Roberts v Roberts

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
ROBERTS v ROBERTS
[2021] SASC 72
Judgment of the Honourable Justice Blue

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - MATTERS NOT GIVING RISE TO BINDING CONTRACT - AGREEMENTS NOT INTENDED TO CREATE LEGAL RELATIONS - DOMESTIC, SOCIAL AND OTHER AGREEMENTS
ESTOPPEL - ESTOPPEL BY CONDUCT - PROPRIETARY ESTOPPEL
EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - CONSTRUCTIVE TRUSTS - ACTING TO DETRIMENT
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - REPUDIATION - GENERAL PRINCIPLES
The applicant seeks specific performance of an alleged oral contract with his father, the first respondent, for the purchase of Jack’s station “Pulgamurtie” for $2.6 million. The first respondent denies any agreement on or discussion about the sale of Pulgamurtie.
In the alternative, the applicant claims that he improved, maintained and worked on Pulgamurtie and purchased plant and livestock and otherwise acted to his detriment in reliance on the first respondent’s representations and encouragement that he was to purchase it, relying on causes of action of proprietary estoppel and constructive trust.
In the further alternative, the applicant claims that the first respondent holds Pulgamurtie subject to an equitable lien due to improvements to, maintenance of and operations on Pulgamurtie by the applicant.
In the further alternative, the applicant claims that, by terminating a Heads of Agreement entered into in 2018 for the sale of Pulgamurtie on different terms for alleged repudiation, the first and second respondents repudiated the Heads of Agreement, he validly terminated it for that repudiation, and he claims damages for breach of contract.
Held:
1.The applicant and the first respondent entered into an agreement (in the colloquial sense) in February or March 2012 for the sale of Pulgamurtie to the applicant for $14 per acre and $2,604,000 in total, with completion to occur after the applicant had paid in full for livestock purchased from the respondent (at [458]-[499]).
2.The parties agreed on the three essential terms for a contract for the sale of land (at [523]-[527]) but, objectively assessed, did not intend to enter into a legally binding contract (at [536]-[541]).
3.If the parties had intended to enter into a legally binding contract, there were sufficient acts of part performance to enable an order for specific performance notwithstanding that the contract was not evidenced by writing (at [562]) and otherwise the applicant would have been entitled to an order for specific performance (at [567]).
4.The applicant has established the elements of a cause of action in proprietary estoppel (at [577], [579], [581], [595]-[596], [605]-[616], [617]).
5.The appropriate relief for the proprietary estoppel cause of action is to order that the first respondent transfer title to Pulgamurtie to the applicant for $3,808,350 based on the agreed purchase price adjusted for the change in the value of money over the nine and a half years since the agreement was made and the applicant took possession of Pulgamurtie pursuant to it (at [640]).
6.If the applicant had failed on the proprietary estoppel cause of action, he would have been entitled to an equitable lien on account of improvements made to Pulgamurtie since March 2012 (at [683]).
7.The applicant did not repudiate the Heads of Agreement (at [743], [761]) and the respondents repudiated it by purporting to terminate it (at [771]). However, the applicant would only be entitled to nominal damages because he failed to prove that the respondents’ breach caused substantive damages (at [785]).
8.The parties to be heard on the terms of orders to finalise the proceeding (at [790]).

Conveyancing Act 1919 (NSW) s 54A; Succession Act 2006 (NSW) s 95; Western Lands Act 1901 (NSW), referred to.
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; Commonwealth v Verwayen (1990) 170 CLR 364; Delaforce v Simpson-Cook [2010] NSWLR 483; Donis v Donis (2007) 19 VR 577; DTR Nominees Proprietary Limited v Mona Homes Proprietary Limited (1978) 138 CLR 423; Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; Giumelli v Giumelli (1999) 196 CLR 101; Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641; Jones v Padavatton [1969] 2 All ER 616; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115; Lavery v R & I Bank of Western Australia Ltd (Supreme Court of Western Australia, Malcolm CJ, Franklyn and Owen JJ, 7 September 1995); Maddison v Alderson (1883) 8 App Cas 467; McBride v Sandland (1918) 25 CLR 69; Pattison v Mann (1975) 13 SASR 34; Pipikos v Trayans (2018) 265 CLR 522; Priestley v Priestley [2017] NSWCA 155; Regent v Millett (1976) 133 CLR 679; Shevill v Builders Licensing Board (1982) 149 CLR 620; Sidhu v Van Dyke (2014) 251 CLR 505; Sion v NSW Trustee & Guardian (as administrator of Will of Chamita) [2013] NSWCA 337; Sopov v Kane Constructions Pty Ltd (2007) 20 VR 127; Steadman v Steadman [1976] AC 536; Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; Sunbird Plaza Proprietary Limited v Maloney (1988) 166 CLR 245; Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Woodar Investment Development Ltd v Wimpey Construction (UK) Ltd [1980] 1 All ER 571, considered.

ROBERTS v ROBERTS
[2021] SASC 72
Civil
BLUE J.
Background.................................................................................................................... 4
Pulgamurtie................................................................................................................ 4
Jack’s parents and siblings....................................................................................... 5
Transfer by Stella to Jack......................................................................................... 5
Jack and Nola’s family.............................................................................................. 6
Grant, Mark and Louise working at Pulgamurtie................................................. 7
Grant and Louise working at Pulgamurtie............................................................. 9
Entry into stock partnership................................................................................... 10
Currency of stock partnership................................................................................ 12
Mr Deacon’s appraisal........................................................................................... 14
Hangar discussion................................................................................................... 15
Implementation of agreement for sale of livestock.............................................. 17
Subsequent events.................................................................................................... 18
August to December 2014....................................................................................... 18
Subsequent events.................................................................................................... 21
The trial........................................................................................................................ 25
Witnesses................................................................................................................... 25
Documentary evidence............................................................................................ 26
Evidence received de bene esse............................................................................. 26
Assessment of witnesses............................................................................................ 28
Witnesses called by Grant...................................................................................... 28
Witnesses called by Jack and Nola........................................................................ 31
Grant......................................................................................................................... 32
Tatiana...................................................................................................................... 37
Jack............................................................................................................................ 39
Nola........................................................................................................................... 42
Specific factual findings............................................................................................ 43
Factual findings on alleged 2012 agreement........................................................ 45
Purpose of Mr Deacon’s appraisal....................................................................... 45
Mr Deacon’s visit.................................................................................................... 50
Receipt of Mr Deacon’s appraisal........................................................................ 51
Timing of agreement for sale of stock................................................................... 51
Statements by Grant to others about sale of Pulgamurtie.................................. 56
Tatiana.................................................................................................................. 56
Mr Gould.............................................................................................................. 56
Mr Scrimshaw..................................................................................................... 57
Mrs Scrimshaw.................................................................................................... 58
Mr Jordan............................................................................................................. 58
Communications with Mr Hennessey.............................................................. 62
Findings concerning prior statements by Grant.............................................. 64

Statements by Jack to others about sale of Pulgamurtie.................................... 70
Mr Jordan............................................................................................................. 70
Tatiana.................................................................................................................. 71
Jenny..................................................................................................................... 73
Existence of 2012 agreement............................................................................. 73
October 2014....................................................................................................... 83
Agfair.................................................................................................................... 84
October 2017....................................................................................................... 85

Contract specific performance................................................................................ 86
Agreement on all necessary terms......................................................................... 86
Intention to enter into legally binding contract................................................... 87
Part performance..................................................................................................... 90
Specific performance............................................................................................... 97
Proprietary estoppel/constructive trust causes of action.................................. 98
Representation....................................................................................................... 100
Assumption/expectation........................................................................................ 101
Reliance.................................................................................................................. 101
Inducement............................................................................................................. 101
Detriment................................................................................................................ 106
Unconscionability.................................................................................................. 110
Remedy.................................................................................................................... 110
Conclusion.............................................................................................................. 116
Equitable lien cause of action................................................................................ 116
Fencing................................................................................................................... 117
Roads....................................................................................................................... 119
Yards and irrigation.............................................................................................. 119
Other work.............................................................................................................. 120
Plant and equipment............................................................................................. 120
Outgoings............................................................................................................... 121
Offsets..................................................................................................................... 121
Conclusion.............................................................................................................. 121
Heads of Agreement damages cause of action................................................... 121
Repudiation by Grant............................................................................................ 122
Legal principles................................................................................................. 122
Factual findings................................................................................................. 124
Renunciation by evincing lack of willingness to perform........................... 129

Renunciation by factual inability to perform.................................................... 131
Repudiation by Nola and Jack............................................................................. 134
Causation and quantum of loss........................................................................... 136
Conclusion................................................................................................................. 140

The applicant, Grant John Roberts (Grant), seeks specific performance of an alleged oral contract with his father, the first respondent Jack Roberts (Jack), for the purchase of Jack’s station “Pulgamurtie” for $2.6 million.[1] Jack denies that there was any agreement on or discussion on the sale of Pulgamurtie or that a contract was formed.
