Expectation versus reality: could a relative’s expectation undo your best laid plans?

By Tom McMahon, Rachel Giudicatti, Bianca McCormack and Caroline Sakinofsky

A recent Victorian Supreme Court decision highlights the potential for children to dispute the documented intentions of their deceased parent, despite the deceased’s well-made plans regarding the control and ownership of their assets.

In the case, the Court determined a claim made by the children of a first marriage for assets accumulated by their deceased father before marrying his third wife. The children claimed these assets should go to them rather than the deceased’s widow.

Hall & Wilcox acted for the third wife, Faye Connock (Mrs Connock), who was ultimately successful in her defence of the proceeding.

Background

In July 2023, the Victorian Supreme Court dismissed the proceeding brought by Richard Anthony Connock (Mr Connock) on behalf of the children of the late Dr Richard Connock (Dr Connock) against Dr Connock’s widow, Mrs Connock.

Mr Connock claimed that the deceased and Mrs Connock created and encouraged an expectation in each other that their assets accumulated before their marriage would be separated and passed to their own children upon each of their passing (Asset Expectation).

In 2009, Dr Connock registered Mrs Connock as a joint proprietor of their matrimonial home, to ensure the home would automatically go to Mrs Connock by operation of law.^[1]

Dr Connock executed a Will in 2014, which detailed well-made plans in relation to the assets accumulated before his marriage to Mrs Connock, including:

• gifting his superannuation fund to Mrs Connock (a gift he insisted on including in his Will, despite advice from his solicitor that superannuation falls outside an estate);
• gifting proceeds from specified term deposits and bank accounts to Mrs Connock; and
• gifting $10,000 to Mrs Connock’s daughter.

Dr Connock also signed a handwritten note stating that ‘in addition to the components mentioned in my will‘, he would like Mrs Connock to have all of his Westpac bank accounts ‘to have & to manage as [Mrs Connock] thinks fit‘.^[2]  

Dr Connock did not make any mention or suggestion that, upon Mrs Connock’s death, the assets he wished to gift to her, or the matrimonial home registered in joint names, were to go back to the Connock children.

Proprietary estoppel

Despite Dr Connock’s efforts to tidy up his affairs before his passing, the children sought to undermine these well-articulated plans by advancing a claim in proprietary estoppel that there was an ‘Asset Expectation’ that ‘Connock money would be left to the Connock children‘. If successful, the effect of this claim would have been to override the written plans made by Dr Connock and divert ‘Connock assets’ back to his children.

Proprietary estoppel is an equitable doctrine that applies where a person creates an assumption that another person would receive an interest in a property and that other person changes their position or acts to their detriment because of that assumption. In such cases, the person who creates the assumption would be prevented from taking steps to reverse the expectation they have created.

Usually, proprietary estoppel can operate to enforce certain promises, such as where an individual contributes their labour in building a house on land owned by another in reliance of an expectation that they would obtain an interest in the land.^[3]

Mr Connock alleged that:

• Dr Connock and Mrs Connock shared a common intention that the survivor of them would hold the property for their lifetime and then pass it to the first deceased’s children;
• Mr Connock’s belief in this arrangement was said to have been encouraged by Mrs Connock soon after the passing of Dr Connock; and
• it would be unjust and unconscionable for Mrs Connock to depart from this representation.

In these circumstances, the Court found that Dr Connock’s conduct prior to his passing did not evidence such a common intention and noted Dr Connock was a ‘highly organised and particular person‘ and therefore it was unlikely that the ‘Asset Expectation’ could exist where there was no recording or documentation of such assumption or understanding.^[4]

Comparatively, had there been written records of Dr Connock stating, ‘the Connock children will receive the property’, the Court may have considered a claim in proprietary estoppel to have more merit, which would have undone the arrangements made by Dr Connock.

Key takeaways

This case provides guidance on the types of representations that could give rise to a claim in proprietary estoppel. In this case, the Court relied on the contemporaneous evidence indicating Dr Connock’s intention to provide for his third wife, which plainly contradicted the version of events offered by witness testimonies.

Notably, the case demonstrates the circumstances in which arrangements can be scrutinised and challenged by the children of the deceased to the effect that the deceased’s arrangements could be altered by the Court.

While in this case the Court did not intervene, it is likely that similar arrangements could be disturbed where there is a lack of contemporaneous evidence demonstrating the deceased’s intentions behind their arrangements.

If you are involved in an equitable or an estate dispute or would like to take steps to protect your assets, please reach out to us to discuss.

[1] Re Connock (No 3) [2023] VSC 420, [66].
[2] Ibid [139].
[3] McNab v Graham [2017] VSCA 352.
[4] Re Connock (No 3) [2023] VSC 420, [140].