Hirst and Hirst and Anor

[2015] FamCA 866

FAMILY COURT OF AUSTRALIA

HIRST & HIRST AND ANOR [2015] FamCA 866

FAMILY LAW – SUMMARY DISMISSAL – Application by third party Second Respondent for summary dismissal of orders and declaration sought by the Applicant wife insofar as that order and declaration affect the interests of the third party Second Respondent

Family Law Act 1975 (Cth) s 78

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125;
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87;
Dey v Victorian Railways Commissioners (1949) 78 CLR 62;
Beck and Beck (2004) FLC 93-181;
Pelerman v Pelerman (2000) FLC 93-037;
Custodio & Pinto & Ors (2006) FLC 92-279;
Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541;
Muschinski & Dodds  (1985) 160 CLR 583
Baumgartner v Baumgartner (1987) 164 CLR 137;
Giumelli  v Giumelli (1996) 196 CLR 101.

APPLICANT: Mr Hirst

FIRST RESPONDENT: Ms Hirst

SECOND RESPONDENT: Ms B Hirst

FILE NUMBER: BRC 8139 of 2014

DATE DELIVERED: 14 October 2015

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 21 September 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Galloway
SOLICITOR FOR THE APPLICANT:	VC Catanzaro Solicitor

COUNSEL FOR THE FIRST RESPONDENT: Dr Sayers

SOLICITOR FOR THE FIRST RESPONDENT: Best Wilson Buckley Family Law

COUNSEL FOR THE SECOND 

RESPONDENT:

Mr Galloway

SOLICITOR FOR THE SECOND RESPONDENT: VC Catanzaro Solicitor

Orders

1. Paragraphs 1 and 2 of the Amended Response filed 31 March 2015 are struck out.

2. Ms B Hirst is removed as party to the proceedings and, so far as it is necessary, Clause (5) of the Order made 16 April 2015 (amended 14 May 2015) is discharged.

3. In the event the Second Respondent seeks an order that the First Respondent pay her costs of and incidental to the Amended Response filed 31 March 2015 and/or the Application in a Case filed 30 June 2015:

   (a)the Second Respondent shall file and serve brief written submissions in support of such application for costs within fourteen (14) days of today; and

   (b)the First Respondent shall file and serve any brief written submissions in answer to the submissions filed and served by the Second Respondent seeking costs within a further fourteen (14) days thereafter; and

   (c)the Second Respondent shall file and serve any brief further written submissions, strictly in reply to the submissions served by the First Respondent, within seven (7) days of its service,

   and any such application for costs shall be considered in Chambers. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hirst & Hirst and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 8139 of 2014

Mr Hirst

Applicant

And

Ms Hirst

First Respondent

And

Ms B Hirst
Second Respondent

REASONS FOR JUDGMENT

1. The Second Respondent is the husband’s mother. On 16 April 2015, Judge Howard joined her[1] to the property settlement proceedings[2] between the husband and wife. His Honour also ordered, amongst other things, that the wife file and serve a Statement of Claim.

   [1]By Order made that day, as amended on 14 May 2015, which also transferred the matter to this Court.

   [2]          Commenced by Initiating Application filed 9 September 2014.

2. The property settlement proceedings involve a dispute between the husband and wife about the terms of orders which are just and equitable after the end of the parties’ thirteen year cohabitation and marriage - a union which produced three children: namely, twelve year old C[3], eight year old D[4] and five year old E.[5]

   [3]          Born … 2003.

   [4]          Born … 2007.

   [5]          Born … 2010.

3. The Amended Response filed on behalf of the wife on 31 March 2015 particularises the relief sought against the Second Respondent as follows:

   1.That it is declared pursuant to section 78 of the Family Law Act 1975, that the Second Respondent, [Ms B Hirst] hold her interest in the real property known as and more particularly described as Lot 2 on Registered Plan …, County of [F], Parish of [G] and contained in Title Reference … (“the farming property”) as well as her interest in any plant, machinery, equipment, livestock, any water or irrigation licenses or other assets held by the joint shareholding with [Mr H Hirst] in the company [I Pty Ltd] on a constructive trust for the Applicant Husband.

