Olsen v Olsen
[2022] VSC 95
•1 March 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2021 02709
| NIELS PETER OLSEN | Plaintiff and Defendant by Counterclaim |
| v | |
| BERYL JOY OLSEN (WHO IS SUED IN HER CAPACITY AS EXECUTRIX OF THE ESTATE OF BARRY LESTER OLSEN, DECEASED) | Defendant and Plaintiff by Counterclaim |
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JUDGE: | Ierodiaconou AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 February 2022 |
DATE OF JUDGMENT: | 1 March 2022 |
CASE MAY BE CITED AS: | Olsen v Olsen |
MEDIUM NEUTRAL CITATION: | [2022] VSC 95 |
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PROPERTY – Caveat – Application to remove caveat – Application to remove caveat disallowed – Transfer of Land Act 1958 s 90(3).
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/Defendant by Counterclaim | Mr D K Carlile | Simon Parsons & Co |
| For the Defendant/Plaintiff by Counterclaim | Mr J L Smith | Ruffin Lawyers |
TABLE OF CONTENTS
Summary.............................................................................................................................................. 1
Evidence............................................................................................................................................... 1
The land............................................................................................................................................... 2
Background......................................................................................................................................... 3
Applicable principles........................................................................................................................ 4
Is there a serious question to be tried?.......................................................................................... 5
Claims in this proceeding............................................................................................................ 5
Beryl’s submissions....................................................................................................................... 7
Niels’ submissions........................................................................................................................ 8
Analysis.......................................................................................................................................... 9
Does the balance of convenience favour maintenance of the caveat?..................................... 9
Beryl’s personal circumstances................................................................................................. 10
Beryl’s submissions..................................................................................................................... 11
Niels’ submissions...................................................................................................................... 12
Analysis........................................................................................................................................ 12
Conclusion......................................................................................................................................... 13
HER HONOUR:
Following the death of a family member, a property dispute has arisen amongst a family of farmers in South Gippsland. This ruling determines whether a caveat should be removed.
The application for removal of the caveat is made by Beryl Olsen.[1] She is the defendant and plaintiff by counterclaim in these proceedings. Beryl is the widow of Barry Olsen and the executrix of his will.[2] Barry and Beryl have three adult children: Niels Olsen, Ross Olsen, and Susan Olsen.[3] Niels is the plaintiff and defendant by counterclaim in these proceedings. He caused the subject caveat to be registered.
[1]To avoid confusion, I shall refer to family members by first name.
[2]Affidavit of Beryl Joy Olsen sworn 8 November 2021, [4].
[3]Ibid.
Summary
For the reasons outlined below, I will disallow Beryl’s application. I am satisfied that Niels has a prima facie case, and the balance of convenience favours maintenance of the caveat.
Evidence
Leave was given for the parties to rely upon affidavits filed in a related proceeding (discussed below).
Beryl relies on her affidavits sworn on 18 October 2021 (‘Beryl’s first affidavit’), 8 November 2021 (‘Beryl’s second affidavit’), 17 November 2021 (‘Beryl’s third affidavit’), 14 January 2022 (‘Beryl’s fourth affidavit’), and 10 February 2022 (‘Beryl’s fifth affidavit’).
Niels relies on his affidavits sworn on 2 August 2021 (‘Niels’ first affidavit’), 11 January 2022 (‘Niels’ second affidavit’), and 3 February 2022 (‘Niels’ third affidavit’).
The land
This dispute relates to a family farm located in South Gippsland. The following parts of the family farm are owned by Beryl or are part of the deceased estate:
(a) five acres where the family home is situated, known as Yarrabin (‘Yarrabin’) – rented by Beryl’s grandson;[4]
[4]Beryl’s second affidavit, [4], Beryl’s fifth affidavit [8].
