In a recent Decision in the Supreme Court of Queensland it was held that a deceased’s property was held by him on a Constructive Trust for the Applicant based on verbal promises that the deceased had made to the Applicant and which promises had been acted upon by the Applicant over the years.
The deceased who was the owner of the property died without a Will. He had no living relatives or other persons interested in his Estate.
The Applicant, who was not a relative, made Application to the Court for an Order in equity that the deceased held the property on a Constructive Trust for the Applicant on proprietary estoppel. The deceased and the Applicant had been living in New Guinea. The deceased advised the Applicant that he owned a property in Australia worth a lot of money and that he would give it to the Applicant if he let the deceased join the Applicant’s clan living on the family land and provided him with food, accommodation and other living needs. The Applicant agreed and they shook hands on the deal. The Applicant believed that the deceased had a property in Australia and that he meant to give it to him if he looked after him. The Applicant proceeded to look after the deceased on the family land in accordance with the promise until the deceased’s death in 2007. The Applicant said that he would not have allowed the deceased to live on the family land and would not have provided for what he needed if it was not for the deceased’s promise to give him or leave him the property.
The Applicant’s Application to the Court was opposed by seven Defendants who also asserted a right to the property on the basis that their grandmother had acquired the property by adverse possession and that she had then left it by Will to their father who had in turn left it to them. After the deceased had been left the property from his mother in 1974, their grandmother and her husband lived in the house on the basis she would pay the rates and utility bills. Her husband had died in 1978 and in about 1989 her son had moved into the property to live with her and remained there after her death in 2000 until his own death in 2017. The grandmother had left her Estate to her son who had left his Estate to his seven children being the Defendants in the proceeding.
The Court’s Decision
The Court dismissed the claim by the seven Defendants that their grandmother had acquired any interest in the property through adverse possession. The Court concluded that the grandmother was a mere licensee having the deceased’s consent which was never revoked to occupy the property under that licence. Accordingly they did not have any standing to mount a defence to the Applicant’s claim.
In respect of the Applicant’s claim the Court found that the fact that the agreement between the deceased and the Applicant had not been reduced to writing was no barrier to the Applicant’s claim based on proprietary estoppel. The Court found that the Applicant’s claim was based on the equity arising from the deceased’s conduct in making the promise that he did to the Applicant, in encouraging the Applicant over the years to believe that he would honour it and in allowing the Applicant to act to his own disadvantage in reliance on it and on that detrimental alliance by the Applicant in the belief that the promise would take effect. The Court found that the Applicant had established a right to relief based on proprietary estoppel. The Court stated that the property was impressed with a Constructive Trust from the time the Applicant began to act in reliance on the deceased’s promise so as to make it unconscionable for the deceased to resile from it. The Court then proceeded to make a declaration that the property was held on Trust for the Applicant.
There have been other cases in which Australian Courts have found that proprietary estoppel has arisen in connection with a promise, relating to land, notwithstanding that, not being in writing, the promise itself could not be enforced. Such cases have involved relatives working on farms as a consequence of having been led to expect that they will inherit or be given the property or parts of it. Other cases such as this one have involved carers who have been led to believe that they will be rewarded with an interest in property or who have provided funds or foregone rights in reliance on an expectation of such kind.