Laird v Laird

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS, EQUITY AND PROBATE LIST

S ECI 2020 02591
S ECI 2020 02406
S ECI 2020 03773

BETWEEN:
ELLEN DOUGLAS LAIRD (by Suzanne Lyttleton her administrator)	Plaintiff
v
NEALE DOUGLAS LAIRD	First Defendant
-and-
STUART GRAEME LAIRD	Second Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	25, 26 & 27 November 2020; 18 May 2021
DATE OF JUDGMENT:	18 June 2021
CASE MAY BE CITED AS:	Laird v Laird & Anor
MEDIUM NEUTRAL CITATION:	[2021] VSC 352 (First Revision 24 January 2022)

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WILLS AND ESTATES — Application for summary possession by administrator — Equitable claims by adult sons — Whether constructive trusts — Whether proprietary estoppel — Whether representations — Whether reasonable reliance — Whether knew or ought to have known about reliance — Whether detriment — Death of plaintiff — Lapse of appointment of administrator — Application to re-open evidence.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Aghion	Bardoel & Adams
For the First Defendant	Mr S Hay QC and Ms R Grayson Morrison	MST Lawyers
For the Second Defendant	Mr D Connors	Mepstead Lawyers

HER HONOUR:

Introduction

The plaintiff, Mrs Ellen Laird, lived on a small farming property at Rowallan Avenue, Harkaway (‘Harkaway’). When the proceeding commenced she was 93 years of age and had lived at Harkaway for the majority of her life with her husband, Mr Keith Laird. Keith and Ellen had seven children: Stuart, David, Eric, Clyde, Neale, Susan and Euan. Keith died in 2012. Preceding May 2012 Ellen suffered cognitive decline and, in May 2018, Ms Suzanne Lyttleton was appointed administrator of Ellen’s estate.

Respectively, Neale and Stuart are the first and second defendants in this proceeding. Neale lived at Harkaway and also ran cattle there, while Stuart operated a plant nursery on a portion of the property.

During the administration of Ellen’s estate, Ms Lyttleton encountered difficulties in accessing liquid funds. In her capacity as administrator, she commenced this proceeding against Neale and Stuart, pursuant to Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’), for summary possession of Harkaway (‘the Order 53 application’). It was Ms Lyttleton’s intention to use funds raised from the planned sale of Harkaway to provide for Ellen’s urgent care needs.

Separately, Neale and Stuart each commenced a proceeding against Ms Lyttleton in her capacity as administrator, asserting equitable interests in Harkaway.

All three proceedings were heard together in November 2020. At that time, Neale and Stuart conceded that Harkaway had to be sold in order to fund care arrangements for Ellen, and on 27 November 2020 interim orders (‘the Interim Orders’) were made to that effect. Otherwise, judgment was reserved.

On 25 December 2020 and before judgment was handed down, Ellen died and, as a consequence of her death, Ms Lyttleton’s appointment as administrator lapsed.[1]
[1]Guardianship and Administration Act 2019 (Vic) s 54.

Neale and Stuart now seek that the Interim Orders be varied or vacated. Neale also applied for leave to reopen his case and adduce further evidence. On 3 May 2021, the Court made orders by consent granting such leave.

An additional issue arose as to who should now administer Ellen’s estate. By her last will, Ellen appointed Neale and Stuart as executors and trustees. They concede that in light of the proceedings in this Court they are in a position of conflict. Each of them have identified individuals who they believe should be appointed administrator ad litem of Ellen’s estate.

Susan Laird also sought to have an administrator ad litem appointed to resolve proceedings concerning Ellen’s estate. Of note, in addition to the three proceedings the subject of these reasons, it is understood a further four related proceedings have been commenced.[2]
[2]Namely a proceeding: in the Magistrates’ Court brought by Ms Lyttleton, in her capacity as administrator, against Neale for the enforcement of costs; the County Court brought by Ms Lyttleton, in her capacity as administrator, against Neale for the misappropriation of funds; this Court, brought by Neale against Ms Lyttleton personally, asserting a breach of equitable obligations; and this Court, in which Neale appeals a costs order of VCAT in favour of Susan associated with her initial application to have Ms Lyttleton appointed.

The issues arising in this part of the proceedings are:

(a) is Harkaway held on constructive trust for the benefit of Neale; and

(b) is Harkaway held on constructive trust for the benefit of Stuart?

Procedural History

Neale commenced his claim on 29 May 2020. Ms Lyttleton initiated the Order 53 application seeking recovery of Harkaway the following month. Stuart commenced his proceeding on 30 September 2020.

By the time of the hearing in late November 2020, it was apparent that Ellen had pressing care needs. The defendants conceded that Ms Lyttleton be permitted to sell Harkaway, with the Interim Orders providing, inter alia, that:

(a) Neale was to vacate the main house at Harkaway by 18 December 2020;

(b) Neale was to remove all of his livestock, possessions, plant and equipment from Harkaway 30 days prior to the completion of any sale; and

(c) Stuart had to vacate Harkaway and remove all of his possessions, plant and equipment from Harkaway 30 days prior to any sale.

The remainder of the hearing was directed toward the claims by Neale and Stuart in respect of Harkaway. Neale’s claim is chiefly that Harkaway is held on constructive trust for his benefit, on the basis of proprietary estoppel, alternatively, he asserts an equitable lien. At the hearing, the Court determined that the claim to an equitable lien would be heard separately from that of the constructive trust. Stuart claimed a constructive trust broadly on the basis of promissory estoppel, however, by closing submissions, he relied specifically on principles of proprietary estoppel.

By summons issued 9 April 2021, Neale sought leave to re-open his case and to adduce fresh evidence in the proceeding, relying upon Q v E Co (No 2)[3]. He also sought a stay, variation or vacation of the Interim Orders. The fresh evidence relied upon by Neale was the death of Ellen, and certain tax records of Keith’s that Neale had located on 18 December 2020 and 7 February 2021. As an interested party, Ms Lyttleton neither consented to nor opposed the summons. Stuart initially opposed the summons and objected to the additional evidence being adduced, however, orders by consent made on 3 May 2021 granted Neale leave to re-open his case and adduce the evidence. The evidence was adduced at a short hearing on 18 May 2020, and Stuart was further cross-examined.
[3][2021] NSWCA 15.

Have the claims of constructive trust been established?
Applicable principles

The applicable principles are not in dispute. Both Neale and Stuart rely upon the principles concerning proprietary estoppel as set out in McDonald v Dunscombe.[4] In order to succeed, they each must establish that:
[4][2018] VSC 283, [14]–[20] (‘McDonald v Dunscombe’).

(a) a representation was made by Ellen to the them that they would receive an interest in Harkaway;

(b) they acted in reliance on that representation;

(c) they acted reasonably in so relying on the representation made by Ellen;

(d) Ellen knew or intended that they would rely on the representation and thereby act in the manner referred to above; and

(e) they suffered detriment as a consequence of the failure of Ellen to adhere to her representation.[5]

Proprietary estoppel seeks to vindicate the expectations of the claimant against the party who seeks unconscionably to resile from the expectation that she or he has created.[6] As Derham AsJ summarised in Leane v Dalbon:

Prima facie, the expenditure of money by a person on someone else’s land does not of itself entitle the person paying the money to acquire a proprietary interest in that land: Pettit v Pettit. The exception to this principle is established by the line of cases following on from Dillwyn v Llewellyn and Ramsden v Dyson. Proprietary estoppel can prevent the owner of an interest in property from asserting her rights against another party whom she has allowed or encouraged to deal with that interest, or act in relation to that property, as if the latter had rights to the property.[7]

[5]Ibid.

[6]Sidhu v Van Dyke (2014) 251 CLR 505, 527 (‘Sidhu’), citing Donis v Donis (2007) 19 VR 577, 582–3 (‘Donis’). See also Harrison v Harrison [2011] VSC 459, [369] (‘Harrison’).

[7][2020] VSC 461, [83] (citations omitted).

His Honour went on to discuss the distinction between estoppel by encouragement or estoppel by acquiescence. Here, the defendants’ pleadings and submissions assert alleged representations rather than acquiescence.

The representation may be inferred from conduct,[8] and while it must be clear, in cases of proprietary estoppel, ‘the test is less stringent and the precision of the promise relied upon does not need to be proved to the same standard as that required to establish promissory estoppel’.[9] As Dodds-Streeton JA stated in Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd:
[8]Legione v Hateley (1983) 152 CLR 406, 438–9.
[9]McDonald v Dunscombe (n 4) [17], citing Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 260 CLR 1, 16.

A representation which is insufficiently certain or complete to create a contract may found proprietary estoppel. Where necessary to inhibit unconscionability, equity will construe a representation robustly in context, to determine its meaning as reasonably understood by the addressee. In my opinion, the standard of certainty, clarity and completeness required of the representation cannot sensibly be determined in isolation from other elements of proprietary estoppel in the circumstances of each particular case. Moreover, ambiguity and indeterminacy generated by the representor in the context of unconscionable conduct should not confer immunity from equity’s ‘long arm’.[10]
[10](2008) 66 ACSR 325, 350 [178]; see Harrison (n 6) [279].

Similarly, in Harrison v Harrison,[11] Kaye J (as his Honour then was) said:

The uncertainty or vagueness of a particular promise may affect the question whether, in fact, the promisee relied on it, and, whether the expectations of the promisee were truly aroused by the promise. A promise may be so vague, indeterminate or inconsistent that it would be unreasonable for the promisee to rely on it. Alternatively, the promise may be expressed in such indefinite terms that the promissor could not be expected to appreciate that the promisee was relying on it to his or her detriment. In addition, the lack of precision of a promise may impact on the measure of equity requisite to address and vindicate the unconscionable departure from the promise by the promissor.[12]

A ‘promise may be definite in the sense that there is a clear promise to do something even though that something is not precisely defined’.[13] Further, a representation may be conditional or subject to limitations, arising by implication from the circumstances in which it is made.[14]

[11]Harrison (n 6).

[12]Ibid [385].

[13]Flinn v Flinn [1999] 3 VR 712, 738 [80] (‘Flinn’); see also Thorner v Major [2009] 1 WLR 776, 803 [95] (the subject of the assurance was the farm as ‘it existed from time to time’).

[14]Harris v Harris [2020] VSC 256, [174] (‘Harris’), citing Thorner v Major (n 13); Waddell v Waddell (2012) 292 ALR 788.

The principles of proprietary estoppel are applicable in circumstances where the promise concerns testamentary dispositions as well as inter vivos dispositions.[15] In Gillett v Holt, Robert Walker LJ noted that in the ‘generality of cases’, it would not be reasonable to rely on a living person’s representations as to their testamentary intentions,[16] however, on the facts there, the expectation was reasonable given that the promises were ‘repeated over a long period, usually in the presence of company on special occasions’ and on occasion, in unambiguous terms.[17]
[15]See Flinn (n 13); McNab v Graham (2017) 53 VR 311 (‘McNab’); Q v E Co (2020) 383 ALR 469 (‘Q v E Co’); Delaforce v Simpson-Cook (2010) 78 NSWLR 483 (‘Delaforce’).
[16]Gillett v Holt [2001] Ch 210, 228 (‘Gillett’).
[17]Ibid.

In Sidhu v Van Dyke (‘Sidhu’), the High Court held that ‘reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of the proof of fact’.[18] The promise does not have to be the sole or predominant cause of action, it needs to be established as a contributing cause.[19] The cases cited by the majority discuss whether the promisee was ‘so influenced’ by the promise that it would be unconscionable for the promisor to resile, and the promise being a ‘significant factor’,[20] while Gageler J framed the question as:

Despite any other contributing factors, would the party seeking to establish the estoppel have adopted a different course (of either action or refraining from action) to that which [the party] did had the relevant assumption not been induced?[21]

In Q v E Co,[22] the New South Wales Court of Appeal agreed with the submission that the two formulations were ‘one and the same’.[23] The party relying on the estoppel must establish that ‘it would have acted differently in the absence of the relevant encouragement’.[24]

[18]Sidhu (n 6) 522–3 [58].

[19]Ibid [66]; Harrison (n 6) [273]; Flinn (n 13) 749 [117].

[20]Sidhu (n 6) 526; see also Priestly v Priestly [2017] NSWCA 155, [136]–[137].