(b) approximately four acres known as Prickle Patch described in Certificate of Title Volume 10325 Folio 829 (‘Prickle Patch’);[5]
(c) 210 acres known as Hallora described in Certificates of Title Volume 9981 Folios 186 and 187 (‘Hallora’) – farmed by Niels (he entered into a lease regarding this land and there is a dispute about his interest in this land);[6] and
(d) 113 acres known as Colgons (‘Colgons’) – rented by Ross.[7]
[5]Certificate of Title for Prickle Patch contained at pages 5-7 of Exhibit BJO-1 to Beryl’s second affidavit.
[6]Certificate of Title for Hallora contained at pages 8-9 of Exhibit BJO-1 to Beryl’s second affidavit.
[7]Beryl’s second affidavit, [4], [34].
Beryl is the registered proprietor of Yarrabin, Prickle Patch, and Hallora in her capacity as executrix of Barry’s estate.
Beryl is the registered proprietor of Colgons. Beryl owned Colgons jointly with Barry, and now owns it solely by survivorship.[8]
[8]Ibid, [4].
There were another three properties that were part of the family farm and are now owned by either Niels or Ross:
(a) a 144 acre parcel of land (the ‘144 acres’) – owned by Niels;[9]
(b) a 147 acre parcel of land (the ‘147 acres’) – owned by Ross;[10] and
(c) a 233 acre parcel of land (the ‘233 acres’) – owned by Ross.[11]
[9]Ibid, [24].
[10]Ibid, [26].
[11]Ibid, [26].
The family farm was originally owned by Barry’s parents: Fred and Mary.[12] Barry worked with Fred on the farm whilst he was also developing his own farming interests.[13] Beryl and Barry entered into a partnership to manage those farming interests in 1965.[14] By the 1970s, the family farm included all seven parcels listed above in paragraphs [7] and [10]. When Fred died in 1974, he left a life interest in the farm to Mary, and the remainder interest to Barry.[15] From 1974 until Mary’s death in 1997, Barry operated the farm for the benefit of Mary.[16] When Mary died in 1997, Barry inherited the farm.[17]
[12]Beryl’s second affidavit, [11].
[13]Ibid.
[14]Ibid.
[15]Ibid, [12].
[16]Ibid.
[17]Ibid.
Until quite recently, Beryl resided in the family home on Yarrabin.
In February 2018, Barry leased Hallora to Niels for a period of three years. Niels was paying $2,306 per month.[18] Beryl deposes that Niels’ last rent payment was on 28 January 2021, however, he continues to use Hallora.[19] On the other hand, Niels alleges Hallora is held on constructive trust for him.
[18]Ibid, [27].
[19]Ibid, [33].
In 2002, Barry and Beryl gifted Ross the 147 acres and gave him a written offer to purchase the 233 acres.[20] Ross accepted the offer and paid in full over some years.[21] Ross currently leases Colgons for which he pays $1,026.66 (plus GST) per month.[22]
[20]Ibid, [26].
[21]Ibid.
[22]Ibid, [34].
Background
Barry died on 4 November 2020, and by his last will dated 27 May 2020 he appointed Beryl as executrix.[23] Probate of Barry’s will was granted to Beryl on 4 February 2021.[24]
[23]Niels’ first affidavit, [2].
[24]A copy of probate parchment and Barry Lester Olen’s will contained at pages 1-4 of Exhibit BJO-1 to Beryl’s second affidavit.
On 21 January 2021, Niels lodged Caveat AT967918K over Prickle Patch and Hallora on the grounds of having an ‘implied, resulting, or constructive trust’ over the properties.[25] Niels claims that this constructive trust is the result of representations made to him by Barry, and his detrimental reliance on these representations.[26]
[25]Caveat AT967918K contained at Exhibit “NPO-1” to Niels’ second affidavit. .
[26]Statement of Claim, [4]-[8].
On 2 August 2021, Niels commenced proceedings pursuant to Part IV of the Administration and Probate Act 1958.[27]
[27]The proceeding number for that proceeding is S ECI 2021 02708.
