What is Proprietary Estoppel and why did this interlocutory application fail?

Perez de la Sala v Perez de la Sala (No 5) [2026] NSWSC 556

Proprietary estoppel is a promise that becomes enforceable. A common example is: “If you stay and work in the family business, I will leave you the farm.”

If the person reasonably believes that promise, spends years working for low pay and gives up another career, it may be unfair for the promisor, or their estate, to keep the farm without recognising the promise.

Broadly, the person claiming the promise must show:

1. A sufficiently clear promise or assurance – not merely a family hope, general encouragement or prediction.
2. Reliance on that promise – the promise must have influenced what the claimant decided to do.
3. A real disadvantage – for example, working for inadequate pay, spending substantial money, moving countries or giving up valuable opportunities.
4. A connection between the promise and the disadvantage – the person must have suffered the disadvantage because of the promise. Something done before the promise cannot have been caused by it.
5. Unfairness in allowing the promise to be withdrawn – looking at the entire relationship, it must be seriously unfair for the promisor or estate to deny the promised benefit.

If those matters are proved, the court has flexibility. It does not automatically award everything allegedly promised; it gives the remedy necessary to prevent the unfairness.

What Christina alleged

Christina’s father died leaving an estate said to be worth approximately $504 million, but his will made no provision for her.

She alleged that, over many years, her father encouraged her to:

• move to Singapore;
• work in the family business;
• help conduct major litigation concerning family assets; and
• accept comparatively little remuneration.

She said he represented that the recovered family wealth would ultimately be divided equally among his children. One alleged statement in about January 2017 was:

“You and your brother and sisters are going to receive an equal share.”

Christina sought approximately one-quarter of the relevant family assets or settlement proceeds.

Why the proprietary-estoppel claim failed

The important qualification is that the Court was not deciding, after a full trial, that Christina was lying or that no promise had ever been made. The claim failed at the pleading stage: the documents setting out her case did not identify a legally workable claim clearly enough.

The central problem was that Christina described substantial sacrifices, but she did not properly connect the legally usable promises to the particular sacrifices supposedly caused by them.

There were several specific difficulties.

1. Much of what her father said was not pleaded as an actual promise

Many early statements amounted to advice or encouragement—for example, that Christina “should” move to Singapore or that there would be a place for her in the family business.

That is different from:

“If you move to Singapore and work for the business, I personally promise to give you one-quarter of my share.”

The court accepted that family assurances can develop gradually. Nevertheless, Christina still needed to identify when the discussions became a sufficiently clear promise and what her father had undertaken to do.

Her counsel ultimately accepted that most of the early statements were only background or “context”. Only two later statements were treated as possible promises.

2. Her major sacrifices happened before the promises on which she could legally rely

Christina relied heavily on matters such as her education, career decisions and move to Singapore in 2003.

But the potentially enforceable promises identified by her case were made in approximately 2011–2012 and 2017.

The simple timing problem was:

A promise made in 2011 could not have caused her to move to Singapore in 2003.

Once the earlier statements were treated merely as background rather than promises, the earlier life decisions could no longer constitute reliance on the later promises.

3. The later disadvantage was not explained with sufficient precision

Christina said that after 2011 she:

• helped fund litigation;
• assisted with the court proceedings;
• worked as a company director for minimum pay; and
• rejected requests to remove other directors.

But the pleading did not adequately explain matters such as:

• how much of her own money she lost;
• whether payments were repayable loans;
• what alternative employment or income she gave up;
• whether her directorship prevented her from doing other work; and
• precisely which action she took because of which promise.

Helping the companies or benefiting the family was not enough by itself. She needed to identify the personal disadvantage she suffered because she trusted her father’s promise.

4. Continued reliance after the family breakdown was implausible as pleaded

Christina became estranged from her father around June 2017. Communications indicated that her parents did not want her presence, and her father subsequently described one of her actions as the “ultimate betrayal”.

Despite this, her case alleged continuing reliance until 2020 or 2021.

The court considered it difficult to understand how she could continue making decisions because she expected her father to reward her once the relationship had broken down so seriously. That did not necessarily make continued reliance impossible, but it required a much clearer and more convincing explanation than the pleading provided.

5. The property and remedy claimed were not properly identified

Christina claimed one-quarter of approximately $502.7 million and company shares. However, the case did not properly distinguish between:

• shares owned by her father;
• assets owned by the companies; and
• cash or assets later transferred to other family members.

Owning shares in a company is legally different from owning the company’s underlying money and property. Her claim also failed to explain how particular assets could be followed, or “traced”, from her father into the hands of the other defendants.

The orders she asked the court to make therefore did not match the property interest her allegations might arguably have supported.

The practical takeaway

Christina may have had evidence of family expectations and even one or two potentially enforceable promises. But proprietary estoppel requires a clear chain:

promise → reliance → personal disadvantage → unfairness

Her pleaded case did not establish that chain. Most of her major sacrifices came before the usable promises, the alleged later disadvantages were not sufficiently explained, continued reliance after the family rupture was doubtful, and the property she wanted was not correctly identified.

Accordingly, the Court refused permission to file that version of the claim. This was a failure to present a legally coherent proprietary estoppel case, rather than a final factual ruling that none of the alleged events occurred.

Christina’s separate family-provision claim concerning her father’s estate remained on foot.

For more information on proprietary estoppel and estates matters, please reach out to our Wills and Estates Team on 8525 2700, or click here to request an appointment today.

Article by Rebecca Exley
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