[1] Unless otherwise specified, dollar figures expressed in hundreds of thousands of dollars are rounded to the nearest hundred thousand dollars.
In the alternative, Grant claims that he improved, maintained and worked on Pulgamurtie, purchased plant and livestock and otherwise acted to his detriment in reliance on Jack’s representations and encouragement that he was to purchase it, relying on causes of action of proprietary estoppel and constructive trust.
In the further alternative, Grant claims that Jack holds Pulgamurtie subject to an equitable lien due to improvements to, maintenance of and operations on Pulgamurtie by him.
In the further alternative, Grant claims that, by terminating a Heads of Agreement entered into in 2018 for the sale of Pulgamurtie on different terms for alleged repudiation, Jack and his wife the second respondent, Nola Roberts (Nola), repudiated the Heads of Agreement, Grant validly terminated it for that repudiation, and Grant claims damages for breach of contract.
Background
Pulgamurtie
Pulgamurtie is situated in the rural locality of Packsaddle in New South Wales. Pulgamurtie is approximately 195 kilometres north-east of Broken Hill. It is approximately 74,663 hectares. It is a cattle and sheep station. It is held under Western Land Lease 6260 and is the subject of certificate of title folio 3540/765892.
Pulgamurtie is divided by fencing into 13 main paddocks. It has several creeks feeding into lakes which only fill as a result of heavy rain events. It has 14 surface catchment dams and one artesian bore. Water is reticulated from the dams to stock troughs via poly water pipelines. It has dirt roads for vehicular access.
Pulgamurtie has a homestead (the Homestead), a workman’s cottage (the Cottage), shearers’ quarters, a shearing shed, a woolshed, equipment and other sheds and smaller paddocks in the vicinity of the main buildings (the home compound).
In 1888 Jack’s grandfather acquired one of the paddocks that now comprise Pulgamurtie and registered “Pulgamurtie” the brand.
A Western Lands Lease (number WL3540) was issued under the Western Lands Act 1901 (NSW) over land including Pulgamurtie. At some point this lease was held by the Kidman Company but the lease was cancelled in or shortly before 1948. In 1948 the New South Wales government conducted a ballot for Pulgamurtie. Jack’s father Charles Henry Roberts (Harry Sr) won the ballot.
In June 1950 Western Lands Lease number 6260 (the Lease) was issued to Harry Sr for an initial period of 20 years commencing on 1 December 1948. The land the subject of the Lease comprised lot 3540 in deposited plan 765892.
Jack’s parents and siblings
Harry Sr was married to Stella Roberts (Stella). They had six children: Stanley Roberts (Paddy), Henry Roberts (Harry Jr), Betty Roberts (Betty), James Roberts (Jimmy), Rita Roberts (Rita) and Jack. Paddy was born in 1924 and Jack was born in 1936. The family, except Harry Jr and Betty who were married, moved to live on Pulgamurtie in 1949. All of the children who lived at Pulgamurtie did station work.
Harry Sr made Paddy and Jimmy stock partners, which means that he gave them a one third interest in his cattle and sheep and they shared the profits from the station enterprise. Jack, who was only 12 years old when the family moved to Pulgamurtie, was paid wages. Later Harry Jr moved to Pulgamurtie and had his own livestock.
In 1953 Harry Sr died, leaving Pulgamurtie and his interest in the livestock and equipment on it to Stella. In August 1956 the Public Trustee as administrator of Harry Sr’s estate under his will transferred the lease to Stella.
Paddy got married. He sold his share of the livestock and used the proceeds to buy a farming property called “Morapoi” in Western Australia.
Harry Jr sold his livestock and used the proceeds, together with an interest free loan from his parents, to buy a farming property called “White Leeds” just south of Broken Hill.
Jimmy got married. He sold his share of the livestock and used the proceeds to buy a farming property called “Thalaka” near Hay in the Riverina.
Rita left Pulgamurtie.
Jack remained on Pulgamurtie working as a station hand.
In 1960 Jack met Nola. Nola was born in 1944.
Transfer by Stella to Jack
In 1961 Stella decided to move to Broken Hill because she had health problems. It was agreed that Jack would purchase Pulgamurtie. A valuation, or more likely an appraisal, of the value of Pulgamurtie was undertaken by Mr Giddings of Dalgetys. Mr Musgrove of the Public Trustee had some involvement in this appraisal or valuation. The appraisal or valuation was the basis on which the purchase price was agreed. The purchase price was £29,254. Dalgetys obtained first mortgage finance of £10,000 from Alexander Thomson. Stella provided vendor finance, secured by an equitable mortgage, of £19,254.

A solicitor Mr Crowley prepared Conditions and Terms of Sale for the sale of the Lease. Stella submitted to the Western Lands Commission an application for consent to transfer the Lease to Jack for £29,254 supported by a declaration dated 14 November 1961. The declaration attached the Conditions and Terms of Sale. They showed that £10,000 was payable as a deposit and the balance of £19,254 was to be advanced as an interest free loan by the vendor Stella on the security of a mortgage to her, the loan to be repayable by yearly instalments of £1,000 commencing on 1 April 1963.
Jack submitted to the Commission an application for approval of a mortgage to Stella supported by a declaration dated 14 November 1961 showing the amount of the mortgage at £19,254.
Jack submitted to the Commission an application for approval of a mortgage to Mr Thomson supported by a declaration dated 27 November 1961 showing the amount of the mortgage at £10,000.
In March 1962 a transfer of the Lease from Stella to Jack dated 18 December 1961 was registered by the Commission.
In August 1963 Jack applied, with the consent of Stella as mortgagee, for extension of the term of the Lease to a lease in perpetuity.
In October 1963 Mr Thomson released the Lease from his mortgage, it having been fully repaid.
In September 1964, the Lease was extended to a lease in perpetuity.
Jack and Nola’s family
In 1962 Jack and Nola married. At some point the station business, previously conducted by Jack as a sole trader, commenced to be carried on by Jack and Nola in partnership under the name J and NE Roberts (the J & NE Roberts partnership).
Jack tended to work on the station from sunrise to sunset. Nola worked similar hours on most of the days that Jack was working before the children were born. After the children were born, Nola often took them out with her. Nola always handled the books for the station.
In February 1964 Grant was born. In January 1965 Adrian Mark Roberts (Mark) was born. In March 1970 Jacqueline Louise Roberts (Louise) was born.
In 1968 Jack and Nola bought a house in Cobalt Street Broken Hill.
Between 1969 and 1972 Grant and Mark were largely home schooled by Nola or a governess.
At the beginning of 1973 Grant and Mark commenced boarding at Westminster School in Adelaide. Grant was in grade 4 and Mark was in grade 3. They returned to Pulgamurtie in the school holidays, being over summer (first week of December to beginning of February), around Easter (three weeks) and around September (three weeks). They also returned on long weekends and boarder exeat weekends. Grant left school at the age of 15 in December 1979, having completed year 10. Mark left school at the age of 15 in December 1980.
Grant and Mark gave evidence that, during the school years, when they were home at Pulgamurtie they generally worked the same hours as Jack, leaving between 8 and 9 am and returning to the Homestead after sunset. Jack, supported to an extent by Nola, gave evidence that this happened sometimes but was not the general pattern. I address disputes on the evidence referred to in this background section below.
Grant and Mark gave evidence about statements made by Jack while they were growing up concerning the family history and the future in terms of Pulgamurtie and having a station. Jack, supported to an extent by Nola, largely took issue with this evidence.
Grant, Mark and Louise working at Pulgamurtie.
