Proprietary Estoppel is a principle that is used in legislative cases to allow individuals to gain certain rights over property that legally belongs to someone else. The principle can be applied when the legal owner of the property enforces their own rights, as the property owner, in a way that is unfair to another party that has an interest in the property.
The principle applies when a property owner implies to another party that they will obtain an interest in their property. This is taken as an assumption or expectation from that party and on the basis of this assumption, that person alters their own position or acts to their own detriment. In the event that they do not receive what they have been promised, a Proprietary Estoppel claim may be made.
Proprietary Estoppel claims are often associated with the agricultural sector. To bring a Proprietary Estoppel claim, it is necessary to show that:
- a promise has been made
- the promise was believed and relied on
- reliance on the promise caused the claimant to suffer detriment
‘Cowshed Cinderella’ Proprietary Estoppel Claim
Many proprietary estoppel cases have been highlighted by the media. A particularly high profile case of Davies v Davies , nicknamed ‘Cowshed Cinderella’ from the UK is an excellent example. In this case, Eirian Davies worked on her parents’ farm for 25 years, being paid low wages under the promise of her parents that she would inherit the 182 acre farm. Davies had two sisters who she describes as being “out having fun” while she worked.
Eirian and her parents had a dispute and she moved away from the family home in 2012. At this time her parents changed their will so that all three sisters would inherit the farm equally. Eirian made a claim against her parents at this time on the basis that they did not keep their promise, which she had relied upon. Eirian also argued that she had acted to her own detriment in order to fulfil her side of the deal.
The High Court decided that Eirian had a valid Proprietary Estoppel claim and was entitled to a share of the farm, awarding Eirian £1.3m to reflect the work and sacrifice she had made.
However Eirian’s parents have since lodged several appeals and most recently succeeded in reducing her award to £500,000.
Proprietary Estoppel and Contesting a Will
Many will contest cases are the subject of valuable estates that include farms and/or land. In cases where the will contains different terms to those anticipated by a beneficiary, a Proprietary Estoppel claim may be lodged. A claim for Proprietary Estoppel can be brought if a will does not honour promises made by the deceased. In particular, if the claimant believes their reliance on that promise has caused their detriment.
A prime example of a successful Proprietary Estoppel claim in Australia is in the Victorian case of Rasmussen v Rasmussen  1 VR 613. In this case, the Court heard the claim of the son of a farmer who was promised a large portion of land when his father passed. The son worked on his father’s farm for no wages for a number of years under the promise that he would eventually inherit the land. However when the father died, this promise was not upheld in his will. The son lodged an equitable estoppel claim and was awarded the land.
The Learnings from These Cases
Proprietary Estoppel cases often involve farmland, so it is important that farm owners clearly and transparently establish a plan as to what will happen to the farm in the event of their passing. Their will should detail a list of all the farm assets and land with clearly defined wishes as to who the beneficiaries will be and what they are entitled to. It can also be beneficial to discuss the will with the beneficiaries before passing so that there are no surprises when they eventually do see the will. This can reduce the likelihood of a will dispute.
Another consideration is for people who own another form of family business as the same principles may be applied. Family business owners should always ensure that they make an up-to-date will in order to avoid broken promises causing problems for the family after their death.