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Melby Farm (renamed Emmerdale Farm III) was a farm the Sugden family bought when they were forced to vacate the previous Hawthorn Cottage in 1997. Later that year, Jack and Sarah's marriage began to fall apart when Jack had an affair with Rachel Hughes. They tried to put things right but financial issues threatened to push them apart. Sarah then left Jack after having an affair with Richie Carter. However, in November 2000, Sarah wanted to take Jack back but Richie pulled her into a barn to try convince her to change her mind. At the same time, Andy tried to resolve the financial problems by burning down the barn, not realising Sarah and Richie were inside. Richie got down in time but a small explosion knocked down the ladder. Sarah refused to jump and told Richie to save himself. Richie did and the barn exploded, killing Sarah instantly. The farm went up for auction in 2002, as Jack could no longer afford to keep it running. The farmhouse was sold to Ray Mullan and the Sugden family moved into Tenant House.

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