The Supreme Court of New South Wales in Bahnik v Budimir [2025] NSWSC 1595 considered the application of proprietary estoppel in succession. The decision confirms that establishing and relying on a promise regarding inheritance does not automatically entitle a claimant to the whole of the deceased’s estate.
Background
Peter Kastropil (the deceased) died intestate in 2017 at the age of 85, leaving an estate valued at approximately $7.8 million. His closest surviving relative was his cousin, Smiljana Budimir – as administrator of the Estate of the late Peter Kastropil (the Defendant).
The plaintiff, Zeljko Bahnik, asserted an entitlement to the entire estate based on a promise made by the deceased several years prior to death.
The plaintiff met the deceasedin 1987 as co-workers. Over the next three decades, their relationship developed into a close friendship. Between 2005 and 2009, the deceased made significant financial gifts to the plaintiff.
From approximately 2005, the plaintiff assisted the devceased and his wife, Lily, with daily activities. As their health declined, their dependence on the plaintiff increased. Both had significant health issues and limited family or social support in Sydney.
The Promise
The critical events occurred in July 2010 afterthe deceased sufferedd a stroke that impaired his vision and reduced his capacity to care for Lily, who had a significant mental illness and was entirely dependent on him. During this period, Mr Kastropil made a specific and direct promise to the plaintiff. He told Mr Bahnik,
“If you continue to look after Lily and me until my death, I will leave you all my possessions.”
Richmond J placed significant weight on the clarity and context of this language, recognising it as the express assurance relied upon by the plaintiff.
His Honour assessed the statement in context. At that time, the plaintiff had been a trusted friend for over a decade and was the couple’s main source of practical and emotional support with the statement a clear and unequivocal promise. A reasonable person in the plaintiff’s position would have understood it as a commitment to inherit the deceased’s estate, conditional on continued care and assistance for the remainder of the deceased’s life.
Richmond J found that the deceased intended the plaintiff to rely on the promise, with the assurance of future care being the purpose of the undertaking.
Reliance and Detriment
A key element of proprietary estoppel is detrimental reliance.
The Court accepted that the plaintiff’s assistance was partly motivated by friendship and gratitude for earlier gifts. However, the extent of care and commitment provided over many years exceeded what would ordinarily be expected from a close friend.
The plaintiff made significant life decisions in reliance on the promise, including retiring earlier than planned and postponing relocation to Brisbane to be closer to his grandchildren.
The Court was satisfied that, without the promise, the plaintiff would not have provided the same level of care or altered his personal and professional plans to the same extent.
These actions constituted substantial and irreversible changes in position recognised by equity as detrimental.
Testamentary Promises and Proprietary Estoppel
The case addresses the principle that promises to leave property by will are ordinarily revocable until death.
Ordinarily, testamentary intentions remain revocable until death. A person is generally free to change their will at any time.
However, proprietary estoppel operates differently. Where a promise induces detrimental reliance, equity may intervene to prevent unconscionable conduct. A promise is intended to be binding, and the promisee reasonably relies upon it; the revocable nature of testamentary dispositions does not defeat the claim. The focus becomes whether it would be unconscionable for the promisor—or their estate—to depart from the promise after the promisee has altered their position in reliance upon it.
The Court reaffirmed that conditional promises may support proprietary estoppel claims. Equity examines events retrospectively and considers whether, in light of the facts, it would be unconscionable not to fulfil the expectation created.
Relief Still to Be Determined
Although the plaintiff established the elements of proprietary estoppel, the proceedings continued to address the appropriate remedy. Richmond J invited the parties to make further submissions on the nature and scope of relief, including whether the whole estate or a lesser sum proportionate to the plaintiff’s detriment should be awarded. Directions were made for the filing of written submissions, with an additional hearing scheduled to determine the appropriate remedy. This allowed the parties to address outstanding issues, such as the valuation of the plaintiff’s detriment and potential adjustments to the estate, prior to final orders.
Practitioners should note the main procedural steps following a finding of proprietary estoppel.
