Proprietary estoppel by encouragement. It is possible to gain an interest in land because of encouragement of that belief by registered proprietor …
The recent case of Wheatley v Salmon  NSWSC 395 examined whether a plaintiff can claim a proprietary estoppel against the Registered Proprietor.
Briefly, the facts of the case were as follows:
• In 2003 Adele Wheatley and her brother Gregory Salmon guaranteed the repayment of a loan by Gregory’s company Marketing Masters Qld Pty Ltd from Westpac in the amount of $550,000.
• In 2005 the company went in liquidation and the Westpac debt was not paid. Ms Wheatley sold her home and paid the debt which was then $640,000. Although Ms Wheatley could have sued Mr Salmon for contribution she chose not to do this.
• In 2006 Ms Wheatley demanded that Mr Salmon buy her a home to make up for the loss of the home she sold to pay the debt to which Mr Salmon refused.
• In 2010 Mr Salmon and his wife decided to buy an investment property and Mr Salmon said to Ms Wheatley that she could live in the home rent free until she got on her feet provided she pay the utilities and expenses associated with the property. Adele believed that the property was for her to compensate her for the earlier loss.
• In 2018 Mr Salmon and his wife served on Ms Wheatley a notice terminating the tenancy. Ms Wheatley commenced proceedings claiming that the Registered Proprietors were estoppel from denying that the property was hers.
His Honour Justice Kunc, held that the plaintiff had not been encouraged to believe that she had an interest in the property. She rather hoped that would be the case. His Honour found that there was no doubt that the property was purchased as part of an investment portfolio.
His Honour set out what must be established to prove that there is an estoppel by encouragement, namely:
1. a representation by the defendant to the plaintiff that the plaintiff has or will have a proprietary interest in property owned wholly or partly by the defendant (representation);
2. the plaintiff forms an assumption that he or she has or will have a proprietary interest in that property (assumption);
3. the conduct of the defendant in making the representation causes or materially contributes to the formation of that assumption by the plaintiff (reliance);
4. the plaintiff takes action in change of his or her position in reliance on that assumption (inducement);
5. the plaintiff would suffer detriment if the defendant were permitted to depart from the assumption (detriment); and
6. it would be unjust or unconscionable for the defendant to depart from the assumption (unconscionability).
His Honour held that the Plaintiff failed to proved the necessary elements and she was not granted the relief sought.
Unfortunately for Ms Wheatley an action against Mr Salmon for contribution was statute barred.
What is the meaning of “best endeavors”…
An expression that often appears in contracts is that party will use its best endeavours to achieve an end result. The Supreme Court has held that this obligation is to be understood as an obligation to do all that reasonably can be done in the circumstances to achieve the contractual obligation but no more.
If the expressions used is “reasonable endeavours“ the courts have held that this obligation is not as high. The difference seems to be that best endeavours imposes an obligation to do everything that is reasonably possible to bring about the stated end, whereas reasonable endeavours simply requires a person on whom the obligation is placed to take steps that a reasonable person in the circumstances would take to achieve that end.