Roger Moore (by his Litigation Friend, Pamela Moore) (Claimant/Part 20 Defendant) v Stephen Moore and Another (First Defendant/Part 20) (Second Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr S Monty QC |
| Judgment Date | 19 August 2016 |
| Neutral Citation | [2016] EWHC 2202 (Ch) |
| Docket Number | Case No: 3BS30094 |
| Court | Chancery Division |
| Date | 19 August 2016 |
[2016] EWHC 2202 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
2 Redcliff Street
Bristol BSI 6GR
Mr S Monty QC
(Sitting as a Deputy Judge of the Chancery Division)
Case No: 3BS30094
Miss Caroline Shea QC and Miss Ciara Fairley (instructed by Michelmores LLP) for the Part 20 Claimant
Mr Nigel Thomas and Mr Paul Clarke (instructed by Thrings LLP) for the Part 20 Defendant
Hearing dates: 5, 6, 7, 8, 11, 12, 14, 15, 18 July 2016
Judgment Approved
A brief introduction
Manor Farm is in Stapleford, near Salisbury in Wiltshire. It is a 650-acre arable farm (although it did for a time have a dairy herd) which for four generations has been run by the Moore family. Since 2008 the Farm has been run as a Partnership by Stephen Moore, the Part 20 Claimant, Stephen's father Roger Moore, the Part 20 Defendant, and Till Valley Contracting Limited ("the Company"), the Second Defendant. In this judgment, as in the trial, the members of the Moore family (including Julie and Andrew Lane) are referred to by their first names. The Company's shares are held as to 51 % by Roger and 49% by Stephen.
This claim was commenced by Roger against Stephen and the Company, seeking dissolution of the Partnership between Roger, Stephen and the Company, but that aspect of the claim has only a walk-on part (there is an underlying disagreement as to the nature of the partnership, which is said by Roger to have been a partnership at will but by Stephen to be a partnership until the death of either himself or of both Roger and Pamela) and I will deal with it at the end of this judgment. It is agreed that the Partnership should be dissolved; the principal dispute is the Part 20 Claim brought by Stephen against Roger in which Stephen claims an equity over the farming business, including the freehold land, operated by the Partnership.
Stephen was represented by Miss Shea QC and Miss Fairley; Roger was represented by Mr Thomas and Mr Clarke. I start by thanking them for their clear and thorough submissions.
Stephen is married to Jackie, and they have two children. Stephen is the son of Roger Moore and his wife Pamela. Pamela and Roger also have a daughter, Julie Lane, Stephen's sister, who is married to Andrew Lane. Julie and Andrew also have two children, Victoria and Sam. Roger has two brothers, Richard and Geoffrey. Sadly, Roger suffers from Alzheimer's disease, and lacks capacity to conduct proceedings; Pamela has been appointed by the court as Roger's Litigation Friend.
There are several houses on the Farm. Manor Farmhouse is a substantial property and is occupied by Roger and Pamela. It was Stephen and Julie's home as they grew up. The Little House is a bungalow occupied by Stephen, Jackie and their children. Ashburton is a house adjoining Manor Farmhouse on which substantial sums were expended in anticipation of it becoming Roger and Pamela's residence in due course.
The background to the dispute is set out in the pleadings and is by and large agreed to be as follows.
In the mid-1960s, Roger and Geoffrey started to run the Farm as partners, and at that time, in 1966, their father gifted the Farm to them and some other land to the third brother, Richard, which Roger and Geoffrey bought back from Richard in 1981. Over the years, both before and after their father's death, Roger and Geoffrey bought further parcels of land which served to extend the farming operations. The farm was a successful and profitable business. Both Geoffrey and Roger took modest drawings and most of the profit went back into the business. Roger, who took the lead in most farming issues, was by all accounts an excellent farmer and Geoffrey was a great support to him.
Geoffrey has two sons, neither of whom have worked on the Farm other than occasionally as harvest workers.
Stephen was born on 2 November 1967. He has worked on the Farm since his childhood, initially at weekends, evenings and in school and then college holidays, and subsequently full time. He now, in effect, runs the Farm alone since Roger is too unwell to participate.
