Harris v Harris

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S CI 2017 00756

CRAIG HARRIS	First Plaintiff
GARY HARRIS	Second Plaintiff
v
RAYMOND JOHN HARRIS	Defendant

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JUDGE:	John Dixon J
WHERE HELD:	Melbourne
DATE OF HEARING:	8 – 11, 14 – 16 October, 3 December 2019
DATE OF JUDGMENT:	13 May 2020
CASE MAY BE CITED AS:	Harris v Harris
MEDIUM NEUTRAL CITATION:	[2020] VSC 256

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EQUITY — Estoppel — Proprietary estoppel — Expectation — Detrimental reliance — Unconscionable conduct — Farmland owned by plaintiffs’ father and mother — Promises as to future ownership made to plaintiffs — Plaintiff performed unpaid work for father over significant period — Expenditure by plaintiff on own property — Father foreshadows intention not to honour plaintiff’s expectation — Whether reasonable reliance — Whether detriment if expectation not fulfilled.

EQUITY — Estoppel — Proprietary estoppel — Remedy —Father’s undertaking at trial to transfer part of property to plaintiff (and another son) on death in part performance of alleged promise— Whether father acted unconscionably —Whether promise should be enforced.

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APPEARANCES:	Counsel	Solicitors
For the First Plaintiff until 9 October 2019	Mr J D S Barber	Cinque Oakley Bryant
For the Second Plaintiff	Mr D B Clough	Macpherson Kelley
For the Defendant	Mr J D McKay	Kevin Davine & Sons

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Facts and allegations.......................................................................................................................... 4

The witnesses................................................................................................................................. 4
1971 to 1977: The first promise.................................................................................................... 7
1981 to 1994: The second promise............................................................................................. 16
2008 to 2012: The third promise................................................................................................ 27
2013 to 2016: The fourth promise.............................................................................................. 32

The principles applying.................................................................................................................. 43

Submissions and analysis.............................................................................................................. 49

John’s key contentions................................................................................................................ 49
John’s representations and Gary’s belief or expectation....................................................... 50
John’s knowledge of Gary’s belief or expectation.................................................................. 55
Detrimental reliance by Gary on the belief or expectation................................................... 57
John’s unconscionability............................................................................................................ 59
Remedy......................................................................................................................................... 62

Conclusion and orders.................................................................................................................... 65

HIS HONOUR:

Introduction

The plaintiff, Gary John Harris (Gary), born in 1961, is the son of the defendant, Raymond John Harris (John). When the trial commenced, Gary was the second plaintiff and his brother Craig Stephen Harris (Craig), born in 1964, was the first plaintiff.

Between 1967 and 1978, John, together with his wife, the late Lynette Harris (Lynette), acquired what are now four separate parcels of land adjoining Whitworths Road in Korumburra South, Victoria, being:

(a) certificates of title volume 8679 folio 903 (the Home Farm);

(b) certificate of title volume 9686 folio 190 (the Delios Farm);

(c) certificate of title volume 9686 folio 189 (the House Block); and

(d) certificate of title volume 8286 folio 326, being a small triangle of land located between the three other parcels of land that I will refer to as part of the Delios Farm,

(together, the Farm).

From 1967, John conducted, at various times, dairy milking and beef cattle farming, starting on the Home Farm and expanding the operation to the Delios Farm following its acquisition. John and, until they became adults and left home, Gary and Craig, lived on the Farm, initially on the Home Farm and later in a new home on the House Block.

At the trial of this proceeding, Gary initially sought a declaration that John holds the Farm on constructive trust for him for life and, on his death, for Gary, subject to an equity adjustment with Craig related to two properties owned by John that I refer to later in these reasons as the ‘Ballarat properties’. Gary contended that the constructive trust arose because John and Lynette routinely promised Gary that the Farm would pass to the boys on their deaths. Initially, the beneficiaries of the promise were both brothers together, but later the promise was to Gary alone. In reliance on these promises, Gary worked the Farm to his detriment, for no wage, over a period of several decades and refrained from seeking alternative employment, including continuing a career in banking that had been briefly commenced in 1977.

Craig originally commenced the proceeding in March 2017, seeking similar relief to that sought by Gary, save that Craig made no claim to the Ballarat properties. Craig claimed that the brothers were entitled equally to the Farm. In December 2017, Gary joined in the proceeding as the second plaintiff. Gary contended that the promise on which Craig relied was later reformulated by John to that outlined in the preceding paragraph.

At the commencement of the trial, John gave the following open undertaking to the court, described as being without admission of liability and irrevocable:

The Defendant undertakes to the Court to hold the land known as part of 105 Whitworths Road, Korumburra South, and being the land contained in Certificate of Title Volume 8679 Folio 903, on trust for himself for the duration of his life, and upon his death, for [Gary and Craig] as tenants in common in equal shares.

Significantly, the undertaking was limited to the Home Farm, while Gary’s claim is in respect of the Farm. John did not seek to amend his defence following the undertaking, despite it pleading a denial that Gary and Craig were entitled to the relief sought.

Soon after the trial commenced, John and Craig compromised their claims, entering into a deed of settlement on 8 October 2019. The trial continued between Gary and John. I invited them to inform me of the terms of the settlement during the running of the trial, but they declined to do so. On 3 December 2019, after the trial had concluded and I had reserved my decision, the parties jointly applied to re-open the trial to put the deed into evidence by consent. The deed is now in evidence, although no witness was asked about it or its implications.

To understand the position now between John and Craig by reason of the deed, I must first explain that Craig ultimately became the sole registered proprietor of farmland at 110 Whitworths Road (Craig’s farm), a short distance from the Farm. Since 2011, John has had the sole possession and use of Craig’s farm. Craig took the first formal step to assert a claim against John by lodging a caveat over each of the titles that collectively comprised the Farm. John’s counterclaim in the proceeding asserted a claim to graze and run livestock on and continue to use Craig’s farm for the purpose of operating John’s farming business.

The substance of the settlement was that:

(a) Craig accepted that he was entitled, on John’s death, to the half interest in the Home Farm that was offered by the undertaking, which John confirmed by recital in the deed;

(b) Craig released and discharged John from all further claims to any interest in the Farm;

(c) John agreed to pay Craig $100,000; and

(d) John relinquished possession of Craig’s farm to Craig and undertook not to interfere with any sale of Craig’s farm.

The deed is silent about the Ballarat properties.

At trial, Gary submitted that there were four discrete categories of promises that he alleged John had made at various points in time about the Farm. In reliance on these promises, Gary acted to his detriment, working hard without pay, spending money, and changing his life by giving up other opportunities. Gary’s reliance to his detriment on the fourth promise, and/or the third, second or first promises, meant that John now holds legal title to the Farm (in its entirety) on trust for him for life, and on his death, for Gary. It would be against conscience for John to deny Gary’s interest in the Farm. Gary’s counsel clarified during the course of the hearing that Gary’s claim is limited to the Farm, and is either the entirety of the Farm or half of the Farm. His claim does not extend to any other properties.

The inconsistencies between the resolution negotiated by Craig with John and the claims pressed by Gary against John have been left for the court to resolve, save that to the extent that the court finds that Gary’s claim impinged on John’s ability to honour the settlement with Craig, Gary invites the court to shave back his claim so far as is necessary to avoid that consequence.

Facts and allegations

The following findings are based on a statement of agreed facts and on evidence both contested and uncontested.

The witnesses

In relation to contested facts, Gary’s evidence was supported by evidence from Kim Harris (his wife), Dorothy Maxwell (a former neighbour), and his brother Craig. John gave evidence, as did his wife, Robyn Harris. John led evidence from a number of other witnesses, each of whom were neighbours, acquaintances or business associates, including Ross Rigano, Judith Jones, Andrew Baldison, Brian Jefferis, Greg Spargo, Dean Bailey, Renalto (Ron) Macri and Leonard Barrett. Apart from family members, the evidence of other witnesses (neighbour witnesses) was of limited assistance on the key issues.

With the exception of John, I mostly accepted the evidence of family members. I prefer Gary’s account whenever there was conflict. Gary’s credit was not damaged by cross‑examination. He consistently rejected John’s proposed evidence in a reasoned way when it was put to him, although he also readily identified some content of the cross-examiner’s puttage that, as a child or teenager, he did not, or could not, know about.

On the other hand, John’s evidence was marked with inconsistencies. His evidence was argumentative and unreliable and his counsel conceded that he ‘did not go well’ as a witness, and could be described as hostile and evasive. I detected an emotional agenda that underlay his unhelpful attitude and persuaded me that John did not care to ensure that the court only received the truth. A distasteful battle between parent and child was evident on John’s part, but not from Gary who retained his dignity and was prepared to make appropriate concessions.

John resiled from his defence and his witness outline when he gave the undertaking, stating in evidence that:

They were always to get the farm, the [Home Farm], and they've already got it, [referring to the undertaking] so what's — what's the big argument?

John described Gary as a liar when commenting on his evidence concerning the morning milking routine when he was at school. He said Gary wasn’t asked to do any farm work when he was playing football. His response was a reconstruction followed by a denial:

[H]ow could you go and milk cows, go and play football, come back home after playing football and then milk cows again? No, definitely not.

John avoided answering questions. Asked to describe a work routine, he answered that the family went for a drive every Sunday, meandering off in his answer to describing irrelevant aspirational intentions. Concerning Gary’s claim that he helped with the milking in the afternoon whilst working at a bank in Korumburra, John responded that Gary wasn’t expected to work because he had a job and that he, John, ran the Farm with lads helping him, including share farmers. This response had not been put to Gary by his cross‑examiner.

John also continued with his response, suggesting that neither Gary nor Craig did much work around the farm because they were talented competitive sportsmen. John suggested that during the time Gary worked at the bank, if he did do anything on the farm, it was limited to perhaps going to get the cows on a motorbike.

John described significant aspects of Gary’s evidence as ‘a fabrication’ or ‘a big fabrication’. This assessment, on each occasion that it was proffered, was mere assertion, and I was not persuaded that any part of Gary’s evidence was fabricated.

John sought to consistently limit the scope of his intention to make a gift of farming land to his sons to the Home Farm. As I will explain, this limitation was inconsistent with the evidence of contemporaneous conversations and documents. I am satisfied that John was intentionally setting out to limit the scope of his exposure to be consistent with the undertaking.

