Gregory Wild v Malcolm Wild
| Jurisdiction | England & Wales |
| Judge | Eyre |
| Judgment Date | 31 August 2018 |
| Neutral Citation | [2018] EWHC 2197 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: D30MA076 |
| Date | 31 August 2018 |
[2018] EWHC 2197 (Ch)
IN THE HIGH COURT OF JUSTICE
THE BUSINESS AND PROPERTY COURTS IN MANCHESTER
BUSINESS LIST (Ch D)
Manchester Civil Justice Centre
1 Bridge Street West
Manchester M60 9DJ
HIS HONOUR JUDGE Eyre QC
(Sitting as a Judge of the High Court)
Case No: D30MA076
Stephen J Pritchett (instructed by Cooper Sons Hartley & Williams) for the Claimant
David Hoffman (instructed by Hibberts LLP) for the Defendants
Hearing dates: 16 th, 17 th July and 1 st August 2018
HH Judge Eyre QC:
Introduction.
Members of the Wild family have farmed at Beard Hall Farm in Derbyshire (“the Farm”) since 1952. The Farm has been operated as a dairy farm with an associated retail milk business and consists of: a farmhouse which is the home of Jean Wild, the Second Defendant; High View Bungalow (“the Bungalow”) which is the home of the First and Third Defendants; and approximately 103 acres of farmland. About 40 acres of adjoining land which was formerly part of Gowhole Farm were acquired and added to the holding in 1995. The current value of the Farm (excluding the Bungalow) is £1.4m and that of the Bungalow £285,000 (or £190,000 if that property is subject to an agricultural occupancy condition).
The Claimant and the First Defendant are brothers. They are the sons of the Second Defendant and of the late Ben Wild. The Third Defendant is the First Defendant's wife. From 1978 to 1994 Ben Wild and the First Defendant conducted the farming business as partners under the style “B & M Wild”. The Claimant and the Second Defendant joined the partnership in 1994 but the Second Defendant left the partnership in 1999. The trading style of the partnership was not changed initially but from 2000 at the latest it traded as “B Wild & Sons”. Ben Wild died in 2003 and his sons continued to trade in partnership thereafter. However, that trading was in circumstances of increasing acrimony between the two brothers and the partnership was dissolved in November 2016. Although there were a series of partnerships with different members in this judgment I will normally refer just to “the partnership” because the parties are agreed that there was a continuing business and, more significantly, that if the disputed property became a partnership asset it became one in 1978 and continued as a partnership asset throughout the changes in membership.
The Claimant commenced the proceedings seeking a declaration as to the dissolution of the partnership; orders for winding up and accounts; and other relief. There has been a substantial narrowing of the issues and agreement of figures. There is agreement that the land at Gowhole is an asset of the partnership but there is no such agreement as to the Farm. The central issue before me was the ownership of the Farm (including the Bungalow). The Claimant says that Farm is an asset of the partnership and is to be brought into account in the winding up. The Defendants say that neither the Farm nor the Bungalow are assets of the partnership. They say that even if the Bungalow is otherwise found to have been an asset of the partnership the First and Third Defendants have an interest in it by way of proprietary estoppel or constructive trust.
The Factual Background to the Dispute.
William Wild acquired the Farm in 1952. He died in 1965 and title to the Farm passed to his widow, Dorothy. At that stage their son, Ben Wild, was farming the land. Dorothy Wild died in 1973. Her will left the Farm to Ben Wild on terms that if he elected to accept that devise he was to pay sums totalling £9,400 to his three sisters and one brother. Ben Wild did that and the Farm passed to him. In January 1975 Ben Wild obtained a loan of £12,000 from the Agricultural Mortgage Corporation and there is disagreement between the parties as to whether Ben Wild used that advance or other funds to make the payments to his siblings. The Farm and the Bungalow were valued at a total of £38,640 in Dorothy Wild's estate accounts.
In 1978 the First Defendant was aged 16. He became a partner with his father and they operated the dairy farm trading as “B & M Wild”. There was no written partnership agreement. It is not surprising the partnershipaccounts from that period are no longer available. The earliest accounts available are those for the year ended 5 th April 1990 although the balance sheet for the preceding year has also been provided. At that stage the partnershipaccountants were the Owen Pickup Partnership but they do not appear to have been the partnership's original accountants. From 1993 the partnershipaccountants were John Bullock & Co (subsequently trading as Bullock Woodburn).
