Court rules on family fallout over farm and dairy herd
Library image © Springfield Gallery/Adobe Stock Another case testing farming family business arrangements was decided in court recently, highlighting the need for clarity and documentation.
This saw a farmer in Ceredigion win possession of a holding called Glasfryn at Rhydlewis, near Llandysul, which he bought in 1988 and where his nephew has lived and farmed since that time.
Luigi Vasami and his wife Grazia claimed that the nephew’s tenancy had ended. They also sought rent arrears and the return of the farm’s dairy herd, which they said belonged to them, or damages.
See also: Court awards farm to son in inheritance promise dispute
Mr Vasami’s nephew, Tony Hack, with his wife Arlene, defended this claim, contending that Glasfryn had been promised to Mr Hack by his uncle, that he had worked long hours there and spent money on the holding.
The Hacks denied they were tenants and said their occupation was on the basis of a family arrangement and the uncle’s promises, and that the herd was transferred to them by Mr Vasami in 2008.
The case highlights how problems can arise over family arrangements, which have developed over many years, when there is no documentation to support what is intended or agreed.
Hard-working, honest people
In his judgment, Judge Jarman KC commented: “The impression I formed of these witnesses, and their respective family members, were that they are hard-working, honest people who were doing their best to recall what was said and done, sometimes many years ago, although now through the fog of bitter, adversarial litigation.
“Each seemed genuinely to believe that he or she was telling the truth. The question is not who is being dishonest, but whose recollection is more likely to be accurate.
“In the absence of contemporaneous documentation, inherent likelihoods are particularly important.”
Partnership
The Vasamis had a second farm, Rhydgoch, also near Llandysul.
There had been a family partnership between the Vasamis, their son Tony, and Mr Hack from the mid-1990s until 2007, when Mr Vasami wanted to retire.
Milk prices were falling and there were borrowings to service.
It was agreed that Mr Hack and his wife would take over the 80 head herd at Glasfryn for £1,000 a cow, to be paid off over time, and be entitled to the profits from that business.
Mr and Mrs Hack would make payments to Mr and Mrs Vasami to service bank borrowing and for them to live on.
Two payments of £4,000 were made, but there were no regular payments after that, despite frequent chasing.
The single farm payments for Glasfryn were made to Mr and Mrs Vasami.
When money issues arose between the parties, Mr and Mr Vasami changed their wills in 2009, leaving Glasfryn to each other should either die.
These also stated that if one did not survive the other for more than a month, then Glasfryn was left to Mr Hack, on condition that he paid £100,000 to their daughter.
If this was not fulfilled then Glasfryn was left to their daughter and son equally.
The next few years saw the relationship between uncle and nephew deteriorate.
In March 2021, the parties met. Mr Vasami wanted to sell Glasfryn and offered it to Mr and Mrs Hack for £1.4m.
Nothing was resolved at this meeting and Mr and Mrs Hack instructed solicitors.
Part of the Hacks’ claim was based on proprietary estoppel.
Such a claim has three tests – that a promise was made, that the promise was relied upon and that this was to the detriment of the claimant.
No promise
Judge Jarman KC found there had been no promise of the farm to Mr Hack and that there was no detrimental reliance.
The judgment said Mr and Mrs Hack were mistaken in their recollections regarding promises.
Regarding detriment, it stated: “Until 2007, he [Mr Hack] was paid a wage, had free occupation of the farmhouse at Glasfryn with bills paid, and could and did undertake other paid employment.”
Thereafter they had farmed Glasfryn, making a healthy profit, occupying the farm and farmhouse without making substantial payments and without paying for the herd.
The judge also said it was not unconscionable for the Vasamis to seek possession.
However, he found it unlikely that the parties intended to enter a tenancy agreement, and that their understanding was more likely to be on the basis of an arrangement within the family.
Therefore, the Vasamis’ claim for arrears of rent failed, as did their claim for return of the herd or damages.