In many respects, John did not have an actual recollection and his evidence was clearly reconstruction by supposition. For example, as far as John knew, he paid for the improvements to the property I refer to later in these reasons as ‘Cochrane’s’ after it was purchased:

When you say to the best of your knowledge or recollection you paid, what does that mean? How can you say that you paid if you can't specifically recall covering a cheque, for example? What makes you say that you paid?---Well, who else was going to pay? Honestly, you can't just go and spend all this sort of money and, you know, someone pay. Where's Gary going to get the money to pay it? He wasn't milking.

Another example was:
So what about the stamp duty for the acquisition of Cochrane’s?---We paid the stamp duty. I know that for definite.
How do you know that?---Well, I just – well, we did.
Do you recall doing it?---Um, do I recall doing it? Um, no, I would be 99 per cent sure we paid it … When we bought it, we – that was the – you had to pay it – well, where was Gary going to get the money to pay it? Come on.

Another unsatisfactory aspect of John’s evidence was that a not insignificant part of it was not earlier put to Gary or Craig when they were cross-examined. This was unexplained in a context where counsel did not put to Gary the evidence that the neighbour witnesses would give about having not observed Gary working on the Farm. When I raised this issue during the trial, counsel explained that he considered it unnecessary to ‘put a negative proposition’ and asked that Gary be recalled for further cross-examination if contravention of the rule in Browne v Dunn[1] was being put against him. I directed that the further cross-examination occur. However, counsel clearly had the instructions from John and cross-examined accordingly. I am satisfied that those parts of John’s evidence on significant matters that were not put to Gary, as opposed to the neighbour witnesses’ evidence, properly reflect poorly on John’s credit. It is probable that counsel had not been instructed about such allegations at any time prior to hearing John’s evidence.
[1](1893) 6 R. 67.

There were direct inconsistent statements in John’s evidence made within moments of each other. For example, discussing the purchase of Cochrane’s, John said:

Was there a mortgage taken out to finance the purchase of Cochrane’s, to your knowledge? --- Not – not with – not by us, that I know –that I honestly know of, yeah.

and:
What did he pay off with the milk cheques?---Ah, he paid off the mortgage on the farm. He was running it - - -
I thought you said there wasn't a mortgage on the farm?---Yeah, there was – look, it was a – um, a separate farm business

John’s only concession was the undertaking made at the outset. While that concession was significant, my impression was that it was recommended by his lawyers and it was qualified as being without any admission of liability. While generally not of great assistance to a tribunal of fact in a civil proceeding, in this case a comparison of the demeanours of John and Gary was revealing. Save where I expressly state that I accept some aspect of John’s evidence, I otherwise reject it.

1971 to 1977: The first promise

John and Lynette purchased the Home Farm (then known as Chapman’s farm) in 1967. In 1971, Gary was of school age and resided on the Home Farm. In addition to attending school, he played sport on weekends. As boys, both Gary and Craig worked on the farm assisting their parents, Gary starting to do so at about this time. Gary alleged that he spent more than four hours per day milking cows and cleaning up after the milking operation, and additional time rearing calves, hay-carting, tractor-driving, mowing, hay-raking, and various other tasks contributing to the working of the farm.

In the period of 1971 until 1977, Gary assisted John with work on the farm both before and after school. While at school, Gary played football on weekends. There was a contest as to whether Gary played other sports, such as cricket in the off-season. I accept his evidence that apart from two seasons of cricket during that period, he did not. Outside of these school/sport commitments, Gary worked on the farm. The farm work principally consisted of milking, feeding calves and cleaning up each day, usually taking two to two and a half hours in each of the morning and the evening.

At this time, John was working full time as a mechanic at Curls Garage in Leongatha, from approximately 8.00am until 5.30pm on Monday to Friday, and on Saturday mornings until 12.30pm. I am satisfied that John also worked the farm before and after this work. Gary was unable to say why John went to work at Curls Garage and it seems probable that John and Lynette decided that the family needed the extra income and that Lynette and the boys could help with the farm routine.

I accept that Gary would usually work each morning before going to school or weekend sport. Gary described the afternoon milking routine as commencing from about 4.00pm, after he got back from school, until 6.00pm or 6.30pm. The milking routine also included rotating the cows between paddocks.

I am satisfied that the weekday routine would be started by John and Lynette. John preferred other farming activities to milking. Gary claimed that he milked for half an hour to an hour before having breakfast and getting ready to catch the school bus. John stated that he and Lynette got up at 4.00am to start the morning milking routine, which involved sending a dog to get the cows while they had breakfast, then milking the cows, finishing by 7.30am because they were the first pick up on the milk round. Craig did not recall that he and Gary contributed significantly to the morning milk routine. John told his own counsel not to be stupid when he suggested that Gary may have participated in the morning milk work. He said the boys got up, had breakfast and went to school. He conceded that sometimes, very rarely, Gary and Craig might help with the afternoon milking by taking a motorbike to get the cows. John would come home from work and milk the cows, finishing at around 6.30pm when the family all had tea together.

I find it probable that John participated in the morning milking routine to some extent, before getting ready to go to work in Leongatha. Lynette would finish the morning milking routine and John was rarely involved in completing the morning routine because he had gone to work at Curls Garage. I accept Gary’s evidence that he participated in morning milking and I consider that Lynette was the driving force who ensured that the milk was ready for collection each day. I cannot make any finding about when in the day the milk was collected.

In the afternoons, the school bus would drop Gary and Craig at the farm at about 4.00pm and, after eating, they would complete the evening milking routine that Lynette had started before they arrived home from school. Gary said the evening milking routine was usually finished by the time that John returned from work, however I think it probable that John undertook other farming activities in the evenings.

When asked why he worked so hard as a school boy, Gary responded:

We had no choice… Dad was at Curls Garage… Mum was like a slave and so was Craig and I. The work still had to be done because if you don’t milk the cows in the morning and at night then the operation falls over. We were told early that the promise was there that if we do the work we’re going to get the farms at the end of the day.

Gary’s claim defined this promise as the first promise.

Gary explained that the real pressure on him to work the farm started at about the age of fourteen, when John started working at Curls Garage. It was after he did so that John ’really started’ to make the promises that Gary and Craig would ‘get the farm at the end of the day’.

The expression ‘the farm’ was never defined in these conversations, except by the context that all of the land in Whitworths Road owned by John and Lynette was being used in their dairying business. At this stage, ‘the farm’ was Home Farm. The expression ‘the farm’ continued to be used in the same context after the Delios Farm and the House Block were purchased and incorporated into the dairy.

It is convenient at this point to also consider the expression ‘the end of the day’, although it is relevant to all alleged promises. Gary stated that each of the promises that were made to him and Craig, at various points in their lives, always included a reference to ‘the end of the day’ or a similar phrase. Gary and Kim each understood this term to mean the death of the survivor of John and Lynette. Neither Craig nor John suggested a contrary meaning.

Gary considered the amount of work that they did on the farm was more extensive than the work done by other kids who came from dairy farms. Craig too gained the same impression from his friends at school. Gary received no pocket money or wage for his work. Gary earned some money assisting a neighbour who was doing hay contracting and some money from playing football. By the time he was 16 years old, he was raising with John the idea of payment. John and Lynette promised in response that he would get the farm at the end of the day and to not worry about it. Gary could not recall John stating any negative propositions to the effect that he wouldn’t get the farm if he didn’t attend to a particular task.

Craig confirmed that Gary worked on the farm as a school boy, although his recollection was that work was generally done after school, rather than before school. He agreed that Gary would work on weekends when doing whatever needed to be done, on both Saturdays and Sundays. This work, he said, was just expected of them, but he explained that ‘We were always promised the farms’ and John and Lynette would say ‘the farms will be yours and Gary’s when we pass on’. That was said fairly regularly, often in the context of a complaint about hard work. John would respond ‘Well, you know, you’ll get the farms in the end so what are you worried about?’. Craig confirmed that Gary also worked on the farm on the days when he played football.

I accept Gary’s description that John is and always has been a very controlling person, whom he described as having ‘an iron fist’. He expected the farm work to be done when he returned home and I accept Gary’s evidence that if things weren’t done when he came home, ‘it wasn’t nice what happened’. Having regard to his demeanour in the witness box, this description of John’s attitude when his boys were children was unsurprising. Gary impressed me as more conciliatory, conflict avoiding, and accommodating.

However, I do not accept as correct Gary’s recollection that John was basically never there and that Lynette ran both the family and the farm. Gary conceded that on a daily basis, John did help complete the work that needed to be done. I am satisfied that he did so before and after his work at Curls Garage and on weekends, although I accept that John didn’t like milking and preferred to tackle other work.

Although each of John and Gary attempted in their evidence to minimise the contribution made by the other to the working of the farm, I accept neither Gary’s proposition that he, Craig and Lynette did the bulk of the farm work, nor John’s proposition that he did the bulk of the farm work. I reject John’s contention that Gary did a small and insignificant amount of work around the farm in between going to school and playing football and cricket, of a scope and nature that was typically required of children growing up on rural properties.

The first promise was said to have been made very frequently by John or Lynette, to the point where Gary described it as volunteered ‘daily’ and ‘being annoying’. In particular, Gary alleged that the promise was also made to him whenever he raised the question of payment for work on the farm. John’s response was invariably the words ‘Don’t worry about it, you’ll get the farm at the end of the day’ or words to the like effect, such as ‘this will all be yours and your brother’s’ and to the effect that Gary and Craig would receive no wage but, if they contributed to the farm, they would each receive a half share in it when John and Lynette died. Gary asserted that the promise was never conditional, and John never threatened that Gary would not get the farm if certain work was not performed.

John said:

Am I going to sit there every day and tell them they're going to get the farm? Let's be honest. They were going to get the farm. Always never been a question they weren't going to get the farm, but when Robyn come on the scene, that was the case, that was the end of it. They didn't want to believe it and they've put me in this position.

Gary alleged that this promise was operative in the period from about 1971 to 1977. Gary contended that the promise was that the brothers would jointly inherit the whole farm, which would not be divided up between them.

When asked about his promises, John said it had always been his intention that the boys got the Home Farm:

…before Gary left to go to the CBC, any discussions or promises that were made to Gary by yourself with respect to his inheritance of the farm, what discussions, if any, did you have with him on that topic in that time?---Well, it was always that they were going to get the home farm regardless.

John confined the scope of the land to which the promise applied. He asserted that he had already proved that intention and his will had always been, and still is, that they would get the Home Farm.

John said:

The family farm, yes; original farm, the 116 acres, most definitely. I've never disputed that, and I do not dispute it…No, I've always – look, they've always and never were ever not going to get the home farm. They've disputed it, and I – that's – and this is the biggest crux of the matter now, and they've been – it's been signed over.

