As a result of the nature of farming, and passing on the farm to the next generation, the courts have seen a wide variety of cases where parents want to change their minds at a relatively late stage in life and change who is to inherit the farm on their death.
A recent case, Moore v Moore, is another example of that. In this instance the parents had a son and a daughter and had apparently told the son from an early age that he would inherit the farm and all the farming assets from them. As a result the son had devoted his entire working life to the farm. The father was in partnership with his brother but when the brother retired, the son bought out the brother at a price, not equal to the actual market value, but a reduced price based on what the brother thought he would require for a comfortable retirement.
From 2008, the son took over the running of the farming business. Unfortunately in 2009 the father was diagnosed with Alzheimer’s and his health got gradually worse. The relationship with the son and parents significantly worsened. The mother felt that no provision had been made for the daughter. Relations fell apart in 2009 and the parents changed their Wills.
The son took his parents to court claiming proprietary estoppel – that he had acted to his detriment based on promises made by his father about what would happen to the farm. The court agreed and held that:
- The father had made promises to the son; and
- The son had relied on those promises to his detriment; and
- It would be unconscionable for the father to go back on those promises.
The court awarded the transfer of the farming assets to the son but with a requirement for the parents to continue to receive an income from the farm for the rest of their lives.
It is always best to think ahead and plan for the future. If you would like advice on planning for the future, or if you may be further down the line please contact Nina Wilson.