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Compensation Of £1m In Family Farm Case

13th November 2019

Compensation Of £1m In Family Farm Case

Compensation Of £1m In Family Farm Case

The courts see a steady stream of cases involving farming families who have fallen out over an inheritance. They are sad situations, with one generation arguing against another, and the wealth of the family being eaten up in legal fees.

The Habberfield v Habberfield case was fairly typical. Lucy Habberfield had worked on the family farm in Somerset for 30 years, working long hours for low wages. Her father promised over many years that when he retired Lucy would take over the dairy business and ultimately inherit the entire farm.

Unfortunately there was a falling out – in fact, a fight in the milking parlour – and Lucy left in 2013. Her father died in 2014, and her mother than closed the dairy business.

Lucy brought a claim against her mother, and the judge held that she was entitled to damages. He found that Lucy had been promised her a significant part of the farm by her father for her years of work. She wanted to begin farming on her own before it was too late – she was 51 at the date of trial. Without access to the cash in the farm she would not be able to do so.

The court awarded her £1.17m in damages, which was close to half of the value of the £2.5m farm.

Lucy’s mother appealed the to the Court of Appeal to reduce the value of the damages, but the appeal was rejected. The appeal court held that the trial judge had a wide discretion to craft an award and compensate Lucy to ‘fulfil her expectation’, not just compensates for the detriment she suffered.

As with so many cases of this sort, the Habberfield cases underlines the importance of open discussion and planning for succession.

Notes

Case: Habberfield v Habberfield [2019] EWCA Civ 890 – case report here.

To find out more about claiming from an estate, click here.