Stephen became a salaried partner in around 1998. He had been earning £200 per week for a 45 to 50-hour week (100 hours per week during harvest time). As a salaried partner, his earnings rose to £590 per fortnight, from which he paid £ 190 per month as a pension contribution. Those earnings were more or less in line with the drawings taken by Roger and Geoffrey. In 2003/4 Stephen became an equity partner, sharing in the profits.
In April 2008, Geoffrey retired from the farming business, bringing the existing partnership to an end. Geoffrey decided to give his half share of the partnership to Stephen in return for a payment from the partnership of £500,000 (in two instalments) in respect of that interest (which was worth some £3m). This decision came as a surprise to Roger, Pamela and Stephen. It was agreed by Geoffrey, Roger and Stephen that Roger and Stephen would continue to farm in partnership together. The Company was set up on advice from the Partnership's accountant, Mr Mike Butler, in 2008 for tax reasons and also became a partner, although it had no function or directing mind independent from that of Roger and Stephen.
In 2010 farming assets were transferred into the Company, paid for by means of Directors' Loans, with the intention that the Directors' Loans would over time be paid down from the profits of the Company. The Company's profits derived principally from its allocated share of Partnership profits; and also, albeit minimally by comparison, from income derived from its contracting operations.
The issues
Stephen says that from an early age Roger told him that the Farm and the farming assets of the Partnership ("the Assets", which include, since its incorporation, the farming assets of the Company) would be his one day.
The questions I must determine are as follows:
14.1. Were promises made by Roger to Stephen to the effect that Stephen would one day have Roger's share of the Farm and the Assets?
14.2. Did Stephen rely on those promises?
14.3. If so, did he rely on them to his detriment?
14.4. If the promises were made, and there was detrimental reliance, would it now be unconscionable for Roger to resile from that position?
14.5. If so, how should Stephen's interest be satisfied?
It is a sad fact that since Geoffrey's retirement in 2008 the relationship between Roger and Pamela on the one hand and Stephen on the other deteriorated dramatically to the extent that these proceedings reflect a substantial falling-out between the members of the Moore family. Stephen's assertions of his entitlement to an equity in Roger's interest under the Partnership, to include his share of the Farm and the Assets, which is supported by his wife Jackie, is strenuously opposed by Roger and Pamela, and also by Julie and Andrew.
Principles of law
The principals of an equitable estoppel claim are, to my mind, best set out by Lewison LJ in Davies and another v Davies [2016] EWCA Civ 463 at [39]:
"i) Deciding whether an equity has been raised and, if so, how to satisfy it is a retrospective exercise looking backwards from the moment when the promise falls due to be performed and asking whether, in the circumstances which have actually happened, it would be unconscionable for a promise not to be kept either wholly or in part: Thorner v Major [2009] UKHL 18, [2009] I WLR 776 at [57] and [101].
ii) The ingredients necessary to raise an equity are (a) an assurance of sufficient clarity (b) reliance by the claimant on that assurance and (c) detriment to the claimant in consequence of his reasonable reliance: Thorner v Major at [29].
iii) However, no claim based on proprietary estoppel can be divided into watertight compartments. The quality of the relevant assurances may influence the issue of reliance; reliance and detriment are often intertwined, and whether there is a distinct need for a "mutual understanding" may depend on how the other elements are formulated and understood: Gillett v Holt [2001] Ch 210 at 225; Henry v Henry [2010] UKPC 3; [2010] 1 All ER 988 at [37].
iv) Detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances: Gillett v Holt at 232; Henry v Henry at [38].
v) There must be a sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. The question is whether (and if so to what extent) it would be unjust or inequitable to allow the person who has given the assurance to go back on it. The essential test is that of unconscionability: Gillett v Holt at 232.
vi) Thus the essence of the doctrine of proprietary estoppel is to do what is necessary to avoid an unconscionable result: Jennings v Rice [2002] EWCA Civ 159; [2003] 1 P & CR 8 at [56].
vii) In deciding how to satisfy any equity the court must weigh the detriment suffered by the claimant in reliance on the defendant's assurances against any countervailing benefits he enjoyed in consequence of that reliance: Henrv v Henry at [51] and [53].
viii) Proportionality lies at the heart of the doctrine of proprietary estoppel and permeates its every application: Henry v Henry at [65]. In particular there must be a proportionality between the remedy and the detriment which is its purpose to avoid: ...
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