The balance sheet from the 1989 accounts contains an entry identifying as one of the fixed assets of the partnership “property” with a value “at cost” of £40,750. The same entry appears in the 1990 and 1991 accounts. The balance sheet and those accounts also include entries and values for a shed and for a beef shedas well as for plant and machinery (listed separately as “farm” and “dairy”) and for tractors, motor vehicles, a milk float, and for goodwill. In subsequent years the entries for property, for the shed, and for the beef shed are combined under the heading “land and buildings”. The parties are in dispute as to whether the “property” entry is a reference to the Farm and, if it was, whether the Farm was correctly included in the accounts as an asset of the partnership.
The First and Third Defendants married in 1987 and in 1988 they moved into the Bungalow. They have lived there since then. It is common ground that the Bungalow was at that time in need of modernisation and refurbishment. It is also common ground that substantial works were undertaken by way of modernisation and renovation including (in 1992 or thereabouts) the building of a substantial extension to the Bungalow. There is, however, considerable dispute as to whether and in what proportions the partnership or the First and Third Defendants paid for those works and as to the basis on which any expenditure by the First and Third Defendants was made.
In November 1991 Susan Owen of the Owen Pickup Partnership wrote to Ben and Jean Wild urging them to make wills. The parties each invite me to draw inferences from the terms of that letter and I will return to the letter later. Notwithstanding that encouragement Ben Wild did not, in fact, make a will until December 2002.
In 1994 the Claimant and Jean Wild joined the partnership. Again there was no written partnership agreement. The Claimant was then aged 25 or 26. In 1995 he married Gillian Race and in the same year they bought Redgate End Farm Cottage in the next village to the Farm. They have lived there since then. There is disagreement as to the extent to which Ben Wild and/or the partnership assisted in that purchase and in the works of refurbishment undertaken on that cottage. The land at Gowhole Farm was acquired in December 1995. The four partners (as there were at that stage) were registered as proprietors. That purchase was funded by a further advance from the Agricultural Mortgage Corporation secured by a charge on the Farm identifying Ben Wild (the paper title owner of the Farm) as the mortgagor and each of the partners as the borrowers. Jean Wild left the partnership in 1999.
In 2002 Chafes Solicitors were engaged by Ben and Jean Wild. Those solicitors corresponded with Mr. and Mrs. Wild and with Bullock Woodburn in the context of preparing and giving advice as to the drawing up of wills and a potential transfer of the Bungalow to the First Defendant. I will consider that correspondence in rather more detail in due course.
Ben Wild died in July 2003. In December 2002 he had made a will in the simplest of terms whereby he left “all my estate both real and personal” to Jean Wild whom he appointed as his sole executrix. Mrs. Wild obtained probate in July 2005 but it was not until March 2017 that she executed assents. Title to the Farm had been unregistered until then but Mrs. Wild then executed assents to herself creating separate titles in respect of the Bungalow and the balance of the Farm, being the farmhouse, farm buildings, and the land.
It seems that the Claimant and the First Defendant had never got on particularly well. After their father's death they continued the partnership business in circumstances of increasing acrimony and indeed hostility. By 2016 matters had reached such a pass that the brothers had not been on speaking terms for a number of years and in November 2014 the First Defendant had been convicted of a common assault committed upon the Claimant in April of that year the former's defence of self-defence having been rejected by the magistrates. On 3 rd November 2016 the First Defendant's solicitors served a notice of dissolution on the Claimant. This purported to dissolve the partnership from 1 st July 2016 but it is common ground that it took effect on 3 rd November 2016.
The Current Issues.
The parties have resolved many of the subsidiary issues as to figures and as to whether sundry comparatively low value items were or were not assets of the partnership. They agreed that there were a number of issues which had to be determined to enable conclusions to be reached on the winding up of the partnership.
The Second Defendant is the registered proprietor of the Farm and of the Bungalow. The Claimant says that those properties are assets of the partnership; are held on trust by the Second Defendant for the partnership; and are to be brought into account in the winding up. The Defendants say that neither property was an asset of the partnership. They say that Ben Wild owned them in his own right before going into partnership with his son; that he did not bring them into the partnership; and that...
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Ivan William Charles McKee and Robert John Pentland McKee (otherwise known as Robin McKee)
...so long as it continues and that could happen perfectly well without any change in the ownership of the farms.” In Wilde v Wilde [2018] EWHC 2197 the court accepted that this was a common arrangement in farming businesses. See also the Scottish case of Jack v Jack [2016] CSIH. In Re Christi......