Estoppel Claims

Estoppel is an equitable remedy made to enforce claims of promise which have been made. There are two types of Estoppel claims which can be made:

1. Promissory Estoppel; and
2. Proprietary Estoppel. 

Estate planning is essential when it comes to preventing claims of estoppel being made over property.

Promissory Estoppel 

Promissory Estoppel is an equitable doctrine and action to enforce a promise made by the deceased to another person, where that person has acted to their detriment relying on that promise and suffered loss as a result.  Proprietary estoppel is relevant in estate planning because it operates an equitable relief mechanism. If you have been made to believe that you have an interest in property, and the owner of that property is deceased, then proprietary estoppel is used as mechanism or a ‘shield’ to protect your interest in that property. 

Promissory Estoppel applies to any property, including chattels and choses in actions. The property is usually in the context of land, in the form of a house. There are three elements that need to be proven for a successful claim of Promissory Estoppel to be made: 

1. There was a promise; 
2. There was a reasonable belief in and reliance on the promise; and 
3. The promisee suffered loss or damage because they relied on the promise.

It is important to note that promissory estoppel may only used as a defence and not a claim as to a person’s interest in property.  

Proprietary Estoppel 

Proprietary estoppel is where someone contributes to a property with the acquiescence of the owner so as to change the nature or structure of it such that they get a proprietary interest in it. It is a legal right that arises in relation to rights to use or own the property of another person. The aim of a proprietary estoppel claim is to prevent “unconscionable conduct” in property dealings.

The main difference between a promissory estoppel and proprietary estoppel is that unlike promissory estoppel, proprietary estoppel can be used as a cause of action or defence in a dispute. The party who has relied upon the assumption will need to prove the following elements for a successful claim: 

1. A clear promises or assurance has been made on the land; 
2. The promise or assurance was relied on; and 
3. A reasonable reliance on the assurance or promise caused the claimant to suffer detriment. 

When there is a claim regarding estoppels, the court will look back and take everything into consideration when deciding an outcome to whom interest will be given. 

Constructive Trust 

A constructive trust is an arrangement where one person holds property as its nominal owner for the benefit of one or more beneficiaries. A constructive trust is an implied agreement implied agreement that can be inferred with a course of conduct. It arises when it would be unconscionable for a person who holds a property/asset to deny that you or another person has a beneficial interest in that property/asset.  

The main difference between promissory estoppel and a constructive trust is that a constructive trust arises in the operation of law. The trust is implied in the by the Court. The court determines that the owner of the asset is a constructive trustee for the benefit of the true owner, and there is no formal trust document or agreement. 

An example might be if you sold your home at the expense of taking care of someone else, in exchange for an interest in that property to be placed in the will. Upon that person’s death, if you are not in the will, you may be able to make a successful claim in the property by way of a constructive trust.  

The important thing about all types of estoppels is that they bring a share in property outside the estate, so the claimant is protected against competing family provision claims by remaining beneficiaries. Here at Green & Associates Solicitors, we can assist you with your estate planning to potential estoppel claims being made on your property. 

Contact us on (02) 8080 7585 for a free consultation.

Green & Associates Solicitors Experience and Success 

• We have turned family provision claims into successful proprietary and promissory estoppel claims, bringing property out of the estate pool the subject of competing claims and granting it to our client without compromise;
• We have raised successful estoppel claims dating back decades with scant evidence, giving rise to acquisition compensation claims against Government claimants.

We also provide in-house advice to companies on a range of matters, including:

• employment-law issues (i.e. enforcing or dispute a restraint of trade clause for previous or new employees);
• compliance and regulatory issues (i.e. licencing and underquoting breaches)
• criminal matters;
• property matters;
• defamation proceedings; and
• all types of commercial matters (i.e. drafting shareholder agreements).