[21]Sidhu (n 6) 531 [93]; see also Harris (n 14) [184]; Sobey v Sobey [2016] VSCA 36, [10].

[22]Q v E Co (n 15).

[23]Ibid 492 [88].

[24]Ibid.

The question of whether the reliance was reasonable encompasses both the reasonableness of adopting the representation in the circumstances, and that of taking the relevant actions.[25]
[25]See GE Dal Pont, Equity and Trusts (LexisNexis, 7^th ed, 2019) [10.170]; Harris (n 14)[173].

Detriment is not to be approached in a narrow or technical sense, and ‘need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial’,[26] ‘real or material’.[27] It must be such that it binds the conscience of the party being estopped,[28] that is, it is approached as part of the broad inquiry into whether departure from the promise would be unconscionable.[29]
[26]Donis (n 6) 583 [20].
[27]Q v E Co (n 15) [127].
[28]Ibid; Donis (n 6) 583 [20].
[29]Ibid.

The Court of Appeal recently summarised the approach to determining the proper remedy as follows:

·the promisee is prima facie entitled to have the promisor held to the promise or expectation, ie the relief which is necessary is ‘usually’ that which reflects the value of the promise;
·the court will then consider all the circumstances to determine whether it is necessary to mould or modify the relief to avoid going beyond what is required for conscientious conduct, or to avoid injustice to others. The equity may be satisfied in another more limited way where a plaintiff’s expectation or assumption is uncertain, or extravagant, or out of all proportion to the detriment suffered;
·proportionality is a relevant consideration, but it should not be viewed as a ‘necessary constitutive element’ to be proved by the party seeking relief;
·the character of the promise/expectation is also a relevant consideration, including whether it is vague or imprecise;
·while the character of the detriment is a relevant consideration, the exercise is not one of ‘weighing detriment too minutely in order that it be converted into some equivalent of cash or kind’, nor does it require ‘substantial correspondence’ between the expectation and the monetary value of the detriment. The detriment should also not be treated as ‘consideration’ for the proprietary interest;
·the detriment need not consist of expenditure of money or other quantifiable financial disadvantage, so long as it is something substantial.[30]

[30]Harris v Harris [2021] VSCA 138, [79]; see also Donis (n 6) 583 [19]–[20]; Delaforce (n 15) 485 [3]; Giumelli v Giumelli (1999) 196 CLR 101, 123 [42], 125 [50]; Sidhu (n 6) 530 [85].

Finally, in Harris v Harris,[31] John Dixon J reviewed the approach to questions of vicissitudes of life. First, his Honour noted that no allowance is made for vicissitudes in the abstract. Secondly:
[31]Harris (n 14) [176]–[180]; see also Browne v Browne (No 2) [2017] WASC 375, [324]–[328].

Whether vicissitudes are relevant when assessing whether the promisee’s reliance was reasonable is a fact-sensitive inquiry that should not be illuminated by hindsight, or by contentions that are speculative or hypothetical and unsupported by admissible or reliable evidence.[32]

Thirdly, his Honour acknowledged that ‘equity will not exclude evidence of vicissitudes relevantly affecting the promisor from the assessment of an equitable, proportionate remedy’.[33] Reference was also made to Delaforce v Simpson-Cook, in which Handley AJA noted Walker LJ’s identification of the ill-defined and unspoken qualifications on testamentary promises, said to be ‘inherent in a promise to be performed when the promisor has no further need for the property’.[34] However, his Honour saw no reason to devalue the claimant’s reliance and detriment due to the possibility of adverse vicissitudes, and in any event, the defendant in the circumstances had other assets of substantial value. His Honour went on to state:

If and when the enforceability of such a promise does arise in the lifetime of a promisor faced, in compelling circumstances, with the need to resort to the capital value of the property, the doctrine of frustration of contracts may be thought relevant.[35]
[32]Harris (n 14) [177].
[33]Ibid [178]; see also JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (LexisNexis, 5^th ed, 2015) [17-105]; Morris v Morris [1982] 1 NSWLR 61, 64.
[34]Delaforce (n 15) 496 [85]–[87], quoting Walton v Walton [1994] CA Transcript No 479 [19]–[21] as quoted Thorner v Major [2009] 1 WLR 776, 794, see also 783–4.
[35]Ibid 496–7 [89]; see also Germanotta v Germanotta [2012] QSC 116 in which McMeeken J similarly pointed to the role of ‘radically’ different circumstances where a disastrous run of seasons depleted financial resources and one of the defendants was in poor health; Alderuccio v Alderuccio [2019] VSC 404, in which Derham AsJ ordered that an ord 53 application proceed by writ in circumstances where, through his administrators, an elderly plaintiff was seeking to sell a property to assist with day-to-day living, but his son may have had a proprietary estoppel claim.

Evidence

Evidence was given by way of affidavit, with each deponent cross-examined. Neale initially relied upon three affidavits but, since Ellen’s death, he filed four further affidavits. Stuart relies upon three affidavits.

Ms Lyttleton relied upon: two affidavits deposed by her; two affidavits by Mr Patrick Lyttleton, who is employed by her firm; an affidavit of Susan; and a number of tendered documents, including a report of Dr Sally McDonald. While initially she also sought to adduce evidence of Mr Douglas Biggs, a property valuer, the parties agreed to holding the Biggs evidence over to the defendants’ equitable lien claims.

Background

Keith and Ellen met in 1948 and married that year. They were both from farming families. Ellen was also a teacher by training.

Keith and Ellen’s seven children were born between 1949 and 1966. Relevantly, Stuart was born in 1949, Neale in 1961 and Susan in 1963.

In around 1949, Keith was farming a dairy farm which had been given to him by his parents, who owned farms in Calivil. Stuart recalls working on the Calivil property after school, on weekends and during school holidays. Initially he fed calves, before progressing to working in the milk shed, herding cows, and from the age of twelve or thirteen, driving a tractor, fencing and fixing machinery.

Purchase and work on Mount Morton

In around 1964, Keith and Ellen bought a property near Belgrave South (‘Mount Morton’). The property was approximately 400 acres, a significant amount of which was bushland. It had been subdivided into a number of 10 acre blocks which Stuart states Keith intended to clear in order to sell.

In 1965 Keith sold his parents’ properties in Calivil, save for a property known as Kennedy’s Block.

In 1966, when Stuart was 16 years old and in year 10, he left school. He worked in a timber yard for about three months and as a hairdresser for a week or two. He is then said to have commenced work at Mount Morton, driving and using heavy machinery to clear the land. He recalls being initially paid $40 per month for his work.

Susan has no knowledge of whether Keith paid Stuart to work at Mount Morton. She recalls Stuart starting his nursery at Mount Morton, and has memories of him and her older brothers doing activities on the farm. She referred to Mount Morton as a ‘bush block’, which Keith cleared and then farmed. When cross-examined, she stated that her knowledge of the block was from information that she had been told, and partly from memory. She recalled children helping at Mount Morton, but she could not recall anyone driving the bulldozer, other than Keith.

Neale agreed with the proposition that areas of Mount Morton were cleared, although he could not recall Stuart’s involvement.

According to Stuart, after working at Mount Morton for around four or five months, Keith informed him that he could not afford to pay him and his wage stopped. He was given a small amount of pocket money, continued to work, and lived at the family home without paying for his room or board. He deposes that at a minimum, he was working 40 hour weeks.

The Mount Morton property was sold in portions from around 1970. Bush blocks of approximately 10 acres were cleared and sold, and when the biggest portion of around 366 acres was sold in around 1970 or 1971, it was leased back from the purchaser. According to Stuart, a small corner block of the property was retained until around 1974.

Stuart states that he continued to work as an unpaid farm hand until 1972. In his statement of claim, he pleads that between that between 1966 and 1972 his parents (more often Keith) said to him on many occasions: ‘[b]ecause you are working for nothing, you will get it all when we pass on or when we retire’ and ‘[t]his will all be yours and your siblings if they help like you are’ (‘the First Promise’).

He deposes that he had conversations with his parents ‘along the lines of’ although he was unpaid, he would end up with the family farm together with any of his brothers who ‘put in like [he did]’. Stuart estimates having three or four such conversations with Keith, sometimes with Ellen present, during the period that he was working at Mount Morton, specifically, that Keith appreciated his hard work, especially without real wages, but that Stuart was really working his own land as one day it would be his, at least in part.

During the same period, Stuart recalls getting some work carting hay for other farmers, and with Ellen, selling plants in markets and shops.

Purchase of Harkaway and Wandeen

In July 1971 Keith and Ellen purchased ‘Wandeen Farm’, a 100 acre property across the road from Harkaway. In the same year, they purchased Harkaway, as Lot 1 on Plan 243782V, Certificate of Title Volume 8059 and Folio 541. At that time it was around 75 acres. An old homestead was located on Harkaway (‘the homestead’), which Keith and Ellen leased to another family while they built a new house on the property.

Stuart pleads that after purchasing Harkaway his parents said to him: ‘[b]ecause you are working for nothing, you will get it all when we pass on or when we retire’ and ‘[t]his will all be yours and your siblings if they help like you are’ (‘the Second Promise’). He is said to have relied on this promise between 1972 and 1977.

He states that he continued to work with his father on the various properties until 1977. He deposes to working without wages, aside from pocket money. In the period from 1972 to 1977 he is said to have had many conversations with his parents, during which they said they were grateful for his work and that he ‘would be given [Harkaway] when they retired or died by [himself] or to share with any of [his] brothers who wanted to work the farm’. Further, in one particular conversation Keith referred to a will in which the family farm was given to Stuart and his younger siblings, because he needed to provide for those siblings until they were old enough to look after themselves. Keith is said to have promised that once those siblings had grown up, and either contributed to the farm or made a career, he would alter his will. According to Stuart, it was clear to him from these conversations that he ‘was to be given the family farm or at the very least a share of it with any brother who decided to work on the farm’.

Tax records

Neale deposes that Keith’s tax workbook for the year 1973/74 lists wages to Stuart of $1,896.18. An earlier page shows wages to Stuart of $3,076, encompassing a salary and the value of board. Tax returns similarly note Stuart being paid a salary as a farmhand in the years 1970/71, 1972/73 and 1973/74. The first three periods split the wage across salary and board, while for the period 1973/74, only a salary is listed. The tax records also indicate:

(a) in around 1970/71 Keith and Ellen’s partnership had cash reserves of around $257,000;

(b) at a similar time, approximately $180,000 appears to have been received for Mount Morton instalments; and

(c) for each of the taxation years, the farming business was running at a loss, but a net positive income was received on account of other assets.

Also exhibited in this regard are photographs of the envelopes in which the tax returns appear to have been sent, covering letters for the years 1971/72 and 1972/73 from Keith and Ellen’s solicitors at the time and for the year 1971/72, a handwritten note which lists wages paid to Stuart under a heading ‘Partnership Expenses 1971–1972’. Neale also deposes to certain pages of Keith’s tax workbook being missing.

Stuart had not seen the tax records until shortly prior to Neale’s application for leave to re-open his case. He maintains that although he received food and board, he did not receive a wage. He denied both having forgotten any payment and that there were adequate funds to pay him. His general impression at that time was that ‘money was tight and there was not a lot to spare’ given the needs of seven children. He was surprised and shocked to see the records, as he views Keith as having been an honest man.

Move to Harkaway

In 1973 Keith and Ellen started building a house at Harkaway and the following year the family moved there from Mount Morton.

According to Susan, Harkaway was referred to by the family as the ‘home block’, as Keith and Ellen did not do much farming there. Rather: they farmed at Wandeen Farm; in 1972 they rented a property at Pakenham (‘Mt Ararat’) under a five year lease; and in August 1973 they purchased a property at Longwarry North (‘Ormefields’). Stuart recalls around $205,000 being paid for Ormefields.

Susan recalls Stuart commencing his nursery business in 1974 at Mount Morton, before transferring it to Harkaway where he worked on it full time. She disagreed with the suggestion that it was a hobby of producing plants at that stage and that Stuart was working full time on the farm. Neale also recalls Stuart growing some plants at Mount Morton.

Susan deposes that her parents encouraged her and her siblings to ‘get an education’, and not to farm. She disagreed with the suggestion that Stuart had been a farmer for significant parts of his adult life and, particularly between 1966 to 1977. Rather, Stuart was said to be ‘at home because he was unemployed, and like all children at any time, when they were home, they helped around the farm. So four siblings helped on the farm’. All of the children were said to have ‘helped out’ on the farm with the hay and feeding the calves and cattle.

