Winter & Anor v Winter

Factual and Procedural Background

The claimants and the defendant are brothers involved in a dispute over the disposition of their father's estate under a will dated 30 April 2015 (the "2015 Will"). The primary asset in the estate was the father's share in a family market garden business operated as a partnership since 1988 and later partially transferred to a company. The father died in 2017, leaving the residue of his estate, including his business interests, to one son, contrary to prior understandings.

The claimants challenge the 2015 Will on two principal bases: first, that their parents made mutual wills in 2000 that should bind the estate; second, that proprietary estoppel applies due to assurances made by the parents that the sons would inherit equally if they committed to working in the family business. Alternative claims based on constructive trust and contract to make a will were not pursued, and there was also a claim to enforce an option to purchase the father's partnership share under the partnership agreement.

Over many years, the sons worked in the family business for low remuneration, reinvesting profits to build the business for their futures. Relations deteriorated around 2013-2014, leading to financial difficulties and a breakdown in cooperation. The business ceased trading after the father's death, and the assets have been or are to be sold. The claimants have received substantial distributions from the business, including ownership of farms purchased with those proceeds.

Legal Issues Presented

1. Whether the father's estate is subject to a constructive trust based on mutual wills made with the mother in 2000.
2. Whether proprietary estoppel arises from assurances made by the parents to the sons regarding their future inheritance of the family business assets.
3. Whether the claimants validly exercised an option under the partnership agreement to purchase the father's share.
4. What is the appropriate remedy if proprietary estoppel is established.

Arguments of the Parties

Claimants' Arguments

• The parents made mutual wills in 2000 that created binding obligations on the survivor not to change the testamentary dispositions.
• Proprietary estoppel applies because the parents assured the sons that if they committed to the family business, they would inherit the business and its assets equally.
• The sons relied on these assurances to their detriment by working long hours for low pay and reinvesting profits rather than seeking alternative careers.
• The option to purchase the deceased partner's share under the partnership agreement was validly exercised by the claimants.

Defendant's Arguments

• The 2015 Will reflects the father's true testamentary intentions after a falling out with two of the sons.
• The assurances made were limited to the sons receiving equal shares alongside their parents during the parents' lifetimes, not to an equal inheritance after their deaths.
• The substantial financial benefits and assets already received by the claimants negate any claim of detriment.
• The mutual wills claim fails as there was no binding agreement preventing the survivor from changing their will.
• The purported exercise of the option under the partnership agreement was ineffective because it required all remaining partners to act jointly.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully examined the evidence of assurances made by the parents to the sons over a period of approximately 40 years. It found that the parents repeatedly encouraged the sons to work in the family business "for their futures" and emphasized equality among the sons. The court concluded that these statements were intended as assurances that the sons would ultimately inherit an equal share of the family business and its assets.

The court acknowledged the informal and long-term nature of the assurances, recognizing the difficulty witnesses had in recalling specific instances but found the totality of the evidence sufficient to establish clear enough assurances to support proprietary estoppel.

Reliance was established by the sons’ lifelong commitment to the family business, working for low remuneration and reinvesting profits, motivated at least in part by the parents' assurances. Although the sons received substantial financial benefits, including shares in the partnership and company and ownership of farms, the court held that this did not negate the existence of detriment. The detriment was not purely financial and included the lifelong commitment and opportunity costs of alternative careers.

The court rejected arguments that the breakdown in family relations, the winding up of the business, or the increased value of assets negated unconscionability. It found that it would be unconscionable for the father's estate to renege on the assurances after such long reliance.

Regarding the mutual wills claim, the court found insufficient evidence of a binding agreement preventing the survivor from changing their will, emphasizing the absence of explicit mutual wills language or legal advice to that effect.

On the partnership option to purchase the deceased partner's share, the court held that the option could only be exercised jointly by all remaining partners and that the claimants’ purported exercise was ineffective.

In remedy, the court adopted the leading principle that the promisor should be held to the promise unless the remedy is disproportionate. Given the assurances extended to the parents' share of the business, the claimants are entitled to an equal one-third share of those assets.

Holding and Implications

The court held that proprietary estoppel arose in favor of the claimants based on assurances made by their parents that, if they committed to working in the family business, they would ultimately inherit equal shares of the business and its assets. These assurances were found to be clear enough, relied upon to the claimants' detriment, and it would be unconscionable to allow the estate to repudiate them.

Accordingly, the father's share in the partnership and his shares in the company are to be divided equally among the three brothers.

The court rejected the claim that the parents made mutual wills binding the survivor not to revoke, finding insufficient evidence of such an agreement.

The purported exercise of the option to purchase the father's partnership share under the partnership agreement was found ineffective due to the requirement for joint exercise by all remaining partners.

The decision directly affects the distribution of the father's estate among the brothers but does not establish new precedent beyond applying established principles of proprietary estoppel, mutual wills, and partnership law.