Nydegger v McKenzie

[2001] NSWCA 393

CITATION:	NYDEGGER V. McKENZIE & ANOR. [2001] NSWCA 393
FILE NUMBER(S):	CA 41041/00
HEARING DATE(S):	25 September 2001
JUDGMENT DATE:	15 November 2001
PARTIES :	Olivia Pearl Nydegger - appellant Therese Violette McKenzie - first respondent Colin McKenzie - second respondend
JUDGMENT OF:	Sheller JA at 1; Beazley JA at 2; Hodgson JA at 3

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	ED4738/99
LOWER COURT JUDICIAL OFFICER :	Bergin J

COUNSEL:	Mr. A.J. McInnes QC with Ms. N. Butler for appellant Mr. J. Sexton SC with Mr. W. Bradford for respondents
SOLICITORS:	Kenneth Harrison, Bondi Junction for appellant Booth Brown Samuels & Olney for respondents
CATCHWORDS:	EQUITY - Estoppel - Maxims - "He who seeks equity must do equity" - Daughter benefit of trust of property subject to life interest in mother - Rift between mother and daughter - Whether daughter as condition of relief should make some provision in mother's favour. D.
CASES CITED:	Flinn v. Flinn [1999] 3 VR 712 Sander v. Twigg (1887) 13 VLR 765 at 785 Malton v. Black, Young J, 26/5/86 Constanton v. Permanent Trustee Australia Limited, Young J, 13/6/91 Nieborak v. Piper, Young J, 11/12/90
DECISION:	See par.62 of judgment

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 41041/00
ED 4378/99

SHELLER JA

BEAZLEY JA

HODGSON JA

Thursday 15th November 2001

NYDEGGER V. McKENZIE & ANOR.
Judgment

: I agree with the reasons of Hodgson JA as set out below.

: I also agree with Hodgson JA.

On 15th December 2000, Bergin J made orders to the effect that, subject to certain conditions, Olivia Nydegger held her interest in four farm properties near Dubbo and certain associated assets on trust for her daughter Therese McKenzie, and also made certain consequential orders. We are dealing with an appeal from those orders. For convenience, I will generally refer to the parties and their relatives by forenames.

BACKGROUND CIRCUMSTANCES

4 Olivia was born in 1918. She married Marcel Nydegger, and there were four children of the marriage: Robert, Leon, Christine, and Therese, the youngest born 25th October 1953. Therese married Colin McKenzie in 1975, and there are three children of that marriage: Grahame and Matthew, both in their twenties, and Max who is about twelve.

5 In 1977, Marcel retired from practice as a dentist, and from about that time Marcel and Olivia established a cattle stud in partnership with Michael and Robin Fraser at the Frasers’ property “Toonga” at Tarcutta.

6 In 1986, Therese and Colin were living on a five acre property at Pitt Town. In that year, the property “Warrawong” near Dubbo was purchased by Therese and Colin as joint tenants as to one half share and Olivia as to the other half share, as tenants in common. The price was $226,000.00. About $126,000.00 was provided by Olivia, and the balance by Therese and Colin: this balance was provided through bridging finance until they sold the Pitt Town property. Therese and Colin then moved to “Warrawong”, where they ran goats and then sheep in partnership with Olivia.

7 In 1987 to 1988, a family company was dissolved by Marcel, and its assets distributed to the children. Therese and Christine received about $167,000.00 each, and Robert and Leon received about $180,000.00 each.

8 In 1989, Marcel purchased a property “Bela” about five kilometres from “Warrawong” for about $160,000.00.

9 By 1990, the Frasers’ marriage had broken up. To continue the “Toonga” cattle stud, Mr. Fraser purchased 1600 acres of a property “Coleraine”, adjoining “Warrawong”, and Olivia purchased about 900 acres of that property for $340,000.00. This 900 acres has been called “Coleraine I”. About twelve months later, there was a falling-out between Olivia and Mr. Fraser, and the “Toonga” stud was divided. Olivia’s thirty-seven stud cows from this stud were then added to the stock of a stud called “Coleraine Murray Grey Stud”, which had been commenced separately on “Coleraine I” and operated by Therese and Colin. This stud was built up over the years, and by the time of the hearing was estimated to be worth between about $200,000.00 and $400,000.00.

10 On 13th August 1991, Marcel died, and Olivia became the sole registered proprietor of “Bela”.

11 In about 1995, Olivia, Therese and Christine began operating an alpaca stud in partnership on “Coleraine I”. This partnership was dissolved in 1998.

12 In early 1997, Olivia was living in a house in Pennant Hills Road, North Parramatta. Leon was living with her, and Christine was living in the house next door.

13 In about May 1997, another 900 acres of “Coleraine” (called “Coleraine II”) was purchased in the names of Olivia and Therese as joint tenants. The price of $380,000.00 was borrowed by Olivia and Therese from the bank, and repaid by Olivia when she sold her house at North Parramatta. Having sold that house, in October 1997, Olivia moved to the homestead on “Coleraine II”; and a little later Therese and her family also moved into this homestead.

