promises to someone about future inheritance; especially if it relates to a family farming operation. If you are going to promise that someone will inherit a certain aspect of your estate when you die, you should make sure the promise is carried out and that you do not act contrary to it.
To discuss any of the issues raised above, please contact a member of the Private Client team on 01384 410410.