When it was put to Susan that the proposition that her parents encouraged the children to ‘get an education’ did not apply to Stuart, as he left school in year 10, she stated that Stuart found school difficult, but it was still the wish of Keith and Ellen that if he had the ability he would have continued at school.

Neale gave evidence that between 1966 and 1977, his parents were farming approximately six properties. He deposes that he moved to Harkaway as a 13 year old in 1974, and that he has lived there ever since. Further, that from his mid-teens, he took an increasing interest in undertaking maintenance tasks on Wandeen Farm and Harkaway, regularly performing slashing and clearing tree branches on weekends and school holidays.

Keith and Ellen moved cattle from farm to farm according to the season. Susan recalls that at the peak of the farming, they were running ‘well over 500 cattle on about 900 acres of land’. Neale similarly deposes that the peak of the farming business occurred in around 1974. Tax records during that period indicate 597 head of cattle, which is broadly consistent with Stuart’s memory.

Sale of farming properties

In around 1977 and 1978, Keith and Ellen sold most of the farming properties. They lived at Harkaway and only ran approximately 50 cattle. The cattle enterprise was scaled back and according to Susan, the couple lived off investments. The price of cattle appears to have dropped dramatically at that time, and it was not financially viable to continue the cattle business.

Stuart deposes that it was at that time that Keith suggested to him that he start a nursery on some of the land at Harkaway. He specifically pleads that his parents said to him that as he was going to receive the property when they retired or died, he could establish a nursery on Harkaway free of rent and charges so long as he helped (‘the Third Promise’). This is particularised by statements to the effect of ‘because you have worked all this time helping us working for nothing, you will get it all when we pass on or when we retire’.

By way of affidavit he states that his parents said: ‘as I was going to receive the property upon their death or retirement that I could use some of the land to establish the nursery … I was allowed to do this at no cost such as rent or fees but was asked to still help out’. In oral evidence he stated that the agreement with Keith was that he did not have to pay rent because he continued to work on the farm.

Stuart had already started operating a nursery, and in 1977 laid out about five acres of land near the family home and registered a business name. He deposes that while he was predominantly focused on his business, he continued to work for his parents around 10 to fifteen hours each week. According to Stuart, around this time he borrowed $440 against his life insurance policy to commence the business. He denied that he was able to purchase a ute and establish his business using wages that he had been paid by Keith.

When it was put to Stuart that it was of great assistance to him not having to pay rent for the nursery he replied ‘that’s not correct’ and stating that ‘the agreement was that, when I started the nursery business … I worked a certain amount of time with [Keith]’.

After a few years, the nursery was earning about $60,000 to $70,000 per annum. Stuart has never paid rent for the nursery.

Neale deposes that after this point, his parents devoted themselves to developing the garden and enhancing their home at Harkaway. He recalls a gradated step-down of Keith’s farming in the 1980s and 1990s.

In 1980 Neale commenced an economics degree, which he completed in 1983. He worked at a chartered accountancy firm for the next four years. During this time, he recalls commuting 100km (return) between Harkaway and the firm. Upon commencing full time work, Neale paid his parents $80 per week ‘board’.

Around 1983, Susan left Harkaway. She returned in her mid-twenties before leaving again. The last time that she lived at Harkaway was in the early 1990s, although she gave evidence that she frequently visited. She accepted that Neale lived there almost all of his adult life and that she was not present on a day to day basis, such that she would not have heard conversations between her parents and Neale.

Susan disagrees with Neale’s assertion that he assisted with their parents’ farming business. She states that by the early 1980s, her parents were effectively retired from farming save for the small herd of cattle at Harkaway. In their retirement, Keith and Ellen were said to have maintained the gardens, with Keith putting in all of the landscaping. The children helped when they were on the property from time to time.

Photographs of Harkaway in the period of the early 1980s were tendered by Ms Lyttleton, showing the lawn and garden around the homestead in a neat condition. The paintwork on the homestead itself appears somewhat aged. Photographs of the paddocks show what Neale describes as ‘scotch thistles’ in the foreground, as well as an old bathtub.

In 1985 Stuart purchased his own home, into which he moved. After around 18 months he moved to a property in which he still resides. The property is a four bedroom brick veneer home on two acres with a pool and garden, and prior to these court proceedings it was unencumbered.[36]
[36]Stuart has obtained a reverse mortgage in order to pay for his legal costs.

By 1986 Neale was paying his parents $100 per week in board. The following year he resigned from the accountancy firm. In 1987 he also stopped paying board, as he states that by then he was regularly paying for groceries and other daily consumables. He then deposes to taking ‘a two and a half year hiatus from paid employment to work on our farms at Harkaway, at [his] own cost’. By this time, he recalls that much of the farm infrastructure had fallen into disrepair as his parents were engaged in other aspects of their lives. In this regard he lists a number of maintenance issues that were apparent including farm sheds requiring repainting, deteriorated fences, overgrown paddocks and partially collapsed farm structures. He states that during the two and a half years he undertook a substantial restoration of the infrastructure at Harkaway, working seven days a week. He also worked on Wandeen Farm. Neale estimates that during this period he worked 5,300 hours without remuneration. Photos are exhibited in this regard.

Development of the garden and restoration of the homestead in the 1990s

Stuart deposes that from around 1980 to 2005 he continued to run his nursery and assist his parents on the property, the latter consuming about 25 per cent of his time. He stated that particularly for the first 10 to 15 years after he started the nursery, he was still helping his father with cattle. The only exception to this was said to be in the late 1990s when his parents stopped running cattle altogether. He then started on a project developing the garden, said to have taken six months of intensive work done in ‘fits and starts’. He identifies labour of $10,000 for the time that he spent over six months preparing the garden for the open garden scheme in the late 1990s and improvements that he believes enhanced Harkaway’s value. According to Stuart, Keith told him that because he was providing assistance, he did not have to pay rent for the nursery. He agreed with the proposition that during this period, the bulk of his work on Harkaway was connected to the nursery, and assisting his parents set up the yard and plant the garden.

When it was put to Susan that her parents sold the last of their cattle in 1991 or 1992, she disagreed, stating that she did not think it was as early as that because Keith still kept some cattle to ‘keep the grass down’.

Neale agreed that Stuart provided some assistance in developing the garden.

Stuart gave evidence that Neale worked on Harkaway in the early 1990s. As such, he recalls that sometime during the period 1977 to the late 1990s, the conversations with his parents changed such that Harkaway was going to be left to he and Neale in equal shares. Specifically, he pleads that between 1977 and 2005, his parents said to him that he was going to receive a half share of Harkaway together with Neale upon their death or retirement (‘the Fourth Promise’). This is particularised by statements to the effect that ‘we appreciate you doing all you do for us without pay, but rest assured, you and Neale will get it all to share equally when we pass on or when we retire’.

In April 1990 Neale commenced full time work as a company auditor. He deposes that he continued to work at Harkaway and Wandeen Farm on weekends and during leave periods. In December of the same year he commenced the partial restoration of the homestead at Harkaway. He lists a number of tasks involved in the project, including stripping old paint, sanding and painting, as well as replacing roofing. Photos are exhibited depicting the homestead before and after such work. Keith provided some assistance with the restoration, which Neale is said to have worked on during leave periods and on weekends until August 1992. Neale purchased power tools and consumables for the restoration work, and he and Keith both contributed to the cost of larger items.

Wandeen was sold in around 1991.

In January 1991 Keith paid Neale $687 associated with expenses that Neale had incurred in purchasing materials for the restoration project and fencing work. Neale also recalls that one day in 1991 when the two were looking at the work, Keith said to him regarding the project expenses: ‘I’ll pay you back if we sell any land’. According to Neale, Keith repeated the same statement many times over the years when he undertook maintenance works at Harkaway, and his parents had previously discussed the possibility of subdividing and selling a five acre lot of Harkaway.

Neale states that he was comfortable with the arrangement, whereby he would maintain Harkaway using his income, and would be reimbursed when Harkaway was later subdivided. Further, he deposes that at times Keith would state ‘[a]re you making sure that you’re keeping a record of your costs’. According to Neale, since 1988 he has kept a ledger and invoices of his costs in maintaining and improving Harkaway. A document, ‘Property Ledger: Materials and Contractors’ is exhibited in this regard and is summarised later in these reasons.

Neale deposes that Euan lived in the homestead from the early 1990s for about eight years, and his parents are said to have received rental income from this arrangement. A photograph tendered by Ms Lyttleton is said to show the farm sheds and yards in ‘very good condition’, and homestead paintwork as ‘clean’ according to Neale, after he undertook work on them in the late 1980s. Further, one photo is said to depict a ride-on lawn mower purchased by Neale.

After Euan left the homestead, Neale was the only child of Keith and Ellen residing at Harkaway. He gave evidence that given Susan had moved out and had her own commitments, she was not immediately able to provide practical day to day assistance to their parents. At this time, substantial termite damage was identified in the homestead. According to Neale, Keith and Ellen did not see merit in refurbishing the homestead a second time, instead opting to focus on tasks such as the garden irrigation.

According to Neale, between 1990 and 1993 he also spent time reclaiming redundant nursery paddocks at Harkaway. This involved removing weeds and abandoned nursery stock. In response to a current photo, however, Neale gave evidence that some of the redundant nursery areas remain. Neale deposes that in 1992 he also continued with the ‘clean up’ of other structures at Harkaway. The same year he ceased work at the accounting practice, before becoming a sole practitioner in 1993 and leasing office space. In 1994 he set up a home office at Harkaway and commenced a local government consultancy practice. He did not pay his parents rent, but contributed to general household expenses and paid for his separate internet connections.

Neale states that by working from home he was able to continue to attend to maintenance tasks on the farm. He only had to attend meetings away from Harkaway for ‘key milestones’ of projects, and was able to assist his parents around the garden and in attending appointments. He deposes that in around 1996, Keith suffered a deterioration in his health, becoming chronically fatigued. Eventually Keith was diagnosed with a heart condition, which although managed by medication, meant that he could no longer perform the more onerous demands of maintaining the farm and cattle. He states that in around 1997 Keith sold the last of his bulls.

According to Neale, he completed extensive fencing and landscaping works at Harkaway between 1992 and 1999 at his own expense. This included re-fencing and planting, and ‘before’ and ‘after’ photographs are exhibited in this regard.

From 1998 to around 2005, Neale is said to have been responsible for the last of Keith’s cattle. With reference to Harkaway, he recalls Ellen saying ‘the last one on the property will get it’.

Formulation of the asserted ‘succession plan’

According to Neale, in the period up to the 2000s his parents expressed to him that they wanted him to have Harkaway, but that they were unsure if they were going to be able to keep Harkaway themselves in light of potential rezoning and increased council rates. He recalls that Keith said to him during this period: ‘we can’t promise anything because we just don’t know what is going to happen’.

Neale states that in 2002 the State government released a new metropolitan planning scheme, which gave greater certainty to his parents’ plans. By way of his second affidavit he deposes that his parents conveyed that the house and farm would ‘pass to him’, while Stuart could continue to run his nursery. This was said to have been on a mutual understanding that he would continue to manage the property and assist his parents and in meeting the commitments associated with his consultancy practice. In his third affidavit he states that his parents conveyed their intention to pass Harkaway on. Later, Ellen is said to have asked questions such as ‘what do you think you’ll do with it? Do you think you will keep it or sell it?’ Neale also recalls conversations with Keith in the mid-2000s concerning the potential for rezoning into smaller allotments, with reference to which Keith stated: ‘well, I won’t see it in my lifetime, but you might see it in your lifetime’.

When Neale started doing more significant capital works to Harkaway in the early 2000s, his parents are said to have stated: ‘the work needs to be done. You’ll get the benefit when we’re not here’.

Regarding Neale’s work on the farm, Ellen is said to have stated:

I don’t interfere with what you’re doing over there. I’m interested in what you’re doing, but I don’t interfere. There is nothing worse when you’re trying to do a job to have someone else come along and interfere in what you’re doing.

Neale states that in around 2003 his parents told him of their plan to get ‘mirror wills’ which reflected this intention.

