Richardson v Armistead

SUPREME COURT OF VICTORIA
COMMERCIAL & EQUITY DIVISION	Not Restricted

No. 464 of 1998

WADE ANDREW RICHARDSON & ORS	Plaintiffs
v
ARTHUR JAMES ARMISTEAD	Defendant

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JUDGE:	Hansen J
WHERE HELD:	Melbourne
DATE OF HEARING:	1-3, 6,9, 10 & 13 November 2000
DATE OF JUDGMENT:	22 December 2000
CASE MAY BE CITED AS:	Richardson v Armistead
MEDIUM NEUTRAL CITATION:	[2000] VSC 551

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Contract – Oral agreement – Provision of funds in exchange for inter vivos transfer of an interest in land – Money paid but lot not subdivided and transferred – Part performance – Limitation period – Two further agreements whereby for financial assistance the deceased would devise his land to three named relatives – Part performance – Whether any agreements made.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R A Lawson	Doyle Considine
For the Defendant	Mr R T A Waddell	Clarke & Barwood

HIS HONOUR:

1. Introduction

In hilly country in the heart of the Otway Ranges at a point about 4 kilometres south-west of Lavers Hill, an access road called Hiders Access leads off the southern side of the Great Ocean Road to a property of 200 acres or thereabouts. The property is on two titles, one a Crown Grant of about 191 acres and the other of an adjoining 8 acres. About 40 acres is cleared, and some timber has been cut in other parts but otherwise it is heavily timbered. Eric Edward Hider owned the property. He lived in a house on the 8 acre lot. The endorsements on the Crown Grant, together with other evidence, show that that part of the land at least had been owned in succession since 1930 by three generations of the Hider family, Eric being the third. He had two sisters, one of whom, Valma Grace Richardson, is a plaintiff. Their childhood was spent with their parents on farms in the Otway Ranges, the last being their parents' property of which Eric became the registered proprietor in 1964. Valma married and had children; her husband and children are also plaintiffs as is the spouse of one child and her parents. They knew Eric and visited him at the property. Eric never married and had no children. The family on Valma's side expected or hoped that Eric would leave the property to Valma's children on his death. In that way it would stay in the family. But when Eric died on 26 September 1995 aged 59 years, it was discovered that by his will dated 4 November 1994 he left his entire estate to a daughter of a near neighbour. The plaintiffs make no attack upon the will, which has been admitted to probate, but seek, principally, an order that the defendant, who is the executor of Eric's estate, specifically perform one or other of two agreements under which he was to devise the property to Valma's children.

To be precise, the plaintiffs are:

(a)Valma Grace Richardson and her husband David John Richardson,
(b)their children Karen Joy Richardson, Wade Andrew Richardson and Trevor John Richardson who are now aged 39, 37 and 31 years respectively,
(c)Wade's wife Barbara Ann Richardson and her parents Douglas Bell Hogan and Mary Hogan.

I will refer to the deceased and the plaintiffs by their given names. Where appropriate I will refer to Douglas and Mary collectively as the Hogans.

2. The pleadings

The writ, endorsed with a statement of claim, was filed on 23 June 1998. That was followed by an amended statement of claim in September and a defence filed in October 1998. At the outset of the trial counsel sought leave to file an amended defence in a form which had been provided to the plaintiffs' solicitors in May this year. Counsel for the plaintiff did not oppose leave being granted. I gave leave but in addition to a reply being necessary it became apparent during the plaintiffs' opening that the amended statement of claim required further amendment. In the result, pursuant to my requirement, counsel prepared and provided to me the next day a further amended statement of claim, a defence to that revised pleading and a reply to that defence. I granted leave to file the first of those pleadings, and the latter two pleadings were then filed.

After some introductory paragraphs the statement of claim is divided into four parts headed the First Agreement, the Second Agreement, the Third Agreement and the Fourth Agreement. By the commencement of the trial the parties had resolved the claim based on the Third Agreement; accordingly no evidence was given in relation to it and I say nothing about it.

The introductory paragraphs (1-5) were either admitted or as a matter of substance turned out not to be in issue. In his final address counsel for the defendant said that the allegations in the introductory paragraphs were not resisted. In fact the defence had admitted paras 1-3 which stated that the defendant was the executor of the estate of the deceased who died on 26 September 1995, the relationship of each plaintiff to Eric, and that Eric was the registered proprietor of the property. Paragraph 4 alleged that in April 1988 Wade and Barbara went to live in Lavers Hill and with Eric's agreement established a wholesale nursery business called Nature's Haven on and in the vicinity of the property. Save that the arrangement with Eric was one whereby he gave permission to use part of his property for that purpose and not "an agreement in the legal sense", counsel admitted the allegations in para. 4. Paragraph 5 alleged that in 1990 Eric ended his employment with Victree Forest Pty Ltd and in July 1990 commenced work at the Nature's Haven business as an employee. The first part as to ending employment was admitted. While counsel was a little guarded about admitting the second part, the allegation was correct.

With that introduction I now identify the three agreements remaining in contention.

3. The First Agreement
(a) Further amended statement of claim

The claim is that by an oral agreement made in or about May 1991 between Eric and the Hogans it was provided that the Hogans would provide $15,000 to Eric and in exchange Eric would transfer a portion of about 15 acres on the Hiders Access corner of his property (or such other location on the property as might be agreed) to Wade and Barbara (para.6). In furtherance of the agreement the Hogans paid $15,000 to Eric in accordance with his directions (para. 6A); in particulars it is stated that $2,536 was paid to Eric and the balance of $12,664 (in fact $12,464) was paid to the nursery business to enable Eric to acquire a 45% partnership share therein. From 1 July 1991 Eric went into partnership with Wade and Barbara in the business, he having a 45% interest and they having the balance (para. 6B). In furtherance of the agreement a proposed plan of subdivision dated 15 April 1994 was prepared whereby around 15 acres near the south boundary of the property was to be subdivided (para. 7) but in breach Eric did not transfer any portion of the property to Wade and Barbara (para. 8). Finally, it is alleged that from June 1991 to January 1992 Eric received periodic payments exceeding $6,500 in his capacity as a partner (para. 9).

The only claimants for relief are the Hogans who seek damages of $15,000 for breach of the agreement or as restitution.

(b) Defence

The agreement in para. 6 is denied. In the alternative, s. 126 of the Instruments Act 1958 and s. 53(1) of the Property Law Act 1958 are relied on in the absence of a sufficient note or memorandum, should it be the case that Eric concluded an agreement for the transfer of land; s. 52(1) of the Property Law Act is relied on on the basis that as the agreement was not made by deed it was void; and s. 5(1)(a) of the Limitation of Actions Act 1958 is relied on on the basis that the claim for damages accrued more than six years before the writ was filed. It is denied that Eric received $15,000 from the Hogans and it is positively alleged that they paid that amount to Wade and Barbara as a loan to the business (para. 6A).

As to the allegation of partnership, it is stated that on 24 June 1991 Eric signed a statement of change under the Business Names Act 1962 advising that on 1 July 1991 he commenced to carry on business under the name Nature's Haven, and that any partnership was dissolved at the end of March 1992. Otherwise the allegations in para. 6B are denied.

As to the plan of subdivision, it is stated that a plan was prepared with respect to approximately 10 acres for the purpose of selling that lot and using the proceeds to reduce Eric's indebtedness (para. 7). Eric did not transfer any land to Wade and Barbara but the allegation of breach is denied (para. 8). Finally, the allegation of amounts paid to Eric as a partner is not admitted (para. 9).

(c) Reply

A plea of part performance is raised to meet the defendant's plea of a lack of writing. The plea is that Eric partly performed the agreement in that he accepted the $15,000 from the Hogans and directed that a plan of subdivision be prepared, which was not prepared until 1994.

As to the defence that the claim was barred by time, it was alleged that Eric did not evince an intention not to be bound by the agreement until at least May 1994. Accordingly the cause of action accrued within the period of six years before the writ was filed.

Finally, in para. 5 a plea of estoppel is raised. It is alleged that by reason of the matters adverted to in the preceding paragraphs of the reply the defendant is estopped from denying that the agreement (and the second and the fourth agreements too) is enforceable. Having asserted that, it is then alleged that the plaintiffs have "acted to their detriment in consequence". No particulars are provided of this plea. In final address counsel for the plaintiff explained how the paragraph was meant to be understood. In relation to the first agreement the relevant plaintiffs based the estoppel on the matters adverted to in para. 1 of the reply, the second agreement on the matters in para. 3, and the fourth agreement on the matters in para. 4. Those paragraphs (1, 3 and 4) made the pleas of part performance to the respective agreements. Counsel explained that the acts of detriment intended to be referred to were not Eric's acts but acts of the plaintiffs in reliance on the existence of the agreement. In the case of the first agreement that was the payment of $15,000 by the Hogans on the basis Eric would effect the transfer of land.

4. The Second Agreement
(a) Further amended statement of claim

The claim is that by an oral agreement made in or about March 1992 between Eric and Wade and Barbara it was provided that Wade and Barbara would indemnify Eric against all claims against, and all liabilities of, the business including borrowings of about $34,000 from the ANZ Bank in order to leave Eric free to use his income to reduce his personal liabilities and that, in exchange, Eric would on his death devise the property to Karen, Wade and Trevor.

It is alleged that Wade and Barbara duly performed their part of the agreement. It is the fact that Eric did not leave the property to them.

The claimants for relief here are Karen, Wade and Trevor. They seek an order that the agreement to transfer the property to them be specifically performed.

(b) Defence

The agreement is denied and, again, the defendant relies on s. 126 of the Instruments Act, and ss. 52(1) and 53(1) of the Property Law Act. The allegation that Wade and Barbara had indemnified Eric against all liabilities of the business is denied. It is alleged that Eric had provided the ANZ Bank with security over his property for the borrowings of the business being fully drawn advance facilities no. 1 and 2. There was an allegation that on or about 23 July 1992 Eric paid out the business's fully drawn advance facility no. 1 in the sum of $32,076.06; this was abandoned by counsel in his final address. Essentially, on the matter of payments by Wade and Barbara, the defendant, who had no personal involvement, put the plaintiffs to their proof.