14 On 26th March 1998, Olivia and Therese visited the accountant Vicki O’Connor at Darcy Kennedy Pty. Limited, and discussed making changes to the “Warrawong” partnership.

15 On 18th May 1998, Olivia was referred by a solicitor Peter Duffy to see another solicitor Kenneth MacDougall in Dubbo for the purpose of providing her with independent advice in relation to the creation of joint tenancies with Therese. In Mr. MacDougall’s presence, Olivia signed transfers transferring to herself and Therese as joint tenants Olivia’s half share in “Warrawong”, and the whole of “Bela” and “Coleraine I”.

16 There is in evidence a letter in Grahame’s handwriting, bearing date 14th September 1998 and addressed to Darcy Kennedy, and bearing Olivia’s signature. The letter states as follows:

I Olivia Nydegger acknowledge that my partnership between myself, Colin and Therese McKenzie cease to operate in March 1998. I accept no entitlement to the livestock, plant and machinery.

17 9th October 1999 was Olivia’s 81st birthday. The four siblings were present at “Coleraine”. There was a heated family discussion in which the other three siblings alleged that Therese had Olivia under her thumb, was ripping the stud off, and taking her mother’s assets.

18 In June or July 1999, Olivia told Therese she could only give her half the stud.

19 On 9th August 1999, a mediation was arranged to be held with Ms. O’Connor. Therese and Colin refused to attend.

20 Olivia brought some notes to the meeting concerning what she said was the position in relation to each of her children. These notes were as follows:

Robert Nydegger.
My eldest son has not received any money.

Mrs. Christine Roffey – my eldest daughter
In Parramatta we owned two homes adjoining. Christine rented one of these for fifteen years at $150.00 a week. When I was selling my home Christine didn’t want to stay there and we decided to sell both homes in one lot. I purchased another home for her at Londonderry on 5 acres for $380,000.00. This property is in my name and Christine has been paying $150.00 a week rent up til a few months ago. She now has to pay the rates and insurance on this property. She has not received any other money from me.

Leon Nydegger – my second son
Leon is not married. He has lived at home all his life. Since my husband died 8 years ago Leon was my constant company. I gave him $265,000.00 to buy a property Bilpan (sic). I still hold $5,000.00 of his money, making the full amount $270,000.00. I gave him $10,000.00 before selling out in Parramatta and on the 3 occasions I gave him $10,000.00 over the years.

Therese McKenzie – my second daughter
Thirteen years ago Therese and Colin wanted to move out of Windsor and go into the country. We found a property at Elong called “Warrawong”. They had $100,000.00 and I made up the difference of $120,00.00 plus tax.

My late husband brought a property of 1100 acres a couple of years later for $160,000.00 which was near by. He bought a mower bailer and loader also a new hay shed for $110,000.00 for Therese. He also paid $8,000.00 for a new plow (sic) for them which they sold later for $2,000.00.

I bought the first part of “Coleraine” 900 acres for my Murray Grey Cattle and the second section a year or so later for a home for myself. The total cost was $705,000.00 plus tax. I spent $4,000.00 for a dam on the first Coleraine and $12,000.00 for a boar (sic). Therese said the money for the boar (sic) came out of funds, but I don’t think so. I was going to put another dam on the home block for my garden which would have cost me 5000 to 6000 dollars, but was advised to buy a bulldozer for $30,000. That is over a year ago but I still haven’t got the dam. I paid $10,000 for a large rainwater tank to the home. I paid half the price of a new four wheel bike for cattle use.

I paid for the steel for a set of cattle yards and Colin did all the work of making them. As for the commercial herd of cattle I put in half the cattle and Colin and Therese put in half. They consider this herd theirs. I have not received any money whatsoever over 13 years for cattle or anything else. Quite a large area is under crops. They did buy me a wheelbarrow for $350 last year and Therese is paying the rates on the property. I paid the rates on Pop’s block up til last year and Colin and Therese have had the full use of Pop’s block since it was purchased. They usually run 700 wethers up there, but now have 350 ewes lambing up there.

Stud Cattle
There is now a problem over the stud.

Toonga Murray Grey Stud was started in 1977 at Tarcutta N.S.W. It was run for 13 years by Mr. and Mrs. M. Fraser who owned the property Toonga. My late husband and I purchased the stud cattle. Any of their progeny born on Toonga were to be jointly owned by the four of us. Mr. Fraser bought a float and hammer mill and paid all the feed and labour.

After a couple of years breeding we showed the cattle with great success winning champion ribbons at Canberra Royal Sydney RAS and were the most successful Murray Grey breeders at Melbourne Royal. We did very well financially with the sale of bulls. Owing to a family break up in the Fraser family, the property had to be sold. My half of the cattle were the foundation of Coleraine stud.