In addition, by writ filed on 2 August 2021, Niels commenced proceedings against Beryl in her capacity as executrix of Barry’s estate. Niels seeks a declaration that Beryl, as executrix of Barry’s estate, holds Hallora and Prickle Patch on constructive trust for his benefit.[28] Alternatively, Niels seeks a declaration that Beryl is estopped by proprietary estoppel from denying his right to title and interest in Hallora and Prickle Patch.[29] Niels seeks an order that Hallora and Prickle Patch be transferred to him.[30]
[28]Statement of claim filed by the plaintiff on 2 August 2021 (‘Statement of Claim’).
[29]Ibid.
[30]Ibid.
By counterclaim filed on 27 September 2021 and summons filed on 15 November 2021, Beryl seeks removal of Caveat AT967918K.[31] Beryl also seeks an order for payment of $20,744, plus GST, for outstanding rent which she alleges that Niels owes pursuant to his lease of Hallora.[32]
[31]Defence and counterclaim filed 24 September 2021, [31] (‘Defence and counterclaim’).
[32]Ibid, Item D.
Applicable principles
The applicable principles are well-established and not in dispute.[33] Turning now to the first question.
[33]Niels referred to Piroshenko v Grojsman & Ors (2010) 27 VR 489, [7]-[11]; Percy & Michele Pty Ltd v Gangemi [2010] VSC 530; Sylina v Solanki [2014] VSC 2; Launer v Carbon Black Lab Pty Ltd [2015] VSCA 126 and Beryl referred to AAGG Developments Pty Ltd v Saafin Constructions Pty Ltd [2020] VSC 768.
Is there a serious question to be tried?
Both parties referred to the claims made in this proceeding. It is necessary to briefly describe some key aspects of the dispute relied upon here.
Claims in this proceeding
Niels deposes that Barry made representations to him in 1977 and again in 1985 that “when [Barry] can no longer work on the farm, half of it will be [Niels’]”.[34] Niels deposes that in 1985, Barry told him that this would include Hallora.[35] By her defence, Beryl denies those representations were made and states that Niels was a child when he alleges that the representations were made and therefore did not have the maturity to discuss the issue of division of family property.[36] Additionally, Beryl’s first affidavit exhibits a copy of Barry’s will dated 13 June 1974 which details his intention for how the farm would be dealt with upon his death.[37]
[34]Niels’ first affidavit, [8], Niels’ second affidavit, [14].
[35]Niels’ second affidavit, [14].
[36]Defence and counterclaim, [4].
[37]Exhibit BO-5 to Beryl’s first affidavit.
Niels deposes that he began working more on the farm from 1974, following the death of his grandfather, Fred.[38] The amount of work he completed increased over time until he left school when he was 17 years old, which was approximately in 1981.[39] Beryl deposes that Niels did not undertake the additional work that he claims he completed, but agrees that the children did assist on the farm.[40]
[38]Niels’ first affidavit, [5].
[39]Ibid, [4]-[11].
[40]Beryl’s first affidavit, [20]-[24].
In around 1981, Niels commenced an agricultural apprenticeship.[41] In 1981 or 1982, he also commenced part-time work at a saleyard.[42] Niels deposes that when he advised Barry that he would like to take up full-time work at the saleyard, Barry advised him that if he did not continue to work on the farm, he would not receive his half share as previously promised.[43] Niels deposes that because of this representation, he did not take up the full-time work at the sale-yard.[44]
[41]Niels’ first affidavit, [11].
[42]Ibid, [12].
[43]Ibid.
[44]Ibid.
Niels deposes that during his apprenticeship, he did not receive adequate pay for his work.[45] He deposes that this is so when taking into account the number of hours he worked per day and the number of days per year.[46] Beryl deposes that Niels was paid “above award wages” and that she and Barry “continued to provide him with free board and lodging and also gifted him livestock from time to time so that he could establish an independent farming operation”.[47]
[45]Ibid, [13].
[46]Niels’ second affidavit, [13]-[17].
[47]Beryl’s first affidavit, [27]-[28].