(c) Reply

It is alleged that Eric partly performed and received the benefit of the agreement in that Wade and Barbara indemnified him against all claims against, and liabilities of, the business and Eric was thus enabled to use his income to reduce his personal liabilities. In particulars it is stated that from March 1992 until Eric's death Wade and Barbara alone serviced the repayment of the business borrowings with the ANZ Bank.

As mentioned earlier, there is a plea of estoppel based on the above part performance allegations relating to the second agreement.

5. The Fourth Agreement
(a) Further amended statement of claim

The claim here is that in July 1993 an agreement partly oral and in writing was made between Eric on the one hand and Valma and David, their three children and Barbara (called "the Richardson Family") on the other hand, that:

(a)the Richardson Family assume the responsibility of:
□paying the arrears due under Eric's mortgage of the property to Davies and Vinci, and
□paying any instalments and other liabilities under the mortgage in the event Eric was unable to pay them, and
□making any such payments under any mortgage entered into by Eric in substitution for the said mortgage; and

(b)in return for such payments and a payment of $1,800 at Eric's request to a builder Keith Reid:
□the Richardson Family would receive the property in the Crown Grant forthwith,
□alternatively, Eric would at his death devise the property to Karen, Wade and Trevor.

The former claim that the Richardson Family was to receive the Crown Grant property was abandoned by counsel in final address. It is to be noted that under that first alternative the relevant property was the Crown Grant whereas the second alternative concerned the whole property, that is to say, the land in both titles. The pleading background to this should be noted. Until the statement of claim was amended during the trial, the fourth agreement had pleaded an agreement that "the Richardson Family would receive [the Crown Grant] forthwith or in any event under the deceased's will”. Hence, the claim for relief was by the Richardson Family, and not merely Karen, Wade and Trevor. The difficulty with that relief was that it was inconsistent with the relief sought under the second agreement. Hence the amendment at trial which added the alternative plea that Eric had agreed to devise "the Property", which the pleading defined to mean the land in both titles, to Karen, Wade and Trevor, and the prayer for relief was limited to specific performance of that agreement. This explains why the first alternative was abandoned

It is alleged that pursuant to the fourth agreement the Richardson Family paid $4,800 to the mortgagees. That is admitted. It was paid as to $2,800 by Karen and as to $2,000 by her father David who also made payments to Reid. It is alleged that Eric did not transfer the 191 acre property to the Richardson Family. It is then alleged that in breach of the agreement Eric did not leave the property by his will to Karen, Wade and Trevor.

The statement of claim concludes (in para. 15) with an allegation that the plaintiffs have suffered loss and damage. In discussion in final address counsel for the plaintiff stated, and counsel for the defendant accepted, that this plea related to the case of the Hogans. As their claim had been pleaded separately and on the basis that the Hogans were understood as claiming to have suffered further loss and damage, counsel abandoned this further paragraph as unnecessary.

Again, the claim is by Karen, Wade and Trevor for an order that the agreement to devise the property to them be specifically performed.

(b) Defence

Save to admit that a draft contract of sale was prepared by Clarke & Barwood, Eric's solicitors, the agreement is denied. Alternatively the same pleas of s. 126 of the Instruments Act and ss. 52(1) and s. 53(1) of the Property Law Act are made. It is alleged in the alternative that:

(a)the agreement was conditional on the Shire of Otway approving a subdivision and consenting to the logging permit continuing, neither of which conditions was satisfied;
(b)the Richardson Family agreed the sale would not proceed;
(c)since Eric's death the father of the beneficiary under the will had made payments under the mortgage;
(d)If Eric breached the agreement the plaintiffs accepted the breach, thereby bringing the fourth agreement to an end.

(c) Reply

Again part performance is alleged. It is alleged that Eric partly performed and received the full benefit of the agreement in that the Richardson Family paid the arrears due under the mortgage and all other instalments and liabilities whenever Eric was unable to pay them, and $1,800 to the builder Keith Reid. Reliance is also placed on the payment of $568 owing under a judgment debt of Eric's; this was the subject of the third agreement which claim had been settled. I heard no evidence on that claim and I disregard any reliance on the payment of $568.

Finally, there is the plea of estoppel which I have referred to.

6. Summary

The claims for adjudication are:

(a)under the first agreement: a claim by the Hogans for $15,000;
(b)under each of the second and fourth agreements: a claim by Karen, Wade and Trevor for specific performance and an order that Eric's property be transferred to them.

No relief is claimed by Valma and David. The only claim in respect of which they had claimed relief was the alternative claim under the fourth agreement which was abandoned in final address. Once that was abandoned they had no claim for relief.

7. The witnesses

Each plaintiff gave evidence. The other witnesses called by the plaintiffs were a builder Keith Alexander Reid, a solicitor Ronald Joseph Stewart, and a land surveyor Neville Leonard Brayley.

The defendants called only one witness, Robert Nicholas Kairuz, the father of the beneficiary under Eric's will. He gave evidence of a long-standing friendship with Eric. The defendant had no witness as to the agreements sued upon.

Wade was the first witness. He gave evidence for two and a half days. That length of time was caused in part by the fact that, without the deceased to provide instructions, defendant's counsel had to explore the facts and to an extent fish around to ascertain what had occurred between the parties.

The evidence of the other plaintiffs occupied nothing like that time. Next called was Mary whose evidence runs over 12 pages of transcript. She was not cross-examined. Then Douglas gave evidence. His evidence runs over only 10 pages of transcript including less than one page of cross-examination. Barbara's evidence runs over 16 pages. She was not cross-examined. Valma's evidence runs to 10 pages including something under two pages of cross-examination. Then her husband David and their children Karen and Trevor gave evidence. None was cross-examined and their evidence runs over a total of only 13 pages.

8. The evidence

I now refer to the evidence. In doing so I will make findings of fact. I do not repeat the admissions or findings of fact referred to already.

In assessing the evidence and making findings of fact I bear in mind that Eric acted on his own in his dealings with the plaintiffs and by reason of his death is not able to give his version of the events, and nor is any other person able to be called by the defendant as a witness to those events. In such circumstances the self interest of a claimant to give evidence favourable to his or her case is obvious. The law does not require that the evidence of a claimant against the estate of a deceased person, assuming it not be disbelieved, be corroborated but in such a case much caution is exercised before the evidence of the claimant is accepted.[1]
[1]See Morrissy v Clements (1885) 11 VLR 13 at 24; In re Hodgson; Beckett v Ramsdale (1885) 31 ChD 177; Tone v Brolly (1891) 17 VLR 467 at 471; Plunkett v Bull (1915) 19 CLR 544 at 548-549; Thwaites v. Ryan [1984] VR 65 at 78-79.

It is convenient to commence with Wade's evidence. Not only was he the first witness but his evidence served to lay the general foundation for the plaintiffs' case on each agreement. The evidence of the other plaintiffs was of much lesser compass, as is indicated by the extent of their evidence in the transcript. Ultimately, in his final address, counsel for the plaintiffs did not rely on the evidence of all of the plaintiffs.

Wade recalled visiting Eric at his property when he was a boy in the 1970s. Wade's grandparents and Eric lived in a house on the property that his grandfather had built. He visited in most school holidays until he became a teenager when other interests reduced the number of his visits. His grandparents died in 1981. Eric continued living in the house.

Wade enlisted in the Air Force in July 1980, married Barbara in 1985 and left the Air Force in February 1988. His evidence indicates that his visits to the property to see Eric were less frequent in these years. He had probably visited Eric at least once in 1987 and spoken to him on the telephone on numerous occasions in that year. Within weeks of returning to Melbourne on leaving the Air Force he and his family visited and stayed with Eric, and they spoke on the telephone two or three times a week.

On his discharge Wade immediately took up employment as a sales consultant. That lasted only three weeks. He then looked for employment. He saw an advertisement for a scheme under which people aged between 18 and 25 received instruction and financial assistance to commence their own business. He recalled when he was young being involved in the removal of tree ferns and like plants and thought that, tree ferns being prolific in the Otways, if Eric was interested he could probably set up a fern nursery on his property. He spoke to Eric who was agreeable to him using part of his property for a nursery. He attended the course which was part of the New Incentive Employment Program and received instruction in Small Business Management. Instruction was provided as to steps to be taken in commencing a small business, including how to write a business plan and approach a bank for finance. Under the program he received income assistance for 12 months.

With the intention of establishing a fern nursery, Wade and his family moved to a rented house in Lavers Hill in 1988. No stock or equipment was held at the home but, as it had a telephone, it was the office and contact point for suppliers and customers. Eric had already given Wade permission to use a small portion of his land, less than one acre, at which to carry on the production side of the business. Eric did not require any payment for the use of his land. A potting shed was built and benches laid out on which to stack pots. This was the nursery. With Eric's permission Wade gathered ferns for potting and sale from the wider property; Eric was paid for the supply of stock.

The business was called Nature's Haven. Wade and Barbara arranged a $10,000 fully drawn advance facility with the ANZ Bank at Colac, which was where Eric banked. The business name was registered in the names of Wade, Barbara and Barbara's father Doublas. They were partners. Douglas, who described himself in evidence as a silent partner, provided a personal guarantee to the bank. It also seems from the business cash receipts book, and it was accepted by Wade as being the case, that although in his evidence Douglas said he only advanced the $15,000 referred to below, in fact he advanced $2,000 to the business in October 1988. As he had gone guarantor, Wade and Barbara treated Douglas as a partner and included him on the business name registration document as conducting business under the name. Douglas signed that document. Otherwise, and save that he might occasionally help out on site, Douglas was not actively involved in the business and obtained no benefit from it.

After nearly two years, in about mid April 1990, Eric's employment with Victree Forest ended. He had a background of working as a logging contractor and operating a bulldozer. He also logged trees and gathered and sold ferns from his property, which produced some income for him. Wade said he helped Eric in these matters and in the care of his land. After losing his job Eric asked Wade if there was work available at the nursery. There was and they agreed that Eric commence work although only on a casual basis as he had commitments with his farm and other duties. They agreed on a starting day and a wage which Wade thought was about $10 an hour. Eric was aiming to put in about 30 to 40 hours per week.