Since then I have spent close on $80,000 on stud cattle to improve the herd which is in a good position. Colin and Therese have also work (sic) hard to make a success of it. I also bought a float for $16,000 and a hammermill for $9,000 plus other extras.

I am not prepared to slip out of the stud after 21 years for $5,000 a year, which I have refused.

Colin and Therese’s second proposition was to give them 2/3 of the stud and 1/3 to me which is to revert to them. I still supply all the grazing. I can’t see this is fare (sic) to me or the rest of the family.

If I don’t agree to this they won’t do anything more with the cattle and the stud will have to be sold later in the year. I will have to get someone else to look after them in the meantime. If this happens, it will end my interest in the hole (sic) set up.

21 Notes were taken of the meeting, and of a subsequent meeting with Christine: those notes are set out below:

NOTES OF THE FAMILY MEETING HELD AT DARCY KENNEDY OFFICES
9TH AUGUST 1999
ATTENDEES: Olivia Nydegger, Leon Nydegger, Robert Nydegger, Christine Roffey
Advisors: Lyn Sykes
Vicki O'Connor
1. Lyn requested an outline of the family history, and this was drawn on the whiteboard. A copy is attached at the back of these minutes.
2. Lyn asked each family member to outline why they wanted the meeting and what they hoped to achieve.
a) Christine

· To equalise the division of Olivia's assets - when she dies.

· Fear of all assets going into Therese's name.

· Therese living with Mum/Colin and Max and may be using her influence to change/move assets into their names.

· All properties (near Dubbo) have been put into joint tenancy - advised by Lands Department - and this has increased her fear of Therese and Colin taking all assets.

· The Alpacas are an issue from Christine's viewpoint.

· Lyn asked Christine what she does and she stated that she is in the Gem business/Alpaca business.

b) Leon

· To understand or confirm who is to get what share of assets on Mum's death.

· What are her assets?

· He stated that he is a Beekeeper on land at Bilpin (bought by his mother recently).

c) Robert

· To make sure that Mum gets her share of income currently and then individually to ensure that Mum's estate is divided equally.

· Robert stated that Therese and Colin bought their original property with Olivia. Olivia put in $130,000 while Therese put in $100,000. They then took over Dad's property (1100 acres) 8 years ago on his death.

· Olivia later bought another 900 acres.

· Finally Olivia bought another 900 acres just 18 months ago.

· Robert stated that he is a farmer on land at Orange (217 acres).

d) Olivia

· To look at a more even distribution to other children.

· The stud cattle have been held 21 years and needs to be decided what to do with them.

· She doesn't really want to live with Therese and Colin. She would prefer a house on her own.

· She would like to have a better return on her assets the she currently receives.

3. Lyn then asked what assets did Olivia have?
Assets
Christine advised these were:
Land (joint tenants with Therese) (valuations from 4/5/98)
611.5 ha Warrawong (1/2 share) $155,000
459.7 ha Bella $ 96,000
360.58 ha Colleraine (1st block lots 1, 15 & 16 $350,000
Colleraine (2nd block) (purchased) $380,000
$981,000

Other Assets
Farming:
Alpaca (10 head) $100,000
Stud cattle (250 head) $ 200,000
(valued by children) $300,000

Other
52 MacPherson Road (lived in by Christine & her husband) $360,000
Bank Accounts: as at 30/6/98
National Bank $ 730
ANZ Bank $ 15,458
Champion & Partners $ 29,000
Colonial State 615 134506-81 $ 2,737
State Bank Term Deposit 060 69015360 $ 36,700
State Bank Cheque A/C $ 4,940
BHP Shares (39930 @ $15) $598,950
State Bank All-In-One 060 690911-83 $ 59,698
$ 748,213
Total Assets: $2,389,213
Assets - Other
Bilpin Property (in Leon's name) $250,000
$2,639,213

· Olivia stated that if the issues cannot be resolved she would like to sell one property and move closer to other family members.

· Peter Duffy (Solicitor) has a copy of Olivia's will. Olivia cannot remember what her will contains.

· Olivia presented her notes to the meeting and a copy is on file for future reference.

4. General Comments
Many issues were raised and some general comments were made.

· Olivia felt her living expenses were approximately $250.00 per week.

· The farming land assets were changed into joint tenancy because Olivia wanted to do so at the time. She was advised by Pete Duffy to seek independent legal advice and did so at that time.

· Colin and Therese had worked on the farm for the last ten years (approximately) and would be entitled in a court of law to seek payment for same at a Manager's rate of pay. This was discussed to be between $25,000 to $50,000 per annum.

· Olivia disclosed that each of the four children had received $200,000 from the estate of her husband eight years ago. Lyn questioned whether in fact, Therese may have put her share into the operation of the farm. If so, she would also be entitled to claim this money from the value of Olivia's assets.

· It was resolved that no-one wanted to pursue a legal action.

