Daughter's proprietary estoppel claim wins her one-third of farm value

Cardiff's High Court has awarded GBP1.3 million to Eirian Davies to settle her proprietary estoppel claim on her parents' Carmarthenshire farm.

Miss Davies, now 45, worked for many years for the farming business for little or no payment, on the understanding that the whole enterprise would eventually pass to her. She has two sisters, but after 1989 neither were closely involved in the business, having moved away to follow other careers. Eirian herself also moved away for a while to begin work in stock breeding, but later moved back at her parents' request.

By 2008, Miss Davies' parents, Tegwyn and Mary Davies, had agreed to hand over a 49 per cent share in the business to her. Documents were prepared to implement the agreement but were never signed. Instead, her parents agreed to draft wills leaving Eirian Davies the land and buildings, and a share in the company with a gift over to her daughter.

However, from then on a family rift developed. The following year, Mr and Mrs Davies decided to place the farm into a trust with the residue to be split between the daughters in equal shares. Family relations went further downhill, leading to Eirian Davies' departure from the farm in 2012. Then she sued to establish her interest in the GBP3.8 million business, claiming proprietary estoppel.

The following year, Jarman HHJ allowed her claim in the Cardiff High Court, though he left the amount of her beneficial interest to be decided by another court. Her parents appealed, but the England and Wales Court of Appeal rejected their plea, except on one relatively minor point: it agreed that Miss Davies' recompense 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).

The Court of Appeal then invited the parties to negotiate a settlement as to the amount of Miss Davies' interest without further litigation. But this proved impossible. Last month she returned to the Cardiff High Court, which, it is reported, granted her GBP1.3 million in compensation – one-third of the business. The amount was described as sufficient for her to start a new farming business of her own.

Sources

• Wales News Service
• BAILII (EWCA ruling of May 2014)