As mentioned earlier, there is no dispute that Eric worked at the business in July 1990. In the cash payments book (which recorded payments by cheque out of the bank account) of the business the first record of wages paid to Eric is $483.70 on 19 October 1990. Down to and including June 1991 the book records varying amounts paid to Eric as wages in every month except September 1990 and January, May and June 1991. In addition, there are time sheets for Eric which record him working at times in the months of July 1990 to April 1991 inclusive with the exception of August 1990. In addressing this period Wade said that Eric had trouble at times being motivated with mundane jobs in the nursery, and that a lot of stock was turned over. The stock was native ground fern which they purchased off numerous suppliers, potted and later sold to customers throughout Victoria. As I understood it, ground fern was also obtained off Eric's land. Wade undertook a delivery run once or twice a week. That evidence indicated that all might have been going well with the business but that was not the case.

This brings the account to May 1991 and the time of the alleged first agreement. It is important to note concerning this agreement that it is not contained in writing and that while the parties to it are Eric on the one hand and the Hogans on the other hand the agreement was not made in any conversation between them. Rather, what occurred is that Wade spoke to Eric and then spoke to one or both of the Hogans and then to Eric. Thus is the first agreement alleged to be produced. The case is that, when he spoke to Douglas or Mary, Wade was acting as Eric's agent duly authorised by him to make an agreement to the effect alleged.

Wade said that Eric stopped working in the business "roughly" in May 1991. At other points he was clearer that it was in May. That accords with the wages records. I infer that the reason why Eric stopped work was that the business had reached such a bad state financially it could not afford to pay wages. According to Wade a strong customer base had been established but there were the following negative features: low sales, a "fairly high" overdraft of $15,000 and a fully drawn advance of about $8,000, insufficient cashflow, and a lack of collateral and capital to grow the business sufficiently to make a profit. Wade and Barbara considered that as matters stood the business would have to close. According to Wade, there was enough stock to clear the debt. But the business was not viable without further funding which Wade and Barbara did not have. Nor did they have collateral to offer a lender as security for finance.

It was in these circumstances that Wade and Barbara had a discussion with Eric at his house in May 1991. Wade said that he and Barbara had a lengthy discussion with Eric about their options. Wade said the purpose was to inform him of the situation. He wanted to highlight to Eric that he was going to lose his job. He informed Eric that the lack of funds meant that they were unable to continue the business. They did not have with them any written information concerning the state of finances of the business, and they had not prepared a revised business plan. I am prepared to accept that they did not approach Eric with the intention of asking him for money or to provide security for their business borrowings, although a hope of assistance may have been in their mind. Wade said Eric expressed concern they were giving up too easily and that he said surely there was a way the business could be kept running. Wade said that after a period of time "we came to the conclusion that we needed … an injection of capital into the business". Eric alluded "to the fact that he had always promised us a bit of dirt to build a house on and he said that if you had the money to purchase that land we would – I'd put that money into the business and out of that would grow a partnership and he would come in as a partner". Wade said that was "the intent" of the discussion and the direction it took from that point.

Wade went on to refer to a visit by or to the Hogans and stated that he and Eric approached Douglas about the idea. I accept that the Hogans later visited Wade but do not accept that Eric approached, or had a discussion with, Douglas about the idea.

At this and other points, Wade's evidence suffered from not being in the nature of a recounting of a discussion as it had occurred but, rather, was his summary of the discussion or event and conclusionary in nature. Perhaps this was due to the elapse of time but in part it was the way in which Wade gave his evidence. It was also reflective of the informality of the discussions. Further, in a case such as this in which the evidence is of oral transactions as long ago as 1991, and only one side to the transaction is able to give evidence, careful scrutiny is required to ensure that the evidence does not suffer from reconstruction or embellishment due to imperfection in recollection and a recollection which has come to suit one’s case.

With those findings and observations, I return to Wade's evidence as to the meeting with Eric. He said that Eric saw "us" (meaning Wade and Barbara) as part of his family. In the past he had made comments about subdividing a block of land for Wade and Barbara. Eric wondered if there was any way in which Wade could get some funds for him to buy the block of land. Wade remarked to Eric that the land could be collateral to support further funding for the business. He also said to Eric that the only way he could get any money would be to speak to the Hogans "and negotiate some form of arrangement".

Wade added that towards the end of the conversation Eric said he was interested in coming in as a partner and that he would like to speak to a solicitor about it. Wade said the idea of partnership "sort of flowed out of what was happening and it was presented by Eric because I think he thought [he would benefit financially]". His recollection was that the idea of partnership came from Eric.

It is important to note that to this point in the evidence the actual area of land to be transferred to Wade and Barbara had not been identified and there had been no discussion of a purchase price for the land. Also, Eric has said he would like to speak to a solicitor about the matter of partnership.

Further on, and well into his evidence-in-chief, counsel returned Wade to the initial conversations with Eric and Douglas. It came after the lunch adjournment and was done for the purpose of seeking to link the payment of $15,000 and Eric becoming a partner with the transfer of land. Wade said that Eric offered to sell to Barbara and himself the block of land he had once offered to give them. Wade said he had insufficient funds and that he could contact the Hogans and perhaps borrow the funds from them. He then spoke to Douglas. (This conversation is referred to below). Douglas said he would pay Eric $15,000 for the block of land. The next day Wade told Eric that Douglas had agreed to pay him $15,000 for the land. Eric said he was happy Douglas had the money "for us to go ahead with" and asked when it would happen. They then talked about seeing a solicitor. This account differed somewhat from the earlier account in its emphasis upon Douglas paying Eric $15,000 to buy the land. In my view it was an attempt, after consideration over lunch, to meet a contention that in truth the Hogans had simply agreed to advance $15,000 to the business and that a transfer of land was not involved as part of the agreement. Moreover it was not part of the arrangement as the Hogans described it that they were buying land. Their requirement was that their money be applied direct to the business on the proviso (as Douglas put it) that Eric transfer land at some subsequent time. There was no suggestion in their evidence that they paid their money as a purchaser or that the transfer was to be at their direction. In truth, I find, in giving the evidence Wade was gilding the lily in an attempt to strengthen the Hogans' case. Wade and Barbara had an interest in the Hogans succeeding. The $15,000 had been advanced at their instigation and no part of it had been repaid.

There was further evidence in Wade's cross-examination which was relied on by counsel to establish the first agreement. Wade said he told Eric of the $15,000 overdraft, that the business was struggling, they were in trouble and the only way would be to close down and sell the stock to pay the debts. He said he did not ask Eric for $15,000. Rather, Eric asked Wade: if he could pay him $15,000 for the block of land he was going to give him "Would that clear the overdraft and would it be able to continue?" Wade described this as "a mere option that he brought forward". He referred to previous discussions with Eric who, he said, "was going to give me the block of land anyway". He said that Douglas' involvement was not really in his mind until Eric asked if he could get some money to put in for the block. Wade said that he did not intend to use the land as collateral. Once the $15,000 was received from Douglas the issue of the transfer of the land in a sense faded.

Later in cross-examination Wade was clear that the payment of the $15,000 by the Hogans was "never a borrowing". He said it was a payment for the block of land that Eric was going to sell to Wade and Barbara.

Then, on the issue of the particular part of Eric's land to be transferred, Wade said that he and Eric had visited probably two or three sites that would be suitable for a house and that a particular site was chosen which was the subject of the proposed plan of subdivision prepared in 1994 and which is referred to below. However, as at the time of the making of the first agreement an actual site had not been agreed. He further said that the transfer had to be subsequent to payment of the $15,000 as the land had to be identified and subdivided. It was not until 1994 that a plan of subdivision was prepared. He said that that plan was prepared pursuant to the first agreement. As to that plan, Wade said Eric asked him "what do we do now" and that he (Wade) told him that if he could do so he should sell the block of land to get rid of his debts.

Somewhat inconsistently with the above Wade said that the block on the proposed plan of subdivision was the block for which the $15,000 was paid. This does not sit well with two things: the fact that in May 1991 the actual piece of land had not been selected, and that the lot on the 1994 plan was 10.6 acres in area.

According to Wade, following their discussion with Eric, he and Barbara telephoned her parents and asked for money. Wade said that first Barbara and then he spoke to Douglas. Barbara gave no evidence concerning this conversation. Before referring to Wade's evidence it is convenient to refer to evidence of the Hogans.

Mary's evidence is that, on the occasion of a visit by the Hogans to Wade and Barbara at Lavers Hill, Barbara said that they were thinking of getting out of the business, they had had enough and would call it a day. She had said that Eric did not want them to go. Then, with a wry smile Wade asked them if they had a spare $15,000 they could lend them. Wade and Barbara said that the $15,000 was to be loaned to Eric to pay into the business and in return they would get about 15 acres. The Hogans did not give an immediate answer. Mary thought Eric was not a good businessman and she did not altogether trust him. They went home and thought about it. They did not want to give money to Eric as he might spend it. Accordingly the Hogans settled on the following: they would put the money ($15,000) straight into the business account, and that is what they did, without any reference to or discussion with Eric. I refer to the step of making the payment below. Mary stated that in return for the money being put in there Eric "was to subdivide the land and give Barbara and Wade the 15 acres and that was his input into the business because he had no capital".

Mary said that Eric had pointed out the area of 15 acres in 1989. She did not actually go to the site, he pointed out where it was. I note that this evidence does not establish that the area in the direction of which Eric pointed comprised about 15 acres.

It may be that the conversation occurred after the Hogans had visited Lavers Hill and had a conversation of the nature referred to by Mary, and not in the reverse order as Wade's evidence indicates.

I now refer to Douglas' evidence. He did not have a good recollection. In explaining the transfer of $15,000, he said that Wade had told him the business wanted an injection of funds and that Eric wanted to be a partner in the business, and it was done so that he could be a partner. It is apparent, but I find, that Douglas did not discuss the matter with Eric. Douglas said that the $15,000 was paid "on behalf of Eric Hider". When pressed as to who actually asked him to transfer the money he thought it was probably Wade but then said that at this stage he did not know who had asked him but he knew why it was done. In that respect he added that the money was paid on "a proviso that 15 acres of land would be given to Wade and Barbara so they could build a property on that land". He said that at different times Eric had pointed out different areas where they might subdivide the 15 acre part. Douglas did not say when these occasions were. The fact is, as the evidence of Wade and Mary makes clear, Eric was talking about giving a Wade and Barbara part of his land and pointing out parts before May 1991 and the making of the alleged first agreement, and also subsequently. Not only is there an imprecision in Douglas' evidence on this point but it indicates the difficulty in relating evidence of pointing out some or other part of his land of some actual or appropriate acreage at some or other time to a promise as part of the first agreement and as a statement of intention to perform such a promise. I note too that when pressed Douglas said that he could not remember Eric actually saying to him that the idea was to transfer land to Wade and Barbara.

