Proprietary estoppel is a legal principle that allows a person who has been given an assurance to seek enforcement of that assurance through positive relief. To establish proprietary estoppel, the court requires five [5] key elements as outlined in Laird v Vallance [2023] YSCA 138:
1. The promisor makes a representation that they will grant the promisee an interest in the property.
2. The promisee acts in reliance on this representation.
3. The promisee’s reliance on the assurance or promise is reasonable.
4. The promisor knew or intended that the promisee would rely on the assurance.
5. The promisee suffers a detriment as a result of the promisor’s failure to fulfill the assurance.
When these elements are satisfied, the court may impose an enforceable obligation on the promisor to prevent the promisee from suffering further detriment due to their reliance on the promise.
A. Synopsis
On 8 August 2024, the NSW Court of Appeal upheld the initial decision in Slade v Brose [2024] NSWCA 197. The case of Slade v Brose involved a dispute over proprietary estoppel and the ownership of various farming properties in Quandialla, New South Wales.
The Court of Appeal dismissed the appeal by the Slades, who had challenged the primary judge’s findings, and the relief granted to the Broses. The Court found that the representations made by the Slades were sufficient to create a proprietary estoppel, that the Broses reasonably relied on these representations, and that they suffered detriment as a result. The Court also granted leave to cross-appeal regarding the costs order, deciding that the Slades should pay 75% of the Broses’ costs.
B. Case Background
The dispute centres around the ownership of several farming properties in Quandialla, New South Wales, between Bruce and Donna Slade and their daughter Kellie Brose and her husband Garreth Brose.
C. First Instance Decision
Promises and Representations Made
The Slades made several representations to the Broses, including:
1. If the Broses relocated to Quandialla and worked for the family partnership, they would receive an interest in certain parcels of the farming land.
2. The representations were made from 2013 to 2019, including during family estate planning meetings.
3. The Broses were told they would be the recipients of future transfers of land and partnership interests.
4.Some properties were transferred to the Broses over the years, and there was an acknowledgment of a 25% interest, later increased to a 50% interest, in the partnership.
The Slades Argued
(a) The representations made were not clear and unambiguous.
(b) That the Broses did not reasonably rely on the representations.
(c) That there had been a relevant change in circumstances, such as the breakdown of the relationship and the end of the partnership, making it not unconscionable for them to depart from the representations.
The Broses Argued
(a) The representations were sufficiently clear and that they reasonably relied on them.
(b) That they suffered detriment by relying on the representations, as they gave up lucrative careers and invested their lives in the farm.
Primary Judge’s Findings
The primary judge found that the Slades made representations to the Broses that they would receive various properties and partnership interests, leading to the Broses relocating and working on the farm.
The equitable principles of proprietary estoppel by encouragement were applied and it was found that the disputed properties were held on a constructive trust as claimed. The representations made by the Slades were sufficiently clear, and in a family context, it was reasonable for the Broses to rely on the repeated assurances by the Slades.
The Court determined the Broses suffered detriment by relying on the representations, as they gave up lucrative careers and invested their lives in the farm. The decision to remain and not take up opportunities elsewhere was more than sufficient to amount to detrimental reliance.
D. Appeal and Cross-Appeal
The Slades appealed the primary judge’s findings, arguing that the representations were not clear and unambiguous, and that the Broses did not reasonably rely on them. The Broses cross-appealed regarding the costs order.
- Proprietary Estoppel: The Court of Appeal upheld the primary judge’s decision that the representations made by the Slades were sufficient to create a proprietary estoppel, as they were clear enough in a family context and the Broses reasonably relied on them.
- Reasonable Reliance: The Court found that the Broses reasonably relied on the representations made by the Slades, leading them to relocate, work on the farm, and forego other career opportunities.
- Detrimental Reliance: The Court agreed with the primary judge that the Broses suffered detriment by relying on the representations, as they gave up lucrative careers and invested their lives in the farm.
- Change in Circumstances: The Slades argued that changes in circumstances, such as the breakdown of the relationship and the end of the partnership, meant that it was not unconscionable for them to depart from the representations. The Court rejected this argument.
- Costs Order: The primary judge initially ordered each party to bear their own costs, but the Court of Appeal granted leave to cross-appeal and decided that the Slades should pay 75% of the Broses’ costs.
The orders were that:
1. The Slades transfer three of the disputed properties to the Broses.
2.The Broses pay the Slades $500,000 to reflect the acceleration of the interests that the Broses were acquiring.
3. The parties to bear their own costs.
The Court of Appeal dismissed the Slades’ appeal, upheld the primary judge’s findings, and granted the cross-appeal regarding costs, reflecting the substantial success of the Broses in the litigation.
E. Implications of the Decision
The case highlights the principle that when a person reasonably relies on assurances such as promise of property ownership and acts to their detriment, the court may enforce those assurances through equitable remedies like a constructive trust. This ruling emphasises that The Brose’s decision to relocate and commit to the Family Business was justifying the enforcement of the Slade’s promises. Additionally, the court’s decision to include a monetary adjustment in favour of the Slades illustrates the judicial effort to achieve a balances and fair outcome, ensuring that the accelerated acquisition of the property interest was addressed.
RN LEGAL has the expertise and experience in dealing with Wills and Estates disputes including promissory estoppel. If you or someone you know requires assistance, please call RN LEGAL on [02] 91919293 or mail@rnlegal.org.