In 1985, Niels purchased property adjacent to Hallora.[48] He deposes that he commenced work on his own farm whilst continuing to work on the family farm.[49] Niels deposes that the reason for this was because Barry told him that his half of the family farm previously promised would now include Hallora.[50] Niels deposes that the promise of Hallora was repeated in 1996.[51] Niels deposes that in 2004, he was the only person in the family maintaining the land at Hallora.[52]
[48]Niels’ first affidavit, [14].
[49]Ibid.
[50]Ibid, [15]-[16].
[51]Ibid, [18].
[52]Ibid, [20].
Niels deposes that contrary to the representations made to him by Barry, he was not given the land he was promised.[53] He claims that he completed significant work on the farm with little benefit due to his reliance on Barry’s representations. He deposes that the promise of the land was the driving force behind him working and learning the skills to run the farm.[54]
[53]Ibid, [22].
[54]Niels’ second affidavit, [9].
Beryl deposes that Niels was provided with benefits including: a gift of $80,000 to purchase his own farming property, the 144 acres farm at no cost, 64 dairy cows, and a tractor.[55] Beryl also deposes that Barry assisted Niels with his own cattle by providing him with feed, free agistment on the 144 acres, and free use of farm equipment.[56] Niels denies that he was gifted the $80,000 and deposes that it was a loan.[57] Niels deposes that he was not allowed free agistment on the 144 acres.[58] He also deposes that he was gifted “24 or 25 dairy cows”, not the 64 cows that Beryl deposes to gifting.[59] Niels deposes that he was not gifted a tractor, rather, he purchased it in 1986.[60]
[55]Beryl’s first affidavit, [33], [42].
[56]Ibid, [35].
[57]Niels’ second affidavit, [18].
[58]Ibid, [19].
[59]Ibid, [22]-[23].
[60]Ibid, [25].
Beryl’s submissions
Niels does not have a serious question to be tried, because the requirements for proprietary estoppel are not established, namely: representation, reliance, and detriment. Beryl denies the representations were made. Niels’ submissions regarding the representations are absurd. The first representation was allegedly made in 1977, when he was a child. It does not refer to Prickle Patch. Both representations are vague. Niels does not allege that Barry said the land would be gifted to him. There is no language suggestive of a binding commitment.
The representations are at odds with Barry’s will and his circumstances, namely that he was married to Beryl, and that there were three children of the marriage. Niels is effectively saying that Barry did not intend to make provision for Beryl, but to give half of everything to his sons. This is absurd.
By 1985, the time of the alleged second representation, Niels was married and had established his own farming operation. Niels has not referred to the gifts he received from his parents, including the 144 acres.
Niels has not established that he relied upon the representations, and that his reliance was reasonable. It could not be reasonable when its ultimate consequence would be that his parents would be forever prohibited from selling Prickle Patch to fund their retirement in circumstances where they, as farmers, had no assets other than land to do so. Niels must establish, too, that Barry knew he would rely upon the representations. It could not be reasonable to rely on the first representation made when he was a child. There is a large unexplained gap in the pleadings from 1985 to 2020 (when Barry dies).
Niels has failed to establish any detriment. There was no Dickensian arrangement. He left school in Year 11 and was paid as an apprentice on the family farm. Niels achieved a Certificate of Agriculture. He was paid substantial wages by his parents, as well as other benefits, on top of board and lodging.
Moreover, Beryl relies upon a defence of laches and acquiescence. In 2000 or 2002, Barry and Beryl invited Niels to purchase Hallora, but he declined to do so. He admits this in his affidavit material. This is fatal to Niels’ claim. By making the offer, his parents were asserting absolute ownership of the property. If he truly believed he had a proprietary interest in Hallora, he should have commenced proceedings immediately, claiming a constructive trust. He did not, and so he acquiesced in the arrangements. Niels waited until his father was deceased, and that is a reason he should be shut out from his claim. The Court needs to proceed carefully when one person to an alleged conversation is deceased.[61] Beryl is disadvantaged by being unable to rely upon Barry’s evidence, and on that basis a laches defence would succeed.
