Pittwater Life April 2018 Issue

Business Life: Law
Business Life
Promises, promises...
examining Mutual Wills
Late last year we considered
Mutual Wills and whether
the manner in which they
were expressed could be considered
a binding contract.
The Manly Daily and the
weekend metropolitan tabloids
often carry advertisements
which state words to the effect:
“Have you been left out of
a Will... Or named in a Will but
treated unfairly? Is the Will
legally binding, can you challenge
the Will? Perhaps you’re
an Executor needing to defend
a claim?”
This can give rise to consideration
of issues other than
the situation which arises in
just interpreting Mutual Wills in
which, for example, there will
be found to exist a contract
not to revoke without notice
to the other party, which will
be enforced by a Court in the
case of breach by means of a
constructive trust in favour of
the intended beneficiaries.
The issue often comes
down to the question of what
are known as ‘testamentary
promises’ which may best be
illustrated by the observations
of a Justice in the English Court
of Appeal in a decision in 2001
in which he said:
“It is notorious that some
elderly persons of means derive
enjoyment from the possession
of testamentary power, and
from dropping hints, as to their
intentions without any question
to an existing or past fact.
Representations are the
subject of common law estoppel
whereas the enforcement of testamentary
promises are found in
the equitable jurisdiction of the
Court by way of what is known
as “estoppel by encouragement”.
A testamentary promise may
be reflected in a testamentary
contract, which is either a contract
to make a Will supported
by an agreement between the
testator and another party by
which the testator agrees to
make provision for that party
or a third party in consideration
for the promise of doing certain
things – for example living with
the testator and providing care
for the testator’s life, or occupying
a property and renovating it,
or rebuilding it.
Such promises arise throughout
society, particularly in
families where ageing relations
wishing to retain their home
and independence may make
arrangements, often not documented,
for a member of the
family or friend to move in with
the testator and care for them
on the basis that the testator will
reward the family member or
friend with a benefit – usually a
share in the testator’s estate.
Sometimes these arrangements
evolve and lack precision
and clarity, and when examined
by a Court, fail.
A quite common area where
testamentary contracts or promof
estoppel arising.”
Estoppel is a judicial device
in common law legal systems in
which a Court may prevent (or
estop) a person from making
assertions or from going back
on his word. As his honour also
noted, a reasonable person
faced with a representation by a
living person as to his intentions
for his will should “not
count his chickens before they
have hatched”.
A testamentary promise may
arise where a promise is reasonably
understood or intended
to be binding and is acted upon
by the promisee when changing
his or her position, that promise
will no longer be revocable and
can be enforced immediately by
the promisee.
But what is a promise; and can
it be contrasted with a representation
of fact? A promise is conduct
on the part of the promisor,
which creates and encourages
an expectation on the part of
the promisee. A representation
is generally a statement made
by a person directed to another
with the intention that it relates
with Jennifer Harris
56 APRIL 2018
The Local Voice Since 1991