Pearson v Williams

[2001] VSC 509

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 4842 of 2001

DONALD ROSS PEARSON and TIMOTHY ROBERT PEARSON	Plaintiffs
v
FRANCES RAE WILLIAMS and MARJORIE ISABEL PEARSON	Defendants

---

JUDGE:	Ashley J
WHERE HELD:	Melbourne
DATE OF HEARING:	20,21,22,23,24,27,28,29,30 and 31 August 2001
DATE OF JUDGMENT:	20 December 2001
CASE MAY BE CITED AS:	Pearson and Anor  v Williams and Anor
MEDIUM NEUTRAL CITATION:	[2001] VSC 509

---

Equity – proprietary estoppel – representations made and expectation created that rural land and farming business would be inherited by nephew – hard work performed, for long hours, with few holidays and for little remuneration – other opportunities eschewed – whether in reliance upon expectation – change of position  – nephew "disinherited" – whether detriment – whether reliance - whether intention that plaintiffs act or refrain from acting in reliance upon expectation – whether knowledge of action or inaction in reliance – appropriate relief – imposition of constructive trust.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr A. Southall, QC with Mr R. McGarvie	Oakleys McKenzie-McHarg
For the First-named Defendant	Mr D. Collins with Mr C. Horan	Arnold Bloch Leibler
For the Second-named Defendant	Mr G. Nash QC	Cornwall Stodart

TABLE OF CONTENTS

Introduction and Personalia............................................................................................................ 1

The Land and Business..................................................................................................................... 1

Present Ownership of the Land and Business............................................................................. 2

Earlier Ownership and Disposition of the Land;  Dispositions of Business Property...... 3

The Work done by Ross and Tim Generally Described............................................................ 5

An Expectation that one day the Land and Business would all be inherited by Tim.......... 6

Frances’ Change of Position............................................................................................................. 7

The Sisters’ Wills............................................................................................................................... 7

Marjorie’s Wills............................................................................................................................. 7
Frances’ Wills................................................................................................................................. 8

The Claim Generally Described.  The Principles which apply............................................ 11

The Leading Witnesses:  Credibility and Reliability.............................................................. 18

Representations................................................................................................................................ 22

A.       Representations allegedly made to Ross, Marjorie and third persons...................... 24

(1)  At the Stockyards.................................................................................................................. 24
(2)  The Dwyer Conversation..................................................................................................... 24
(3)  Meeting in Mr Hanrahan’s Office 11 April 1986.............................................................. 26
(4)  The Cope Conversation........................................................................................................ 31
(4)  The Dunlop Conversation.................................................................................................... 32
(5)  The Crown Grant Conversation.......................................................................................... 32
(6)  The New Partnership Discussion....................................................................................... 33
(7)  The 1992 Wills Discussion................................................................................................... 34
(8)  The Holden Statesman “ute”............................................................................................... 36
(9)  The Wilson Conversation..................................................................................................... 37

1. The Morris-Thomas Conversation.................................................................................. 37

2. The Mitsubishi Magna Discussion................................................................................. 38

3. The Proposed Subdivision of Dunlops.......................................................................... 39

4. The Perrett Conversation................................................................................................. 40

5. The Remark made to Mrs Murdica................................................................................ 41

B.       Representations allegedly made to Tim.......................................................................... 42

(1)  Conversations between Marjorie and Tim........................................................................ 42
(2)  Conversation between Frances and Tim, March 1996..................................................... 43
(3)  Other Conversations involving Marjorie, Frances and Tim........................................... 43
(4)  A Remark repeated to Tim.................................................................................................. 46

Detriment, Reliance, Intention, Knowledge............................................................................... 46

Remedy............................................................................................................................................... 80

Orders................................................................................................................................................. 87

HIS HONOUR:

Introduction and Personalia

1. Before me is a writ filed 9 March 2001 by which Ross and Timothy Pearson seek both equitable and contractual relief against Frances Williams and Marjorie Pearson.  The substantial defendant is Frances Williams.  Marjorie Pearson, as will be seen, makes common cause with the plaintiffs. 

1. Donald Ross Pearson (“Ross”) is the husband of Marjorie Pearson (“Marjorie”).  He is aged 58 having been born on 7 September 1943.  They married on 24 January 1970. 

1. Timothy Pearson (“Tim”), born 17 August 1974, is the adopted son of Ross and Marjorie Pearson.  He has an adopted sister, Angela, who is a little younger. 

1. Marjorie is the sister of Frances Williams (“Frances”).

1. Frances and Marjorie are the daughters of Thomas and Marjorie Cashin.  The daughters were born respectively on 31 August 1944 and 17 October 1947.

1. Thomas Cashin died 16 December 1985.  He left a will dated 7 September 1978.

1. Marjorie Cashin died 7 July 1996.  She left a will dated 15 July 1992.

1. At all times until 5 February 2000 Frances was a single woman.  But on that day she married Trevor Williams, a retired Uniting Church Minister who had been widowed in December 1998.  They had announced their engagement to Ross, Marjorie, Timothy and his wife at a birthday party for Frances held on 27 August 1999.  Until Frances’ marriage, and after her parent’s deaths, Marjorie was Frances’ closest living relative.  Tim was and remains her only nephew and Angela her only niece. 

The Land and Business

1. The proceeding concerns farming land at Middle Tarwin in South Gippsland (“the land”), together with a business constituted by beef cattle run on that land and pertinent plant and equipment (“the business”).  It further concerns work done on the land by Ross and Tim.

1. The land consists of the following properties:

¨    “Home Farm”

¨    “Macs”

¨    “Days”

¨    “Dunlops”

¨    “The Bush”

1. Each of Home Farm and Macs is on one Certificate of Title.  Days, Dunlops and The Bush are each on two Titles.

1. Home Farm and Macs adjoin.  In all they amount to 293 acres.  The Bush and Dunlops adjoin.  In all they comprise 1262 acres.  Days alone has a Tarwin River frontage.  It is 184 acres in area.

1. The evidence shows that the properties are heavy carrying and extremely well improved.  There are yards on each of Dunlops, Home Farm and Days.  There is shedding on Dunlops.  Water for Dunlops is reticulated from a storage on The Bush.  The fencing is first rate.  There is electrification of fencing using solar powered energisers.  A concrete silage bunker has been erected on The Bush.  At one stage it was used in a type of lot-feeding programme.  The pastures are highly improved.  There has been regular and considerable application of fertiliser. 

1. Testimony to the state of improvement of the land, as well as to stock management, is the fact that some 2000 beef cattle, including breeding cows, are now run on the properties and a leased property of 340 acres known as “Nisa Bula”.  Further testimony to the state of improvement of the land, as well as to stock management, is the fact that the stock for a long time have made premium prices.  Presently bullocks are sold to the Jap Ox and European markets. 

Present Ownership of the Land and Business

1. Frances and Marjorie are registered as the proprietors as tenants in common in equal shares of the five properties.  They also own the stock, plant and equipment as tenants in common in equal shares.

Earlier Ownership and Disposition of the Land;  Dispositions of Business Property

1. At the times of Mr Cashin’s death in December 1985 he was the registered proprietor of Home Farm, Macs and The Bush.

1. He and his wife were registered proprietors as tenants in common of Days and Dunlops.

1. He and his wife conducted the business in partnership as equal partners.

1. By his will dated 7 September 1978 he appointed his wife and daughters his executrices and trustees.  He bequeathed his interest in his stock to his daughters as tenants in common in equal shares.  He bequeathed his interest in plant, vehicles and effects used in the farming partnership to Marjorie.  He gave a life interest in a property at 7 McDonald Street, Leongatha to his widow, with the property or proceeds of sale to go to Frances absolutely on the death of his widow.  He and his wife, it is here convenient to note, had lived at 7 McDonald Street for a considerable period before his death. 

1. He provided, as to the balance of his real estate, that subject to his trustees exercising power of sale it be held for his daughters as tenants in common in equal shares.  If a daughter predeceased him, but left a child or children, then that daughter’s share was to go to such child, or, if there was more than one child, to the children in equal shares.

1. In the event, neither of his daughters predeceased Mr Cashin.  When his estate was wound up the situation was this (remembering that interests were held as tenants in common): 

Land Home Farm, Macs, Bush: Dunlops, Days:	Frances 50%, Marjorie 50% Mrs Cashin 50%, Frances 25%, Marjorie 25%
Stock	Mrs Cashin 50%, Frances 25%, Marjorie 25%
Plant and equipment	Mrs Cashin 50%, Marjorie 50%

1. Mrs Cashin’s last will was made, as I said earlier, on 15 July 1992.  At that time, and at her death in July 1996, the farming partnership which had in Mr Cashin’s life been carried on between he and his wife had been superseded by partnership in which the partners were Mrs Cashin, Frances and Marjorie.  There had been a period in which the farming business had been carried on by Mr Cashin’s estate and Mrs Cashin in partnership.  That period had ended in mid-1988.

1. By her will Mrs Cashin appointed her daughters her executrices and trustees.  She made small specific bequests to each of Tim and Angela.  She left a property at 5 McDonald Street, Leongatha to Frances.  She left the balance of her real property – critically her interest in Dunlops and Days – to Frances and Marjorie as tenants in common in equal shares.  She left the residue of her estate – which thus included her interests in partnership stock and plant and equipment – to her daughters as tenants in common in equal shares.  Her will, in substance, resulted in the situation being as follows:

Land:	all land owned by Frances and Marjorie as tenants in common in equal shares
Stock:	owned by Frances and Marjorie as tenants in common in equal shares
Plant and equipment:	Marjorie’s interest 75%,  Frances’ interest 25%

1. After Mrs Cashin’s death a farming partnership was constituted by Frances and Marjorie.  It continued until 30 June 2000.  On that day it was dissolved, as Frances claimed, by notice first given on 27 August 1999 and on several occasions thereafter. 

1. A dispute arose between Frances and Marjorie concerning dissolution of the partnership.  Frances commenced a proceeding against Marjorie in this Court on 29 June 2000[1].  That proceeding was settled very shortly before trial.  The Terms of Settlement were said to be of some significance to the present proceeding.  I will refer to them later.

   [1]Writ 5934/00.

The Work done by Ross and Tim Generally Described

1. Ross went to work on the Cashin properties in about July 1969.  He was then aged 26.  He had been brought up on a dairy farm at Dumbalk, and after leaving school he had worked in dairying until leaving to go to work for Mr Cashin.

1. Since 1969 Ross has worked continuously on the properties.  Over the years his work assumed a more managerial role.  After Mr Cashin’s death he formally assumed the title of manager.  But throughout his work has involved daily hands-on activity.  He has worked, specifically since Mr Cashin’s death, very hard and innovatively for very long hours, for less than adequate wages, without taking proper holidays, and without  any provision of long service leave.  He has done so despite a heart attack leading on to cardiac surgery in early 1996[2].

