Words stand up

Catchwords: Equity, constructive trust, clear words, express representation, induced son, detriment, equitable estoppel, Lieschke, Austin J, Walton Stores

A farming son was successful in enforcing his father’s verbal statement made in 1975 about the farm. “That’s yours now. You pay the rates.” (Lieschke v. Lieschke unreported Supreme Court NSW 12/8/2003 per Austin J)

The son did pay rates from 1975. He improved the property from 1975 to 1980 by clearing dead trees, purchasing a pump, laying poly pipe, building a dam and fences and improving pasture and trees. These amounted to “substantial improvements” for that block of land. The father paid no wages to his son, nor did the son receive any share of farm income.

The father died and his estate was gifted to the mother. Then the mother died but made the other brother and sister executors of her will and gave the son only a one 3rd share as a tenant in common. Probate was not granted to either of these 2 wills. The farm was then sold.

The case was decided on the basis of “equitable estoppel”. The words in 1975 amounted to an “express representation” that the farm was now the son’s land, rather than a mere statement of intention to make a gift later. The words were clear and unambiguous and the rates notice was handed over at the time.

The father “induced” the son to expect that he would transfer the land at some stage. The father was not free to withdraw from his representation. The son acted in “a reliance” on the representation and almost immediately started improvements and paid the rates. His father would have known about the improvements. It the son were not the absolute owner, he would suffer “detriment” because he would not get two thirds of the proceeds of sale. The father failed to act in his lifetime to avoid a detriment to the son and to fulfill this expectation.

The Court applied the principles in Walton Stores v. Maher, imposed a “constructive trust” over the whole of the proceeds of sale and declared that they were the son’s absolutely.

Clear words in such circumstances can stand up; overcome an unfavourable will and the usual requirement for writing. So you have if you have been ignored in a will consult your solicitor before rushing to kick the coffin.

Jonathan de Vere Tyndall

 

Article updated 7 January 2015, originally published in The Quirindi Advocate on 3 December 2003

Editors note: The articles published contain comment only and not legal advice, for which you should retain a solicitor. No responsibility is accepted for the accuracy of the contents.