Also in 2003, Neale is said to have ‘project managed’ a proposed subdivision of Harkaway with no remuneration.[37] He deposes that his parents had long-considered such a plan as a financial contingency, however, they ultimately decided to keep Harkaway intact.
[37]The proposal was to subdivide the property into a 11.6 acre vacant block and a 63.4 acre developed block.

Between 2001 and 2004 Neale served as a sessional member of Planning Panels Victoria.

In 2004, Neale purchased a new skid sprayer and slasher. He states that he felt confident buying plant and equipment based on the representations of his parents as to his succession in title to Harkaway.

Neale states that by 2004, his parents’ cash reserves had declined and in April that year Keith enquired as to whether Neale could help financially. He deposes that he gave Keith a cheque for the sum of $40,000 in this regard, which avoided Keith and Ellen having to sell their share portfolio. They are said to have advised that they would pay him back if they sold any land. Neale states that a document was drawn reflecting the arrangement, which was signed by Keith.

According to Neale, the decision to contribute to the funding of his parents’ living expenses was ‘life changing’ for him, as it meant that he forewent opportunities to purchase his own property. He exhibits in this regard a brochure for an auction of a rural property that he attended in May 2002 with Stuart, and personal bank statements showing cash of around $113,011 in April 2004.

Neale deposes that between April 2004 and June 2009 he provided 15 lump sum loans to his parents, totalling $126,500. He states that each loan was confirmed by Keith signing a loan confirmation form or making a record in his bank deposit book, and that on the advice of his parents’ lawyer, the loans were to accrue interest. Neale identifies that as of December 2019, he was owed $198,865 on account of these loans. Documents are exhibited for each of the 15 loans.

Loans 1 to 9 relate to living expenses, council rates, solicitor’s fees (July 2006) and repairing the dam pump and timber deck. For each of the first seven loans, a cheque butt for an account of Neale’s with a description including ‘loan to Mum and Dad’, or ‘loan for’ is matched with a bank statement of Neale, and, save for Loan 2, a bank statement of his parents showing the transfer of the relevant sum. Further, a typed document titled ‘Loan Confirmation’ identifies: the sum in question; the loan provider as Neale; the loan recipient as Keith and Ellen; and the date of the loan. Each ‘Loan Confirmation’ document, all of which appear to bear Keith’s signature, adds to the last, such that the one associated with what is said to be Loan 8 lists the preceding seven transfers. While Keith’s signature appears in blue pen for the first three documents, after that it appears in black, although at times amendments have been made in blue pen. The loan confirmation documents do not set out any interest payable.

With regard to Loan 6, said to be of the sum of $7,000 and made to cover council rates for the 2005/06 period, a rates notice is also exhibited. Rates notices are similarly exhibited for Loan 8.

In around 2005 Neale had commenced running his own small cattle herd at Harkaway, which he describes as his second business. This was said to be encouraged by Ellen. He deposes that between January 2005 and January 2014, he purchased stud-registered cattle in preference to ordinary commercial cattle, relying on the tenure of his promised succession of Harkaway. Further, that since February 2006 he has owned all of the cattle at Harkaway.

According to Stuart, Keith’s health started to deteriorate in 2005. He was required to do more work around Harkaway and assist by taking Keith to appointments and respite. As a consequence, he estimates that by 2008, he was only working on the nursery around half of the time and earning an income of $20,000 to $25,000. Stuart also deposes that during this period his parents said to him that they appreciated that he was not running the nursery fully, and that he and Neale would be given Harkaway or be left it in their wills as repayment for the work and help that they had given over the years. Specifically, he pleads that Keith requested that he provide greater assistance with Harkaway and Keith’s care, and that Stuart would not be paid because the plaintiff was going to ‘get a half share in the property’ (‘the Fifth Promise’). This promise is particularised as words of his parents to the effect that ‘we just can’t manage the place without your help now that I/your father is not in good health but if you agree to help you and Neale will get a share equally when we die or when we retire’. Further, Keith and Ellen are said to have stated that the promise was ‘rock solid’ as it had been put into their wills.

Stuart also gave evidence that Neale provided Keith and Ellen with greater assistance from this period, rather than primarily working on the property. He denied that Neale provided the bulk of assistance to his parents. Rather, he was said to be away during the day on the farm or doing local government contract work, so if anything needed to be done during the day it fell to Stuart, while Neale helped when he got home late at night.

Susan disagreed with the suggestion that Keith’s health deteriorated from 2005, citing her recollection that he later assisted in the Black Saturday bushfires. In 2005 Keith was also said to be driving to Lockington to assist a family member there.

The mutual wills

According to Neale, in late 2005 or early 2006, he witnessed Keith informing Eric that Stuart and Neale were to inherit Harkaway. Further, he accompanied Keith and Clyde to an appointment with Keith’s solicitor, during which Keith said that he wanted new wills prepared passing the property to Neale and Stuart. Ellen did not attend the appointment. He recalled that his parents already had mutual wills, leaving Harkaway to Stuart, Susan, Euan and himself, while the residue was left to David, Eric and Clyde.

On 19 July 2006, Keith and Ellen made their last wills. Clauses 3, 4, 5 and 7, which are identical in each will, state:

3. PROVIDED THAT I own my property known as Harkaway Farm Rowallan Avenue, Harkaway in the State of Victoria being whole of the land more particularly described in Certificate of Title Volume 8059 Folio 541 (‘the property’) at the date of my death then I DIRECT that clause four of this my Will shall apply. IN THE EVENT that I no longer own my property at the date of my death then I DIRECT that clause five of this my Will shall apply in the alternative.
4. (a) I GIVE DEVISE AND BEQUEATH the property together with all of the contents, furniture, fittings in the home erected on the property, all the plant, equipment, machinery and implements stored in or about the property to my sons, STUART GRAEME LAIRD and NEALE DOUGLAS LAIRD as shall survive me and if more than one as tenants in common and equal shares.
(b) I GIVE DEVISE AND BEQUEATH the residue of my real and personal estate of whatsoever nature and wheresoever situate to my trustees upon trust to sell call in and convert into monies such parts thereof as shall not consist of money with power to my trustees to postpone the sale calling in or conversion thereof for so long as my trustees in their sole and absolute discretion shall think fit and I DIRECT my trustees after payment of all my just debts, Funeral and testamentary expenses to hold the residue of my estate (‘the residue’) upon trust for my children that is to say, DAVID KEITH LAIRD, ERIC JOHN LAIRD, CLYDE WILLIAM LAIRD, SUSAN ELIZABETH LAIRD and EUAN CRAIG LAIRD as shall survive me and if more than one as tenants in common and equal shares.
5. IN THE EVENT that I no longer own the property at the date of my death then I GIVE DEVISE AND BEQUEATH all my real and personal estate of whatsoever nature and wheresoever situate to my trustees upon trust to sell call in and convert into monies such parts thereof as shall not consist of money with power to my trustees to postpone the sale calling in or conversion thereof for so long as my trustees in their sole and absolute discretion shall think fit and I DIRECT my trustees after payment of all my just debts, Funeral and testamentary expenses to hold the residue of my estate (‘the residue’) upon trust for such of my children that is to say, DAVID KEITH LAIRD, ERIC JOHN LAIRD, CLYDE WILLIAM LAIRD, SUSAN ELIZABETH LAIRD, STUART GRAEME LAIRD, NEALE DOUGLAS LAIRD and EUAN CRAIG LAIRD as shall survive me and if more than one as tenants in common and equal shares.
…
7. I have made greater provision for my sons, STUART GRAEME LAIRD and NEALE DOUGLAS LAIRD because of the contributions made by my sons to the property during my lifetime.

Stuart recalls being shown the wills. Based on conversations that he had with Susan and his brothers at the time, he understood them to be unhappy with the terms of the wills as they were not being left a share of Harkaway.

Neale states that his parents showed him a copy of the mutual wills and he was ‘quizzical’ about cl 7, as he privately queried what contribution Stuart made to Harkaway. Keith is said to have separately conveyed to him that the clause was inserted by the lawyer who drafted the wills. According to Neale, the aggrieved members of the family became estranged from himself and his parents after the wills were executed. Further, he agreed that unhappiness amongst his siblings was associated with insistence that his parents get a further legal opinion. In this regard his parents sought the advice of Mr John Natoli. As to how cl 4(a) would work in practice, when Neale asked Keith, Keith is said to have replied: ‘you’ll just have to work that out between yourselves when the time comes’.

According to Neale, in the period after the mutual wills were executed, Ellen said to him: ‘[t]he property is yours if you want it? Do you want it? Do you think you can manage it’.

When it was put to Susan that some of the children were unhappy about the terms of the mutual wills, she replied ‘I think we were unhappy about the duress that siblings put on our parents’. When asked whether she expressed that to her parents, Susan stated: ‘my mother expressed to us … how unhappy she was on how that … will was written’. Further, that the will was discussed, but Ellen said that even though the defendants’ names were on it for the land, the ‘land was for all of us and their names were simply on the will … because Neale was just living at home and Stuart was living at the nursery … [Ellen] said to us, it will all be worked out in the end’.

Susan deposes that Keith and Ellen never promised that any of their children would receive Harkaway while they were alive. Rather, she recalls that on many occasions at dinner and during every day discussions, they stated that Harkaway was the ‘family back-up’ if anyone was sick or ill or there was an accident in the family. She cites a number of examples in this regard, including payments made to her and Euan, space being provided for Stuart’s nursery to operate, and Neale working as an accountant from a home office at Harkaway.

When it was put to her that as Stuart lived at Harkaway, he assisted Keith and Ellen as they aged more than the children who did not live at Harkaway, Susan stated that she was unaware. Ellen was said to often call her for assistance as she was ‘the daughter’.

What Neale describes as Loan 8, groups together four separate payments between November 2006 and February 2008. The cheque butts for ‘Loan 8’ do not use the word loan, rather, they refer to repairs, and share of council rates.

A transfer of funds described by Neale as ‘Loan 9’, occurred in April 2008 and is said to be related to living expenses. It is evidenced by a cheque butt with no description provided, a loan confirmation document appearing to be signed by Keith in blue ink, and bank statements.

Loans 10 to 15, made between May 2008 and June 2009, are said to relate to: the removal of tanks from the farm; general living expenses; and council rates. Rather than being supported by a loan confirmation document, exhibited for each are notations in the cheque book of Keith and Ellen, referring to a sum and ‘Neale’. Bank statements are also exhibited indicting the transfer and deposit of the relevant sum on each occasion. Cheque butts from Neale’s account refer, for loans 11 to 15, to ‘loan to Mum and Dad’ or ‘loan for rates’. The same document for Loan 9 details ‘for hire of dumpster’. With regard to Loan 14, concerning payment of the 2008/09 council rates, a rates notice is also exhibited.

Neale states that between 2008 and 2016 he invested in capital works at Harkaway, including:

(a) the installation of tanks and sprinkler system (September 2008 to early 2010, $10,420);

(b) the rewiring of farm sheds (May 2009, $5,258), originally organised by Keith, who is then said to have stated ‘you can pay for it. You will have the benefit of it’;

(c) the installation of underground electricity wires (December 2010, $18,260). Neale deposes that he volunteered to pay for the work, including that to the nursery dam, in the context of the succession plan and circumstances where Stuart had said that he was intending to retire from the nursery in a few years;

(d) the reconstruction of farm dams (January 2011). Contractors were paid for by Keith and Ellen, although Neale is said to have used his own plant and equipment for finishing works;

(e) the construction of a hard stand area and drainage works to a laneway (September 2011 to mid-2012, $8,707); and,

(f) the upgrade of an irrigation system (2014).

The works are said to have aligned with his long term plans for Harkaway and he deposes that he funded them on the basis of his promised succession in title. He also deposes to other capital works which he undertook on the farm without the use of contractors, including fencing, the construction of yards and gateways, and the establishment and maintenance of tree reserves, as well as work undertaken in association with the Black Saturday bushfires. Photographs are exhibited in this regard.

Some of the costs identified as ‘capital improvement works’, are identifiable on the ‘Property Ledger: Materials and Contractors’ of costs referred to in para [72] above.

Keith moves to an aged care facility

In around 2010 or 2011 Keith was diagnosed with Alzheimer’s disease. He was cared for at Harkaway before moving to an aged care facility in November 2011. Stuart agreed with the suggestion that he and Neale provided a fairly high level of care to Keith and Ellen in the 2010 to 2011 period, although he denied that at times Neale would provide assistance by showering Keith and changing his continence pads.