Recommendations

· It was resolved that another meeting would be held at 9.00am on 22 September 1999 at the Darcy Kennedy Pty Ltd building. All family members are to receive a copy of these minutes and invited to attend:-

Olivia
Robert & June
Christine & Arthur
Leon
Therese & Colin

· The next meeting is to be limited to discussion of the options for the future of the Cattle stud. The group was asked to make a list of some options regarding the stud. Nine options were suggested and are attached.

· After the next meting, a third meeting should be held to discuss the asset dispersal. Olivia would decide which assets she wants to have go to which family members and whether she wants this to happen now or via her estate.

6. Prior to the Next Meeting
It was agreed that the family members would take some action prior to the next meeting
1. Solicitor
The family would approach Peter Duffy and find out this information:-
a) What are the terms of any Powers of Attorney's held?
b) Can Olivia sell any of the properties held in joint tenancy? Can the joint tenancy be undone? If so, at what cost?
c) What are the terms of Olivia's current will?
2. Bank
The family would approach the State Bank to provide detail :
a) Who are the signatories on the bank accounts in Olivia's name?
b) What are the balances on these accounts?

Accountant (Vicki O'Connor)
Prior to the meeting, Vicki is to provide to all family members Stud records for last five years. This is to show how many cows are registered, what sales and purchases occurred and an update to 30 June 1999. This trading information should include the Alpaca Stud updated until the split. In particular, Vicki is to provide details on how much income Olivia has received from the sale of the stud cattle versus how much the McKenzie's received.

7 Conclusion
Lyn asked how each person felt at the end of the meeting.
a) Christine
Christine felt that some of her questions had been answered.
b) Leon
Leon was satisfied with the day. He wants to see Olivia happy and needs to solve some of these issues.
c) Robert
Robert felt that a step had been taken in the right direction.
d) Olivia
Olivia felt that a lot of good had been done.
NEXT MEETING:
22ND SEPTEMBER 1999
9.00AM
DARCY KENNEDY PTY LTD BUILDING

NOTES AFTER THE MEETING
Christine had returned to the office and advised the following:-
1. The solicitor said the joint tenancies could be "undone" for a fee of $67.00 each.
2. The State Bank advised that the account balances and signatories are:-
Account name & details Balance Signatories
State High Performance $2,736.29 (Olivia only)
(615 134506-81)
State Bank Term Deposits $13,844.17 (Olivia only)
(60 69013560) .
State Bank Cheque A/C $3,312.78 (Olivia, Colin&
Therese)
State Bank All-In-One $17,967.36 (Olivia only)
(060 690911-83)
The State Bank also advised that the following other accounts existed:-
State Bank (12921381) $4,593.08 (Olivia &
Therese)
State Bank Warrawong $16,547.63 (Colin, (13649900) Therese,
Olivia
&Grahame)
State Bank Term Deposit $9,982.50 (Olivia
only)
(13877760)
Christine commented that there did not appear to be a "Colleraine" account.
OPTIONS FOR STUD
1. Colin & Therese to guarantee $5,000 payable to Olivia and that she transfer ownership of the Stud
2. Transfer 2/3 ownership to Colin & Therese and keep 1/3 herself. That the balance of 1/3 to be transferred on Olivia's death.
3. Sell all of the Stud.
4. Transfer Stud to another location.
5. Olivia sell farm (Colleraine block) and move stud and Olivia elsewhere.
6. Olivia to transfer stud to all four children now.
7. Do nothing.
8. Olivia to give Therese 1/2 of the stud now and leave the boys 1/4 each on her death.
9. Colin & Therese to buy the Stud from Olivia.

22 It appears that Robert, Leon and Christine then prepared a handwritten document, the effect of which appears to be that Therese should pay Robert $340,000.00 in order that reasonable equality be achieved among the children.

23 On 10th August 1989, Christine took this document to Therese, and said words to the effect that, if Therese wanted all the properties, she would have to raise $340,000.00 for Robert. Therese would not consider this proposal.

24 A day or so later, Olivia left for Sydney in order to deal with litigation arising out of the sale of the properties at North Parramatta, only taking a small suitcase with her. A few days later, Therese had caveats placed on the properties, and on 2nd September 1999, Olivia signed a document to sever the joint tenancies on the properties. Olivia has not returned to “Coleraine”, and these proceedings were commenced, initially so as to maintain the caveats on the title.

THE PROCEEDINGS

25 In the proceedings, Therese claimed, on the basis of contract or estoppel, entitlement to Olivia’s interests in the four properties and the stud, subject to a life interest in favour of Olivia. Olivia put on a cross-claim for relief, including the setting aside of the transfers of 18th May 1998 and relief in relation to the profits of the partnership and the stud.

26 The basis of Therese’s claim was as follows. Therese alleged that in 1986, she and Colin sold the Pitt Town property, put the proceeds of sale into “Warrawong”, and moved to “Warrawong”, in reliance on a promise and/or representation by Olivia that, if they did so and worked the property, Olivia would transfer her half interest in the property to Therese on her death. Subsequently, in further reliance on that promise and/or representation, Therese and her husband continued to work that property.