   [2]And, as opened, but not the subject of evidence, surgery for prostate cancer in November 1999.

1. From a young age Tim was encouraged into farming activities by his grandfather.  Nothing could have been more natural.  He was the only male available to carry on the farming operations in which the Cashin family had engaged at Middle Tarwin over a very long period of time.

1. Tim showed an aptitude for farming.  As a child, he built up his own herd, starting off with orphaned calves.  By the time he left school it was certain, I consider, that his future lay in farming.

1. Tim began employment by the partnership[3] in early 1992.  He was then aged 17.  He continued to work for the partnership, as it was constituted from time to time, until its dissolution on 30 June 2000.

   [3]Then constituted by Mrs Cashin, Frances and Marjorie.

1. I am abundantly satisfied that throughout the period between January 1992 and June 2000 Tim worked very hard and very efficiently for very long hours and for very low wages.  He had little in the way of holidays.  He learned much from his father.  His responsibilities increased over the years.  He assumed particular responsibility for a period following the heart attack suffered by his father in March 1996.  It is clear that he managed his increasing responsibilities, and the period of particular responsibility following his father’s heart attack, very well.

1. It is, I think, pretty remarkable that Ross, and later he and his son, have conducted so large a farming operation so well, and with a minimum of assistance, over the period since Mr Cashin’s death.

An Expectation that one day the Land and Business would all be inherited by Tim

1. I am abundantly satisfied, for reasons which I shall later set out, that from a time soon after Mr Cashin’s death Ross had an expectation, which he continued to hold until at least the birthday announcement of August 1999, that one day all the land, stock and plant would be inherited by Tim.  I am further satisfied to the same degree that Tim was of the same expectation even before he commenced paid work for the then partnership in early 1992;  and that he held such expectation until at least the birthday announcement.

1. The expectation held by Ross and Tim was founded on things said by Marjorie and Frances, but particularly Frances.  I say “particularly Frances” because it was never in doubt that Tim would in time inherit his mother’s interest in the land and business.  That left Frances, who acquired an interest in the land and stock upon her father’s death;  and who was, in practical terms, certain to supplement that interest when Mrs Cashin died. 

1. Frances, according to the plaintiffs’ claim, repeatedly represented after her father’s death that, in substance, Tim would inherit her interest in the land and business;  this leading inevitably in the circumstances to the consequence that one day he would inherit all the land and the business.  Indeed, according to the plaintiffs’ case the representation was for the most part couched in those terms.

1. As will later appear, I am satisfied that Frances did make many representations[4] along the lines alleged by the plaintiffs;  and I am also satisfied that they were a cause of the plaintiffs forming the pertinent expectation.

   [4]Sometimes I shall refer to them as “statements”.

Frances’ Change of Position

1. I am satisfied that from the time of her father’s death in 1985 until what I have called the birthday announcement in August 1999 Frances firmly intended that Tim should one day inherit whatever interest she held in the land and business at the time of her death.  She did not always intend during that period that Tim be her immediate beneficiary.  In a moment I will refer to her successive wills, which make the point.  But certainly her intention was that, so far as it was within her capacity to bring it about, one day Tim would inherit all the land and business.  Her firm intention was wholly consistent with her repeated representations, to the detail of which I shall later refer.

1. Commencing with the birthday announcement – which pertinently conveyed an intention of dissolving the partnership – and continued by her later insistence that the partnership be dissolved and by the content of her will dated 4 January 2000, Frances disavowed her previous intention, reflected by the representations which she had made.  The position which Frances has adopted since August 1999 was unreservedly repeated by her in evidence at trial.  As matters stand, then, Tim will not inherit – partly from his mother and partly from Frances – all the land and the business.  The most that he can hope for is to inherit so much of the land and business as his mother retains after dissolution of the partnership has been completed.

The Sisters’ Wills

1. It is now convenient to chart the intended dispositions disclosed by the sisters’ wills.  They show Marjorie’s continuity of intent, and Frances’ change of position.

Marjorie’s Wills

1. Wills made by Marjorie bearing the following dates went into evidence:  16 June 1992[5], 14 August 1998[6] and 14 May 1999[7].  There was thus no will in evidence whose date preceded the date of Mr Cashin’s death.  But nothing turns on that.

   [5]Exh. M.

   [6]Exh. AA.

   [7]Exh. AB.

1. By her 1992 will, prepared by Mr Hanrahan, solicitor to the estate of Mr Cashin and friend of Frances, Marjorie appointed Ross her executor and testamentary guardian of her children;  or, if he predeceased her (or died before her estate was fully administered) then Frances as executrix and guardian.  She left Nisa Bula to Ross.[8]  She left a life interest in her share of the Cashin land and the business to Ross, with Tim to take absolutely after Ross’ death so soon as he attained (if he had not already attained) the age of 25.

   [8]Nisa Bula is a 340 acre property gifted to Marjorie by her father at the time of her marriage to Ross in January 1970.  Ross and Marjorie live on that property.  They have done so since 1970.  So did Tim until recent years.  The property has been leased to the successive farming partnerships.

1. By her 1998 and 1999 wills the essential pattern of the 1992 will was retained;  see clauses 4, 5(a) and 6.  A specific provision addressed what might be thought to be an imbalance in the dispositions to Tim and his sister;  see clause 11.

1. Marjorie’s overall intention concerning the land and the farming business over the period spanned by these wills was clear:  Nisa Bula was to be left to her husband.  Her share in the Cashin land and the business, together with any share in such land and business left to her by Frances, was to go to Tim.

1. Marjorie, as I have said, is a defendant to the proceeding.  But in name only.  She adheres to her intention that Tim should inherit whatever interest she has at the time of her death in the land and business. 

Frances’ Wills

1. Wills made by Frances bearing the following dates went into evidence:  16 June 1992[9], 5 August 1997[10], 22 May 1998[11], and, 4 January 2000[12].  Each of the wills, and a codicil dated 21 September 1999[13], was prepared and its execution was witnessed by Mr Hanrahan.

   [9]Exh. N.

   [10]Exh W.

   [11]Exh. X.

   [12]Exh. Z.

   [13]Exh. Y.

1. By her 1992 will Frances appointed Marjorie and Ross as her executors and trustees.  She made small specific bequests – eight in all, totalling $7,000.  She gave all her rural real estate and her interest in the farming business to Marjorie absolutely;  or if Marjorie predeceased her then to Tim on his attaining the age of 25 years.  She gave the residue of her estate to Angela, Tim’s sister.

1. By her 1997 will, made about 14 months after her mother’s death, Frances appointed a different executor and trustee.  Importantly, with respect to her rural land and her interest in the business, she provided that Tim should take absolutely at age 25.  Marjorie was thus written out of the will.

1. By her 1998 will a change was made whereby the vesting age for Tim (and Angela) became 30 in lieu of 25.

1. The codicil made on 21 September 1999, that is, not long after Frances and Mr Williams had announced both their engagement and Frances’ intention to withdraw from the farming partnership, saw the appearance of Mr Williams as a beneficiary – of Frances’ stocks, shares, notes and debentures in any company.

1. The will of 4 January 2000 was expressly made in contemplation of marriage.  It undoubtedly made radical changes to what had gone before.  Frances appointed Mr Williams as a joint executor.  She made 14 specific monetary bequests.  They totalling $925,000.  They included gifts of $300,000 to the Royal Victoria Eye and Ear Hospital, $200,000 to the Uniting Church in Australia, Melbourne, $200,000 to the Cairnmillar Institute (an organisation set up or conducted by Dr Francis McNab, a man prominent in the Uniting Church), $100,000 to Mr Williams, and $10,000 to each of Tim, Angela and their children and the children of Mr Williams who attained the age of 18.

1. The will further provided that Frances’ residuary estate be held on trust to be applied, in her trustees’ absolute discretion, for the maintenance, education advancement and benefit of any one or more of Tim, Angela and their children for a ten year period, with the balance of capital and income then to be distributed to one or more of the institutions named as specific beneficiaries.

1. Depending upon the trustees’ exercise of discretion, then, it could be the case, assuming Tim outlives Frances, that he will obtain under her will of January 2000 simply the sum of $10,000.

1. In an affidavit sworn 24 October 2000, upon which she was relevantly cross-examined, Frances deposed that she had made a new will which “still makes provision for Tim and Angela but not in the same terms as in my previous will”.  She exhibited part only of her 2000 will to that affidavit.  In evidence she gave an explanation why she had done so. 

1. I consider that each of the language of the affidavit and the explanation were disingenuous.  That said, the objective facts are clear.  It is impossible to regard Frances’ will of January 2000 as other than making a vast change in the status quo.

1. It is convenient before passing on to refer to evidence given by Frances as to why she disinherited her sister by her 1997 will;  and as to why she altered the vesting age, so far as Tim was concerned, by her 1998 will.  Frances said that she did the former because she was upset by her sister’s conduct in requiring her to buy a share in her late father’s interest in the plant and equipment.  She felt that she could no longer trust Marjorie completely[14].  She said that she did the latter because of unease about Tim’s marriage.  She wanted to protect him.[15]

   [14]T.732.

   [15]T.731.

1. Whether the reasons which Frances gave should be accepted is not critical to determination of this matter.  But I am inclined to accept both, and to think that they reflected her determination that Tim should receive her share of the land and her share of the business. 

1. Concerning the first change, Frances said that she “began to wonder what else could happen and so I thought I would do what I did to protect… my inheritance”.  It is, I think, far fetched to imagine that Marjorie would ever have altered her will so as to deprive Tim of any interest in the land and business left to her by Frances.  I find it hard to imagine that Frances could have believed that Marjorie’s conduct concerning the plant and equipment[16] suggested the possibility of behaviour which was entirely inconsistent with Marjorie’s oft-repeated position with respect to the land and the business.  If Frances held no such belief then the change should be regarded, I think, as secretly vindictive.  Strange though her explanation was, I am, as I say, on balance disposed to accept it.

   [16]The conduct was this:  Mr Cashin, by his 1978 will, left his half share in plant and equipment to Marjorie.  By her 1978 will Mrs Cashin did likewise.  Marjorie knew about those provisions.  But by her 1992 will Mrs Cashin left her half share in the plant and equipment to the sisters in equal shares.  When Marjorie found out about this – she said, and I believe, after her mother’s death – she required Frances to purchase 50% of the interest in plant and equipment left by their late father, the consequence being that the sisters would then own the land, the stock and the plant and equipment in equal shares.  Frances agreed.  The plant and equipment was purchased at its 1985 valuation.  After an offset, the amount paid by Frances was $16,000.