Neale states that as Keith’s Alzheimer’s progressed, he would assist his father daily with toileting hygiene, dressing, attendance at appointments and changing and washing of bed linen. Keith also received some assistance from Ellen and paid care. After Keith moved to the aged care facility, Neale visited him every second day except Sundays. He deposes that the time he spent caring for, and then visiting, his father, ‘severely curtailed’ the time that he had for consultancy work, resulting in a decline of income and lost opportunity. Further that:

Whilst [he] would have devoted time to caring for [his] father and visiting him in the nursing home regardless, it was only by reason of having the surety of [his] promised succession in title to [Harkaway], which provided the comfort of at least knowing that [he] would still have a roof over [his] head irrespective of [his] decline in income, that [he] was able to devote so much time to caring for [his] father as [he] did.

Stuart agreed that Neale checked on Keith fairly regularly in the aged care facility, in particular, that he was main visitor during the week.

Ellen’s list — February 2012

On 17 February 2012, Mr Natoli, a solicitor of ABN Barristers and Solicitors, wrote to the seven children with regard to medical and financial powers of attorney. The letter notes that Ellen did not wish to appoint a guardian at that stage, but that she requested that the family bear in mind the wishes and directions in the enclosed list. The list states, amongst other things:

I wish to continue to reside in my home at [Harkaway], with the support of such nursing care and domestic assistance as required, unless a medical practitioner advises that my healthcare needs require a level of support that cannot be adequately provided for in the home and provided that my son Neale or other member of the family resides in the home with me.
In the event that, pursuant to the advice of a medical practitioner, I require accommodation in an aged care facility I wish to reside in [a named Nursing Home] …
…
I would like the property at [Harkaway] to be maintained to at least the same standard of maintenance as myself and husband Keith have maintained it.

Keith died on 5 April 2012. Ellen received his estate, and Mr Natoli acted for her in his capacity as executrix.

According to Neale, after Keith’s death Ellen became more definitive about telling him that she wanted Harkaway to pass to him. She is said to have stated to Neale: ‘[y]ou’ve got the house and farm, but you’ll have to let Stuart continue to run his nursery’. Further, with reference to the running of the farm and the maintenance of the property: ‘[y]ou’re the boss. You just get on and get things done’, and ‘[y]ou’ve got to be able to make your own decisions. There is no good me trying to tell you what to do. I am too old now and I can’t rule from the grave’.

On 26 June 2012, a solicitor acting for Neale wrote to Mr Natoli, stating amongst other things: ‘[t]he amount of $314,138.00 is to be included as the loan amount payable to my client in the Inventory of Assets and Liabilities for the application of probate’. Neale agreed that the figure was based upon records that he had been keeping since 1991 when he was prompted by Keith. Further, that he did not then instruct his solicitors that he had been promised the whole of Harkaway, although he denied that that was because such a promise had not been made. Rather, by that year, both Keith and Ellen were said to have promised him the whole property.

According to Neale, the letter was written upon the suggestion of Mr Natoli, after Neale, Ellen, Eric and David met with him for probate purposes. The arrangement was that the loans were to be paid back when property was sold.

An email from Neale to Mr Natoli dated 3 July 2012 states:

My solicitor was due to provide you with written advice by now regarding the sum of the monies that I loaned to my father (for possible inclusion in the statement of assets and liabilities of the estate). As previously discussed, it is not my intention to seek any reimbursement of these funds from my late father’s estate. In this respect the subject amounts should be regarded only as ‘deferred’ or ‘contingent’ liabilities.

During cross-examination Neale agreed that the contingency that he had in mind was the sale of the land, as Keith had referred to in 1991. Further, that he did not claim an interest in the land at that time.

When she was asked whether her parents ever promised Stuart that he would receive Harkaway, or part of it, after they died, Susan acknowledged that that was ‘one clause of their will’. She denied being able to recall any conversations in which her parents told her that that was their intention. Rather, she recalled reading Keith’s will when it was presented by Mr Natoli, and that she read Ellen’s will as part of the evidence in the proceeding. Further, she recalled a meeting with Mr Natoli in which Ellen was discussing her will ‘at a family meeting saying that that was not her will’.

According to Neale, following Keith’s death Ellen decided to revisit the prospect of subdividing Harkaway. He asserts that the purpose was to ‘free up capital’ for Ellen’s living expenses, and to ‘open up further diversified investment opportunities’. In September 2012 a planning consultant, KLM Spatial, was formally engaged to lead the subdivision project. Neale states that he undertook the subdivision as a ‘joint endeavour’ with Ellen. He is said to have ‘project managed’ the on-site work.

The November 2012 note

Stuart deposes that on 28 November 2012 a discussion took place between himself, Neale, Ellen and Susan. The purpose of the meeting is said to have been establishing the ‘rights and responsibilities regarding [Harkaway] until it was transferred to Neale and [Stuart]’, in a context where he was ‘running the nursery on [Harkaway] and Neale was running cattle on [Harkaway]’. The meeting is said to have been called because there was angst between himself and Neale, and Ellen’s health was not very good. The angst surrounded Stuart growing plants in a paddock, which Neale tried to take over and maintain. As stated by Stuart:

I’d been growing plants in those paddocks for over 20 years and I can’t see why Neale would want an extra acre or two of those paddocks when he already had 50, at that stage he already had 50 some, over around 50 acres that he was using for his hobby farm of just his cattle.

A handwritten note, dated 28 November 2012 and appearing to be signed by Ellen, Stuart, Neale and Susan, states, amongst other things:

Ellen is now owner of Harkaway Farm
Stuart to have public liability insurance.
Stuart re farm paddocks from this date to my advice from K.L.M. & my solicitor
Please no more discussion about this
Stuart to have use of, but not control must advise me before any major works take place & my permission.
Paddock east of Harkaway farm
Nursery & paddock east side of house
…
Neale
To maintain blackberries
Farm to be in control of all his cattle.
Subject to mum control approval Neale has 65 acres for cattle grazing etc
Mum has control of property infrastructure.
& maintenance weeds fertiliser.
& David Eric Clyde Susan & Euan have access to all the property & with my approval help to maintain property.
This document is valid only until result of my solicitor & K.L.M. until the decision in relation to the subdivision plan.

Stuart agreed that the note was in Ellen’s handwriting. He also conceded that there was nothing in the note referring to Harkaway being transferred to himself and Neale.

Neale initially stated that he had no recollection of the meeting. However, he then agreed that he and Stuart had an argument and Ellen then called Stuart, Neale and Susan out to the paddock, before everyone went inside and the document was drawn up. He agreed that the document is in Ellen’s handwriting, that he signed it and its purpose was to resolve the argument. Neale rejected the assertion that the purpose of the document was to set out the ownership of Harkaway, although that is what the document says on its face. Further, he denied that the document was prepared because he and Stuart were treating Harkaway as if they owned it. Neale accepted that it did not refer to himself and Stuart having an interest other than using Harkaway while Ellen was the stated owner. He gave evidence that Ellen was under significant duress signing the document from Stuart and Susan, such that it was not her own free will.

According to Neale, he and Stuart had been arguing over the use of certain paddocks, and Ellen had collapsed in the paddock in tears. The purpose of the document was ‘to take the heat out of the argument’, and Ellen is said to have later stated ‘well, that’s not a serious document to be considered’.

Stuart deposes that between 2009 and 2014 he paid a number of bills associated at Harkaway, because of the promises that his parents had made.[38] However, during cross-examination, he conceded that he received $4,000 from Neale in relation to the bills and that a number of them were business expenses associated with the nursery.
[38]These include: rates ($13,000); electricity bills between 1977 and 2020 ($17,200); telephone bills between 1977 and 2020 ($13,200); waste bin bills ($22,500); $300 on account of a gardener; and costs associated with the garden sprinkler systems ($12,000).

The 2014 meeting

According to Stuart, a meeting occurred in 2014 between himself, Susan, Ellen and Neale at Harkaway. Susan is said to have asked Ellen whether it was her intention that only Stuart and Neale would receive Harkaway, to which Ellen is said to have replied that it was the intention of her and Keith that Harkaway would be given to the defendants rather than being divided between the family due to the work that they had put in over the years, and that her intention had not changed since Keith’s death. Stuart deposes that as Ellen had confirmed that he was to receive a half share in Harkaway, he continued to operate the nursery and made no efforts to secure alternative premises.

Susan does not recall such a meeting occurring.

Neale stated that he did not recollect that specific meeting in 2014. However, he gave evidence that there was another occasion in which he, David, Ellen and Susan were present, during which Ellen expressed that there had been no intention of Keith to divide the property equally.

Subdivision of Harkaway

A planning permit was granted for a three lot subdivision of Harkaway on 12 September 2014, with the condition of a ‘conservation management plan’ for the homestead. Lot 1 of the plan of subdivision was approximately 35 acres, encompassing the house in which Ellen and Neale lived, Lot 2 comprised 20 acres including the original homestead and farm sheds, and Lot 3 was a vacant block of 20 acres.

Neale deposes that in February 2015, he and Ellen embarked upon a plan to jointly purchase an additional farm in Neerim. It was initially proposed that the purchase would be funded with the future proceeds from Lot 3. His contribution to the joint purchase was said to be his equity in Lot 3 together with the loan funds owing to him. Neale deposes that although he and Ellen later made offers in this regard, they were not accepted.

In June 2015, during the subdivision process, an issue arose as to the location of the boundary of Harkaway. This led to the commencement of an adverse possession claim such that the relevant strip of general law land (‘the Boundary Land’), would be registered to Ellen under the Torrens system.[39]
[39]Stuart deposes to this being around five acres, while Neale suggests that it is approximately 0.6 acres.

The planning permit was later amended to allow a staged subdivision, such that Lot 3 would first be subdivided from Lot S2 (Lots 1 and 2 combined). Neale deposes that he project managed the undertaking of works to satisfy the planning permit conditions, including construction of drainage and a driveway. Photographs are exhibited in this regard.

Neale deposes that also in June 2015, an unsuccessful Victorian Civil and Administrative Tribunal (‘VCAT’) proceeding was commenced by Euan seeking the appointment of guardians and an administrator to represent Ellen. Neale deposes to written submissions of Ellen at the associated hearing which refer to a desire of some of her children to ‘take control of [her] property’. Further, Neale states that after the VCAT proceeding Ellen conveyed a desire to transfer the title of Harkaway to him. Neale is said to have ‘posited’ that he could instead become joint proprietor, which Ellen accepted. He states, however, that due to other commitments he did not immediately act to give effect to Ellen’s wishes.

According to Neale’s evidence, in around September 2015, Ellen paid KLM Spatial’s fees concerning the subdivision of Lot 3.

On 16 April 2016, ‘Lot 3’ was sold off the plan at public auction for $2,425,000. The following month, separate titles for Lot 3 and Lot S2 were registered. Stuart deposes that he was prepared to ‘waive his rights’ to Lot 3 as he wanted Ellen to be properly looked after. He believed that the sum realised was more than enough to provide for Ellen, and any surplus would be shared between himself and Neale. Neale gave evidence that he did not challenge the subdivision, as he always understood that there was a five acre area of vacant land that was to be sold in the event that funds were needed. He did not press his claim as to the sale of a larger area because of Ellen’s needs.

According to Neale, in the week after the auction Ellen received an offer from the purchasers of Lot 3, to buy Lot S2 also. Ellen is said to have rejected the offer outright, and stated to Neale with regard to what was planned to become Lot 2: ‘if you want to sell over there … and buy another farm you can. That’s entirely up to you. It’s your decision’. Neale then prepared a written offer of sale concerning Lot 2, which was rejected.

Neale deposes that in May 2016, he and Ellen made an unsuccessful joint offer on a property in Neerim. Another unsuccessful joint offer was made in September 2016 in relation to a different property.

On 13 October 2016, Ellen was registered as the owner of the Boundary Land, described as Lot 1 on Title Plan 962864H, on certificate of title Volume 11876 Folio 860. As such, following the sale of Lot 3 and the successful adverse possession claim, Harkaway was registered to Ellen across two tiles: the Boundary Land and Lot S2 on plan of subdivision PS735766P.[40]
[40]Certificate of Title Volume 11652 and Folio 720.

