A son has successfully sued his parents for a broken promise to gift the farm to him when the parents die.
In 1999 the parents made promises to their children about how the farm was to be divided. The parents promised each of their 4 sons farming land. Each of the sons was to farm independently on the lands allocated to them. The sons were to pay the parents rent, take on business debt and on the death of the parents, the sons were to be given the lands.
Around 2013 the relationship between one of the sons, Stephen and the dad became strained. The dad no longer acknowledged Stephen’s entitlement to “Burracoorong” the land that had been promised to Stephen.
Steven applied to the court for orders that his dad held the land on trust for Stephen and for the land to be transferred to him.
The question before the courts was whether a verbal promise of an ultimate gift was binding?
The courts held that it was.
The argument centered around the principle of estoppel by encouragement. To prove this, three elements must be shown:
There was encouragement of an expectation of a future interest in the property. Here, the dad had told his sons they would ultimately be given the land.
There was reliance of the promise and a change in position. Steven relied on the promise by building his home on the land and working it for many years. Their whole lives had been planned around one day inheriting the land.
Detriment will be caused if the promise is not fulfilled. Having lived and worked on the land, the court found financial and personal losses were inevitable if Steven was not gifted the land.
The court went further. The land was not, as may be expected, to be transferred to Steven upon the dad's death. Instead the court ordered it be transferred immediately.