Abstract

This article alerts farmers and those who advise them of the need for caution when making arrangements or agreements with family members regarding the future ownership and succession of the family farm. Such arrangements are frequently oral and informal. Promises are made and revised, and often unspoken ‘understandings’ are arrived at. This lack of legal formality gives rise to a propensity for matters to go badly and bitterly ‘wrong’. Furthermore, the article draws attention to the fact that, even where formal arrangements are made, they are vulnerable to challenge and the nature of the legal and equitable doctrines applicable in such cases means the outcome of such challenges cannot be confidently predicted. It may come as a surprise to many farmers to learn that their autonomy in dealing with their land and businesses can be overridden by legally imposed obligations of morality and good conscience. The article illustrates its thesis by examining three High Court cases in which family farming agreements have been challenged. In each case, the court determined the fate of the family farm, not by reference to the farmer’s intention, but by the application of succession legislation and equitable doctrines, such as equitable estoppel and unconscionable transaction. Moreover, in two of these cases, the farmer’s actual intention was overridden in favour of an arrangement that better coincided with what the court considered that he ought to have done - resulting in an outcome that neither the parties nor their legal advisers could have expected.

Keywords

Peer-reviewed

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