Marriage Breakdown - Asset rich but cash is hard to come by
Marriage breakdown is difficult to manage at the best of times but when it occurs within a farming family, it can have devastating effects. One of the major problems is the financial fall-out as many farmers these days are asset-rich whilst cash is hard to come by.
There are, of course, no two sets of circumstances which are the same but all too often they involve a forced sale of assets. Some times the consequences are different and this was so in a case called Wormall v. Wormall decided by the Court of Appeal towards the end of last year. In this matter the father had allowed his daughter to use the family farm and to carry on her business there for so long as it remained the family farm.
So far, so good, but unfortunately the father and his wife divorced and the father needed to sell the holding so that he could meet his financial obligations to his divorced wife. Predictably, the daughter claimed an equitable right to remain in the property called "proprietary estoppel".
At the original hearing of the matter, the trial judge upheld the principle of this claim and required the father to pay the daughter compensation of £50,000.00 for giving up occupation of the property. This would enable him to sell with the benefit of vacant possession. The father appealed against this order and was successful in the Court of Appeal. The Law Lords who sat in judgement decided that the daughter only had such an equitable right to remain in the property until the farm was sold.