   2.That an account be taken and the calculation made as to the value of the trust interest of the Applicant Husband subsequent to the declaration made under paragraph 1 above by this Honourable Court.

4. On 10 June 2015, the wife filed a Claim and Statement of Claim particularising the material facts she relies on as the basis for the relief sought against the Second Respondent. She has also filed two affidavits – on 20 November 2015 and 1 September 2015 – in which she gives relevant evidence.

5. On 30 June 2015, the Second Respondent filed an Application in a Case[6] seeking that the wife’s claim against her is summarily dismissed on the basis that the contents of the Claim, Statement of Claim and the affidavits filed on behalf of the wife do not disclose a cause of action against her and, therefore, there is no proper basis upon which she should remain a party to the property settlement proceedings between the husband and the wife.

   [6]Subsequently amended on 2 September 2015 in a manner that is immaterial to the disposition of the Application in a Case itself.

6. The wife opposes this. She seeks that the Application in a Case is dismissed or, alternatively, that she have liberty to file an amended Claim and Statement of Claim after further disclosure has occurred.

Principles applicable to Application for summary relief

1. The principles[7] to be applied in determining whether to summarily dismiss that aspect of the wife’s Amended Response[8] by which she seeks orders against the Second Respondent may be summarised as follows:

   [7]See, for example: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87; Dey v Victorian Railways Commissioners (1949) 78 CLR 62; Beck and Beck (2004) FLC 93-181; Pelerman v Pelerman (2000) FLC 93-037; Custodio & Pinto & Ors (2006) FLC 92-279; Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541; Friar & Friar [2011] FamCAFC 71.

   [8]           Really, a cross-application in so far as the Second Respondent is concerned.

   a)the power for summary dismissal is a discretionary one; and

   b)as the relief of summary dismissal “is rarely and sparingly provided”, the power to order summary dismissal of a claim must be exercised with exceptional caution; and

   c)relevantly here, the Second Respondent must show that the wife has no reasonable likelihood of success[9] in her claim as against her; and

   d)if there is a serious legal question to be determined, it should ordinarily be determined at a trial; and

   e)if, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings; and

   f)the issue is not whether the wife ‘would probably succeed’ in the relief sought against the Second Respondent, but whether her material demonstrates that the action should not be permitted to go to trial in the ordinary way because it is apparent that it must fail (i.e. that this aspect of her case has no reasonable likelihood of success); and

   g)if sufficient facts are asserted to demonstrate that, if the same are proved, the law arguably provides the relief sought by the wife against the Second Respondent, the Application for summary dismissal should be refused; and

   h)in determining whether the wife has no reasonable likelihood of successfully prosecuting the claim for relief advanced as against the Second Respondent, caution must be exercised in making such a finding where “contested evidence might reasonably be believed one way or the other so as to enable one side or the other to succeed”; and

   i)the Court should have regard only to the wife’s material (the Claim, Statement of Claim and her affidavits) and material relied upon by her; must proceed on the basis that the wife’s ‘version of the facts’ (if not  inherently incredible) is that which would ultimately be accepted at a trial and must examine the substance of the wife’s claim (or case) as against the Second Respondent; and

   j)the guiding principle is doing what is just: if it is clear that the wife’s case has no reasonable likelihood of success, her action against the Second Respondent should be dismissed so as to protect the Second Respondent from being further troubled, the wife from further cost and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.

   [9]           Rule 10.12(d) Family Law Rules (2004).

2. In order to determine whether, as the Second Respondent advances, the wife has no reasonable likelihood of succeeding[10] in her claim for a declaration in the terms outlined above, it is, of course, necessary to consider whether, if proved to the civil standard, the facts she asserts are capable of supporting the basis she asserts for the declaratory relief she seeks.

The wife’s case against the Second Respondent

[10]         Rule 10.12 Family Law Rules (2004).

Constructive trust[11]

[11]The High Court emphasised in Giumelli v Giumelli (1999) 196 CLR 101 at [2]: “Professor Scott has pointed out “It is sometimes said that when there are sufficient grounds for imposing a constructive trust, the court ‘constructs the trust.’ The expression is, of course, absurd. The word ‘constructive’ is derived from the verb ‘construe’ not from the verb ‘construct’…. The court construes the circumstance is in the sense that it explains or interprets them; it does not construct them."