- First, the Court typically directs parties to exchange evidence and submissions addressing the remedy. This may include gathering further factual or expert evidence regarding the claimant’s detriment, the value of services or care provided, and any changes in the estate’s value.
- Second, written submissions are filed detailing the scope of appropriate relief, including legal and factual contentions.
- Third, a further hearing is held where the Court considers submissions, hears any necessary further evidence, and addresses contested issues such as quantification of detriment or adjustments to the estate.
These steps aim to ensure the remedy is accurately tailored to the circumstances. Practitioners should be prepared for these phases post-finding to effectively advance or defend the case during the relief stage.
The Court recognised that establishing an enforceable promise does not automatically entitle a claimant to the precise benefit promised.
The central issue was whether awarding the entire $7.8 million estate would be proportionate to the plaintiff’s detriment.
Justice Richmond observed that requiring the estate to fulfil the promise in full may be disproportionate. The Court directed the parties to provide further submissions on the appropriate remedy.
The decision confirms that proprietary estoppel claims in succession disputes require consideration of two distinct questions:
- Was a promise made, relied upon, and acted upon to the claimant’s detriment?
- If so, what remedy is necessary to avoid unconscionability?
The remedy determined may not correspond directly to the promise established.
Even where a claimant establishes a promise to inherit an entire estate, the Court retains discretion to grant relief proportionate to the detriment suffered and the circumstances.
Bahnik v Budimir reinforces that establishing an expectation is only the initial step. The remedy must satisfy equity’s requirements for proportionality and fairness.
Bahnik v Budimir (No 2) [2026] NSWSC 456
In Bahnik v Budimir (No 2) [2026] NSWSC 456, Richmond J considered the appropriate relief and costs orders following an earlier finding that the plaintiff had established a claim in proprietary estoppel based on a testamentary promise.
The decision addresses the principles governing expectation-based relief in proprietary estoppel claims, particularly where a claimant has provided years of care and support in reliance on a testamentary promise.
Facts
The plaintiff, Zeljko Bahnik, successfully established in Bahnik v Budimir [2025] NSWSC 1595 that the deceased, Peter Kastropil, had promised in 2010 that if the plaintiff continued to care for and support him and his wife, Lily, for the remainder of their lives, he would leave the plaintiff “all my possessions”.
In reliance on the promise, the plaintiff devoted substantial time and effort to caring for Peter and Lily over many years. He delayed plans to relocate to Queensland and spent considerable time assisting the deceased rather than attending to his own family commitments.
After Peter’s death in 2017, the estate was distributed under the rules of intestacy. The defendant, asadministratorr, disputed the extent of relief available to the plaintiff.
Issues
The Court was required to determine:
- Whether the plaintiff should receive the whole estate or only a lesser amount reflecting the value of his detriment.
- Whether relief should be limited to the plaintiff’s earlier estimate of the deceased’s wealth.
- Whether the estate should be transferred subject to estate liabilities and expenses.
- How the costs of the proceedings should be borne.
Decision
Richmond J held that the plaintiff was entitled to expectation relief, giving effect to the promise that he would receive all of the deceased’s possessions.
The Court rejected the defendant’s argument that relief should be limited to approximately $2.9 million, representing the plaintiff’s estimate of the deceased’s assets in 2013, or some lesser proportion of the estate.
His Honour emphasised that Australian law does not require courts to award only the minimum relief necessary to do justice. Where proprietary estoppel is established, the prima facie position is that the claimant’s expectation should be fulfilled unless this would be out of all proportion to the detriment suffered.
The plaintiff’s detriment was substantial and life-changing, including years of personal care and support, postponement of major life decisions, and significant impacts on personal and family life. The Court found that such detriment could not be measured solely by reference to the market value of services rendered. The promise was clear, certain and directed to the entirety of Peter’s estate. The appropriate remedy was therefore a constructive trust over the net estate.
