High Court Honours Farmer’s Wish to Keep Land in the Family

When partnerships are dissolved, the usual rule is that their assets must be sold on the open market and the proceeds divided. In one case, however, the High Court took a different course in honouring a farmer’s wish that his land should remain within his family.

FarmlandThe farmer owned the arable farm equally with his sister and the pair had cultivated the land in successful partnership for many years. On his death, his share of the land passed to his widow, who was his sole beneficiary. The two women did not get on and the widow felt that she had been unfairly excluded from the business. The sister, who had been involved in farming the land for over 40 years, felt that the farm was none of the widow’s concern.

When the farmer died, his partnership with his sister was automatically dissolved and it was agreed that his land would have to be sold under the terms of the Trusts of Land and Appointment of Trustees Act 1996. The widow argued that it should be placed on the open market, as the only true and definitive test of its value. The sister, however, submitted that she should have the opportunity to buy the land at a price fixed by the Court.

The land had been cultivated by members of the family since at least the mid-19th century and, in upholding the sister’s arguments, the Court accepted that the farmer would have wanted that state of affairs to continue. The land had been owned by him and his sister as individuals, but there was no doubt that it had been held in trust in order to allow it to be farmed by the partnership.

On the basis of expert evidence, the Court found that it was possible to place a value on the land with sufficient accuracy to reduce the risk of the widow not receiving full value for her interest. The Court took into account the possibility that the land might at some point be sold for development in valuing it at £3,245,000. The sister was given two months in which to complete a buyout of the widow’s interest for half that sum. Failing that, the land would be placed on the open market.