I return to Wade's account of his conversation with Douglas.

Wade said that when the telephone was handed to him he told Douglas the business was struggling, that he and Eric had discussed partnership but Eric needed capital and that he asked Douglas if he would give Eric $15,000 for that capital. He said that he and Barbara would receive land from Eric on which they could set up home, and he referred to an area of about 15 acres which Douglas was aware of. Douglas asked how the arrangement was to work and what was the function of the $15,000 and about Eric's ability to work in the business. Wade assured him and Douglas said that if Wade and Barbara were going to get a benefit in the way of the land he would provide the $15,000 to Eric. Wade said that this area of land had been discussed as a place for he and Barbara to set up home "probably since coming to the Otways". He had visited a couple of sites with Eric as far back as late 1988.

Wade said that subsequently he discussed the matter with the Hogans at Lavers Hill. On Wade's account nothing was added to the matter in that conversation.

Wade said that he spoke to Eric and told him that Doug was happy to give him the money as they had discussed. He advised that the funds would be available from the Hogans "for us … to get that block of land". Eric said "That's great". Wade also referred to Eric saying "Well, if we can organise it then I'll come in as a partner". To a further question he said he informed Eric that Douglas was happy to provide the $15,000 for the transfer of around about 15 acres to himself and Barbara, and Eric said the $15,000 would be his contribution as a partner in the business and asked when would they see a solicitor about it. In fact Wade and Eric went and saw a solicitor at Coulter Burke in Geelong within the next few days. I find that, in the initial conversation and subsequently, Eric referred to the need for legal advice. It is further to be observed that on the evidence this was the first time in the discussions between Wade and Eric that the land was identified as being about 15 acres and that $15,000 was related to such an area. (That is not to say that in a discussion between them at one time or another Eric might not have talked of an area of about 15 acres.) At one point in his evidence Wade said that $15,000 was a rough estimate of what "we saw as the value". But, he said, it was "a nominal fee really". It seems clear and I so find, that $15,000 was not arrived at as any sort of assessment of the market value of any portion of Eric's land. In the first place no such actual area of land had been identified by the parties. Rather, and in my view this is the truth of the matter, the amount of $15,000 was adopted because it approximated the amount owing of the business overdraft.

I now refer to the meeting which Wade and Eric had with the solicitor. Following the meeting the solicitor sent a general letter of advice which mentioned a range of matters for their consideration. The letter is dated 8 May 1991 and refers to a discussion on 6 May 1991. I find that they met with the solicitor not long after the initial discussion at Eric's house. The letter commenced by noting that Wade had been conducting a wholesale nursery business for about three years on land owned by Eric at Lavers Hill and that no formal lease had been entered into or rent paid to Eric. The letter stated that it was desired now with a view to reducing overheads to enter into a partnership for the further conduct of the business, anticipated to commence on 1 July 1991. The letter then raised a range of matters which they should consider before the solicitors could draft an adequate partnership agreement. They confirmed their suggestion that it may be appropriate for Eric, in particular, to obtain independent advice. That was doubtless because the proposal as reflected in the letter involved Eric transferring all his land to the partners and the land being security for existing indebtedness of the business, the basis and tax consequences of which needed consideration. Some of the other issues were how capital was to be contributed and profits and losses were to be borne. The solicitor sent a copy of the letter and an account to Wade and Eric. They never saw the solicitor again and obtained no further legal advice on the matter. Nor was a partnership agreement prepared. Nor was a business plan prepared for the future.

Wade was cross-examined about the absence of any reference in the letter to a transfer of 15 acres for $15,000, and the fact that the only transfer mentioned in the letter was of all the land. Wade could not recall the amount of $15,000 being discussed. He also said the solicitor had misunderstood what had been said.

It would seem more likely that the agreement of the Hogans to advance $15,000 was advised to Eric before the attendance upon the solicitor, although on this and some other matters it is hard to know exactly what came first in the way the evidence was given. In the end it seems not to matter. Whatever the sequence, the plaintiffs' case is that an agreement was made as alleged in the amended statement of claim.

On the partnership aspect, Wade said that in a discussion with Eric in late May it was agreed that Eric would have a 45% interest and that Wade and Barbara each have a 27½% interest, that the new partnership would carry the liabilities of the former partnership including the existing debts and Eric would work 46 hours a week. Eric would not then be paid a wage but would receive agreed drawings. And whereas previously he was paid for all ferns taken from his land he would in future only be paid for tree ferns.

Wade and Eric saw the bank manager and advised him of the new partnership arrangement. Eric agreed to a request of the manager that the mortgage currently held by the bank be available as a security for Nature's Haven debts.

Wade also referred to an occasion, which I infer was in May 1991, when the Hogans visited and they (with Wade and Barbara) went to see Eric. He could not remember what was said. He just remembered talking to Eric about the decisions that had been made and the plans they had put in place. There was, he said, an air of celebration about the whole deal, an acceptance of all parties. It is important to note that evidence was not given of the discussion on this occasion in a form which established what had been said and thereby be able to constitute a basis for a finding of an agreement and its terms. Moreover, counsel for the plaintiff did not rely on the evidence to establish the agreement.

The next step is that on 3 June 1991 the Hogans had $15,000 transferred from their account with the Defence Credit Co-operative (Aust) Ltd to the credit of an account which Wade and Barbara held with the same Co-operative. In other words, the funds were transferred direct to Wade and Barbara who then went to the ANZ Bank in Colac where the business account was held and saw the manager for the purpose of having the $15,000 transferred to the credit of the business account. They provided the manager with their own cheque for $15,000. The manager informed them that Eric was slightly overdrawn on his personal account and he required that part of the funds be used to clear that debt. That was done. Eric was unaware of these transactions and what was happening at the bank. The manager effected the following deposits with Wade and Barbara’s concurrence: $2,536 was credited to Eric's account and the balance of $12,464 was credited to the business cheque account. This occurred on 5 June 1991. The receipt book of the business records that on 5 June 1991 $12,464 was received from Wade and Barbara. It was so recorded because the funds were received by cheque from their personal account. Nevertheless, they regarded that as Eric’s incoming to the partnership.

I accept that the parties agreed that Eric would become a partner as from 1 July 1991. Consistently with this on 24 June 1991 Wade, Barbara and Eric, and on 26 August 1991 Douglas, signed a business name form which stated that on 30 June 1991 Eric had commenced to carry on the Nature's Haven business with the other three.

In summary, the arrangements between the parties had a number of related elements, namely:

(a)the Hogans to pay $15,000 to Wade and Barbara for them to pay to the business (they would not pay it to Eric as he might have used it for himself);
(b)the $15,000 would be applied as Eric's capital contribution on becoming a partner;
(c)with effect from 1 July 1991 a new partnership would be formed with Eric as a partner with Wade, Barbara and Douglas, and on the basis that the partnership assumed responsibility for the liabilities of the former partnership;
(d)Eric would subdivide a portion of his land, said to be about 15 acres, and transfer that portion to Wade and Barbara for their use as they saw fit.

The story moves on from July 1991. Two points may immediately be noted. The first concerns evidence of the Hogans of statements by Eric as to the area of land to be given to Wade and Barbara. I mentioned earlier Mary's evidence that in 1989 Eric had pointed to an area. It was down past where they had picked beans and peas. She supposed that half a dozen times after advancing the $15,000 and up to Christmas 1993, she spoke to Eric about the subdivision of the 15 acres. He would avoid the subject and say "Oh you can't hurry these people, it all takes time". She felt it was under control. He was going down to Apollo Bay and it was all in the process. He did not identify the actual piece of land to be subdivided; Mary said "We didn't go into that". Eric just said the subdivision was under control; it would take time. She did not raise the subject after Christmas 1993 because Eric had not been well.

In his evidence Douglas said that at times they asked Eric if the land had been transferred across. He would say "Everything takes time, she'll be right". He could not remember him saying who it would be transferred to. Nor did he speak to Eric about surveyors but Douglas said he believed he knew "they had been there". Then to further questioning in-chief Douglas said that Eric pointed out "a few areas" where the 15 acres might be subdivided.

The second point is that Eric recommenced working in the business and commencing on 12 July 1991 to be paid drawings as distinct from wages. In the year to 30 June 1992 payments to Eric on account of drawings totalled $8,447 according to the summary in the cash payments book.

Unfortunately after six or eight weeks into that financial year Eric became unwell and required visits to doctors and hospital. The disease which ultimately caused his death had manifested itself. The time required for medical treatment and deteriorating strength reduced his ability to apply himself in the business which required manual work. Accordingly his hours reduced from an initially agreed 46 hours per week to a situation in which he would work as much as he could, when he could. Towards the end of 1991 he was virtually not working in the nursery business and had started doing jobs for other people.

Wade said, in reference to the July to December 1991 period as I understood it, that on two or three occasions he had spoken to Stewart, the solicitor, and that Stewart was working on the subdivision. When Stewart gave evidence he was not asked about, and did not refer to engaging in, any such work at that time. Nor was Brayley involved until 1993. I do not accept that Stewart was working on the subdivision in 1991. That and the absence of any evidence of surveyors being involved prior to August 1993 leads me to conclude, on the probabilities, that Douglas' belief about surveyors was subsequent to the fourth agreement. I also find, for the same reasons, that allusions in Mary's evidence to "these people", which would seem to be a reference to surveyors, was later in time than she recalled.

Turning into 1992, Eric's health had improved and in January Wade asked Eric what his intentions were with the partnership. The context was that a letter addressed to Wade, Barbara and Eric and dated 2 January had been received from the bank which noted the account was overdrawn $28,508 and requested an interview. The letter also referred to previous correspondence and noted that there was to have been a review by 31 December by which date the limit was to reduce to $25,000. To put it bluntly, the infusion of the $12,464 had not been sufficient to reverse the fortunes of the business.

In response Eric said he was concerned about the level of debt and whether the nursery could pay him enough to work in it. Wade said the level of stock was such that it should produce rewards when sold in the next few months. He said that an intensive effort was required to clean pots, remove weeds and prepare pots for sale. That was about 10,000 pots. Eric was agreeable.