1. Concerning the second change, there is not the slightest evidence that in 1998 there was any problem with Tim’s marriage.  But that is not to say that Frances did not perceive that there was or might be some problem;  or that she did not have some doubts generally about the permanence of marriage amongst young people today.  I am prepared to accept that she had some concerns.  In that context her change to the vesting age should be seen as designed to ensure that Tim should receive and should not be deprived of any part of her interest in the land and business.  It might be said that Frances’ explanation was specific for Tim;  yet in Angela’s case also the vesting age had been altered.  So, it might be argued, the explanation was unlikely to be the truth of the matter.  Neither of those propositions was in fact advanced.  Had they been, I should have thought that the likely explanation was symmetry.

The Claim Generally Described.  The Principles which apply

1. The nature of this proceeding, against the backdrop of the circumstances so far described, can now be outlined. 

1. By their Further Amended Statement of Claim (“the statement of claim”) the plaintiffs lay their claim in a number of ways.  Not all of them were pursued at trial.  Those that were pursued were not all pursued exactly as they were pleaded.  I deal with the case as it was finally articulated – about which there was no room for doubt.

1. The plaintiffs’ main contentions at trial were essentially these: 

(1)Frances, after her father’s death in December 1985, represented, promised and/or induced or encouraged the assumption and expectation in Ross and Tim that the land and business would always remain in the family, and that her interest therein would ultimately be inherited by Tim.

(2)Ross from the time of Mr Cashin’s death, and Tim from early 1992, worked on the farms in the way they did and for the remuneration they did, and acted or eschewed from acting in other ways, in reliance upon the assumption or expectation that Frances’ interest would ultimately be inherited by Tim.

(3)In so doing Ross and Tim each acted to their substantial detriment, measurable not simply by events which had occurred, but also by the consequences to them if that assumption or expectation was not fulfilled.

(4)Frances knew or intended that Ross and Tim would act or abstain from acting in reliance on that assumption or expectation.

(5)In the circumstances Frances’ conduct was unconscionable.  She should be estopped from denying that Tim was entitled to become the ultimate owner of her interest in the land and business.  A constructive trust should be erected, it being declared that Frances held her interest in the land and business on trust for Tim.  To bring finality to the matter, an order should be made for the conveyance of her interest in the land to Tim;  and an order for the disposition of her interest in the business. 

1. The plaintiffs pursued other claims at trial;  though not unconditionally.  First, each of them raised a claim for equitable compensation.  So far as Ross is concerned, the claim was one for long service leave provision, unused annual leave, damage to personal tools used in partnership activities, personal and motor vehicle expenses, persistent under-remuneration and consequential loss of opportunity.  So far as Tim is concerned, the claim was one for pro-rata long service leave provision, unused annual leave, the value to the partnership of a tractor owned by Tim and operated by him in partnership work, and persistent under-remuneration.

1. Second, each of the plaintiffs raised, in part alternatively to the claim for equitable compensation, a claim based upon alleged contractual entitlement.  It was confined in each instance to a claim for (pro-rata) long service leave and for unused annual leave.

1. Having said that the plaintiffs raised claims additional to what was evidently the main claim I should add that counsel for Ross specifically abandoned his client’s claim both to equitable and contractual damages in the event that a constructive trust was impressed in favour of Tim.  He made it clear that it was his client’s predominant concern that Tim obtain the promised interest in the land and business.  Further, counsel abandoned Tim’s money claims in the event that a constructive trust was impressed.

1. The principles which apply in a case such as the present have been recently discussed and applied in Giumelli and Anor v Giumelli[17];  Flinn v Flinn and Anor[18];  Gillett v Holt[19]; and Rogers v Rogers[20].  For the most part those principles were not in dispute.  I should highlight some of them.

   [17](1999) 196 CLR 101.

   [18][1999] 3 VR 712.

   [19][2001] Ch 210.

   [20][2001] VSC 141.

1. First, the relief primarily sought by the plaintiffs is the erection of a constructive trust.  The connotation of that term in a case of the present kind was explained in the majority judgment in Giumelli[21].

   [21]At paragraphs 2-5.

1. Second, in such cases the constructive trust, proprietary in nature, is founded in an equity which arises from an assumption or expectation as to the future acquisition of ownership of property which has been induced by representations upon which there has been detrimental reliance by the plaintiff.[22]

   [22]Giumelli, at paragraphs 5-6.

1. Third, equity is relevantly concerned to prevent unconscionable conduct on the part of the defendant.  That is why, if a plaintiff is to succeed in such a case, something more is needed than simply a promise or representation in reliance upon which acts are done or omitted to be done.  The “something more” may take the form of creation or encouragement of an assumption or expectation that the promise will be performed or representation made good;  and reliance upon that assumption or expectation.

1. Fourth, depending on the circumstances, a promise to leave property by a will is to be understood to be a promise not of making a revocable testamentary instrument, but of a gift by will taking effect on death.[23]

   [23]Flinn, at paragraphs 75-76.

1. Fifth, in considering whether a promise or representation is capable of founding an estoppel, as being sufficiently certain, the authorities exhibit a liberal approach.[24]

   [24]Flinn, at paragraphs 80-94.

1. Sixth, reliance or inducement must be established.  But it is not necessary to show that the promises or representations relied upon were the sole cause of particular action or inaction.  It is enough if they were an inducement.  Moreover, a “commonsense and rebuttable presumption of fact” may arise “from the natural tendency of a promise”[25].

   [25]Flinn at paragraph 117;  see also Gillett, at 226H, citing Balcombe LJ in Wayling v Jones (1995) 69 P and CR 170 at 173, the latter authority being also cited by Brooking JA in Flinn.

1. Seventh, detriment is an essential ingredient of proprietary estoppel.  But what will constitute detriment?  In Gillett, Robert Walker LJ said this:

“But the authorities also show that it is not a narrow or technical concept.  The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial.  The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the  circumstances."

and

“There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it.  Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded – that is, again, the essential test of unconscionability.[26]

[26]At 232 D-F.  His Lordship pointed out that the second series of propositions derived from Spencer Bower & Turner on Estoppel by Representation, 3^rd Ed, and traced back to the judgment of Dixon J in Grundt v Great Boulder Gold Mines Ltd.  Those propositions, he accepted, applied to proprietary estoppel.

1. In Grundt Dixon J said that

“the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it.”[27]

What his Honour said aligns with observations in the majority judgment in Giumelli[28] approving the approach of Rowland J, sitting in the Full Court of the Supreme Court of Western Australia.  Rowland J had said that even if the plaintiff had not suffered an appreciable loss of income by remaining in a farming partnership over a period of years in reliance on the defendants’ representations, the detriment suffered by him was the loss of the property which he worked to improve, not to obtain immediate income but to gain the proprietary interest.  For that, he gave up the opportunity of a different career path.

[27](1938) 59 CLR 641 at 674-675.

[28]At paragraph 27;  noted as pertinent by Brooking JA in Flinn at paragraph 121.

1. Eighth, in determining what relief should be granted (if relief is appropriate) the court must look closely at the circumstances of the particular case to see in what way the equity can be satisfied.  It should approach the matter cautiously, in order to achieve the “minimum equity to do justice to the plaintiff”[29].  Clear it is that the court is not precluded from requiring the party stopped to make good the assumption.  On the particular facts, such an order was made in Flinn and (in substance) in Gillett.  But, on the particular facts, it was otherwise in Giumelli and in Rogers. 

   [29]The language of Scarman LJ in Crabb v Arun District Council [1976] Ch 179 at 198, cited with approval in Gillett at 235 E-F; and, more importantly, compatible with the approach in principle in The Commonwealth v Verwayen (1990) 170 CLR 394, relevant observations being collected in Giumelli at paragraphs 42-47. See also Flinn at paragraph 119.

1. Ninth, in moulding an order the Court should deal with the situation, including detriment suffered, as it exists when the order is formulated.  So, in the present case, the Court was urged by counsel for Frances to take into account the effect of the very late settlement of the partnership dispute – it giving Marjorie the opportunity of acquiring partnership assets, particularly Frances’ interest in the land and stock, at values applying as at 30 June 2000.

1. Thus far I have dealt with principles disclosed by the authorities.  I must mention two further matters.  One was in dispute, the other not.  I deal first with the matter which was in dispute.

1. In the course of his final address counsel for Frances made a considerable number of submissions referring to lack of demonstrated benefits accruing to his client in consequence of the impugned representations.  So, he submitted that Frances did not make the statements “to induce Ross or Tim to act for her benefit or their detriment”;  and that it had not been argued for the plaintiffs “that she made the statements for the purposes of inducing the plaintiffs to act to give her such a benefit”[30].  He referred to detriment alleged by the plaintiffs, and asked rhetorically:  “What benefits is it said that Frances unconscionably seeks to retain”[31].  He analysed certain evidence with a view of showing that in fact his client had not obtained much of a return on her capital investment between 1986 and 2000.

   [30]T941.

   [31]T945.

1. Pressed by me, counsel at first conceded that benefit to his client was not a matter essential of proof by the plaintiffs.  Nonetheless, it was “one of the matters in the round”[32].  It was to be found, explicitly or sub silentio, in the cases.  Later he submitted that whilst it might not be an essential element in every case, it was important in determining whether the conduct was unconscionable[33].

   [32]T985;  a reference to what was said by Robert Walker LJ in Gillett at 225D.

   [33]T987.

1. Counsel for the plaintiffs submitted that there was nothing in the authorities to say that for every detriment there must be a corresponding benefit.  This was not a contract case turning upon the presence or absence of consideration.  What was relevant was detriment to the plaintiffs.  But in any event, counsel contended, if benefit was pertinent, then benefit to Frances there had been.

1. In some of the cases it is clear enough that detriment occasioned by a plaintiff has been mirrored by benefit accruing to a defendant.  In Rogers, Hansen J said that “Benefit to the defendant provides a mirror image of detriment suffered by the plaintiff[34].  His Honour then analysed benefit which accrued to the defendant in that case.

   [34]At paragraph 82.

1. It can be said to be the situation, I think, that in some, perhaps many, cases detriment suffered by a plaintiff will be reflected in benefit accruing to a defendant.  I think it is not unreasonable to say that detriment may more readily be detected if there is corresponding benefit;  and that benefit for a defendant at the expense of or detriment to a plaintiff may underline the unconscionable character of a particular defendant’s conduct.  But I doubt that detriment will always be mirrored by benefit.  At least that is so unless benefit be given a very wide meaning.  Further than that, I think there is no authority for the proposition that a finding of unconscionability depends upon proof of both detriment and corresponding benefit.

1. I go to the further matter which was not in dispute.  Although Ross is a plaintiff, no question of a constructive trust being declared in his favour arises.  Rather, the plaintiffs contend that conduct by Ross to his detriment in reliance on the expectation that Tim was to inherit Frances’ interest in the farming land and business constitutes part of the circumstances by which it would be unconscionable if Frances were not now held to the expectation which she created.