In February 2017, Neale wrote to solicitors requesting the documents necessary for Harkaway to be transferred from Ellen, to himself and Ellen jointly. This was said to be at Ellen’s repeated urgings and requests, and the plan was for Ellen to receive independent legal advice. Nothing came of the proposal as on 1 March 2017 Ellen suffered a transient ischaemic attack.

On 17 March 2017, settlement for the sale and transfer of Lot 3 occurred, clearing approximately $2,300,000. Some of the settlement funds, after originally being placed into Ellen’s bank account, were transferred to Neale’s business account in the name ‘Laird Young’ and expended. In total, $500,000 was transferred to accounts that Neale controlled. Although he had earlier been appointed joint financial attorney with Mr Natoli, the transfer did not occur under that appointment. Neale gave evidence that from the $2,300,000 he spent several hundreds of thousands of dollars on Ellen’s behalf. Further that funds from the Laird Young account were used in relation to conditions of the contract of sale requiring works to be completed before settlement, and that they were reimbursed from the proceeds of sale.

According to Neale, in mid-2017 preliminary works were commenced regarding a proposed re-subdivision and creation of ‘Lot 4’. This included planting an avenue of oak trees and commissioning the construction of a concrete crossover. According to Neale, the proposed re-subdivision was ‘curtailed’ with the appointment of Ms Lyttleton as administrator of Ellen’s estate.

Neale deposes that prior to the appointment of guardians and an administrator, he was Ellen’s primary carer. He purchased groceries and pharmaceuticals, took her to appointments, administered her insulin and ‘organised the scheduling’ of privately funded personal care assistants. He states that he ceased consultancy work and devoted his time entirely to Ellen, a process that he was only able to commit to based on the surety of his promised succession in title to Harkaway.

Guardianship and administration of Ellen’s estate

In her later years, Ellen suffered from cognitive decline. On 8 May 2018, by orders of VCAT Ms Lyttleton was appointed administrator of her estate. By the same orders, Susan and David were appointed Ellen’s guardians for 12 months. Neale deposes that he met with Ms Lyttleton on 16 May 2018 and informed her of the loans owing to him.

After she was appointed guardian, Susan visited Ellen most days. She deposes that from when she and David were appointed guardians, Ellen received 24 hour, seven day per week paid nursing care at Harkaway. Stuart gave evidence that he had to provide assistance at times responding the questions of Ellen’s carers, such as showing them how to use the appliances in the house.

On 4 September 2018 Neale applied for caveats over both titles for Harkaway.

In November 2018, Ms Lyttleton was reappointed for a further period of five years.

The appointment of Susan and David as guardians was extended by VCAT at a rehearing, and they were later granted additional powers as to where and with whom Ellen lived. Susan states that Ellen always expressed a strong wish to be cared for and die in her own home.

On 24 April 2019 caveats were registered on the titles of Harkaway on behalf of Neale, on the grounds of ‘implied, result or constructive trust’. In her capacity as administrator, Ms Lyttleton pursued a proceeding seeking removal of the caveat, which resulted in orders for the caveat removal by consent, with certain undertakings given by each party. At the time of the hearing of this proceeding, her costs in the sum of $43,644 remained unpaid.

Between May 2018 and April 2020, Ms Lyttleton sought the approval of VCAT to take a number of steps in the administration of Ellen’s estate.

On 21 May 2020 Ms Lyttleton applied to VCAT for approval to commence the Order 53 application. A report in support of her application sets out, amongst other things, that:

(a) at that time, Ellen required 24 hours of care seven days each week. That care was being provided to her at home, at a cost of approximately $40,000 per month;

(b) in the twelve months prior to her application, Ms Lyttleton had made unsuccessful attempts to subdivide the property and obtain a reverse mortgage. In relation to the latter, the maximum funds available were insufficient to meet the likely bond for Ellen to move into aged care;

(c) Ms Lyttleton considered that the only option was to sell Harkaway, subject to a right of residence in favour of Ellen;

(d) the estate had $190,000 of liquidated funds, and liabilities of approximately $50,000. As such, there were sufficient liquid funds to provide Ms Laird with two more months of care at home; and

(e) while the reverse mortgage could provide funds prior to the sale of Harkaway, Neale had not signed a document titled ‘other occupier acknowledgement’ required by the lender.

On 22 May 2020, VCAT approved Ms Lyttleton commencing the Order 53 application. A week later, Neale commenced his proceeding number S ECI 2020 02406, claiming an equitable interest in Harkaway and other assets on the property.

On 3 June 2020, a solicitor of Davies Collison Cave wrote to Neale on behalf of David and Susan in their capacity as guardians, directing Neale to vacate Harkaway.

Another letter of Susan and David, in their capacity as guardians and dated 23 July 2020, urged the Court to resolve Ms Lyttleton’s application as urgently as possible.

In July 2020, the nursing care for Ellen at Harkaway ceased, and she moved into respite care for a period.

An expert report of Dr Sally McDonald dated 20 October 2020, notes that at that time, Ellen required full time high level nursing home care.

Lawyers for Ms Lyttleton retained the assistance of a mortgage broker, Mr Paul Dwyer, who specialises in arranging reverse mortgages. By email dated 10 November 2020, Mr Dwyer noted that lenders had advised that they would require the defendants’ constructive trust claims to be resolved prior to the assessment of Ms Lyttleton’s application for a reverse mortgage.

A statement of Ms Lyttleton’s administration dated 11 November 2020 discloses, amongst other things: that Harkaway is valued at $5,000,000; as administrator, Ms Lyttleton held cash of approximately $52,039 and shares to the value of $3,104; that Susan was paying for Ellen’s food and living expenses; and Ellen’s estate had a fortnightly deficit of $11,824 (inclusive of legal fees) and an annual deficit of $307,441. Neale agreed that the figures indicated that the estate was cash insolvent.

At the time of the hearing, Ellen was residing with Susan with restricted support as the estate had limited funds. Ms Lyttleton gave evidence that the assistance being provided was less than what Ellen required, such that the burden fell to the family. While Ms Lyttleton recognised Ellen’s wish to return to Harkaway, she stated that such a course was not financially possible.

In Giumelli, the respondent was concerned that the family partnership, in which he was included, would not continue. He had an opportunity to change career and work for his father-in-law, but did not pursue it because his parents promised him certain property if he stayed. In the event, the partnership terminated and his parents refused to transfer the property.

Donis was a case in which the respondent moved from her parents’ home to an area in which she would not have chosen to live, interrupted her teaching career by commencing a family earlier than she wished, and spent funds improving a property, on the basis of a promise by her husband’s parents that her and her husband would be gifted the property to which they moved, which extended to 20 acres. The marriage broke down and the respondent’s husband left. The respondent subsequently received a notice to vacate the property and came home to find the house ‘stripped’. After the respondent moved back to her parents’ home, the property was sold for $3.97 million. In the circumstances, Nettle JA referred to the detriment being of the kind and extent that ‘involved life-changing decisions with irreversible consequences of a profoundly personal nature’ such that the equity raised by the parents’ conduct could only be accounted for by the substantial fulfilment of the promise.[54]
[54]Donis (n 6) 589 [34].

In all three cases, the ‘stain’ on the promisor’s conscience is readily apparent. Here, Ellen made a general representation that Harkaway would pass to Neale and a number of ambiguous statements. Neale was around 43 years of age at the time of the relevant representations. While the Court accepts that he forewent an opportunity to purchase his own farm and contributed to Harkaway instead, he did this in a context where his life was already established on Harkaway, he was able to commence a ‘second business’ on the property, and he understood that a proportion of his financial contributions were covered by way of documented loans and a promise that items recorded in his ‘Property Ledger: Materials and Contractors’ would be repaid. Further, he was looking to purchase a farm within around an hour’s drive of Harkaway. The circumstances do not immediately resonate with the irreversible and ‘profoundly personal’ consequences emphasised in Donis, and observed in Giumelli and Sidhu. That said, the Court accepts that Neale suffered financial detriment by not investing his funds in an alternative property and by contributing to Harkaway in the form of unpaid labour. Such detriment was ‘substantial’ in the sense that it would have been unconscionable for Ellen to resile from the representation.

What relief is appropriate?

Had Neale established the preceding elements of his claim, prima facie he would have been entitled to satisfaction of his expectations, that is, that he was promised Harkaway as a testamentary gift and that Ellen could not deal with Harkaway in a manner inconsistent with this. However, it is necessary to consider all of the circumstances in determining whether that position should be modified to avoid going beyond what is required for conscientious conduct or to avoid injustice to others. Here:

(a) Ellen’s representation was general and coupled with a small number of ambiguous statements over multiple years. That is, Ellen’s conduct in ‘inducing’ Neale was limited. Moreover, her reference was to Neale receiving ‘Harkaway’, but it was never precisely defined whether that referred to Harkaway, as it existed in 2003, or what remained of Harkaway at her death. Neale’s awareness of the long-standing plan to potentially subdivide the property, and his management and acceptance of the subdivision in 2016, suggest that the representation related to what remained of Harkaway;

(b) through her administrator, Ellen was only looking to sell Harkaway in order to fund her urgent care needs;

(c) as noted, Neale’s detriment was not ‘profoundly personal’ or involved him adopting a course in life significantly different to that which he had already established. While he missed an opportunity to purchase his own property, his case is that he was looking to buy another farm; and

(d) although there is not substantial correspondence between the value of the lost opportunity and unpaid labour (placing to one side the funds owed by way of the ‘Property Ledger: Materials and Contractors’) and that of Harkaway, the two cannot readily be described as ‘disproportionate’ in the sense described in cases.

To recognise a constructive trust in favour of Neale over the whole of Harkaway would go beyond what is required for conscientious conduct. Rather, had Neale established his case, monetary relief from the proceeds of sale of Harkaway might have been appropriate. Further, without finally determining the issue, the Court notes that even if the need for Ellen’s urgent care needs have now fallen away, matters such as funds owing by the estate and the associated injustice to third parties, would perhaps have resulted in the same conclusion.

Is there a constructive trust in favour of Stuart?
Stuart’s submissions

Stuart relies upon the five promises set out in his statement of claim, which are asserted to be mainly oral, to the effect that ‘because you have worked for us all this time, working for nothing, you will get the farm when we retire or pass on’. They are claimed to be of a ‘dual nature’, either to gift the property to Stuart during his parents’ lifetime, or to leave him a half interest under the mirror wills. Further, they are said to be consistent with the terms of the mutual wills.

He asserts that the promises were predominantly put by Keith, as it was ‘the men in the family’ who were doing the manual labour and Stuart was working under Keith’s direction. Keith is asserted to have spoken on behalf of himself and Ellen. That is, the representations of Keith loosely incorporated Ellen in that they were a married couple and jointly owned the land at Mount Morton.

Although initially Stuart framed his detriment in three ways, his closing submissions no longer emphasise his payment of bills, such that he now only relies upon:

(a) his provision of decades of unpaid labour rather than earning a wage in other endeavours; and

(b) establishing his business on Harkaway, which is not easily transferable, particularly at this stage of his life.

In relation to the claim of unpaid labour, Stuart emphasises the period of 11 years between 1966 and 1977, due to its length and stage in his life. At that time he gave up the opportunity to save and buy a farm of his own. As to the tax records, Stuart asserts that his oral evidence should be preferred, he was not paid, and that an inference can be drawn that Keith and Ellen created a tax deduction by saying that they paid him a wage.

Stuart also claims that the evidence he gave of unpaid labour between 1977 and 2005, and 2005 to 2008, is unchallenged.

In his opening submissions, he asserted that his equitable interest in Harkaway was perfected in 1977, and in waiving his rights associated with the subdivision in 2016, he contributed $1.25 million to Ellen’s care. This was modified by his closing submissions, which suggest that in allowing the sale of Lot 3, he cannot now be characterised as selfish.

It is submitted that in the absence of some clear qualification or understanding that the promises would not operate in the face of some need or hardship of Ellen or Keith, Ellen could not resile from them.[55] Further, that Ellen should have been in a better position to resile from the promises simply because she retained the legal title,[56] and it is unconscionable for her to deny Stuart his half interest in Harkaway.
[55]Hogan v Baseden [1997] NSWCA 151.
[56]Estephan v Estephan [2012] NSWSC 52; Quinn v Bryant [2012] NSWCA 377.

