Living On A Promise: The Court may sort out your Succession Planning if you don’t

A father (defendant) made numerous representations (i.e. promises) to his two sons (one being the plaintiff) between 2003 and 2011 that he would leave ownership of a 17,600 acre wheatbelt farming property to his sons in his Will. The plaintiff and his brother worked on their respective portions of farming land on the assumption they would be transferred that property. The defendant told the plaintiff that the farming property was the property on which he would be living and where his future was.

Each son also assumed one half of their father’s farm related debt, requiring the plaintiff to borrow $1.65 million for that purpose, as well as taking on one half of his father’s debt for various farming machinery. In addition, the plaintiff borrowed $1.25 million to acquire adjoining farming land. The plaintiff did not pursue any alternate career paths outside of farming.

The plaintiff suffered significant health issues as a result of high levels of stress. From 2011, the plaintiff was in a poor financial situation and the defendant reluctantly agreed to sell a portion of the property the plaintiff was farming. The relationship between the defendant and the plaintiff then began to deteriorate. The defendant asked the plaintiff to sign a lease over the farming property which the plaintiff worked on. The plaintiff did so, reluctantly, after the defendant threatened to kick him off the farming property. The plaintiff refused to sign another lease on its expiry and left the farming property.

The plaintiff commenced an equitable action, relying on the principles of the law of equity (i.e. justice), claiming that it would be unconscionable (i.e. unfair) for the defendant to refuse to transfer ownership of the farming property. The defendant denied any agreement that the land would be transferred to the plaintiff.

The W.A. Supreme Court found for the plaintiff and ordered that defendant transfer the farming property to his son.

We can assist if you require advice in respect of succession planning or a potential equitable action.