A person may promise that “one day this farm will be yours” and then die without ever putting that promise in writing, leaving a later will that says something different. In Kramer v Stone [2024] HCA 48, the High Court confirmed that, in Australia, a person who relies on such a promise to their real detriment may still hold the promisor to it, even where the will provides otherwise. The Court held that this may extend to restraining the executors of a deceased estate from dealing with estate property in accordance with the will, where doing so would break a promise on which someone had relied. The legal mechanism is equitable estoppel.
At its heart, the case raises a straightforward question: how far will the law go to protect a person who makes a life-altering decision in reliance on another person’s word?
Equitable estoppel: what it is and why it matters
Equitable estoppel provides that where a person makes a promise and another person seriously relies on it, taking significant and irreversible personal steps as a result, the promisor (or the executors of the promisor’s estate) may not be permitted to depart from that promise where doing so would be unconscionable.
Justice Brennan, in the leading case Waltons Stores v Maher (1988) 164 CLR 387, set out the requirements for equitable estoppel:
- There must be a clear promise.
- The person making it must have intended, or a reasonable person in their position would have expected, the other person to rely on it.
- The other person must have actually relied on the promise, meaning they would not have acted as they did without it.
- That reliance must lead to detriment: the person must be worse off than if the promise had never been made.
If these criteria are satisfied, the court can make orders for equitable relief. This may take the form of compensation, or, in some cases, an order requiring the transfer of the promised land or rights, even where that land had been allocated to someone else under the deceased’s will.
David Stone’s reliance on the promise in Kramer v Stone [2024] HCA 48
David Stone had worked a 100-acre property on the Colo River since the mid-1970s. The arrangement was informal: he lived on the land, managed the crops, and earned a modest return. In the early 1980s, Dr Harry and Dame Leonie, who owned the farm, told David that he would one day inherit the land.
Dr Harry died in 1988. After his death, Dame Leonie reaffirmed the promise, and David remained on the property for 23 years. He did not buy a house or pursue other employment. He lived in poor conditions, including mosquito-infested water, no insulation and mice, and turned down other financial opportunities because he believed the farm would be his.
When Dame Leonie died in 2016, her most recent will, made in 2011, left the farm to her daughter, Hilary Kramer. David received $200,000. The farm was valued at $1.5 million.
The executors’ arguments on appeal
After losing before the Court of Appeal, Hilary and co-executor Jaime Ferrar appealed to the High Court. They argued that David needed more than a promise to succeed: he needed subsequent encouragement, and Dame Leonie needed to have known with certainty that David was relying on the promise.
The High Court said no.
The Court held that these additional requirements conflated two distinct legal doctrines. One arises from the doctrine of imperfect gifts, concerning gifts that were never legally completed. The other arises from estoppel by acquiescence, where a person allows another to act under a mistaken belief, knowing of the mistake, and says nothing.
This case was neither.
In Kramer v Stone [2024] HCA 48, the Court found that a clear promise, reasonable reliance and real detriment were sufficient. There was no requirement for further encouragement after the promise, or for proof that Dame Leonie was aware David was suffering as a result of his reliance.
Justice Gleeson’s dissent
Justice Gleeson dissented, considering that more was required: either actual knowledge on Dame Leonie’s part, or some conduct after the promise encouraging David’s reliance. The majority disagreed, holding that Dame Leonie’s conduct made it unconscionable to depart from the promise, and that this was sufficient.
Implications of Kramer v Stone [2024] HCA 48
The decision raises a genuine question: should a verbal promise made decades earlier override a formal will? The High Court’s answer, in this case, was to favour fairness over formality.
The case raises questions that go beyond law: about family, trust, and the consequences of relying on a promise that was never put in writing.
The case is a reminder that promises matter. If a person makes a life decision in reliance on another’s words, a court may treat that promise as binding. Estate planning is not only a matter of paper; it also concerns the expectations a person is led to hold. Where those expectations are strong enough, a court may uphold them, even where the will does not.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