An interview was had at the bank on 10 January 1992. A letter from the bank dated 12 February states that approval was given to an overdraft facility for $30,000 until 31 March 1992 when an update will be taken, and the fully drawn advance was to continue reducing at $254 per month and to be reviewed with the overdraft. Hence it can be seen that although the payment of $12,464 had reduced the overdraft account to $3,508 on 5 June 1991 the balance had since blown out to the $30,000 region.

Wade said that several days after the conversation Eric informed him that Keith Reid had advised he was ready to start building works at Eric's house. The background is this. On 18 November 1988 Reid had given Eric a quotation of $24,000 for the erection of a frame of a house. The job was to refurbish Eric's old timber house including converting it to brick veneer. Eric accepted the quotation but work did not start until early 1992. Reid said that Eric spoke to him from time to time as to his finances and when the job might commence. He told him he needed to arrange finance. Eric obtained finance from the ANZ Bank which was secured by a mortgage registered on title on 30 March 1989 (and later discharged on 23 July 1992). At one time he mentioned the cost of establishing the nursery. Anyway, whatever the circumstances, in early 1992 Reid told Eric he could commence work but on condition that Eric assist by providing his labour. Hence Eric's call to Wade.

That is the context in which Eric told Wade the builder was ready to start. Eric wanted Wade to help him with the labouring work. Wade pointed out that they had just agreed to work in the nursery over the next month or two to prepare the stock. Eric said the builder was coming and it would only take five or six weeks and when the house was at lock up stage they would go back and start on the pots. Wade agreed to help. They commenced preparatory works and the builder arrived about two weeks later. In all there was about five or six weeks' work during which, at times, Wade also did deliveries for the nursery. The house reached lock up stage in March 1992 and Wade returned to regular work at the nursery. According to Wade, Eric did not return to the nursery. The circumstances were these.

One day in early March 1992 after the house had reached the lock up stage Wade called in. Eric passed him Reid's bill and asked him "How are we going to pay it?" to which Wade replied that he (Eric) had organised his finance through the ANZ. Eric said he had spent it, and asked how he was going to overcome the debt. Wade said he would have to borrow more money. For some time they discussed how much he owed. They concluded that working in the nursery business would not provide enough money to fund his debt. It was more than Wade had understood it to be. According to Wade, in their discussion Eric asked him if he and Barbara would take over the business debts. He meant all of the debts. Eric said to him that he knew he would be looked after when Eric died because "you will get the property, I think his words were". And, according to Wade, Eric said "You know you must pay those bills and keep them up to date – I think was his word – because if you don't your brother and sister as well as you will not have the land in the end". Eric also said that he needed to concentrate on his own debts. Wade agreed to pay the business debts. Of course the payment of those debts was necessary to avoid the risk of the bank selling the land under its mortgage. It was also necessary to avoid the bank taking action against Wade and Barbara, and against Douglas as a partner and guarantor of the fully drawn advance. In the result Wade did make payments. In part at least he (and Barbara) did so in the hope that it would protect Eric's property which would ultimately come to him. This conversation is relied on by Karen, Wade and Trevor as constituting the second agreement.

Wade and Eric then went and saw the bank manager. Eric told the manager he had spent the initial $32,000 borrowed from the bank, $25,000 of which had been to build his house. They said that Eric would not continue in the business. Eric explained that there was not enough money in it to pay him for the next few months. He said he could do other things. Wade said they had agreed to dissolve the partnership and they would each go onto NewStart or JobSearch allowance. The manager said he would contact head office as to interest only finance on the nursery debt and an overdraft for Eric. Wade and Eric then attended at a social security office.

Apart from that Wade tried his best to derive an income from the nursery business. Eric took no further part in the business. Wade and Barbara attended to bills. That does not mean they paid every debt of the partnership – because they did not - but that they alone made payments. Wade struggled on with the sale of stock but there was a continuing cashflow crisis. When Eric died some viable stock remained on hand and $11,078.03 was owing to the bank. Wade said that when Eric died he was denied access to the stock and its condition depreciated. That is to move on somewhat, and I should go back to events that followed the meeting with the bank manager in March 1992.

Wade said that he and Barbara had meetings with the bank manager in May 1992. They discussed how they would deal with the business debts, the overdraft then being about $29,000. In the result, on 16 June 1992 the manager sent a letter addressed to Wade, Barbara and Eric in which he advised the bank had agreed to the existing fully drawn advance no. 1 to continue reducing at $254 per month covering principal and interest for five years, a second fully drawn advance for $28,700 was approved interest only for six months and then to be re-assessed, the limit on the overdraft facility cancelled and that account to operate strictly on a creditor basis. In other words, the amount of the overdraft was converted to a fully drawn advance. An approval letter for the no. 2 fully drawn advance was enclosed which Wade, Barbara and Eric were requested to sign and return and which was done. The letter stipulated the following as security: a guarantee from Douglas for $10,000 which was his existing guarantee for the no. 1 advance; and a letter from Eric which connected the debt to his existing security. Wade explained that the bank already held Eric's title so a letter was sufficient to provide security. Until 23 June 1992 the bank held a registered mortgage over Eric's property. Thus although Eric had ceased to be a partner the title to his land was security for the further facility. Wade said that in June 1992 the business debts were about $34,000, constituted by the no. 1 advance then of about $6,500 and the no. 2 advance of $28,700. As far as the bank was concerned Eric was liable for the account as a former partner, and was at risk under his security, and their correspondence continued to be addressed to him and Wade and Barbara.

I have mentioned that the registered mortgage to the ANZ Bank was discharged from the title on 23 July 1992. On the same day a mortgage to John Robert Davies and Vincent Anthony Vinci was registered in lieu. The mortgagees were solicitors and partners in the firm Clarke & Barwood who are the solicitors for the defendant in this proceeding. The mortgage is dated 3 July 1992 and secured an advance of $75,000. It was an interest only mortgage which required quarterly payments of interest. The due date under the mortgage was 3 July 1995. Of the sum advanced $44,205.53 was paid to the ANZ Bank in settlement of the amount due and secured under its mortgage. Hence the ANZ mortgage was discharged and the Davies and Vinci mortgage was registered as a first mortgage on the property.

To complete the picture, on 26 November 1992 a further mortgage to the ANZ Bank was registered on title. The advance secured by this mortgage seems to have been about $25,000. I am here referring to the Crown Grant which comprises about 191 acres. I have not seen the title to the 8 acre lot. It was not suggested that the position with that title was any different.

The story then moves to 1993 and the fourth agreement. According to Wade this arose in the following circumstances.

In late June or early July 1993 Eric told Wade that he had received a letter from Clarke & Barwood which made a demand under the Davies and Vinci mortgage for $2,800. Eric produced the letter and asked what he could do about it. He said he had no money. Wade suggested a meeting with the family. That was arranged and all the plaintiffs other than the Hogans met with Eric at Wade's house in early July 1993. All those plaintiffs were called to give evidence about the meeting. I now recount their evidence commencing with Wade.

Wade said that at the meeting Eric referred to the letter from Clarke & Barwood and said that $,2800 was outstanding. David said that he could not get any money out and Wade asked who had some money. Karen said she could get some. Eric starting crying and said to Karen that his intention "was to leave the property for you and your brothers". Karen consoled him. She put her hand on his shoulder and told him not to worry, "we would help". After a time Eric composed himself and Barbara said to him:

' … [did you] mean to say that if we help you, you will leave the property to – I think she said Wade, Karen and Trevor, or – I couldn't be sure if she said our names specifically, but I – she might have said the kids. And Eric said, "I will". Barbara continued saying "would it" – perhaps, I think she said, or maybe – "perhaps be better to sell us the property to make it easier for you", I think she said, and I think Eric said maybe. He said something like "maybe that's the way" or – yes, and I'm sure it was "maybe that's the way, it's something we'll have to talk about", I think he said. He did ask the question at that point, he said, "I'd still be able to live and use the property". I don't think he said – "as I do now", I think he said. It was something to that effect.
And who answered?---It wasn't as if it was a unanimous "Yes". But it was almost every member of the family said – almost in succession, that we didn't want him to feel that he was being pushed out of the property. I said personally that – I said, "Of course, it goes without saying, we're only here to help you through this problem". And similarly my father, I remember him saying – how did he put it – "We'll help you in any way we can" or something to that effect, and several other comments of support were given by the family members, not in any sort of semblance of order but more as a gesture of the understanding of the situation. I then asked, or made comment about my – I said "Perhaps if we re-finance" – re-finance wasn't the word I used – perhaps if I – "if we buy the land the amount of money I'm paying to the ANZ now would be enough to pay whatever payments were required". Something like that - to that – and Eric asked how much I was paying, he said, "How much are you paying?"
Did you tell him? --- At that time I was – I said to him, I said, probably around 12 or $1,300 a month. Eric replied his payments were – he said, "That's more than I pay now for 75,000", I think he said, and he stated the figure, and that's the – it continued along the discussion of amounts of money and who had availability of the money. I know that Karen reiterated that she could – she said that she could get the money we talked about earlier just by filling in a form and it was at that point I said, well, that's a start, the main thing is to get that money and get the initial debt – not initial debt – the debt, I think I called it, paid. '

Wade said that the meeting closed with him saying that the plan of attack was to pay the $2,800 and Karen confirming she would pay it.

After Wade had given the above account he was asked if he recalled anything more being said on the subject of a sale, to which he said:

' Right. After Barbara said that she – after Barbara said "You mean to say", or something to that effect, "you will leave the property to the kids; Wade, Karen and Trevor", Barbara said, "Would it not be easier or" – I don't think she said easier – "would there be less of a burden if you sold it to us", I think she said – or "to the family", I think she actually said – to the family.
What did Eric say as best you can recall in reply?---He said "Maybe that's one way to go". Maybe that's the way to go, and that's when I said that I was already – already making payments, I'm already paying a lot of – business debts, I think I called it – perhaps we can use that to purchase – to assist in the payments. '

Wade said that in response to a question from Eric he said he was paying over $1,200 per month.

Wade said that the next day he went and saw the solicitor Stewart, explained the situation and asked him to speak to Eric as to what he wanted to do regarding a possible sale. He told Stewart that one way of helping Eric might be to sell the property to the family. He also contacted the bank to find out about the amounts he was paying. He also asked if the bank would possibly re-finance Eric's property with all the family being involved. At a time which I find was shortly thereafter the bank sent a letter dated 7 July 1993 to the proprietors of Nature's Haven. The letter addressed itself to Wade, Barbara, Eric and Douglas. It advised that the bank had approved deferment of fully drawn advance payments due 1 July 1993 pending payout of the loans by 31 July 1993. Clearly, this resulted from Wade's telephone call.