1. As I understood the submissions made by Counsel who appeared for the wife, her case for equitable relief against the Second Respondent is that:

   a)there was a common intention[12] between the husband and the Second Respondent that the husband should have a beneficial interest in the farm land and the shares in I Pty Ltd and that he acted to his detriment on the basis of this common intention such that it is unconscionable for the Second Respondent to deny him that (or an) interest in the same; and/or

   b)the Second Respondent engaged in conduct by which she was unjustly enriched or she engaged in conduct regarded as unconscionable vis-a-vis herself and the husband and wife (in that she retained the benefit of contributions made by them individually or collectively to the joint endeavour of the operation of the farming enterprise upon the farm) such that she should be declared to hold her interest in the farming property and the shares in I Pty Ltd as constructive trustee for the husband and wife;[13] and/or

   c)she and the husband (collectively or individually) relied to their detriment (collectively or individually) on an assumption, induced by representations made by the Second Respondent, as to the husband’s future acquisition of ownership of the Second Respondent’s interest in the farm land and shares in I Pty Ltd - that is:    the Second Respondent induced, encouraged or allowed the husband to believe he would acquire her interest in the farm land and her shares in I Pty Ltd and, in reliance on this belief, he acted to his detriment to her (the Second Respondent’s) knowledge and she (the Second Respondent) seeks to take unconscionable advantage of him by denying him the right or benefit he expected to receive.[14]

   [12]Which may be demonstrated by the conduct of the parties and which may also be implied by the Court.

   [13]         Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137.

   [14]Giumelli  v Giumelli (1996) 196 CLR 101 per Gleeson CJ, McHugh, Gummow and Callinan JJ at 112: “… the equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant.”

2. For the purpose of determining the Second Respondent’s Application, I proceed on the basis that the matters outlined below would be established by the wife at trial.

   Accepted Premises

3. On 16 May 1996, as a consequence of an agreement reached by the Second Respondent and the husband’s father after they separated, the husband and the Second Respondent executed an Option Agreement. At that time, the Second Respondent owned a half interest in the farm land particularised in Clause 1 of the wife’s Amended Response and a half share in the Hirst Partnership (by which the farming enterprise was operated on the farm land during her marriage to the husband’s father).

4. The Option Agreement provided that the husband could exercise an option to purchase the Second Respondent’s interest in the property described above by delivering a contract and a $1,000.00 bank cheque (by way of deposit) to her at any time between 9.00 am on 17 May 1996 and 4.00 pm on 16 May 2001. Nothing in the Option Agreement suggests that the Second Respondent’s interest in the property referred to was to be gifted to the husband. In fact, the Option Agreement clearly outlines the method by which the purchase price for her interest was to be calculated.

5. Whilst the Second Respondent would have been legally obliged to transfer or cause the transfer to the husband of her interest in the farm land and the farming enterprise if the husband had exercised his option, this transfer would only have occurred upon her receiving the purchase price calculated in accordance with the terms of the Option Agreement: that is, her obligation would not have been to transfer her interests in the identified property without consideration or by way of gift to the husband.

6. Given the terms of the Option Agreement, it could not be advanced that, at the time it was executed, the Second Respondent intended that the husband acquire her property without payment for the same: that is, her intention was clearly to permit him to purchase her property for a certain price within a certain time.

7. In August 2000, the wife and the husband had a discussion about merging their finances. This conversation occurred in the context that the wife, who owned a car (said to be worth $15,000.00) and a house in which she had limited equity, was concerned about losing her financial independence. During this conversation, the husband told her that he, too, had a lot to lose[15]: he showed her the Option Agreement and she read it.

   [15]At this time he had, on her account, a car valued at $15,000.00, tools of trade valued at $1,500.00 and furniture and contents with nominal value.

