Julie Anne Morton (as Executrix of the Estate of Jennifer Ruth Morton) v Simon Nigel Morton

Hearing dates: 8, 9, 10, 14, 15, 16, 17, 23 June 2021

APPROVED JUDGMENT

HHJ

(1) Introduction

This judgment follows the trial of proceedings between two siblings after the death of their mother, the late Jennifer Ruth Morton (“ Jennifer”). The proceedings relate to the ownership of some properties and the dissolution of a family partnership.

The Claimant, Julie Anne Morton (“ Julie”), sues as executrix of Jennifer's final will (“ the Final Will”) and as her sole residuary beneficiary subject to an option in favour of her brother, Simon Morton ( “Simon”). She has joined, as Defendants, Simon and his wife, Alison Mary Morton (“ Alison”). Simon and Alison have counterclaimed.

The properties include two farms, namely Reddish Hall Farm (“ Reddish Hall Farm”) at Lymm, Cheshire and Fairoak Grange, (“ Fairoak Grange”) at Eccleshall, Staffordshire, each of which were once farmed in partnership.

Most of the land at Reddish Hall Farm was originally acquired by the late Geoffrey Morton (“ Geoffrey”), husband of Jennifer and father of Julie and Simon. He predeceased Jennifer after transferring to Jennifer and himself, jointly, his title to most of such land. However, he omitted to transfer to Jennifer his title to all of the land. Moreover, he initially acquired some parcels jointly and, in various combinations, with Jennifer, Simon and Julie. In any event, Fairoak Grange was acquired upwards of ten years after Geoffrey's death.

Jennifer obtained probate of Geoffrey's estate as his sole executrix. However, there are issues as to the trusts on which the constituent parts of Reddish Hall Farm were held and devolved. They include issues as to when such land was first introduced into partnership so as to furnish Simon with a beneficial interest. There is also an issue whether Simon is entitled to an order rectifying or rescinding the trusts of a registered transfer between Jennifer and Simon.

More generally, there are issues whether Geoffrey made assurances to Simon that he would ultimately inherit the farm business and the farm or farms from which it was conducted and, if so, whether Simon relied upon the assurances to his detriment so as to found a case based on proprietary estoppel. There are also issues whether, as Jennifer's executrix, Julie is entitled to specific performance of a contract for the sale of Jennifer's interest in partnership assets following the exercise of an option in the partnership agreement and, more generally, whether Simon is precluded from relying on proprietary estoppel by the provisions of a partnership agreement and the service of an option notice under the agreement.

Before me, Mr Giles Maynard Connor QC appeared on behalf of Julie and Mr Jonathan Edwards, of counsel, appeared on behalf of Simon and Alison.

(2) Background

Geoffrey and Jennifer married on 24 ^th April 1957. Simon and Julie were their only children, born respectively on 15 ^th October 1958 and 11 ^th February 1961.

Simon and Alison married in 1987. They have two children, Victoria (“ Victoria”) and Benjamin, born respectively on 29 ^th October 1990 and 8 ^th April 1994. Julie married David Simpson (“ David”) on 7 ^th September 2018.

Geoffrey came from a farming family. When he married Jennifer, he was farming in partnership with his father, Sydney, from land at Home Farm, Dunham, Cheshire. The following year, he purchased Reddish Hall Farm in his sole name. This comprised an estate (“ the Main Estate”) of some 151 acres or thereabouts together with a farm house and outbuildings. It was conveyed to him on 24 ^th September 1958 (“ the 1958 Conveyance”).

Between 1959 and 1972, Geoffrey acquired neighbouring land in a series of successive conveyances. These included (1) approximately 1.53 acres acquired, on 25 ^th June 1959, from John Edward Adey (“ the 1959 Land”); (2) 7.064 acres of glebe land acquired, on 31 ^st March 1962 ( “the 1962 Land”); (3) land known as Barley Croft and the Long Field acquired, on 18 ^th March 1964, from Samuel Gould (“ the 1964 Land”); and (4) some 1.34 acres acquired, on 6 ^th April 1972 from Mary Elizabeth Winstanley (“ the 1972 Land”). The title to all of this land was unregistered and Geoffrey acquired it in his sole name.

