The Weekly Advertiser

‘It’s the law’ — A reminder to put plans in writing

its the law by patrick smith 2018 (1)

I recently assisted two different groups of farmers succeed in claims in the County Court for farmland worth about $4-million.
Both claims were in the same area of law and, importantly, not based on a well-known cause of action.
I believe there are likely to be many people in the Wimmera who have similar potential claims.
Many people would be familiar with well-known causes of action such as ‘breach of contract’ or ‘negligence’ but would not have heard of the cause of action relied on in these recent cases – ‘proprietary estoppel’.
Estoppel is a difficult area of law to understand but can be used when someone promises something to another person and then does not fulfil that promise.
Both of my cases involved the promise of a gift of substantial farmland from parents to their children.
It is not uncommon for farming parents to make promises to their children that they will receive the family farm when they are older.
However, proving such a statement was made will not be enough for a claim of estoppel to succeed.
To be successful, a plaintiff must establish that not only was such a statement made, but also that they relied on the statement to their disadvantage.
In both of my cases, the plaintiffs suffered detriment through significant unpaid work for their parents and through expending money improving the land due to their assumptions that the land would be theirs.
In both cases, the court accepted that this detriment was enough for the claim to be made out.
I believe these two cases provide two important lessons.
Firstly, speak with a solicitor if you feel you have been hard done by, even when unsure whether any cause of action exists to help you.
This visit should be made sooner rather than later as limitation periods exist for most types of claims. This limitation period could prevent court proceedings being initiated if left too long after a claim arose.
And second, establish a written succession plan.
Many farmers in the Wimmera work for their parents in similar arrangements and it seems most of these arrangements work out when the parents follow through on their promise to transfer the land.
However, in my two recent cases the transfer was not made and legal proceedings were required to ensure the transfers would occur.
If you are in a family business, I hope these cases encourage you to speak to your professional advisers about putting a written succession plan in place.

The entire May 8, 2019 edition of The Weekly Advertiser is available online. READ IT HERE!

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Posted on May 15 2019

Posted by on May 15 2019. Filed under Community. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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