Proprietary Estoppel

You would have to prove that you were misled into believing that the deceased would give you the digital assets upon their death and that you depended on this promise or guarantee for this to be successful.  

If you thought you would receive the digital assets upon the dead’s death, and neither you nor the deceased attempted to transfer the assets before they passed away, it would be a detriment. It is then your responsibility to prove why breaking that pledge would be unacceptable for the deceased.

Although the courts will generally respect the parties’ expectations, if the parties are unclear about what they want, the court will begin by considering the harm that the parties have caused to each other. Therefore, proprietary estoppel claims do not always result in the property transfer to the claimant.

Proprietary estoppel, a legal concept of great import, arises when one party pledges to grant another party property or an interest in property, but fails to do so effectively.

This occurs despite the first party’s knowledge that the second party will engage in actions that are detrimental, such as spending money, or that the second party’s actions will be based on the anticipated or promised gift, to the extent that it would be ‘unconscionable’ to enforce the expectation.

Adam grows up on a farm with his mother and father as well as his sister, Jennifer. Adam often helps out with the farm during his childhood and teen years. He does well at school and achieves very good grades, and receives an offer from a good university to study accounting.

When Adam is 18, his parents assure him that if he stays on the farm and learns how to run it, he will inherit the farm when they die. On this basis, Adam decides not to go to university and continues to live and work on the farm. He does not earn as much as he otherwise would have if he had continued his studies and become an accountant, however he is assured over the years that he will inherit the farm later in his life. Adam continues to work on the farm for the next 20 years.

Adam begins to have serious disagreements with his parents. Due to these arguments, his parents decide to amend their wills and leave everything they own to Jennifer. Jennifer had also achieved good grades at school and continued her studies at university. She has since become a doctor.

It is only after Adam’s parents have died that he is told that the farm will in fact be inherited by Jennifer.

Adam may therefore be able to claim proprietary estoppel in relation to his rights in inheriting the farm. He would need to show that an assurance was made by his parents, and that he relied on that assurance and suffered detriment due to that reliance. This is likely to be made out in Adam’s case; his parents specifically assured him that he would inherit the farm, and he declined an opportunity to become an accountant and earned less than he would otherwise have done due to the reliance on his parent’s assurance.

This could happen even where the assurance is not an active statement – if Adam’s parents had not specifically stated that they would leave the farm to Adam in their will, but they knew that he was expecting to do so and said nothing to dispel this belief, Adam may still have a claim.

If Adam were able to show that he had placed reliance on his parents assurance and had suffered a detriment due to that reliance, the court would have discretion over the remedy that would be given. It would likely be seen as very unfair (or unconscionable) if Adam received nothing as per his parents’ wishes, and as such the court would attempt to establish a fair remedy for him. This remedy would be open to the court, and could range from granting Adam the farm itself, financial compensation for the loss of the farm or some other fair remedy.