[61]Laird v Laird & Anor [2021] VSC 352, [175].
Niels’ submissions
There is a prima facie case. Niels relies on his affidavit evidence of the representations. There is no dispute that he worked on the family farm. It was pursuant to a promise or family arrangement. The Court cannot decide that at this time, because it is a factual dispute. Niels relied on the promises made by Barry. They were made to him when he was working on the family farm and so, self-evidently, are reasonable. It made sense that Barry would divide the family farm between his two sons and give them adjacent land. The detriment was that he worked on the family farm for little reward. He joins issue with Beryl’s submissions about some of the benefits he received.
The thrust of Beryl’s submissions related to whether the evidence of Niels will be accepted. They were similar to closing submissions at trial.
As to Beryl’s defence of laches: that is also an issue for trial. It is often determined at the end of a trial, having considered all the evidence. Niels says the promise is not that he would be given the land in 2002 but, rather, he would be given the land once Barry could no longer work on it. Accordingly, there was no crystallisation of the claim at that time because the gift had not crystallised. Barry continued to work on the land. Niels’ evidence is that Barry was still working in 2018.[62]
[62]Niels’ second affidavit, [35].
Analysis
Niels has established there is a serious question to be tried on the question of whether he has an interest in Prickle Patch on the basis of proprietary estoppel or a constructive trust. He has pleaded the necessary elements and deposed as to the material facts he relies upon.
As is evident, there is a factual dispute here. Beryl’s submissions essentially invite the Court to conclude that Niels’ evidence of the representations is not credible and that it is implausible for him to have relied upon the representations and suffered any detriment. These are issues to be canvassed at trial. So too is the question of whether Beryl can rely upon a defence of laches or acquiescence.
Does the balance of convenience favour maintenance of the caveat?
Beryl’s circumstances changed significantly between the making of this application and the hearing.
Beryl’s personal circumstances
Beryl is 80 years old and until recently, she resided in the family home at Yarrabin.[63] This property is quite isolated, the mobile service is unreliable and there are limited shops and medical facilities nearby.[64] Beryl deposes that earlier in 2021, she had a fall and was unable to call for help for hours.[65] Subsequent x-rays indicated that she had fractured her hip and leg.[66] Beryl’s medical practitioner recommended that she move into accommodation that is close to medical facilities and with mobile telephone reception.[67] As discussed below, that is what she has now done.
[63]Beryl’s second affidavit, [41].
[64]Ibid.
[65]Ibid, [42].
[66]Ibid.
[67]Exhibit BJO-2 to Beryl’s third affidavit.
Beryl deposes that she and Barry planned to sell Prickle Patch and had commenced work preparing it for sale in 2020, prior to Barry’s death.[68] Beryl deposes that she would like to continue with this plan and has listed Prickle Patch for sale.[69] She deposes that she has received an offer to purchase it.[70] Beryl deposes that Prickle Patch is the only property within the farm that can be sold because: Yarrabin provides the only livestock and machinery access for Ross’ property and Colgons is her only current source of income. Further, Hallora was another source of income until Niels ceased his rent payments, and the sale of Hallora would provide more capital than she requires at this stage.[71]
[68]Beryl’s first affidavit, [60].
[69]Beryl’s second affidavit, [45].
[70]Ibid, [46].
[71]Ibid, [47].
On 19 November 2021, Beryl entered into a contract to purchase a three-bedroom unit in town for $510,000.[72] Settlement was completed on 14 February 2022.[73] In order to fund this purchase, Beryl used a large amount of her savings and supplemented the remaining balance with a mortgage of $170,000.[74] Beryl deposes that her savings will be reduced to approximately $58,000.[75] She also deposes that her income will be limited to: $1,026 per month, being lease payments from Ross for Colgons, and $866.66 per month from her grandson who is renting Yarrabin.[76] Beryl deposes that her current liabilities will exceed her yearly income by $21,109.[77] She also deposes that she is concerned that, unless Prickle Patch is sold, she may default on her mortgage or be unable to meet other essential liabilities.[78]
[72]Contract of Sale signed 19 November 2021 is contained at exhibit BJO-1 to Beryl’s fifth affidavit.
