Proprietary Estoppel Claims: A Guide

Proprietary estoppel is a legal remedy that can be used in circumstances when someone has promised you land or an interest in property at a later date, but then reneges on the agreement after you have relied on their promise.

It is sometimes used at the same time, or as an alternative, to contesting a will to argue that land or property does not form part of the deceased’s estate.

However, proprietary estoppel does not need to be linked to a death and could also be relied upon during the promisor’s lifetime.

What is proprietary estoppel?

Proprietary estoppel occurs when:

• A promise or assurance is made regarding property or land
• The promisee relies on that promise
• The reliance leads to a detriment
• It would be ‘unconscionable’ for the promisor to renege on the promise

A classic example is a farm or family business, with a “one day, this will all be yours” promise from a parent. Farms and family businesses often rely on children and younger generations working tirelessly to build the business and keep it running. Quite often that hard work is only undertaken on the promise or assurance that the business or land will be left to them by the earlier generation.

There are numerous scenarios where a person might feel that they have been promised something or treated unfairly, but later find that the land or business have been left to someone else in a will.

Promissory estoppel steps in to prevent unfair outcomes where someone has acted to their detriment in reliance on a promise and that promise is not upheld.

The Key Elements of Proprietary Estoppel

1.     A promise or assurance

In order to rely on proprietary estoppel, a claimant must prove that there was a representation or assurance that created an expectation that they would be entitled to land or property. This could be in words, but could also just be in conduct. Evidence from people independent of the dispute is often important especially if they can give evidence of a verbal promise or a history of conduct which shows a promise or assurance was made.

2.     Reliance

A promise alone is insufficient. A claimant will need to show that they relied on that promise. Did they base their life decisions on the promise, give up other opportunities or focus their entire life a certain way in reliance on the promise or assurance made?

3.     Detriment

In order to rely on proprietary estoppel a claimant will need to show that they acted to their detriment in reliance on the promise. Did they work for a much lower wage, because they one day thought they would inherit a farm or a business? Alternatively, perhaps someone gave up other lucrative opportunities to study or work in other sectors to work for a farm or family business instead.

4.     Unconscionability

More recently the Courts have focused on the whole picture and it is not necessarily a tick box exercise. If a Claimant can show that the conduct of the promisor was unconscionable in the round the Court is more likely to use proprietary estoppel as a means to remedy the situation.

Remedies for Proprietary Estoppel

Bringing a successful promissory estoppel claim does not automatically mean that the Court will order a transfer of property in whole. The Court has a wide discretion to set the award by way of either land or money and has a wide discretion to order a remedy which it considers proportionate to the detriment incurred.

Time Limits

There are no formal time limits.

However:

• Delay in bringing a claim could be used as a defence to a claim.
• Courts may consider how long it took the claimant to assert their rights.

Challenges of Proprietary Estoppel Claims in Practice

Proprietary estoppel claims are not without their difficulties.

The person who is often alleged to have made and breached the promise has often passed away, or alternatively will be denying all knowledge of any promise or assurance.

It is often the case that there has been significant family fall out and breakdown. Attempts to resolve the issues within the family may have failed. It may be that there are complicated family dynamics for example the interests of siblings or family members who are not involved in the business or farm, but still feel a moral right to an inheritance from their parents.

The outcome of a proprietary estoppel claim is notoriously difficult to predict if it proceeds to trial given that there is often limited documentary evidence and the Court is left to weigh up competing witness evidence. Then even if a Court finds in favour of a Claimant the Court has such a wide discretion in making an award there is a very wide spectrum of potential outcomes, further adding to the uncertainty.

Given the unique background and facts to each scenario, the courts deal with claims on a case-by-case basis meaning that it is uncertain which case law and precedent a Judge may find applicable.

Seeking Support on a Proprietary Estoppel Claim

Whether  as part of a Contentious Probate claim or a claim against a living promisor, Napthens is on hand to work with you towards desired outcomes. Contact us via our form today.

FAQs

What is the difference between proprietary estoppel and promissory estoppel?

While both doctrines derive from equity, focusing on the fairness of a promise or assurance, they apply in different contexts.

Proprietary Estoppel: Related to land or property interests. The claimant may seek a cause of action to enforce or remedy this promise.

Promissory Estoppel: Typically arises in a pre-existing contractual or legal relationship. It typically acts as a defence rather than a claim.

Can proprietary estoppel be used as part of an estate dispute?

Yes, but it is also a legal remedy that can also be used while the promisor is living. The key point is reliance on a promise and resulting detriment.

What evidence is needed to show prove a promise or assurance?

• Verbal assurances
• Conduct showing ongoing reliance
• Witness testimony
• Documentation showing sacrifices or investments made in reliance on the promise

When can a proprietary estoppel claim be made?

There is no formal time limit, but an undue delay in making a claim by the claimant may be used as a defence by the defendant.

What remedies are available for a proprietary estoppel claim?

Courts may award land, property, money, or a combination.