Kramer v Stone

[2023] NSWCA 270

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Kramer v Stone [2023] NSWCA 270

Hearing dates:

4 September 2023

Date of orders:

10 November 2023

Decision date:

10 November 2023

Before:

Ward P at [1]; Leeming JA at [257]; Kirk JA at [296]

Decision:

1.   Dismiss the appellants’ notice of motion filed 24 July 2024 with costs.

2.   Dismiss the appeal with costs.

Catchwords:

EQUITY – Proprietary estoppel – Estoppel by encouragement – Knowledge of detriment – Where the deceased promised to leave the property to a sharefarmer who had worked on the property for approximately 40 years – Where the deceased’s will did not do so – Where the sharefarmer continued to share farm on the property in reliance on the representation – Whether the deceased needed to have actual knowledge of detrimental reliance on the representation for estoppel to be established

PROCEDURE – appeals – further evidence – evidence adduced at subsequent hearing before final orders made – whether such evidence “further evidence” for purposes of Supreme Court Act 1970 (NSW), s 75A – whether appellant should be permitted to rely on such evidence following first hearing to impugn findings made after first hearing

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 56

Commonwealth Constitution, s 73

Evidence Act 1995 (NSW), s 136

Supreme Court Act 1970 (NSW), s 75A, 101

Uniform Civil Procedure Rules 2005, rr 36.16, 51.51

Uniform Civil Procedure Rules (Amendment No 15) 2007 (NSW)

Cases Cited:

Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429

Akins v National Australia Bank (1994) 34 NSWLR 155

Ambridge Investments Pty Ltd (in liq) (rec apptd) v Baker [2010] VSC 59

Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582

Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15

Baden v Societe Generale pour Favouriser le Developpement du Commerce et de l’Industrie en France SA [1992] 4 All ER 161

Barnes v Addy (1874) LR 9 Ch App 244

Barnes v Alderton [2008] NSWSC 107

Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158

BP v State of New South Wales [2019] NSWCA 223

Carter v Brine [2015] SASC 204

Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752; 4 All ER 713

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14

Commonwealth of Australia v Verwayen (1990) 170 CLR 394; [1990] HCA 39

Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1; [2016] HCA 26

Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84

DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348

Dillwyn v Llewelyn (1862) 4 De GF & J 517; 45 ER 1285

Donis v Donis (2007) 19 VR 577; [2007] VSCA 89

Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105

Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45; [1968] HCA 91

E Co v Q [2018] NSWSC 442

Evans v Evans [2011] NSWCA 92

Farah Constructions v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22

Flinn v Flinn [1993] 3 VR 712; [1999] VSCA 109

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Galaxidis v Galaxidis [2004] NSWCA 111

Gillett v Holt [2001] Ch 210

Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10

Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; [1937] HCA 58

Hopgood v Brown [1955] 1 WLR 213

In re Basham, decd [1986] 1 WLR 1498

Jennings v Rice [2003] 1 P&CR 8

Leading Synthetics Pty Ltd v Adroit Insurance Group Pty Ltd [2011] VSC 467

Lloyds Bank Plc v Rosset [1991] 1 AC 107

McNab v Director of Public Prosecutions (NSW) (2021) 106 NSWLR 430; [2021] NSWCA 298

Miller Heiman Pty Ltd v Sales Principles Pty Ltd (2017) 94 NSWLR 500; [2017] NSWCA 106

Milling v Hardie [2014] NSWCA 163

Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1

New Zealand Pelt Export Co Ltd v Trade Indemnity New Zealand Ltd [2004] VSCA 163

Olsson v Dyson (1969) 120 CLR 365; [1969] HCA 3

Pham v Gall (2020) 102 NSWLR 269; [2020] NSWCA 116

Plimmer v The Mayor, Councillors and Citizens of the City of Wellington [1884] 9 AC 699

Priestley v Priestley [2016] NSWSC 1096

Priestley v Priestley [2017] NSWCA 155

Q v E Co [2020] NSWCA 220; (2020) 383 ALR 469

Ramsden v Dyson (1866) LR 1 HL 129

Riches v Hogben (1985) 2 QR 292

Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19

Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466

Sledmore v Dalby [1996] 72 P&CR 196

Steria Ltd v Hutchison [2007] ICR 445

Stone v Kramer (No 2) [2022] NSWSC 1716

Stone v Kramer [2021] NSWSC 1456

Stone v Stone [2014] NSWSC 1655

Sullivan v Sullivan [2006] NSWCA 312

Taylor’s Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] 1 QB 133

Thompson v Palmer (1933) 49 CLR 507; [1933] HCA 61

Thorner v Major [2009] 1 WLR 776

Trentelman v The Owners – Strata Plan No 76700 (2021) 106 NSWLR 227; [2021] NSWCA 242

Trippe Investments Pty Ltd v Henderson Investments Pty Ltd (1992) 106 FLR 214

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1998] HCA 7

Willmott v Barber (1880) 15 Ch D 96

Texts Cited:

A Robertson, “Knowledge and Unconscionability in a Unified Estoppel”, (1998) 24(1) Monash University Law Review 115

Heydon JD, Heydon on Contract: The General Part (Thomson Reuters, 2019)

J Hamilton, G Lindsay and C Webster, New South Wales Civil Procedure Handbook 2023 (13th ed, 2023, Thomson Reuters)

K Handley, “Recent Cases” (2017) 91 Australian Law Journal 812

K Handley, Estoppel by Conduct and Election (2nd ed 2016, Sweet & Maxwell)

Meagher, Gummow & Lehane's Equity: Doctrine & Remedies (5th ed, 2014 Lexis Nexis Butterworths)

W Cornish et al, The Oxford History of the Laws of England (2010, Oxford University Press), Vol XI

Category:

Principal judgment

Parties:

Hilary Lorraine Kramer (First Appellant)
Jaime Ferrer (Second Appellant)
David Lindsay Stone (Respondent)

Representation:

Counsel:
R Wilson SC with M McGirr (Appellants)
L Ellison SC with H Bennett (Respondent)

Solicitors:
Walker & White (Appellants)
Lane Associates (Respondent)

File Number(s):

2023/84277

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity

Citation:

[2021] NSWSC 1456

Date of Decision:

16 February 2023

Before:

Robb J

File Number(s):

2017/00261027

HEADNOTE

[This headnote is not to be read as part of the judgment]

This appeal arose out of a dispute concerning the ownership of a property in Upper Colo, New South Wales (the Property). The Property was owned by the late Dame Leonie Kramer (the deceased) after the death of her late husband (Dr Kramer). Under the deceased’s final will made in 2011, the Property was left to one of the couple’s daughters, the first appellant.

The respondent had farmed the Property under an oral share farming agreement since 1975. He claimed he was entitled to the Property on the basis of a representation allegedly made to him by the deceased (the Representation), that he would receive the Property on her death, following earlier representations allegedly made to him by Dr Kramer to the similar effect (although the first of those representations referred only to a life interest). The respondent maintained that he relied on the alleged Representation to his detriment by undertaking additional tasks on the Property and in continuing with the share farming agreement in circumstances that he would have terminated the agreement and sought more remunerative work elsewhere.

The primary judge found that the Property was held on constructive trust for the respondent, on the basis of an equitable estoppel arising out of the Representation made by the deceased to the respondent. In so doing, the primary judge found that the respondent had relied on the Representation to his detriment, and that the deceased “ought reasonably to have assumed” and “ought to have known” that the respondent had continued with the share farming agreement on the expectation that he would inherit the Property, and that it was otherwise unconscionable for the deceased to have resiled from the Representation.

The principal issues before this Court were whether the primary judge erred in: (i) finding that the Representation had been made; (ii) finding that the Representation was an assurance as opposed to a revocable testamentary promise; (iii) failing to find that the deceased did not encourage the respondent to act to his detriment; (iv) finding that actual knowledge by the deceased that the respondent acted to his detriment is not essential where constructive knowledge is made out; (v) finding that the deceased had constructive knowledge of the respondent’s reliance on the Representation; (vi) finding that the deceased acted unconscionably in not leaving the respondent the Property despite leaving a legacy of $200,000; and (vii) finding that the respondent’s reliance on the Representation was reasonable.

A further issue (ix) arose on the appellants’ application to rely, for the purposes of their challenges on appeal to findings made in the principal reasons for judgment, on evidence admitted for the purpose of a subsequent hearing in which the respondent applied to reopen his case.

The Court held (Ward P, Leeming and Kirk JJA agreeing) dismissing the appeal:

As to issue (i)

1. It was open to the primary judge, having had regard to all of the evidence, to be positively satisfied on the balance of probabilities that the Representation was made to him by the deceased. The primary judge had the benefit of seeing the respective witnesses and clearly formed a favourable view of the respondent’s credit, and (notwithstanding the delay in judgment) there was nothing to indicate that his Honour did not carefully review the evidence when he came to prepare his reasons. Nor is the finding as to the making of the Representation inconsistent with incontrovertible objective evidence: [128]-[132] (Ward P); [296] (Kirk JA).

2. There was no error in the fact-finding process adopted by the primary judge. This Court is not entitled to set aside findings made by the judge who saw the trial unfold and who was acutely conscious of the frailties of memory: [277] (Leeming JA).

As to issue (ii)

1. The primary judge did not err in concluding that the Representation made to the respondent (that the deceased would leave the Property to him) would have been understood by a reasonable person in the respondent’s position as an assurance, (i.e., tantamount to a promise) rather than a mere statement of revocable intention, given what would have been objectively conveyed to a person in the respondent’s position, knowing the character of the deceased: [150]-[151] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

As to issue (iii)

1. Upon a fair reading of the primary judge’s reasons, his Honour must have concluded that the Representation by itself amounted to the requisite encouragement, especially given his Honour’s emphatic rejection of the proposition that the deceased would have made the Representation to convey a mere possibility of inheritance rather than as an assurance (as that would have been cruel and out of character for her): [166] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

2. Having not run a case of acquiescence or standing by at first instance, the respondent cannot now maintain such an argument without having filed a notice of contention: [168] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

As to issue (iv)

1. There is a distinction between proprietary estoppel by encouragement and by acquiescence, and in the latter, it is the defendant’s knowledge of the plaintiff’s reliance on the assumption or expectation that amounts to the relevant inducement or encouragement. However, if the requirement that the defendant “knew or intended” the plaintiff to act or abstain from acting in reliance on the relevant assumption or expectation is a requirement of subjective knowledge at the time of making the relevant representation, then the findings in the present case are problematic insofar as there is no express finding of such knowledge or intention. As to the question of knowledge, as a matter of principle, such knowledge may be inferred: [191]-[193] (Ward P); [291] (Leeming JA); [296] (Kirk JA).

   Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1998] HCA 7; New Zealand Pelt Export Co Ltd v Trade Indemnity New Zealand Ltd [2004] VSCA 163; Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105; DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348; Priestley v Priestley [2016] NSWSC 1096; Priestley v Priestley [2017] NSWCA 155, considered.

2. The question of knowledge of detrimental reliance goes to the question of whether it would be unconscionable for the estate of the deceased to be permitted to resile from the representation; it is therefore not necessary to express any concluded view as to whether such knowledge must be actual or constructive: [201]-[202] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

As to issue (v)

1. The complaint as to whether the primary judge correctly applied the “clearly ought to have known” test (assuming it applied at all) goes nowhere given the conclusion as to issue (iv): [217] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

2. The primary judge’s finding that the deceased ought to have known that the respondent’s motivation for staying on the Property was the expectation that he would inherit it is not glaringly improbable or inconsistent with incontrovertible facts: [218] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

As to issue (vi)

1. The relief granted was not out of proportion to the detriment or wholly disproportionate thereto. The authorities on relief for a proprietary estoppel make clear that the starting point is the prima facie position that the expectation be made good: [243] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

   Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19; Donis v Donis (2007) 19 VR 577; [2007] VSCA 89; Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84, considered.

As to issue (vii)

1. The primary judge did not err in concluding that reliance by the respondent on the Representation (by not terminating the share farming agreement and instead remaining on the Property until the deceased’s death) was not unreasonable: [252] (Ward P); [257] (Leeming JA); [296] (Kirk JA).

As to issue (ix)

1. The appellants should not be permitted to rely, for the purposes of their appeal, on evidence adduced at first instance subsequent to the principal hearing, for the purposes of the respondent’s application to reopen, even though the evidence was adduced before orders were made: [67]-[75] (Ward P); [258]-[275] (Leeming JA); [296] (Kirk JA).

Judgment

1. WARD P: This appeal arises out of a dispute concerning the ownership of a 100 acre property situated on the Colo River in Upper Colo, New South Wales (the Property), which (after the death of her husband, the late Dr Harry Kramer) was owned by the late Dame Leonie Kramer (the deceased). Under her final will made on 11 November 2011 (the Will), the deceased left the Property to one of the couple’s two daughters (Hilary Kramer, the first appellant) (cl 2 of the Will).

2. The respondent (David Stone) had for many years farmed the Property under an oral share farming agreement. The respondent claimed that he was entitled to the Property on the basis of a representation allegedly made to him by the deceased, following earlier representations allegedly made to him by Dr Harry Kramer, to the effect that the Property would be his. The respondent maintained he had relied to his detriment on the alleged representation in undertaking additional tasks on the Property and in continuing with the share farming agreement (in circumstances where he could otherwise have terminated the agreement and sought more remunerative work elsewhere).

3. The primary judge found that the respondent had established an entitlement to equitable relief, on the basis of a proprietary estoppel arising from the making by the deceased of the third of the representations relied on by the respondent (see below), characterising the case as one based upon an estoppel by encouragement (see Stone v Kramer [2021] NSWSC 1456, the primary judgment, at [30]). His Honour found that, on the faith of that assurance, the respondent had acted to his detriment in continuing the farming operation on the Property for about 23 years in the belief that he would inherit the Property under the deceased’s Will (see the primary judgment at [249]-[250]).

4. His Honour found that the deceased “ought reasonably to have assumed” ([234]) and “ought to have known” that part of the respondent’s motivation in continuing the farming operation was the expectation that he would inherit the Property and concluded that, in those circumstances, it was unconscionable for the deceased not to have left the Property to him in the Will ([251]).

5. However, his Honour considered that it would not be equitable to the estate to order that the Property be transferred to the respondent in circumstances where the respondent was entitled to keep the bequest that had been made to him in the Will (a legacy of $200,000 subject to any Consumer Price Index (CPI) increase between the date of the Will and the date of payment) ([340] of the primary judgment). Hence, the orders ultimately made in February 2023 included a declaration that the executors of the deceased’s estate, in lieu of the provision made for the respondent in cl 6 of the Will, hold the Property on trust for the respondent (see orders made on 16 February 2023). There is no challenge by the respondent to the conclusion by the primary judge that the declaration as to the respondent’s interest in the Property should be in lieu of the legacy provided for him under the Will.

6. After the primary judgment was handed down but before final orders were made (and in the context of the parties seeking to reach agreement on the orders to be made to reflect his Honour’s reasons), issues arose between the parties as to a number of matters, such as who was to bear the liability for stamp duty on the transfer of title to the respondent and for rates and taxes over the period up to the date of transfer, as well as what was encompassed by the Property (namely, whether farm equipment and water rights attaching to the land were encompassed in the representation made by the deceased) and whether the transfer was to be subject to a condition permitting occupation of the cottage on the Property by the deceased’s family.

7. There was a hearing on 18 March 2022 as to the form of the proposed orders, at which evidence was adduced by both parties.

8. On 29 March 2022, the primary judge made orders by consent granting leave to the respondent to file and serve a notice of motion seeking leave to amend his statement of claim and to re-open the evidence in the proceeding. The respondent filed that notice of motion on 3 May 2022, seeking leave to file an amended statement of claim in which he sought a declaration that the appellants not only hold the land on trust for him but also the water licence, the machinery, pumps, plant and equipment still in existence at 20 April 2016.

9. The respondent’s motion was heard on 20 October 2022. This culminated in a second judgment (Stone v Kramer (No 2) [2022] NSWSC 1716, to which I will refer as Kramer (No 2)), which was published on 16 December 2022.

10. In Kramer (No 2), the primary judge determined that leave should be granted to the respondent to amend his statement of claim and to re-open his case for the limited purpose of his application for the appellants to pay or indemnify him for: all stamp duty on the transfer of the Property to him and all rates, taxes, fees and liabilities assessed and/or levied in respect of the Property up to the date of transfer. Procedural orders to that effect were made by consent on 16 February 2023. His Honour did not permit claims to be made as to the inclusion of the farm equipment and water rights in the definition of the Property and similarly refused to entertain an application made at that second hearing by the appellants for the transfer of the Property to be subject to a condition permitting their family occupation rights in relation to the cottage on the Property.

1. Final orders were made in the proceedings at first instance on 6 April 2023. This date has some relevance in light of the application by the appellants before this Court to adduce additional evidence (see below).

2. The appellants (Hilary Kramer and her co-executor, Jaime Ferrer) now appeal from the first of the two decisions (the primary judgment). There is no appeal from the decision in Kramer (No 2). Nor is there any cross-appeal or notice of contention filed by the respondent.

3. As adverted to above, at the outset of the hearing of the appeal, an application was made by the appellants for leave, if leave be necessary, to adduce additional evidence (see their notice of motion filed 24 July 2023). The evidence sought to be adduced comprises evidence which was put before the primary judge at the hearings on 18 March 2022 and 20 October 2022 (see affidavit affirmed 24 July 2021 by the appellants’ solicitor, Jamie Cklamovski). In essence, the appellants seek to rely on this evidence to challenge the primary judge’s finding in the primary judgment that the respondent was a person of “exceptional credibility” (relevant to ground 1 of the grounds of appeal). I consider this application in due course.

Events leading up to the proceeding at first instance

14. By way of background, the Property (valued at the time of the Grant of Probate dated 2 December 2016 at $1.5 million) is a partly cultivated property that has been used over the years variously as a citrus orchard, for grazing cattle and as a commercial vegetable farm. The respondent’s father had been a share­farmer on the Property with the previous owner since 1965 and, after the Kramers acquired the Property in 1969, the respondent’s father continued to share-farm the Property with them until 1974, when he left the Property. When the respondent was about 22 years old, in 1975, he commenced to share farm the Property. The respondent lived rent-free in a house on the Property while he was share farming.

15. The respondent particularised the share farming agreement he had with Dr Harry Kramer (see the particulars to [4] of the respondent’s statement of claim) as being an oral agreement, the terms of which included that: the respondent would grow crops and maintain the Property; Dr Harry Kramer would pay all operating costs except fuel (which would be shared by Dr Harry Kramer and the respondent); the respondent would reside rent-free in one of the houses of the Property; and the respondent would receive a quarterly retainer ($600) and half the gross proceeds from the sale of produce and cattle. The arrangements in relation to the profit-share seem to have changed over time but nothing turns on this.

16. The respondent alleged that in the 1980s three representations were made to him (defined in the pleading as the First, Second and Third Succession Plans) as to the ownership of the Property.

17. The first representation, as pleaded, was an oral representation by Dr Harry Kramer that he would leave the respondent a life interest in the Property in his will (see at [6] of the statement of claim). The respondent’s evidence as to the first representation (see [83]-[85] of the primary judgment) was that in the early 1980s the late Dr Harry Kramer said to him words to the effect:

I am dealing with my Will and have decided to give the Colo Property to the girls on condition you receive a life interest, so you can work the Colo Property as your own for your life. The only other condition is that the family retain use of this cottage.

18. In cross-examination, the respondent accepted that the expression “life interest” was not used by Dr Harry Kramer (T 69.5-42) (attributing that expression to his lawyers).

19. The second representation pleaded was that Dr Harry Kramer represented to the respondent that he had made an agreement with the deceased that he (Dr Harry Kramer) would leave the Property to the deceased in his will but that the deceased would then leave the Property to the respondent in her will (see at [8] of the statement of claim). The respondent’s affidavit evidence as to the second representation (see [86]-[90] of the primary judgment) was that in about 1987 or 1988 he had a conversation with Dr Harry Kramer in which the latter said words to the effect:

I don’t want to upset you but I am not long for this world. I have been diagnosed with cancer. I have also changed my Will and the girls will not be inheriting this place. [The deceased] wants the farm transferred to her and whilst I have agreed, it’s on the basis she and I have agreed it will go to you, outright, on [the deceased’s] death. Like before, the girls will always have use of the cottage.

and:

When you inherit the farm you will be free to do whatever you like with it. You can sell it, borrow money against it; whatever you like.

20. As to the second representation, it may be noted that the interest in the Property that it is alleged Dr Harry Kramer had represented the respondent would have was now no longer simply a life estate but absolute ownership. (As I have noted above, in cross-examination the respondent accepted that Dr Harry Kramer had not used the words “life interest”). Further, there is an inherent inconsistency between the proposition that the respondent would be free to deal with the Property as he wished, after he inherited it on the death of the deceased, and the proposition that the “girls” would always have use of the cottage (an inconsistency to which the appellants have emphasised when arguing that the making of this alleged representation was implausible).

