Promissory Estoppel & the Conditional Gift

Promissory estoppel is an equitable doctrine in which the promisee who relied upon a reasonable promise who has subsequently suffered loss may recover damages from the promisor

Faith Richardson was born in 1934; married at the age of 19 and had four daughters, Gloria, Vicki, Grace and Fiona.

Following the death of her ex-husband in 2010, Faith sold property she owned in South Grafton and commenced living with her daughter Fiona’s family at a rental property in Orange.

Fiona and her husband John have three children: twins born in 1999 and a daughter born in 2009.

In late 2011 Fiona and John purchased a property in Orange (”the property”) for $470,000, of which Faith contributed $220,000 pursuant to a Deed of Family Arrangement (“the Deed”).

The Deed conditionally gave $220,000 to Fiona and John to assist them to purchase the property. By the Deed, Fiona and John undertook to care for Faith, allow her to live with them and to fund her transition to an aged person’s unit or care facility when necessary.

Fiona and John subsequently sold the property purchasing a new property about 25 kilometres outside of Orange. Faith argued that this move occurred without her consent. After initially moving with Fiona and John; Faith later moved out and has not returned to live there.

Faith commenced action against Fiona and John seeking the return of $220,000, arguing it was a “conditional gift”

At first instance the Court held that not only did Faith agree to the move, she was enthusiastic about it; therefore Faith was estopped from making the claim, and was not entitled to the return of her “conditional gift”, nor to the higher amount of $345,000 to which she alleged her original contributions had grown by reason of Fiona and John’s investment in the Orange property.

On appeal Faith’s submissions were dismissed unanimously by the Supreme Court of NSW.

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