The New South Wales Supreme Court in a recent appeal was asked to consider whether a promise to transfer a burial licence gave rise to a binding contract of law and, in particular, whether consideration had been given to form a contract. The Court was asked to consider an alternate argument – whether the doctrine of promissory estoppel applies.

What Happened?

The facts in the matter of Arfaras v Vosnakis [2016] NSWCA 65 (07 April 2016) are as sad as they are strangely romantic. In essence, the defendant promised the plaintiff to transfer a burial plot so he would be buried next to his late wife. When he later refused to transfer, the applicant argued that the parties had formed a binding contract. Or, alternatively, the defendant was now estopped from making good his promise in circumstances where the applicant had relied on the promise.

The primary judge found that although the conversations in July 2012 did not give rise to a legally binding contract, the respondent was nonetheless estopped from denying the applicant the right to be buried next to his wife (i.e. perpetual internment). As a result, the respondent held the perpetual internment right to the plot as trustee for the applicant and should transfer accordingly.

What is Equitable Estoppel?

In contract law, the doctrine of equitable estoppel provides that if a party changes his or her position, and reneges on a prior promise, then that party can enforce the promise even though the essential elements of a contract are missing. The courts will only apply this doctrine if certain elements are present including:

  • The plaintiff must rely on the defendant’s promise to its detriment; and
  • It would be inequitable or unfair if the promisor were not required to make good on their promise.

Here, the Court found that while consideration (or detriment suffered if the promise was not fulfilled) was unusual, it still existed. The reliance on the promise in fulfilling his wish to be buried next to his wife was enough for the doctrine to apply.

As an aside, and in response to an interesting argument raised, the Court held that if the applicant desired to be buried next to his wife, it shouldn’t consider imposing the legal possibility of exhumation and reburial.

Key Takeaways

Simply put, the moral of this story is that just because parties do not enter into a formal contract, or provide consideration in the usual or monetary sense doesn’t mean a party cannot be deemed liable, and required to comply with their promises. That, of course, and you shouldn’t mess with a man who wants to spend his final resting place next to his beloved.

Questions? Get in touch with our contract lawyers on 1300 544 755.

Emma Jervis

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