Creasey & anr v Sole & ors [2013] EWHC 1410 (Ch)

Analysis

The claimants were the executors of the late Constance Jenkins (M), and, by representation, the executors of the late Kenneth Jenkins (F). F died on 21 October 1995 and M died on 15 January 2005. The defendants, F and M’s children, disputed the devolution of their parents’ estates and the court’s direction was sought.

F and M had owned a farmhouse and land extending to some 210 acres on the Isle of Wight as beneficial tenants in common (Ashey). F and M owned other land, in some cases jointly and in others cases individually. One such further holding consisted of 26 acres, known as Wrax Marshes, which was in F’s sole name.

All four sons had worked on the land owned by their parents from time to time, but the sixth defendant (Michael) had entered into an arrangement with F and M in 1984 to manage their farming enterprise. He was not paid for this work but was in return allowed to carry on his own farming enterprise on his parents’ land. Over time, Michael’s enterprise expanded and he was allowed to use more of his parents’ land. The land used by Michael was removed from the area registered in his parent’s name with the Ministry of Agriculture.

In 1985 F and M had purchased a property known as Ashey Lodge, which was renovated and made available for Michael’s occupation. In April 1992 F and M took steps to transfer the property into Michael’s name. At this point Michael first became aware of an agricultural tie (requiring the occupier to be engaged in agricultural activity) over the property and became upset because of the consequential reduction in its value, in contrast to the unencumbered property purchased for the fifth defendant (Richard). Michael’s contention was that on confronting F about the agricultural tie, he was told not to worry about it: ‘as Ashey would be [his] when they [died]’. Michael did not contend that M said anything directly relevant at this or any other time, but that she heard these words and made no contrary intention known.

F’s will dated 27 February 1974 left Ashey and all the assets of his share of the farming enterprise, including his share in the farmhouse, to any of the defendants as were ‘working either as an employee or a partner fulltime in such business’ at the date of his or M’s death, whichever was the later (clause 5(b)(i)). M’s will, dated 5 November 2004, provided for her interest in the farmhouse to be divided between the defendants in shares provided they signed options by a specified date (clause 6.1). M’s will made further gifts of what were defined as ‘Michael’s land’ and ‘Richard’s land’ to Michael and Richard respectively (clauses 6.2 and 6.3). Michael’s land was defined as the land ‘either upon the Down or situate to the west of the road leading to the waterworks including the road itself and the orchard and the duck pond together with such part of the farm buildings and yards… as my trustees shall consider at their entire discretion to represent a half-share in value…’ Richard’s land was defined as ‘the remaining land at East Ashey Manor Farm not devised in accordance with clauses 6.1 and 6.2 of my will’.

In all these circumstances, Michael contended:

1. (i) that his work on the farm satisfied the condition in the father’s will;
2. (ii) that he obtained security of tenure over an extensive are of the land under the Agricultural Holdings Act 1986;
3. (iii) that he acted to his detriment in reliance on the statement made by his father following their argument in 1992 so as to be entitled to a substantial portion of the land under the doctrine of proprietary estoppel; and
4. (iv) that he had been in occupation of certain of the land under the provision of the Trusts of Land and Appointment of Trustees Act 1996 (TLATA 1996) and that he ought to be allowed to continue in occupation.

Further issues were raised in relation to the construction of Michael’s land in M’s will, with regard to various payments made to Michael by the Rural Payments Agency and in respect of the classification of the gifts made by M’s will under the Administration of Estates Act 1925 (AEA 1925).