In evidence was John’s will made in August 2011, after Lynette’s death. It was not to the effect stated by John. Under that will, John left his interest in lands that he jointly owned with Craig and his wife, to Craig, but otherwise directed that all of his properties be sold and the residue of his estate be transferred in equal shares to Craig and Gary. This will does not evidence an intention that Craig and Gary would not receive the Delios Farm and the House Block. John’s last will, made on 22 May 2018, and revoked by his marriage to Robyn, also provided for a greater gift to Gary and Craig than the Home Farm. It provided that they equally share in the Home Farm, the Delios Farm and the small triangle that I defined above as part of the Delios Farm, while the balance of his estate, both real and personal and specifically including the House Block, was the subject of an incomplete gift that failed to nominate a beneficiary. John incorrectly said that it had always been his intention that Gary and Craig got the Home Farm, meaning only the Home Farm. I am satisfied that John was dissembling and I reject the contention that the promise was limited to the Home Farm rather than the Farm.

I accept that statements to the effect of the first promise were made by John and Lynette. John contended that if I was satisfied that the first promise was made, it was not made on many occasions, although it matters not on how many occasions the statement was made. I am satisfied that statements in what can be described as broad promissory language were made to Gary and Craig, with the intention that they would be encouraged to work on the farm.

Gary’s claim that he worked long hours during his childhood and teens beyond the workload that would be normally carried by boys on a farm is a proposition that I cannot evaluate on the state of the evidence. I could take judicial notice of the commonly expressed sentiment that rural children have a hard life working their family farms, but assessing the degree of that hardship is a different matter. Gary suggested that the amount of work he was required to do necessarily harmed his living conditions and his schooling. He described having notoriety for sleeping on the school bus and being physically exhausted at school, and of struggling to complete his homework. However, there is no evidence of how his performance at school was evaluated, and subsequent events suggest that he got a job that he enjoyed and in which he prospered. Ultimately, I am not persuaded that in relation to the first promise, he acted to his detriment in reliance on it. That is not to say that I reject the proposition that he had a harsh upbringing at the hands of a domineering father.

I accept John’s contention that if I was satisfied that the first promise was made, it was made in an informal, familial context, while Gary was still a child, and could not have conveyed to any reasonable person that some form of legally binding ‘promise’ was being made, or that any legal relationship would be formed by Gary working on the farm during his childhood years. Further, Gary did not persuade me that his expectation was greater than that possessed by any child in relation to the assets accumulated by their parents. Gary was content to walk away from farming and find an alternative career path. His conduct at that time is consistent with an expectation that he could have received his inheritance in any form. I do not accept that John’s conduct in making the first promise and accepting the benefits induced by it, were he to resile, would leave a stain on his conscious in the relevant sense.

That said, subsequent repetition of the substance of the promise at a later time in different circumstances built on the first promise and fuelled John and Gary’s perceptions about the obligations attached to it.

In 1977, Gary took a position at the Korumburra branch of the Commercial Banking Company (CBC). He worked standard business hours. Lynette would drive him to and from work. This was his first job off the farm. Gary started with the bank as a junior and progressed to acting first teller before he was transferred to the Trafalgar branch in 1979, by which stage he had a driver licence. Once Gary started working at CBC at Korumburra, he continued to assist with the morning farm work until about 8.45am, when Lynette would drive him into work. She would also stop farm work and come and collect him when he knocked off in the afternoon. He would then assist Lynette to complete the evening farm work.

Gary said the farm work was always a priority. The promise that he and Craig would get the farm always influenced their belief that if they didn’t do the work, the farm might have been lost. John consistently sought to motivate Gary and Craig with the observation that they would get the farm at the end of the day. Lynette supported and repeated these observations.

In May 1978, John and Lynette purchased the Delios Farm and the House Block and the acquired acreage was incorporated into the farmland used for the family dairying business.

As soon as Gary started working, he was required to pay board. John denied this but I do not accept his denial. It is probable that board was a financial transaction between Lynette and Gary, about which John was unaware. John still made no payment for work done on the Farm and Gary’s contribution was simply expected of him, in the context of the encouraged expectation that he could expect to one day own the Farm with Craig.

In 1979, when Gary transferred to the Trafalgar branch of CBC, he remained living at the Farm for a period, before moving to Morwell. This was an opportunity for him because he became the first teller in his own right, with responsibility for the sub‑agency at Thorpdale. He then moved to securities, bank cards and loans. At this stage, banking business was recorded in hand written ledgers, although computers were about to arrive. Gary’s career was progressing fairly rapidly.

Once at Trafalgar, Gary stayed in Morwell on Monday, Tuesday and Wednesday nights, not always Thursday night because of football training, and would return to Korumburra on the weekend to play football. However, once he moved away from living on the Farm, his contribution to farm work changed. When he was back in Korumburra, he would stay on the Farm and would usually help Lynette with the farm work. He could not recall a weekend when he did not go to the Farm and help out, and he could not recall being at the Farm and not working to help complete the milking work.

Gary’s recollection that he worked on the Farm after he started at CBC was contested by John, but largely corroborated by Craig and Kim. I accept that he did continue to work on the Farm in the manner and for the times that he described. Kim stated that at about this time, Gary told her that he worked so hard because of the family expectation that he do so, because the Farm would be his and Craig’s in the end. They didn’t have a choice to say no. John and Lynette frequently made statements to that effect at the dinner table in Kim’s presence, and she also heard statements to that effect made in the presence of relatives, including Lynette’s sister and her children. Kim’s specific recall was of the context that Lynette’s father remarried when her mother died, and he delayed the succession process when he granted his new wife rights to live in the house until she died. Her recollection was that both John and Lynette frequently said ‘When we die, the boys will get the farm’.

Although Gary performed some work at the Farm after he moved out, Craig, who was still at school, picked up the load in assisting John and Lynette working the Farm. In 1981, Craig left school, moved to Melbourne, and commenced employment in the Richmond branch of the National Australia Bank as a clerk.

Also in 1981, CBC transferred Gary to the William Street, Melbourne branch in a position of first teller. He moved to Melbourne and lived in Prahran. As the first teller, he had the opportunity to be in charge of the finances of a Melbourne branch. He would occasionally step in for the accountant. Gary considered himself to be well on the way to becoming an accountant and then a branch manager. He stated his belief that he was progressing well at the bank, which was confirmed when he told his manager he was leaving because he had personal issues. He described having a career path that he was happy with, and he said he was happy with his life living in Prahran and working in William Street.

His progress at CBC persuaded me that his education did not suffer in any relevant sense from hard work on the farm when a schoolboy, in detrimental reliance on the first promise.

1981 to 1994: The second promise

During a period of Lynette’s ill health in 1981, Gary resigned from CBC and returned to Korumburra, to live at and to work on the Farm. Gary alleged that he was induced to do so by John and Lynette’s promises that the boys would ‘get’ the farm when John and Lynette passed away (the second promise). His case was that he acted significantly to his detriment in giving up his banking career.

First, I am satisfied that when Lynette fell ill in 1981, John asked Gary to come back and help out at the Farm, said they would provide board and meals, and stated that ‘you will both get the farm when we die’. Craig was also asked by John and Lynette, when Lynette got sick, to come back to the Farm. He presumed that Gary was also asked to return. Craig, also working at a bank by this time, was offered a wage to encourage him to return.

John falsely denied the second promise:

… at or around the time that he resigned and returned was there a discussion where you repeated the promise about the inheritance of the farm to Gary?---Honestly, not to my knowledge. Look, they've brought this up that I'm supposed today say it every day of the week. This is just fabrication. Come on.

Gary returned to and worked on the Farm for no wage. He alleged that he relied on this promise to his detriment. This proposition requires careful evaluation. Gary alleged in his pleading that he worked 70 to 80 hour weeks on the Farm, without pay, until about 1993, having given up employment with a weekly wage and accrued benefits such as annual leave, personal leave and long service leave. He refrained from seeking alternative employment, including reinstatement/continuation of his position at CBC. He worked long hours on the Farm that he otherwise could have devoted to working on his other farming interests, forgoing profits. Gary failed to prove this rather expansive claim, as I will now explain.

John denied that Gary worked on the Farm in any significant way when he initially worked for CBC, and he lived with John and Lynette free of board. All he did around the Farm was to occasionally help with the harvest and to disperse hay on the tractor for the cattle in the winter months. John alleged Gary did no work on the Farm when he lived in Morwell, and later in Prahran. I do not accept these denials. As I have already stated, I am satisfied that Gary mostly did the work that he described and that he did so to help Lynette.

The key issue with this second promise is whether Gary was induced by it to act to his detriment, or whether he responded to other motivations. Let me firstly deal with the other motivations and I will return later to the issue of detriment.

John alleged that Gary came back to Korumburra because he no longer wanted to work at CBC, wished to be a farmer, and wanted to be with Kim. John asserted that to help Gary, he approached Mr and Mrs Cochrane, the owners of a neighbouring farming property on the opposite side of Whitworths Road adjacent to the Farm (Cochrane’s), enquiring whether they might sell their land. Gary was aware that Cochrane’s would be purchased before he came home from Prahran. Gary denied this, and I will come to the circumstances of this purchase in more detail.

The proposition that Gary returned for reasons other than reliance on the second promise, on the probabilities cannot be readily dismissed. Gary accepted that Kim’s presence, his future wife, attracted him back to Korumburra and this was probably a strong motivation for a 20 year old man. I am also satisfied that Lynette’s serious ill health was probably also a strong motivating factor in his return to Korumburra. Kim confirmed as much and subsequent events support these probabilities.

Gary and Kim married in 1984.

Lynette was first diagnosed with cancer in 1979, and after that, her health was variable. In 1981, Lynette was very seriously ill and expected to die. John stopped working at Curls Garage and was increasing his workload on the farm but was unable to cope operating it without her help, even with Craig’s assistance. Gary said most of the farm work at the time was being done by Craig.

At this time, when Lynette was very ill, Gary returned fairly regularly from Melbourne on weekends to help out on the farm and to see Kim. He would stay at the farm and, if there, John required him to assist with the farm work. On those weekends he would spend five to ten hours on farm work, for which he was not paid. Every weekend when Gary returned to Korumburra, John pestered him to come back to live on and work the farm. John stated that he needed Gary’s help because he couldn’t run the farm on his own, and that if he didn’t help, he might lose the farm. Gary could not identify the precise conversation when John suggested that he needed Gary’s help to avoid the loss of the farm. Kim recalled that Gary came back to work on the farm and be part of the farm business because it would eventually become his.

