Fatal Accident; Farming Partnership

November 1st, 2015

In the matter of  BLIGHT -v- RICHARDS & ANOR, the District Court assessed a claim for damages by the 47 year old husband of the deceased who died in a traffic accident as a result of the defendant’s negligence.

The plaintiff and the deceased were partners in a farming venture. Each contributed and genuinely earned their income from the business.

Their income was pooled.

The court adopted what was termed the “conventional method” of assessing the degree of dependency by proceeding on the basis that one third of the pooled income was spent on each of the husband and the wife whilst the balance covered items of expenditure of a capital nature enjoyed by both and of a recurring nature which were truly joint and which carry on notwithstanding the death of the deceased. Thus, dependency was taken as being two-thirds of the joint income but having regard to the income contributed by the plaintiff.

That loss was calculated over the period from the date of death to the trial and beyond to age 65.

The land on which the farming property was conducted was registered in the deceased’s name but the court found that the land was nevertheless partnership property.  There was a finding that “for the purpose of assessing the benefit
derived by the plaintiff from his wife’s estate in the present case, a
deduction must be made of one half of the value of the land in order to
acknowledge the plaintiff’s interest to that extent as a partner”.

On her death, the deceased left the farming property to the plaintiff husband.

The defendant argued that the plaintiff husband had thus received an accelerated benefit, the value of which is greater than any damages for which the defendant was liable. This argument is based on the position that in some cases, the benefits from the estate of the deceased to the dependant may entirely outweigh any award for the loss suffered by the dependant based upon the degree of dependency upon income of the deceased. The value of the benefit in such cases is the difference between the value of the estate actually inherited and the present value of the estate if it had been inherited at the normal time. The approach applies to items such as stocks and shares and comparable income producing investments but not items such as the family home and furniture on the basis that the surviving spouse would have continued to enjoy the use of such items after death to the same extent as before. In such cases there is really no accelerated benefit.

In this case, the trial judge assessed the undiscounted value of the accelerated benefit at $226,000 on the assumption that in about 20 years, the husband might have inherited the benefit in any event.  On the issue of the most appropriate discount, the Judge said the following;

It falls then to consider what deduction should actually be made for the
accelerated benefit in all the circumstances.
The plaintiff would in any event have continued indefinitely to have the
benefit of the assets and facilities of the farm including the residence had
his wife lived. The evidence of the substantial appreciation in value of the
property for the future leads to the possibility…….
that the plaintiff and his wife may have considered the sale of the farm or,
perhaps, of the land other than the location on which the residence stands, so
as to take advantage of the income from investment of the proceeds instead of
continuing to work the property.

It is true that consideration must be given to the prospect that, if the
plaintiff were to have inherited the deceased’s interest in the future
“normal” course of events, then that interest would be substantially enhanced
in value. But, without in any way detracting from the contribution of the
deceased in the farming business, the increase in future value would not have
been because of the accumulation of assets or other activity on the part of the plaintiff’s wife but, rather, because of the demand for subdivisional land
in the area. It means that the value of the land will increase in the same
way notwithstanding the absence of the plaintiff’s wife. There is also to be
weighed the prospect that the plaintiff may not in the normal course have
inherited his wife’s interest.

In the end, it is difficult to see what material advantage has been
received by the plaintiff other than the simple fact that he is now the sole
proprietor of assets which previously he shared with his wife and that,
instead of their joint enjoyment of the assets, he is able to deal with the assets
unilaterally.

The Judge then made an overall deduction of only $10,000.