Neale’s submissions

Neale contends that Stuart relies upon representations made to Keith rather than Ellen, and the representations relied upon lack specificity and context. The evidence that Stuart gave in relation to detriment is also asserted to be general in nature. Further, the tax records are contemporaneous and serious documents, which indicate both that the partnership had funds to pay Stuart during the relevant period and that Stuart was paid. The Court is encouraged to find that Stuart was in fact paid, given such evidence and his age at that time, and that he has failed to establish detriment. Even if he did suffer some detriment, it is submitted to have been of a kind that could be cured by allowing Stuart to continue to operate his nursery until his retirement.

Insofar as Stuart relies upon expenditure on Harkaway, Neale asserts that the costs were business expenses. Further, there is said to be no causal relationship between the care that Stuart provided to his parents and the promises that he relies upon, and it is emphasised that Stuart has established himself by purchasing his own home and running his business rent free. According to Neale, it is open for the Court to find that Stuart did not in fact rely upon the representations to his detriment.

Notwithstanding the difficulties that Neale asserts arise in Stuart’s case, he is prepared to recognise that his parents’ were cognisant of Stuart’s long-term use of the nursery at Harkaway and submits that an order could be crafted recognising this, perhaps in the form of ‘notional rent’.

Ms Lyttleton’s submissions

Ms Lyttleton contends that Stuart does not rely on a precise conversation. Rather, the only specific conversation is a discussion with Keith about the content of his will. She agrees with the assertion of Neale that Stuart’s evidence of representations lacks specificity and context.

Although Stuart’s case is noted to rely heavily on the terms of the mutual wills, Ms Lyttleton submits that the they do not support his contention. Instead, they make a conditional specific gift to the defendants, provided that Ellen was still living at Harkaway. Properly understood, the wills are consistent with the defendants being repaid, not the existence of a constructive trust. As with Neale’s case, Ms Lyttleton points to the statement of wishes, the 2012 agreement, and the lack of challenge to the subdivision as all being at odds with Stuart’s case.

While he does not appear to have been the beneficiary of any specific promise, Ms Lyttleton accepts that Stuart made some contributions to Harkaway, which, subject to proof and quantification, he is entitled to claim. That is, she concedes the existence of an equitable lien, but otherwise submits that a constructive trust has not been established.

Consideration

Stuart’s statement of claim pleads five different promises, each of which will be considered in turn.

First Promise

Stuart pleads the First Promise, relating to the period 1966 to 1972 as: ‘[b]ecause you are working for nothing, you will get it all when we pass on or when we retire’ and ‘[t]his will be yours and your siblings if they help like you are’.

As noted, he pleads that the First Promise was stated on many occasions by each of Keith and Ellen and similarly deposed that he had main conversations with both of his parents. However, he estimated three or four conversations with Keith, ‘sometimes with Ellen present’ and submitted that Keith’s representations loosely incorporated Ellen.

The Court accepts that Stuart, after leaving school and briefly attempting alternative vocations, assisted Keith at Mount Morton. Stuart’s evidence is broadly consistent with Susan’s understanding, albeit differences exist as to the use of heavy machinery. A conclusion cannot be drawn as to whether Stuart was paid in the period 1967 to 1974. While Stuart claims that he worked unpaid, the tax records cast this assertion in doubt. On balance, it has not been established that he was not paid. In circumstances where:

(a) Stuart’s oral evidence is to be approached with the requisite caution;

(b) the tax records are inconsistent with the terms of the First Promise; and

(c) the representations are otherwise uncorroborated and lack context[57] —

the Court is not satisfied that they were made by Keith.

[57]Cf Harris (n 14).

Additionally, even if the Court were to accept Stuart’s evidence and find that the statement was made by Keith, the proposition that any representation by Keith ‘loosely’ incorporates that of Ellen, simply because they were married and joint owners, is not accepted. At times, evidence may support a finding that a party adopts the representations of their spouse.[58] However, other than Stuart’s statement that Ellen was sometimes present, the evidence that she participated in the conversations or otherwise confirmed the First Promise is lacking. Alternatively, while cases have recognised instances where a spouse is aware of a beneficial interest in property, such as by way of a joint endeavour between family members,[59] such a contention was not pressed here and is not apparent on the evidence.
[58]See, eg, Flinn (n 13) 729.
[59]Nagi Zekry v Margritte Zekry [2020] VSCA 336, [72], [159].

Overall, while the Court accepts that Stuart worked on the farms, as suggested by the tax records, his evidence and the family circumstances at the time, the evidence does not go so far as establishing that the First Promise was made by Ellen.

Further difficulties arise concerning the question of reliance. Stuart has not provided evidence as to how he would have acted differently had the representations not been made. He attempted different careers and there is reference to occasionally obtaining employment carting hay for other farmers, but he did not depose to foregoing an opportunity to work longer hours on other farms. However, the Court is prepared to accept that a promise of inheriting or being gifted part of the family farm ‘so influenced’ him to work at Mount Morton unpaid. This was particularly so in circumstances where Keith told Stuart that he had been given a ‘start’ at Calivil when he was gifted some land from his father.

As to whether Stuart reasonably relied upon the promise, the breadth of the promise, ‘you will get it all when we pass or retire’, subject to the actions of six other siblings, as well as Stuart’s age during this period (16 to 22 years), weigh against it being reasonable to rely upon the representation that he would definitely obtain an interest in his parents’ farming properties. That is, at that stage the representation appeared more as a general, revokable statement as to inheritance and possible succession planning, rather than a promise upon which to reasonably rely.

Had the First Promise and reasonable reliance been established, the Court accepts that in the circumstances, Ellen ought to have known that Stuart was acting on the assumption that he would receive an interest in the family farms.

On the issue of detriment, as noted, the Court has not found that Stuart was unpaid during this period. In the event that this conclusion is incorrect, the lack of pay over six years is substantial, in the sense that it would have been unconscionable for Ellen to resile from her promise that Stuart would ‘get it all’. While Stuart submits that he lost an opportunity to save over this period and potentially purchase his own farm, evidence has not been adduced in this regard.

As to relief, while prima facie he would have been entitled to an interest in the family farms: the representation was general — there was significant uncertainty in the exact interest that Stuart would acquire; a significant turn in the cattle market occurred and Keith and Ellen supported Stuart in pursuing an alternative career and successful business; and the detriment at that time, six years unpaid labour, appears disproportionate to a proprietary interest in Harkaway. Conscientious conduct would not have required recognition of a constructive trust over Harkaway.

Second Promise

The Second Promise is pleaded in the same terms as the first promise as: ‘[b]ecause you are working for nothing, you will get it all when we pass on or when we retire’ and ‘[t]his will all be yours and your siblings if they help like you are’.

Stuart deposes that his parents told him that he would be given the family property when they retired or died, either by himself or to share with his brothers who worked on the farm. The Second Promise is asserted to relate to the period after the family purchased Harkaway when Stuart’s tasks shifted from land clearing at Mount Morton, to cattle farming across a number of properties. The asserted representations encounter the same difficulties as those of the First Promise:

(a) for the period 1972 to 1974 they are inconsistent with the tax records;

(b) they are uncorroborated, general, and lack context; and

(c) although as pleaded they were made by Keith and Ellen, no specific evidence was given as to Ellen’s involvement and the Court rejects the proposition that they were made jointly on account of Keith and Ellen’s marriage.

The Court does not accept that they were made by Ellen or confirmed by her.

In terms of reliance, the Court is prepared to accept based upon Stuart’s evidence and the tax records, that he worked on the cattle farms during the relevant periods. While Susan stated otherwise, she was quite young at the time such that her evidence in this regard is less reliable. Certain difficulties again arise as to how Stuart would have acted differently had the representation as to an interest in land not been made. However, the Court is again prepared to accept that by the age of 23 years, in circumstances where: the farming enterprise was successfully expanding; Stuart’s work had shifted to cattle-farming; Stuart was the eldest son; Keith himself had been gifted property; and, on Stuart’s case, the representation had been made by Keith over at least five years, it was reasonable to rely upon the assumption that he would inherit or be gifted part of the farming enterprise. Further, that had the representation been made by Ellen, she knew, or should have known, that Stuart was relying upon it.

In relation to detriment, as noted, the Court is not satisfied that Stuart has established that he was not paid for the period 1967 to 1974. As to the two remaining years, it can be accepted that working unpaid on the family farms would have been a substantial financial detriment at that time of his life. However, as discussed above, in the Court’s view the appropriate remedy would have been to mould any relief such that a monetary payment was appropriate rather than a constructive trust over Harkaway. This is particularly so in circumstances where the proceeding arose in the context of Ellen’s urgent care needs.

Third Promise

The Third Promise is said to have occurred in around 1977, and is particularised by the following statement, asserted to have been repeated on multiple occasions by each of Keith and Ellen: ‘because you have worked all this time helping us working for nothing, you will get it all when we pass on or when we retire’ in relation to establishing a nursery at Harkaway. Further, that they told him they were going to change their wills.

Stuart deposes that his parents told him that as he was going to receive the property on their death or retirement, that he could use some of the land to establish a nursery. Again, his evidence is not otherwise corroborated, and the specific context in which such a promise was made, particularly by Ellen, is lacking. Further, the content of the promise shows a degree of uncertainty. It appears to have two aspects: first, that Stuart could lay out a piece of land for the nursery as he was going to inherit or receive the property anyway; and secondly, that he did not have to pay rent if he continued to assist on the farm. The pleaded representation is also inconsistent with the family’s circumstances in around 1977. As pleaded, Keith and Ellen had by then decided that only Stuart was to receive the farm. However, three of the children remained under the age of 20, such that at that time it appears unlikely Keith’s concern that they were financially secure was met.

Again, on the evidence at hand the Court cannot conclude that the Third Promise was made or confirmed by Ellen. Such a conclusion finds further support in that Stuart did not seek to clarify or rely on the Third Promise when:

(a) he purchased his own property in 1985. In taking such a step in his life it is reasonable to infer that he would have made enquiries with his parents as to any promised proprietary interest in the family farms; and

(b) his parents stepped back from cattle farming and sold property in the early 1990s.

Further, he did not discuss with his parents the promise of an inter vivos gift in 2006 when the mutual wills were executed and shown to him, or raise the issue with Ellen when there was conflict over the running of the farm in 2012 and the planning permit was granted in 2014. Regarding the later subdivision, there is no evidence that Stuart enquired with Ellen as to how the promise of an inter vivos gift or gift via the mutual wills was consistent with such steps.

Even if it could be accepted that Ellen made the representations, significant questions of reliance arise. On Stuart’s case, the price of cattle dropped at the time and there was a corresponding drop in the amount of work available on the family farms, some of which were being sold or for which tenancies not renewed. By then, Stuart was around 28 years old and had been working as a farm hand for eleven years, the prospects of becoming a successful cattle farmer — or inheriting a cattle farm — had diminished, and he had no other qualifications. He had, however, commenced growing plants in the years previously and was encouraged by Keith to pursue the nursery as a source of income.

While it was submitted that in reliance on the Third Promise Stuart worked the nursery on Harkaway rather than seeking to buy elsewhere, this is inconsistent with the notion that he had been working unpaid for eleven years and there is otherwise no evidence of his resources at that time. He also gave no evidence that he discussed with his parents the possibility of purchasing elsewhere. The inference is that Stuart’s employment options were limited and he was offered an area on Harkaway to afford him the opportunity to commence a nursery business formally and potentially earn an income. While he continued to contribute hours of work to the farms, this was in exchange for not having to pay rent. On the whole, the Court is not satisfied that the representation as to an interest in property and the reliance, in the form of both laying out the nursery and helping on the farms, are ‘sufficiently connected’ or in other words, that Stuart was ‘so influenced’ by the representation that it would be unconscionable for Ellen to resile from it. In this regard the extent of Ellen’s unconscionability can perhaps be gauged by Stuart’s response to the following proposal:

We can no longer provide you with work on the cattle farms. However, you can use an area of Harkaway and the dam to commence your nursery and hopefully earn an income, you do not have to pay us rent but you need to continue to help on the farm for 10 to 15 hours each week. The property remains ours and if we need to, we may sell it.[60]

The Court is not convinced that Ellen’s conduct can readily be described as unconscionable.

[60]See, eg, Sidhu (n 6) 527–8 [77]; Q v E Co (n 15) 492 [89].