In context, the expression ‘the farm’ in these discussions can only be referring to the land defined above as the Farm, that is the Home Farm, the Delios Farm and the House Block. There was no evidence of any separate discussion of individual blocks, nor was there any evidence of distinct farming activities on any particular block.

Gary said he left his employment with CBC because John wanted him to come back to the Farm. I am satisfied that he was also coming home regularly to see Lynette and Kim. Gary conceded that his decision to leave CBC was made for many reasons. He first mentioned his mother’s illness, his future wife’s presence in Gippsland was clearly another reason, as was his father’s request and the promise of the Farm. Subsequent events tell us that despite what Gary said about being interested in pursuing a career in banking, he never returned to it, while on the other hand, he appears to have made a successful life as a farmer. At a later point in his evidence, he said:

Now, at the time that you had decided to sell Cochrane’s and then move to Hallston, why didn't you go back into banking?---Oh, maybe I should have. Um, I decided that, um, farming was the way I wanted to go at that stage and, um, clearly just purchased a property and, yeah, go forth. The opportunity was there to go banking but or whatever I wanted to do but, yeah, I went farming.

Gary could not recall a particular discussion or request that directly led to his decision to return to the Farm, giving up his position at CBC, on the promise that he would inherit the Farm, because of the frequency with which these requests were made. He considered that John wore him down with constant requests. I am satisfied that Lynette’s terminal illness was a significant factor in both John’s requests that Gary come home and in Gary’s decision to do so. That said, I accept that but for his return to the Farm at this stage, it is unlikely that he would have become a dairy farmer and he would have instead continued to progress his promising career in banking, probably staying in Melbourne.

Because Gary had been earning a wage, the question of John paying Gary to return to work on the Farm came up in conversation. Gary had stated that he would not come home unless he was paid. John offered to pay Gary the same wage as he was receiving from the bank. John said ‘okay, we’ll see how it goes’. Gary rejected the suggestion in cross-examination that John never intended to pay him a wage because he was going to be operating Cochrane’s and earning his own income. Gary stated that his decision to return was made, and he had in fact returned, before there was any mention of Cochrane’s.

Gary returned to live at the Farm, but it did not go well. Lynette had handled all the finances and despite her illness, she continued to do so. The farm finances revolved around the monthly milk cheque as the major income source. Lynette often said to Gary that she could not pay him because ‘we’re running a bit short this month’. His parents had resorted to explaining their inability to pay his wage by reminding him that he would get the farm ‘at the end of the day’. Gary said he seriously regretted his decision to leave CBC and considered returning, but he did not do so, and there was only his evidence that he thought about it as an option. His conduct suggested a greater interest in farming and staying in South Gippsland.

In 1982, John, Lynette, Gary and Craig were registered as proprietors of Cochrane’s as tenants in common in equal shares, acquired on vendor terms. Gary and Kim moved to Cochrane’s and established a dairy milking operation on the property. The circumstances of the acquisition of Cochrane’s were disputed, beginning with whose idea it was. No documents remained as evidence of the transaction.

Gary’s evidence was that in 1982, he approached Mr and Mrs Cochrane enquiring whether they were interested in selling their farm on vendor finance terms. Gary explained that having just left his banking career, he saw this as an opportunity for his future. In contrast, John recalled that the opportunity to acquire Cochrane’s came up to add prime farming land adjacent to the Farm to the family holdings. I note that this motivation is distinct from John’s evidence that he approached the owners of Cochrane’s to help Gary return to farming, as noted above. In any event, I make no finding as to who caused the acquisition of Cochrane’s. The purchase and the farming of Cochrane’s was a family enterprise, at least in some respects as I will explain. Gary’s evidence about the matters that now follow was substantially corroborated both by Kim’s and Craig’s recollections.

Gary considered that Cochrane’s was not a viable farm in its own right for him and Kim. He discussed with John and Lynette the proposition that Cochrane’s, together with the Delios Farm situated directly across the road, would be very viable. He claimed that they agreed with him and permitted him to use the Delios Farm. Gary and John each saw an opportunity from his own perspective. Gary preferred this option to returning to banking, particularly because of Lynette’s illness and his desire to be close to Kim. John saw the opportunity to have Gary nearby to help him with the Farm. Whether there was any firm agreement about access to the Delios Farm was another matter.

Gary’s recollection of the financing of the purchase of Cochrane’s was hazy. He thought that with Lynette’s assistance, he negotiated to purchase the farm on vendor terms. The purchase price was about $140,000, requiring him to find $70,000, with the vendors providing finance of $70,000 on vendor terms for three years. Gary believes a small deposit of about $1,000 was paid, probably by Lynette, although his parents did not run separate finances, and the balance of the $70,000 was borrowed from a bank on a second mortgage security.

John’s recollection was also unclear. He thought he put down a deposit, but could not state the amount paid. He thought he and Lynette put in around $70,000 as a 50% deposit, with the remaining $70,000 on vendor terms. Later he said that he just assumed ‘we had it there and it was there and we paid it. Like, Lyn always done the bookwork.’

Craig could not recall much about the purchase of Cochrane’s and didn’t even know that his name was on the title until the proceeding was commenced. He did not recall signing any documents.

Improvements were made to Cochrane’s, including the installation of a new milking machine and modifications to the milking shed and the cow yard. Exactly who did what, when, and at what cost, in respect of these improvements, was contentious.

John suggested that, as far as he knew, he and Lynette made capital improvements to Cochrane’s. John maintained that soon after Cochrane’s was purchased, he spent about $25,000 on improvements that included new milking machines and associated equipment, the transformation of the milking shed from a three double‑up walk‑through shed to a ten ‘swing-over herring-bone’ shed, the extension and concreting of the cow yard, digging out an effluent pit, excavating and building a large new dam, the installation of a pressure pump and pipelines, and the installation of a concrete floor in the milking shed. This evidence was a reconstruction of the events of the time to put John in a favourable light. In cross-examination, John conceded that he had no direct knowledge that he made any contribution toward the improvements.

Gary suggested that John misunderstood what happened to bills that he received from contractors and passed to Lynette to pay. Lynette gave them to Gary and he paid them out of his milk cheque from the Cochrane’s herd. No banking records or other documents provided any independent trail to verify either of these claims. Gary’s evidence, which I prefer, was that ultimately the improvements were done over an extended period of time, not three to four weeks as John suggested, and paid for by him from his milk cheque proceeds.

John permitted Gary to use an old red two wheel drive tractor. This tractor was kept on the Farm and Gary found that whenever he went to use it, he could not do so until he had completed various jobs on the Farm for John, and within six to eight months of buying Cochrane’s, Gary had acquired his own tractor. I reject John’s contention that he gave the red tractor to Gary.

I am satisfied that the purchase of Cochrane’s was essentially an expansion of the Harris family farming enterprise. For a start, John arranged for the property to be purchased in the joint names of himself, Lynette, Gary and Craig. Gary accepted that there was both an intention to grow the family farm and an intention that Cochrane’s would be Gary’s when it was fully paid for. The arrangement about Gary’s access to the Delios Farm was particularly vague and I cannot be persuaded that any arrangement was in fact reached. Although Gary envisaged having access to Delios Farm to make Cochrane’s a viable farm, John refused to permit Gary to use the land, claiming he needed that acreage for his cows. This impasse came about within months of the purchase of Cochrane’s. Desiring to make his farm viable, Gary negotiated to lease land from a neighbour, Alec Humphries. Gary paid the rent to Humphries from his milk cheque.

The farming business was intertwined to some extent. Gary provided labour for John’s business, but without reward. John supplied Gary with about 40 cows for Cochrane’s that he milked for approximately two years before, according to Gary, returning them. At about this time, Gary became interested in developing a quality herd using artificial insemination and rotation techniques. He developed his own herd in this manner, which permitted him to return John’s cows. John denied that the cows were ever returned, describing Gary’s evidence as a fabrication. However, I preferred Gary’s evidence that he did return the cows. Beyond the issue of the cows and a tractor, there was no evidence that any of John, Lynette or Craig provided any assistance to Gary in farming Cochrane’s.

Gary received all the milk income at Cochrane’s and paid all the expenses and interest in relation to that farm, including the rent for Humphries’ land, and the cost of the improvements that were made. John suggested this evidence was a fabrication, but could not prove any alternative hypothesis. Gary said it was difficult to survive, as for the first couple of years Cochrane’s was not profitable. I prefer Gary’s evidence that he made Cochrane’s viable through hard work and sacrifice, particularly once he leased additional land from Humphries. Gary and Kim managed to pay all the interest payments, but could not reduce the principal outstanding during that time. However, I am satisfied that John and Lynette made Gary’s opportunity viable by paying the deposit, lending their names to the debt/mortgage obligations that Gary assumed, and by providing cows to initially generate a milk cheque income.

John and Lynette’s contributions were significant, but were overstated by John in his evidence. In a real and practical sense, John and Lynette helped Gary to start his own farm, as they would later do for Craig. It was adjacent to the Farm, as Craig’s block would be. Although Gary and John (or Craig) never farmed in partnership, these land acquisitions were consistent with the expressed promises about the future ownership and use of the Farm.

In these circumstances, Gary had not acted to his detriment in returning to Korumburra.

I also find that once Gary started working Cochrane’s, he continued to work on the Farm. I accept his evidence that he worked an average of ten hours per week, with tasks such as calving, attending to sick cows and so forth. Gary suggested that he would often be obliged to work on the Farm. For example, there were strings attached to borrowing the tractor, such as having to spread John’s hay before he could use the tractor to feed out his own hay. It is probable that, to some extent, Gary avoided interactions with his father to reduce the extent to which he was required to work on the Farm. Kim recalled very persistent telephone calls from John asking for Gary and stating that he needed him to come down to the Farm.

Gary worked the hay season for John every year from 1981 to 1993, assisting with John’s hay contracting business. Gary estimated, and I accept, that he worked a couple of hundred hours a year in John’s hay contracting business for no pay, principally cutting and raking hay at the Farm and a separate property rented by John that was referred to as ‘Condoluci’s’. John alleged, but I reject, that Gary only worked Cochrane’s and did nothing on the Farm, while John baled hay on Cochrane’s for no reward.

In 1984, just prior to the expiry of the vendor terms on Cochrane’s, Gary and Kim took over the title and the debt from John, Lynette and Craig, and became the sole registered proprietors. It was not clear that John particularly favoured permitting this course and probably, as Kim stated, Lynette pressed John to agree to do so. I prefer Gary’s evidence that he and Kim paid the stamp duty, legal costs and the balance owing to the vendor with a loan from Rural Finance, and took over responsibility for the existing National Bank loan originally used to finance the purchase. It was not disputed that at the time of this financial transaction, John, Lynette and Craig transferred Cochrane’s to Gary and Kim absolutely, and were released from responsibility for the outstanding loans.