8. The wife said, in her affidavit filed 20 November 2014, that the husband told her the Option Agreement provided him with the option to purchase the Second Respondent’s half share in the farm land and her interest in the former Hirst farming partnership at a price of $80,000.00 less the Second Respondent’s share of any liabilities owed by the partnership. This is an accurate recitation of the relevant terms of the Option Agreement.

9. However, the wife’s account of this conversation in her affidavit filed 1 September 2015 is markedly different. Her later affidavit contains her assertion that, during the conversation, the husband said: “So you see, one day I’ll be given half the farm”. This comment is inconsistent with the terms of the Option Agreement itself and inconsistent with the wife’s recounting of the discussion in her November 2014 affidavit. Whilst this statement has been adopted in Paragraph 11(3)(ii) (C) of the Statement of Claim, no reference is made therein to the recounting contained in the November 2014 affidavit.

10. That the wife’s own account of one of the important conversations she relies upon in advancing her claim against the Second Respondent contains a very significant inconsistency causes difficulty in determining which of these versions I should accept for the purpose of determining the Second Respondent’s Application for summary dismissal.

11. I consider it inherently incredible that, at the time he was discussing the Option Agreement (which gave him the opportunity to purchase the Second Respondent’s interest in the property) with the wife and had provided it to her, the husband would say that he would be given the farm. I also find it inherently incredible that, in first recounting the conversation in affidavit material the wife would positively assert that the husband had told her he had an option to purchase the Second Respondent’s interests whilst in her second recounting he is said to have said he would be given half the farm. Consequently, I proceed on the basis of the wife’s account of the conversation as outlined in her November 2014 affidavit.

12. The wife and husband commenced cohabitation in about April 2001 and married on 3 November 2001. Thus, the period within which the husband could have exercised his option to purchase the Second Respondent’s interests ended one month after the husband and wife started to cohabit and about six months before they married.

13. The husband did not exercise his option under the Option Agreement to purchase the Second Respondent’s interest in the identified property.

14. At some time thereafter, J Pty Ltd was established. K Pty Ltd (an entity under the control of the Second Respondent’s de facto partner, Mr K) owns 400 of the 800 shares issued and I Pty Ltd (an entity owned by the Second Respondent and the husband’s brother, Mr H Hirst) owns the remaining 400 shares.

15. J Pty Ltd operates the farming enterprise previously operated via the Hirst Partnership. The husband is employed by J Pty Ltd as the farm manager. He has been employed in this role since about December 2002, when he and the wife moved to live in L Town. His labours have contributed to the farming enterprise in that he has been responsible for managing the packing shed workers and organising produce to be sent to various markets and supermarket chains. The husband’s contributions have improved and/or enhanced the farming enterprise in that he has increased the volume of produce it has been able to send to market.

16. At least for a period after the husband and wife moved to live in L Town in about 2002, the wife worked outside the home for remuneration also.  She and the husband deposited their incomes into a joint account and applied these funds to meeting their joint expenses. There is no suggestion that either the husband or the wife applied any funds toward, or made any direct financial contribution to, the farm land and/or the farming enterprise operated by J Pty Ltd.

17. Whilst J Pty Ltd lent the husband and wife $20,000.00 in about February 2002 to assist them to purchase the former matrimonial home, this was repaid in about mid 2002 after the wife sold the house she owned at the commencement of cohabitation.

18. When the parties moved to L Town in December 2002, the husband told her he would be paid a wage by J Pty Ltd to start with and, once he was more involved and when the farm did better, he would obtain his “rightful share”.

19. The only evidence the wife gives about any discussion with the Second Respondent herself is that, in about 2002 (and before the parties moved to live in L Town) whilst in the car with her husband and Mr H, they discussed moving to live on the farm and working there; the Second Respondent said it was going to be hard work, was not easy, that farming could be a difficult life and that some years would not be financially rewarding because of matters such as market prices and weather.

1. In referring to this conversation, the wife says, at paragraph 26 of her September 2015 affidavit, that: “I recall having understood from that conversation that eventually we (the husband and I) would obtain a controlling proprietorship of the farming enterprise when [Ms B Hirst] decided to pass her ownership to the husband”.