27 Next, Therese alleged that in 1991, Olivia made a promise and/or representation to her that, if she and Colin did the work to operate and improve the Coleraine Murray Grey Stud, Olivia would transfer the stud to Therese on her death; and in reliance thereon, Therese and Colin did the work to operate and improve that stud.

28 Next, Therese alleged that in or about 1991, Olivia made a promise and/or representation to Therese that, if she and Colin worked “Bela”, Olivia would transfer “Bela” to Therese on her death. In reliance thereon, Therese and Colin did work “Bela”.

29 Next, Therese alleged that in 1992, Olivia made a promise and/or representation to Therese that, if she and Colin did the work to operate and improve the stud on “Coleraine I”, Olivia would transfer “Coleraine I” on her death; and in reliance thereon, Therese and Colin did work to operate and improve the stud on “Coleraine I”.

30 Finally, Therese alleged that in May 1997, Olivia made a promise and/or representation to Therese that, if she and Colin continued to do the work to operate and improve the stud partly on “Coleraine II”, Olivia would transfer “Coleraine II” to Therese on her death; and that in reliance thereon, Therese and Colin did do the work to operate and improve the stud partly on “Coleraine II”.

31 Olivia denied the promises and/or representations, denied inducement, and denied that what Therese and Colin did gave rise to any estoppel or trust. In particular, Olivia alleged that they worked the properties and the stud for their own benefit, did not account to her for profits, and did not pay her any money arising from them. In her cross-claim, Olivia alleged that she signed the transfers in May 1998 under duress and was not aware of their effect; and also alleged that she did not knowingly sign the renunciation in relation to the partnership, and claimed accounts of the partnership.

32 The primary judge rejected Olivia’s claim of duress and lack of understanding, and held that she was bound by the transfers and by the renunciation. She found that promises and/or representations were made as alleged by Therese. She found reliance and action to her detriment by Therese as alleged, so as to make it just that a trust be imposed on Olivia’s interests in the four properties and the stud. The primary judge made the following orders:

THE COURT DECLARES that:-
1. Subject to the condition specified in paragraph 2 below, the First Defendant holds her interest in the lands known as "Warrawong", Bela", "Coleraine I" and "Coleraine II", these being respectively the lands contained in Folio Identifiers 27/754293, 25/54293, Auto Consol 94228 and 13/754292 on trust for the Plaintiff.

2. The First Defendant is entitled to live with the Plaintiff and her family on Coleraine II and, in the event that the First Defendant avails herself of this entitlement, the Plaintiff shall maintain and support the First Defendant for the remainder of her life.

3. Subject to the condition specified in paragraph 4 below, the First Defendant holds her interest in the assets of the "Coleraine Murray Grey Stud" ("the Stud") including but not limited to those cattle which are or may in the future be registered by the Murray Grey Breeding Society with the prefix "NYK" or "NFR", their progency (sic), stored semen and plant and equipment, on trust of the Plaintiff.

4. The First Defendant is entitled to fifty percent (50%) of any profits from the Stud during her lifetime.

5. The joint tenancies on the lands described in order 1 above are hereby severed by virtue of that order.

THE COURT ORDERS that:-
6. The Second Defendant shall forthwith register the document entitled "Transfer Unilaterally Severing Joint Tenancy" No.6161303, a copy of which is annexed to these Orders and marked "A".

7 .The Second Defendant shall forthwith register the "Transfer Unilaterally Severing Joint Tenancy", a copy of which is annexed to these Orders and marked "B”

8. The First Defendant by herself, her servants and agents, is permanently restrained from mortgaging, charging, encumbering, disposing of or otherwise dealing with her interest in the lands known as "Warrawong", "Bela", "Coleraine I" and "Coleraine II".

9. The First Defendant by herself, her servants and agents, is permanently restrained from:
(a) mortgaging, charging, encumbering, disposing of or otherwise dealing with her interest in the assets of the Stud; and
(b) doing or permitting or omitting to do any act or acts the effect of which would or might interfere with the operation of the Stud by the Plaintiff.

10. The Plaintiff is hereby entitled to lodge a Caveat on the First Defendant's interest in each of the lands described in order 1.

11. The Further Amended Cross-Claim is dismissed.

12. The First Defendant is to pay the Plaintiffs costs in these proceedings, and those of the Second Cross-Defendant.

13. Liberty to apply on 48 hours notice.

GROUNDS OF APPEAL

33 Numerous grounds are set out in the Amended Notice of Appeal. Some merely challenge the ultimate findings, and need not be considered further (Grounds 3 and 16). Others challenge the primary’s judge’s rejection of duress and other grounds for setting aside the transfers and the renunciation (Grounds 1, 5, 18, 22 and 23). Others again challenge the finding that there were the promises and/or representations (Ground 2). Others challenge the findings of reliance and action to Therese’s detriment (Grounds 4, 6, 7, 8, 9, 10, 11, 12, 13 and 17). Finally, there are others challenging the conditions of the order, especially those concerning Olivia living and being supported on “Coleraine II” (Grounds 14, 15, 20 and 21).