1. It was not submitted for Frances that a claim so pleaded and developed was conceptually flawed.  I think there have been other cases in which such a claim has in substance been raised.[35]  Having regard to the way in which the claim was pleaded, and the trial conducted, I will assume that the main claim as formulated, so far as it pertains to Ross, was legally tenable.

The Leading Witnesses:  Credibility and Reliability

[35]Rogers may have been such a case.  But there the person in the position of Ross was not a plaintiff – the circumstances being otherwise different. 

1. Having set out some of the circumstances of the matter, the claims raised by the plaintiffs and the applicable principles, I must address matters which were in dispute at trial.  But before doing so I should say something about the credibility and reliability of the leading witnesses.

1. Rarely have I encountered a proceeding in which the advantage of seeing and hearing the leading witnesses was more strongly apparent than in this matter.  The following is my assessment of those witnesses expressed in the order in which they gave evidence. 

1. Ross Pearson impressed me as a man proud of his hard work and his achievements and proud of his son’s development as a farmer.  He further impressed me as a man who felt wronged by what Frances had done.  From his perspective, Frances had committed herself over a long period to leaving her interest in the land and business to Tim;  and had then reneged.  His recollection of when Frances had allegedly made a disputed statement of intent at a meeting held in Mr Hanrahan’s office in 1986 involved reconstruction;  but I reject the submission made for Frances that the attributed statement was a belated invention.  I think it likely that Ross has an animus against the Reverend Williams.  I conclude that he attributed to Mr William’s a remark – at the birthday party held on 27 August 1999 – which in terms Mr Williams did not make.  But I conclude that a remark was made whose effect was not much different to the remark attributed to Mr Williams by Ross.  In all, despite his feelings adverse to Frances and Mr Williams, I consider that Ross was a credible and generally reliable witness.  I add that I am very confident that his evidence as to what he and Tim did over the years on and concerning the farm was unimpeachable.

1. Marjorie Pearson impressed me as a woman devoted to her husband, her son and retention of what she sees as the family farm.  I do not doubt that she harbours very strong feelings against her sister, whom she sees as someone who has obtained certain advantages in family dispositions which she has not earned.  I think that this attitude was reflected in her suggestion to Frances that the latter’s loan to the partnership be paid out and that the partnership refinance at a lower rate of interest (Frances would certainly have received a lower rate of interest at the time had she been forced to reinvest) and in her requirement that Frances buy – albeit at 1986 values – 50% of the interest in plant and machinery left her by their late father.

1. It is, I think, also very clear that Marjorie feels betrayed by what Frances did in retiring from the partnership and changing her will.

1. The question arises whether Marjorie’s evidence should be accepted generally, and in particular in those instances where it conflicted with, or at least was at odds with, the evidence of Frances or the evidence of Mr Hanrahan.  Not without some doubt, I think that the answer to that question is for the most part yes.  The matter that has caused me most doubt is the statement of intention attributed by Marjorie to Frances at a meeting in Mr Hanrahan’s office in 1986.  In the end I conclude, see these Reasons elsewhere, that such a statement was made – although contrary to Marjorie’s evidence the meeting was not held on 31 January 1986.  I should add that I have been careful to consider whether Marjorie overstated the plaintiffs’ case in her evidence.  In the end I have concluded that she did not do so.  In almost every instance the evidence which she gave was compatible with other evidence – whether viva voce or documentary.

1. My impression of Tim Pearson was an entirely favourable one.  I formed a clear conclusion that his evidence was reliable and credible.  That conclusion requires no elaboration.

1. Frances Williams:  Counsel for Frances pressed upon me a conclusion that his client was a truthful person who had been honest in saying what she could and could not remember.  She had been liberal in describing other witnesses as truthful people. 

1. I can accept some of what counsel submitted, but I did not form a favourable impression of Mrs Williams as a witness.  I was not generally impressed by the reliability of her evidence.  Her credibility suffered.  I should say a little about those conclusions.

1. Mrs Williams portrayed herself as a soft person, easy prey for her sister and her brother-in-law, a person who remained a farming partner only because her late mother would not quit the business, a person who was without sufficient strength, until Mr Williams came along, to retire from the business even after her late mother’s death.

1. Having listened carefully to Mrs Williams’ evidence, and observed her giving it, I think that her self-portrayal was far from accurate.  That is so despite evidence given by Marjorie and Ross to the effect that Frances is a more sensitive, emotional person that her sister.  I think that she was very ready to cry when a difficult point developed in the course of her evidence. 

1. I next consider that Frances’ revealed conduct towards her sister over the years was quite hard when her interests were concerned.  One example is her attitude when the question of refinancing her loan to the business arose.  Again, I think that she overstated her selflessness in making loans to her parents when they faced hard times in the late 1970s.  It emerged, though there had been no hint of it in examination in chief, that she had been paid interest throughout at a substantial rate.  Further, although she made a point of saying that she had never disagreed with a suggested wage rise for Ross or Tim, she seems to have been content that over a long period of time the two of them had very little in the way of holidays.  Of that circumstance, as bookkeeper, she could hardly have been unaware.  Had holidays been taken, replacement labour would likely have been a consideration;  and for holidays a premium on wages would have been or was likely to have been payable. 

1. Concerning the business books, and it reflects upon Frances’ alleged frailty, I should also observe that within hours of her father’s death, though much affected, as she told me, she told her sister and Ross that she would take the books.  She did so, and she continued to keep them.  That businesslike approach was pursued, I note, in the letter of 30 December 1985 which she wrote to Mr Hanrahan, replete with its comment that:  “I don’t mind paying tax, I just hate giving the government interest free loans”[36].

   [36]Exh 3.

1. Concerning Mrs Williams’ evidence that there was always a reason why she could not quit the partnership until Mr Williams appeared on the scene, a matter bearing upon her alleged frailty, her initial evidence was that her mother wished to stay, and that her father had said that she not leave unless her mother would do so.  That evidence did not extend to the period after her mother’s death.  About that period, in evidence in chief, she said nothing.  It was when I brought the matter up that she burst into tears and then told me that she lacked the strength to act.  I thought that her evidence upon the matter was unimpressive.  It sat uneasily with the wills which she made in 1997 and 1988.  So far as the period up to her mother’s death is concerned, I must say that I regard her evidence as pretty improbable.  Mrs Cashin came off the land, had been in a farming partnership with her mother, had an extant will which assumed a continuing interest in the land and the farming business, was the mother of a daughter whose husband was working tirelessly to improve the business, and was the grand-mother of a boy who had already shown an aptitude for farming.  All these circumstances – with the possible exception of the contents of the will – were known to Mr Cashin.  I think that it is scarcely conceivable that he would have spoken with Frances in a way that committed her to staying in the partnership unless her mother would quit it.

1. Mr Hanrahan, the solicitor, gave very little evidence of importance.  It was really confined to the question whether Frances made the statement of intention attributed to her by Ross and Marjorie at a meeting held in 1986.  He said that no such statement had been made.  He was vigorously cross-examined to suggest that he had an emotional attachment to Frances;  and that he was privy to communications with Frances which were susceptible of compromising performance of his professional responsibilities to the executrices of Mr Cashin’s estate.  So, it was contended, his evidence was unreliable, his credibility affected.

1. I have no doubt that Frances fostered a relationship with Mr Hanrahan;  and that she imparted confidences to him.  It was not disputed that he became her friend.  Indeed, he spoke at her wedding many years later.

1. I do not conclude that Mr Hanrahan’s friendship with Frances caused him to give deliberately untruthful evidence.  But I think it is very clear, having listened carefully to his evidence, that in truth he had no independent recollection of any of the three meetings that were held in the first half of 1986.  His evidence that there was no pertinent statement of intention depended upon a recollection which I am satisfied he did not have.  Even if there was not the prospect that something was said at a meeting whilst he was temporarily absent, I would not in the circumstances accept his reconstructed recollection.

Representations

1. According to the plaintiffs’ case, as I have said, Frances and Marjorie represented, induced and/or encouraged the assumption and expectation in Ross and Tim that the farming land and business would on the death of Frances and Marjorie be inherited by Tim.[37]

   [37]I have noted already that the case as developed at trial did not exactly fit the allegations made by the statement of claim.  So, for instance, the plaintiffs relied as representations upon discussions pleaded by paragraphs 15 and 18 to have culminated in agreement.  The allegation that agreement had been concluded was not pursued.  Further, as the trial was conducted the allegation made by paragraph 18, pertaining to discussions held in 1992, was treated as an allegation concerning discussions held both in 1988 and in 1992.

1. Evidence supporting the making of representations by Frances was given by Ross and Marjorie, Tim, Mr Morris-Thomas, Mr Cope, Mr Dunlop, Ms Wilson, Mrs Murdica and Mr Perrett.  There is no doubt in my mind that most of the alleged representations were made.  Indeed, the contrary was not argued by Frances’ counsel.  The evidence revealed, however, some areas of dispute.  They must be resolved.

1. Although the plaintiffs sought relief against both Frances and Marjorie, I have already noted that Marjorie supported the plaintiffs’ claims, and that through counsel she agreed to abide the Court’s decision.  For that reason I will concentrate upon the representations allegedly made by Frances.

1. As will appear, some of the representations which I find that Frances made were made to persons who did not communicate them either to any of Marjorie, Ross or Tim.  The suggested significance of those representations was that they made it more likely that other disputed representations along similar lines were in fact made.  That was the way in which counsel for the plaintiffs sought to use them in final address.  Counsel for Frances did not challenge their use in that way.  I will assume that they were capable of such use, without exploring the basis or bases upon which that might be so.  In the event, I have not found it necessary to rely upon them to resolve any disputed incidents.

1. Some representations, as I find, were made to Marjorie and Ross;  others were repeated to Marjorie.  Neither Marjorie nor Ross claimed that they transmitted the detail of each such representation to Tim.  If they had given evidence that they had done so I would not have believed them.  The picture created by their evidence was rather one of Tim from time to time being told by his parents, not in a formal way, that in due course – that is, when his grandmother, mother and aunt died – the land and business would be his;  communications supplemented by direct conversation with his aunt on several occasions.

1. Against the background of those observations, I turn to the detail of the alleged representations:

A.       Representations allegedly made to Ross, Marjorie and third persons

(1)       At the Stockyards

1. According to Ross, Frances said on a number of occasions, soon after Mr Cashin’s death, whilst watching stock being loaded for sale, that the business would be continuing as before[38].  Marjorie’s evidence was that firstly at the stockyards one or two weeks after their father’s death, and again thereafter:

“Words just came out of mouths.  ‘Aren’t we so lucky now, Frances?  Aren’t we so lucky to have a grandson to keep this going, to carry on’, and that kept kept coming on and on.”[39]

Frances’ evidence was that she could imagine her mother saying something along the lines attributed to her by Marjorie, though, she couldn’t recall it precisely.  She said nothing about her contribution to any conversation. 