21. The third alleged representation (see at [11] of the statement of claim), said to have been made by the deceased in 1988 after the death of Dr Harry Kramer, was pleaded as a representation that the Property would pass to the respondent upon the deceased’s death, together with a sum of money. It was alleged that the context of this so-called Third Succession Plan was that the respondent would continue with the share farming agreement and otherwise assist the deceased and her family with management of the farm (see at [12] of the statement of claim). There was, however, no evidence of any conversation between the respondent and the deceased in which his continuation with the share farming agreement was a condition of the promised inheritance.

22. The respondent’s evidence as to the third representation was considered at [91]-[93] of the primary judgment. Relevantly, his Honour extracted the following passage from the respondent’s affidavit affirmed 24 August 2017:

33.   Harry died in 1988 and shortly after his death [the deceased] had a conversation with me in the main machinery shed on the Property. We were standing near the driver’s door of the Hino Truck. [The deceased] initiated a conversation where she said words to me to the effect:

“Harry always admired your honesty. Harry and I did agree the farm will pass to you upon my death and I want you to know there will also be a sum of money.”

I said words to [the deceased] words to the effect:

“Thank you very much Leonie, and for outlining the succession plan.”

23. In cross-examination, the respondent accepted that the words “succession plan” were not said by him in this conversation (T 67.46-47).

24. The respondent acknowledged in his affidavit that the deceased did not advise him what amount of money she would be adding to his inheritance and that he did not discuss the third representation, or anything arising from her death or estate, again with the deceased (see [92] of the primary judgment). In cross-examination, the respondent accepted that the representation was: made once, was “out of the blue”, and was not made in response to any complaint by him or any agreement by him to continue working the share-farm agreement (evidence recorded at [93] of the primary judgment).

25. In his 24 August 2017 affidavit (at [36]-[37]), the respondent deposed to his reliance on the promise that he would inherit the Property (see [92] of the primary judgment), namely, that he did not leave the Property and pursue any new employment elsewhere; that he restricted his personal and domestic life to stay living on the Property; and that he did not make any attempt to build a superannuation fund or consider how he might acquire a home of his own.

26. The deceased died in April 2016. In 2017, the respondent commenced proceedings claiming that the Property was held on trust for him.

Primary judgment

27. As noted above, the primary judge characterised the respondent’s claim as being based on an estoppel by encouragement ([30] of the primary judgment) and there was no demur to this, although in submissions in this Court the respondent at times invokes the language of estoppel by acquiescence. The primary judge set out (from [32]) his distillation of the relevant principles governing such a claim. The primary judge, having referred (at [32]-[34]) to the judgments of Priestley JA in Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466 and Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 (Austotel), noted that equitable estoppel operates on representations or promises as to future conduct and that it is not necessary that the representation be promissory in form (see at [35]). His Honour said that the “expanded fifth proposition” set out by Priestley JA in Austotel (as to the requirement for the creation or encouragement of an assumption and reliance thereon in circumstances where departure from the assumption would be unconscionable) may be satisfied:

… if the representation by the defendant encourages the plaintiff to make an assumption that an interest will be granted to the plaintiff by the defendant, and the plaintiff relies upon the assumption in circumstances where departure from the assumption by the defendant would be unconscionable.

going on to say:

Subjective knowledge by the defendant that the plaintiff is acting in reliance upon the assumption encouraged by the defendant may contribute to a departure from the assumption being unconscionable. However, the issue of whether the departure is unconscionable depends upon the particular circumstances of the case, so that if the nature of the representation and the circumstances in which it is made are calculated to induce reliance by the plaintiff, departure from the assumption may be unconscionable even if the defendant does not subjectively understand that the representation has motivated the plaintiff’s reliance.

28. Pausing here, this is relevant when considering the challenge to the primary judge’s finding that the deceased “clearly ought to have known” that the respondent’s motivation for staying on the Property was the expectation that he would inherit it. That finding (of constructive knowledge) cannot be understood as being determinative of the issue of detrimental reliance in his Honour’s eyes (as opposed to being a factor going to the unconscionability of resiling from the promise), as to which I say more in due course.

29. Of the representation necessary to establish a proprietary estoppel by encouragement, the primary judge noted (by reference to Meagher JA’s reasons in Q v E Co [2020] NSWCA 220; (2020) 383 ALR 469 (Q v E Co)) that the meaning and effect of a representation must be determined objectively according to the impact that whatever is said may be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee ([37]; and see also [228] of the primary judgment). (The appellants here complain that his Honour impermissibly applied a subjective test on this issue.)

30. From [94], his Honour addressed the credibility of the respondent as a witness, recording (see [95]) that he had no hesitation in accepting the respondent’s evidence as being truthful “and as reliable as the passage of time will permit”. Perhaps anticipating the complaint here made as to the delay in publication of his reasons, his Honour also there made clear that the findings he made concerning the respondent’s credibility as a witness were based on the notes his Honour had made in the two days following completion of the hearing. His Honour then recorded a submission made by the appellants’ senior counsel of the respondent (including that the respondent was an intelligent, articulate, not inexperienced and not incompetent person), with which his Honour expressed emphatic agreement (as evidenced by the exclamation mark at [97]).

31. At [99], his Honour expressed his satisfaction that the respondent’s evidence was given honestly and with a genuine recollection of the respondent’s understanding of the meaning and effect of the words used and in which the respondent had believed since the time that the representations were made. His Honour returned to the issue of the credibility of the respondent’s evidence concerning the making of the three representations at [166], affirming at [167] that he had found the respondent to be an “exceptionably credible witness”. Indeed, his Honour recorded that, if it had been sufficient to be satisfied on the balance of probabilities on the basis of the respondent’s testimonial evidence alone that the deceased had made the third representation with the meaning that the respondent claimed it had, his Honour would have accepted that the third representation was made in the way that the respondent had claimed (at [167]).

32. Nevertheless, acknowledging the inherent fallibility in all testimonial evidence, the danger in accepting testimonial evidence that is not directly corroborated, the scope for misinterpretation of nuance in the meaning of the words actually used by the deceased ([168]-[169]), and the need to make proper allowance for the fact that neither Dr Harry Kramer nor the deceased was available to give evidence in contradiction of the evidence given by the respondent ([177]), the primary judge proceeded to a consideration of the circumstances surrounding the making of the alleged representations, the subsequent behaviour of the parties to the conversation, and a scrutiny of the available objective evidence (from [189]).

33. Relevantly (in light of the reliance now sought to be placed by the appellants on the so-called “new” evidence of the respondent’s intention to continue farming on the Property), at [195] his Honour said that the evidence did not support a conclusion that, at the time the representations were allegedly made or at any time thereafter, the Property was a viable property for the purpose of conducting farming operations. (The respondent argues that this was his Honour’s conclusion; not the tenor of his evidence.)

34. His Honour then (at [221]) addressed the submissions made by the appellants as to the improbability of the representations having been made. When addressing the evidence that the respondent never discussed the issue again with the deceased after the making of the third representation, his Honour considered this to be explicable on the basis of his impression of the respondent in the witness box that he is relatively laconic; and referring to the great social imbalance between the respondent and the deceased. His Honour noted that he had formed the judgment that the respondent was a man of his word, who expected other people to act honourably in the same way.

35. His Honour made no express finding as to the making of the first and second representations; rather, his Honour treated these as only forming the contextual background to the making of the third representation (see at [162] of the primary judgment). (Complaint is here made by the appellants that his Honour did not consider the acceptability of the third representation in the context of the first and second representations – a complaint that I address in due course.)

36. His Honour had earlier concluded (at [111]) that the collective effect of the evidence from the respondent’s witnesses, while not directly corroborating the making of the first, second and third representations, supported an inference that the effect of the representations was that the Property would be left to the respondent in the deceased’s Will. I interpose to note that such an inference would be consistent with an acceptance that the second representation had been made but not the first (since the first representation was as to the giving of a life interest in the Property, not that the respondent would be left the Property) but in any event there was not an express finding to that effect.

37. At [228], his Honour repeated that it is not necessary that an encouragement be formally expressed in terms of a promise before it may form the basis of a proprietary estoppel. His Honour then went on to say that:

A bare statement that the maker will do a specified act in the future may be sufficient. Whether the maker will be held to performing the act will depend upon whether the circumstances justify an expectation in the listener that the intention to do the act is serious and the statement may reasonably be relied upon by the reasonable listener. Where the act is the conferral of a benefit on the listener, it will be easier to treat the statement as being an assurance. It will also be easier to do so where the making of the statement is likely to induce conduct by the listener from which the maker will benefit. In short, a statement that is not overtly promissory in form may be sufficient to create a reasonable expectation. …

38. His Honour also there repeated the reference to Meagher JA’s acceptance in Q v E Co that whether a representation or promise has been made, and if so its meaning, must be judged objectively according to the impact that whatever is said or done may be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee.

39. Relevantly, in the context of grounds 4 and 5, his Honour addressed (from [230]) the appellants’ reliance on the fact that there was no evidence that either Dr Harry Kramer or the deceased knew that the respondent was only staying on the Property and continuing to implement the share farming agreement because of any of the representations.

40. His Honour stated at [231] that, for an equitable estoppel to arise, the representor must know that the representee has placed reliance on the representation; and referred to Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 445 (Deane J); [1990] HCA 39 (Verwayen) as authority to the effect that constructive knowledge was sufficient. His Honour did not there distinguish between the different forms of equitable estoppel (and it is of relevance to note that Verwayen was a case of promissory estoppel).

41. The primary judge referred at [232] to Leading Synthetics Pty Ltd v Adroit Insurance Group Pty Ltd [2011] VSC 467 (Leading Synthetics), where Macaulay J adopted the preference expressed by Nettle JA (as his Honour then was) in the Victorian Court of Appeal in New Zealand Pelt Export Co Ltd v Trade Indemnity Ltd [2004] VSCA 163 (New Zealand Pelt) for the view of Deane J (as opposed to Brennan J) as to the requisite knowledge that the inducing party must have to establish an estoppel (i.e., the “knew … or clearly ought to have known” test as opposed to Brennan J’s formulation “knew or intended”).

42. Then, addressing whether there was a need to establish that the deceased knew that the “only” reason the respondent stayed on the Property was because of the alleged representations, the primary judge said at [234]:

I do not accept that estoppel by encouragement can only arise where the representor has actual knowledge that the only reason why the representee engages in the conduct … Furthermore, subjective knowledge on the part of the representor is not essential, provided that a reasonable person in the position of the representor would understand that it was probable that the representee was engaging in the conduct in the expectation that the representation would be realised. [my emphasis]

43. His Honour went on at [234] to find that:

In any case, as a matter of fact, the income earned by [the respondent] from the farming operation was consistently so irregular and meagre compared to the amount of arduous work that was required that, if it is accepted that [the deceased] made the third representation to [the respondent], she ought reasonably to have assumed that part of his motivation for continuing was the expectation that he would inherit the Farm. That [the first appellant] and Jocelyn [the deceased’s other daughter] had at various times assumed [the respondent] would be left the Farm lends weight to this inference.