Difficulties are also encountered in relation to whether it was reasonable for Stuart to rely upon the Third Promise for the entire period 1977 to 2005. Of note in this regard:

(a) in the period 1972 to 1977 Keith discussed with Stuart his existing will. Stuart’s understanding was that in accordance with that will, he would receive ‘the family farm’ with his younger siblings who at that time, were not yet old enough to look after themselves. This is consistent with Neale’s evidence that prior to the mutual wills being executed, Harkaway was devised to Stuart, Euan, Susan and himself. Keith is described as an honest man, and is said to have promised that he would change the will when family circumstances changed. However, in the period of the Third Promise, there is no evidence that Stuart enquired as to whether Keith had in fact changed his will to reflect more favourable terms of the Third Promise, particularly as his younger siblings grew and increased their financial security;

(b) by 1991, Harkaway was Ellen and Keith’s only property and a key asset. Stuart had purchased his own property six years earlier and was able to earn an income from the nursery. During the 1990s, Neale lived at Harkaway and was contributing time to the farm, Euan rented the homestead there, and Susan lived there for a period. In such circumstances, and in the context of seven children, it was unreasonable for Stuart to rely on a general representation that he would ‘get it all’ or ‘receive the property’; and,

(c) the help that Stuart was providing his parents was at least in part tied to rent not being required in relation to the nursery.

On balance, at least from around 1991 it was not reasonable for Stuart to continue to act in reliance on a general representation from 1977 that he would receive Harkaway via either an inter vivos transfer or as an inheritance.

Further, given the circumstances discussed in para [247], the Court cannot conclude that Ellen knew, or should have known, that in laying out his nursery at Harkaway and forgoing 10 to 15 hours at the nursery each week, Stuart was acting in reliance on the Third Promise, that is, that he would receive an interest in the property.

In the event that the preceding findings are incorrect, the detriment that Stuart suffered appears limited to the loss of income he sustained in not working at the nursery for 10 to 15 hours each week. Again, although substantial financially it was not profoundly personal or of a life-changing nature. Rather, Stuart has been able to establish a successful business, which has continued for 43 years, and in 1985 he purchased property of his own. While it can be accepted that as a 70 year old man the prospect of relocating his business has a degree of injustice, the limited conduct of Ellen, the nature of the detriment, the generality of the representation and the disproportion between the detriment and the value of Harkaway, lead to the conclusion that a constructive trust in favour of Stuart over the whole of Harkaway would have been going beyond what was required for conscientious conduct. This conclusion is further strengthened by the circumstances in which Ellen was seeking to resile from any promise.

Fourth Promise

The Fourth Promise is said to relate to the period 1977 to 2005, during which Keith and Ellen are asserted to have repeatedly stated: ‘we appreciate you doing all you do for us without pay, but rest assured, you and Neale will get it all to share equally when we pass on or when we retire’. He deposes that they said on a number of occasions that he and Neale would be given Harkaway or be left it, to pay them back for the work and help over the years.

Again, the representations lack context. Further, although Neale appears to have contributed at Harkaway and Wandeen on weekends and school holidays, in the early 1980s he was studying, and until 1986, working at an accountancy firm. As such, for his parents to then represent that he would receive a half share in Harkaway appears inconsistent with the alleged basis of Keith’s earlier asserted approach — waiting to see who of the children ‘put in’ on the farm or otherwise established themselves. Further, no similar representation appears to have been made to Neale prior to the period 2002 and 2003.

While the terms of the mutual wills acknowledge Stuart’s contribution, and gift him half of Harkaway provided that the survivor of Ellen and Keith still own the property at their death, other than Stuart’s statement, there is no evidence supporting an inference that Stuart’s parents represented to him that he would be transferred a half interest in Harkaway during their lives. Although, as noted in para [206] above, the 2012 note perhaps suggests that the rights and responsibilities concerning Harkaway may have altered after Ellen received advice from KLM and her solicitor, and Ellen mentioned to Susan that things would be ‘worked out’ in the end, such evidence does not go so far as indicating that Stuart was to receive, or was promised, an inter vivos gift of half of Harkaway. As Stuart accepted, despite the references to KLM in the 2012 note, there is no express acknowledgement that the defendants’ were going to be transferred Harkaway.

Further, there is no evidence that Stuart raised the Fourth Promise as an issue at significant times as set out in para [245] above. In relation to the planning permit and subdivision, the Court rejects the proposition that he simply waived his asserted rights to $1.25 million without raising the issue.

Stuart recalls a meeting in 2014 in which Ellen is said to have confirmed that it was her intention to give Harkaway to the defendants rather than divide it between the family. However, Neale and Susan did not recall the meeting and as such, the Court cannot be satisfied that it occurred.

On balance, Stuart has not established that the Fourth Promise was made or approved by Ellen in the terms suggested.

As to reasonable reliance, Stuart asserts that he relied upon the Fourth Promise in devoting a quarter of his time to the family farms and foregoing income from the nursery during the period 1977 to 2005. If Stuart had established the Fourth Promise, in the Court’s view, the factors set out in para [248] above weigh against a finding that it was reasonable for him to rely upon it for the entire 28 year period as the family’s circumstances changed. Additionally, it was not reasonable for him to rely on any general representation in 2005 that he and Neale would inherit Harkaway equally in circumstances where the representation was general; Harkaway was a key remaining asset of Ellen and Keith and where they lived; by that stage Neale appeared to be managing the farm, that is, the majority of Harkaway; it could be anticipated that his siblings would be unhappy with the arrangement and seek to challenge it with their parents; and, Susan’s evidence is that Harkaway was discussed at family dinners as a ‘back up’.

As with the analysis above, in the Court’s view had Stuart established his claim based upon the Fourth Promise, to recognise a constructive trust in his favour over half of Harkaway would have been going beyond what was required for conscientious conduct.

Fifth Promise

The Fifth Promise is asserted to be that in around 2005 Ellen and Keith stated: ‘we just can’t manage the place without your help now that I/your father is not in good health but if you agree to help you and Neale will get a share equally when we die or when we retire’. Further, that the promise was described as ‘rock solid’ as it had been put into their wills. Stuart deposed that:

During this period, I had conversations with my parents wherein they told me that they appreciated the work and help I was giving them and the sacrifice I was making in not running the Nursery fully. They said on a number of occasions that Neale and I would be given [Harkaway] or be left it in their Wills when they were both dead to pay us back for the work and help we had given over the years.

Again, the context of the Fifth Promise is lacking. Additionally, it goes beyond the representations that Neale asserts were made to him and Euan at that time in that it refers to an inter vivos gift. The mutual wills support the inference that Keith and Ellen sought to acknowledge Stuart’s contributions and gift Harkaway to the defendants if it was still owned at the time of death. Clauses 3 and 5 contemplate that Harkaway may no longer be owned at the time of death. On one view, this is consistent with the Fifth Promise. Alternatively, the drafting may have been directed toward the possibility of vicissitudes, such as a later need to fund nursing home care from the realised value of Harkaway. Other than Stuart’s assertion, there is no evidence that Keith and Ellen promised gifting Harkaway to Stuart while they were alive. Of note in this regard is Neale’s evidence. Although he deposes that he interpreted cl 5 as addressing circumstances in which he no longer lived or worked at Harkaway, he did not claim that Ellen or Keith had ever promised to transfer Harkaway during their lifetime.

Additionally, the pleaded promise differs from that deposed by Stuart. Insofar as it is relied upon:

(a) for Keith and Ellen to represent that they may gift the property when they ‘retire’ seems at odds with their position in life. By 2005 they were 81 and 78 years old respectively. Keith had ceased running cattle and Neale was staring his own small herd on Harkaway; and

(b) for Keith to have stated that his promise was ‘rock solid’ in around 2005 as it was in ‘the wills’ is inconsistent with the mutual wills being executed in 2006.

Both forms of the Fifth Promise are inconsistent with Susan’s evidence that on many occasions at dinner Harkaway was referred to as the family ‘back-up’, and she was not aware of any promises to gift it to Stuart or Neale. Again, there is no evidence that Stuart raised the promise at key times such as the argument in 2012, planning approval in 2014 or Lot 3 sale in 2016, although in this regard he may have been content to rely upon the terms of the mutual wills. While he deposed that he sought to confirm the promise in 2014, the Court has rejected this evidence. On balance, the Fifth Promise has not been established.

Stuart pleads that in reliance of the Fifth Promise, that between 2005 and 2008 he continued to dedicate 25 per cent of his time working on and assisting with Harkaway, and 50 per cent of his time from 2008 to 2012, including in assisting Keith. He points to a deterioration in Keith’s health in this context. Neale deposed that Keith became chronically fatigued in the mid-1990s but improved with medication such that he could assist around the garden, while Susan said that after 2005 Keith was still driving and that he fought in the Black Saturday bushfires. The Court accepts that from 2005, Stuart provided greater assistance to his parents, albeit Keith may have still been physically well enough to drive and contribute to fire fighting. As to the proportion of time that Stuart was assisting his parents, without further evidence, the claim of 50 per cent of his working time appears generous, particularly when Neale was also providing assistance and before 2011 when Keith was diagnosed with Alzheimer’s disease. However, given Stuart has failed to establish other issues, it is unnecessary to finally determine the point.

Even if the Fifth Promise was made, it was not reasonable for Stuart to act in reliance upon it. Again, it is not apparent that he clarified the position of his parents’ wills in 2005. Even after the mutual wills were executed in 2006, Harkaway was Keith and Ellen’s only remaining property and where they lived, Neale had then commenced running cattle on the majority of the farm, to which he had contributed over the years, Stuart was aware that some of his siblings were unhappy with the terms of the mutual wills, and cl 3 and cl 5 contemplate the disposal of Harkaway within the lives of Keith and Ellen. To act in reliance of the Fifth Promise in such circumstances, particularly where any inter vivos gift was likely to generate conflict and challenge from his siblings, including Neale, was not reasonable.

Stuart specifically argued that despite Ellen’s need for urgent care in 2020 she could not resile from her representations in the absence of some clear understanding that they were voidable at her election should her needs warrant it. Cited in support of this submission was Hogan v Baseden.[61] However, at issue in that case was the application of s 66G of the Conveyancing Act 1919 (NSW), after a party had successfully established a proprietary interest on the basis of what appeared to be constructive trust. Comments of Mason P as to the need for a clear agreement related to application of s 66G rather than the constructive trust. In the context of proprietary estoppel, it is recognised that the relevance of vicissitudes to reasonable reliance is a fact-sensitive enquiry. Here, the issue appears finely balanced. On the one hand, Keith and Ellen were elderly at the time of the Fifth Promise and obtaining loans from Neale for liquid funds. The possibility that funds may need to be realised from Harkaway for nursing home care was real. On the other hand, the evidence is that at least in 2004 Ellen and Keith still maintained a share portfolio, and the size and value of Harkaway suggested that reasonable funds may be realised from subdivision rather than sale of the entire property. However, when such issues are combined with the disharmony in the family concerning the terms of the mutual wills, and the existence of cl 3 and 5, the overall picture is that it was not reasonable for Stuart to assume, based on the general representations of his parents, that he would receive a half share in Harkaway.
[61][1997] NSWCA 150.

Had Stuart established the Fifth Promise and that his reliance was reasonable, the Court accepts that Ellen knew, or should have known, that his greater contributions after 2005 were in reliance on the Fifth Promise. As to Stuart’s detriment over this period, again, even if less than 50 per cent of foregone income, it was a substantial financial loss, such that it would have been unconscionable for Ellen to resile from her promise. On the issue of relief, similar to the analysis above, to recognise a constructive trust in favour of Stuart over half of Harkaway would have been going beyond what was required for conscientious conduct. Rather, in the circumstances, monetary relief would have been more appropriate. While the size of Stuart’s financial detriment was more significant and the asserted representation by Ellen more precise, the circumstances in which she was resiling from the Fifth Promise would have weighed in favour of such an approach. As noted in relation to Neale’s claim, even in light of Ellen’s urgent care needs falling away, the Court’s initial impression is that the debts owing by the estate and the potential injustice to other parties may have continued to support the conclusion that a monetary remedy was appropriate.

Conclusion

Neither Neale nor Stuart have established their claim of constructive trust over Harkaway.

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[2021] VSC 352

18 June 2021