19 June 2018

Mudslinging doesn't always pay off in litigation: Thompson v Thompson proprietary estoppel case


Natasha Stourton
Associate | UK

When 'internecine warfare' breaks out within the family, it can pay to play nicely.

In the recent case of Thompson v Thompson, a mother's attempt to exclude her son from inheriting the family farm back-fired because of her 'attempted character assassination'.

Mr Thompson came from a long line of farmers. Whilst working on his parents' farm, he met the future Mrs Thompson. After four daughters, they had a much-wanted son to 'take over the family farm they anticipated acquiring'.

When Gilbert was 15 years old, he left school to work full-time with his father. Gilbert was paid £20 a week. This rose over the years, but never exceeded £70 a week.

In 1989, Mr Thompson bought Woody Close Farm. All four daughter had by this time married and left home. Gilbert lived nearby with his girlfriend but continued to work full-time with his father on the farm.

In 1992, on advice from the family solicitor, Mr Thompson transferred the farm into a partnership, he, Mrs Thompson and Gilbert each having one-third. Later, Mr and Mrs Thompson and Gilbert entered into a partnership deed 'to record more formally the applicable terms on which the partnership had been carried out since August 1992'. The deed said Gilbert was to 'devote his full time and attention to the business' whereas Mr and Mrs Thompson had a 'discretion' as to how much time and attention they would devote.

In 2004, Mr and Mrs Thompson and Gilbert met with the partnership accountant to discuss inheritance planning. Attendance notes record that, although the parents wanted to provide for all their children, they did not want to split up the Farm. They decided to leave their insurance policies to their daughters and the rest of their assets, namely the Farm, to Gilbert.

On 14 August 2012, Mr Thompson died. Sixteen days later, Mrs Thompson signed a new will leaving everything to Gilbert (the insurance policies already having been earmarked for the daughters).

Mrs Thompson and Gilbert signed a new farming partnership deed under which Mrs Thompson had two-thirds and Gilbert one-third.

In July 2013, Gilbert and his girlfriend, Sue, whom Mrs Thompson did not like, moved into the farmhouse. Family relations began to deteriorate with arguments over how the farmhouse was to be decorated and whether Gilbert was pulling his weight.

In July 2014, Gilbert and Sue went on holiday. On their return, they found they had been excluded from the farmhouse, Gilbert's mobile phone contract had been cancelled and Mrs Thompson was refusing to pay for the running expenses of his car and his partnership credit card.

Gilbert issued court proceedings

Gilbert claimed that throughout his working life his parents promised him that, on their deaths, he would inherit the farm. In reliance on these promises, Gilbert said that he worked on the farm all his life at a very low wage, never buying his own property and in effect giving up the possibility of any independence and any life outside the farm.

At the hearing, Gilbert had eight witnesses give evidence in support of his position, including his two sisters Elaine and Pauline. They all gave evidence of Mr and Mrs Thompson's repeated comments about the farm 'being Gilbert's' and the judge found their evidence to be 'credible, truthful and reliable'.

Mrs Thompson denied ever making any promises to Gilbert and claimed it was never her husband's intention for Gilbert to take over the farm. In case the judge found otherwise, she argued that there was no injustice as Gilbert's one-third share under the farming partnership more than made up for the lifestyle choices he made in working on the farm.

When shown the attendance notes of meetings with her solicitors and accountant, she said she and her husband were simply 'going along' with what the professionals were saying. The judge found this out of keeping with his view of her as a 'formidable' woman and a 'very firm and proud matriarch'.

Mrs Thompson had four witnesses give evidence, including the third daughter, Karen.

Mrs Thompson and Karen described Gilbert as 'incompetent and recklessly negligent' in the manner that he looked after the farm. They said he was 'unfit to be a farmer' and gave this as a reason why no such promises would have been made. The judge found this to be 'attempted character assassination'.

The judge was 'not impressed' with Mrs Thompson's other witnesses either. Karen's partner referred to dinner being prepared for Gilbert by his mother as an indication of Gilbert's lack of ability, initiative and self-sufficiency. He also said Gilbert watched too much TV and that he had seen Gilbert out drinking 'on two different occasions… in the last few years' (hardly a crime!). The judge found his language 'inappropriate, emotive, unfair and unjustified'.

The judge's decision

The judge was convinced that Mr and Mrs Thompson had made promises to leave the farm to Gilbert on their deaths and that Gilbert had relied on those promises to his detriment. Therefore, Mrs Thompson was not free to now change her mind. Gilbert not having worked on the farm since 2014 did not affect the judge's decision as by that time 'equity had crystallised'.

The judge left the question of how to effect the proprietary estoppel (Mrs Thompson still being alive and living on the farm) to another day – the hope being that the family would resolve the position between themselves now that the main issue in contention had been decided.
This case shows just how important witness evidence can be, and how damaging it can be to 're-write history' and make unjust criticisms.

Natasha Stourton Associate | London

Category: Article