At this point it is convenient to refer to the evidence of the other plaintiffs who were at the meeting with Eric.

I commence with Barbara. She said they all read the letter Eric had received. It requested payment otherwise the land would be sold. Eric was upset and was consoled by Karen. He said things like, "All I want to do is have something left to give to you three kids. That's all I ever wanted to do, and these mongrels are going to try and take my land off me". He asked Wade to speak for him. Wade said that because he, Karen and Trevor were going to benefit in the long run, they should take the burden of the debt from Eric. In the discussion Eric said he wanted to be able to keep the land so that he could give it to "you kids, I want to keep it for the family". He said he wanted the family to help. Barbara suggested she could see Stewart, for whom she worked at the time, and see what arrangements could be made as to perhaps buying the land from Eric so as to take the burden of responsibility from him. Barbara said she talked quite a bit because of her legal experience so she suggested she talk to Stewart and see what sort of arrangement could be made. A little further on she said that Wade said that "We would all help by making any payments in the future that Eric couldn't meet". Wade also suggested to Eric that any income he made from use of the property be paid to the mortgage and as to amounts he could not pay the family – or whoever was able to – would help.

Karen recalled Eric saying that he needed help because he had a debt and they were going to foreclose on the house. About $2,800 was needed in about a week's time. She said she had some money and would help as best she could. She said that Eric said that "If we put in – or if I put in money – I put in money, he would give the land to myself, my brother and Trevor". She remembered that Barbara and Wade asked whether they could all buy the place; she did not recall what Eric said to that. She said another idea discussed was that Wade and Barbara buy the land.

Counsel for the plaintiff did not rely on the evidence of Valma and David and their son Trevor to establish the fourth agreement but it should be noted.

Valma recalled Eric said that he owed money and he had to pay or else the land would be sold up. He wanted them to help him. She remembered that "we all decided we'd have to help him out". Otherwise she could not recall what was said. David said Eric said he had a mortgage that had to be paid urgently, he wanted some money in a few days and wanted to know if they could help. David thought that it was Wade that said they could help and Karen said she could get money straight away and make the payment he wanted. David said he could help after that. Eric thanked him. Trevor told him he could not help and he referred to in his personal situation. Wade said he would be able to help in some way. David could not recall anything else being said. Finally, Trevor recalled Eric saying he had a few difficulties in paying a few things, that he did not say what he wanted and that they said they would help him "as good as we could" to which Eric said "Yeah, no worries". He did not remember what the others said, and he may have left the room. His recollection was that they were telling Eric they would help out the best they could.

I have referred to the fact that on the day following the meeting Wade contacted Stewart and the bank. Karen did what she said she could do and on 9 July she obtained from her bank a cheque for $2,800 payable to Clarke & Barwood. She gave the cheque to Wade who took it to the ANZ Bank where it was deposited to the credit of the Clarke & Barwood Trust Account.

At this point the evidence of Stewart and Brayley becomes relevant. Stewart, who on past occasions had been consulted by Eric, recounted that in about July 1993 Wade and Eric came to see him to discuss a transaction. He was told Eric had two mortgages (to Davies and Vinci and the ANZ Bank), that he could not meet the payments, the family had had a meeting with him, and as a result it was decided to transfer the property to the Richardson family and they would assume responsibility for the mortgages. Eric did not expressly dissent from this. Stewart advised a contract would have to be prepared. It would have to be subject to the mortgages because there was no capacity to pay them out and it should be a terms contract. It had to cater for Eric's requirements that he be able to remain in possession of the property, that a two or preferably three lot subdivision be carried out, and that the proceeds of sale of any lot be applied in reduction of the first mortgage. And either then or later he advised that parties to a terms contract had to be separately represented and he recommended Eric see Clarke & Barwood. Thereafter Eric consulted Vinci at that firm.

On 20 July Stewart wrote to Clarke & Barwood. He noted that he acted for David and Valma, Wade and Barbara and Karen and Trevor. It is apparent from the letter, which was marked for the attention of Vinci, that Stewart understood that Eric had consulted Vinci. The letter set out Stewart's instructions: Eric owed $75,000 to lenders through Clarke & Barwood which was secured by the Davies and Vinci mortgage over the two titles; his clients "are desirous of purchasing" the 191 acre property on a "suggested purchase price" of $75,000; in addition Wade had a loan of $25,000 and would like to borrow $100,000 to purchase the property and consolidate his existing loan; because of valuation considerations it would be necessary to put up both titles for the loan; his clients "would like" to purchase under a terms contract so as to defer stamp duty; his clients would assume responsibility for the loan; the purchase would be subject to a planning permit to subdivide the property into three allotments and to a permit being granted to clear, fell and log the property, the proceeds from the logging operation to be lodged in an interest bearing trust account to offset the loan. The letter concluded by stating that the loan of $25,000 had been secured by a second mortgage against the title: that was the ANZ mortgage. It was noted that the bank wanted repayment. Stewart requested the amount be added to the first mortgage.

Clarke & Barwood wrote in reply on 9 August 1993. They advised that Eric was willing to sell the 191 acre property for $75,000 on the basis Stewart's clients assume responsibility for the existing $75,000 mortgage. Clarke & Barwood would not advance further funds to his clients and the sale would be conditional on Eric retaining possession to earn his income and having the first option to purchase at a price equivalent to the total amount of payments made by Stewart's clients.

Stewart wrote in response on 12 August 1993. The letter raised several aspects for consideration. On 20 August 1993 Clarke & Barwood sent Stewart a proposed contract of sale and vendor's statement under s. 32 of the Sale of Land Act 1962. It provided for the sale of the land in the Crown Grant to the Richardson Family for $75,000. The adjoining 8 acres was not included. The sale was subject to the existing first mortgage which secured $75,000 for which the purchasers were to assume liability. In a special condition it was provided that payment of the mortgage would constitute payment of the purchase price. Other special conditions provided: Eric was entitled to continue farming the property for income purposes provided the income was first applied in repayment of the mortgage; Eric was required to apply for all necessary logging and similar permits; Eric agreed to apply for a permit (on behalf of the purchasers) to subdivide the land into two or more lots and the sale of any lot would be permitted provided the proceeds were applied in reduction of the mortgage; and Eric had an option to purchase at a price to be agreed should the purchasers wish to sell the whole or any part of the land.

It may immediately be noted that Eric never applied for approval to subdivide and, as far as Wade knew, he never applied for a continuation of his existing logging permit.

Following this letter Stewart sought to have Clarke & Barwood increase their mortgage loan to $100,000.

In the meantime Wade had contacted the land surveyor Brayley with a request for a meeting at the property to look at the prospect of subdivision. As a result Brayley spoke to the Shire town planner and informed Wade of his advice. Wade had inquired as to a three lot subdivision. The advice was that the excision of two lots would not be reasonable under the planning scheme whereas one lot would be. Brayley arranged a site meeting for 26 August 1993 at which he and an assistant were present together with the Shire planning officer, Wade and Eric. They looked at the area Eric had in mind for subdivision. (While Wade had referred to two different areas to be subdivided in his initial telephone call, Eric did not do so; he took Brayley to one area that he had in mind.) The terrain made it difficult to estimate the size of the area. At Brayley's request Eric signed in blank an application for planning permit form on the basis that Brayley would prepare the necessary sketch and fill in the required details for the Shire. Brayley then had to prepare the sketch.

Eric also had the matter of paying his builder. A combination of the evidence and the plaintiffs' further and better particulars of the Eric's request to pay the builser $1,800 establishes, and I so find, that in early September 1994 Eric saw David and said he was having trouble paying the builder, and asked David to help him. David agreed and paid Reid $1,500 on 5 September 1994 and $300 in October 1993, a total of $1,800. David also made payments under Eric's mortgage, namely $1,000 on 18 October 1993 and 13 January 1994 to Clarke & Barwood, a total of $2,000, as interest due under the Davies and Vinci mortgage.

On 7 September 1993 Clarke & Barwood advised Stewart that they were prepared to lend $100,000. They requested that if that was acceptable Stewart forward his version of the contract.

On 13 September Stewart sent to Clarke & Barwood an amended contract of sale for consideration. The terms were somewhat different. The purchasers and the land sold were the same. The purchase price was increased to $77,800 and whereas there had previously not been a deposit there now was, namely, $2,800 being the amount paid by Karen. It was by including that amount that the purchase price increased to $77,800. It was now provided that the purchasers were to pay the purchase price by arranging a first mortgage for $100,000 which would be secured over both titles. The extra $25,000 would be used for the purpose of the business (in which Eric was no longer a partner) and Eric's second mortgage would be discharged in due course.

As it came about, something (of the details of which I was not informed) transpired between the parties and a contract was never signed. In his evidence Wade said that they had not been willing to go ahead with buying the property, that he told Eric who said "Okay, if that's what you want to do". Wade told him they would still help him to protect the property and do what it takes to keep it. Eric said he knew that. Wade then informed Stewart and asked him to contact Clarke & Barwood regarding the cessation of the sale. On 20 October 1993 Stewart wrote to Clarke & Barwood. He stated that he had been instructed by his clients that after discussions with Eric "it has been agreed between the parties that this matter will now not proceed. Accordingly my clients will not be requiring the loan". It was common ground that the letter stated the position as it was. It remained the position. Wade hoped the property would be left to himself, Karen and Trevor but it was not.

In the meantime Brayley had been left with his task and he ultimately produced a plan of proposed subdivision. On 15 April he wrote to Eric; he enclosed a copy of the proposed plan for his records and an application for planning permit duly completed with the plan and requested that Eric send it with a cheque and an enclosed letter from himself to the Shire town planner. Eric did not send the application to the Shire. Brayley also sent a copy of the proposed plan to Stewart for his information. The plan depicted one lot having an area of 4.3 hectares or approximately 10.6 acres to be subdivided out of the Crown Grant. It might be mentioned that the other area which Wade had referred to initially was estimated by Brayley to be between two and five acres in area.