Craig recalled that John provided some assistance to Gary in establishing Cochrane’s, although he was unable to be specific. Craig had no knowledge of the circumstances in which Cochrane’s was transferred to Gary and Kim.

In 1986, the parent title to the Delios Farm and the House Block was subdivided to create those two properties, with John and Lynette registered as tenants in common. A new home was built on the House Block at some stage. Craig married Suzanne and in 1987, and they moved to Ballarat and bought a mixed trading business. The Farm was then worked by John and Lynette, with assistance from Gary, who was then living on Cochrane’s.

In 1988, Lynette again fell ill and was unable to work on the Farm. Craig then sold the mixed trading business and returned to work on the Farm.

In 1993, Gary and Kim purchased a farm in Hallston on vendor terms for $1,020,000. In April 1994, they moved to that property and continued dairy farming. Between 1993 and 1995, Gary and Kim subdivided Cochrane’s and sold off the land. Gary’s evidence was that John, who considered Cochrane’s to be prime farmland, was disappointed, even angry, that Gary was not keeping it within ‘the family’. John also alleged that when Gary and Kim sold off Cochrane’s, they made substantial profit that enabled them to purchase the farm at Hallston that is worth several million dollars and exceeds the value of the Farm. Craig recalled that John was very disappointed and fairly angry when Gary and Kim sold Cochrane’s and moved to Hallston, because John wanted to create ‘a little empire of Korumburra South’.

Kim described the decision to buy the farm at Hallston as necessary, because Cochrane’s was not viable and could not accommodate their ambitions to build the herd. Additionally, John’s constant demands on Gary to work on the Farm meant that Gary was effectively on call 24 hours a day, when they had a family with three kids, as well as their own farm. John’s demands motivated them to move away to a larger property.

Around this time, Gary and John’s relationship broke down and they mostly ceased contact for more than a decade. Gary described a huge falling out, with John doing his best to ensure no purchaser was interested in buying any part of Cochrane’s, including by pulling signs off fences and verbally discouraging potential purchasers from inspecting the property. During that following decade, Gary did no work on the Farm. Gary believed that Craig was helping John for significant periods during his absence.

In considering whether Gary acted to his detriment in reliance on the second promise, John invited the court to take into account the undertaking that he gave at the commencement of the trial. Gary disagreed with the suggestion that the value of the half-interest that he would receive in the Home Farm would more than adequately compensate him. Gary had alleged in his pleading that he had a very promising career as a banker. I accept that he made progress in that occupation before he gave it up, but there was no evidence as to what he might have done in banking and the financial returns that he might have received, had he not returned to farming in 1981.

On the other hand, there was no evidence that Gary was dissatisfied with being a dairy farmer at any time prior to establishing Hallston as his principal farming property. I am not persuaded that Gary suffered any significant financial detriment by reason of his decision to give up his career in banking and return to farming. However, I am satisfied that Gary was induced to assist John in working the Farm when he could have devoted his efforts to his own farming interests. Just as John himself had done, Gary might have engaged in a second job to assist in the acquisition of income and assets for himself. Gary raised a detriment of this sort at a very general level. There simply was no evidence of the weekly wage or the accrued benefits of employment that might have been foregone. Nor was there specific identification of the opportunities to pursue other profitable farming interests that were foregone by the time that Gary spent working for John. That said, I accepted the general proposition advanced that working long hours on somebody else’s farm for no wage would ordinarily be considered detrimental to a person’s financial wellbeing.

The related question was whether John unconscionably exploited Gary’s detrimental position, and it is particularly in this context that his undertaking is relevant. However, as the undertaking was not given until the commencement of the trial, it is appropriate to defer consideration of unconscionability until later in these reasons.

In December 1993, John, Lynette, Craig and Suzanne became registered as proprietors of the land I have named above as Craig’s farm.

By 1996, Craig and Suzanne had returned to Ballarat. John and Lynette occupied Craig’s farm, with his agreement, and used it as part of their commercial dairy operations.

In 2000, John and Lynette ceased to run a dairy and cropping farm and began to farm beef cattle. In about October 2001, part of Craig’s farm was sold. Soon after, John and Lynette bought house blocks at three different locations at Lake Gardens near Ballarat and built houses on them (Ballarat properties).[2] In late 2002, or early 2003, a further part of Craig’s farm was sold, and in 2006, another tranche of approximately 13 acres was sold. Proceeds of these sales were applied to discharge the mortgage and then divided approximately equally between John and Lynette on the one hand, and Craig and Suzanne on the other.
[2]In 2010, John sold one of the Ballarat properties to Craig, leaving John with two properties in Ballarat.

After John and Lynette acquired the Ballarat properties, Craig recalled that the promises were extended to include those properties. His recollection was that the promises were always that land would be left to Gary and him and there was never any promise of particular individual gifts.

In about 2001, Gary became disillusioned with farming. He leased his Hallston farm to a third party. Between 2001 and 2006, Gary worked as a real estate agent. In 2007, Gary suffered a serious injury when attacked by a bull and was incapacitated for a period of time. During that period of incapacity, Gary’s relationship with John began to improve. At this time, Lynette’s health deteriorated. She had a hip replacement and soon after fell ill and became unable to work on the Farm.

2008 to 2012: The third promise

Once Gary and John’s relationship had thawed, Gary helped John once again with his hay contracting business. Gary assisted with the baling and trucking of John’s hay, all for no pay or reimbursement, but on the repeated promise of 'You're going to get the farm at the end of the day. You boys will get the farm at the end of the day' (the third promise).

By 2009, Lynette, who had worked long hours on the Farm, was now incapacitated by her terminal illness. She was diagnosed with multiple metastases in both lungs and the liver. John had hired a ‘young bloke’ but Gary did not know how much he did or what the arrangement was. The Farm was now carrying beef cattle and there was not as much work to be done. John asked Gary to come back and he did so, not only working on the Farm contributing his own equipment but continuing to help with the hay baling business, all for no pay and while working full time on his own farm at Hallston.

In this context, there were many conversations between Gary and Kim and John and Lynette that Gary would not receive a wage for working on the Farm while Lynette was incapacitated, but that Gary and Craig would each inherit half the Farm when their parents passed on. Gary’s evidence was:

When that happened [referring to Lynette’s deteriorating health], was there ever any discussion with you about you doing more work on the farm?---Yeah. Well, Dad wanted me to help out on the farm because it's going to be mine at the end of the day– well, Craig's and mine at the end of the day. And so around that 2008 period – because I had nothing to do with the Ballarat properties, and the Ballarat properties– I wouldn't even know if I could find them if I went to Ballarat… so the farm – because the farm – Dad promised the farm to us boys, of course. He wanted help to work the farm. So – and because of Mum's deteriorating health, maybe I felt obligated to go and help him, so I did.
Was there any discussion about you being paid?---Paid. ‘You'll get the farms at the end of the day, so why worry?’
…
Can you be more specific about what he said?---Um, so what said was the farms, which is four bits, would go to me, Craig would get the three Ballarat properties or two Ballarat properties – whatever that was at the time – and, um, there would have to be an equitable split between Craig and myself – how we done that dad wasn't too concerned about.

It was notable that in his claim, and his evidence, Craig made no mention of an entitlement to the Ballarat properties. His case was that he would get half of the Farm and, as already noted, the deed between Craig and John is silent about the Ballarat properties. Craig said John or Lynette never discussed with him that instead of receiving half the Farm, he would receive the Ballarat properties and an adjustment payment. He said that John and Lynette always told him that he and Gary were to receive half of everything. He was not surprised to hear Gary suggest a different promise because these promises were invariably made to Gary or Craig independently and not in each other’s presence. That said, it made sense that he receive the Ballarat properties because he lived in Ballarat and as long as he and Gary were going to share equally, he didn’t really care how it was sorted out.

Gary recalled these conversations as having taken place around the kitchen table on quite a few occasions. John said there was no sense in Craig having the farm when he was in Ballarat, and it didn’t appear that he was coming back to Korumburra. Conversations to this effect started shortly after Lynette passed away and continued for a couple of years. John told Gary that in exchange for these promises, he wanted Gary to help him run the farm, and as Lynette had passed away, it was clear that he needed that help. Gary said he worked at least ten hours a week on the farm while still running his farm at Hallston. Usually he would attend at the farm in the middle of the day, between milking sessions at Hallston. I accept that these conversations occurred.

Again, I pause to note that the evidence did not suggest that when they referred to ‘the farm’, the reference was to some other land than what I have defined above as the Farm. The discussion was not confined to any individual block and not specifically to the House Block.

I am satisfied that by this time John (and Lynette) had firmly established the expectation that Gary and Craig would each inherit half the Farm when their parents passed on, but would not be paid for any work they performed.

Kim confirmed the change in the expression of intention after Craig moved to Ballarat and John and Lynette’s purchase of the Ballarat properties. She recalled many conversations in which the suggestion was always that Craig would get the houses in Ballarat when Lynette and John died and Gary would get the Farm, and that they would make some sort of adjustment between themselves to achieve an equal split. John would say ‘you can work out any difference yourselves.’

Kim recalled that Lynette was bitter about her illness and working on the Farm and that she would often talk to Kim about her view that the boys would get the Farm when John died. At that time, she was concerned that John was about to commence a relationship with another woman. She asked Kim to promise that the boys would fight for the Farm if they needed to.

Dorothy Maxwell was a neighbour who lived across the road from John and Lynette and was friendly with both of them, particularly with Lynette prior to her death. She recalled that each of them use to say that the farm ‘would all belong to the boys’ or ‘this will all belong to the boys one day when I’m gone’. Ms Maxwell could not indicate precisely when such statements were made, but she recalled that they were usually made at mealtimes. She and her husband regularly dined with John and Lynette. She did not resile from her evidence under cross‑examination and I accept her evidence insofar as it provides some broad general level of support for Gary’s claim.

John stated:

All right. And at about that time Gary says that he had a conversation with you where you made further promises as to the inheritance of the farm - - -?---Oh, do I have to - - -
- - - to lure him back – or just let me finish – to lure him back to work on your farm. What do you say as to that?---Complete fabrication.