44. As to the third representation, his Honour noted (at [244]) that he had accepted that the respondent believed he had been given an assurance that he would inherit the Property because of the third representation (which, as I read it, must be a reference back to his Honour’s earlier finding as to the credibility of the respondent), and that the respondent had told other family members of that belief. This was in the context of the primary judge addressing the first part of a submission by the appellants (see as noted at [243]) to the effect that, even if the statements were made as asserted by the respondent, what was said only encouraged in the respondent a hope and not an expectation that he would receive the Property when the deceased died (and hence no estoppel could arise). The primary judge considered that it was an inherently improbable proposition that the “collective effect of the representations allegedly made by Dr Harry [Kramer] and [the deceased] were only reasonably capable of conveying to a person in [the respondent’s] position that it was possible that the Farm would be left to him when [the deceased] died”.

45. Complaint is here made by the appellants that this wrongly assesses whether the representation was made by reference to the subjective belief of the respondent, rather than an objective test being applied to that question. However, read in context, I do not see this as employing subjective reasoning. Rather, his Honour is there considering, against the background of the respondent’s belief that he had been given such an assurance, what the alleged representations were reasonably capable of conveying to a person in the respondent’s position.

46. At [245], his Honour dealt with the second part of the appellants’ submission recorded at [243], namely the submission that, even if the representations were made and did encourage the respondent to have an expectation rather than just a mere hope, neither of the Kramers “intended or knew” that the respondent had that expectation “and that he was staying on the property only because of what they had said to him” (and that in those circumstances an estoppel could not operate). His Honour there repeated both his conclusion that for estoppel by encouragement to arise it was not necessary that the assurance be the “only reason” why the representative acted on the faith of the occurrence and his conclusion that:

…it is not necessary for the representor to have any intention or subjective appreciation that the representee is acting on the faith of the assurance, if the representee is aware of circumstances that make it objectively reasonably apparent that the representee is so acting.

47. At [249], the primary judge expressed his positive satisfaction that, on the balance of probabilities, the third representation was made to the respondent by the deceased. Read in context, the reference by the primary judge to the “third representation” in this finding must be understood as a reference to the representation set out at [91] from the respondent’s affidavit evidence (rather than to the somewhat differently worded third representation as pleaded).

48. The primary judge was satisfied that the respondent acted to his detriment on the faith of that assurance by continuing the farming operation on the Property for about 23 years thereafter in the belief that he would inherit the Property under the deceased’s Will (at [250]). His Honour was further satisfied that there was a sufficient probability that, in the absence of such a belief, the respondent would have decided that the farming operation was “too hard going” and would have terminated the share farming agreement and successfully pursued a more remunerative occupation (at [251]). Earlier, at [195] the primary judge said that the evidence did not support a conclusion that, at the time the representations were allegedly made, or at any time thereafter, the farm was a viable property for the purpose of conducting farming operations. (I again note that the respondent has submitted this was not the tenor of his evidence but, rather, was his Honour’s conclusion drawn from the objective facts.)

49. Repeating his finding that the deceased “ought to have known” that part of the respondent’s motivation for continuing the share farming operation was the expectation that he would inherit the Property (at [251]), his Honour went on to conclude that it was unconscionable in the circumstances for the deceased not to have left the Property to him in her Will.

50. From [253], his Honour considered (and rejected) the matters raised by the appellants in defence of the respondent’s claim, including: the appellants’ claim that the respondent had deceived the deceased on a significant number of occasions from 2007 ([254]-[277]); the allegation that the respondent had not conducted the farming operation under the share farming agreement in a proper and workmanlike manner ([278]-[325]); the fact that the respondent and his family had rent-free accommodation on the Property for almost 40 years ([326]-[329]); the allegation that the respondent did not comply with the share farming agreement because he failed to maintain the house that he lived in ([330]); the fact that the share farming agreement contained terms entitling the respondent to half the proceeds of sale of the crops and a bonus ([331]); the fact that loans had been made by the Kramers to the respondent from time to time (that it was alleged had been forgiven from time to time) ([332]); the fact that the respondent’s only desire was to live on the Property ([333]); and the making of the bequest under the Will to the respondent ([334]-[337]).

Kramer (No 2) judgment

51. I have already noted that outcome of the application by the respondent to amend his claim at first instance. Relevantly, in light of the challenge here made to the credibility findings, the primary judge in his second judgment, at [62], when referring to his finding in the primary judgment as to the lack of the commercial viability of the Property as a farming operation, indicated that this was a substantial basis for the determination of the respondent’s claim in his favour. His Honour, somewhat equivocally, said:

It may be that a reason why the Court and [the first appellant] and her legal representatives simply accepted that the subject matter of [the respondent’s] claim was the real property component of the Colo Property was that a basis of [the respondent’s] claim was that the farming operation was not commercially viable, so the implicit assumption was that if [the respondent] succeeded in his claim, he would in due course sell the Colo Property and use the proceeds of sale to fund his retirement. [my emphasis]

52. As the primary judge presumably knew the assumption on which he had proceeded in the primary judgment, the equivocation in the above passage may simply relate to the position of the first appellant and her legal representatives. In any event, it is relevant to note that the primary judge at [62] of Kramer (No 2) made clear that the fundamental basis on which the respondent had achieved success in the proceeding was his Honour’s finding as to the lack of commercial viability of the farming operation (a finding relevant to the detriment the respondent would suffer in reliance on the promise were the promise not to be made good; and the unconscionability of the deceased, through her executors, being permitted to resile from the promise). This was one of the matters that his Honour considered militated against the application by the respondent to amend and re-open his claim to encompass the water licence and farming equipment as part of the Property alleged to be held on trust for him.

53. At [65] of Kramer (No 2), his Honour accepted that if the claims for water licence and farming equipment had been advanced in the first hearing the respondent would have been subject to more avenues of cross-examination, with a “correspondingly increased risk” that he would have been unable to sustain his position with the same credibility that his Honour had accorded to his evidence in the primary judgment.

54. As noted, the primary judge rejected the respondent’s application to amend his statement of claim to seek a trust over the water licence, the machinery, pumps and the plant and equipment (including by reference to the principle of finality of litigation – see at [68] of Kramer (No 2)). The primary judge also declined to accede to the appellants’ application (raised only during the second hearing) to the effect that the declaration of trust ought be made subject to a provision that the Kramer daughters have a licence (during their lifetimes or alternatively during the period the respondent remains the registered proprietor of the Property) to use the cottage on the Property that was formerly occupied by their parents as they see fit (see at [75]-[80]). His Honour did so, consistently with the basis on which he had denied the respondent’s application to raise new issues, on the basis that this issue had not been formally raised at the hearing (at [76]).

Appellants’ application to adduce additional evidence

55. Before turning to the grounds of appeal it is convenient to deal with the application by the appellants, pursuant to r 51.51 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and s 75A(9) of the Supreme Court Act 1970 (NSW) (the Supreme Court Act), to adduce, as additional evidence, affidavit evidence given by the respondent after the date of the primary judgment (which was published on 10 November 2021) but before final orders were made in the proceeding in April 2023 (see their notice of motion filed 24 July 2023). That evidence was adduced in support of the respondent’s May 2022 notice of motion for leave to amend his pleading and to re-open the evidence at trial (see the discussion in the transcript of the hearing on the motion on 20 October 2022 from T 3.22).

56. It is also of relevance to note that the respondent made clear at the hearing on 20 October 2022 that there was no application to vary the primary judgment or order (20/10/22; T 4.47). The respondent’s affidavit evidence was read insofar as it went to the re-opening application and what would be said on any future hearing (and not read to prove facts on that application) (see 20/10/22; T 5.47). On that basis, the respondent was not cross-examined on various paragraphs of his affidavit evidence that the appellant’s counsel indicated he would otherwise challenge (see 20/10/22; T 5.37).

57. Relevantly, what the appellants now seek to adduce is the respondent’s evidence (contained in his affidavits affirmed on 11 March 2022 and 3 May 2022) as to what he understood the Property to comprise (i.e., that he considered the “farm” to comprise the land, the farm machinery, the improvements affixed to the land, and the water licence) (see his affidavit affirmed 11 March 2022 at [15]; and his affidavit affirmed 3 May 2022 at [4]) and as to his intentions in relation to the Property (namely, that he wanted to continue to operate, manage and maintain the farm if it were transferred to him) (see his affidavit affirmed 3 May 2022 at [5]).

58. The appellants seek to rely on this additional evidence in support of their challenge to the respondent’s credibility (see ground 1 of the grounds of appeal). They argue that the respondent’s “new” evidence that he sought to recommence the farming operation on the Property is inconsistent with a case of fundamental commercial unviability of the farming operation (which was a substantial basis for the determination in favour of the respondent at first instance, referring to [62] of Kramer (No 2) – see above). The appellants say that this new evidence would also have opened up a further line of cross-examination had this evidence been led at the trial.

59. The appellants submit that his Honour’s credibility findings in relation to the respondent were central to the primary judgment (referring to the findings at [94]-[100]; [166]-[222]) and they argue that his Honour could only have made the findings as to the critical representation(s) if (as the primary judge found) the respondent’s credibility was impeccable. The appellants emphasise in this context that the representations: were attributed to deceased persons, were not witnessed by any other person, were not reduced to writing, and were not asserted ever to have been mentioned or discussed between the deceased and the respondent after 1989. Hence, the significance placed by the appellants on the additional evidence as undermining the findings of credibility. (Pausing here, I do not consider that the findings made as to the third representation required such an effusive finding of credibility that his Honour made, although I quite accept the need for careful scrutiny of the evidence when reliance is placed on representations allegedly made by person now deceased.)

60. Further, the appellants argue that the unfairness of the respondent permitting outlays by the first appellant on irrigation equipment and farm equipment at a time when he had not informed the first appellant of his belief (or expectation) that he would inherit the Property (referring to [15] of the respondent’s affidavit of 11 March 2022 in which the respondent does not dispute that he did not inform the first appellant of his belief that he would inherit the farm at that time) impacts on the finding by the primary judge that the respondent was “exceptionally credible”. The appellants refer to the first appellant’s affidavit sworn 22 February 2022, in which she deposed to the acquisition of plant and equipment in 2015 after the respondent had left the Property (at [20]), evidence which the appellants say would have been led at the trial had the respondent led evidence of his expanded understanding of the “farm”.