[38]T.199.

[39]T342.

1. I consider it very likely that each of Mrs Cashin and Frances said what was attributed to them.  I think that Frances said nothing to suggest that her mother’s vision of Tim as the person who would ultimately carry on the business – albeit that he was then aged only 11 – was not a vision that she shared.

1. In the overall scheme of things whatever Frances then said or acquiesced in by silence does not loom large.  What she herself said was no more than a statement of fact.  The partnership was bound to continue for a period at least – until Mr Cashin’s estate was wound up.

(2)       The Dwyer Conversation

1. Marjorie gave evidence that shortly after her father’s death Frances told her about a conversation with a local stock and station agent, Peter Dwyer.  According to Marjorie, Frances told her that Mr Dwyer had warned her that other agents would be wanting partnership business and wanting to sell the land;  and that she had told Mr Dwyer, concerning the land:  “They have no hope, we are not selling any land, we are keeping it for Tim.”[40]

   [40]T342.

1. Frances gave evidence that she had spoken to Mr Dwyer.  They had spoken about the prospect of other agents seeking to sell partnership cattle.  The company for which Mr Dwyer worked had sold Cashin cattle for more than 50 years.  She did not recall speaking with him about the land;  so she would not have said what was attributed to her in that context.[41]

   [41]T692-693.

1. I think that Marjorie’s evidence should be accepted.  Other evidence shows that in early 1986 Frances discussed valuing the land with Mr Dwyer, although his particular expertise was with stock[42].  It seems to me quite likely that in the course of such a discussion Mr Dwyer might have raised the possibility that other agents would be looking for business, both to do with the land and with stock.  Frances’ reported response concerning the land was consistent with things that she undoubtedly said thereafter.  That is so even though in early February 1986 she apparently gave consideration to selling some land[43].  I note, moreover, that Marjorie was not cross-examined to the effect that Frances had told her of a conversation with Mr Dwyer in which he had raised only the risk of predatory conduct by other agents concerning sales of stock. 

   [42]See Exhibit 3, letter Frances to Mr Hanrahan, 3 January 1986; and letter Frances to Mr Hanrahan, 4 February 1986. 

   [43]See Exhibit 3, letter Frances to Mr Hanrahan, 4 February 1986.

1. Finally upon this matter, Frances gave evidence in cross-examination that Mr Dwyer is still alive and that she knew of his whereabouts.  It was said for the plaintiffs, I think, that Frances should have called Mr Dwyer;  and that an inference adverse to her should be drawn in circumstances where she had not done so. 

1. Mr Dwyer should not be regarded, I think, as being in the camp of either Frances or the plaintiffs.  He was described as the late Mr Cashin’s best friend.  Now, according to Frances’ evidence, he is retired (though he sells some rural real estate).  Even if he should be treated as being in Frances’ camp I would draw no inference adverse to her.  It is true that the parties and other witnesses in this case claimed to retain a memory of things said long ago.  But one cannot extrapolate from the case of a witness with such purported recollection to a person who did not give evidence.  In the event, my conclusion favourable to the plaintiffs does not rest on the Jones v Dunkel[44] principle.

(3)       Meeting in Mr Hanrahan’s Office 11 April 1986

[44](1959) 101 CLR 298.

1. According to the evidence of Marjorie and Ross, Frances stated at a meeting held at the offices of Mr Hanrahan’s firm that she would never part with any of the land that Mr Cashin had worked so hard for and that hopefully the land would go down to Tim[45].  They said that Frances’ attitude came as a surprise.  Based on discussions between Ross and the late Mr Cashin they had expected that she would want to leave the partnership and quit her interest in the land.

   [45]T.191-192, 301-304, 338, 369-374.

1. Each of Marjorie and Ross fixed the date of the meeting as 31 January 1986.  They obviously did so because in the course of the case being got ready for trial they ascertained that a meeting had been held on 31 January 1986.  Their evidence was keyed in to that date.  Frances, they said, was extremely emotional.  It was very soon after her father’s death.

1. At the time Marjorie and Ross gave evidence the solicitor’s file had not been located.  Later it was produced.  I am satisfied that the meeting to which they referred was held on 11 April 1986.  There was a meeting on 31 January 1986.  But only Frances attended.

1. The case for Frances was opened on the basis that she did not recall making any statements to the effect sworn to by Marjorie and Ross;  but that she may have made an emotive statement to such effect.

1. In evidence, before the solicitor’s file came to light, Frances spoke of a meeting which had taken place about six months after her father died.  The future of the farming business was discussed.  The meeting was quite short.  Mr Hanrahan had advised that the partnership should be run out “for the full two and a half years”.  He recommended that Ross be appointed manager and paid $500 per week.  He recommended that Marjorie and she each receive $17,000 per annum – Marjorie for rent, she for interest.  She also said that she could not recall attending a meeting on 31 January.

1. It is, I think, clear that up to and including the time Frances gave her initial evidence it was the common assumption that if the statement made by Francis had been made, it had been made at a meeting which took place on 31 January 1986.  Frances had no recollection of that meeting.  Beyond that, Frances gave evidence of a meeting which, by reference to Mr Hanrahan’s file notes, seems most likely have been a meeting held on 13 June 1986[46]. 

   [46]Just possibly, it was evidence combining things said at meetings held on that day and on 11 April 1986.

1. Marjorie and Ross each recognised that there had been a meeting at which the matters referred to by Frances had been discussed.  Their evidence was that they had attended two meetings.  In that they were correct.  Their evidence was further that the critical statement had been made at the first of the meetings.  Frances did not in her evidence identify more than one meeting.  She gave no discrete evidence about the first of the two meetings referred to by Marjorie and Ross, a meeting which by reference to Mr Hanrahan’s notes took place on 11 April 1986.

1. I turn to Mr Hanrahan’s evidence.  I formed the clear view, as I said earlier, that he had no independent recollection of the meetings held on 31 January 1986, 11 April 1986 and 13 June 1986.  He really admitted as much[47]; but nonetheless claimed to remember that something attributed to one of the participants had not been said[48].  He said that the statement attributed to Frances would have represented a significant decision made soon after Mr Cashin’s death, a decision the like of which should not be made in such circumstances, and which if made would have loomed large.

   [47]See, for example, T.892, 897, 898, 899, 902.

   [48]T.892.

1. I repeat my earlier conclusion that Mr Hanrahan’s evidence on this matter was really reconstruction.  It seems to me not to adequately reflect the possibility that Frances in an emotional way may have said something to which he did not attach great significance, but which was of a different import to others then present;  or the possibility that he had not been present when the critical remark attributed to Frances was made.

1. I think that Mr Hanrahan tended to downplay the likely extent of Frances’ emotional distress.  Further, his evidence was uncertain as to which meeting it was with respect to which he described her emotional state[49]. 

   [49]T.902.

1. Notwithstanding the five months’ elapse from her father’s death, I consider it likely that Frances did behave as deposed to by Marjorie and Ross.  The fact that they wrongly related her behaviour to the death of her father only six weeks earlier does not render their description of Frances’ behaviour improbable.  It was, on the contrary, quite consistent with her presentation in evidence. 

1. In a memorandum dated 4 February 1986 sent by Frances to Mr Hanrahan the former evinced an apparent reluctance to part with the farming land – except Days, and that to pay debts.  This was said in a memo in which Frances referred to her father’s alleged advice that she not enter into a farming partnership with Marjorie and Ross.  It might reasonably be concluded that the statement attributed to Frances was consistent with her adopting a firmer position, in the event that it appeared that debts would not oblige a sale of land, that no land should be sold.

1. Summarising thus far, Marjorie and Ross gave evidence that Frances, whilst emotionally distressed, made a statement to the effect earlier described.  They were wrong in saying when the statement was made;  and so some of the circumstantial detail of their evidence must be rejected.  Frances next, gave no positive evidence at all pertaining to the statement attributed to her.  Her recollection of meeting Mr Hanrahan in 1986 was very imperfect.  Probably she gave no account at all of the meeting held on 11 April.  Her memorandum of 4 February was consistent with a reluctance to sell land.  Mr Hanrahan had no independent recollection of any of the three meetings held at his firm’s office in 1986.  Indeed, until seeing his file notes he had recollection of only one meeting.  His denial that Frances said what Marjorie and Ross attributed to her was based on reconstruction.  He tended to downplay the extent of her emotional distress;  and he could not relate it to any particular meeting.

1. Were that the end of the matter I would have no doubt that the evidence of Marjorie and Ross should be accepted.  Frances’ counsel raised, however, two considerations which in his submission tended to the contrary.  First, Marjorie had not mentioned the alleged statement in her initial affidavit.  Second, no occasion had arisen for Frances to make the statement attributed to her.

1. In her first affidavit, sworn 11 August 2000 in the partnership dispute in opposition to an application for summary judgment, and consistently with a defence filed on 4 August 2000[50], Marjorie deposed[51] that it was “possible, or even probable” that the assets of the partnership “may well be held on a constructive trust in favour of” Tim.  On the other hand, she did not refer to discussions or statements which took place shortly after her father’s death[52];  and in particular she did not refer to the alleged statement made at the solicitor’s offices in early 1986.

   [50]See paragraphs 9 and 11.

   [51]Paragraph 5.

   [52]See paragraphs 10-12, which in part were founded on a mistaken recollection as to when the partnership between Mrs Cashin, Frances and Marjorie commenced.

1. An amended defence was filed in the partnership proceeding on 29 August 2000.  The earlier pleading was recast.  But particularly an allegation was now raised[53] that shortly after the death of their father Frances and Marjorie reached agreement in a number of oral discussions that the land would always remain in and continue to be farmed by the family;  and that the land and the business would ultimately pass to Tim.  Particulars appended to the pertinent paragraph of the amended defence did not identify with any specificity the occasions upon which discussions had allegedly taken place.

   [53]By paragraph 2D.

1. Leaving aside the fact that the discussions between Frances and Marjorie were characterised in terms of agreement, it is, I think, clear that from a time pretty soon after the commencement of the partnership proceeding[54] Marjorie was alleging that discussions of pertinent content had taken place shortly after her father’s death.  The occasions upon which discussions were held were not individually identified.  The alleged statement made at Mr Hanrahan’s offices was not identified.  But I think that the point made by Frances’ counsel, reliant on Marjorie’s affidavit sworn on 11 August 2000, did not have the force the he sought to give it.

   [54]29 June 2000.