At the end of 1979 or beginning of 1980 Grant commenced working full-time at Pulgamurtie. He was employed by the J & NE Roberts partnership. Grant’s ambition was to take over the family station if he was the only child interested in doing so or own his own station if more than one child wanted to run their own station. He expected that he would have to wait until Jack did not want to work the station any more before taking over Pulgamurtie if he was to be the one to do so. During 1980 Louise was being home schooled at Pulgamurtie.
At the end of 1980 or beginning of 1981 Mark commenced working full-time at Pulgamurtie. He was employed by the J & NE Roberts partnership.
At the beginning of 1981 Louise commenced boarding at Wilderness School in Adelaide in grade 6.
Grant and Mark generally started work between 7.30 and 8.00 am and finished work an hour or so after sundown. Grant and Mark gave evidence that they generally worked seven days a week apart from Christmas and an odd day or two off now and again. Jack and Nola took issue with this to some extent.
Nola gave evidence that Grant and Mark were paid the award rate for station hands plus $100 per week plus board. Mark gave evidence that they were only paid the award rate, which was about $100 per week. There is no documentary evidence of the rate paid and I am unable to make a finding whether Nola or Mark is correct or the position was somewhere in between. Grant and Mark were paid the same wage regardless of their actual hours worked; they were never paid overtime.
Mark gave evidence, which was not challenged in cross-examination or contradicted and which I accept, that as properties in the area came up for sale, there was discussion about them at the dinner table and Jack expressed an opinion about the type of property and whether it was any good. Mark, Grant and Jack looked in the Stock Journal at land for sale. There was discussion about the value of land and the likelihood of a given property selling for a given price.
In 1981 Jack, Grant and Mark looked at purchasing a station called “Lonsdale” for the family as a second property in addition to Pulgamurtie. They inspected it. Jack said that it was worth buying. Grant and Mark gave evidence that Jack said that, if they purchased it, Grant and Mark would have to work without a salary for the next eight or 10 years to pay for it. Jack disputed this. Mark said “Don’t buy it on my behalf”. Mark gave evidence that this was because he did not want to commit to having no money for 10 years at the age of 16. Jack expressed surprise or disappointment at Mark’s statement.
Mark gave evidence, which was not challenged in cross-examination or contradicted and which I accept, that over the years he inspected a few more properties with a view to purchasing them with his parents’ financial backing. He discussed these properties with Jack and Grant. He inspected some of these properties with Jack and Grant. Jack never told Mark that they could not buy another station and he did not discourage him from looking at one. However, Jack gave various reasons for not purchasing properties identified by Mark.
In August 1983 Stella died. In her will, she forgave any balance of the loan to Jack to purchase Pulgamurtie. If Jack had made payments in accordance with the mortgage, the loan would have been repaid in April 1982 before Stella died.
At the end of 1984 Louise left Wilderness School at the end of year 9. In 1985 and 1986 she undertook year 10 and year 11 by correspondence at Pulgamurtie. In 1987 she commenced working for her parents at Pulgamurtie. There is a dispute about the extent to which she undertook station work in the paddocks as opposed to work within the home compound. In September 1988 she undertook a nanny course in Coffs Harbour. In 1988 or 1989 she worked in Adelaide as a nanny. Otherwise she remained on Pulgamurtie until 2010.
In 1987 the status of Grant and Mark was changed from employees to contractors. Nola no longer deducted tax from their pay. They became responsible for paying their own tax. Otherwise thy continued to be paid the same amount as if there had been no change in status. There is a dispute about whose decision this change was and the reason for it.
In December 1988 Grant married Anne Roberts (Anne). They went on a two week honeymoon. Anne resigned her employment in Broken Hill and moved to live at Pulgamurtie with Grant. For the first six months, they lived in the Homestead (with Jack, Nola and Louise) while the Cottage was being renovated. They then moved into the Cottage. The Cottage is approximately 60 to 100 metres from the Homestead.
From time to time, Jack and Nola gave orphaned lambs and calves to Grant. He developed from them his own stock of sheep and cattle which ran on Pulgamurtie. They had different ear tags to distinguish them from stock owned by Jack and Nola.
In October 1989 Mark met Tania, whom he later married. In July 1991 he ceased working on and left Pulgamurtie.
In September 1991 Grant and Anne’s first child Danielle was born.
In 1992 Grant and Anne purchased a block of land in Broken Hill with the intention of building a house on it. They borrowed $50,000 from the ANZ Bank and $50,000 from Anne’s mother to finance the purchase of the land and building of the house.
In 1992, Nola was diagnosed with cancer and had an operation to remove it. This prompted Nola and Jack to take more holidays in future. In the 1990s they went on a Pacific cruise in 1994, to the USA in 1996, to China in 1998 and to Turkey in about 1999.
During their marriage Grant and Anne inspected four stations with a view to purchasing them but this did not transpire.
In early 1993 Mark returned to work on Pulgamurtie as a station hand as before. Over the next six months, he also renovated a red house at Pulgamurtie, with assistance from Tania on her weekends off, with a view to their living there. In late 1993 Mark left Pulgamurtie as a result of arguments with Jack. After this, he only returned on occasions to work for limited periods as a contractor.
Grant and Louise working at Pulgamurtie
In January 1994 Grant and Anne’s second child Owen was born and in September 1995 their third child Madeleine was born.
In 1996 Grant and Anne’s builder commenced constructing a house on their block in Broken Hill.
Ed Gould was born in 1961. He did station work for Harry Jr, Jack’s brother, in his relative youth. He did work from time to time for Jack, then for Jack and Grant and then for Grant at Pulgamurtie. He generally worked at Pulgamurtie for a week or fortnight at a time. He assisted with many tasks over the years, including mustering, fence repairs, station maintenance and general station hand tasks. He was introduced to Grant by Mark in 1996. He was, and still is, a friend of Mark and then also Grant.
At the end of 1996 or beginning of 1997 Anne and Danielle moved to live in the newly constructed house at Broken Hill so that Danielle could attend school. Before Anne moved, Nola told her that, if she moved to Broken Hill, Nola would seek parenting orders from the Family Court. After Anne moved, Nola issued a proceeding against Anne seeking parenting orders. Nola joined Jack as a co-applicant with herself and joined Grant as a co-respondent with Anne. At this point, in February 1997, Grant decided to end the relationship with Anne.
By Easter 1997 the parenting proceeding between Nola and Anne had been resolved on the basis that Nola would have access to the children in Broken Hill or Pulgamurtie. There were then parenting and property proceedings in the Family Court and Federal Magistrates Court between Grant and Anne. The parenting proceeding was resolved in March 1999 by final orders by the Family Court that the children reside with Anne and spend one weekend per month and half of the school holidays at Pulgamurtie with Grant. The property proceeding was resolved in November 1998 by final orders by the Federal Magistrates Court on the basis that Anne received 60 per cent of the net assets. In November 1998 Grant and Anne were divorced.
Following their separation, Grant became liable to make child support payments to Anne in respect of their three children.
In October 1998 Ghandi Investments Pty Ltd (Ghandi Investments) was incorporated for the purpose of holding Grant’s farming (livestock and plant and equipment) assets and income from the use of those assets not being taken into account in calculating child support. Ghandi Investments’ shareholders and directors were Jack and Louise, who were the signatories to its bank accounts.
In 2001 Jack and Nola purchased a new house at Wyman Lane in Broken Hill and were looking to sell their old house in Cobalt Street. Louise was looking to buy a house in Broken Hill. Louise asked Jack how much he wanted for the Colbalt Street house and he told her to go and get a valuation. She obtained two verbal appraisals, the midpoint of which was $40,000. It was agreed that Jack and Nola would sell the house to Louise for $40,000. In October 2001 a transfer of the property for $15,000 from Jack and Nola to Louise was lodged for registration at the New South Wales registration office.
In the early 2000s there was a severe drought that effected the Western District of New South Wales (including Broken Hill and Pulgamurtie) (the Millenium drought).
Entry into stock partnership
In about June 2002 Jack and Grant were having a break from work. Grant walked into the Homestead returning from the break and Jack said “Do you want to come in on the stock as a stock partner?”. Grant said “Yeah, course I do”. Grant asked Jack what was happening with Louise. Jack said that he did not know and that Grant should ask her.
