Playing Fair with the Family Farm - Disputes regarding family farms
April 19, 2023
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Playing fair with the family farm - Succession, disputes ...
Rural enterprises, like many small to medium sized businesses are typically a ‘family affair’. Mum and dad work together, the business and land are in their name and/or control, and the children help according to their age and ability. This scenario usually works well while dependent children are still learning essential industry skills from senior family members.
Once children have grown to adulthood and begin to consider their place within the family business structure, formerly productive working arrangements can change dramatically. Who will farm the land, run the associated business, live at the homestead and ultimately inherit the property? In families where there are a number of siblings, these types of questions can cause bitter family divisions if they have not been dealt with honestly and openly by parents.
The addition of spouses and another generation of offspring usually creates a tipping point within the family dynamic whereby unmet expectations rise and poor communication can threaten to destroy a lifetime of hard work.
There have been many cases where grown children have been forced into court to enforce promises made by their parents. Usually they work for little comparative remuneration on the promise that the family farm and its associated business will be theirs at some point in the future.
Generally, nothing is ever written down and as the years pass, no property is ever legally transferred from one family member to another. Adult children pass up other employment opportunities and eventually find themselves waiting for an inheritance or financial interest that may never come their way. This type of situation can give rise to a claim of equitable estoppel, which essentially means that any promise made to a child in this kind of circumstance should be kept.
There are also situations where the actions and behavior of the parents have led the child to reasonably believe that they will be rewarded for their endeavors and input into the family business, even if this has never been stated. In these instances, the courts will look at their contribution to the business and the intention shown by all those concerned that they had a ‘stake’ in the successful operation of the rural enterprise.
Adult children who work on their parent’s farm may believe that their interest in the property has been clearly established by an unspoken understanding that they will inherit the property. This can give rise to a claim that a constructive trust exists on the grounds that it would be unconscionable for the parents to maintain beneficial ownership when it is clear that the child is working to benefit the family business.
A lack of communication and/or an unwillingness to acknowledge and commit to a decision can often lead to expensive legal action. It is essential to remember that these types of dispute have the ability to decimate a family’s business interests and irrevocably tear relationships apart.
For further information or guidance regarding these issues please call us at 9321 5451.
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The International Sustainability and Carbon Certification (ISCC) System has come to the attention of many Western Australian farmers recently, as the scheme has changed one of its policies regarding aerial spraying. What is the ISCC? The ISCC is one of the world’s largest voluntary sustainability certification schemes enabling participants to demonstrate they are producing materials in a sustainable way that meets or exceeds community expectations. In Australia it is widely used in the canola industry, enabling Australian canola growers to access the European biofuel market. CBH Marketing and Trading holds certification for the ISCC EU and ISCC PLUS programs, that cover canola, barley, oats, wheat and lupin, allowing WA growers to participate in both programs. Participating in the ISCC program can result in a premium on grain, however participants are subject to more stringent measures to satisfy sustainability accreditation requirements. Recent decision on aerial spraying ISCC Principle 2.6.2 prevents aerial spraying from taking place within 500 metres of a body of water. CBH has successfully lobbied for an exemption to this Principle, for farm dams and salt lakes of low ecological value. As part of its lobbying, CBH provided expert reports to the ISCC on the hydrology and ecology of WA farm systems. For farmers who are signed up to the ISCC program, this removes an obstacle during the season for weed management. The Principle does still require a 500 metre buffer for other bodies of water, including freshwater lakes, rivers, ponds or creeks. However, for those who farm yabbies and marron, this change may not be welcome. Marron and yabby farmers have noticed impacts on their populations where aerial spraying has taken place close to their properties, and aerial spraying can unintentionally damage natural vegetation, including young and old growth trees. For growers, it’s always prudent to follow best practice guidelines for aerial spraying to avoid spray drift – including monitoring weather conditions and the effect of water added to the chemical. For some farmers, this decision may prompt an examination of whether signing up to the ISCC program might be best for their business. In this circumstance, it is important to weigh up the potential benefits of the program compared to the sustainability accreditation requirements. For others, this decision is a timely reminder to stay up to date with best practice guidelines when it comes to spraying, particularly during the seeding season. For assistance with all of your agribusiness needs, contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au By Ciara Nalty (Solicitor) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
How does the Annual Wage Review affect workers and small business owners? Each year, the Fair Work Commission reviews the National Minimum Wage and the minimum wages set out in awards. Cost of living and inflation are front of mind for both employers and employees, and this year’s Annual Wage Review is likely to see an increase in the minimum wage and award rates. The Annual Wage Review is conducted by an Expert Panel, which takes submissions from interested groups, including the Federal Government, unions, and business lobby groups. The Federal Government’s submission to the Wage Review this year called for an increase to the minimum wage, though not specifying an amount. The Australian Chamber of Commerce and Industry has advocated for an increase of 2 per cent, at most. The announcement will likely take place in early June and any increase to the national minimum wage will take effect in the first full pay period on or after 1 July 2024. Failure to pay employees at least the minimum rate that is set out in an applicable award can result in penalties, including requirements for back pay and fines. The Fair Work Ombudsman uses its enforcement powers to issue compliance notices to employers, and recovered $14.8 million in unpaid wages in 2022-23. Small and medium businesses are subject to the same scrutiny as large businesses. For business owners, this is a timely reminder to review employment agreements and payments to staff. You should be conscious of which awards cover your staff members, as award rates for each level increase commensurate with the national minimum wage increase. It is also important to be aware of employee entitlements and set-offs, to ensure you are paying employees what they’re entitled to and avoiding future claims. If you are not sure what award your employee is covered by, have a question about employment conditions or require any other assistance with employment and workplace matters contact Bailiwick Legal on 08 9321 5451 or email office@bailiwicklegal.com.au . By Ciara Nalty (Solicitor) For further information about our legal services, please visit our website: https://www.bailiwicklegal.com.au The above information is a summary and overview of the matters discussed. This publication does not constitute legal advice and you should seek legal or other professional advice before acting or relying on any of the content.
