For many people, their home is their largest asset. It is not unusual for people to have discussions with their children or other family members or friends about who they want to inherit their property when they die. However, difficulties can arise when these wishes are not recorded in a valid will. If somebody was promised the family home, but this was not reflected in the will or there was no valid will and they don’t inherit it, then they may be left with no option but to bring a claim in “proprietary estoppel”.
The following elements are needed for a successful claim based on proprietary estoppel:
- a clear assurance or promise;
- the person bringing the claim has relied on the assurance or promise; and
- the person bringing the claim has suffered detriment (i.e. they have been disadvantaged) because they have relied on the assurance or promise.
In other words, somebody has been promised the family home (or another asset), and has acted to their detriment, relying on the fact that the promise would be upheld.
If all of the elements are proved, then the Court will do what is necessary to avoid an unconscionable (or unfair) result.
The third element (detriment) is often demonstrated by showing financial loss, such as working for a low wage or giving up a job. However, detriment does not have to be financial. The requirement for detriment could be satisfied by, for example, the person bringing the claim showing that they gave up opportunities, or changed the course of their career.
Many proprietary estoppel cases relate to farms, with the classic example of a proprietary estoppel case being that the eldest child agrees to work on the farm for a low wage (giving up alternative career opportunities), relying on a promise that one day they will inherit the farm, only for there to be a family disagreement and for the farm to be left to someone else.
However, proprietary estoppel is not limited to cases involving farms, and it can arise in a wide range of scenarios. A recent case concerning the estate of Irene Chung demonstrates how proprietary estoppel can apply to a normal family home.
Irene died in 2016 without a will. Under the intestacy rules (which govern who inherits when there is no valid will), Irene’s estate is divided equally between her three children. One of the children, Robert, claims that he was promised the family home (where he has lived for over thirty years) in return for looking after his parents.
Robert argued that he had suffered detriment by giving up his career to look after his father, and later his mother. Robert said that he had hopes of a career in the film industry, which he gave up to work in a local Job Centre when he moved home to look after his parents. Robert’s siblings dispute that he had any hope of a career in the film industry or that he provided any care to their parents, describing him as a liar and a financial drain who had relied on Irene to do his washing and cook his meals until she became too ill to do so. Robert’s siblings also say that it would have been out of character for their parents to make any promises about the house.
Judgment has not yet been given, so it remains to be seen whether Robert has established all of the elements needed for a successful proprietary estoppel claim. Nevertheless, the case provides a useful example of how proprietary estoppel can apply to the family home, for example when one child has given up career opportunities to care for their parents.
If you have any questions about proprietary estoppel, then please get in touch and a member of our specialist team will be happy to assist.