Louise came into the room a short time later. Grant said “Listen, Lou. Dad wants to talk stock partners. Do you want to come in too? Now is the time.” Louise said “No, I don’t want no part of it”.
Grant and Jack agreed that the stock partnership would commence on 1 July 2002; Jack would gift to Grant half of his livestock; sales revenue would be divided 50/50; expenses would be divided 50/50; and Grant would no longer be paid for his labour. It was also agreed that Jack would lend to Grant 30 bales of wool, which Grant would repay when he could afford to do so.
During the stock partnership, sales revenue paid, for example, by Elders for the sale of wool or livestock was paid by Elders as to 50 per cent to J & NE Roberts and as to 50 per cent to Grant or his nominee. Grant initially nominated Ghandi Investments. Some expenses, such as those charged by Elders, were paid as to 50 per cent by J & NE Roberts and as to 50 per cent by Grant or his nominee, which again was initially Ghandi Investments. Other expenses were paid either by J & NE Roberts or by Grant/Ghandi Investments and at the end of each quarter and the end of the year Nola calculated an adjustment so that the expenses were ultimately borne equally and a balancing payment was made by one partner to the other (true up).
There is no direct documentary evidence of the number or value of the sheep and cattle gifted by Jack to Grant. Annual financial statements for the J & NE Roberts partnership were only tendered in respect of the financial year ended June 2007 onwards. Nola gave evidence that she destroyed a lot of business records in 2014 and thereafter (including such financial statements).
In October 2002 Jack and Nola signed an Elders Rural Bank loan account application form, which showed 500 cattle and 6,500 sheep on Pulgamurtie. Jack gave evidence that this related to the total livestock the subject of the stock partnership with Grant and not just 50 per cent of them. The application form showed the average value of the cattle at $350 and the average value of the sheep at $20. It showed the total value of the cattle and sheep at $305,000. This implies that the value of the livestock gifted to Grant was about $150,000. In March 1998 Elder’s branch manager valued a subset of cattle and sheep at Pulgamurtie at $164 and $17 to $20 respectively. Although cattle and sheep prices fluctuate substantially over time, this valuation tends to corroborate the values shown in the Elders application.
In cross-examination, Jack said that the cattle were worth more than $350 each (about $500 each) and the sheep were worth a lot more than $20 each (about $100 each). In his affidavit evidence in chief, Jack had said that the value of the livestock gifted to Grant was approximately $560,000. Earlier in cross-examination, Jack had said that he recalled this value but not how it was calculated.
Jack and Nola had no incentive to understate the value of the livestock when applying for a loan. In the circumstances, I find that the value of the livestock gifted by Jack to Grant was approximately $150,000.
Currency of stock partnership
At the time of entry into the stock partnership, Jack was 66 years old and Grant was 38 years old. From 2002 Jack spent less time working on Pulgamurtie and more time on holidays. Between 2002 and 2011 Jack and Nola went on trips that included a three week Pacific cruise; went to the United States of America for seven weeks; went to China for five weeks; went to Turkey for six weeks; and went to Asia and Africa for 10 weeks.
Louise continued to be employed by J & NE Roberts. She was never employed by the stock partnership.
In March 2003 Grant met Tatiana by telephone through a dating agency. Tatiana lived in Russia. They communicated by telephone. In October 2003 Grant went to Russia for 30 days to meet Tatiana and her daughter Ksenia.
In about 2004 Jack and Grant purchased 425 head of black Angus cattle with a view to fattening them and selling them, although they ended up retaining them. All of the other cattle at Pulgamurtie were Poll Herefords.
In October 2004 Tatiana and Ksenia arrived in Australia. In December 2004 Grant and Tatiana were married and went on a honeymoon for 10 days. On their return, they lived in the Cottage.
In January 2006 Grant and Tatiana’s daughter Grace was born.
In 2007 the K & R Family Trust was created. Its financial statements indicate that it had a corporate trustee. Although no direct evidence was adduced, I infer that its initial trustee was Ghandi Investments and later it became Veimar Nominees Pty Ltd.
In 2007 Grant brought a proceeding in the Federal Magistrates Court against Anne and the Child Support Agency challenging child support assessments made by the Child Support Agency.
In 2008 Louise met Trevor Dannenburg, who lived in Broken Hill, and they began a relationship.
In January 2009 Veimar Nominees Pty Ltd (Veimar Nominees) was incorporated. Tatiana was its sole shareholder and director until July 2017, when Grant became an additional shareholder and director. By 2009/2010, Veimar Nominees had become the trustee of the K & R Family Trust.
In 2009 Jack collapsed in the wool shed. In March 2009 he had a heart operation. He was away for about a month and slowed down after this. After this, the stock partnership hired contractors to assist with the mustering.
At some point Tatiana acquired Louise’s share in, and replaced Louise as a director of, Ghandi Investments. No direct evidence was adduced of the date of this change. However, the company search for Ghandi Investments shows that there was a change in officeholders and shareholding on 1 December 2009. I find that this was the date of the change.
In 2010 Louise married Trevor Dannenburg and moved to Broken Hill to live.
In August 2011 Ed and Diane Scrimshaw spent six weeks at Pulgamurtie, staying in a caravan while Diane tutored Grace, who was then five years old. Ed Scrimshaw gave evidence that Jack told him that he was retiring at the end of the year and going on a cruise on the Sun Princess. Jack in cross-examination initially denied having conversations with the Scrimshaws. Later he accepted that he may have told them about the forthcoming cruise but was adamant that he did not say that he was retiring.
As at 2011 the Roberts family (Jack and Nola and their entities and Grant and Tatiana and their entities) had been banking with Rural Bank for several years. Rural Bank was at that time (and up to 2018) a joint venture between Elders and Bendigo and Adelaide Bank. Rural Bank treated the Roberts family as a single client under the name “J & NE Roberts Group”.
Michael Jordan has been employed by Rural Bank (originally Elders Rural Bank) since about 1995. In 2011 he was based in Adelaide and his title was District Banking Manager. In 2011 he took over from Robert Goode (who is now deceased) as manager for the Broken Hill region. He was responsible for the pastoral regions in Australia, comprising parts of South Australia, New South Wales and Queensland. In 2011 he became the responsible manager for the J & NE Roberts Group.

In November 2011 Rural Bank conducted a review of the facilities of the J & NE Roberts Group. Rural Bank normally conducted an annual review and additional reviews if there were substantive changes to facilities. Rural Bank maintained a computerised system which produced a “Historical Credit Assessment Report” in respect of each review. The Historical Credit Assessment Report for November 2011 shows that Grant requested an increase in a facility in the name of Veimar Nominees, which was recommended by Mr Jordan and approved by the Head Office Senior Manager.
Mr Deacon’s appraisal
Grant gave evidence that in January or February 2012 Jack asked him if he was interested in buying the place; Grant said yes; and Jack said that, so that they were all happy with the price, he would get Elders to put a value on it. Jack denies this conversation.
Marty Deacon was the principal of Elders Real Estate Mildura, Robinvale and Wentworth, which covered amongst others the Western Division of New South Wales including Broken Hill, Wentworth and Packsaddle. In 2012 he had been a stock and station agent for over 25 years and had spent the previous 20 years servicing clients in the Western Division of New South Wales, focusing on stations in the vicinity of Broken Hill.
A regular part of Mr Deacon’s business was inspecting station properties in the Broken Hill area and providing an appraisal of their value. This was either to inform a decision whether to sell or for marital separation or family retention purposes. Mr Deacon does not get involved in any discussions as to why his appraisal is required unless the client volunteers it or a financial institution has requested the appraisal. Although he points out to the client that his appraisal is not a valuation, the client is often satisfied with an appraisal.
Jack gave evidence that he had probably met Mr Deacon before. He knew that Mr Deacon was at Elders and that he was a “valuator or whatever you call him”. He knew that Mr Deacon was the selling agent for two properties nearby.
In early February 2012 Jack telephoned Mr Deacon and asked him to provide his opinion of the current market value of Pulgamurtie. Mr Deacon agreed to meet Jack on his next visit to the district. Mr Deacon was marketing or about to market four stations in the vicinity and arranged to visit Pulgamurtie as part of a trip with his colleague Martin Williams to visit those properties.