[73]Beryl’s fifth affidavit, [6].
[74]Ibid.
[75]Ibid, [7].
[76]Ibid, [8].
[77]Ibid, [9].
[78]Ibid, [10].
Beryl deposes that she purchased her town property prior to the finalisation of this application due to the urgency of her need for new accommodation and anxiety about remaining at Yarrabin.[79]
[79]Ibid, [4].
Beryl’s submissions
The balance of convenience is in favour of Beryl given the circumstances above. Her financial circumstances are teetering: her expenses outweigh the income generated from rent, and her savings have been reduced by the purchase of the home in town. Her substantial asset base is tied up in litigation.
In reply to Niels: Beryl cannot sell another parcel of land. It is not that simple. Yarrabin provides the only vehicle access to Ross’ property, and she receives income from renting Yarrabin to her grandson. It is also subject to a caveat lodged by Niels. Colgons is leased to Ross and is Beryl’s only reliable source of income. If sold, it would up‑end Ross’ farming operations. Hallora is leased to Niels. On the other hand, Prickle Patch is not being gainfully used and was being prepared for sale. Barry and Beryl planned for many years to sell it. Beryl says she has a willing buyer. Niels does not say he has ever used Prickle Patch or accessed the water source there. It is not adjacent to Niels’ property. It is not an essential part of the Hallora farmland. It is across the road from it. There is no reason an undertaking as to damage would not suffice.
Niels’ submissions
Beryl is a party to this proceeding in her capacity as executrix of Barry’s estate. Her personal circumstances are unfortunate, but she is not a party in her personal capacity. Beryl’s expenses listed in her affidavit concern both personal matters, and expenses that are estate matters, such as farm insurances, and water charges and rates for Hallora, Colgons, and Yarrabin.
There is no reason why the estate should have any problem paying its expenses. The estate does not suffer as a result of maintenance of the caveat.
The inventory of assets for Barry’s estate contains a value of $2.7 million. Shares are contained in the inventory. There is no reason the shares cannot be sold if Beryl has a pressing financial need. Vehicles are also listed, and it is not evident what has happened to them.
Beryl’s first affidavit does not identify Colgons as an asset. It could be sold. It fronts on to a road. No lease has been produced. It could be sold subject to lease if necessary. Colgons has not been given a value.
Analysis
The inventory of assets and liabilities contains assets amounting to $2.78 million and no liabilities.[80] There is no evidence to suggest the estate cannot meet expenses.
[80]Exhibit BO-2 to Beryl’s first affidavit.
Moreover, the inventory lists Barry’s personal assets, including shares, amounting to approximately $132,000. Beryl appears to be the residuary beneficiary of the deceased estate.[81] There was no explanation of why these personal assets could not be sold and distributed.
[81]Will contained in Exhibit BO-1 to Beryl’s first affidavit.
I agree with Niels’ submission that the list of expenses Beryl has identified in her affidavit include estate expenses.[82] It appears that her costs may exceed her income by about $10,000 per annum. However, she also has savings. Moreover, as discussed, there are shares and other assets, and there was no explanation as to why, as the executrix of the estate and its beneficiary, she could not sell Barry’s personal assets. Of course, Beryl is also the owner of Colgons and would have a number of options regarding that, should she have financial difficulties.
[82]In particular, items (i)-(l) and perhaps item (f). Expenses are listed in Beryl’s fifth affidavit, [9].
On the other hand, Prickle Patch is unique, primarily because of its proximity to Hallora (across the road). It also contains spring water. If sold, damages are not likely to be an adequate remedy.
Finally, there is no trial date listed. However, the parties have filed substantial material in the proceeding and I anticipate that it will be listed for trial shortly.
Weighing up all factors, I consider the balance of convenience favours maintenance of the caveat.
Conclusion
I will make orders dismissing the application and hear the parties on costs.
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