2. I consider it inherently incredible that any person could form the understanding the wife deposes to having formed from that conversation. Two further comments may be made:

   a)given the structure of the farming enterprise as operated by J Pty Ltd, the Second Respondent cannot provide the husband with “controlling proprietorship of the farming enterprise”; and

   b)any “ownership” which the husband may obtain from the Second Respondent will arise “when [she] decides to pass [it] to [him].” That is, from the wife’s perspective, the Second Respondent’s comments at that time made it clear to her (the wife) that the farming enterprise was, at that time, the Second Respondent’s property and any issue of any transfer to the husband would only occur when she determined to divest herself of her property.

3. In 2002, the wife had a conversation with the husband, his father (the Second Respondent’s ex-husband) and his father’s partner during which the husband’s father (whose interest in the farm and the farming enterprise had been transferred to the husband’s brother, Mr H Hirst) said that, ‘one day’ the husband’s “rightful share” will be ‘given to him.’  Whatever these comments meant, it is not asserted in the Statement of Claim that they amount to representations made on behalf of the Second Respondent.

4. On a number of occasions in December 2002, 2003, March 2006 and September 2013, the wife and the husband had conversations about him obtaining ‘his share’ of the farm.

5. In 2006, she encouraged him to speak with the Second Respondent and Mr H Hirst to have paperwork drawn to transfer the farm. He told her it was not financially viable, they would lose Centrelink benefits and it would be costly to transfer because the farm was better, bigger and worth more then. In 2008 or 2009, she and the husband spoke about building a home on land owned by the farming enterprise – whilst the farming enterprise offered to transfer a block of land to them if they paid the costs of the transfer, this did not happen because they (the husband and wife) thought this would not advantage them financially.

6. Between 2011 and 2012, during a period of marriage difficulties, the wife told the husband to leave the farm and do building work. He said the farm would be ‘theirs’ one day, if he left it would not be his and that, if he worked elsewhere, they would not have the financial security the farm had and would provide to them. He told her that the Second Respondent and her de facto (Mr K) would not work the farm forever and would not live forever and that then they (the husband and wife) would move into the main house (where the Second Respondent and Mr K live) and manage everything and that, when the time came, she would be able to run the office and administration and they would run the shed together. He also told her they were better to stay at the farm because they would not obtain the significant financial benefits and/or support it gave them and their Centrelink payments may reduce dramatically. On this evidence, the parties would have suffered detriment if the husband ceased to work for the farming enterprise rather than suffering detriment because he continued to work for it.

7. Between 2011 and 2013, the husband referred to “his patch” of tomatoes which were located on part of the property. This comment alone could not sensibly be considered as amounting to an assertion by the husband of a right to ownership of the farm land or the expression of an assumption that that was the case.

8. On an occasion the wife’s mother asked the husband when his mother (the Second Respondent) was going to give him the farm or share of the farm and suggested he take her to Court. He said he was not interested and was concerned it would cause family friction.

9. During another conversation, when the wife’s mother asked what he was getting from the long hours he was working on the farm, he said “One day, the farm will be half ours.” Such a comment appears consistent with that referred to in paragraph [33]. When the wife’s mother said he should get his share from the Second Respondent or the hours he was working were worth nothing, he said it did not matter and he was happy with the benefits they obtained from the farming enterprise and happy for that to continue. Nothing in these comments suggests that the husband was labouring under an assumption or expectation that he had or would acquire an interest in the Second Respondent’s property.

10. The wife suggests that the farming enterprise records are inaccurate, that the husband worked more hours than those for which he was paid and/or which were shown on the payslips and that he told her he did not get holiday pay. She also says that, in addition to paying a weekly cash wage to the husband, J Pty Ltd paid expenses like home and contents insurance, car expenses, rates, electricity, telephone, internet, private health insurance, firewood, water (when necessary), veterinary bills, dog registration and food expenses. Additionally, the parties were given a credit card (which had a limit of $5,000.00) for their use and the costs of the wife’s attendance at University were also paid. J Pty Ltd also paid for house renovations and extensions and the installation of a bore; a ride-on mower was purchased; lease repayments for a car were paid; motorbikes were provided and a contribution made towards the parties’ purchase of a caravan.

