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Equitable Estoppel: Making a Claim on an Estate

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Equitable Estoppel: Making a Claim on an Estate

Equitable Estoppel:  You don’t always need a point of law to make a claim.

“Death separates us from those we love and cleaves us from our assets”… but what then?

An Executor has a duty to uphold the terms of a will subject to reasonable compromise.

Persons wishing to challenge a will usually:

  1. Commence proceedings pursuant to part 3 of the Succession Act 2006;
  2. Commence a will construction suit;
  3. Commence a construction suit capacity suit;
  4. Allege undue influence, or;
  5. Raise an equitable estoppel.

Equitable estoppel is when a claim can be made upon an estate despite not having a claim under law.  It provides for the consideration of issues of intent or the deemed “fairness” of a claim.

Zupicic v Angela La Camera Paino

An equitable estoppel arose in the matter of Lorena Zupicic v Angela La Camera Paino as Trustee for the Estate of the late Mario Novic [2018] NSWSC 692.

Mr Novic was born in Italy, and spent a period of time living in Croatia. He migrated to Australia in 1947,  purchased a property with the proceeds of his superannuation in 1994, and died in July 2017, aged 89 years.

A woman, who was born in Croatia, made a claim on the estate. She had lived with Mr Novic’s mother for a period of time as a child, and later migrated to Australia.  She formed a close bond with the deceased, and regularly visited him at his unit.

The Parties

The Plaintiff, (Claimant), gave evidence of working shifts to accommodate looking after Mr Novic and declining promotion opportunities to help cater for his needs. Furthermore, she gave evidence that she had regularly visited him at his unit, provided him with home cooked meals and clothing, and would take him to appointments. In addition, he would spend Christmas and Easter with her family and formed a close relationship with the Plaintiff, her husband and two sons. The Plaintiff’s husband renovated Mr Novic’s kitchen, at no cost to Mr Novic.

The Defendant, (Executor and Beneficiary), met Mr Novic in late 2009 initially acting as his carer. The Defendant ingratiated herself to Mr Novic and during the litigation denied being in a romantic relationship with him. Nevertheless, Mr Novic sent notes to the Defendant that indicated his infatuation with her.

The Facts

Over a period of time Mr Novic’s relationship with the Plaintiff and her family deteriorated.

Regardless, the Plaintiff’s husband had arranged for a solicitor to prepare a will for Mr Novic in June 2011. Consequently, the will was forwarded to Mr Novic though there is no evidence of that will ever having been signed.

Two later wills, in favour of the Defendant, were signed. As a result, the Defendant was appointed as Mr Novic’s Executor and sole beneficiary.

Concerning aspects of the case included a reverse mortgage taken over the property in July 2015, the unit having been unencumbered prior to that. The reverse mortgage was in the sum of $205,000.00. Amounts were drawn on it, including large sums of money paid to the Defendant. The Defendant produced evidence that Mr Novic was an inveterate gambler based on unaccounted for funds. However, the Court found Mr Novic had lived an austere life and refused to accept the Defendant’s evidence.

Fortunately for the Plaintiff, Mr Novic had a number of friends who were able to give evidence regarding his intention. Specifically, they said that Mr Novic had stated his intention that he wanted the Plaintiff to inherit his assets and in particular, for her two sons to benefit from his estate. This, and promises he had made directly to the Plaintiff, that she would inherit his estate, were sufficient for the Court to find a claim in the Plaintiff’s favour for equitable estoppel.

The Judgment

The Court made Orders in favour of the Plaintiff. Mr Novic had made promises to her that caused her to believe that she would inherit his estate. Due to her actions benefitting Mr Novic and the expectation created by him, the Court found the Plaintiff had relied upon Mr Novic’s representations to her detriment,  resulting in the Court raising, an estoppel in her favour.

This held not so much as to Mr Novic benefitting the Plaintiff with his estate, but more importantly, refused to deprive the Plaintiff of her expectation of inheriting his estate based upon a state of mind which Mr Novic had caused.

In the result, the Plaintiff had a trust declared in her favour for what was left of the Estate.

(The matter may be subject to appeal.)

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Koffels Solicitors & Barristers have a strong practice in issues of Family Provisions, Wills & Estates.

Should you be considering the defence of, or claim on, an estate, be sure to seek legal guidance as to your reasonable prospects of success.

When making a will, particularly in situations of;  complex property, succession and structure issues, be sure to get sophisticated advice to protect your legacy. What may be your perception as to who may be your rightful beneficiaries, may not be those of the Court if your estate is challenged.

 

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