A son works on a farm for three decades. His father makes him a promise. You get the farm. But the father’s Will gives the land to his other children. The son sues the estate. The court upholds the Will. The son loses the farm he worked his whole life to build.
This is the outcome of Kronenberg v Macaulay [2025] NSWCA 195. The decision demonstrates that a verbal promise for a multi-million-dollar farm is worthless.
What is equitable estoppel in Australia for farm land?
Do not let a verbal promise leave your farm in ruins.
The heart-wrenching outcome of Kronenberg v Macaulay proves that a handshake is not enough.
Secure your family farm and prevent devastating disputes.
Build your legally 3-Generation Testamentary Trust Will, Contractual Will Agreement and Loan Agreements on our website.
The law sometimes enforces verbal promises, even without a formal contract. This is the legal doctrine of equitable estoppel. It exists to prevent ‘unconscionable’ conduct. This is where it is deeply unfair for a person to break a promise that another person has relied on.
Example of equitable estoppel for a farm: promise and detriment
Dad takes his son to the top of the hill to get a high vantage point of the farm.
“Son, if you stay on the farm and do not go to uni one day, this will be all yours”.
That is the promise. The son declines his university offer and works his entire life on the farm for less than full pay. That is the son acting on the promise. That is the detriment.
- Dad’s Promise: work on the farm
- Son’s Detriment: I will
What was the promise in Kronenberg v Macaulay?
In Kronenberg v Macaulay, the son argued equitable estoppel. It deals with promises over property and land. The son who wanted his Dad’s farm, Scott Macaulay, argued it was unconscionable for his father’s Will to ignore the promise of the farm. He lost the court case.
Why the court rejected the son’s estoppel claim for farm land
The New South Wales Court of Appeal found two fatal flaws in the son’s argument. These are vital for anyone in a farming partnership to understand.
1. Why ‘reliance’ is crucial for an estoppel claim
To win an estoppel claim, you prove you acted in reliance on the promise. The promise must cause you to act in a certain way. The court found Scott Macaulay had already committed his life to the farm. He joined the partnership in 1989. This was long before the key promises were made. Therefore, the promise did not cause his actions. He was already there. This failure to prove reliance destroyed his case.
2. Proving financial loss or ‘detriment’
You must also demonstrate that you suffered a genuine financial loss. The court questioned whether Scott suffered a detriment. He was a partner in the business, not just a farmhand. He received financial benefits. He even acquired his own farm, ‘Fairfield’, with the partnership’s financial support. This made it difficult for him to argue that he was left worse off.
How Legal Consolidated’s documents prevent farm disputes
The Macaulay family spent years embroiled in a bitter and expensive legal battle. This was an entirely avoidable tragedy. The right legal documents provide certainty and protection:
A 3-Generation Testamentary Trust Will protects assets
A standard Testamentary Trust Will is not good enough for farming assets. The dead father’s non-tax-effective Will failed his family. A 3-Generation Testamentary Trust Will is the superior estate planning tool. It places the farm and other assets into a trust controlled by your beneficiaries. This shields the inheritance from divorce and bankruptcy claims. It gives your children and grandchildren asset protection.
Farmers’ Contractual Will Agreement
Dad and Mum enter into a Contractual Will Agreement NOT to change their Wills. A Contractual Will Agreement is an agreement Mum and Dad sign while they are alive. They agree not to change the intent of their Wills (which are attached to the Contractual Will Agreement).
A Loan Agreement clarifies family money
Was the money the partnership advanced to Scott for his farm a gift or a loan? This was a point of confusion. A Loan Agreement makes it clear. It documents the debt. It protects both the lender and the borrower. It removes any doubt about a family member’s intentions.
Partnership Agreement
While the farms are in the Self Managed Super Fund, Family Trusts and Dad’s name, the ‘farming’ day-to-day activities are in a Partnership.
Powers of Attorney plan for life
Succession planning is not just about death. What if a farmer loses mental capacity? A Legal Consolidated Enduring Power of Attorney and a Medical Power of Attorney appoint a trusted person to make financial and medical decisions. This is a vital part of any succession plan.
Build your farm succession plan on a law firm’s website
A verbal promise leads to heartbreak and legal fees. Do not leave your family’s future to chance. Put a legally binding plan in place.
You build your complete Australian farm succession plan on our law firm’s website. Secure your legacy. You build your Wills, family agreements and loan contracts online. The process is simple and affordable. Start building your protection now.
Free Farming Succession Planning Toolkit – protect your intergenerational legacy
These structures safeguard your intergenerational legacy, ensuring that future generations benefit from your diligent work and vision.
This free toolkit educates you on the various structures for planning your farm’s future. Enjoy the free education:
-
-
-
- Asset protection for the farmer’s children
-
-
Farmer lending money to children
-
-
-
- Lend money to the farming spouse most at risk – do not give them money
- Farmer should lend money to their children – do not make gifts
- Every year, make sure your children forgive any money your family trust owes them
-
-
3-Generation Testamentary Trust Wills for rural landowners
-
-
-
- How the farmer can protect vulnerable children in his Will
- How to stop your daughter-in-law from challenging your Will
- How do Bankruptcy Trusts in your Will protect the farmer’s children
- Life Estates do NOT protect farming children – cause tax problems
-
-
Farming Family Trusts
-
-
-
- How to put succession planning into your Family Trust
- Son lost the farm to his sisters – Family Trust guilty
- Son loses farm to his sister AGAIN
- Free training video on Family Trusts
- Why the best practice is to have a company as trustee of your farming family trust
- Should the farmer have a bucket company under his Family Trust?
- Using the farming Family Trust as a service trust
-
-
Unit Trust for farming assets
-
-
-
- Unit Trusts v Company to hold a farm
- Who should be the trustee of a farming unit trust?
-
-
Partnership Agreements for Farming Families
-
-
-
- Partnership leasing farmland from the Family Trust
- Common Partnership structures and safeguard the farmland in a trust
-
-
Self-Managed Superannuation
-
-
-
- Leasing farmland from your SMSF
-
-