At this time the work that Gary did for John was the hay. He took cattle to market in his own truck, which may have included herding the cattle from the fields into the yards and driving to Koonwarra, often doing two trips. He estimated he was working five to ten hours per week for his father. Another witness called by John, Brian Jefferis, gave evidence that he did cattle cartage for John. Gary did not deny that he did and I am satisfied that Gary did cart cattle as he suggested, and that he was not the only person who did so.

Gary alleged that he again relied on the third promise to his detriment. I am satisfied that he returned and worked on the Farm for no wage. He worked long hours on the Farm and in the hay baling business that he otherwise could have devoted to working on his other farming interests, forgoing profits. Gary assisted with the hay contracting business each year until 2014.

On 1 February 2010, Lynette passed away. John became registered as the sole proprietor of the Farm and the Ballarat properties. That same year, Craig and Suzanne purchased one of the Ballarat properties from John. At this time, John continued to enjoy the sole possession and use of the unsold part of Craig’s farm.

A financial disaster emerged after Lynette died, when John discovered that he had not lodged tax returns for 25 years. Gary’s cross-examiner, presumably on John’s oral instruction put to him that John had to borrow approximately $700,000 in order to pay off his tax debt, including interest and penalties, ‘to avoid the ATO taking over the farm’. Gary had no knowledge of that and John produced no documentary proof about a tax debt. Craig recalled some discussion of a debt of approximately $400,000 that John paid by selling one of the Ballarat properties to him, and selling a house that he had inherited from his aunt. John, he said, just wanted to put his head in the sand and ignore these problems.

In 2011, Craig and Suzanne divorced, reaching a property settlement in 2012 under which Craig retained the Ballarat property and Craig’s farm. John provided $65,000 to enable Craig to make the necessary cash adjustment in that settlement. Craig became the sole registered proprietor of Craig’s farm in October 2013, when John transferred his interest to him.

In about 2013, John commenced a relationship with Robyn Jones, now Robyn Harris. From that time, John made statements that indicated that he was thinking he might depart from the promises that he had made to provide for Robyn after his death.

Gary’s work for John during the period of the third promise was mainly away from the Farm. It is unsurprising that John’s neighbour witnesses, whose evidence I have not specifically recounted, stated that they either did not see Gary working on the Farm, or saw him only half a dozen times. The hilly topography of the Farm and the layout of its infrastructure also would have made it difficult for them to see him working. I was not persuaded that evidence of a negative – Gary was not seen by the witness working on the Farm – was probative, and I gave no weight to such evidence. Leonard Barrett gave limited evidence about John’s hay contracting business. Mr Barrett only helped John ‘to get him out of trouble’, meaning when he was flat out with other things. That was intermittently. Mr Barrett could not comment on whether Gary also helped John in the hay contracting business.

2013 to 2016: The fourth promise

Following Lynette’s death and Craig’s return to Ballarat, Gary said that the nature of the promises made by John changed. He was still asking Gary to help him run the Farm, and assist with his hay baling business without a wage, but was promising that Gary would solely inherit the Farm, and that Craig would inherit the two remaining Ballarat properties owned by John, subject to the two brothers coming to some equitable accommodation, based on the relative values of those properties, so that they would each receive the same value (the fourth promise).

John described Gary’s evidence about this promise as ‘utter bull’, before dissembling by reference to his failure to lodge tax returns and pay tax. Gary’s evidence about the fourth promise was corroborated by Kim and I accept his account as truthful.

Between 2013 and 2015, John and Gary discussed a proposal for Gary to lease the Farm, which I take to be a reference in this instance to the Home Farm and the Delios Farm since John and Robyn were to remain living on House Block. After Lynette’s death, John fell into a habit of having dinner every Thursday night with Gary and Kim at the Leongatha RSL. He wanted to slow down or retire and asked whether Gary would be interested in renting the Farm. John repeated his intention to give Craig the Ballarat properties and to give Gary the Farm, and that the boys would have to make an equitable split between them. Gary said he would do the book work and see whether it was worth his while.

Kim recalled the Thursday night dinners at the RSL and corroborated Gary’s evidence of the tenor of the statements that John made. Kim recalled that she often paid for tea and John would complain often about not having cash to spend. The conversation would turn to possible ways of increasing his cash income. It was from these conversations that the idea of the lease agreement and the use of the Farm as part of Gary and Kim’s business developed. Kim left the detail of these discussions to Gary, while stressing to him that it was important that he obtained a written agreement from John. She recalled that the arrangement reached was that Gary was going to lease the land at the going rate and that Gary would do any improvements that needed to be done to the property because, at the end of the day, he would inherit it.

Ultimately, Gary concluded that the project would be viable, as it would allow him to increase the size of his herd, convert Hallston to wholly dairy, and use the Farm for haying, silage and raising calves and young stock. Gary’s assessment was that his Hallston farm at 350 acres carried 200 to 220 cows, as well as running calves and young stock. Gary’s perception was that, if he rented the Farm, he could manage up to 300 or 400 cows, but he lacked the infrastructure at Hallston to milk more cows. The project would require improving Hallston, to support the increase in milking activity, as well as rendering the Farm, fit for Gary’s purpose. Gary contemplated improving the infrastructure on Hallston to milk the number of cows capable of being carried by both properties, on the basis that he could rotate cattle between them. There was no milking infrastructure left on the Farm since John had converted to beef farming some years earlier.

John said he would happily accept a market rent, which Gary assessed to be around $170 an acre, or about $34,000 a year. To advance the proposal, Gary sought confirmation from John that he was still going to get the Farm at the end of the day and John gave that further confirmation. Although the market might have paid a higher rental, say $220 an acre for dairy farmland, without the infrastructure, John could not rent the Farm to anyone for much more than $34,000 a year. This assessment of the market rent for the Farm was not challenged.

Having concluded that his project was viable, Gary agreed with John to lease the Farm for a market rental. There was no written agreement, Gary said John fobbed off his request for a documented lease with the response ‘You’re my son; you’re going to get the farm at the end of the day. Don’t worry about it.’ I pause to note that Gary confirmed that, at this stage, with Lynette having passed away, the expression ‘the end of the day’ meant when John passed away. He always understood that his father used the expression in precisely that meaning.

The proposal for Gary to lease the Farm was agreed in 2014 but John suggested that he needed two years to wind down his operation. Gary also wished to be properly set up for the project, and it was agreed that he would take over on 1 July 2015.

Gary proposed increasing the size of his herd to run on the Farm by breeding from his herd at Hallston using artificial insemination. He also made significant capital improvements at Hallston to enable a much larger herd to be accommodated and milked. In particular, the water supply was increased. The cow yards were expanded. Irrigation lines were also added, and additional gates were fitted. Needing help with the infrastructure improvements, and based on the expectation of profit from the project, Gary contacted Craig and invited him to work for him, initially paying him a $1,000 a week, but proposing a share farming arrangement from 1 July 2015. Craig suggested that he bring the 73 acres or thereabouts of his farm into the arrangement and the extent of Craig’s share in the arrangement would depend upon how many cows he contributed. Gary was also assisted by an employee who lived at Hallston and was principally responsible for doing all the milking.

At some point, Gary became aware that a neighbour, Ron Macari, had a property just below Craig’s farm, adjacent to the Farm, and was interested in renting it out. To allow Gary to build his herd up before the lease of the Farm began, Gary made that arrangement and ran 60 head of cattle on that property, referred to as Dominic’s or Macari’s.

Kim confirmed Gary’s evidence about the improvements made at Hallston as part of this project. Kim recalled that the Farm wasn’t properly set up for the way in which Gary proposed to use it, particularly in relation to the fencing of paddocks and laneways, given the frequent movement of cattle that was proposed. Kim said that she and Gary relied on the promise that he would inherit the Farm in undertaking their expenditure on both the Farm and at Hallston, because that project would not otherwise have been economically sensible.

The proposal for a farming partnership between Gary and Craig and its failure to fly was explored in evidence but, in my view, nothing turns on it. John was not included. The financial consequence for him was that he would receive rent for the Farm, except that the lease never became operative for reasons discussed elsewhere.

Gary contended that the fourth promise, that he would inherit the whole of the Farm, was the active promise that was the foundation for the claim that he made in the proceeding. Again, he pleaded that he acted on John’s promise to his detriment, continuing to work on the Farm for John for no pay, refraining from seeking alternative employment and foregoing profits that he could have made through his other farming interests. However, his case was put differently at trial.

John’s evidence was internally conflicting, as the following passages from his evidence in chief show:

Well, you've heard Gary's evidence that he then assumed that there was a lease in place or there would be and, therefore, improve Hallston in a certain way?---Gary dreams, to be honest. He – he – well, he's fabricated and he’s fabricated a lot of things here yesterday and today…
…
All right. And you've heard his evidence that essentially those improvements are now useless because of you pulling out on an agreement as to a lease?---That's a complete fabrication. Those improvements on that farm have made that farm. It's a very valuable farm. Anybody comes to want a farm on that place with irrigation, it is a top farm, most definitely. It's a credit to him.
…
So just to be clear then, so the period during which the works had been carried out at Hallston, in or about that period, were there any discussions between yourself and Gary as to the inheritance of your farm?---He would inherit the farm when I died.
…
Well, that's why we're asking. The judge needs to know what actually was said so - - -?---Well, I'll be honest. Yeah, they were always going to get the farm. There was never a doubt they were not going to get the farm, and that's the [Home Farm], and that's the 116 – the 116 acres, definitely.

There was evidence of significant expenditure by Gary on improvements at Hallston that was not contested, and I need not detail the expenditure in these reasons. A schedule of expenditure that Gary had compiled was in evidence and it was largely unchallenged. In respect of expenditure of more than $330,000 that Gary claimed to have spent after July 2013 on improving Hallston in furtherance of the project, John contended that the expenditure all related to improvements at Hallston that made Gary’s farm very valuable. However, his opinion about its value was not supported by admissible opinion evidence and I reject it.

Gary was clear that without the lease, he would not have undertaken any of these improvements, because they were not economically justified and amounted to overcapitalisation of Hallston. His business case was that sufficient cattle could be kept on Hallston to warrant expenditure increasing the milking infrastructure there, and he anticipated that the cost of that additional infrastructure, together with the additional costs of leasing the Farm at a market rental, would be recovered from milking after five years, and would provide a significant financial benefit by year 10.