61. The respondent opposes the application to adduce additional evidence, submitting that the evidence has little relevance and is of low probative value; and complains that, by this application, the appellants again seek (as they did at the hearing below) to impugn his credit and character. The respondent (perhaps ironically since finality of litigation was in essence the reason why he was not permitted to amend and re-open the proceedings except to the limited extent noted above) emphasises the public interest in the finality of litigation, citing Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158 where Payne JA (with whom White and McCallum JJA agreed) stated at [51] that “regard must be had to the nature of the proceedings and the general public interest in the finality of litigation”.

62. In particular, the respondent says that the issue of him not informing the first appellant of the third representation was extensively addressed in the evidence at the hearing (noting that it was explored in depth during his cross-examination) (at T 100.37-103.10) and that it was the subject of submissions (at T 330.29-332.7). The respondent points to the primary judge’s findings in relation to the issue as to why he did not raise the third representation with the deceased again (see at [221], referred to above); and argues that the evidence that the appellants now seek to have admitted brings no new or other relevant evidence to the proceedings on this issue which has already been addressed by the primary judge.

63. As to his understanding as to what the “farm” comprised, the respondent submits that there is no evidence of a “change” in position; rather, there was a need for further delineation of his understanding on the issue (given the ambiguity which the primary judge accepted was interest in the term “farm” (see Kramer (No 2) at [54]-[55])). The respondent accepts that the affidavit and oral evidence at trial made no reference to the water licence but he points out that the Grant of Probate made no reference to this asset as an asset of the estate and says that its disclosure and the details of its identification only arose in the context of making the final orders. The respondent submits that any further fresh evidence on which the appellants might seek to rely is not relevant to this appeal and is of no probative value.

64. As to the issue of his intentions in relation to the Property, the respondent maintains that from the commencement of the proceedings he has been clear in stating that his intention was to work the farm as long as he was able to do so, and then to sell and use the funds from the sale to provide an income in his retirement as well as a home in which to live (referring to his affidavit affirmed 24 August 2017 at [116]), which was not the subject of challenge and from which he says he has never resiled. The respondent says that there is no evidentiary basis for an asserted “change in position” in this regard.

65. Insofar as the appellants have raised the issue of his credit by reference to the primary judge’s statement that the farm was never a viable property for the purpose of conducting farming operations (at [195]), the respondent emphasises that this was an objective finding made by the Court. The respondent says that there is no evidence that he believed this to be the case; rather, that the evidence to the contrary was that his passion for farming continued and that he intended to continue farming. The respondent says that, in the course of his cross-examination, he explained his dedication and ongoing commitment to farming and the farm, and his subjective expectation, even as he was leaving the farm in 2014, that he could make the farm viable (T 110.32-47). Further, the respondent says that his 2022 affidavit evidence goes to his state of mind (i.e., what he believed at that time and not necessarily in the context of his discussions with the Kramers) and suggests that, had such evidence been sought to be adduced at the first hearing, it would have been ruled inadmissible by the primary judge. In any event, the respondent argues that the appellants had ample opportunity to explore the respondent’s state of mind at the first hearing.

66. Insofar as the appellants seek to challenge credit findings made by the primary judge, the respondent points to the advantage of the primary judge in seeing and hearing from the respondent (as well as from the Kramer daughters). It is submitted that the proposed evidence is not capable of impugning the respondent’s credit (reference here being made to Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 (Fox v Percy) at [23] per Gleeson CJ, Gummow and Kirby JJ).

Determination

67. Pursuant to r 51.51 of the UCPR, and s 75A(8) of the Supreme Court Act special grounds must be established for evidence that was available before the hearing to be admitted on a subsequent appeal. Ordinarily, an appellant will need to satisfy three requirements: first, that the evidence is credible; second that the evidence is highly or relevantly probative; and, third, that the evidence was not previously obtainable by reasonable diligence (see Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 per Clarke JA, with whom Sheller JA agreed).

68. In the present case, the evidence sought to be relied upon by the appellants is evidence that was read in the proceedings at first instance, albeit after the primary judgment had been delivered and only as to what would be adduced if the application to re-open was successful. As explained above, it was not adduced until prior to the final determination of the proceedings (and then only in the context of the application by the respondent to amend the pleadings and to re-open the evidence). In one sense, therefore, it might be said that the respondent’s affidavit evidence that was read in the course of the hearing of the May 2022 motion is not evidence “after” final judgment in the matter (such that leave would not appear to be necessary for it to be relied upon in the appeal).

67. The real difficulty, it seems to me, is that the appellants seek to rely on this evidence in order to challenge the credit findings that were made by the primary judge following the first hearing (i.e., without the benefit of that additional evidence), in circumstances where at least some of the matters raised by that “additional” evidence had been the subject of challenge at the hearing itself (namely, the evidence as to the respondent not having informed the first appellant of the third representation) or were the subject of evidence that was before the Court on the hearing of the May 2022 motion (namely, the evidence as to the expenditure by the first appellant on equipment after the respondent had left the Property, on which the appellants seek to base an unfairness argument to impact on the respondent’s credibility; and the evidence as to the respondent’s intention to continue farming on the Property). It was presumably open to the appellants at the time of the hearing of the May 2022 motion to seek to rely on that additional evidence in order to re-open the credit findings that had been made in respect of the respondent following the first hearing, but the appellants apparently did not seek to do so; and to that extent they ought be bound by that forensic decision.

68. In any event, I do not accept that the evidence now sought to be relied upon to challenge the credibility findings made in favour of the respondent is sufficiently probative to undermine those findings (notwithstanding the observation by the primary judge to the effect that, had it been clear at the first hearing that the respondent claimed that the water licence and plant and equipment were held on trust for him, the respondent would have been subjected to more avenues of attack in cross-examination and may not have been able to sustain the favourable credit findings that had been made) (see [65] of Kramer (No 2)).

69. That is because the fact that the initial pleading did not identify the water licence and farm equipment as part of the Property the subject of the trust allegation is equally (if not perhaps likely to be more so) explicable by reference to an oversight in the pleading of the claim as it is by reference to some change of position on the part of the respondent. Any unfairness to the appellants in this being raised at a late stage in the proceeding is met by the fact that the respondent was ultimately not permitted to amend his claim to encompass those additional components within the declaration as to the Property held on trust. Moreover, to rely on that evidence now (at appellate level) to challenge the credibility findings that were made at first instance would require that the evidence be able to be tested and would, in effect, require that the matter be remitted for re-hearing.

70. As to the submission that there was unfairness on the part of the respondent in failing to inform the first appellant of his expectation to inherit the Property at the time that the first appellant was expending money on the acquisition of farm equipment and the like, any such unfairness is met by the respondent not being permitted to amend his claim to encompass the plant and equipment. It does not, without more, undermine the respondent’s credit as to his evidence of the making of the representations to him in the first place. The additional evidence does not on its face (and certainly not without being tested) warrant a conclusion that the respondent knowingly acquiesced in expenditure by the appellants on the farm with a view to the respondent unfairly seeking later to obtain a benefit therefrom if the Property was ultimately transferred to him.

71. As to the evidence of the respondent’s intentions at the relevant time as to future farming on the Property, I accept that the additional evidence does not necessarily establish a change of position as such on the part of the respondent and that the finding by the primary judge as to the unviability of the commercial farming operation was not one founded (or at least explicitly based) on any evidence of subjective belief or intention by the respondent on that issue.

72. Therefore, to the extent that leave were to be necessary for the admission of the additional evidence, I would refuse such leave and, to the extent that the additional evidence was already in evidence before the primary judge at the time of the second hearing but was not there relied upon to challenge the credibility findings made in the primary judgment, I consider that the appellants should not now be permitted to re-open those findings on the basis of that evidence (not having chosen to do so when the matter was before the primary judge). I consider below the overall complaint as to the credibility findings in the context of ground 1 of the grounds of appeal.

73. The appellants’ notice of motion filed on 24 July 2023 to adduce further evidence should be dismissed with costs.

Proprietary estoppel by encouragement

76. To put into context various of the grounds of appeal, it is helpful briefly to outline the elements of a proprietary estoppel by encouragement claim, that being the equitable doctrine here invoked by the respondent (see the primary judgment at [30]).

77. Proprietary estoppel by encouragement is one of a number of discrete equitable doctrines falling within the rubric of “equitable estoppel”. The elements common to such doctrines are encapsulated in the well-known formulation of Brennan J, as his Honour then was, in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-429; [1998] HCA 7 (Waltons Stores v Maher):

… [I]t is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant’s property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff’s reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs. [My emphasis]

78. While those elements are not to be applied in every case in a “mechanical fashion” (Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 (Doueihi) at [166] (Gleeson JA, with whom Beazley P, as Her Excellency then was, and Leeming JA agreed); and see DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 (DHJPM) at [47] (Meagher JA, with whom Macfarlan JA agreed)), they are commonly regarded as a useful guide or check. It has been said that “if the facts of the case did not measure up to those tests, it would be necessary to think thoroughly about why not” (Austotel at 615-616 (Priestley JA), referred to approvingly in Doueihi (at [166] by Gleeson JA)).

79. There is a recognised need for care in identifying the requisite elements for the different forms of estoppel, as emphasised by Meagher JA in DHJPM. The suggestion of an emergence of “one overarching doctrine of estoppel” (see Mason CJ in Verwayen at 410-413) or that estoppel is a “unified [doctrine] which operates consistently in both law and equity” (see Deane J at 445-446 in Verwayen) not having gained currency (as recognised in this Court in Doueihi at [136] per Gleeson JA, with whom Beazley P and Leeming JA agreed; and see also JD Heydon, MJ Leeming & PG Turner, Meagher, Gummow & Lehane's Equity: Doctrine & Remedies (5th ed 2014, Lexis Nexis Butterworths) (MGL) at [17-055]). Their Honours were there speaking in the context of the doctrines of proprietary and promissory estoppel. However, relevantly, for the present case, there also remains a recognised distinction between the two forms of proprietary estoppel (see Milling v Hardie [2014] NSWCA 163 (Milling v Hardie) at [50]-[52] (Macfarlan JA, with whom Beazley P agreed); Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 (Sidhu v Van Dyke) at [2], [77] (French CJ, Kiefel J, as her Honour then was, Bell and Keane JJ); Priestley v Priestley [2017] NSWCA 155 (Priestley v Priestley) at [7]-[8] (Macfarlan JA); MGL at [17-100]).

80. The line of authority concerning proprietary estoppel by encouragement derives from Dillwyn v Llewelyn (1862) 4 De GF & J 517; 45 ER 1285 (Dillwyn v Llewelyn) and the dissenting judgment of Lord Kingsdown in Ramsden v Dyson (1866) LR 1 HL 129 at 170-171 (Ramsden v Dyson), that judgment cited approvingly by the Privy Council in Plimmer v The Mayor, Councillors and Citizens of the City of Wellington [1884] 9 AC 699 (Plimmer). Ramsden v Dyson itself is the authority from which the separate line of authority concerning proprietary estoppel by acquiescence derives.