A difference in the evidence of Brayley and Stewart may be noted. Stewart said that a month to six weeks earlier than 15 April Wade and Eric had told him they wished to proceed with the subdivision and that he contacted Brayley and made the necessary arrangements. Brayley gave no such evidence. If Stewart was correct, the instructions he referred to were not on the basis that the parties had agreed to proceed with a contract of sale. The parties never reviewed the matter of the contract of sale. Moreover the instructions do not mean that Eric was to give some land to Wade and Barbara, or any other member of the Richardson Family. The probability is that the purpose was to raise funds to enable Eric to reduce his debts.

Brayley had no further dealing with Eric. His next information was from Stewart that Eric had died and that consequently the subdivision was not proceeding. On 29 February 1996 Brayley wrote to Clarke & Barwood with an explanation of his involvement and requested the executor pay his fee of $180 for which an account was enclosed.

Following the making of the alleged fourth agreement Eric made payments to Clarke & Barwood under the Davies and Vinci mortgage. There were payments in October 1993 ($1,250), March, May and October 1994 ($3,110), and January, April and July 1995 ($6,750).

When Eric died and the Richardson Family learned Eric had not left his land to any of them, they made no further payments under the alleged fourth agreement. Wade said: "We stopped the payments". There "had been a breach of what was agreed" and that was the end of it.

9. Part performance

In his submissions on this aspect counsel for the defendant referred to the following authorities. He relied upon the judgement of Fullagar J as a member of the Full Court in Thwaites v Ryan[2] as containing a correct statement of the applicable law, in particular of the questions to be considered when part performance is raised and the order in which they are to be considered. Counsel referred me also to two decisions of single judges of this court in which that statement of principle concerning the order of the inquiry in a part performance case was applied.[3] At the outset of his address counsel for the appellant said that he agreed that those authorities stated the applicable legal principles and that counsel for the defendant had correctly outlined the relevant principles. He referred in addition only to Regent v Millett.[4] To these references I add merely a reference to the judgment of Marks J as a member of the Full Court in McMahon v Ambrose[5] where he expressed agreement with a particular passage in the judgment of Fullagar J in Thwaites.
[2][1984] VR 65.
[3]Riley v Osborne [1986] VR 193 at 199 per Kaye J, and Butler v Craine [1986] VR 274 at 282 per Marks J.
[4](1976) 133 CLR 679.
[5][1987] VR 817 at 846-848.

Further, no formality of a written record of the arrangement was made. In the context of a family arrangement, that may be understandable. But the absence of a written record is reflective of informality, and, perhaps, that in relation to the aspect of the transfer of land it was not intended by Eric at least that a legally binding agreement be created. That is to say, that the discussion was more an expression of a desire or intention on Eric's part without constituting a binding and enforceable agreement. Whether that be so or not I am of the view that the claim of a first agreement must fail.

I add that Wade struck me as a person who might well have considered that he had the land "in the bag", so to speak, and felt comfortable about saying to his in-laws that Eric would transfer land to himself and Barbara, as though under a contractual obligation to do so. He impressed me in his dealings with Eric as not being astute to ensure that all things were in place before making and implementing business decisions. For instance, the deliberate decision not to take further advice from Coulter Burke and not have a partnership agreement. I further note Wade’s evidence that Eric was a man who kept his promise.

In short, the plea of the first agreement is based on a fallacy, namely, that the Hogans agreed with Eric to provide him with $15,000. They would not do that. Accordingly they paid their money to Wade and Barbara. Hence the further plea in para. 6A is false. The Hogans did not pay $15,000 to Eric in accordance with his directions. They gave the money to Wade and Barbara for them to use on the understanding referred to above.

14. The first agreement - estoppel

On the above analysis of the facts the plea of estoppel must fail. It is sufficient to say that there was no first agreement and therefore the detriment alleged as a result of providing the $15,000 was not suffered as a result of the alleged agreement.

15. The second agreement

The issues here are similar except that there is no limitation point. The facts are brief; see [86].

On the pleadings the first issue is part performance. In my view it is impossible to say that the acts of Wade and Barbara in paying some but not all of the debts of the partnership, being debts for which they were liable in any event, and the consequent saving to Eric, were on the balance of probabilities unequivocally and in their own nature referable to some agreement of the general nature alleged. In my view the answer must be that the acts of payment are not so referable. The payment of partnership debts for which one is liable as a partner does not unequivocally refer to some contract between all of the partners dealing with the disposition of land owned by one of them whether on the death of that person or otherwise.

That leaves the plea of estoppel. That is, by reason of the detriment to Wade and Barbara in paying debts, the defendant is estopped from denying the second agreement is enforceable. It is not the fact that Wade and Barbara paid all of the debts but I put to one side the issue whether in fact up to the time of death they paid more than their proportionate share. I consider, rather, whether there was a second agreement as alleged or, to put it another way, a representation by Eric to that effect.

Regarding the evidence closely and being mindful of the need for caution in a case such as the present, I am not satisfied to accept, on the balance of probabilities, that Eric clearly stated, in terms that were intended to be and which were understood and acted upon as being in the nature of a promise, that he would make a gift by will of the entirety of his property to Karen, Wade and Trevor if Wade and Barbara would pay the bills of the nursery business and keep them up to date. Even accepting that Eric referred to a disposition of his property at death to Karen, Wade and Trevor, I do not accept that what was said was intended to be or was understood as being an irrevocable statement of intention to make a testamentary disposition of his property to Karen, Wade and Trevor. Rather, in my view, he was making a statement, in the context of an intention to leave his land to them, as to what might be the case – that the land would be lost – if payments were not made. See the recent discussion by Brooking JA in Flinn v Flinn.[11]
[11][1999] VSCA 1999 at [73-76].

16. The fourth agreement

Here, again, the plaintiffs (being all the plaintiffs other than the Hogans) sue on an oral agreement and rely upon acts of part performance or an estoppel to establish their claim.

At [22–25] I set out the allegations in the amended statement of claim. All that was alleged by way of particulars was that "The agreement was partly oral and it was evidenced in writing". It was alleged that the writing was a draft contract prepared by Clarke & Barwood acting for Eric; this was the contract referred to at [108]. Then the amended statement of claim alleged an agreement to the effect I set out at [22]. The obligation on Eric was alleged in the alternative to be either to forthwith transfer the land in their Crown Grant to the Richardson Family or on his death to leave by his will the whole property to Karen, Wade and Trevor. I have set this out as it is essential background in understanding how counsel for the plaintiffs put the case in final address.

Late in his final address counsel informed me that the first alternative of an immediate transfer of the Crown Grant was abandoned. Counsel said, in explanation, that he could not "point to anything at the meeting" in July 1993 between Eric and the Richardson Family "where there was a concluded agreement to sell". Counsel said that the plea of a gift to the Richardson Family "should not have been there at all". Counsel then said, however, "that when that family meeting ends, there is a binding obligation on Mr Hider to leave the property to [Karen, Wade and Trevor]". He submitted that there was an agreement because the Richardsons had agreed to remedy the immediate default and to support him financially. He submitted that there was to be found in the evidence a promise by Eric to leave the property in his will to Karen, Wade and Trevor.

In abandoning the claim that Eric had agreed to forthwith transfer the land in the Crown Grant counsel merely addressed the reality of the situation. The claim was doomed to fail. It was not established by the evidence of any plaintiff. If one may speculate, the inspiration for the allegation probably lies in the subsequent attempt to conclude a written contract of sale. Perhaps too it was inspired by a statement such as Stewart gave in evidence that he was instructed the property was to be transferred to the Richardson Family: see [103]. It is sufficient to say of this evidence that it did not state the fact as to an agreement at the meeting. There was no such agreement, as counsel conceded. It was no higher than an idea to be taken up and worked through. The parties did take it up but the idea was abandoned before a contract of sale was signed.

Counsel then addressed submissions as to the relevance of the draft contracts of sale. Notwithstanding that neither contract referred to a gift by will to Karen, Wade and Trevor, and that the draft contracts were concerned with a sale to the Richardson Family, counsel submitted they were relevant in pointing to what came out of the meeting. They do that insofar as they are part of what occurred in pursuing the matter of a sale. However that part of the case is abandoned. What occurred subsequent to the meeting is reflective of the fact that a discussion, and, it may be considered, a serious discussion had occurred, but neither draft contract evidences a promise by Eric to give the whole property to Karen, Wade and Trevor by his will.

17. The fourth agreement – part performance

This means that the agreement sued upon was oral. Counsel for the plaintiff conducted the case on the basis that to succeed he had to establish part performance or an estoppel.

The acts of part performance identified in the plaintiffs' reply are the payments of amounts under the mortgage and the payment of $1,800 to the builder Reid. I mentioned at [27] that another act of paying a judgment debt of $568 is to be disregarded. As mentioned earlier the payments under the mortgage were: $2,800 by Karen on 9 July 1993 and $1,000 on 18 October 1993 and 13 January 1994 by David, a total of $4,800 in the period July 1993 to September 1995 inclusive. In addition, by payments in September and October 1994 David paid Reid $1,800.

Karen's payment of $2,800 constituted a payment of the arrears of which Clarke & Barwood had demanded payment. David's payments may be taken as amounts which at the time Eric had a present difficulty in paying. I address below whether they may be considered as payments made pursuant to the fourth agreement.

In his final address, when making submissions as to acts of part performance, counsel referred to and developed an argument concerning Karen's payment of $2,800. Apart from a fleeting reference to "the other payments" he did not develop an argument concerning them. Perhaps this was because the other payments were made by David and he was not a plaintiff in respect of the claim being pursued. Nor did it seem to be submitted on this aspect that in making payments David was acting for an on behalf of Karen, Wade and Trevor pursuant to the alleged agreement. I note at this point, by way of reminder, that once the first alternative claim of an immediate gift to the Richardson Family was abandoned David was not a claimant for any relief at all. Hence the relevant plaintiffs for the purpose of identifying an act of part performance are Karen, Wade and Trevor. Of those plaintiffs only Karen made a payment. It should however be noted that the amended statement of claim alleged that the obligation to make payments was a joint obligation of the Richardson Family. In this respect it did not distinguish between the alternative claims in favour of the Richardson Family on the one hand and Karen, Wade and Trevor on the other hand. Perhaps therefore, at least in the sense of being within the pleading, it is to be taken that the payments by David are to be considered as acts of Karen, Wade and Trevor in relation to the agreement they rely upon. The matter is not so simple however, and I should now say why. Take first David's payment of $1,800. The pleaded case is that in July 1993 it was agreed that in consideration of, inter alia, the payment of $1,800 at Eric's request to Reid, Eric would make the inter vivos or testamentary gift. This part of the pleading is impossible to sustain. There was no reference to that payment at the meeting in July 1993. As I have found above, it was not until early September 1994 that Eric asked David to make that payment. It should never have been in the pleading. This may explain why counsel did not develop argument about the payment. The second point is that David's payments were made at or subsequent to the time (October 1993) when the parties called off the idea of a sale. Notwithstanding these matters I will consider these payments as alleged acts of part performance.