I am satisfied that multiple representations were made between 1981 and 1994 that constitute what is defined as the second promise. At this stage, the circumstances differed significantly from when the first promise was made. I am satisfied that John and Lynette promised Gary (and Craig) that the boys would get the Farm, when John and Lynette passed away, if Gary gave up his job in banking and returned to work on the Farm. John and Lynette promised board and meals and payment of a wage. The Delios Farm had been acquired several years earlier, and I am satisfied that both promisor and promisee were referring to the whole of the Farm. The promise was made in sufficiently clear terms that Gary might reasonably have relied upon it, and that John appreciated that Gary would rely on this promise and be induced to change his position. These findings are also supported by the consistent repetition of the promise from when Gary was a school boy living at home and working on the Farm.

The representations compendiously referred to as the third promise were made after a break in Gary and John’s relationship, at a time when Lynette had become incapacitated by her terminal illness from helping to work the Farm, which was now carrying beef cattle. Again, as expressed above at [117], John made promises that Gary would acquire, together with Craig, title to the Farm when he died. Gary was entitled to, and did, reasonably expect that he would inherit the Farm with his brother, and John intended that Gary act by helping him with the Farm without pay in that expectation. Again, the consistent repetition of the promise adds weight to the reasonable expectation engendered in Gary.

By the time of the representations constituting the fourth promise, circumstances had again changed. Lynette had passed away and Craig had returned to Ballarat. John was still asking Gary to help him run the Farm and assist with his hay baling business without a wage. I am satisfied that John’s promise varied to stating that Gary would solely inherit the Farm and that Craig would inherit the Ballarat properties, subject to the two brothers coming to some equitable accommodation based on the relative value of those properties, so that they would each receive the same value. I am satisfied that Gary made this representation to John and that he did so in Kim’s presence. Gary reasonably expected that he would inherit the Farm and John knew that Gary believed that he would honour his promise.

John’s knowledge of Gary’s belief or expectation

Gary accepted that it was necessary for him to establish that John knew or intended that he would act, or abstain from acting, as a result of relying on the expectation that he would get the Farm.[26] He submitted that John’s knowledge and his intention was clearly evident in the express promises John made to him regarding the Farm, and in his acceptance of Gary’s work on the Farm, in hay baling and later, in respect of the improvements made to the Farm in the lead up to its prospective lease.
[26]Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 423.

As I have stated, I accept this submission. John’s knowledge can be inferred, as John clearly encouraged Gary to assume or expect that he would get the Farm, and Gary did so. As I have noted, the inherent revocability of a will does not necessarily bar statements of intention to dispose of property upon death from serving as a basis for a proprietary estoppel.[27] Even though John could revoke or change the provisions of his will, equity’s focus is not on the promise itself, but on the expectation that it creates.[28] The repetition of the promise on many occasions over a long period of time, and in the presence of other family members, supports the finding that Gary’s expectation was reasonable and that John plainly knew of it.
[27]Gillett v Holt [2001] Ch 210, 227-9; Delaforce v Simpson-Cook [2010] 78 NSWLR 483, 490 [36]; Flynn, 736-7 [75]–[76]; Wantagong Farms Pty Ltd (as Trustee for Bulle Family Trust) v Bulle [2015] NSWSC 1603, [64].
[28]Riches v Hogben [1985] 2 Qd R 292, 301, quoted with approval in Giumelli, 121–2 [35].

In opening submissions, John stood on his defence and denied that he made any representations, apart from conceding a generic ‘the farm will be yours one day’ to one or both of the boys in their childhood. I was satisfied, as I have stated, particularly from John’s own evidence, that his denials that he made the representations were false. By final submissions, John’s concessions that he intended to refer, when making the statements he originally denied, to the Home Farm, and not to any other part of the Farm, implicitly accepted, as was appropriate, that he had promised a gift of farmland to Gary.

I pause to note that because the representations compendiously described as the first promise must be characterised as I have previously described, it would be unsurprising that John would intend that Gary would expect that he would get the Farm.

What is significant for present purposes is that, irrespective of the precise property that was promised, by the later promises (the second to fourth promises) John intended to induce Gary to work on the Farm, and for John more generally, without being paid. John knew that Gary, several years earlier, had left home and enjoyed financial independence. John knew that Gary now sought work and financial reward to establish his own life and family. John knew what other activities and productive work Gary could have been performing for his own benefit, whether on Cochrane’s or Hallston, and that he had forgone that opportunity because of his expectation that if he gave his father the help he needed to run the Farm, it would one day be his. John knew it was the expected benefit of the gift of the Farm in his death that motivated Gary’s immediate financial sacrifice, from which he directly benefitted.

I am satisfied to the requisite standard that John appreciated that Gary believed that he, John, would retain, and not dispose of, the Farm, and that Gary (or Gary and Craig) would inherit it, initially on the death of the survivor of them and then later, after Lynette died, when John died, as he promised. Notwithstanding submissions to the contrary, I was not persuaded that John ever contemplated, up to the commencement of the proceeding, selling any part of the Farm.

I also accept that neither John and Lynette or, later, John or Gary and Craig, specifically contemplated or made any particular provision for the circumstance that there might be a period between the parents, or the survivor of them, retiring from farming and their death, or that during that period, the financial needs of both the parents and the sons might be quite different from what had been contemplated.

My comfort in making this finding is enhanced because I reject John’s concession based on his undertaking, to the extent that he limits its application to the Home Farm. When making the statements he originally denied, John was referring to the Farm, not just the Home Farm, for the reasons I earlier gave.

Detrimental reliance by Gary on the belief or expectation

The burden of establishing detrimental reliance rests with Gary, the individual to whom the representation was made. In Sidhu, the High Court observed that:

[T]o speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representee induced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact.[29]

[29]Sidhu, 522 [58].

John put three contentions. First, he contended that Gary never relied on any of the promises that he alleged, assuming they were made, in anything that he did after he moved away from the Farm. When each action or omission to act is examined, it is plain that Gary was motivated by matters other than John’s promises about the Farm. Noting that submission, nonetheless, John’s counsel appropriately conceded that, in light of the way the evidence had fallen, any blanket denial of Gary’s reliance on the promises could not be maintained. John fell back on a submission that proportionality was required between the detriment and the remedy that I will come to later in these reasons.

Secondly, John contended that Gary never acted to his detriment. First, Gary reaped a substantial financial reward from his farming association with John, most particularly through the acquisition of Cochrane’s, that equipped Gary to later acquire Hallston. John submitted that Hallston was a valuable property, the value of which was improved by the very conduct that Gary contended was detrimental reliance on John’s promises.

Thirdly, John contended that, assuming against his contentions, Gary’s reliance is found, in assessing detriment, the irrevocable undertaking was a complete answer.

Gary identified the factual basis for five categories of detrimental reliance on John’s promises that he submitted were established on the evidence. In relation to a number of these contentions, I have already set out my findings:

(a) Gary worked long hours during his childhood and teens, beyond the work that boys normally do on a farm. While working in Korumburra and Trafalgar (including while living away from home in Morwell), Gary continued to work significant hours on the Farm, for which he was never paid. Irrespective of whether this was conduct to Gary’s detriment, which I need not determine, his conduct was not induced by any act on John and Lynette’s part that was capable of affecting legal relations about the proprietary interests in the Farm.

(b) Gary gave up a highly promising career in banking. One of his motivations in returning to Korumburra, abandoning his career in banking, was the promise of the Farm and of paid work on the Farm. When he realised that John and Lynette did not intend to pay him, he purchased Cochrane’s. It doesn’t matter that he was also motivated by other interests, such as his mother’s health and his girlfriend’s presence, the promise of the Farm and of paid work on the Farm materially contributed to Gary acting to his detriment. I need not decide the issue of causal reliance, as I have not been persuaded that Gary acted to his detriment when he gave up his banking career.

(c) While operating Cochrane’s full time, Gary continued to work for John without pay. Most significant was about 200 hours every hay season from 1981 to 1993, cutting and raking hay, on Cochrane’s, the Farm and John’s property at Condoluci’s. He also spent about ten hours per week working on the Farm, helping with calving, sick cows and other farm work. I am satisfied that Gary acted to his detriment in this way, in reliance on the second promise.[30]

(d) From 2008 to 2014, Gary continued to work for John, assisting in significant ways, carting cattle, working in John’s hay contracting business during the hay season, and working five to ten hours per week on the Farm. After Lynette died in 2010, Gary continued to work for John on the Farm and with his hay contracting business. I am satisfied that Gary acted to his detriment in this way, in reliance on the third promise.[31]

(e) From 2013 to 2015, Gary ‘wasted’ more than $330,000 in connection with the 2013 lease agreement, scuppered by John, which Gary would not have undertaken but for the expectation of inheriting the Farm, and in circumstances where he would have preferred to slow down, rather than expand his operations. John’s contention was that the predominant motivation to expend money on the project between 2013 and 2015 was to take advantage of obtaining possession of the Farm in July 2015. It was, John’s counsel contended, a dispute about reneging on an agreement to lease, which was not an issue in the proceeding, rather than reneging on an inheritance promise. I am satisfied that Gary acted to his detriment in making the improvements and expenditure that I have described above, in reliance on the fourth promise. In particular, applying Gageler J’s approach to causation, on the basis of my analysis of the evidence[32] that despite any other contributing factors, Gary would have adopted a different course and would not have made the improvements expanding substantially the capacity of his milking infrastructure at Hallston, had the relevant assumption that he would inherit the Farm not been induced by John’s fourth promise. The notion of a market value lease of the Farm giving Gary possession of the Farm from John’s retirement until his death was not in any way inconsistent with the promises.

[30]See above at [106].

[31]See above at [125].

[32]See above at [154].

John’s unconscionability

Gary submitted that his conscience was free from any knowledge that John might need the Farm or his equity in it to deal with any future vicissitudes. As I do not understand Gary’s ‘conscience’ to be relevant, I have reframed this submission as a contention, which I accept, that John and Gary never discussed any condition or reservation as insurance for John against any future contingency. The unmentioned possibility of a second wife or old age in a nursing home did not impact on the reasonableness of Gary’s reliance on John’s promises.

As Kaye J noted in Harrison, imprecision or ambiguity in the expression of the promise of the expectation is not fatal to the claim, but is relevant when assessing issues relating to reliance and whether, in all the circumstances, it would be unconscionable for John not to adhere to the promise found by the court. I accept that the real purpose that Gary worked, as I have described, in reliance on the third promise, and expended substantially on improvements to Hallston (and, to a much lesser extent, on maintenance of the Farm) in reliance on the fourth promise, was not that he would receive some financial recompense, but that the Farm one day would be his (initially with Craig).

