Feud on the farm

The importance of having your personal affairs in order has once again been highlighted in a case where the claimant has been dubbed the ‘Cowshed Cinderella’.  While this sounds like a fairy tale, it has in fact been a harrowing journey for one family, which has resulted in a daughter being awarded £1.3million.  Sue Nicholson, Private Client Lawyer, reviews the case and how this has implications for all, not just those in the farming industry.

Miss Eirian Davies had worked on her parents’ farm, Caeremlyn Farm near Whitland, Carmarthenshire, her whole life.  She was paid nothing for her work until she turned 21 when it was normal for her to be paid about £15 a day.  Miss Davies also claimed she missed out on important teenage experiences as she had to stay at the farm and complete her chores, something her two sisters did not have to contend with.

“The reason that Miss Davies went along with her treatment was because she believed she would inherit the majority of the farm,” explains Sue.  “She was shown a draft Will in 2009 to this effect, however her parents went on to change this, placing the farm in trust for the benefit of all three sisters equally.  It was in August 2012 that the legal proceedings started after an argument led to Mr and Mrs Davies seeking to evict their daughter from the farm.

“After a long legal battle between the two parties, the Court of Appeal found that Miss Davies had been working on the farm in good faith that her parents would fulfil their promise that she would receive the lions share of the farm.  She had therefore committed herself to working on the farm for a low income, sacrificing activities she would have liked to have been a part of that her sisters were.  Her sisters also went on to forge their own careers away from the farm.  Considering all these factors, the Court of Appeal ruled that she was entitled to a ‘beneficial interest’ in the business, and as the farm was worth £3.8 million, an appropriate award to compensate her would be £1.3million.”

Mr and Mrs Davies are due to appeal this decision, stating that the compensation should only be enough to buy their daughter a house.  “While the outcome of this appeal is hard to predict, it’s possible that Mr and Mrs Davies will be unsuccessful as the Court of Appeal has taken into account not just the financial implications of Miss Davies’ treatment, but also the fact that they made verbal promises on several occasions, as well as producing a draft Will,” explains Sue.

“While this amount of compensation is a rare occurrence, these types of disputes can be quite common in the farming industry,” comments Sue.  “Historically the family farm has been left entirely to the eldest son, but this is now evolving as females become more involved with the operations of the farm, partly due to the evolving machinery and technology prevalent in farming.”

Other businesses are also not immune to these types of disputes.  “Family businesses must have clearly defined plans for the inheritance of the business to avoid resentment and possible costly disputes such as this,” concludes Sue.  “The right legal paperwork must be in place such as Declarations of Trust, Wills, Shareholders or Partnership Agreements, and any verbal discussions must be consistent with this paperwork.”

If you’d like any advice on declaration of trusts or Wills in the context of your family business, you can contact Sue or the Private Client Team on 01329 222075 or visit their section of the website.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.