Estoppel and the Oaks Cottage: The High Court Decision in Sidhu v Van Dyke [2014] HCA 19

In Sidhu v Van Dyke [2014] HCA 19 (16 May 2014) the High Court of Australia has dismissed an appeal from the Supreme Court of New South Wales Court of Appeal (see Van Dyke v Sidhu [2013] NSWCA 198 (1 July 2013)), where it had been found that Mr Sidhu (the appellant) was precluded from departing from assurances he had made as to the transfer of certain real property to Ms Van Dyke (the respondent).

Background

The respondent and her then husband had moved into a property in 1996 with a house on it known as the “Oaks Cottage”. The house was located on a block of land known as the “Homestead Block” owned by the respondent and his wife. In 1997, the appellant and the respondent started a relationship, out of which the appellant gave assurances to the respondent that he would subdivide the land on which the cottage stood and transfer the cottage to her once the land had been subdivided.

The respondent continued in her relationship with the appellant, performing unpaid work on both the Homestead Block and Oaks Cottage and in that time did not pursue gainful employment elsewhere. As well the respondent divorced her husband in 1998 and did not seek a property settlement from him; however, by 2006, the relationship between the appellant and the respondent ended and the appellant refused to transfer the property on which the cottage stood to the respondent.

Trial Proceedings

The respondent initiated proceedings in the Supreme Court of New South Wales (see Van Dyke v Sidhu [2011] NSWCA 187 (1 July 2011)), claiming that the appellant was estopped from departing from his assurances on the basis that the respondent had acted in reliance on those representations to her detriment. At trial the Supreme Court dismissed the respondents claim on the grounds that the trial judge was not satisfied that the respondent had acted to her detriment in reliance on the assurances given her by the appellant.

The Court of Appeal

The New South Wales Court of Appeal (see [2013] NSWCA 198 (1 July 2013)) allowed the respondent’s appeal. It held that, where inducement by the promise may be inferred from the respondent's conduct, there was a presumption that the respondent acted to her detriment in reliance on the appellant's representations. The Court of Appeal found the appellant failed to rebut that presumption and thus found that the appellant was precluded from departing from his assurances. The appellant was ordered to pay the respondent equitable compensation in an amount to be assessed on the “market value” of the Oaks property.

The High Court

The appellant sought special leave and appealed to the High Court which has by a unanimous decision dismissed the appeal. The High Court found that the New South Wales Court of Appeal had erred in proceeding on a presumption that the respondent had acted to her detriment in reliance on the appellant's representations. The respondent carried the onus of proof in relation to her detrimental reliance, but nevertheless, the High Court concluded that the respondent's evidence at trial had established that she had acted to her detriment in reliance on the appellant's representations. As a result the respondent was entitled to equitable compensation in the amount to be assessed by reference to the value of the Oaks property. 

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Sidhu v Van Dyke [2014] HCA 19 (16 May 2014)

Van Dyke v Sidhu [2013] NSWCA 198 (1 July 2013)

Van Dyke v Sidhu [2011] NSWCA 187 (1 July 2011)