34 Several of the grounds, and a substantial part of the argument, amounted to challenges of findings of fact made by the primary judge. It is not necessary or appropriate to refer to all of them, because in general terms they seek to challenge those findings in ways that are just not open on appeal. However, I will focus on the principal submissions made on this and other matters.

DETRIMENT

35 Mr. McInnes QC submitted that there was a plain error by the primary judge in finding that Therese had suffered detriment in reliance on Olivia’s promises and/or representations, so as to justify the imposition of trusts. In particular, he submitted that Therese and Colin had been unsuccessful in previous business ventures; that they had developed skills in operating the properties, with which they could earn amounts in the order of $50,000.00 per year each; that they enjoyed the work on the properties; and that they had kept all the benefits of the operations of the properties and paid nothing to Olivia.

36 I accept that these were matters relevant to the question which the primary judge had to consider. However, there were matters pointing the other way: undoubtedly, Therese and Colin had lost the opportunity to develop and pursue other modes of life; for them to attempt to capitalise in the job market on the skills they had acquired would be very different from applying these skills in running their own property; the primary judge found, as she was entitled to do, that Therese and Colin had worked very hard and lived very frugally over thirteen years, for very little return apart from the improvement of the property; and the primary judge found, as she was entitled to do, that Olivia had the benefit of participating in the operation of the properties and the continuing success of the stud.

37 In my opinion, subject to what I say about proposed amendments to the grounds of appeal and about the conditions of the orders, no appealable error has been shown in the primary judge’s finding of reliance and detriment such as to give rise to an estoppel precluding Olivia from resiling from her promises and/or representations that Therese should have the four properties and the stud upon her death.

ADDITIONAL GROUND ON DETRIMENT

38 During the hearing of the appeal, the appellant sought to add a ground of appeal along the following lines:

Her Honour failed to consider whether there was action to detriment in reliance on representations or promises made for properties other than “Warrawong”, that is Bela, Coleraine I and Coleraine II and the stud, and/or that her Honour erred in finding there was such action to detriment in relation to promises or representations in relation to those properties as would justify the imposition of a trust.

39 The application to amend was opposed by Mr. Sexton SC for the respondents. He pointed out that the application, in so far as it applied to “Coleraine II”, was hopeless and against a concession made at the hearing; and he referred us to Black Appeal Book p.288, where Olivia said unequivocally that “Coleraine II” was to go to Therese, so that she could not leave it to anyone else. In relation to the properties “Bela” and “Coleraine I”, Mr. Sexton submitted that no suggestion had been made at the trial that Therese and Colin would have acted in substantially the same way even if there had not been promises and/or representations concerning “Bela” and “Coleraine I”, but on the contrary, it was suggested that “Warrawong” was not viable on its own, so that they needed “Bela” and “Coleraine II” to have a viable holding. Mr. Sexton also pointed to detailed evidence given by Colin in particular as to work done subsequent to and in reliance on the promises and/or representations made in relation to “Bela” and “Coleraine I”.

40 In my opinion, having regard to the concession made in relation to “Coleraine II” and the lack of any attempt at the trial to suggest any different position concerning reliance and detriment in relation to “Bela” and “Coleraine I” as distinct from “Warrawong”, leave should not be granted to add this ground of appeal.

RENUNCIATION OF PARTNERSHIP

41 Mr. McInnes submitted that Therese had given evidence that she had been advised by Ms. O’Connor that the partnership could cause trouble after Olivia’s death, and that she told her mother about this, and then later changed her evidence to say that Olivia had been present when this advice was given. He submitted that Ms. O’Connor had no recollection of this, but said there would be no problem caused by the partnership, so that, Mr. McInnes submitted, it was unlikely that Therese’s evidence was correct. Mr. McInnes submitted that the primary judge should have found that Therese procured the signing of the renunciation, that Olivia did not knowingly sign it, or that Olivia did sign it without appreciating its effect. Further, Mr. McInnes submitted that the renunciation, on its true construction, did not give up any right to the capital assets of the partnership or any right to an account of partnership profits over the years.

42 In my opinion, apart from the construction question, the submissions amount to no more than an attempt to challenge primary findings of fact, in circumstances where no ground for interference by an appellate court with such findings is shown. On the construction question, it is my opinion that the document plainly indicates in intention to renounce any rights in partnership assets, including both capital assets and rights to an account of profits in previous years.

TRANSFER OF REAL ESTATE

43 Mr. McInnes submitted that there was evidence of pressure being applied to Olivia to make the transfer of May 1998, which had not been denied. He submitted also that there was a presumption of undue influence in relation to a transfer from a parent to a child: see Louth v. Diprose (1992) 175 CLR 621 at 628.

44 In my opinion, the presumption of undue influence as between parent and child only operates in relation to transactions in which the child benefits the parent, not vice versa. In my opinion, there was in substance a plain denial by Therese of pressure, and the primary judge’s decision that there was no duress or undue influence amounted to unappealable decisions of fact.

