Family promising to transfer property with no contract or registered transfer? The potentially binding nature revisited.

The recent decision of Pirrottina v Pirrottina [2025] NSWCA 55 provides yet another example of families litigating when promises are made with respect to land, but the promise is not set out in a contract (or Deed), nor is the land officially transferred to accord with the promise.

There is a way the promise can be held to be binding. That way being an equitable ‘estoppel’ where the Court makes an order that the promise is binding, and orders the parties to be ‘estopped’ from denying that it is binding.

Two quite powerful forms of equitable estoppel are ‘promissory estoppel’ and ‘proprietary estoppel’. The latter relates to land, and can be maintained as an actionable claim (a legal sword, not merely a defensive shield).

We will look at proprietary estoppel here.

Without getting into the complexities of the distinctive nature of each branch of estoppel (proprietary estoppel itself having two forms – encouragement and acquiescence), broadly speaking what a Court is looking for proprietary estoppel is:

1. A party (Party A) inducing another party (Party B) to assume that Party B has either certain legal rights, or that Party A will carry out some future conduct.
2. Party B relies on this inducement by Party A.
3. Party B is acting reasonably in their reliance of Party A.
4. Party B would suffer a detriment if Party A backed out of the inducement.
5. Party A would be acting unconscionably if they backed out of the inducement.

If this can be established, a Court of Equity can override what is on title to the relevant property – either making an Order that the whole title be transferred to the claimant, or part thereof, depending on the circumstances.

The usual scenario being that parents promise to transfer land (usually a farm) to a child, the child having worked on the land, and then the parents renege before effecting the transfer (registering any Transfer of land).

This scenario in Pirrottina v Pirrottina is slightly different.

Here, the parents (Mr and Mrs Pirrottina Snr) owned a farm (here a 100 acre property in Mangrove Mountain, NSW).

They have two sons: Sam (Saverio) and Rocco.

The two sons begin working on the farm at a young age: 14 and 13 respectively.

After Sam worked on the farm for 12 years without a wage, the parents, in 1994, promised to build a house for Sam on the area of land near the driveway and main orchard.

The house was built by the parents and the keys given to Sam and his fiancé in 1996. The associated land of the house is 1 acre in size, and is referred to in the proceedings as the “Lot” (even though it was not a subdivided lot).

At the Sam time, Sam (in reliance of this promises) rejected two other offers; one being from his own parents to buy him another lot of land, and another by his finance’s father to contribute to construction costs.

In 2002, the parents transfer the farming business and the title of the farm itself to Sam and Rocco as tenants in common in equal shares (i.e. on title, 50% each).

In 2022, after the parents had died, Rocco sought to dissolve the partnership with his brother Sam, and as part of the proceedings Rocco sought to a trustee appointed to sell the whole farm under s66G of the Conveyancing Act 1919.

Sam maintained a cross claim, asserted that he had a personal ‘equity’ in the property, arising from the 1994 promises, thus being before the 2002 transfer to him and his brother in 50:50 shares.

At trial, Rees J held that Sam did indeed establish a personal equity in the property. Here, the personal equity – being an equitable proprietary interest in the 1 acre area where his house was built - was valued at 20% of the market value.

Thus Rees J ‘readjusted’ the 50% ownership of Sam and Rocco to 40% each – with Sam having an equity in the 20% area where his house was located.

Rees J then made an order for Sam to buy out Rocco’s “40%” share.

Rocco appealed.

There were 14 grounds of appeal, with the primary grounds of appeal being:

“1.   whether the promise made to Sam by his parents was limited to an assurance that they would build a house for Sam on the Farm that would be his (which Rocco no longer disputed) or did the promise include an area of land surrounding the house;

2.   whether Sam’s reliance on the 1994 and 1996 promises was reasonable or detrimental;

3.   whether it would have been unconscionable for the parents to resile from the assurances given to Sam;

4.   whether Sam had a personal equity against Rocco;

5.   whether the primary judge’s discretion had miscarried in ordering the buyout relief, rather than the appointment of trustees for sale;

6.   whether the Farm is the personal property of Sam and Rocco, or property of the partnership; and

7.   whether the primary judge erred in making a special costs order in favour of Sam.” – see Headnote.

Rocco lost on all grounds, save for the final ground on costs (on a technical, complex point, as Sam had made an offer of compromise but that relates also to the partnership dispute and the partnership accounts had not be finalised).

This case is, while slightly different to the usual, involves an area of law which is commonly litigated.

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