“All This Will Be Yours One Day”

High Court Lessons About Proprietary Estoppel

If you make a promise to someone, to say that they will receive something of yours when you die, the law might just hold you to it – even if there is no mention of it in your Will. You need to be very careful when you make such promises, and here is why.

The relevant legal doctrine is called ‘promissory estoppel’, and it has been successfully applied in contested Will matters. The key elements are as follows:

1. Clear and unambiguous promise
The deceased must have made a clear promise about leaving property to the claimant in their Will (e.g., “I will leave you the house when I die”).

2. Reliance on the promise
The claimant must have relied on the promise. In estate matters, this often involves the person changing their position or acting to their detriment—such as giving up a job, caring for the deceased, or investing in the property—based on the expectation of receiving the promised benefit.

3. Detrimental reliance
The reliance must result in a significant disadvantage or loss to the beneficiary, making it unjust not to enforce the promise.

4. Unconscionability
It would be unfair (unequitable) to allow the estate to deny the promise after the claimant acted to their detriment.

An example of when the doctrine was successfully relied upon by a claimant, is the recent case of Kramer v Stone [2024] HCA 48.

In this case, Mr Stone had worked on the farm that belonged to Dame Leonie and her husband, Dr Harry, for 40 years. He was a ‘share farmer’, which meant that he shared in some of the farm’s profits. His income was meagre, and he could have earnt a better wage elsewhere. The farming agreement was not written down, it was a verbal agreement. After Dr Harry died in 1988, Dame Leonie made a promise to Mr Stone that the farm would pass to David upon Dame Leonie’s death, together with a sum of money.

As a result, Mr Stone continued to work on the farm for another 23 years, whereas if the promise had not been made, he would have terminated the share farming agreement and sought employment elsewhere for a higher wage. These facts were not in dispute.

When Dame Leonie died, she left the farm (valued at $1.6 million) to one of her daughters in her final Will. Mr Stone was left $200,000.00. There was some evidence to suggest that Dame Leonie may have forgotten about her promise, as she was diagnosed with dementia in the later stages of her life.

In a nutshell, Mr Stone argued that he was made a promise, and he relied on that promise to his detriment. The daughters of Dame Leonie argued that there had to have been encouragement after the promise was first communicated. The High Court rejected this view. The person who relies on the promise must be able to show that relying on the promise made a difference, in either taking a course of action, or inaction (Kramer v Stone [2024] HCA 48 at paragraph 39). Merely to consider the promise in your decision making is not enough, it must have made a difference.

This area of law is very technical, and there are a lot of elements to it. A full analysis goes beyond the purpose of this article. The message we want to convey is this: if you make promises, you might just have to keep them!

If you have questions about your existing Will or would like create one, contact Solari and Stock and speak with one of our Sutherland Shire Estate Planning Team on 8525 2700, alternatively click here to request an appointment, or use the Book Now button below.

Article by Nicole Commandeur
Image created in Canva