1. That takes me to counsel’s second point.  I think that there was nothing to it.  According to Marjorie and Ross the meeting was not short.  Discussion ranged from pleasantries to the way in which the farming business should be conducted into the future.  Mr Hanrahan’s file note is cryptic.  In the context of discussions which, even by reference to Mr Hanrahan’s file note, embraced matters such as the value of the farm (?Nisa Bula) for leasing purposes, the salary then being paid to Ross, and the availability of cattle for sale, it seems to me that an occasion might well have arisen for Frances to make an emotional statement about the future of the land and the business.  Bear in mind, also, that according to both Ross and Marjorie the statement was made, as it were, uninvited and out of the blue.  Finally, if the evidence of Ross and particularly Marjorie be correct as to the range of matters that were discussed, the opportunity for Frances to make the statement attributed to her was the greater.

1. Counsel pursued a subsidiary argument.  It went this way:  it was obvious that the farming partnership would have to continue for some time.  That was a consequence of taxation considerations.  The parties being condemned to a continuing relationship, what occasion could there be for Frances to speak in the terms attributed to her?

1. I do not accept that argument.  It assumes a cold and clinical approach to discussion of matters which had an emotional content.

1. It might be argued that, if Frances made the statement attributed to her when at Mr Hanrahan’s offices, neither Marjorie nor Ross should have been surprised as they said they were, for what she then said was consistent with what she had reportedly said to Mr Dwyer;  and consistent also with remarks made by her at the stockyards on more than one occasion.  So, it might be argued, it could not be the case that pertinent remarks were made at the stockyards and to Mr Dwyer, and that in addition a statement as described was made at Mr Hanrahan’s offices.

1. Assuming, as I think it is right to do, that the incident(s) at the stockyards and involving Mr Dwyer preceded 11 April 1986, I think that the surprise of which Marjorie and Ross gave evidence was not unremarkable.  This was the first “formal” occasion on which such a statement had been made.  It was the first time that Frances had directly made such a statement in the presence of Marjorie and Ross.  It was not a case of adopting by silence something said by another – as in the case of the stockyards discussion(s).  It was not a case of Frances repeating to Marjorie what she had said to a third person.  Moreover, directly stated by Frances it was at odds with the situation which Marjorie and Ross had anticipated in light of discussions between Ross and the late Mr Cashin.

1. All in all, I am satisfied that Frances did make at the meeting held on 11 April 1986 a statement to the effect described by Marjorie and Ross.

(4)       The Cope Conversation

1. About 14 – 15 years ago James Cope, a relation of Frances and Marjorie who farms land adjacent to Macs, told Frances that if ever it was sold he would be interested to buy it.  Frances said “No, it is not for sale.  One day it will be for Tim”[55].  That was Mr Cope’s evidence, and I accept it.

   [55]T.462.

1. Marjorie gave evidence that she heard of this conversation both from Frances and Mr Cope.  The language allegedly used by Frances to describe what she had said varied a little from the language attributed to her by Mr Cope – viz:  “We are not selling.  We are hanging on to it for Tim”[56].  Nothing turns on the difference.  I would not expect word perfect recollection.  I accept Marjorie’s evidence that the gist of Frances’ statement was passed on to her by both Frances and Mr Cope.

(4)       The Dunlop Conversation

[56]T.345.

1. In the late 1980s, according to Mr Stanley Dunlop, a farmer with land adjoining Home Farm, he asked Frances if he could buy a small part of that land.  He was told that it was not for sale, it would stay in the Cashin family, and would eventually be passed down to Tim.  His evidence was untouched by cross-examination.  I accept it.  This incident was not made known to any of Marjorie, Ross or Tim before litigation commenced.

(5)       The Crown Grant Conversation

1. Marjorie gave evidence that sometime after her father’s death, “before titles were getting swapped over”, she and Frances discussed a Crown Grant pertaining to Home Farm which Frances had in her office.  It was a magnificent document, bearing the Crown Seal and a reference to King Edward VII.  Frances, who “loves the British Monarchy” said that she would never part with the document.  It was not going out of the family.  When she said to Frances that one day, when Tim got the land, there would just be Pearson on the title, Frances replied “That is ok,  it is still the family”[57]

   [57]T.343.

1. Marjorie was cross-examined to suggest, first, that she had identified a Crown Grant copied into the Court Book which, or a copy of which, Frances had never had at her home;  second, that Frances never had an original title at her home;  and third, that the conversation of which she had given evidence had never occurred.

1. Frances gave evidence that she had never had the original Crown Grant to Home Farm at her home.  She had probably discussed the title with Marjorie, “It is a lovely title to have, this one”[58].  She did not recall Marjorie ever saying that when Tim got the land there would “just be Pearson on . . . the title”;  or of saying “That is ok,  it is still family”[59].

   [58]T.695.

   [59]T.695-696.

1. It is, I think, likely that Marjorie mis-identified the particular title in respect of which discussion allegedly took place.  It is very likely that any document about which discussion took place was a copy.  Frances had copies of all titles at her home at least from February 1986.  The real question is whether the alleged discussion took place.  In that connection I much prefer the evidence of Marjorie.  Having regard to Frances’ attitude to at least one of the Crown Grants, as revealed by her evidence in chief, it seems to me that if a conversation had developed with respect to a Crown Grant it might well have commenced in the sort of interchange of which Marjorie gave evidence.  If that was not so Marjorie possessed a considerable imagination.  She did not impress me as having that quality.  Moreover, Frances’ denial of the conversation was founded on reasoning which was not obviously sound.

1. All in all, then, the substance of Marjorie’s evidence should be accepted.  The incident probably occurred in 1988, the year in which title particulars were altered.

(6)       The New Partnership Discussion

1. In mid 1988 a new partnership was constituted between Mrs Cashin, Frances and Marjorie.  A question arose as to the name of the partnership.  Mrs Cashin wanted to call it “Cashin Farms”.  Marjorie protested, saying that there should be reference to the name Pearson.  That led, in stages, to adoption of the name “Cashin Pearson Pastoral”, it being registered as a business name in consequence of application dated 24 June 1988. 

1. According to Marjorie, in advocating addition of the name Pearson she referred to all the hard work that Ross had done and said:

“Well, when it is just going to be Tim, which [it] will be, one day it will just be Pearson.  You are best to keep continuity of trading name and set yourself up.”[60]

Asked if Frances agreed “with that”, Marjorie replied: 

“She didn’t not agree because then we all agreed ‘Pastoral’ added to the bottom, ‘Cashin Pearson Pastoral’.”

Frances’ evidence about the matter was that Marjorie felt left out.  She was to be a partner, but there was to be no reference to the name Pearson.  “It was thoughtless and we included her in”.[61]  She had no recollection of mention of Tim.

[60]T.345.

[61]T.697.

1. It may be the case that Marjorie made reference to Tim in the course of the conversation.  But on no view did Frances do so;  and there was good reason to include the name “Pearson” in the partnership name quite apart from the prospect that Tim would one day own the land and business.  I could not draw a conclusion favourable to the plaintiffs from the fact that Frances joined in submitting the name “Cashin Pearson Pastoral” for registration.

(7)       The 1992 Wills Discussion

1. I have already set out the substance of the 1992 wills made by Frances and Marjorie.  There was dispute as to what was said between Frances, Marjorie and Ross concerning wills made that year.  They included a will made by Ross.

1. The burden of Marjorie’s evidence was that she and Frances had quite a bit of discussion concerning the terms of their wills.  It included mention of Tim being a farmer, and of his sister, Angela, hating the farm.  Frances had said “We will have to leave all the land to Tim”[62].  She, Marjorie, had readily agreed.  It was agreed between them that Tim would get all the land and that his sister would get other things.

   [62]T.346.

1. The case for Frances was opened on the basis that there had been discussion between she and her sister before they made their 1992 wills.  She had not suggested that all the land and farming assets be left to Tim.  Marjorie had done so.  Marjorie had also suggested that other assets be left to Tim’s sister.  She had not disagreed with those suggestions.

1. Frances’ evidence in chief was that her sister did not tell her what provisions she had made in her will.  Marjorie had said she was concerned that Frances not leave anything, particularly land, jointly to the children.  She, Frances, had told Marjorie that she would think about it.[63]

   [63]T.698.

1. Frances admitted in cross-examination that in an affidavit sworn on 24 October 2000 she had deposed that her sister had specifically proposed that she, Frances, leave the land to Tim;  and that she had made a mistake when she deposed as to the sequence of events.  But otherwise she held to the account of events that she had given in evidence in chief.

1. By her 1992 will Frances did not, of course, leave her interest in the land to Tim.  She left it to Marjorie absolutely, save if Marjorie predeceased her.  In the latter situation it was to go to Tim at age 25.  She made similar provisions with respect to her interest in the business.

1. There could be no doubt that Frances knew in 1992 that Marjorie intended to leave her interest in the land ultimately to Tim.  Likewise her interest in the business. Frances was doubtless aware that a person can change a will.  But I think it very clear that she would have believed that Marjorie would not change her intended ultimate disposition to Tim.  In those circumstances, for Frances to leave her interest in the land and business to Marjorie carried assurance that Tim would one day inherit that interest.

1. In the circumstances described there was no point to be made by Frances that she had not in fact done what, on Marjorie’s account, she had said she would do.  That leaves open the question whether it was she or Marjorie who had initiated the proposal that the land be left to Tim.

1. Not only Frances and Marjorie, but also Ross gave evidence of discussions pertaining to the wills which were made in 1992.  He said that he thought he had been present at some of the discussions.  He gave an account of discussions pertaining to the sisters’ wills in terms which accorded with what the wills in fact provided.  He gave no account of the particular discussion of which Frances and Marjorie gave evidence. 

1. The evidence of Frances and Marjorie was that no one else was present at the time of that discussion.  Ross’ evidence did not tell to the contrary.  Whether he participated in, as distinct from learning about, any discussions between his wife and Frances is extremely doubtful.  In the event, the question to which I referred a few moments ago must be resolved by considering, in context, the versions given by Frances and Marjorie.

1. In context, I think it very likely that Frances, if she did not initiate the suggestion that Tim be left the land, at least intimated that she agreed to such a course.  To have done so was entirely consistent with statements of intent that she had made to a number of people over a period of years.  Moreover, it was the fact that Frances came from a farming family with a long interest in the land, that Tim was the only son available to carry on the family tradition, that he was interested in and adept at farming, and that his sister had no such interest.  I think it very improbable, in all the circumstances, that Frances simply heard out what her sister said in silence.

1. I should add one matter.  The sisters’ evidence suggests that whatever discussion they had pertained to the land.  The land and the farming business, however, were intimately related.  I think it likely that they each treated discussions about the land as extending to the business.  That is reflected in the wills which they made.

(8)       The Holden Statesman “ute”

1. When he was 17 Tim bought a “metallic blue Holden Statesman utility, with running board flares, rather flash, with a V8”.[64]  It proved to be a magnet for girls.  Marjorie became concerned.  Tim attracted “a couple of unsavouries I didn’t like”.[65]  Marjorie discussed the matter with Frances.  Frances said:

“It is a real worry who Tim will end up with.  I would hate to see that this land would get split up in a divorce settlement.”[66]

[64]T354.