On the afternoon of 10 February 2012 Mr Deacon and Mr Williams arrived at Pulgamurtie. Jack invited them in for a cup of tea and introduced them to Nola. Grant then arrived. They inspected the improvements on foot in the home compound.
They then inspected some of the paddocks by car for an hour or so. Jack drove Mr Deacon in his utility. Mr Williams followed in Mr Deacon’s vehicle accompanied by Grant. They inspected water tanks, dams and other improvements as well as the livestock in the paddocks. Mr Deacon took approximately 70 photographs. Grant gave evidence that they drove into the property for some 12 kilometres. Jack gave evidence that the inspection was quite limited.
Mr Deacon gave evidence that, during the inspection, he and Jack discussed the history of the station and the length of time that the Roberts family had owned it. Jack conveyed that Pulgamurtie had a long family history. Jack told Mr Deacon that the appraisal was to assist him in working out something with his son, who was currently working on the station.
On 11 February 2012 Mr Deacon sent a letter to Jack. Mr Deacon did not give oral evidence because he was not required for cross-examination. I infer that parts of his letter, such as the disclaimers that it was not a valuation, market conditions can vary over short periods of time and the competitive nature of the buying process can have a major bearing on the final value, were pro forma. Mr Deacon said in the letter that he considered a recent sale of Packsaddle Station in 2011 at $17 per acre to be a comparable sale and observed that he considered it to be a very good sale based on outstanding improvements. He also considered currently marketed sales of Mount Stuart Station at $14-15 per acre which had been on the market for over 12 months but not sold, Gardenvale/Nantilla stations at $12.50 per acre which had been on the market for three years and for which an offer had recently been made, and Wonnaminta, Lonsdale and Katalpa for which the price was on application with an offer having been made for part of Wonnaminta but it had been on the market for two years.
Mr Deacon said:
I estimate the current market value of “Pulgamurtie’ station in the current market place has an estimated selling value of $2,418,000 to $2,604,000 or within the price ranges of $13 to $14 which is the equivalent of $235 to $252 a DSE based on 186,000 acres with a running capacity of 10,300 dry sheep or cattle equivalent.
I have taken into consideration your well kept and maintained improvements as well as the fact that you have been on the property for over 60 years. You have clearly demonstrated the Pulgamurtie if managed correctly can be a viable and livable grazing area.
As this is an appraisal only and I have presented a conservative figure due to economic uncertainty and rising interest rates and the cost to purchase and replace livestock.
After Jack received Mr Deacon’s appraisal, Grant read it in the presence of Jack and Nola. There is a dispute as to the precise circumstances of Grant’s reading of it and as to what was said on that occasion.
Hangar discussion
Grant gave evidence that, not long after this, Jack had a discussion with him while they were sitting in the Nissan at the hangar on Pulgamurtie. They agreed that Grant would buy Pulgamurtie from Jack for $14 per acre being $2.6 million. They agreed that Grant would purchase Jack’s interest in the livestock and the sale of the station would be completed after Grant had paid the full amount for the livestock. Jack denies that there was any agreement to sell Pulgamurtie or any discussion with Grant on the topic of selling it until 2017.
Grant gave evidence that Jack and he agreed that:
·he would pay $100 per head for the sheep;
·the number of sheep would be determined by the shearing contractor at shearing time;
·Jack and Grant would share the wool cheque from that shearing;
·Grant would pay for the sheep over time interest free out of the proceeds of the sale of surplus sheep (bearing in mind that most sheep would be retained for wool until they got too old or there were too many sheep for the pasture to carry);
·these sheep would be sold in Jack’s name and treated, for external purposes, as if they were Jack’s sheep;
·Grant would be credited with the proceeds of sale against the purchase price.
It is common ground that these were the terms of the agreement for the sale of the sheep but there is a dispute when the agreement was made. Grant’s case is that the agreement was made in 2012, the stock partnership ceased on 30 June 2012 and from 1 July 2012 he conducted the pastoral business on Pulgamurtie himself in the name of his entities. Jack’s case is that the agreement was made in 2013, the stock partnership ceased on 30 June 2013 and from 1 July 2013 Grant conducted the pastoral business on Pulgamurtie himself in the name of his entities.
Grant gave evidence that Jack and he agreed that:
·he would pay for the cattle at the average price obtained from selling them in the sales at about that time;
·the number would be determined by a count by Jack and Grant when the cattle were mustered;
·he would pay for the cattle over five (or four) years interest free.
It is common ground that, subject perhaps to two qualifications, these were the terms of the agreement for the sale of the cattle but, as observed above, there is a dispute when the agreement was made.
The first qualification is that Grant gave evidence that Jack did not want to sell to him his interest in the black Angus cattle that they had purchased in about 2004 and wanted to ascertain what profit they would ultimately make on those cattle. As a result, it was agreed that the black Angus cattle would be excluded from the livestock sold to Grant and instead would continue to be owned by Jack and Grant jointly and they would divide equally the net proceeds of their sale whenever they were sold. Jack did not take issue with this evidence and, when it was put to him in cross-examination, accepted that this was how they dealt with the black Angus cattle.
The second potential qualification relates to the time for payment for the cattle. Jack gave evidence in chief that there was no time specified for payment for the cattle. I find that it was agreed that they would be paid for over five years.
First, in the response by Jack’s solicitors of 6 March 2018 to Grant’s solicitors’ letter of demand dated 19 February 2018, they said that they were instructed that:
On or about 30^th June 2012, our client and your client agreed, to purchase the remaining 50% of the livestock that our client owned. The agreement provided for our client to accept payment over five years on an interest free arrangement.
This letter responded to the Boylan Lawyers’ letter which had relevantly stated that Grant had five years to pay for the cattle.
Secondly, in his original defence, Jack admitted Grant’s plea that Grant was required to pay for the cattle within five years.
Thirdly it is common ground that the cattle were to be paid for in a manner different to the sheep and unconnected with their sale. It is inherently likely that there was some stipulation as to payment for the cattle.
Fourthly in cross-examination Jack accepted that it was agreed that Grant pay for the cattle over five years.
Implementation of agreement for sale of livestock
The shearing contractor’s count of the sheep resulted in Grant purchasing 3,862 sheep (half of the total) for $100 each, resulting in a purchase price of $386,200 (plus GST). Payments for the sheep were made by Jack receiving net proceeds of sheep sales between July 2014 and July 2017.
The agreed count for the cattle was 293 cattle (half of the total) and the total purchase price for the cattle was $123,300 (plus GST). Payments for the cattle were made between March 2014 and April 2017.
The wholesale price for the sheep and Poll Hereford cattle sold by Jack to Grant was $509,500 (plus GST).
Apart from the black Angus cattle, the cattle were Poll Herefords, which were generally a reddish colour. There was a mob of about 30 Poll Hereford cattle led by a cream-coloured bullock that were not mustered and it was agreed that they would be excluded from the livestock the subject of the sale to Grant.
Grant gave evidence, which was not contradicted by Jack, that most of the black Angus cattle were sold between November 2012 and May 2013. The net proceeds were divided equally between Jack (J & NE Roberts) and Grant (Ghandi Investments).
Subsequent events
On 2 May 2012 Tatiana, via Veimar Nominees, acquired Jack’s share in Ghandi Investments and Jack resigned as a director, leaving Tatiana as the sole director of the company.
In May 2012 Jack and Nola left to go on a 104 day world cruise on the Sun Princess. Their passports do not show when they left Australia but show that they arrived in Singapore on 27 May 2012. I infer that they left Australia one to two weeks earlier on the ship.
Jack and Nola’s passports do not show when they returned to Australia but I infer that it was in late August 2012 on the basis that it was a 104 day cruise.
In October 2012 Rural Bank conducted an annual review of the facilities of the J & NE Roberts Group, which were unchanged.
In 2013 Grant and Tatiana looked for a house in Broken Hill to purchase. In August 2013 Mr Jordan met with them and subsequently recorded in the Rural Bank Historical Credit Assessment Report that they had requested approval in principle to borrow 70 per cent of the purchase price of a Broken Hill property up to $250,000. Approval in principle was recommended by Mr Jordan and approved by the Lending Manager.
In October 2013 Rural Bank conducted an annual review of the facilities of the J & NE Roberts Group.
