Donnelly Neary & Donnelly DND LAW Solicitors – Probate NewsDaughter’s share of parents’ farm is cut to GBP500,000

Last Will and Testament document with quill pen and handwriting

The Davies farming family of Carmarthenshire, Wales have returned to court regarding their long-running battle over ownership of the farm. This time, Tegwyn and Mary Davies succeeded in having their daughter Eirian’s proprietary estoppel award reduced from GBP1.3 million to GBP500,000.
Eirian is the second of three daughters born to Mr and Mrs Davies. By the time she was 17 in 1985, it had become clear she was the only one of the three sisters who was likely to take over their dairy farm, the other two having declared their intention to follow other paths while Eirian continued to work on the farm. At some later stage Eirian received an indication from her elderly parents that she would receive the farm in return for her work, for which she received only her board and lodging and an allowance for clothes and leisure.

At a later date Eirian moved away from the family farm to begin a career in stock breeding, but subsequently moved back at her parents’ request.

By 2008, her parents had agreed to give a 49 per cent share in the business. Documents were prepared to implement the partnership agreement but were never signed. Instead, her parents agreed to draft wills leaving Eirian the land and buildings, and a share in the company with a gift over to Eirian’s daughter.

However, the following year Mr and Mrs Davies changed their minds. They transferred the farm into a trust to be split between the daughters in equal shares. This caused a family rift, and Eirian left the farm in 2012. She sued her parents to establish her interest in the GBP3.8 million business, claiming proprietary estoppel.

In 2013 the Cardiff High Court allowed her claim, though the amount of her beneficial interest was left undecided. Her parents appealed, but the England and Wales Court of Appeal rejected their plea, except for agreeing that Eirian’s claim could be settled either by granting her equity in the farm or by a cash payment rather than an immediate beneficial interest (Davies v Davies, 2014 EWCA Civ 568).

In any event the parties could not reach an agreement, and in February 2015 Eirian went back to the Cardiff High Court to obtain a settlement. It granted her GBP1.3 million in compensation – about one-third of the business.

However, her parents returned to court to challenge the size of the award. They argued that Eirian’s expectations could be satisfied by an accommodation payment of GBP180,000 plus a partnership element of GBP22,000.

Last week, the England and Wales Court of Appeal accepted Mr and Mrs Davies’ argument to reduce their daughter’s proprietary estoppel award from the GBP1.3 million originally proposed by the same court. The judges did not accept, however, their figure of GBP350,000; instead they applied their own reasoning to recalculate the amount of the award at GBP500,000 though they did not say exactly how this figure had been calculated.

‘In different situations the court is often called upon to award compensation for non-pecuniary losses, and the difficulty of assessment is no bar to an award’, said Lord Justice Lewison. ‘To the extent that the offer includes compensation for past expectations […] some additional sum must be allowed to reflect delay in payment and the changes in the value of money since those expectations were created. On the other hand, in so far as a monetary award covers future expectations it must be discounted for early payment’. (Davies & Davies v Davies, 2016 EWCA Civ 463).
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