Monday 12 December 2011

Dad Promised us the house ! Constructive Trusts and Promissory Estoppel

In situations where a promise has been made and acted upon over a period of years it is sometimes possible to enforce that promise even if it not in writing.
In Harrison -v- Harrison, a recent Supreme Court of Victoria case,  dad died and left everything to one Son. In order to convince his Sisters not to dispute the will, the Son promised the Sisters "I will look after you....everything will be ok....dad's trusted me to do the right thing and that's what I'll do...." (and other words to like effect).
The Sisters relied on these words and refrained from disputing the will within the six month time limit.
The Sisters eventually realised that their Brother had no intention at all of "... doing the right thing."
No extension of time was possible because the estate had been fully distributed by the time the Sisters finally realised that the Brother was in fact not going to do the right thing at all.
The Sisters went to Court pleading that the Brother had made them a promise and that they had relied upon this promise, to their detriment, by not contesting dads will in the first place.
The Court agreed and found that the Son who had been left everything now held the Real Estate that he had inherited,  UPON TRUST,  as to part, for his Sisters.
Evans -v- Evans was a similar New South Wales case inasmuch as it also involved a promise and the promise being relied on. In this case dad bought a house and let his Daughter and Son in Law move in rent free. He promised them both that the house  was "...your home" and allowed them to do renovations and improvements over the years. Eventually, in 2007 when the Daughter asked her dad to transfer the house to her and her Husband, dad refused.
So the Daughter took dad to Court, proved he made, and repeated,  the promise, proved that she relied upon it to her own detriment ( by spending heaps of money on the house) and the Court agreed.
The Court ordered that house be transfered to the Daughter and her Husband.
The will in this case could not be disputed in the normal way because dad hadn't died yet.
This line of cases known as "Proprietary Estoppel"  or "Constructive Trust" cases have been consistently used to provide relief to claimants when, for various reasons, it is not possible to contest the will or estate of a person in the normal manner, pursuant to the Admnistration and Probate Act.
Interestingly, the Courts have found that the vagueness and oral nature of the promise relied upon will not necessarily cause the claim to fail.
If someone makes a promise and another relies on that promise to their detriment, the Courts in Victoria will provide relief in appropriate circumstances.
Harrison -v- Harrison provides a lengthy and comprehensive dissertation on the principles of Promissory Estoppel and their development over the years since the landmark case of Dillwyn -v- Dillwyn  in 1862.

1 comment:

  1. Great post........An estate is the net worth of a person at any point in time alive or dead. It is the sum of a person's assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time.Disputing A Will"

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