In October 2013 Grant and Tatiana signed a contract to purchase a property in King Street Broken Hill for $237,000. They approached Rural Bank requesting a mortgage loan of $165,000. This loan was recommended by Mr Jordan and approved by the Lending Manager as part of the annual review.
August to December 2014
In August 2014 Rural Bank conducted an annual review of the facilities of the J & NE Roberts Group, which were unchanged. As a condition of his approval, the State Credit & Lending Manager required certain documentation to be signed, including a Guarantee and Indemnity and a Consent by Owner.
On 2 September 2014 Rural Bank sent a letter to Tatiana as director of Veimar Nominees and Ghandi Investments referring to the recent approval and enclosing six documents required to be executed, including a Guarantee and Indemnity and a Consent by Owner.
At the end of September 2014 Tatiana gave the Consent by Owner form to Jack with a request that he sign it. Jack gave evidence that the form said that Veimar Nominees and Ghandi Investments owned all of the livestock on Pulgamurtie, it comprised a mortgage over Jack and Nola’s property at Wyman Lane in Broken Hill and he refused to sign it. Jack gave evidence that it was not true that Veimar Nominees and Ghandi Investments owned all of the livestock on Pulgamurtie because he and Nola still owned the livestock that he was selling to Grant. Nola gave evidence that the form showed that the security being offered was their home in Broken Hill.
The Consent by Owner form was tendered. It referred to Veimar Nominees and Ghandi Investments as “the occupier”, recited that the Bank had provided financial accommodation to the occupier and referred to the occupier having provided security for the accommodation over all livestock owned by the occupier and situated on the property. It defined the property as the land comprised in folio identifier 20/263482 and referred to Jack and Nola as the owner of that property.
It is evident, and I find, that the Consent by Owner did not purport to be or refer to any mortgage by Jack and/or Nola over their property; the Bank intended to show the title reference for Pulgamurtie but mistakenly showed instead the title reference for Jack and Nola’s Broken Hill property; and the document was intended to comprise a consent by Jack to the granting by Veimar Nominees and Ghandi Investments of security over their own livestock and a grant of a right of entry to the Bank for the purpose only of exercising its rights in respect of that livestock. The document did not purport to grant or refer to the grant of any security over any livestock that might be owned by Jack and Nola. It is evident that Jack and Nola misunderstood the nature of the document in several respects.
Jack and Nola each gave evidence that on the following morning they met with Mr Jordan, had a discussion with him, and refused to sign the form. Mr Jordan in cross-examination did not recall the specific content of that meeting. Jack and Nola gave evidence that Mr Jordan referred to it being fraud and a police matter. However, I find that Mr Jordan did not say this because there is nothing about the form that could be so considered and Mr Jordan in his evidence did not recall saying this.
Grant gave evidence that in about September 2014 he received a telephone call from Mr Jordan, who told him that there was a problem obtaining the land owner’s consent for the stock mortgage because Jack had said to him that Grant did not own all of the sheep on Pulgamurtie.
Mr Jordan has an entry in his appointment diary for 9 am on 30 September referring to a meeting with Jack. I find that the Consent by Owner form was given to Jack by Tatiana on 29 September. I take into account that Mr Jordan has another entry in his appointment diary for 1.30 pm on 8 October 2014 but find that it was at the earlier meeting on 30 September that Jack complained to Mr Jordan about the Consent to Owner form. This is because the meeting with Mr Jordan on that day was in the morning (in accordance with Jack and Nola’s evidence), the Bank had sent the form to Tatiana in early September and Grant gave evidence that he received a telephone call from Mr Jordan after the meeting with Jack and before 8 October.
Mr Jordan has an entry in his appointment diary on 8 October 2014 referring to a meeting with Grant and Tatiana. Mr Jordan gave evidence that he does not have a clear recollection of the content of this meeting. Grant gave evidence that he outlined to Mr Jordan his agreement with Jack and Mr Jordan told him that it would be better if he had something in writing.
On 8 October 2014 Grant spoke to a lawyer in Broken Hill, Ms Keady of Buckworth Keady Lawyers. Ms Keady referred him to John Hennessey of Hennessey & Co, solicitors in Sydney, and sent an email to Mr Hennessey confirming the referral in relation to a potential dispute with Jack and Nola, for whom she said that she had acted many times in the past.
On 8 October 2014 Grant and Tatiana spoke by telephone to Mr Hennessey, the fact (but not the content) of which was confirmed by an email from Tatiana to Mr Hennessey sent on 14 October.
Grant and Tatiana gave evidence that there was a meeting with Jack and Nola at the Homestead at Pulgamurtie on 17 October 2014. Jack and Nola denied that there was any meeting on 17 October 2014 or any meeting at any time at which there was any discussion of the type referred to by Grant and Tatiana.
On 20 October 2014 Tatiana sent an email to Mr Hennessey reporting briefly on a recent meeting with Jack and Nola.
On 23 October 2014 Tatiana sent an email to Mr Hennessey attaching a three page Word document entitled “I started to work from my parents in December 1979” (the 23 October document). It included references to discussions between Grant and Jack in relation to the purchase of Pulgamurtie and the livestock. It posed three questions to Mr Hennessey at the end.
On 1 November 2014 Mr Hennessey sent an email to Tatiana containing three numbered questions/comments followed by answers to the three questions posed at the end of the 23 October document.
On 3 November 2014 Tatiana sent an email to Mr Hennessey attaching a two and a half page Word document entitled “Questions for John” which reproduced the body of Mr Hennessey’s 1 November email together with responses (the 3 November document).
On about 9 November 2014 there was apparently a Skype call between Mr Hennessey and Grant and Tatiana.
On 11 November 2014 Tatiana sent an email to Mr Hennessey attaching a one and a quarter page Word document entitled “Notes for John” (the 11 November document).
On 15 November 2014 Mr Hennessey sent an email to Tatiana attaching a one and a quarter page Word document entitled “Roberts Outline of Agreement and comments”.
On 28 November 2014 Tatiana sent an email to Mr Hennessey requesting him to draw a contract.
On 9 December 2014 Mr Hennessey sent an email to Tatiana attaching a two and a half page draft deed entitled “Roberts Deed”.
Grant gave evidence that there were no further dealings with Mr Hennessey after this because matters with his parents appeared to have settled down.
Subsequent events
On 13 February 2015 Rural Bank agreed to waive the requirement for the Consent by Owner to be signed for the time being.
In 2015 Louise and Trevor separated and in 2017 they were divorced.
In October 2015 Jack and Nola purchased a unit at Morphettville in Adelaide for $330,000.
Every two years in May, an agricultural fair is held at Broken Hill entitled Agfair. Jack gave evidence that he has gone to several Agfairs with various people. Grant gave evidence that he went with Jack in May 2016 and in the car they had a discussion about Grant buying Pulgamurtie. Jack said “You still interested in buying the property?”. Grant said “Yes, of course I am”. Jack said “Have you got finance for it?”. Grant said “No, I haven’t”. Jack said “Well, I’ll finance you but I want a 10% deposit, I’d want 10% interest and I want the remainder paid over 10 years”. Jack said that the deposit would be $260,000. Grant said “Okay dad, fair enough”. Jack denied any such conversation.

Grant gave evidence that some time later he had a discussion with Jack in which he said that, when he received the wool cheque from the 2017 shearing, he would have the money for the deposit for Pulgamurtie and Rural Bank had told him that, if he gave them the deposit, they would finance him for the purchase. Jack said “Grant, I can’t do that because that’s going to happen too quick, I need time to sort out my farm management deposits”. Grant asked him how long. Jack said “A couple of years’” and clarified that he meant financial years. Jack denied any such conversation.
In August 2016 Tatiana opened a clothing shop in Broken Hill.
In January 2017 Louise bought will kits from the post office for Jack and Nola as they were about to embark on a cruise to South America. They prepared home-made wills and executed them. They left the Broken Hill property to Louise, the Adelaide property to Mark and Pulgamurtie to Grant but provided that Grant was to pay to Louise and Mark whatever amount was necessary so that each of them received an equal one third share of the estate.
In March 2017 Grant made the final payment for the cattle purchased from Jack.
In June 2017 Grant made the final payment of his child support liability to Anne.
In July 2017 Grant made the final payment for the sheep purchased from Jack.