    Discussion and conclusions

11. The fact that the equitable remedy of constructive trust is predominantly remedial does not mean it is a medium for the indulgence of idiosyncratic notions of fairness and justice.[16]

    [16]         Muschinski & Dodds (supra) per Deane J at 614-615.

12. As pleaded, Paragraphs 3 and 5 of the Statement of Claim assert simply that the Second Respondent had an intention to transfer or cause the transfer of her property to the husband. Neither contains any reference to the fact that one of the terms of the Option Agreement – relied on as providing the basis for the asserted intention pleaded – was that the husband would purchase her property from her.

13. It is, I think, misleading to assert that the Second Respondent held a particular intention at a particular undefined time on the basis that she was then putting into effect the agreement between her and her ex-husband (which led to the creation of the Options Agreement in May 1996) without reference to the fact that any transfer of property from the Second Respondent to the husband was to be conditional upon him purchasing her property from her. Any intention shared with the husband was that the Second Respondent receive payment from him for her property.

14. Whilst Paragraph 7 of the Statement of Claim asserts that at an unknown time of the restructuring of the farming enterprise, the Second Respondent had an intention to transfer or cause a transfer of her property to the husband, any intention imputed to her, at this unknown time, appears to be reliant upon the implicit assertion (for reasons not particularised) that her intention remained then (whenever “then” was) as it had been when the Option Agreement was executed in May 1996.

15. As is the case with Paragraph 5 of the Statement of Claim, the intention asserted in Paragraph 8(3) fails to recognise the significant issue that the transfer then contemplated by the Second Respondent was conditional on the payment of a price by the husband.

16. The representations pleaded by the wife in Clause 13 of the Statement of Claim as having been made by the Second Respondent to the husband ‘on dates presently unknown’ to her can only, from the way in which Clause 13(4)(c) of the Statement of Claim is constructed, have occurred after the husband and wife moved to L Town and he started working for remuneration (and the benefits the wife deposes to) in the farming enterprise – that is, after about December 2002 and after the Option Agreement had lapsed and, consequently, after the Second Respondent would have been obliged to transfer her interests in the farm land and farming enterprise to him if he exercised his option. Given this, they cannot provide a basis for his asserted failure to exercise his rights under the Option Agreement.

17. The Statement of Claim does not contain the assertion that the move to L Town occurred after representations were made to the husband. It is not pleaded that the husband or the parties relied upon any representations in determining to move to live in L Town.

18. Whilst it is pleaded that representations were made that the transfer by the Second Respondent of her property would be affected by her because the husband had moved to L Town and was continuing to be involved in the farming enterprise and work in or on it, no detail is provided about when these representations are said to have occurred – thus, there is no way of assessing matters like when any asserted assumption or expectation of the acquisition of future interest in the Second Respondent’s property arose.

19. Paragraph 14 of the Statement of Claim suffers from similar deficiencies as identified for earlier paragraphs: that is, the wife asserts that the Second Respondent held a specified intention at some time but cannot say when; additionally, any intention shared by the Second Respondent and her ex-husband previously must, given the terms of the Option Agreement, be seen as being an intention to cause a transfer upon the husband paying the Second Respondent for her property.

20. Given the deficiencies in paragraphs 13 and 14 of the Statement of Claim, the assertions outlined in Paragraph 15 are meaningless: that is, when was the asserted common intention formed? Given the absence of reference to the requirement for the husband to purchase the Second Respondent’s interests under the Option Agreement, is it suggested that the shared common intention was to transfer upon receipt of payment (as was intended by the Option Agreement which is said to be one of the matters relied upon by the Second Respondent in forming the asserted intention) or not?

21. Paragraph 16(1) of the Statement of Claim provides no assistance in attempting to ascertain when it is suggested that asserted representations are said to have been made. Whilst the pleading advances that the pleaded representation occurred “after August 2000”, no further detail is provided. This makes it impossible to ascertain the time at, or from, which any detriment falls to be considered.

22. Paragraph 16(2) of the Statement of Claim refers to the period after the Option Agreement had expired without the husband taking up his right to purchase the Second Respondent’s interests. Paragraph 16(4)(B) is not capable of being clearly understood because no rights existed under the Option Agreement after 16 May 2001.

