Roger Moore (by his Litigation Friend Pamela Moore) v Stephen Moore
| Jurisdiction | England & Wales |
| Judge | Leggatt LJ,Floyd LJ,Lord Justice Henderson |
| Judgment Date | 27 November 2018 |
| Neutral Citation | [2018] EWCA Civ 2669 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2016/3565 |
| Date | 27 November 2018 |
[2018] EWCA Civ 2669
Lord Justice Floyd
Lord Justice Henderson
and
Lord Justice Leggatt
Case No: A3/2016/3565
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE CHANCERY DIVISION (BRISTOL DISTRICT REGISTRY)
MR SIMON MONTY QC sitting as a Deputy High Court Judge)
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Christopher Pymont QC & Mr Nigel Thomas (instructed by Thrings LLP) for the Appellant
Ms Caroline Shea QC & Ms Ciara Fairley (instructed by Michelmores LLP) for the Respondents
Hearing dates: 9 and 10 October 2018
Introduction and background
This is a case about proprietary estoppel. As so often, it involves a family farm, and a sad breakdown in relations between members of the family. Indeed the dispute has already been ruinous in both human and financial terms. We were told that the total costs so far incurred on both sides are estimated to be in the region of £2.5 million.
The case comes to us on appeal by the original claimant and Part 20 defendant, Mr Roger Moore (“Roger”), from the order made on 19 August 2016 by Mr Simon Monty QC, sitting as a deputy High Court Judge of the Chancery Division, following a nine-day trial in Bristol between 5 and 18 July 2016. Roger was unable to participate in the trial, because he was already suffering from moderately severe Alzheimer's disease and lacked capacity to conduct legal proceedings. He was represented by his wife and litigation friend, Mrs Pamela Moore (“Pamela”). Sadly, Roger's condition has continued to deteriorate over the last two years. He now lives in a care home, where he needs permanent care and (as matters stand) will remain for the rest of his life. He is now 76 years old, having been born on 30 March 1942, and Pamela is approximately the same age.
Roger and Pamela married in 1965, when they were both in their early twenties. Roger was the eldest of the three sons of John Moore, who was himself the second generation of the Moore family to own and farm Manor Farm in Stapleford, near Salisbury in Wiltshire. Roger's two brothers were Geoffrey (who plays an important role in the history of the present case) and Richard. Pamela, however, did not come from a farming background. She was born in London and moved to Salisbury at the age of 18 in 1960 to study at a teacher training college. She soon met Roger, and they started dating. Their relationship flourished, and they married, as I have said, in 1965, by when Pamela had qualified and was teaching music and history at Wilton Secondary Modern School.
In 1966, John Moore gave the farm to Roger and Geoffrey, who began to farm it together in partnership. John also gave some other land to Richard, who was not interested in pursuing a farming career. In 1981, Roger and Geoffrey bought this land back from Richard.
Roger and Pamela have two children, a daughter Julie, who was born in 1965, and a son Stephen, born in 1967. Julie is married to Andrew Lane, and they have two children, Victoria and Sam. Stephen is married to Jackie, and they have two daughters. Stephen is the original defendant and Part 20 claimant. It is Stephen's claim in relation to his father's half share of Manor Farm and the partnership business, raised for the first time in a defence and counterclaim to partnership proceedings instituted by Roger, which lies at the heart of the present dispute.
Manor Farm extends to some 650 acres of mainly arable land (although it has in the past supported a dairy herd). As the judge recorded, there are several houses on the farm. Manor Farmhouse itself is a substantial property, where Roger and Pamela have lived since their marriage, and where Stephen and Julie grew up. The Little House is a bungalow occupied by Stephen, Jackie and their children. Ashburton is a smaller thatched house adjoining Manor Farmhouse, “on which” in the judge's words “substantial sums were expended in anticipation of it becoming Roger and Pamela's residence in due course.”
It is common ground that the farm was a thriving and profitable business during the period of over 40 years when Roger and Geoffrey were both partners, until Geoffrey's retirement in April 2008. Over the years, both before and after the death of John Moore in 1980, Roger and Geoffrey bought further parcels of land to expand the farming operations, including the land which they bought back from Richard in 1981. According to the judge:
“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.”