CONDITION OF RELIEF

45 Orders made by the primary judge which provided for a trust in favour of Therese of Olivia’s interests in the four properties and in the stud were not made subject to a life interest in Olivia, as had been claimed in the Statement of Claim. Although this was not made a ground of appeal, it was conceded by Mr. Sexton that those orders should have been made subject to Olivia’s life interest.

46 Mr. McInnes submitted that it was not appropriate that the only benefit going to Olivia from that life interest should be a right to reside at and be supported at “Coleraine II” (along with one-half of the profits of the stud) when, due to the breakdown of the relationship between Olivia and Therese, Olivia did not wish to return to live there. Furthermore, the associated requirement of support for Olivia was one which was impossible for the Court to supervise. Mr. McInnes submitted that it was reasonable for Olivia to want a return from her assets during her lifetime and a fair distribution to her children on her death. There was an obligation on Therese, in seeking equity, to do equity. In the result, Mr. McInnes submitted, that relief either should be denied, or should be granted subject to a condition appropriate to do equity to Olivia, such as a payment of a fair rental for Olivia’s interests.

47 There was some question whether these submissions fell within the grounds of appeal, but the Court in the course of argument indicated a view that it fell within the grounds 14, 15, 20 and 21. In any event, no prejudice was suggested by Mr. Sexton in relation to these submissions.

48 Mr. Sexton submitted that the primary judge had appropriately addressed considerations as to what was required for equity to be done to Olivia. He submitted that it was not apparent until the hearing that Olivia claimed to be firm in her resolve not to return to “Coleraine II”, and that the primary judge was entitled to conclude that reconciliation was a realistic expectation. The conditions imposed were appropriate. Mr. Sexton referred to Flinn v. Flinn [1999] 3 VR 712. He submitted also that that case showed that a condition of support and maintenance was one which could appropriately be imposed. Mr. Sexton submitted that the Court should not let the tail wag the dog, and refuse relief because of difficulty in relation to the conditions to be imposed.

49 In case the Court took a different view, Mr. Sexton indicated that he had instructions to offer, in order to do equity in relation to Olivia’s half interests, $25,000.00 per annum by equal monthly instalments. $25,000.00 had previously been discussed in argument before this Court as a figure given by applying an annual rate of five percent to assets of capital value of $500,000.00.

50 In my opinion, there was a plain error in the form of the declarations, in that they did not make the trust in favour of Therese subject to a life interest in favour of Olivia, as had been claimed in the Statement of Claim. I make no criticism of the primary judge for this: there was ample opportunity given to Olivia to make submissions as to the form of orders, and this error was not drawn to the primary judge’s attention.

51 In my opinion, the question of Therese doing equity in relation to Olivia’s life interest was not adequately addressed at the primary hearing, the focus of that hearing being the principal dispute as to whether the facts were such as to justify the finding of a trust.

52 In my opinion, it should have been part of Therese’s case to offer to do equity and prove willingness to do so: see Sander v. Twigg (1887) 13 VLR 765 at 785, 795; Malton v. Black, Young J, 26/5/86; Constanton v. Permanent Trustee Australia Limited, Young J, 13/6/91, and Nieborak v. Piper, Young J, 11/12/90. Therese was plainly seeking that she and Colin be permitted to continue in possession and control of the properties and the stud, even though, on their case, Olivia had a life interest in half-interests in the properties and a life interest in the stud. In those circumstances, doing equity would involve ensuring that Olivia received appropriate benefits in return for her life interests, in circumstances where Therese was to have possession and control of these assets and Olivia could not apply under s.66G of the Conveyancing Act to realise her share. No such offer was made in the Statement of Claim, and no evidence of such offer or of willingness to do equity was provided in the affidavits.

53 There were some submissions before the primary judge pertinent to this, giving rise to the conditions actually imposed by the primary judge, but it would seem that in those submissions and in the primary judge’s consideration of the problem, Olivia’s life interest was lost sight of: there was no consideration of why the conditions imposed were adequate, even though they would not benefit Olivia unless Olivia chose to move back to “Coleraine II”, apart from her Honour’s view that reconciliation was a possibility. These matters were not adequately dealt with, it seems, in submissions to the primary judge, but, in circumstances where the requirement to do equity should actually have been part of Therese’s case, I think the matter can and should be addressed by this Court.

54 Mr. Sexton submitted that the condition actually imposed was appropriate, because it was precisely the benefit to Olivia contemplated by the arrangement made between the parties; and it would fail to benefit Olivia only by reason of a breakdown in the relationship caused by Olivia wrongly denying Therese’s equity. There is some force in those submissions, but I think courts should generally avoid attributing all blame to one party in relation to the breakdown of personal relationships.

