Proprietary Estoppel

Succession planning is always an important consideration for any family. A recent court decision regarding inheritance planning, both on death and in relation to lifetime trusts, has put the cat among the pigeons; confirming that not only farming families, but any family considering succession and drafting complex wills should beware.

The recent case of Suggitt -v- Suggitt has just been decided in the Court of Appeal. It involved a farmer’s son, John, who was denied the right of inheriting the 400 hectare farm and farmhouse in his father’s will. John, had not only failed to graduate from agricultural college, but also squandered another inheritance. Therefore the father, presumably knowing John’s nature, left his entire estate to his daughter Caroline. The will contained the following clause:-

“I express the wish (without imposing a trust) that if at any time my son John… shall in the absolute opinion of Caroline show himself capable of working on and managing my farmland that she shall transfer my farmland to him”

Caroline presumably decided that John was not capable of doing so and, refused to grant him any part of her father’s estate; arguing that her father’s intention was that John was only to inherit the farmland if he demonstrated or proved his readiness and capability to farm the land. 

John disagreed and claimed that the farmland and the vast majority of the farm assets should be transferred into his name. He argued that his late father had promised this during his lifetime. Unfortunately John wasn’t able to provide any clear proof.

Sadly, the sorry tale was concluded at Court, with many, understandably, thinking that if the father had expressly stated John should receive no part of his estate, then John was left facing a steep climb to success. The majority, in this case, were proved wrong.

John’s challenge was to prove the late father had made clear and unconditional promises, on which he had relied. The court held that although the evidence did not prove the promises allegedly made to John by his late father, the Will remained a fair reflection of his actual wishes. Therefore, on the balance of probabilities, it was likely that the late father had made some kind of repeated promise to John that led him reasonably to expect that the farmland would be his after his father's death.

John showed that he had relied on these promises by continuing to work on the farm in return for payment at a lower rate than an agricultural worker would have expected, when he could have worked elsewhere at a higher rate. Therefore John was able to persuade the court that he should be granted the farmland and also a residential property. He was not successful in his additional claims for the remaining farm properties and business account monies.

The message is simple:- not only should succession planning be considered very carefully indeed, but also those who feel disadvantaged by their lot on the death of a relative should also carefully consider their position.

Birkett Long has extensive experience with these types of issues in particular: Lisa Cox who leads the contentious probate team. We would be pleased to assist on any of the issues raised by this recent case or more generally in relation to succession planning.