I am satisfied that there was no ambiguity about the farmland that was the subject of the promises. It was always the Farm, or whatever land comprised it. I also find that at relevant times John never intended selling any of the Farm. He has always preferred to add to his (or the family’s) property holdings, in distinction to some cases where the parties both contemplated, and did buy and sell different blocks incorporated into a working farm. None of the remainder of John’s property was affected in respect of any interest that Gary would be entitled to expect. By the fourth promise, it was clear that the promise identified the Farm. It was not confined to the Home Farm, and the Ballarat properties had been excluded from discussions.

There was no exploration in the evidence of the implications of imprecision or ambiguity in relation to contingencies.

I raised the following example during final submissions. If John were to sell the Delios Farm, for example, and from the proceeds pay a refundable accommodation bond to put himself in a nursing home, then provide in his will that when the bond was refunded, it be paid to Gary in recognition of his promise during his lifetime, would he have acted unconscionably? Were the promises actually connected to that particular piece of farmland or to its value? Would Gary have opposed John’s desire?

Gary conceded that, in theory, a change in John’s circumstances, such as a need for money to take care of himself in his old age, might alleviate, to some extent, his conscience in resiling from the expectation he encouraged, and thus ameliorate the relief for Gary. However, he submitted that as John gave no evidence of vicissitudes during the trial, the court could not conclude that John resiling from promises for the purpose his ongoing care would not be unconscionable. The questions that I posed were unanswerable and this was a matter on which John bore an evidentiary onus that he had not discharged.

There is a time frame in which John’s capacity to act in good conscience is to be assessed. It began when Gary acted in detrimental reliance on the promise and would extend to ‘the end of the day’, meaning John’s death. However, in this case, as the parties have brought the claim to court, the time frame must end when judgment is entered in the proceeding. The implications of possible vicissitudes were simply not explored in evidence, and that reflects the fact that such vicissitudes never entered the thinking of either John or Gary at any relevant time, including during the trial.

For these reasons, I accept Gary’s submission that possible vicissitudes cannot affect the assessment of unconscionability or proportionality as John contended because, bearing the onus in this respect, John adduced no evidence in respect of any relevant vicissitude.

What is unconscionable on the findings that I have made is John’s assertion, in the proceeding, that he has absolute legal title to the Farm, and may encumber or dispose of his equity in the Farm as he sees fit, without recompense to Gary for his detrimental reliance on the promises that John made. John contended that, at least not since the trial started when he gave the undertaking, he does not assert absolute legal title. Although John’s undertaking is limited to the Home Farm, any greater disposition of his equity in the Farm would be disproportionate to Gary’s detrimental reliance. The question became: Was it unconscionable for John to assert absolute legal title to the Delios Farm and the House Block, or was enforcing a promise that the Delios Farm and the House Block would pass to Gary (or Gary and Craig) disproportionate to Gary’s detriment?

Gary, too, submitted that John’s undertaking cannot be ignored. He submitted it stood not only as an admission that John encouraged Gary’s expectations, but also as an admission that it would be unconscionable for him to resile from them.

The issue then was one of proportionality in the remedy. Bearing in mind my finding that the promises always referred to the Farm, and not to any individual block or part of it, was John’s undertaking a complete answer to Gary’s claim that he was acting unconscionably, or was it necessary to require John to fulfil the promises in terms to wash the stain from his conscience?

Remedy

John submitted that disproportionality is an inquiry that must be made at the time that the court enforces the promises, should it be satisfied of Gary’s detrimental reliance and John’s unconscionability in resiling from the promises. He submitted that the undertaking in respect of the Home Farm was a complete answer. Although it was not initially clear, I take John’s contention ultimately to be directed not at the notion that, because of the undertaking, he has not resiled from his promises, despite this being a clear flavour detectible in his evidence, but rather he has no stain on his conscience because the undertaking is proportionate to Gary’s detrimental reliance, and no further remedy is demanded on any assessment of John’s unconscionablity.

The question is not, as John’s counsel put it, whether, in the context of the undertaking, detrimental reliance can actually be established. I have already explained my reasons for concluding that Gary did act to his detriment in reliance on John’s promises. The undertaking was not then on the table. It may never have been offered and could not be relevant to that inquiry. It is important to recall that the dispute between the parties commenced and was framed for trial in the context of John asserting his absolute legal title to the Farm, unencumbered by any interest that Gary (or Craig) might assert. There was a timing question, because it was not until the trial started that the undertaking was given.

The question is, rather, whether the relief sought by Gary is proportionate, given the ‘significant gift’ that the irrevocable undertaking now provides. Does the proprietary interest offered, a one half interest in the Home Farm in remainder, sufficiently relieve John’s unconscionable conduct, having regard to the true extent of Gary’s detrimental reliance?

In this context, I reject John’s submission based on the assertion that Gary ‘has done very well’ at Hallston and does not need the benefit of the promises that he have the Farm, which ought (save for the Home Farm) to revert back to John, whose need is now greater. That is not to the point. Relevantly, I am satisfied John has ‘done very well’, assisted considerably by Gary’s conduct in reliance on his promises.

Gary was making lifestyle choices in reliance on the promise. I am not referring to his decision to give up a career in banking, for reasons previously discussed. John knew that Gary gave up his time and his labour to help him work the Farm, operate his hay baling business, and to a much lesser extent, his beef cattle business. Gary helped to keep the Farm viable, particularly through the final years of Lynette’s life and in the aftermath of her death. I am satisfied that once Lynette was no longer able to assist John on the Farm, he could not viably run dairy without assistance from Gary or Craig. Gary gave up not just his entitlement to be paid for his work, but the opportunity to devote all of his energy to creating opportunities and returns for his own family. Later, John was able to run beef cattle with less assistance from Gary. I am satisfied that the unpaid assistance John received from Gary helped him to expand his financial interests, including the purchase of other property, such as the Ballarat properties.

The detriment to Gary flowing from reliance on the fourth promise was also not readily quantifiable in financial terms. It is not enough to add up Gary’s expenditure at, say $330,000, and determine that a half interest in the Home Farm when John dies relieves the detriment. Expenditure by Gary on his own property at Hallston is not likely to be completely wasted. The correct assessment is the extent to which the expenditure was wasted because of overcapitalisation of Hallston. In the absence of appropriate evidence, I cannot make any finding in this respect. There was no evidence of the expectant value of the Home Farm for Gary that would permit a comparative assessment. As I have stated above, the detriment to Gary was not limited to the overcapitalisation of Hallston. This was a project planned on the basis that Gary would have the Farm, not just the Home Farm. There were family elements evident from the invitation to Craig to join a partnership. The project that Gary devised and the expenditure was unusual. Without the Farm as part of the project, it became pointless. Gary would never have embarked on that project.

The detriment to Gary if he is now denied the Farm was accumulated over many years. I would not describe the detriment suffered by Gary as involving life-changing decisions with irreversible consequences of a profoundly personal nature, to borrow the language used by Nettle JA in Donis.[33] However, the detriment to Gary is beyond the measure of money, and is such that the equity raised by John’s conduct can only be accounted for by substantial fulfilment of the assumption upon which all of Gary’s actions were based. Stepping back to take an expansive view, Gary’s conduct in reliance on John’s promises set the course of his life over decades in a way that cannot now be unscrambled. The course of Gary’s life since he returned to Korumburra and started farming Cochrane’s was substantially influenced by the expectation induced by John that he would receive, at least, a half share with Craig in the Farm. For Gary to receive no more than a half share in the Home Farm necessarily occasions him detriment of a kind and to an extent that calls for the intervention of equity.
[33]Donis, 588 [34].

By the time of the fourth promise, that assumption, induced by John’s conduct and his acceptance of the benefit to him of Gary’s consequent conduct, was that on John’s death, Gary would solely inherit the Farm and Craig would inherit the Ballarat properties, subject to the two brothers coming to some equitable accommodation based on the relative values of those properties, so that they would each receive the same value. I have accepted that John reformulated the promise that he expressed to Gary as a promise to Gary alone. Having regard to John’s demeanour and the content of his evidence, it is unsurprising that Craig sought to enforce a different and inconsistent promise.

At this point I must re-examine the settlement between Craig and John that would seem to make fulfilment of the promise to Gary inappropriate. First, as I noted at the outset, Gary’s counsel clarified during the course of the hearing that Gary’s claim is limited to the Farm, and is either the entirety of the Farm or half of the Farm. His claim does not extend to any other properties. Neither Craig nor Gary makes a claim for the Ballarat properties. They were never promised to Gary.

The terms of Craig’s settlement with John provided that John holds the Farm on trust for himself for life and, on his death, as to a half share for Craig. The settlement deed makes no express mention of any claim by Craig in respect of the Ballarat properties. Craig did not claim a promise by John to him that he would inherit the Ballarat properties and Gary would inherit the Farm, subject to the two brothers coming to some equitable accommodation based on the relative values of those properties, so that they would each receive the same value. Craig settled for a half interest in the Home Farm only.

These inconsistencies were not resolved during the trial, which was conducted without revealing to the court prior to or during evidence the terms of the settlement.

Conclusion and orders

I have concluded that there is a conflict between the relief that I propose to grant to Gary and the interest that John has granted to Craig pursuant to the deed, because I am satisfied that John reformulated his promises. The consequence of Gary’s concession that he does not seek relief that impinges in any way on John and Craig’s settlement is that his interest in the Home Farm will be limited to a half share with Craig.

I propose to declare that the defendant, Raymond John Harris, holds the land described in certificates of title volume 8679 folio 903, volume 9686 folio 189, volume 9686 folio 190, and volume 8286 folio 326 on trust for himself for life and, on his death, as to the land described in certificate of title volume 8679 folio 903 for Craig Stephen Harris and Gary John Harris as tenants in common in equal shares and as to the remaining properties for Gary John Harris.

I invite the second plaintiff to submit a precise minute of the declarations and any other orders sought to give effect to these reasons for judgment.

There appeared to be no reason why the defendant should not pay the second plaintiff’s costs of the proceeding, but before making an order to that effect, I will give the parties an opportunity to be heard on costs if they wish to be. In the first instance, I would propose to determine the issue of costs on the papers following receipt of written submissions.[34] If either party considers some form of oral hearing is necessary on the question of costs, that application can be made by way of those submissions.
[34]Bearing in mind community restrictions in place due to the coronavirus (COVID-19) pandemic.

Accordingly, I direct that:

(a) by 22 May 2020, the plaintiff submit a minute of the judgment sought by him in the proceeding, including costs if agreed; and

(b) if the parties are unable to agree in respect of costs, by 29 May 2020, each party shall file and serve any submissions in respect of costs.

Unless persuaded otherwise by the submissions, I will resolve the question of costs on the papers.

[2020] VSC 256

13 May 2020