In August 2017 Grant and Tatiana purchased a unit at Ascot Park for $530,000. Rural Bank agreed to lend $350,000 on first mortgage security. Grant and Tatiana paid the balance of $180,000 in cash from the K & R Family Trust.
In September 2017 Tatiana closed her shop in Broken Hill. She moved to Adelaide to live with her daughter in the Ascot Park unit and to open a new clothing shop in Unley in Adelaide, which was opened in November.
Grant gave evidence that in October 2017 Jack telephoned him, asked him what he thought Pulgamurtie was worth now and asked him if he knew that land prices had gone up. Grant said that he thought it was worth about $8.5 million.
Grant gave evidence that on the following day he had a discussion with Jack on the back veranda of his house in Broken Hill. Jack asked if Grant thought that $45 per acre was a fair valuation of the property (imputing a value of $8.3 million). Grant said that he thought that it was. Jack said “Well, that’s what I want for it”. Grant said “Dad you’ve already agreed to sell it to me for $2.6 million”. Jack said “I never agreed to sell it for that much”. Grant said “Dad, we agreed on $2.6 million”. Jack said that the price was $8.3 million or else Grant would have to leave Pulgamurtie.
Jack gave evidence that there was a conversation in 2017 about the value of Pulgamurtie being $8.3 million as deposed by Grant. However, he denied that there was any discussion about his having agreed to sell it for $2.6 million or about Grant having to leave Pulgamurtie.
Jack and Nola gave evidence that, between September and November 2017, they agreed that Jack should offer the property to Grant for $8,399,870.50 (calculated based on 186,657.5 acres at $45 per acre) with a $5 million deposit and the balance paid by annual instalments of $200,000. Nola gave evidence that she hand wrote an offer to this effect and gave it to Jack. A copy of the offer was tendered. It showed, in addition to the above details, interest at 0.5 per cent per annum and a breakdown of the annual instalments comprising $183,000 principal and $16,997.94 interest.
Jack gave evidence that sometime between September and November 2017 he gave the handwritten offer to Grant but he never received a reply. Grant denied ever receiving the handwritten offer.
On 19 February 2018 Boylan Lawyers, solicitors acting for Grant, sent a letter to Jack and Nola saying that they were instructed amongst other things that in 2012 Jack and Grant entered into an oral agreement for the sale of Pulgamurtie for $2.6 million to be completed after Grant had paid off the full amount of the livestock he acquired from Jack but in about October 2017 Jack said to Grant that he would only sell the station to him for $8.3 million and otherwise he would have to leave. The letter requested confirmation within 14 days that Jack would complete the sale in accordance with the terms of the 2012 agreement.
On 6 March 2018 Doyle Kingston & Swift, solicitors acting for Jack, sent a letter to Boylan Lawyers. They denied that there was any agreement for the sale of Pulgamurtie in 2012.
On 7 March 2018 Grant lodged a caveat over Pulgamurtie.
On 29 March 2018 Boylan Lawyers sent a letter to Doyle Kingston & Swift taking issue with various contentions in their letter and saying that Grant had little choice but to commence proceedings.
On 13 April 2018 Doyle Kingston & Swift sent a letter to Boylan Lawyers saying that they were instructed to prepare a contract of sale of Pulgamurtie at $45 per acre for 186,657.5 acres, which offer to sell was open for 90 days.
On 4 July 2018 Doyle Kingston & Swift sent a letter to Boylan Lawyers saying that they were instructed to propose that Grant commence paying a market rent of $15,000 per month, payable in advance, for Pulgamurtie commencing on 13 August 2018. They said that Jack was prepared to consider a reasonable alternative arrangement but, if an agreement could not be negotiated, Grant should commence to make alternative arrangements for his livestock.
On 27 August 2018 Grant instituted an action against Jack seeking specific performance of an agreement made in 2012 for the purchase of Pulgamurtie for $2.6 million (the primary action).
On 31 August 2018 an injunction was granted restraining Jack from dealing with his interest in, or evicting Grant from, Pulgamurtie until further order. Although initially intended to operate as an interim injunction pending any argument whether it should operate as an interlocutory injunction, the question whether it should operate as an interlocutory injunction was never argued until May 2020.
Jennifer Nesbit (Jenny) is Nola’s younger sister, having been born in 1947. She has been married to Jimmy Nesbit since 1965. Jimmy purchased Dalmuir station from his mother after having been a stock partner. In 2016 Jimmy and Jenny agreed with their daughter and son-in-law to sell Dalmuir station to them at its then value with completion in 2020. Jenny gave evidence that it was normal for farmers in the Western district to sell their properties to their children at lower than market prices and some farmers have given the family property to their sons. Jenny gave evidence that she recalled Jack telling her that Grant was the only one who deserved Pulgamurtie because he was the one who had stuck about working on it.
Jenny gave evidence that in late 2018 Jack and Nola visited Jimmy and her at their house in Broken Hill. They discussed prices of properties recently sold in the area ranging from $49 per acre to $69 per acre and ranging in size from 70,500 to 183,000 acres. During the conversation, Jack said that Pulgamurtie was now worth much more than what he had agreed with Grant that Grant could have it for. Jack said that he had to charge Grant a lot more for Pulgamurtie because it was worth a lot more than it had been back at the time of their agreement. Jenny said “You told Grant he could have it at an agreed price. You can’t put the price up now. You can’t do that to Grant.” Jack said “Well, you’d be putting yours up too”. Jenny said “No, we wouldn’t”. Jack said “Well you’re a bloody idiot”. Jack and Nola denied this conversation.
On 28 November 2018 Grant, Jack and Nola executed a Heads of Agreement in settlement of the primary action (the Heads of Agreement). It was effectively conditional upon approval by the New South Wales Supreme Court under subsection 95(3) of the Succession Act 2006 (NSW) of a release by Grant of his right to make an inheritance family provision claim against Jack and Nola’s estates. It recited that Nola asserted that she held an equitable interest in Pulgamurtie on the basis of her contributions to it since 1962.
The Heads of Agreement provided that Grant would purchase Pulgamurtie for $7,250,000. Completion would occur 30 days after approval by the New South Wales Supreme Court. At completion there would be an exchange of a transfer of Pulgamurtie by Jack to Grant in return for payment by Grant of $3,500,000. The balance of the purchase price would be paid by 15 annual instalments of $250,000 each, commencing on the 12 month anniversary of the payment of $3,500,000. Grant would grant a second mortgage in favour of Jack and Nola to secure payment of the balance and Jack and Nola would enter into a deed of priority with the first mortgagee providing finance for the purchase.
On 13 August 2019 Jack and Nola filed a summons in the New South Wales Supreme Court against Grant and Tatiana seeking approval of the renunciation by Grant of any inheritance family provision claim.
On 18 September 2019 Philip Lowe on behalf of Westpac sent a letter to Grant containing an approval in principle to provide finance to the Roberts Pastoral Trust totalling $5,500,000 for the purchase of Pulgamurtie.
On 15 October 2019 Avenyou Finance sent an email to Grant containing an indicative offer to Grant to lend $4,606,000 for six months. It was subject to conditions.
On 30 November 2019 Mr Lowe on behalf of Westpac sent a letter of offer to Roberts Pastoral Investments saying that it had approved his request for finance and offered him four facilities totalling $5,500,000. It was subject to conditions.
On 16 January 2020 Avenyou Finance sent a letter of offer to Grant offering to lend $4,500,000 comprising a principal amount $3,500,000, $100,000 working capital, $135,000 application fee and $765,000 prepaid interest. It was subject to conditions.
On 3 February 2020 Nola instituted a new action in this Court against Grant, naming Jack as an additional defendant, seeking declarations that Grant had repudiated the Heads of Agreement and that such repudiation could be accepted by Nola or Jack (the secondary action).
On 26 March 2020 Douglas Hoskins Legal (who were acting for Nola) sent a letter to Boylan Lawyers stating that their client terminated the Heads of Agreement on the ground of repudiation by Grant. They said that the letter was sent on behalf of “our client” without naming their client. The trial was conducted on the basis that Jack and Nola jointly terminated the Heads of Agreement.
On 29 April 2020 Boylan Lawyers sent a letter to Douglas Hoskins Legal and Adelta Legal stating that their clients’ conduct itself comprised a repudiation of the Heads of Agreement and Grant accepted that repudiation and himself terminated the Heads of Agreement.