55 In this case, even though the primary judge has found facts in favour of Therese on the balance of probabilities, giving rise to a cut-and-dried view as to what happened, this is necessarily an over-simplification of the whole dynamics of the personal relationships between Therese and Olivia. It is appropriate also to take a wider view of the relationship. Therese has been given land for which Olivia and/or her husband paid $126,000.00 in 1986, $160,000.00 in 1989, $340,000.00 in 1990, and $380,000.00 in 1997. Leaving out of account the effects of inflation and variations in value, this totals about $1 million. One half of this was conveyed to Therese absolutely in May 1997 and May 1998, and the other half is to go to Therese on her death. Also, Olivia has given Therese a right to succeed to a stud worth between 200,000.00 and $400,000.00 on her death. Plainly, and arguably not unreasonably, Olivia formed the view in 1999 that this was unfair to her other children, and sought to bring about a fairer distribution of her whole estate.

56 Even though, on the primary judge’s findings which have not been successfully challenged, Olivia could not do this by preventing Therese succeeding to these properties, her objective of somehow promoting fairness between her children was arguably a reasonable one, and one which Therese as a daughter whose mother had given her probably at least $1.2 million worth of property ($500,000.00 outright and at least $700,000.00 subject to a life interest) could arguably, as a matter of daughterly affection, respect and gratitude, have been expected to co-operate. It might reasonably be thought that her initial refusal to mediate and unwillingness even to discuss a proposal whereby she pay $340,000.00 to Robert contributed to the breakdown of her relationship with Olivia.

57 For these reasons, in this case as in many cases the wise and correct course is not to attribute blame to one party, and in my opinion it would be wrong to look at the rift between Therese and Olivia as being entirely Olivia’s fault. Accordingly, it would in my opinion be wrong to take the view that if Olivia is not prepared to live on “Coleraine II”, she should in effect receive no benefit. In my opinion, the question should be approached on the basis that there has been a breakdown in the relationship between Therese and Olivia, without attempting to attribute fault for this breakdown, and to consider what Therese should be required to do in order to ensure that, in those circumstances, Olivia receives an appropriate benefit from her life interests.

58 I would wish to avoid, so far as possible, an expensive further hearing on what would be an appropriate benefit. It seems that Olivia’s life interests in real estate relate to interests of the value of about $500,000.00, and her life interest in the stud relates to property in the region of $200,000.00 to $400,000.00. There are severe potential difficulties in relation to a right to one-half of the profits of the stud, having regard to the different ways in which these profits could be calculated. In my opinion, a fair and practical approach would be to omit the condition about half of the profits of the stud, but to require a payment of five percent per annum calculated on the capital of value of all the property in which Olivia has a life interest as at 1st September 1999, such payments to be made as from 1st September 1999. This I believe is a modest and appropriate rate, whether regarded as interest on the value of the relevant property or rent to be paid for such property.

59 I would order that, pending agreement as to this value or determination of it, $35,000.00 per annum be paid on account (this being five percent of a capital value of $700,000.00). I would propose that the instalments up to 30th August 2001 be set off against Olivia’s liability for costs at first instance; but that payments from 1st September 2001 onwards should be made without any set-off or deduction.

60 I would propose that the costs order below stand. As regards the costs of appeal, I note that the question of conditions and doing equity was not properly argued below, nor clearly raised in the grounds of appeal. On balance, I think the appropriate order as to the costs of the appeal is that each party bear its own costs.

61 These orders leave outstanding the determination of the value of the relevant assets as at 1st September 1999 and the quantification of the costs order at first instance. These questions are ones which, in my opinion, could very usefully be mediated between the parties, and one could even hope that agreement as to these matters might provide a basis on which there could be some reconciliation between the opposing factions of the family. I would expect that the orders could be given effect to so as to provide a benefit to Robert in some tax-effective way, if Olivia wished. If there is not agreement on the valuation question, then provided the valuers engaged by the parties are reminded of the Court guidelines for expert evidence, any further court hearing should be quite short.

62 The orders I propose are:

1. Appeal allowed in part.
2. Amend declarations 1 and 3 below by adding the words at the end “subject to a life interest in favour of the first defendant”.
3. Set aside declarations 2 and 4 below.
4. Order as a condition of orders 8 and 9 below that the plaintiff pay to the first defendant, in satisfaction of the first defendant’s said life interests, 5% per annum of the value of the property referred to in declarations 1 and 3 below as at 1st September 1999, quarterly in advance as from 1st September 1999 until the death of the first defendant.
5. Order that, pending agreement or determination as to the value of the property referred to in the previous order, the plaintiff pay to the first defendant $35,000.00 per annum quarterly in advance on account of the payments referred to in the previous order, provided that the instalments of such payments for the period 1st September 1999 to 30th August 2001 may be retained as a provisional set-off against the first defendant’s liability for costs at first instance.
6. Liberty to either party to apply within twelve months in the Equity Division for a determination of the value of the said property.
7. Appeal otherwise dismissed.
8. Each party to bear its own costs of the appeal, and the respondents to have a suitors’ fund certificate in respect of their costs if otherwise entitled.

*************