Stephen has worked on the farm since his childhood, initially at weekends, evenings and in school and then college holidays, and subsequently full time. He became a salaried partner in around 1998, by when he had been earning £200 per week for a 45 to 50-hour week (rising to 100 hours per week at harvest time). As a salaried partner, Stephen earned £590 per fortnight, from which he paid £190 per month as a pension contribution. The judge found those earnings to be “more or less in line with the drawings taken by Roger and Geoffrey”. Then in 2003/4 Stephen became an equity partner, sharing in the profits with his father and uncle.
Geoffrey had two sons of his own, James and William, but neither of them worked on the farm except occasionally at harvest time. When Geoffrey came to retire from the farming business in April 2008, thereby bringing the existing partnership to an end, he decided to give his half share of the partnership to Stephen, his nephew, in return for a payment from the partnership of £500,000 which was satisfied in two instalments. The judge found that Geoffrey's interest in the partnership was worth approximately £3 million, so this represented a very substantial benefaction by Geoffrey to Stephen, at the apparent expense of his own sons (who, like Richard before them, did not wish to become farmers).
The judge found that Geoffrey's 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. This they did, although for tax reasons, and on advice from the partnership's accountant, Mr Mike Butler, a company, Till Valley Contracting Limited (“the Company”), was established in 2008 and also became a partner. The shares in the Company are held as to 51% by Roger and as to 49% by Stephen. Its main purpose was to provide a receptacle for some of the substantial profits of the business, which would otherwise have been liable to tax at higher marginal rates in the hands of Roger and Stephen. In addition, various farming assets were transferred into the Company in 2010, and were paid for by means of directors' loans, with the intention that those loans would over time be paid down from the profits from the Company. The directors were Roger and Stephen, and as the judge found the Company “had no function or directing mind independent from” them. Although the Company derived a small amount of income from contracting operations, its main source of revenue was its allocated share of partnership profits, the amount of which would be determined from year to year on advice from Mr Butler.
The judge found that relations between Pamela and Stephen had been difficult since Stephen's childhood, and that Pamela was “critical both of Stephen's behaviour and his academic performance”. There is nothing, however, to indicate that this tension caused any practical difficulties before Geoffrey's retirement. The serious breakdown in relations within the family seems to have begun in 2009, which the judge described as “a key year” which “marked a serious breakdown in relations between Stephen and Jackie on the one hand and Pamela, Roger, Julie and Andrew on the other.”
As the judge explained:
“109. Roger was finding it hard to adjust to his reduced role on the Farm. Stephen was noticing problems with his father's memory and reliability and consequently he gave him fewer tasks to do on the Farm, which Roger could not accept (he commented to Pamela, “I might as well shoot myself”) and which Pamela blames Stephen for, because she would not accept that Roger was less capable than before. Pamela could simply not accept Stephen as head of the business.
110. It also marked a period when Pamela started to keep Roger away from Stephen. This coincided with a growing feeling, on Pamela's part, that what I have described as the over-arching plan for the Farm's future was unfair on Julie and benefitted only Stephen, with whom she was becoming increasingly disenchanted.”
The “over-arching plan” to which the judge referred was central to his analysis of the evidence which he heard and evaluated about the family's plans for the future of the farming business following Roger's death or retirement. The judge described this plan as follows, at [63]:
“It seems to me that everything points to an over-arching plan under which Stephen would inherit the whole farm and business in due course, and that Stephen was told that this was the case by both Roger and Geoffrey. I think that Pamela is wrong to characterise that as a mere hope – in my view, on the evidence, it was more than that. It was a clear understanding and intention which Stephen was told about on many occasions. It underpinned all the decisions made in relation to the Farm, and in particular the basis on which Geoffrey retired.”
As the judge found, this over-arching plan was consistent with the evidence of Mr Butler, and also with Pamela's acceptance in cross-examination that Geoffrey's decision represented “the...
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