Geoffrey continued to purchase neighbouring land when it became available. However, he started to do so on a joint basis with other members of his family, particularly Jennifer. Once the land in this part of Cheshire had become compulsorily registrable, his acquisitions were entered on the records maintained at HM Land Registry. On 2 ^nd May and 2 ^nd September 1977, Geoffrey and Jennifer were jointly registered, under Title no. CH111728, as the freehold owners of some land near Thelwall (“ the Thelwall Land”) and, under Title no. CH113902, as freehold owners of land on the West side of Reddish Lane (“ the Reddish Lane Land”). Then, on 12 ^th August 1981, Geoffrey, Jennifer, Simon and Julie were jointly registered, under Title no. CH176642, as freehold owners of land on the West side of Crouchley Lane, Lymm known as “Great Oak” (“ Great Oak”). On 6 ^th August 1982, Geoffrey and Jennifer were registered, under Title no. CH198637, as freehold owners of another piece of land on the West side of Crouchley Lane, Lymm (“ Crouchley West”). Finally, on 1 ^st April 1987, Geoffrey, Jennifer and Simon were registered, under Title no. CH273326, as freehold owners of land on the East side of Crouchley Lane, Lymm (“ Crouchley East”). The land acquired under each successive transaction was farmed with the Main Estate.

By then Geoffrey had made arrangements for Jennifer and, subsequently, Simon to be treated as partners in the farming business. More likely than not, this was at least partly for tax management reasons. A draft partnership agreement was admitted in evidence although the circumstances in which it came to be prepared are obscure. It was unsigned or undated save for the year in which it was apparently prepared, 1975, but Geoffrey, Jennifer and Simon were each identified, in the draft, as partners. In 1975, Simon could have been no more than 17 years of age. He would then have been at secondary school although it is conceivable the parties already knew he was destined for agricultural college. By the draft agreement, it was provided that the capital of the partnership would include stock, machinery, vehicles, book debts and other assets excluding the freehold interest in the land and buildings comprised in the farm.

Simon was not admitted as a partner at that stage. However, there is a letter dated 23 ^rd September 1975 from Geoffrey's accountant, Mr Pollard, referring to his accounts for the year ending on 11 ^th February 1975 and explaining that Jennifer was now to be treated as a partner with the profits shared between them on a ratio, in his favour, of 2:1. The first partnership (“ the First Partnership”) was thus between Geoffrey and Jennifer only and commenced at this stage. Jennifer appears to have carried out some work for the First Partnership managing the accounting records and farm documentation.

Geoffrey's accounts for the year ending on 11 ^th February 1975 are no longer available. However, copies of his accounts for the following year, ending on 11 ^th February 1976, were admitted in evidence. By then, Jennifer was indeed treated as a partner with a share in the profits, in Geoffrey's favour, of 2:1. Contrary to the draft partnership agreement, “Reddish Hall Farm” and “the land” were entered, on the balance sheet, as assets of the partnership.

Between 1977 and 1980, Simon attended Harper Adams Agricultural College. Having completed his course, he commenced work at Reddish Hall Farm as a paid employee. In 1985, he was admitted as a partner with Geoffrey and Jennifer (“ the Second Partnership”). There was no partnership deed but, with effect from 7 ^th August 1985, he was treated as a partner in the partnership accounts for the year ending on 11 ^th February 1986, albeit with no share of capital at that stage. These accounts showed that Geoffrey and Jennifer were entitled to 35% each and Simon 30% of the net profits with effect from 7 ^th August 1985.

Having married in 1987, Simon and Alison moved into rented accommodation. Some six weeks later, they purchased a property at 14 Moore Grove, Lymm, not far from Reddish Hall Farm. However, mindful of their intentions to start a family, it was agreed Geoffrey and Jennifer would vacate the farm house at Reddish Hall Farm (“ the Farmhouse”) so Simon and Jennifer could move in. To accommodate Geoffrey and Jennifer, a house would be built for them on the Farm, a short distance from the Farmhouse. By 1990, this house (“ Pheasant Lodge”) had been fully constructed. Geoffrey and Jennifer then moved into Pheasant Lodge. Simon and Alison themselves moved into the Farmhouse shortly before the birth of their first child, Victoria.

Not long afterwards, by a deed of gift dated 31 ^st Mary 1991 (“ the Deed of Gift”), Geoffrey conveyed the Main Estate to himself and Jennifer to hold as beneficial joint tenants. However, title to the Main Estate remained un-registered. The Land Registration Act 1925 was then in force and, under Section 123(1) of the 1925 Act, transfers by gift were not compulsorily registrable.

Julie was not encouraged to pursue a career on the Farm. She set out on her own career path, purchasing...