81. The foundation for an estoppel by encouragement, as summarised by Kitto J in Olsson v Dyson (1969) 120 CLR 365 at 378; [1969] HCA 3 (Olsson v Dyson) by reference to the decision in Dillwyn v Llewellyn, is conduct which induces a change of position for the worse in reliance thereon. In Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84 (Delaforce v Simpson-Cook), Handley AJA at [21], expressed an estoppel by encouragement as one that may arise “when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed his or her position to [his or her] detriment”.

82. The equity does not arise through the mere attempt or promise to make a gift to another of a proprietary interest. As Mason CJ and Wilson J noted in Waltons Stores v Maher at 406, there needs to be “something more” which amounts to unconscionable conduct on behalf of the representor.

83. As to the elements required to establish a proprietary estoppel by encouragement, the following may be noted.

Representation

84. The weight of appellate opinion is that there are less stringent certainty requirements for a representation or promise in proprietary estoppel, as distinct from the certainty requirements for estoppel by representation or promissory estoppel. While an express representation or promise is not necessary (indeed, the representation or promise may derive from conduct), it is necessary carefully to identify the alleged representation or promise (and this is to be assessed by reference to the circumstances of each case – see Doueihi at [186] (Gleeson JA), citing Verwayen at 445 (Deane J); see also, Thorner v Major [2009] 1 WLR 776 (Thorner v Major) at [56] (Lord Walker)).

85. In Flinn v Flinn [1999] 3 VR 712; [1999] VSCA 109 (Flinn v Flinn), Brooking JA (with whom Charles and Batt JJA agreed) concluded (at [80]) that a promise “may be definite in the sense that there is a clear promise to do something even though the something promised is not precisely defined” and made clear that uncertainty of the kind that would prevent the creation of a contract would not necessarily prevent the intervention of equity (see at [95]). Those passages from Flinn v Flinn have been cited approvingly on numerous occasions (see, for example, Delaforce v Simpson-Cook at [55]; Evans v Evans [2011] NSWCA 92 (Evans v Evans) at [121] (Campbell JA, with whom Giles JA and Sackville AJA agreed); DHJPM at [54] (Meagher JA); Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1; [2016] HCA 26 (Crown Melbourne) at [215] (Nettle J); cf [159] (Keane J)). Similarly, in Evans v Evans (see at [116] per Campbell JA) it was accepted, in effect, that the precise content of the assumption and expected arrangements flowing from the relevant representation or promise need not always be susceptible to precise legal analysis (see also Plimmer at 713).

86. The representation or promise has been said to be sufficiently clear “if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely” (Galaxidis v Galaxidis [2004] NSWCA 111 at [93] (Tobias JA, with whom Giles and Hodson JJA agreed)). See also the statement by Hodgson JA in Sullivan v Sullivan [2006] NSWCA 312 (Sullivan v Sullivan) at [85] (cited with apparent approval in Evans v Evans at [124] (Campbell JA), Doueihi at [187] (Gleeson JA) and in Crown Melbourne at [147]-[148] (Keane J); [179] (Nettle J)) that:

Generally, a promise or representation will be sufficiently certain to support an estoppel if it was reasonable for the representee to interpret the representation or promise in a particular way and to act in reliance on that interpretation, thereby suffering detriment if the representor departs from what was represented or promised. Generally, if there is a grey area in what is represented or promised, but it was reasonable for the representee to interpret it as extending at least to the lower limit of the grey area and to act in reliance on it as so understood, I see no reason why the Court should not regard the representation or promise as sufficiently certain up to this lower limit.

87. While a distinction has sometimes been drawn between arms-length/commercial cases and domestic/family cases when assessing adequacy of an assurance or the reasonableness of an expectation or assumption (see, for example, DHJPM at [104]-[105] (Meagher JA); Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752; 4 All ER 713 (Cobbe) per Lord Walker (at [68])), Gleeson JA has stressed the need for care in the use of such “shorthand labels” (Doueihi at [178]). I consider in the context of ground 2, the cases which consider testamentary promises.

Assumption and inducement

88. In order to rely upon a proprietary estoppel by encouragement, it must be established that the representative held an assumption that he or she would have an interest in the relevant property (Carter v Brine [2015] SASC 204 at [326] (Blue J); Doueihi at [131]; [154]; [159]-[168] (Gleeson JA)), this requiring careful identification of the nature of the assumption held by the plaintiff (Doueihi at [186] (Gleeson JA)); and, relevantly, that this assumption was induced by the representor.

89. In cases of estoppel by encouragement, the relevant assumption is “induced” by the relevant representation or promise, be it express or implied from conduct. By contrast, in cases of estoppel by acquiescence, the relevant assumption is not “induced” in the same sense. Rather, it is the defendant’s knowledge of the assumption, and his or her inaction while possessing this knowledge, which supplies the element of inducement; “[t]he act of standing by without correcting the plaintiff’s mistaken belief is itself an act of encouragement” (Priestley v Priestley [2016] NSWSC 1096 (Priestley NSWSC) at [109] (White J, as his Honour then was)). As Brennan J said in Waltons Stores v Maher at 429:

… a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff’s reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.

90. This distinction is of significance here in terms of the challenge made by the appellant to the finding of knowledge (see ground 4 below).

Reliance

91. There is no presumption of reliance; rather, reliance is a fact to be found (Sidhu v Van Dyke at [58]); and it is not necessary that the relevant assumption be the sole inducement operating on the mind of the party setting up the estoppel (Sidhu v Van Dyke at [71]; it need only be a “contributing cause” at [71]-[73] (French CJ, Kiefel, Bell and Keane JJ); [90] (Gageler J)).

92. The test for reliance has been variously expressed. On the one hand, it has been said that a plaintiff must show that he or she “would have acted differently” but for the assumption (see Gageler J in Sidhu v Van Dyke at [90]ff; Darke J in Stone v Stone [2014] NSWSC 1655 at [44]-[46]; this Court in Miller Heiman Pty Ltd v Sales Principles Pty Ltd (2017) 94 NSWLR 500; [2017] NSWCA 106 (Miller Heiman) at [37]-[49] (Macfarlan JA, with whom McColl JA and Sackville AJA agreed); White J in Priestley NSWSC, and Macfarlan JA, on appeal, in Priestley v Priestley). On the other hand, it has also been said that the question is whether the promise or representation was “a contributing cause” or “influenced” the plaintiff’s action (Edelman J’s reading of Sidhu v Van Dyke in Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825; (2015) 329 ALR 1 at [776]-[779]; Emmett AJA in Priestley v Priestley at [136]; K Handley, “Recent Cases” (2017) 91 Australian Law Journal 812). In E Co v Q [2018] NSWSC 442, at first instance I noted my view was that the better reading of the Sidhu v Van Dyke “contributing cause” test is that propounded by Gageler J (Sidhu v Van Dyke), White J (Priestley NSWSC), and Macfarlan JA (Miller Heiman; Priestley v Priestley). I remain of that view.

Detriment

93. The basal purpose of the equitable estoppel doctrine was identified by Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674; [1937] HCA 58 as being “to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting”.

94. In a case of estoppel by encouragement, the relevant detriment is not the loss flowing from mere non-fulfilment of a representation or promise (Verwayen at 429 (Brennan J); and see Neuberger LJ in Steria Ltd v Hutchison [2007] ICR 445 at [125]). Rather, what must be established is that the plaintiff has suffered (or will suffer) detriment if the defendant is permitted to resile from his or her representations or promises.

95. As with reliance, there is no presumption of detriment; the fact that detriment has been suffered (or will be suffered) must be established on the balance of probabilities. However, the concept of detriment in the context of proprietary estoppel is neither narrow nor technical (Donis v Donis (2007) 19 VR 577; [2007] VSCA 89 (Donis v Donis) at [20] (Nettle JA, with whom Maxwell ACJ and Ashley JA agreed)).

96. The question of detriment is assessed as at the time a party seeks to depart from the assumption or expectation (DHJPM at [72] (Meagher JA)). Detriment may be of a kind that involves “life-changing decisions with irreversible consequences of a profoundly personal nature” (Donis v Donis at [34]; cited approvingly in Sidhu v Van Dyke at [84] (French CJ, Kiefel, Bell and Keane JJ)).

Unconscionability

97. Finally, as to the element of unconscionability, it does not exist at large (and has been said not to be a “triable issue” as such – see MGL at [17-040] and the authorities cited therein; K Handley, Estoppel by Conduct and Election (2nd ed 2016, Sweet & Maxwell) (Estoppel by Conduct and Election) at [1-027]-[1-032]).

1. Dismiss the appellants’ notice of motion filed 24 July 2024 with costs.

2. Dismiss the appeal with costs.

257. LEEMING JA: I have had the large advantage of reading the reasons of Ward P in draft. I agree with the orders her Honour proposes, and, subject to the following, which is by way of elaboration rather than qualification, with her Honour’s reasons.

258. The first hearing took place over six days between 20 and 27 November 2020. Judgment was reserved. No orders were made when the primary judge published reasons on 10 November 2021: Stone v Kramer [2021] NSWSC 1456. Instead, those reasons invited the parties to draft short minutes of order to give effect to them. Rather than orders being made in the following days, there was a second hearing on 18 March 2022, which served to confirm that a number of matters remained in dispute, including that Mr David Stone sought to amend his pleading so as to advance new claims over the water entitlements attaching to the land. That led to procedural orders being made (by consent) on 29 March 2022, granting Mr Stone leave to file and serve further evidence in support of his new claims, and a third hearing on 20 October 2022 following which his Honour reserved and delivered further reasons on 16 December 2022: Stone v Kramer (No 2) [2022] NSWSC 1716. Once again no orders were made, although this time 15 substantive orders were proposed with a view to the parties being heard further as to their form. The reasons recorded the primary judge’s view that the application to amend should in large measure be refused, primarily on the basis of what had occurred at the first hearing, including the more limited cross-examination Mr Stone had faced, the unfairness of permitting Mr Stone to add to his success by expanding his claim without being subjected to the same litigation risk as if he had advanced the expanded claim at the first hearing, and the inevitability that the Court would be drawn into re-considering many of the issues that have been determined: at [65]-[67]. However, the primary judge did permit a limited expansion of Mr Stone’s case, and thus ordered a further timetable for the determination of the “New Issue”, which was defined in proposed order 7 as “the new issue raised by the amendment of [Mr Stone’s] statement of claim”.

