Sidhu v Van Dyke

This High Court of Australia decision revolved around a building, Oaks Cottage, situated on a 32 hectare rural property in New South Wales known as Burra Station. The appellant, Mr Sidhu, lived in the main homestead on Burra Station. The respondent, Ms Van Dyke, and her husband lived in Oaks Cottage, approximately 100 metres away. Ms Van Dyke and her husband paid rent to Mr Sidhu’s wife in respect of Oaks Cottage. Both the main homestead and Oaks Cottage were located on an unsubdivided block of land owned by Mr Sidhu and his wife as joint tenants.

Towards the end of 1997, Mr Sidhu and Ms Van Dyke commenced a physical relationship. In January 1998, Mr Sidhu promised Oaks Cottage to Ms Van Dyke upon the subdivision of Burra Station. In the middle of that year, Ms Van Dyke and her husband separated and later divorced. Ms Van Dyke, upon Mr Sidhu’s advice relating to the promise of Oaks Cottage, did not pursue a settlement with her ex-husband and continued to live in Oaks Cottage with her child. Ms Van Dyke paid rent to Mrs Sidhu at a rate lower than market and carried out work at Burra Station and an adjoining property also owned indirectly by Mr and Mrs Sidhu and assisted with the subdivision of Burra Station, which was to lead to the transfer of Oaks Cottage to her. During this time, a period of eight years, Ms Van Dyke lost the opportunity to earn wages elsewhere.

Between 2000 and 2006, Mr Sidhu confirmed in writing his promises to give Oaks Cottage to Ms Van Dyke once the subdivision was effected, and in one of those communications, he proposed terms of transfer, valuation and he and his wife bearing the financial burden of defraying that amount. On 31 July 2006, Ms Van Dyke and Mr Sidhu’s relationship came to an end and Ms Van Dyke left Burra Station. 

Council approval for the subdivision was never granted. 

Ms Van Dyke commenced proceedings in the Supreme Court of New South Wales complaining that Mr Sidhu was estopped from departing from his promises to her in relation to Oaks Cottage on the basis that she acted upon those promises to her detriment. The Supreme Court was not satisfied that Ms Van Dyke had in fact acted to her detriment. Upon appeal to the Court of Appeal, a finding was made of a presumption that Ms Van Dyke had acted to her detriment given an inducement could be inferred from Ms Van Dyke’s conduct. It held that Mr Sidhu was precluded from departing from his promises and ordered him to pay Ms Van Dyke equitable compensation in an amount assessed by reference to the market value of Oaks Cottage.

After some contention as to the where the burden should be placed, the High Court, on appeal by Mr Sidhu, determined that Ms Van Dyke at all times bore the burden of proving that she had been induced to rely upon Mr Sidhu’s promises. It found further that Ms Van Dyke made out a ‘compelling’ case of detrimental reliance. The Court reasoned that it was unlikely, as ‘a matter of the probabilities of human behaviour’ that Ms Van Dyke would have devoted herself to the appellant and exerted herself over the period of eight and a half years were it not for Mr Sidhu’s promises. Moreover, it did not matter whether or not the promises were the sole motivation of Ms Van Dyke in undertaking the detrimental action. They needed only be a contributing cause (which, according to Gageler J, also required establishing that the belief Ms Van Dyke had regarding Oaks Cottage made a difference to whether or not she took action. Gageler J determined that Ms Van Dyke met this requirement) and they were indeed found to be so.

Also persuasive of a detrimental reliance on the part of Ms Van Dyke, was Ms Van Dyke’s concern to have Mr Sidhu confirm the promises. 

Ultimately, the High Court upheld the Court of Appeal’s findings and determined that Mr Sidhu should be held to his promises and that it was no answer to Ms Van Dyke’s claim that performance of his promises were conditional on the completion of the subdivision, and the consent of his wife, as he sought to argue. Mr Sidhu promises were categorical. Mr Sidhu was ordered to pay Ms Van Dyke’s costs and the previously ordered equitable compensation in an amount assessed by reference to the value of the Oaks Cottage.