This is not a case in which an alleged promisor has given up possession of his land for another who has also made payments by way, for instance, of mortgage, rates and upkeep. Eric never gave up possession. It is not suggested that the use of a small area of his land in connection with the nursery business in any way constituted an act of part performance. The case rests on the payment by Karen and also, I accept for this purpose, the payments by David.

In my view the single payment of arrears of $2,800 was not unequivocally referable to some contract between Karen and Eric of the general nature alleged. The payment is explicable in my view as a payment by Eric's niece to assist a relative in a present situation of difficulty. And that was the case. Eric was in difficulty in two respects: health and financial. The single payment which Karen made as early as July 1993, and which was not followed by any other act on her part, was the kind of thing that can occur within a family, as the Richardsons regarded themselves, to assist a relative in necessity. Eric's circumstances are readily to be understood as productive of such a circumstance. The same I think is true of David's payments. All told the payments were made in July 1993, in or about September and October of 1993 and January 1994. No further payments were made before Eric's death in September 1995, a further period of some 20 months. In total Karen and David paid $6,600. By contrast, in the period July 1993 to September 1995 Eric made payments under the mortgage of $11,110; and he did not give up possession of his property. To develop the contrast a little further, in the period from February 1994 to September 1995 in which the plaintiffs made no payment Eric paid $9,860 under the mortgage. These facts are consistent with the payments by Karen and David being made at times when Eric had difficulty in doing so and to assist him in that regard and that the payments ceased as he overcame that difficulty.

Further, while the payments of Karen and David might seem large from their point of view, one might reasonably suppose they were not of large proportion in relation to the value of Eric's property of about 200 acres. Further, the circumstances of the payments were such that Eric might have been expected, when his financial position better enabled him to do so, to have repaid the amounts contributed.

In my view the payments, and whether Karen's payment is considered alone or together with David's payment, were not in their nature unequivocally referable to some such agreement of the general nature alleged. Accordingly the claim of part performance must fail.

It is, however, necessary and desirable that I record my finding as to whether there was a fourth agreement as alleged.

The submission is that there is to be found in the evidence of the discussion at the meeting a promise by Eric to leave his property by will to Karen, Wade and Trevor. I reject the submission.

The evidence indicates that three ideas or possibilities were mentioned in the discussion. They were: leaving the property to Karen, Wade and Trevor; a sale of the property to the Richardson Family; or that Wade and Barbara buy the land. The third was referred to in evidence only by Karen. I accept that it was raised.

I accept that in the discussion Eric said that he intended to leave the property to Karen, Wade and Trevor and that he asked the family for help. I note that Karen used the word "give" but I would understand the meaning as being to leave by will. I find that Eric made this statement in the early part of the discussion. At this time he was upset and distressed and required comforting. It is probable that Wade said that as they would benefit in the long run he, Karen and Trevor should assist Eric with his debt burden. I do not accept, and it is not the pleaded case, that it was suggested that they assume liability for all Eric's debts. It was neither the proposal nor what was done. The proposal was to assist when necessary to the extent they could do so. That is also borne out by the subsequent record of payments.

According to Wade, Barbara asked Eric whether "if we help you, you will leave the property to [Karen, Wade and Trevor]" and that Eric said he would. There is also Karen's evidence that Eric said that if money was put in he would give them the land. I am more inclined to find that Eric said something to the effect of the latter evidence than to accept the former evidence in its literal form. That is because, having seen the witnesses, I cannot believe on my assessment of them, and I do not accept, that Barbara or any other member of the family present was intending to strike a bargain of a contractual nature with Eric in making that or any such statement. That is, I do not accept that the offer of financial assistance to Eric was extended as a quid pro quo for a promise by him to gift his property at death to Karen, Wade and Trevor. The greater likelihood, and the finding I make, is that Eric referred to his intention to leave his property to Karen, Wade and Trevor and said words to the effect that if he is not helped financially the land may be lost. In that sense they should assist as his intention was to benefit them. Barbara, I find, asked for clarification of that intention. Karen's evidence reflected the substance of the matter.

It is at this point, I find, that a different approach was introduced into the discussion. I find that Barbara, and Wade also, asked Eric whether it might be better for him to sell the property. I referred above to Karen's evidence that an idea discussed was that Wade and Barbara buy the property. It would seem that in the first instance, when the idea of a sale was raised, that it would be a sale to all the Richardson family present as distinct from a sale to Wade and Barbara. That is how it would seem but nothing turns on the precise order in which the ideas were raised and discussed. What is clear however is that it was not discussed that the property might be sold to Karen, Wade and Trevor.

Eric did not agree to a sale. He said that it may be the way to go, but it would have to be talked about. He did make it clear that if there were a sale he would have to be able to live on and use the property. The meeting ended on this basis.

I find that, by the time the meeting ended, the plan of action of the parties was that Karen would meet the immediate financial difficulty by paying the mortgage arrears of $2,800, that further financial assistance would be provided by members of the family if necessary and to the extent it was possible for them to do so, and that the matter of a sale to the Richardson Family would be pursued. The discussion had moved from a statement of intention by Eric to leave his property by will to three members of the Richardson Family to a possible sale of the property to all members of the Richardson Family. They were two very distinct and different concepts. One did not stand with the other. In my view the situation was fluid. The submission of the plaintiffs' counsel involves a finding that in the early part of the discussion Eric made a statement, not merely of a revocable testamentary intention, but as a promise of a gift by will intending to be bound by it and understood as such by those to whom it was conveyed. It also involves a further finding that when the discussion moved on to the idea of sale and concluded without agreement but on a basis that was not unfavourable and that discussions would take place, that all that, and all that followed, was without prejudice to the continuing subsistence and enforceability of the earlier testamentary promise and agreement. It was like an agreement that would stand in default of a further agreement. The curious thing is that the agreement to leave the property was oral and never put in writing or referred to in contemporaneous correspondence

These issues were not discussed at the meeting or subsequently. It was never suggested to Eric that notwithstanding the failure to reach agreement on a sale he was bound by his agreement made at the meeting to leave his property to Karen, Wade and Trevor. These were not the instructions to Stewart and Stewart did not put it to Clarke & Barwood.

Perhaps the point was too subtle for those present at the meeting. But, again, perhaps it was not, and the truth is that the idea of sale was pursued as the preferable course. It would not have been too subtle for Stewart, if it had been advised to him.

The reality is, in my opinion, that counsel's submission does not accord with the fact. The position I accept, regarding the discussion at the meeting overall is that the Richardson Family would provide $2,800 immediately and thereafter assist financially when necessary and as they could afford, and that the matter of a sale to them would be pursued. I reject the submission there was also an underlying agreement by Eric to leave his property by will to Karen, Wade and Trevor which agreement would be regarded as terminated in the event of a sale but otherwise continue to subsist and be enforceable against Eric or his estate should a sale not eventuate.

I do not accept that Eric's statements constituted a promise of a binding nature. Regarding the discussion overall and regarding the issue of intention objectively, I am of the view that the meeting was seeking to deal with practicalities as distinct from making agreements and that Eric's statements as to leaving his property by will were in the nature of a revocable testamentary intention. The circumstances were of financial difficulty and susceptibility on his part, just as those present appreciated. The object was to devise a plan of attack whereby to assist Eric with payments under the mortgage if and when (including the present $2,800) he might require it. As it turned out it was only necessary to the extent of $4,800 under the mortgage and $2,000 of that was paid at or subsequent to the time when the parties brought their negotiations towards a sale to an end. That reference to subsequent matters is not to judge the nature of the statement when it was made by reference to later events, but there is nothing to suggest that reasonable foresight at the time might not have anticipated payments of that order and not an appreciable amount more. That would represent an obvious imbalance in relation to the value of about 200 acres, even allowing for the risk of foreclosure. But, apart from that, I am of the view, objectively considered, that Eric did not intend by his statements to mean, and was not understood to mean, that he thereby irrevocably promised that in consideration of any assistance provided he would leave his property by his will to Karen, Wade and Trevor.

Even if I was wrong in that conclusion I am of the view, as stated above, that by the end of the subsequent discussion that promise was foregone by the parties in favour of the prospect of a sale.

It follows that there was no agreement as claimed and that the payments of $4,800 under the mortgage and $1,800 to the builder was made to assist Eric in circumstances of necessity but not as consideration for or pursuant to the fourth agreement. I repeat the point that it could not have been and was not a term of the alleged fourth agreement that the Richardson Family pay $1,800 to Reid. The request to pay that sum was made over a year later. In any event, if in July 1993 there was an agreement, it was to pursue the idea of a sale and the payments of $4,800 and $1,800 were either made in that context or voluntarily by two members of the family to aid Eric in a time of financial stress. It is was the former, David's payments were made at or subsequent to the time when the idea of a sale was called off. On that basis, with the possible exception of the first $1,000, they were not made pursuant to an agreement for sale the parties had been working towards. In my view, however, the latter was the situation.

It is not necessary to consider the further points raised by the defendant concerning the agreement.

18. The fourth agreement – estoppel

The plea of estoppel is premised on there having been a fourth agreement and the payments by Karen and David having been made pursuant to it. Those payments are relied upon as constituting detriment in acting upon the agreement. For the reasons stated, in particular that there was no such agreement, the claim of estoppel must fail. This is so even if Eric's statements, relied on as constituting the promise relied upon, are regarded as a representation inducing a change of position and the suffering of the detriment alleged. That is because the representation does not bear the character or meaning contended for and, in the circumstances, that the payments were voluntary acts made to aid a relative in a situation of financial difficulty.

19. Conclusion

Each claim fails and the proceeding will be dismissed.

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[2000] VSC 551

22 December 2000