259. Even at that stage, on 16 December 2022, 13 months after delivery of the first set of reasons and 25 months after the first hearing, it remained impossible for any party to bring an appeal. That is because no determinative orders had been made. It is axiomatic that appeals lie from orders, not reasons: see BP v State of New South Wales [2019] NSWCA 223 at [11]-[12] and the authorities there cited; see also McNab v Director of Public Prosecutions (NSW) (2021) 106 NSWLR 430; [2021] NSWCA 298 at [25]. No differently from “judgments, decrees, orders, and sentences” in s 73 of the Commonwealth Constitution from which an appeal lies to the High Court, the “judgment or order” in respect of which s 101(1) of the Supreme Court Act 1970 (NSW) confers a right of appeal does not include “reasons for judgment”, although as Barwick CJ and Kitto J observed in Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64; [1968] HCA 91 in many contexts, “judgment” is a convenient abbreviation for reasons for judgment.

260. Final orders confirming Mr Stone’s entitlement to the Colo Property were eventually made on 16 February 2023.

261. It is very much to be hoped that the 15 month delay between delivering reasons for judgment and making orders is an extreme case. Whatever may have contributed to this delay subsequent to the delivery of reasons, that delay would not have happened if orders had been made at the time judgment was delivered. It is to be borne in mind that reasons are not the objective of litigation. Parties go to court in order to obtain orders. Indeed, reasons are in fact reasons for judgment. It is a misconception to think that the reasons come first, from which orders then follow.

262. There is at least a chance that had orders resolving at least part of Mr Stone’s claim been made shortly after the first reasons were published this appeal would have been heard and determined a year earlier than it has been. It would have been an interlocutory appeal, but there would be good reason to grant leave since there had been a six day trial. (Indeed, as this appeal stood on 16 February 2023, the present appeal would require leave for the same reason, in light of the “New Issue” identified in the reasons delivered on 16 December 2022; however, it appears that that issue has been resolved by orders made on 6 April 2023.)

263. It is true that orders resolving the entirety of a dispute commonly cannot be made without giving the parties an opportunity to be heard further. But it is seldom the case that no orders at all can be made after a final hearing. It is also true that if a court makes orders or enters judgment at the time reasons are delivered, it is quite possible that the court may have overlooked a point, or either or both parties may wish to be heard as to the form of the order, especially if the matter is complex. Many years ago this mattered much more than it does today. In part that was because traditionally a dissatisfied litigant was entitled to apply for a rehearing, a review or an appeal, and the right to a rehearing was not lost until a decree had been drawn up, entered and enrolled. It was with this in mind that Professor Polden wrote, “It is no wonder that nothing was ever considered final in Chancery”: W Cornish et al, The Oxford History of the Laws of England (2010, Oxford University Press), Vol XI at 673, and see Pham v Gall (2020) 102 NSWLR 269; [2020] NSWCA 116 at [35]-[39].

264. Times have changed. In the ordinary course, it is desirable for courts to make orders at the time reasons for judgment are delivered. I respectfully agree with the commentary in J Hamilton, G Lindsay and C Webster, New South Wales Civil Procedure Handbook 2023 (13th ed, 2023, Thomson Reuters) at 1004 [36.16.80] that “[i]t is likely that the perceived risk of the early entry of orders is higher than the reality”. Any judgment or order may be set aside or varied by notice of motion if it has not been entered, and, importantly, so long as a notice of motion is filed within 14 days, orders which have been entered may be set aside or varied as if they had not been entered: Uniform Civil Procedure Rules 2005 (NSW), r 36.16(3A). That is a basal departure from the traditional approach in equity, and requires changes to habits of thought. Sub-rule (3A) was inserted by the Uniform Civil Procedure Rules (Amendment No 15) 2007 (NSW) and there is no reason to doubt that the liberalisation of the power to set aside or vary orders was intended to alter the traditional approach.

265. If a court makes orders when delivering judgment and if there are errors or omissions that matter, the parties are entitled pursuant to UCPR r 36.16 to apply for further or different orders. But the issue is a different one from that which arises if reasons are delivered but no orders are made. On the one hand, if a court makes no orders at all, but invites the parties to bring in orders according with the reasons for judgment, that is a course which gives rise to the greatest possible scope for disputation as to the appropriate orders, between self-selectingly disputatious litigants who not only have been unable to resolve their dispute before trial but also may be considering their rights of appeal. On the other hand, if a court makes orders, the question is never more complicated, and may in fact be significantly simpler: each litigant need only ask, “Is it necessary to vary or set aside any of the extant orders, or to seek additional orders?” Accordingly, the latter course will ordinarily accord with the just, quick and cheap resolution of the real issues. To be clear, I struggle to see how delay which has occurred in the present litigation, of 15 months between substantive reasons and orders, accords with s 56 of the Civil Procedure Act 2005 (NSW). That criticism is not directed at either party or their lawyers or the primary judge; it does not greatly matter whether the fault lies with any or all of them. However, nothing in the record suggests that sufficient regard was had by anyone to the obligations imposed upon litigants, lawyers and the court by s 56.

266. In addition to the above, making orders is a course which ensures that a party’s rights of appeal are available. In many cases one litigant will be less concerned about delay than another. In many cases one litigant will be less concerned about expense than another. Even so, that litigant is under an obligation to advance the overriding purpose of achieving the just, quick and cheap resolution of the real matters in issue. And a court’s obligation in all cases is to attempt to deal with the real issues justly, whilst minimising expense and delay. It must follow that a court must often resist the submissions advanced by a litigant who may be content with the status quo and who urges a luxurious timetable and concomitant expense.

267. The course adopted in the present case gives rise to unusual and perhaps novel questions of construction under s 75A(7)-(9) of the Supreme Court Act. Those provisions provide:

(7) The Court may receive further evidence.

(8) Notwithstanding subsection (7), where the appeal is from a judgment after a trial or hearing on the merits, the Court shall not receive further evidence except on special grounds.

(9) Subsection (8) does not apply to evidence concerning matters occurring after the trial or hearing.

268. When there has been a single hearing resulting in a judgment or order from which an appeal is brought, it is clear that “further evidence” in subsections (7) and (8) is evidence that was not adduced at that hearing but which existed at the time, and evidence concerning “matters occurring after the trial or hearing” in subsection (9) is “fresh” evidence which could not have been adduced at that single hearing because it concerned matters which had not yet occurred. Those provisions do not deal explicitly with a situation such as the present, where a hearing takes place in stages prior to orders being made, with evidence being adduced at subsequent stages for different purposes. This Court was not referred to any authority squarely on point. Whether evidence which was adduced before orders were made but after the relevant hearing and for a different purpose is “further evidence” is at least arguably debatable. The Court did not hear any substantive argument on the issue, and reserved its decision on the motion.

269. In this context, “regard must be had to the nature of the proceedings and the general public interest in the finality of litigation”: Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158 at [51] and the decisions there cited. As noted above, the primary judge declined to permit Mr Stone to expand his claim to include water entitlements, in part because it would have altered the way the earlier hearing was conducted, and in part because it would have involved the Court re-considering its own reasons on a different evidentiary basis.

270. The evidence adduced at the second hearing was directed to preventing Mr Stone from expanding his case. In large measure that effort succeeded. But no appeal is brought from orders reflecting the determination of any issue at the subsequent hearing on 20 October 2022. Instead, it is now sought to rely upon that evidence in order to impugn the orders made on 16 February 2023, which reflect the reasoning of the Court following the first hearing. Indeed, the very matters which were relied upon by the primary judge to prevent Mr Stone from expanding his case (namely, that they might call into question earlier findings of fact) are now sought to be relied upon in the appeal, and to the same end.

271. It is not necessary to express a definitive view as to the operation of the constraint upon the receipt of “further evidence” in s 75A of the Supreme Court Act in a case such as the present. The view which is most favourable to the appellants is that none of the evidence is “further evidence” because all of it was adduced before the primary judge before any judgment or order was made. I favour that view, which has the result that the “special grounds” requirement in s 75A(8) is inapplicable. Test the matter this way: suppose Mr Stone had brought a cross-appeal from the dismissal of that part of his application to amend to advance a claim based on the water rights, or suppose the appellants had included in their appeal a challenge to the grant of leave to Mr Stone to litigate the “New Issue”. The evidence adduced by each side in respect of that application would be properly before this Court. Whether or not that evidence could be used by the appellants to impugn the findings on which the equitable estoppel was based would give rise to the same issue that arises in the appeal as constituted. Thus it is clear that the resolution of the issue does not turn on s 75A.

272. The evidence upon which the appellants now seek to rely was before the primary judge on a limited basis, for the purpose of opposing an expansion of the case, and it was not before the primary judge when making findings of fact and when applying the law on the only aspect of Mr Stone’s claim from which this appeal has been brought. No limiting order was made under s 136 of the Evidence Act 1995 (NSW), but none was needed because the parties proceeded on the basis that the evidence could not be used to alter findings already made, and thus the evidence was only relevant to the application to amend.

273. The position was no different from the position which would have obtained if there had been a single hearing, at which some evidence was admitted on the limited basis that it was confined to the issue of whether an amendment ought to be permitted, and was not available to be used on other issues (such as whether Mr Stone’s claim for estoppel by encouragement was made out). In such a case it is clear that this Court if hearing an appeal would not have regard to the evidence tendered on that limited basis for a different purpose, unless and until an appeal was brought from the evidentiary ruling.

274. Accordingly, even assuming s 75A(8) does not apply in terms, I agree with Ward P that this Court’s review of findings of fact should not be conducted on a different basis from the six day trial which resulted in the first set of reasons. This is not a case where this Court should admit evidence on appeal upon which the primary judge did not rely, in order to support the challenge to his Honour’s factual findings. Permitting further evidence, which was not considered by the primary judge, to be adduced for the purpose of establishing error in the fact-finding performed by the primary judge is antithetical to the public interest in the finality of litigation, and contrary to the ordinary way in which this Court conducts appeals by way of rehearing.

275. For those further reasons, I agree that the appellants’ notice of motion filed on 24 July 2023 should be dismissed with costs.

