A PROMISE IS A PROMISE.

The recent decision by the High Court of Australia this week has further highlighted the Court’s favour for estoppel claims having significant sway in estate and testamentary disputes. Kramer v Stone [2024] HCA 48

The concept of estoppel is a time-worn equitable principle long respected by the courts of common law jurisdiction. At the risk of over-simplifying, it is where one party makes a statement or action to another and then refuses to honour or uphold this promise. It operates to stop someone going back on their word when the other party has upheld their end of that agreement, usually requiring them to do so at some level of detriment.

Key facts of this case:

• The party claiming estoppel was a farm worker who earned ‘irregular and meagre income..’ working on the farm and sharing some costs and income.
• The owner of the farm promised that the worker would inherit the farm on the owner's death (the ‘promise’).
• Interesting to note that the owner who made the promise passed away from cancer and the wife reinforced the promise initially, but in the end had a will made leaving the worker only a lump sum of money.
• Without this promise the worker would have sought work elsewhere and for a much better income, without the hardship of working the farm. The worker continued to work the farm for and with the owner for 23 years (the ‘detriment’).
• The owner did not leave the farm to the worker in their will and did not inherit the farm as a result.

The farm worker then made a claim of promissory estoppel which held in his favour in the Supreme Court of NSW, which was the subject of this case, the appeal to the High Court of Australia who upheld the decision awarding the Colo property to the worker.

This case highlights the danger of promises which have been made, and may have never been in writing, can be to the subject of a family estate. Much of this risk can be avoided where there are proper structures and plans put in place to give effect to the persons intentions and protect the assets for later generations. 

Unfortunately, this is an all-too-common point of dispute in regional estates. Often where property values were initially quite modest, but the capital growth means they are now much more sought after and hotly contested in family disputes. And these estoppel claims can come from inside or outside the family unit too, causing even more complications.

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If you’re concerned about protecting your estate and ensuring your wishes are upheld, don’t wait until it’s too late. Seek advice from an experienced legal professional to put proper structures and plans in place. Contact us today to discuss how we can help safeguard your legacy.

Disclaimer: The information provided here is general in nature and does not constitute legal advice. For specific advice tailored to your circumstances, please seek professional legal counsel.