Let me estop you there
Can promises be enforced on the death of a promisor?
The Gucci family has a long and storied history involving lies, murder, and fraud. However, one element of the Gucci past that isn’t talked about nearly enough is that, historically, in business, sons were treated differently to daughters. This is evidenced none more so than the treatment by Guccio Gucci, the founder of Gucci, of his daughter, Grimalda Gucci.
There is a significant lack of information about Grimalda Gucci despite her position in the Gucci family, but what is known is that she was the eldest biological child of Guccio Gucci and Aida Calvelli. Grimalda worked for Gucci for years, supporting her father tirelessly through Gucci’s early years when the company was struggling, including providing the finances with her husband, Giovanni Vitali, to save Gucci from bankruptcy in 1924; Gucci is unlikely to exist today were it not for Grimalda.
Despite this, when Guccio died in 1953, Gucci was left in equal shares to Guccio’s sons, Aldo, Rodolfo, and Vasco; Grimalda was completely excluded from the company she was instrumental in helping create. Incensed at her exclusion, Grimalda brought a claim against her brothers in the Italian courts to fight for part ownership of Gucci.
Forced heirship – Italian law
Not much is known as to the contents of Grimalda’s claim against her father’s estate, however, it is likely to have been based around Italy’s laws relating to forced heirship. Under Italian law, an individual in Guccio’s position would only be able to freely allocate 25% of his estate under their Will; another 25% would go to the spouse and the remaining 50% would be split equally between the children. It would, therefore, seem as though Grimalda had an equal entitlement to her father’s estate as her brothers. Grimalda’s claim for a stake in the Gucci company was ultimately unsuccessful.
Grimalda’s claim may have been unsuccessful because of some very careful lifetime planning by Guccio whereby the sons received a stake in the business during his lifetime. Grimalda was said to have received 12 million Italian lire and some land when Guccio died; this potentially could have equated to the Gucci shares that her brothers received via forced heirship with anything more than this coming to them as part of the 25% of Guccio’s estate that Italian law allows him to leave as he pleases.
How would the outcome of Grimalda’s case differ nowadays? Are there any legal remedies available that Grimalda’s case could have benefitted from were it tried in the United Kingdom during the modern day?
Grimalda’s claim under UK Law
Proprietary estoppel is a legal doctrine in the United Kingdom which, in the context of Wills, prevents property from being left in a Will if it has been promised to another party during life. Though typically used in the context of promises relating to land, farms, and houses, proprietary estoppel has been used in relation to shares in cases such as Harris v Kent & Anor [2007] whereby the court found that the defendant made a promise to the claimant that he would become an equal partner in the company, and, in reliance on this promise, the claimant lent the company large sums that enabled it to stave off insolvency (similarly to how Grimalda and Giovanni helped Gucci).
In order to establish proprietary estoppel, there are three separate conditions that must be satisfied, there must have been:
- a promise/representation
- that was relied upon
- to one’s detriment
Promises and representations
Firstly, it is important that there were actual promises or representations made; it is not enough for one to expect to inherit property.
It is clear from the ethos of Gucci during Grimalda’s time working at Gucci that she had no reason to expect to inherit a share in Gucci. Jenny Gucci, the wife of Grimalda’s nephew wrote, “it was a known fact in the world of Gucci that women were second-class citizens and would never be included in its management.” Therefore, for Grimalda to have been as enraged by her omission from receiving an equal share in Gucci as she was, there must have been more than mere expectation on her part.
There is no evidence to suggest that Guccio made a promise to Grimalda, but representations can be implied through conduct. In Thorner v Major [2009], the claimant was led to believe he would inherit a farm through the conduct and implied assurances of the deceased rather than an express promise. Perhaps Guccio was involving Grimalda heavily in the Gucci business for little to no remuneration? Grimalda was a board member and Guccio was certainly prepared to allow Grimalda to work tirelessly during Gucci’s early years and to provide the financing that kept the business afloat, something one would expect of more than just an employee.
Reliance
Secondly, there has to have been a reliance on the promise that was made. In other words, the party relying on the promise must have acted in a certain way because that promise was made to them; it is not enough to simply be promised something, that promise has to have been significant enough to impact your actions.
In Grimalda’s case, the question that a court would ask is: would Grimalda have provided Gucci with financial support in its early days were she not relying on the fact that one day she would inherit the business?
The court would also look at how Grimalda conducted herself. For example, if Grimalda knew that her decades of effort and investment would bear her no stake in Gucci, would she have continued to work for Gucci? Perhaps she even turned down the opportunity to work for another clothing brand or even set up her own?
Detriment
Finally, detriment; as a result of relying on a representation or promise, one has to have suffered a detriment. This is typically a financial detriment, but the detriment element of a proprietary estoppel claim can include more than just financial detriment.
There is a whole host of detriments suffered by Grimalda that the court would consider in Grimalda’s case. These include the financial investment that Grimalda made into Gucci of which there is no evidence that she was ever repaid, and personally in terms of the work that she put into the business of which there is no evidence of acknowledgment (not to mention, of course, the fact that Grimalda would have been an owner of a quarter of a company that is now worth over $20 billion).
If, however, Grimalda had been fairly remunerated for her services to Gucci, her loans repaid, etc. the court may struggle to find a detriment. For example, if Grimalda had decided to work elsewhere for the same salary as she received at Gucci, she cannot be said to have suffered a detriment by choosing to stay.
Conclusion
The absence of facts makes it difficult to accurately establish the strength of Grimalda’s claim, but if representations were made to her through Guccio’s conduct and she relied on these representations to her detriment by investing her time, money, and life into Gucci, then Guccio Gucci’s estate and sons may have had to have accepted that Grimalda had a stake in the company and/or pay her a considerable sum in damages.
If you are experiencing a situation similar to Grimalda’s, Birketts’ Private Wealth Disputes Team are experts at dealing with proprietary estoppel cases and can help you ensure that you don’t find yourself working for decades on the basis of a promise that is never fulfilled.
This article was written by Ben Green, Solicitor. For any enquiries, please contact a member of our team on 01473 406386 or at disputeawill@birketts.co.uk.