For practitioners, this reasoning highlights the importance of carefully assessing both the quality and extent of reliance in advising claimants and defendants. In practical terms, advisers should assist clients in gathering comprehensive evidence to establish reliance and detriment. This may include preparing detailed chronological timelines to demonstrate the duration and nature of care or support provided, collecting contemporaneous documents such as emails, text messages, diaries, or financial records showing changes in the claimant’s circumstances, and obtaining affidavits from the claimant and independent witnesses to provide first-hand accounts of the actions taken in reliance on the promise.
Where possible, practitioners should also secure expert evidence on the value of services rendered or the losses incurred as a result of life-altering decisions. Advisers should counsel clients that the Court will give close consideration to whether the claimed detriment and expectation are proportionate, and that clear evidence of life-altering decisions made on the faith of a promise will be highly persuasive when seeking to enforce or defend inheritance-related estoppel claims.
Relief Granted
The Court declared that the defendant held the deceased’s net estate on constructive trust for the plaintiff from the date of his death on 2 November 2017.
The trust applied only to the net estate after payment of:
- estate debts and liabilities;
- taxation obligations;
- administration expenses; and
- the parties’ costs.
The Court declined to make further accounting or payment orders, granting liberty to apply for further orders if implementation issues arose.
Costs
Although the plaintiff succeeded, the Court ordered that both parties’ costs be paid from the estate.
The plaintiff’s costs were payable on the ordinary basis.
The defendant administrator’s costs were payable on the indemnity basis under UCPR r 42.25. Richmond J found that the administrator acted properly in defending the proceedings, obtained judicial advice authorising her conduct, and was entitled to require the plaintiff to prove his claim despite ultimately beingy unsuccessful. Awarding indemnity costs in these circumstances is consistent with standard practice for estate litigation. Courts typically allow an estate trustee oradministratorr to recover their legal costs in full when they act reasonably and seek judicial advice, as they have a duty to uphold the proper administration of the estate. This approach recognises the risks faced by administrators who must respond to claims against the estate and encourages them to seek the Court’s guidance without fear of personal cost exposure.
Significance
The decision reinforces several principles in Australian proprietary estoppel jurisprudence:
- Expectation relief remains the starting point where a clear testamentary promise has induced substantial reliance.
- The doctrine is concerned with preventing unconscionable departure from a promise rather than compensating merely for measurable financial loss.
- Courts will not reduce relief simply because the value of the promised inheritance exceeds the economic value of services provided.
- Long-term caregiving and life-changing personal sacrifices are forms of detriment capable of justifying full expectation relief.
- Where relief concerns an estate, the successful claimant ordinarily receives the net estate after payment of debts, liabilities and administration expenses.
The case illustrates the ongoing application of proprietary estoppel as a mechanism for enforcing inheritance expectations arising from informal promises where substantial reliance and detriment are established. Recent authorities, including Kramer v Stone [2023] NSWCA 270; 112 NSWLR 564 have similarly recognised the willingness of Australian courts to grant expectation relief in succession cases involving clear promises and long-term caregiving, particularly where the claimant has devoted significant time and sacrificed personal opportunities. Collectively, these decisions reflect a broader trend in which courts give careful attention to proportionality between promise and detriment and are prepared to grant substantial relief where unconscionability would otherwise arise.
Bahnik v Budimir is likely to have an impact beyond New South Wales. While proprietary estoppel is an equitable doctrine applied in all Australian jurisdictions, approaches to the remedy andto the assessment of proportionalitycontinueg to evolve. Courts in other states, such as Victoria and Queensland, frequently consider New South Wales authorities to be persuasive, particularly wherethe principles of unconscionability and the expectations of testators and caregivers are concerned. This decision strengthens the position that, subject to local procedural rules, substantial expectation-based relief may be available where there is clear evidence of a testamentary promise and life-altering reliance in any Australian jurisdiction. Practitioners throughout Australia should monitor developments following Bahnik v Budimir, as its reasoning is likely to influence the approach to proprietary estoppel claims in succession matters nationally.
For practitioners, Bahnik v Budimir sits within this evolving body of law and signals the ongoing importance of clear evidence of reliance and detriment in proprietary estoppel claims arising from succession disputes.