Intestacy, estoppel & the unknown child

Where a party acts on “an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff”, the Court may grant relief to vindicate the assumption in whole or in part: Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at 112; [1999] HCA 10 at [6] (Gleeson CJ, McHugh, Gummow and Callinan JJ); in Trentelman v The Owners – Strata Plan No 76700 [2021] NSWCA 242; (2021) 106 NSWLR 227 at 257; [2021] NSWCA 242 at [116][117] Bathurst CJ set out the elements to be proved:

(1) An owner of property (the representor) has encouraged another (the representee) to alter his or her position in the expectation of obtaining a proprietary interest; and

(2) The representee has relied on the expectation created or encouraged by the representor; and

(3) The representee has changed his or her position to their detriment; and

(4) The detrimental reliance makes it unconscionable for the representor to depart from the promise or representation.

As soon as there has been a detrimental reliance the party who created the expectation is bound by an estoppel by encouragement. The Court judges this objectively and the detriment must be material.

Background

Richard John Janson (the deceased) aged 67 died on 23 April 2019 in a car accident after he suffered a brain aneurysm while driving. The deceased was survived by his mother, Valerie his brother, Kevin The deceased was also survived by two persons whom the Court has found to have played a significant role in the lives of the deceased and Valerie – Raymond and Francine Daniel.

The deceased died intestate. Letters of administration of the deceased’s estate were granted to Valerie on 18 September 2019. The effect of the intestacy provisions in the circumstances was to make Val the sole beneficiary of the whole of the deceased’s intestate estate.

The primary assets in the deceased’s estate are two real properties at Merrylands West and North Richmond. There are two adjacent parcels of real property at Merrylands West (No 36) and the adjoining property, owned and occupied by Valerie at the date of her death (No 34). Raymond has lived in the deceased’s property at No 36 since 2005.

Raymond, the plaintiff in Daniel v Athans [2022] NSWSC 1712 claims to have been a close friend and, a member of the deceased’s household and dependent on the deceased for his accommodation from 2005 until Richards’s death. Although still married, Raymond and Francine are separated but remain friends, and Francine says she was, for some time, Val’s carer.

Luke Athans, the defendant is Richard’s biological son. Luke’s existence was unknown to Val, Kevin, and Raymond until April 2020 when he first met with Val. The parties now agree, based on subsequent DNA testing, that Luke is Richard’s biological son and is entitled to the whole of the intestate estate.

Raymond and Val were put on notice of the results of two DNA tests of Luke in February 2021 and June 2021. Raymond first sought legal advice in respect of the consequences of Luke’s appearance in late June 2021.

Luke’s appearance dissolved the basis:

  • for the grant of letters of administration to Val, and to her entitlement to the whole of the deceased’s intestate estate and
  • which Raymond, who had been living in No 36 with Val’s consent, could continue to reside in that property.

The proceedings

Raymond commenced proceedings by statement of claim on 10 July 2021 based on equitable estoppel arising from a series of representations the deceased made in respect of his occupation and, later, ownership of No 36. seeking :

  • a declaration that Luke as the administrator of the deceased’s estate holds No 36 on trust for Raymond and
  • an order that No 36 be transferred to Raymond.

Alternatively, Raymond seeks an order that the administrator of the deceased’s estate pay equitable compensation to Raymond, and further an order for further provision from the deceased’s estate under Ch 3 of the Succession Act 2006 (NSW). The plaintiff acknowledged that the family provision application had been brought out of time; an order of the Court is required to commence that application.

Luke filed his defence on 29 July 2021.

Val made her last will on 30 October 2021 (Val’s 2021 Will) gifting Francine a 50 per cent share of her estate. Val died on 6 November 2021 with probate granted to Francine on 28 April 2022. Before her death, Val made three affidavits which although read in the proceedings could not be cross-examined.

Raymond pleaded his equitable estoppel claim in two tranches, each of which consists of a pleading as to representations made by the deceased to Raymond and a subsequent pleading as to Raymond’s response to these representations in the form of work and assistance rendered to the deceased and Vall.

The first tranche concerns what the pleadings refer to as the “2005 Representations”, in late 2004 the deceased told Raymond that he would be able to occupy [No 36] as long as he wished if he:

a. looked after Val when the deceased was not around;

b. helped the deceased to clean up [No 36]; and

c. assisted to pay the bills and rates;

Raymond submitted that, from early 2005 to 2016, Raymond rendered “Initial Work and Assistance” in respect of No 36 and of Valerie in reliance on the 2005 Representations. The deceased should have known Raymond undertook those tasks in reliance on those representations

The second tranche refers to the “2016 Representations”, in early 2016 the deceased told Raymond that:

a. he would give [No 36] to Raymond.

b. [No 36] belonged to Raymond.

Importantly Raymond submitted between 2016 and his death, the deceased explained to friends that [No 36] belonged to Raymond. Additionally the deceased had conversations with Val in Raymond’s presence concerning the arrangements to transfer ownership of [No 36] to Raymond.

Luke was unable to give any evidence that the Court felt was persuasive concerning the events that Raymond alleges gave rise to the equitable estoppel in respect of No 36.

The decision

The Court concluded that the deceased intended that Raymond would be the recipient of his property at No 36. Luke, as the administrator of the deceased’s estate, holds No 36 on constructive trust for Raymond. Although the Court found it unnecessary to determine the alternative family provision application, it held that it was appropriate for the sake of judicial efficacy and to provide further context to the equitable estoppel claim to set out the factual matters bearing on the family provision claim; at 183-195

Although Richard was survived by his mother, brother, and two close friends who were dependent on the deceased for accommodation he did not leave a will and hence died intestate. The effect of the intestacy provisions was to make Val and then Luke the sole beneficiary of the whole of the deceased’s intestate estate. If Richard had made a will his estate could be distributed as he wished.

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