Published in the Coffs Coast Advocate on 16 May 2015.
Jim and Jane owned a grazing property jointly. The grazing business was owned by a family company of which Jim, Jane and their eldest son James were shareholders. Jim and Jane have another child, Julie who grew up on the farm but was not involved in the family business.
In recognition of James’ work on the farm, Jim and Jane transfer the property to James, together with their shares in the family company.
The family company also owned a holiday house which was later transferred into Jim and Jane’s sole names.
When Jim and Jane pass away, James discovers that the holiday house has been left to Julie.
He states that before they died, his mother and father promised that half the house would be left to him and the other half would be left to Julie.
He states that it was on the basis of this promise that he did not object to the transfer of the house from the family company into his parents’ names.
James takes the matter to court, seeking a declaration of trust, based on “promissory estoppel”, claiming that he is entitled to half of the proceeds of sale of the holiday house.
Julie argues that James’ evidence regarding the alleged promise should not be believed because it cannot be independently corroborated.
The court states that if Jim and Jane had promised half the house to James, the promise could not be withdrawn if it was “unconscionable” for them to do so and if James had “detrimentally relied” upon the promise.
The court states that a promise of this nature must be “clear and unambiguous” and it must be reasonable for the promise to be relied upon.
After considering all of the evidence during the course of a four day hearing, the court found that Jim and Jane’s alleged promise was not enough to constitute an “irrevocable promise”.
The court ruled that in the circumstances, even if the promise was in fact made, Jim and Jane were able to change their minds. It ruled that “mere disappointment” was not enough for the court to rule in James’ favour and his claim was dismissed.