[65]T354.

[66]T355.

1. Frances did not contradict that evidence.  In cross-examination she agreed that she had expressed a concern to her sister about the brittleness of marriage amongst young people.[67]

   [67]T731.

1. Counsel relied upon valuations of the land as at December 1985 and June 2000.  I have already made some reference to those valuations in paragraphs 293 and 297.  I now make it clear that I accept evidence as to the value of the land at the earlier time.  Value at the later time, I note, was agreed.  It is convenient to summarise the material.  Thus: 

Land	Value December 1985	Value 30 June 2000
Home Farm and Macs	$308,570	$586,000
Dunlops	$543,900	$960,000
The Bush	$528,822	$933,000
Days	$216,900	$374,000

1. Counsel further relied upon evidence of changes in the CPI All Groups Index[105].  By recourse to this evidence he submitted that between 30 June 1986 and 30 June 2000 the index increased by 76.9%, whilst the value of the land, averaged out, increased by 78.5%.  So despite capital expenditure, he argued, there had been no increase in real terms in the value of the land since 1986.  Indeed, the land which had most appreciated in value had been the land upon which there had been lesser expenditure. 

   [105]A weighted average of eight capital cities, which took as its base year 1989/1990 and then extrapolated back to 1970 and forward to 2001.

1. Counsel for the plaintiffs disputed the calculations which I have just set out.  He referred to and relied upon evidence given by Mr Perrett.  He submitted also that it was immaterial whether Frances had benefited by retaining the land.  I have dealt already with the last of these matters. 

1. In my opinion, contrary to the submission of counsel for Frances, the plaintiffs will suffer detriment if they must buy Frances’ interest in the land at its 30 June 2000 value.  Mr Perrett gave evidence, which I accept, that in the area where the land is situate the long term experience is that capital growth is in the order of 3- 3.5% per annum[106].  He said in cross-examination that in the past few years properties have not appreciated very much[107].

   [106]T.525-526.

   [107]T.533.

1. Assuming, favourably for Frances, that appreciation had been an average compounding 3% per annum, then if the index on 1 July 1986 had been 100 it would have been about 152 on 30 June 2000.  In that event it is clear that there was disproportionate increase in the value of this land between 1986 and 2000.  Accepting the calculations advanced by Frances’ counsel, it should be concluded that whilst the cost of acquiring her interest in the land would  not be higher in real terms as at 30 June 2000 than it would have been on 1 July 1986, the cost of acquisition would be considerably greater than might ordinarily have been expected.  So the amount that the plaintiffs would have to pay, absent relief, for the interest in the land acquired by Frances on her father’s death would be more than would ordinarily have been expected having regard to its June 1986 value.  That, I consider, should be regarded as a detriment to them.

1. Why is that so?  There are a number of reasons.  First, the plaintiffs for entirely understandable reasons would wish to buy the particular land;  not any other land.  They would thus be condemned to buying an interest in land which has disproportionately increased in value since 1986.  Second, the disproportionate increase in value no doubt reflects the way in which they have worked to improve the land. [108]  I need say no more about the manner and quality of their work, their under-remuneration, lack of holidays and so on.  If they are condemned to buy Frances’ interest in the land then they will be paying for land which has disproportionately increased in value since 1986 by reason of work for which only a fraction of the under-remuneration is contractually recoverable. Third, the value of the land increased disproportionately between 1986 and 2000 by reason of a work regime followed by Ross and Tim which I consider impacted detrimentally upon their quality of life.  Fourth, I do not accept the thrust of the submission that by purchasing the land the plaintiffs would gain the benefit of expenditure of partnership moneys, this denying a conclusion that any detriment would be suffered.  I do not consider that the disproportionate increase in the value of the land can be simply attributed to expenditure of partnership moneys.  Much turns, in my view, on the quality and the hours of work done by Ross and Tim;  work for which they were under-remunerated.  Moreover, the availability of partnership funds depended, in part, upon Ross and Tim being under-remunerated;  and upon their working in a way that diminished the need for expenditure on outside labour. 

   [108]I have reached this conclusion notwithstanding that major works were done on The Bush and Dunlops after 1985;  and that other properties have increased in value by slightly more.  The impact of the work done by Ross and Tim was surely not confined to The Bush and Dunlops.

1. Thus far I have dealt with and rejected the submission made for Frances that the plaintiffs suffered no detriment in taking no steps before the birthday announcement to acquire the interest which Frances acquired in the land after her father’s death. 

1. I should deal briefly with the issues of reliance and knowledge in that connection.  I am abundantly satisfied that Ross took no steps to effect purchase at an early time in reliance upon the expectation created by Frances;  and that this position flowed on to Tim.  I also have no doubt that Frances knew that Ross, and later Tim, took no steps in reliance upon that expectation. 

1. I turn to the submissions made for Frances concerning the amount that the plaintiffs would have to pay for stock as at 30 June 2000 in the event that the expectation created by Frances went unfulfilled.  The main submission in that connection was that such amount would be no more in real terms than they would have had to pay on 30 June 1986.  It was a submission which depended upon an analysis of tax returns for the financial years 1985/1986 and 1999/2000. 

1. Counsel’s submission took as its starting point the book value of stock as at 30 June 1986.  By reference to the type and value of stock on hand as at 16 December 1985 counsel argued that the market value of the stock on hand on 30 June 1986 was, conservatively, $405,031.  Applying the CPI Index to that sum, the market value of stock on hand on 30 June 1986 became, as at 30 June 2000, $708,804.  The market value of stock on hand on 30 June 2000 was $839,506.  Under the terms of the settlement of the partnership proceeding the stock could be purchased at 30 June 2000 values by any or all of Marjorie, Ross and Tim.  The evidence showed that in the period between 30 June 2000 and trial stock prices had increased by about 30%.  Any detriment to the plaintiffs, to be assessed presently, was thus eliminated.  That was so even making adjustment for deferred tax.

1. I do not agree that the expectation which Frances created has resulted in the plaintiffs suffering no detriment if they are required to buy Frances’ interest in the stock as at 30 June 2000.  At least they lost the opportunity to stage the purchase of the interests in stock which she successively acquired;  an advantage in itself.  Moreover, had they purchased the interest which Frances acquired upon her mother’s death in the year or so thereafter, they could certainly have purchased at a market price well below that obtaining in 2000 and 2001. 

1. Counsel for the plaintiffs challenged certain of the assumptions upon which the submissions made for Frances rested.  I do not consider that the state of the evidence permits a clear conclusion whether the assumptions were supportable.  Matters could have been raised in cross-examination of Ross; but they were not.  In all, I consider that the exercise was of uncertain validity.

1. But even if counsel’s stock analysis was accepted, it producing a market value difference of about $130,000 as at 30 June 2000, I remain doubtful that detriment occasioned by purchase of a 50% interest in stock – that is, about $65,000 – would be eliminated by the effect of the increase in the market value of stock since that date. The taxation implications for assumed sales in June 1986 and June 2000 were not thoroughly canvassed. 

1. Investigation whether there is detriment in the present connection also, arguably, would justify there being brought to account the fact that under the terms of settlement of the partnership dispute Frances is entitled to receive, from 1 July 2000, out of partnership assets and separately from interest of $17,000 a year, 7% each year on the value of her interest in the net assets of the partnership.[109]  In calculating the amount payable, the value of the land, as well as of stock, plant and equipment and shares, is to be brought to account.  I do not, however, rest my conclusion that the plaintiffs have suffered detriment upon this consideration. 

   [109]Taking into account any impact of this proceeding.

1. I should briefly refer to counsel’s argument that Frances gained no benefit by retaining her increasing interest in stock in the period 1986 to 2000 because returns were poor;  and that, as a mirror, the plaintiffs suffered no detriment by not acquiring her interest in that period.

1. The partnership tax returns show, as I earlier noted, periods of profit and periods of loss.  They show that profit on the cattle account itself was generally quite good.  But it was counter-balanced by overall farm expenditure.

1. It is, I think, inescapable that had the plaintiffs acquired Frances’ interests in the stock as she successively acquired them, they would have suffered years of overall loss for tax purposes;  and probably in fact.  But it does not follow that the immediate impact of such losses would outweigh the benefit flowing from acquisition of a valuable asset in a staged way at a lesser amount in real terms than that for which the asset can now be purchased. 

1. So far as Frances’ position is concerned, I have concluded already that benefit to a representor is not necessary in order that such person be held to the expectation which he or she has created.  In any event, retention by Frances of her interest in the land and stock was not devoid of advantage to her;  and so far as benefit could be relevant it should not be measured, as I said earlier, by comparison with the hypothetical consequences of an entirely different course which was not followed. 

1. All in all, I am satisfied that the plaintiffs suffered a definite but probably modest detriment by relying upon the expectation created by Frances and in consequence not seeking to acquire her increasing interests in the stock before the partnership was dissolved.  Frances knew of the expectation she had created.  She must have known that it provided a reason why they would not take any such step.  But I doubt that she knew that their inaction was to their detriment – though depending upon the time at which she addressed her mind to the issue a different conclusion could be reached. 

Remedy

1. The plaintiffs have satisfied me that Frances made statements creating the expectation that one day Tim would inherit all the land and the business – this involving, from her standpoint, disposition of her interest to Tim by her will.  The plaintiffs have further satisfied me that in reliance upon the expectation thus created they have each suffered substantial detriment – both financial and other; and that if the expectation which Frances created is not fulfilled they will suffer an important detriment of the kind referred to by Dixon J in Grundt[110].  The plaintiffs have satisfied me, again, that Frances intended that they should rely upon the expectation which she created, that she knew of most but not all of the detriments they have suffered, and that she knew that there was a causal link between the expectation created and the detriment suffered. 

   [110]See paragraph 73 and footnote 28 of these Reasons.

1. The question arises, what is the minimum equity necessary to do justice to the plaintiffs?  For the plaintiffs it was submitted that the court should impress a constructive trust in favour of Tim over Frances’ interest in the land and business, or at least over most of the land and other assets.  Counsel accepted that Frances had a certain entitlement.  He submitted that it should be satisfied either by orders having the effect of transferring to Frances the entire interest in certain of the parcels of land; or else by an order for a money sum secured against the land and other assets of the business.  For Frances it was submitted that any relief should be confined to an order for a money sum in favour of one or both of the plaintiffs, to be paid out of the assets of the partnership and secured against them.

1. In my opinion a constructive trust must be impressed in favour of Tim over Frances' interest in the land and other assets of the business in the particular circumstances of this case.  I am satisfied that nothing less would suffice.  I further consider that the entitlement which Frances definitely possesses should be reflected by an order for payment to her of a money sum, secured against Tim's interest in the land and other business assets, rather than by an order for conveyance to her of the entire interest in one or more of the parcels of land.  I must explain these conclusions.  I do so by considering various scenarios.