23. Whatever representations were made by the husband to the wife, these are not representations made on behalf of the Second Respondent; there is nothing to suggest that the Second Respondent induced or encouraged the husband’s reliance on any asserted representation: at its highest, where the pleading refers to representations made by the husband to the wife, they amount to a basis and/or explanation for his actions in remaining on the farm - especially when seen in the context of the wife’s evidence of specific conversations as referred to in paragraphs [33] and [36] above.

24. Whatever the husband’s intention in making whatever representations he made to the wife, these are not capable of establishing matters required before equity will intervene to impose a constructive trust over the entirety of the Second Respondent’s interest in the farm land and farming enterprise some 19 years after the Option Agreement was executed.

25. The representations made by the husband to the wife – as pleaded in paragraph 16(5) of the Statement of Claim – do not and cannot amount to representations made by or on behalf of the Second Respondent.

26. Given that Paragraph 17 of the Statement of Claim refers back to “the time of the second agreement” (which, in itself, is completely unspecified in time), the contents of this paragraph are meaningless. I consider it a necessary requirement that some point in time is identified by the wife as the time at which it is asserted that any intention was formed, assumption engendered or encouraged and/or from which any alleged reliant activities to the husband’s potential detriment occurred - without this, the claim against the Second Respondent has no reasonable likelihood of success.

27. It is relevant that Paragraph 17(3) of the Statement of Claim does not contain an assertion that the husband acted to his detriment.

28. Despite the Statement of Claim containing the positive assertion that, at the time the operation of the farming enterprise was ‘restructured’ (presumably at or around the formation of J Pty Ltd), the Second Respondent had an intention - because of her agreement with the husband’s father which resulted in the creation of the Option Agreement signed in May 1996 - to cause the transfer of the farm to the husband, the wife does not plead when the restructuring occurred.

29. That is, she does not plead when it is alleged that the Second Respondent had the asserted intention; the pleading does not outline the basis upon which it is asserted the relevant intention was formed in any way other than to relate it back to the Option Agreement which came into existence in May 1996 and which lapsed in May 2001.

30. Nothing in the Statement of Claim or the wife’s evidence provides a basis for a conclusion that the Second Respondent and the husband had a common understanding and mutual intention that the Second Respondent would transfer her interest in the farm land and the farming enterprise to him at any particular time. Additionally, the conversations deposed to by the wife wherein it was said that the husband would, at some time in the future, be given his ‘rightful share’ in the farm land and the farming enterprise are consistent with this gift occurring by way of testamentary disposition. I accept the submission made by Counsel for the Second Respondent that, even if the Second Respondent represented to the husband that, at some (indeterminate) time in the future her interest in the farm land and the farming enterprise would pass to him, that no more creates for him now an equitable interest in her property than a proposed provision in a Will.

31. At best, the husband’s asserted inaction in not seeking higher wages or more benefits from the farming enterprise in the context of the possibility of obtaining – at some indefinite time in the future – the Second Respondent’s interests in the farm land and farming enterprise amounts to nothing more than the equivalent of the hope of an inheritance.

32. Neither the husband nor the wife are alleged to have made any financial contributions to the farm land or the farming enterprise. On the wife’s evidence of the husband’s assertions to her during their conversations about remaining on the property, he advanced that it was beneficial (and certainly not detrimental) for him to remain working as farm manager - the wife’s evidence outlines the wages and financial benefits she and the husband received as a consequence.

33. Whilst I am, of course, completely cognisant of the comments of Kirby J in Lindon v The Commonwealth (No.2)[17] that “… Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment”, it should not be forgotten that the wife has already filed affidavits in the Court in which she has addressed the very issues which must be established in order for her claim against the Second Respondent to succeed.

    [17] (1996) 70 ALJR 541 at 544 – 545.

34. For the reasons I have expressed, I consider that the wife’s application for declaratory relief as contained within the Amended Response filed on 31 March 2015 has no reasonable likelihood of success.

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 14 October 2015.

Associate: 

Date:              14 October 2015