Ground 1

276. I agree with Ward P that ground 1 should be dismissed. That said, it should not be thought that factual findings at first instance are insulated from appellate review merely either by concluding that a witness was “exceptionally credible”, or by relying on contemporaneous notes made shortly after a trial. However, the primary judge explained, at length, that he was familiar with the distortions of human recollection, the close scrutiny of evidence required when a deceased estate is involved, the fallibility of demeanour-based findings and the need for reconciliation with the probabilities and other evidence, and attended to the fact that Mr Stone’s sworn evidence of the conversation some thirty years ago was materially different from that in his affidavit. His Honour said at [182]-[183]:

Notwithstanding the self-evident validity of these reservations about the wisdom of a court accepting the oral evidence of an interested witness that is not directly corroborated of statements allegedly made by a now-deceased person long in the past, the courts may from time to time have to decide cases of considerable importance to individual plaintiffs, where the plaintiff’s claimed rights are based upon statements made to them in private, in circumstances where the context is one of trust between the participants, and where they have no intention to seek legal advice, to involve strangers in the transaction, or to enter into formal legal agreements. …

While it is clear that the amplification of the forensic uncertainties that may attend the enforcement of non-commercial arrangements based on oral agreements in informal circumstances, where it is expected that the agreements will be honoured on the basis of trust, requires that the Court exercises exceptional care in acting on the evidence of a plaintiff that is not directly corroborated concerning oral assurances, that is a circumstance that only makes the Court’s duty more onerous. The issue is always whether the plaintiff has established the claim on the balance of probabilities, having regard to all of the evidence, as well as the gravity of the matters alleged and the other considerations required to be taken into account under s 140(2) of the Evidence Act 1995 (NSW). There is no rule that the Court should not act on the uncorroborated evidence of an interested party as to the terms of historical conversations. There is scope for great injustice to be done if the Court adopts an excessively inflexible resistance to accepting oral evidence of conversations in that manner.

277. I respectfully agree. I am unpersuaded that there was any error in the fact-finding process adopted. I do not think this Court is entitled to set aside the findings made by the judge who saw the trial unfold and who was acutely conscious of the frailties of memory.

Ground 4

278. This ground boils down to whether a claim based on estoppel by encouragement was available if it were not shown that the representor (in this case, the late Dame Leonie Kramer) had actual knowledge of the plaintiff’s (Mr Stone’s) assumption.

279. The appellants maintained that the primary judge had erred in finding at [234] that:

I do not accept that an estoppel by encouragement can only arise where the representor has actual knowledge that the only reason why the representee engages in the conduct that will lead to detriment being suffered if the representation is not realised is the expectation that the representation will be made good. It will be sufficient if the making of the representation is a real or significant reason for the response of the representee. Furthermore, subjective knowledge on the part of the representor is not essential, provided that a reasonable person in the position of the representor would understand that it was probable that the representee was engaging in the conduct in the expectation that the representation would be realised. …

280. The primary judge relied on what Deane J had said in Commonwealth v Verwayen (1990) 170 CLR 394 at 445; [1990] HCA 39 that “a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption”, as adopted by Macaulay J in Leading Synthetics Pty Ltd v Adroit Insurance Group Pty Ltd [2011] VSC 467 at [67]-[69], the latter based in part upon a preference expressed by Nettle JA writing for the Victorian Court of Appeal in New Zealand Pelt Export Co Ltd v Trade Indemnity New Zealand Ltd [2004] VSCA 163 at [98]-[99].

281. The appellants contended that the primary judge was bound to find that Mr Stone’s case required showing actual knowledge on the part of the representor, because of Brennan J’s formulation in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7, which was said to have been accepted by this Court as applying in an “orthodox proprietary estoppel case”. They submitted:

Unlike Brennan J’s general formulation in Waltons v Maher, Deane J’s statement of the General Doctrine of Estoppel by Conduct has not been accepted by the NSW Court of Appeal as applying to an orthodox proprietary estoppel case. In Doueihi … Gleeson JA at [136] observed that in Giumelli the plurality noted that in Verwayen, Dawson J (at 454) and McHugh J (at 499-501) did not accept Deane J’s general doctrine of estoppel by conduct and that Brennan J approached the matter on a different footing.

The primary judge described this case as an estoppel by encouragement case. There is nothing in the facts to suggest it is otherwise than an orthodox proprietary estoppel case. The primary judge erred in applying a constructive knowledge test in assessing whether the Deceased knew the Respondent had acted in reliance upon the third representation. The primary judge was bound by the Court of Appeal decision in DHJPM to apply Brennan J’s test of actual knowledge or intention. The primary judge should not have applied a constructive knowledge test as Deane J’s formulation in Verwayen has been questioned by this Court in Doueihi, and it is only arguably applicable in a promissory estoppel case.

282. I do not accept that the appellants’ submission is correct in principle. Nor do I accept that authority obliged the primary judge so to find.

283. The passage from Waltons Store v Maher on which the appellants rely is the familiar conclusion of Brennan J at 428-429 which follows some 15 pages of analysis of estoppels at common law and in equity. The conclusion is as follows:

In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant’s property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff’s reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.

284. The appellants pointed to the fourth element “the defendant knew or intended him to do so” and said that this is inconsistent with anything short of actual knowledge of the plaintiff’s detrimental reliance. I do not agree.

285. Previously, his Honour at 427 had referred to the following passage from Dixon J’s judgment in Thompson v Palmer (1933) 49 CLR 507 at 547; [1933] HCA 61:

The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other’s detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct … or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party’s adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption. (Emphasis added; citations omitted.)

286. Brennan J explicitly stated at 427 that that reasoning was applicable to equitable estoppels (“The same observations hold good, mutatis mutandis, with respect to the adoption of an assumption or expectation which founds an equitable estoppel”). That makes it clear that he regarded the part taken by the defendant/representor in bringing about the plaintiff’s misapprehension to be central to the inquiry. Dixon J’s nuanced account sits uneasily with the posited contention that actual knowledge of the plaintiff’s reliance is necessary before an estoppel can be established. To the contrary, it was clear to Dixon J in the passage reproduced above, and reflected in the conventional distinction between estoppel by encouragement and estoppel by acquiescence, that there is a difference between cases where the plaintiff’s assumption is brought about by the defendant’s express representation, as opposed to cases where the plaintiff’s assumption is known to but uncorrected by the defendant.

287. Consistently with the above, Brennan J insisted at 427 that “an element in unconscionable conduct is the inducing of the other party to adopt an assumption or expectation as to the parties’ legal relations”. That led to further consideration of the position whether an equitable estoppel could arise by silence, and it was in that context in which his Honour insisted upon knowledge. But where the inducement comes about not through permitting the plaintiff to labour under an incorrect assumption to which the defendant did not contribute, but instead because of the defendant’s own positive encouragement, the element of inducing the other party to adopt the assumption may be satisfied by the encouragement itself. That is the force of the passage upon which the appellants rely, and in particular the words “or intended him to do so”.

288. In other words, Brennan J’s requirement that “the defendant knew or intended him to do so” was carefully drafted in order to capture cases of encouragement and also cases of silence. The disjunctive “knew or intended” captures (a) cases of encouragement where the defendant intended the plaintiff to hold the assumption, and (b) cases of silence where the defendant knew that the plaintiff was labouring under an incorrect assumption.

289. The passage at [48] in DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 which the appellants submitted bound the primary judge is merely Meagher JA’s statement that:

The outcome of this appeal does not turn on whether the equitable estoppel relied upon is a proprietary estoppel or a promissory estoppel with respect to a promise to create new rights. The propositions stated by Brennan J are applicable to circumstances which would give rise to an orthodox proprietary estoppel. …

290. When it is understood that Brennan J’s formulation does not stand in the way of a finding of knowledge or intention when the defendant’s own express encouragement has brought about the plaintiff’s assumption, DHJPM takes the matter no further.

291. I think the correct position is that the point is unsettled, with the weight of authority suggesting, as the primary judge correctly observed, that actual knowledge is not necessary.

292. I do not accept, as seemed implicit in some of the appellants’ submissions, that the test is the same for estoppel by encouragement and estoppel by acquiescence. There is similarity and overlap between the species of proprietary estoppel commonly known as estoppel by encouragement and estoppel by acquiescence, which is to say the principles associated with Dillwyn v Llewelyn (1862) 4 De GF & J 517; 45 ER 1285 and Ramsden v Dyson (1866) LR 1 HL 129 respectively. There will be cases where the defendant has both encouraged and acquiesced in the plaintiff’s incorrect assumption. There will also be cases where the defendant’s encouragement of the plaintiff is so marginal that it may be debated whether the plaintiff’s claim is in estoppel by encouragement or estoppel by acquiescence. But just as the existence of twilight does not erode the distinction between day and night, so too there is a sensible distinction between cases where a defendant’s active conduct causes a plaintiff to hold an assumption, and cases where the defendant does nothing to bring about the plaintiff’s wrong assumption, but nonetheless knows that the plaintiff is labouring under a misconception.

293. Both doctrines confer an entitlement in equity to relief, consequent upon the detriment occasioned to the plaintiff in acting pursuant to an assumption brought about by the defendant, typically in relation to the defendant’s land. Both doctrines, no differently from some other types of estoppel, are driven by the same purpose, namely, preventing unjust departures by the defendant of an assumption adopted by the plaintiff. But it is one thing to identify common elements or a shared purpose, and another to conflate the doctrines. I mention this because I am conscious that it has been said by the highest authority that there is a “category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn and Ramsden v Dyson”: Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 at [2], referring to Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 at [6]. That assimilation is sensible in order to contrast those types of estoppel in equity with the “traditional notion” that “estoppel could only be relied upon defensively as a shield and not as a sword”: cf Waltons Stores v Maher at 400. But that does not mean that the differences between the types of proprietary estoppels have been conflated.

294. When dealing with whether an equitable estoppel could be supported by silence, Brennan J’s reasons make it clear that knowledge is required. “Silence will support an equitable estoppel only if it would be inequitable thereafter to assert a legal relationship different from the one which, to the knowledge of the silent party, the other party assumed or expected”: at 426. But where the assumption has been brought about by the defendant’s positive encouragement of the plaintiff, there is no reason in principle why some further knowledge on the part of the defendant should be required. Why should it be necessary not only to know that the defendant has encouraged the plaintiff to labour under a false belief, but also to know that the plaintiff has relied on the encouragement? The distinction is quite artificial. Further, I can see no reason why two landowners, both of whom make the same representation to their neighbours who act upon it, should be in different positions if one is thereafter absent from the country and has no means of knowing what steps have been taken by the neighbour. That view is consistent with A Robertson, “Knowledge and Unconscionability in a Unified Estoppel” (1998) 24 Monash University Law Review 115 where it is stated at 117:

The central thesis of this article is that the unconscionability requirement is fulfilled in most cases by the core elements set out above: assumption, inducement, detrimental reliance and reasonableness. It is only in cases where the representor has not actively induced the adoption of the relevant assumption that questions of knowledge or intention become relevant. In cases of estoppel by silence or acquiescence, the representor must know of the representee’s adoption of the relevant assumption, and must have knowledge of the representee’s detrimental reliance, or intend to induce such reliance.

295. As the primary judge observed, the weight of authority favours the conclusion that actual knowledge of detrimental reliance is not required in a case where the defendant's own positive encouragement brought about the plaintiff’s assumption, and in my respectful view that accords with principle.

296. KIRK JA: I agree with Ward P. I also agree with the additional observations of Leeming JA with respect to grounds 1 and 4.

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Decision last updated: 10 November 2023