1. First, if Frances was permitted simply to resile from the expectation which she created, any one or more of Frances, Marjorie, Ross and Tim would have to pay the partnership a sum in the order of $1.92M to acquire her interest in the land and other partnership assets.  Frances, for her part, would receive from the partnership about $1.77M, representing the net value of her interest in partnership assets as at 30 June 2000.  In addition, she would be entitled to be repaid by the partnership loans totalling $120,000 and interest thereon;  and also interest upon the net  value of her share in the assets from 1 July 2000.[111]

   [111]See paragraphs 297 and 313.

1. Second, if Frances is, by imposition of a constructive trust, held to the expectation which she created, it certainly does not follow that she is bereft of any entitlement.  Mr William Buttler, an actuary, gave evidence of the value of the notional life interests of Frances, Marjorie and Tim in property estimated to have a pre-tax value of $4M, and a possible after tax value of $3M.  He assumed for his calculations that Frances and Marjorie would share equally in the income earned by the property in their lifetimes, and that Tim would have the reversionary entitlement of the entire property.  His valuation was based on assumed gross returns and values, ignoring tax except to the extent that the supplied capital valuation already accounted for tax.  He assumed a long term income return of 3% per annum, and a capital accretion in the long term of 3% per annum.  He applied a discount rate of 7.5%.  He made use of the Australian Life Tables 1995-1997.  He assumed that both Frances and Marjorie enjoyed a normal standard of good health.  He valued the interests of Frances, Marjorie and Tim as follows:

% of Total Value	Gross	Net
Frances	23.3%	$932,973	$699,730
Marjorie	25.3%	$1,013,869	$760,402
Tim	51.3%	$2,053,158	$1,539,869
100%	$4,000,000	$3,000,000

1. The technique which Mr Buttler employed was described by him as the standard procedure for valuing life interests in succession.  That evidence was not challenged in cross-examination. 

1. In my opinion Mr Buttler’s evidence made use of assumptions which were generally justified by the evidence otherwise.  The assumed value of the property – by which the witness evidently meant the land and business assets – was a little high; and he made an assumption concerning Frances’ state of health which was not entirely justified[112].  Importantly for present purposes, neither of those assumptions would operate to diminish the valuation of Frances’ life interest made by the witness.

   [112]See T.703.

1. The consequence of Mr Buttler’s evidence, which I accept, is that if Frances were to be held to the expectation which she created then in some way she must receive $932,973 gross (or $699,730 net).  That does not take account of her loans to the former partnership;  nor of her entitlement to interest upon those loans since 1 July 2000 and to interest on the net value of her share in partnership assets since that date.

1. Bearing in mind the fact that Frances has wished to quit the partnership since August 1999, realising her interest in the land and other business assets, she could hardly complain in principle if the Court’s resolution of this proceeding produced that outcome.  What she would certainly say is that, notwithstanding I have found her conduct to be unconscionable, she should not be required to dispose of her interest for an amount[113] of not more than $932,973 in lieu of an opportunity of obtaining from the partnership, assuming that one or more of Marjorie, Ross and Tim exercised their settlement right of acquiring her interest in partnership assets, a net amount of about $1.77M.[114]

   [113]Excluding loan repayment and interest since 1 July 2000.

   [114]This amount also being exclusive of loan repayment and interest since 1 July 2000.

1. Third, consider the position if the plaintiffs were to be confined to recovery of money sums – I will assume both contractual and equitable damages.  On such a footing Ross would be entitled to an order for payment out of the assets of the partnership.  In that connection the relevant components would be under-remuneration and lost opportunity in the period 1986-2000, $190,500; motor vehicle and personal expenditure, $67,500; unused holidays, 80 weeks; and long service leave, 26 weeks. 

1. The parties agreed that in the event that either or both of Ross and Tim was entitled to damages[115] then he should recover against the partnership as it was constituted in 1999/2000.  Frances’ counsel further accepted that Ross was entitled to make out a claim for unused annual leave and for long service leave recompense stretching back to 1970.  He specifically conceded Ross’s claim for unused annual leave in an amount of $56,000; and for long service leave in an amount of $18,200.

   [115]In which description I include, conveniently amounts due under contract.

1. In all, then, upon my conclusions and the admissions that were made, Ross would be entitled to a maximum damages sum of about $332,200. 

1. As for Tim, he would have an entitlement to damages for under-remuneration, unused annual leave and recompense for use of his tractor.  I have concluded that, judged against the inexact guide of Award rates, under-remuneration was in the order of $80,000.  Counsel for Frances admitted Tim’s claim for 17 weeks’ unused annual leave at $530 per week:  that is, in an amount of $9,010.  I have concluded that Tim’s claim for $16,000 in respect of use of his tractor was made out. 

1. In all, then, upon my conclusions and the admission that was made, Tim would be entitled to a maximum damages sum of about $105,000. 

1. In my opinion, to award Ross and Tim a maximum of some $437,210 in damages against the partnership, to be secured against partnership assets, would be a wholly inadequate remedy for the detriment that they have suffered and will suffer if Frances is permitted without more to resile from the expectation which she created.  That amount would simply be the bare arithmetic of their past detriment.  It would not reflect depreciation in the quality of life which I am satisfied that they have suffered – in Ross’s case for a period of more than 14 years, in Tim’s case for a period of about eight and a half years.  It would in no way make up for the intense commitment given to their work by the two men for protracted periods in reliance upon the expectation which Frances created.  It would provide cold comfort for what would surely be the adverse mental impact resulting from removal of the expectation. 

1. Further, such a remedy would operate unfairly against Marjorie.  Her net interest in the partnership assets would be depreciated, excepting in respect of contractual damages, in consequence of reliance by Ross and Tim upon an expectation relevantly created by Frances, from which Frances was being permitted to resile.

1. It might be argued that Marjorie was a beneficiary of the under-remuneration of the men, of their use of their own vehicles for farm use, of their work in improving the farm.  Why then should she not suffer depreciation in the value of her interest in the partnership so as to make good any detriment which they had suffered?

1. I would not accept that argument;  or at least permit it to weigh much in the balance.  For it must be remembered that it was Frances who created the critical expectation,  giving rise to detrimental reliance;  and Frances’ conduct in resiling from the expectation which gave rise to this proceeding. 

1. They are not the only reasons why an order for damages in favour of Ross and Tim would be an inadequate remedy.  I have previously explained why I consider that they have suffered a detriment if the land must be bought from the partnership at its 2000 valuation.  I have concluded that it is inevitable that Home Farm, Mac’s and Days would need to be sold if any one or more of Marjorie, Ross and Tim are to retain the balance of the land and other business assets.  I have concluded that had purchases of Frances’ interest been staged, at worst it would have been necessary to sell one or two of the outlying blocks.  I have concluded also that the price payable would reflect a disproportionate increase upon its 1986 value, importantly a consequence of action by the plaintiffs to their detriment.  Those conclusions did not address the situation if an award of damages was made in favour of each of the plaintiffs.  If such an award was made it would have some impact upon the need to sell property.  But it would not eliminate the need to sell at least two parcels of land – very probably a worse situation than would have been faced had the critical expectation not been created in 1986 and perpetuated thereafter.  Bear in mind also the fact that such a payment would itself impose a burden on partnership assets – perhaps requiring sale of another of the outlying blocks.

1. Again, an award of damages would not meet what I have described as the definite but probably modest detriment suffered by Ross and Tim in not seeking to acquire Frances’ increasing interest in stock before the partnership was dissolved; and it would not meet the detriment suffered by Ross in his not seeking to exploit the commercial value of his inventions, rather being satisfied that the partnership have the day to day benefit of their use. 

1. In all the circumstances of the particular case, as I said a little earlier, I consider that the minimum equity required to do justice to the plaintiffs is that a constructive trust should be impressed upon Frances’ interest in all the land and other partnership assets in favour of Tim.  There should be no award of damages in favour of either plaintiff.  Frances must do what is necessary to convey her interest in the land to Tim. An order should be made in favour of Frances for payment by Tim of an amount of money, secured against his interest in partnership assets.  A reasonable but not overlong time should be fixed for payment of that amount.  In addition, of course, the partnership will remain liable to repay France her loans to the partnership;  and interest upon those loans until they are repaid.  Concerning Frances' entitlement to 7% interest on the net value of her share in partnership assets I must say something more a little later. 

1. Why impress a trust on all the land and other assets rather than impress a trust on some only of the land and order that the balance of the land be conveyed to Frances absolutely?  I partly supplied the answer to that question earlier.  Frances has wished to quit her interest in the partnership assets since August 1999.  The course I propose will achieve that outcome.  Moreover, the amount which I shall order to be paid to her will adequately reflect the amount which she could recover if the entire ownership of Home Farm and Mac’s were to be acquired by her and then sold at values prevailing on 30 June 2000;  and if her interest in the stock, plant and equipment and shares was realised and paid to her at 30 June 2000 values.  Moreover, in light of the state of the relationship between Frances, Ross, Marjorie and Tim, the sooner that they are wholly disengaged in a business sense, the better.

1. What amount, then, should be fixed, exclusive of the loans that are repayable and any interest that may be payable?  It should definitely be considerably less than the net $1.77M which Frances would recover if she was permitted simply to resile from the expectation which she created.  It should also definitely be a lesser amount than $1.77M less 50% of the impact of a damages award of $437,510 in favour of Ross and Tim. 

1. In light of Mr Buttler’s evidence there is a good case for saying that it should be no more than $932,973.  It may be said that such a figure reflects several assumptions quite favourable to Frances.  But still it seems to me that such an amount would reflect too harsh a judgment upon Frances’ conduct.  Looking at the matter overall, not ignoring the argument, pressed by counsel for Frances, that by a resolution such as I propose Marjorie would obtain a benefit denied to Frances, I answer the question which I posed a few moments ago by the answer:  $1,200,000. 

1. A question arises concerning Frances’ entitlement to 7% interest on the net value of her share in partnership assets after 1 July 2000.  There is no doubt, as I understand the intended application of the settlement terms in the partnership dispute, that Frances would have been entitled to such interest had I decided that Ross and Tim should have monetary relief leaving her with net assets of diminished value;  or if I had decided that certain parcels of land should be conveyed to Frances absolutely.  But it may be otherwise because I have decided that a constructive trust should be impressed upon all her interest in the land and other assets, and that she should be paid a money sum.

1. I consider that Frances should not be deprived of interest because of the particular form of relief which I have decided is appropriate.  She should have interest at 7% on the amount of $1,200,000 from 1 July 2000.  If, as I suppose, there is doubt whether that would be so under the terms of settlement, then the formal orders I make should reflect an entitlement to such interest. 

Orders

1. I ask counsel to prepare minutes of orders in accordance with my conclusions. 

---