Held:

1. (1) Michael did not satisfy the condition in clause 5(b)(i) F’s will. Accordingly, the default gift in clause 5(b)(iii) is operative and F’s interest vests in the defendants equally.
2. (i) The relevant time for qualification was the date of M’s death. Had the farming relationship between M and Michael in relation to M and F’s farming enterprise been contractual, Michael would have been a service contractor not an ’employee’. In any case, had he been an employee he was not working in that capacity ‘fulltime’ as he spent the majority of his time working in his own farming enterprise.
3. (ii) The words ‘such business’ in clause 5(b)(i) of F’s will could not be construed to include Michael’s enterprise.
4. (iii) F’s statements during the 1992 argument, even if they were admissible as an aid to construction, were not direct or indirect evidence of his testamentary intention.
5. (2) As to M’s will:
6. (i) The second defendant and Richard signed the options mentioned in M’s will and their gifts of the farmhouse vested accordingly. The conditional gifts made to the other defendant’s failed and instead took effect as gifts to Michael and Richard in equal shares.
7. (ii) A field known as ‘Long Field’ was not part of the Down or ‘upon the Down’. It did not therefore fall within the definition of Michael’s land – the Long Field was South, not West, of the road and there was no reason to suppose that there was any intention contrary to the geographical reality of its location.
8. (iii) The words ‘the road itself’ includes the verges to the road extends to the middle of the root line of the hedge situated on the eastern side of the verge.
9. (3) The arrangement made between Michael and his parents did not confer upon him an exclusive right to occupy the land used for his farming enterprise and accordingly it was not upgraded from a licence to a protected tenancy from year to year under s2 of the Agricultural Holdings Act 1986. F and M used a considerable portion of this land for their own farming activities. The fact that the land used by Michael was referred to by M in an agricultural census as the subject of ‘other tenancy’ was not conclusive and did not overcome the substance of the agreement between Michael and M and F.
10. (4) The claim in proprietary estoppel failed. In relation to F’s interests in the land, it was not possible to conclusively find a representation in the argument of 1992. In any case there was no reasonable reliance and substantial detriment such as to raise an equity – the farming work undertaken between 1984 and 1992 was not on the basis of any promise, the work undertaken between 1992 and 1995 was not such as to constitute substantial detrimental reliance and Michael’s readiness to do work after F’s death in 1995 is explained by the reasons he undertook work prior to 1992 and thereafter. In relation to M’s interests in the land there was no representation or acquiescence sufficient to raise an estoppel.
11. (5) As to rights of occupation under a trust of land:
12. (i) Under the terms of F’s will Wrax Marshes was held for M for life and thereafter for the defendants equally. Accordingly, the land is to be sold and was not held on trust so as to be available for Michael’s occupation under s12 TLATA 1996.
13. (ii) F’s share of Richard’s land is held on a sub-trust for the defendants equally and M’s share of Richard’s land is held on a sub-trust for Richard absolutely. Accordingly, the land is not held either on the principal or the sub-trusts for Michael’s occupation under s12 TLATA 1996.
14. (iii) F’s share of the land not within the definition of Michael’s land or Richard’s land is held on a sub-trust for the defendants equally. M’s share is held on a sub-trust for five of the defendants. Accordingly, the land is not held either on the principal or the sub-trusts for Michael’s occupation under s12 TLATA 1996.
15. (iv) F’s share of Michael’s land is held on sub-trust for the defendants equally and did not come within s12 TLATA 1996. Even if M’s share of Michael’s land had been within s12, it was held that this section did not apply to a mere undivided share in physical land or, alternatively, that it was unavailable/unsuitable for his occupation because it could not be physically occupied.
16. (6) Michael was obliged to pay damages (to be assessed) for trespass in respect of the land occupied by him since 1 October 2007 without the claimants’ consent.
17. (7) The payments made to Michael by the Rural Payment’s Agency under the Single Payment Scheme were not due to the executors and thus there was not duty to account for them.
18. (8) Although clause 6 of M’s will begin with the words ‘My trustees shall hold my residuary estate upon the following trusts’, the gifts in sub-clauses 6.1, 6.1 and 6.4 were in substance specific devises and thus fell within para 2 of Part II of Sch 1 of the AEA 1925.

JUDGMENT MR JUSTICE MORGAN The parties [1] This dispute is between six brothers and sisters. They are the children, now adults, of Kenneth (known as Ken) and Constance (known as Connie) Jenkins. Ken and Connie Jenkins were farmers in the Isle of Wight. Ken Jenkins also ran a haulage business. Ken Jenkins, to whom I …

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