On 29 May 2020 Grant filed a cross claim in the secondary action against Jack and Nola (Grant’s cross claim) seeking a declaration that he had validly terminated the Heads of Agreement on the ground of repudiation and seeking damages for breach of contract. Ultimately Grant’s cross claim was consolidated with Grant’s primary action.
The trial
Witnesses
The evidence in chief of the non-expert witnesses was given primarily in the form of affidavits, sometimes supplemented by oral evidence in chief.
Grant gave evidence and called Mark, Tatiana, Jenny, Mr Gould, Mr Scrimshaw, Mrs Scrimshaw, Mr Jordan and Mr Lowe to give evidence. In addition, an affidavit by Mr Deacon was admitted without Mr Deacon being required for cross-examination.
In cross-examination, it was put to Grant that in 2018 he invented the story about an agreement to buy Pulmamurtie. Grant adduced evidence from Tatiana, Mr Gould, Mr Jordan and Mr and Mrs Scrimshaw of statements made to them by him in or after 2012 but before 2018 to rebut recent invention. The use of evidence of Grant’s prior statements is limited to the purpose of restoring Grant’s credibility and rebutting the suggestion of recent invention.[2]
[2] R v Martin (No 2) (1997) 68 SASR 419 at 441 per Doyle CJ (with whom Lander J agreed); Leeks v XY [2008] VSCA 21, (2008) 21 VR 118 at [30]-[35] per Redlich JA (with whom Buchanan and Vincent JJA agreed).
Jack and Nola gave evidence and called Louise and Anne to give evidence. They also called their solicitor Georgia Contala to give evidence about a trip with Nola and Jack to Broken Hill during the trial to search for documents.
Jack and Nola called James Hickey, a valuer. In August 2020 Mr Hickey provided a valuation report to Jack and Nola’s solicitors. He valued Pulgamurtie at $10,453,000. His evidence in this respect was not challenged by Grant. It is common ground that the value of Pulgamurtie as at August 2020 was $10,453,000. I address the balance of his evidence below.
Jack and Nola obtained an expert report from Philip Camens, an accountant. This comprised the collation of information provided to him, and mathematical calculations made by him on the basis of information provided to him, by Jack and Nola in relation to benefits received and costs incurred by both parties in respect of Pulgamurtie. Mr Camens was not required for cross-examination and did not give oral evidence.
Documentary evidence
Both parties tendered several lever arch folders of documentary evidence. The documentary evidence included business records of Jack and Nola, Grant and his entities, Rural Bank and Westpac. It also included communications between Tatiana/Grant and Mr Hennessey.
Evidence received de bene esse
Mr Hickey was asked to express an opinion on the market rent payable in respect of the use and occupation of Pulgamurtie from January 2012 to August 2020. He applied what he described as a “rule of thumb” of a lease rate of five per cent of capital value. He assessed the capital value of Pulgamurtie as at February 2012 at $2,985,080 and calculated that an increase from that amount over eight years to $10,453,000 involved an average annual increase of 17 per cent. He assumed that the change in value each year was equally distributed over that period at 17 per cent per annum. He used this assumption to impute capital values each year from February 2013 ($3,492,543) to February 2020 ($10,481,968). He then applied five per cent to the capital value each year to arrive at an annual rent ranging from $149,254 in February 2012 to $524,098 in February 2020.
Grant objected to this evidence on the grounds that Mr Hickey did not have any demonstrated expertise in the valuation of rental values of rural properties such as Pulgamurtie; there was no adequate factual foundation for his opinion; and there was no adequate reasoning process disclosed to arrive at his opinion as to market rental. Mr Hickey gave evidence in chief and was cross-examined simultaneously in relation to the admissibility, and the merits, of his opinion.
Mr Hickey operates a land agent’s business based in Broken Hill. That business occupies approximately 70 per cent of his time. That business relates exclusively to the sale of residential, commercial and industrial land in or close to Broken Hill and does not encompass the sale of any rural land. Mr Hickey also operates a valuation business. Ninety per cent of the valuations undertaken by Mr Hickey relate to the value of residential, commercial and industrial land in or close to Broken Hill. Ten per cent relate to the value of rural land. Mr Hickey said that he does not get many rural valuations because the banks generally do their own.
Mr Hickey was not able to identify any lease transactions as comparable transactions. He said that stations of the size of Pulgamurtie are simply not the subject of leases.
Mr Hickey described the basis of the “rule of thumb” of five per cent of value to which he referred in his report in the following terms:
The basis is on normal investments in western New South Wales, the whole of western New South Wales virtually, is whether it be commercial, industrial or whatever, you need a minimum of a 5% yield to make it worthwhile. Grazing probably would come under the same thing as I’ve mentioned, you know, however, if you’re an investor and you bought a property for investment, you would want at least a minimum 5% yield.
I uphold Grant’s objection to the admissibility of Mr Hickey’s opinion concerning market rental value of Pulgamurtie. Mr Hickey has no demonstrated expertise in valuing rent as opposed to capital value and no demonstrated expertise in valuing rent of rural properties. There is no proper foundation for his expression of rental value. Mr Hickey did not refer to any lease transactions in respect of rural or other land. The mere fact that an investor might seek a minimum yield of five per cent to justify investing in residential, commercial or industrial property is no basis to assess the rental value of rural land.
In his report, Mr Hickey said that his rent calculation was supported by an agistment rate of $0.50 per dry sheep equivalent (DSE) per week. He said that, based on a carrying capacity of 14,000 DSE, this equated to $364,000 per annum. Although Mr Hickey only used this to support his opinion about rental value, Jack and Nola seek to rely upon this as independent evidence of the value of the use of Pulgamurtie to Grant. Grant objects to the admissibility of this opinion on the same grounds as in respect of the lease value.
Mr Hickey said that he does not have any written evidence of agistment rates because a lot of it is done privately. He said that he has spoken to lots of owners. He expressed the opinion that the current agistment rate is about $0.80 per DSE per week but over the eight year period the average, and the minimum, would have been $0.50 per DSE. He said that agistment arrangements were for a relatively short term of up to six months. He said that one could contact stock companies to ascertain agistment rates and also look on the internet. In cross-examination, he said that he has never heard of a 184,000 acre property being used for agistment. He said that agistment is usually a temporary arrangement for a grazier who does not have enough feed of their own for their livestock.
I uphold Grant’s objection to the admissibility of Mr Hickey’s opinion concerning agistment rates between 2012 and 2020. Mr Hickey has no demonstrated expertise in relation to agistment rates. The vast majority of his business (of the order of 97 per cent) relates to the sale or valuation of residential, industrial or commercial properties in or close to Broken Hill. The balance relates to the valuation of rural properties. None of his business relates to the valuation of agistment rates. There is no proper foundation for his expression of opinion in relation to agistment rates. He did not refer to any particular transactions. He did not make enquiries of stock agents who he said were a source of knowledge of agistment rates. He did not produce or refer to any internet searches. The sole source of his knowledge was a generalised reference to discussions with owners.
As observed above, Mr Hickey expressed the opinion that the value of Pulgamurtie as at February 2012 was $2,986,000. There was no objection to the admission of this evidence when it was given. During closing address, Grant submits that Mr Hickey’s opinion of the objective value of Pulgamurtie as at 2012 is inadmissible because it is irrelevant (other than as forming a foundation for Mr Hickey’s expression of opinion as to market rental, which I have excluded). It was too late during closing address for Grant to object to the admissibility of this evidence because it had already been received (without objection). I address the use of this evidence below.
Assessment of witnesses
The principal witnesses were Grant and Jack and to a lesser extent Tatiana and Nola. I address my assessment of their evidence after addressing the other witnesses.
Witnesses called by Grant
Jack and Nola do not submit that Mark was a dishonest witness. They do, however, submit that he was an emotive witness, who was disappointed that the Heads of Agreement had ended and his evidence was at times coloured by that disappointment.
I found Mark to be an honest, straightforward and reliable witness. He gave his evidence in an objective and convincing manner. He did not exaggerate. He made clear the limits of his recollection. He was not overly-emotive. His evidence was not coloured. In general terms, I accept his evidence.

Nola and Jack plead that, by reason of three pleaded matters, Grant evinced an intention to perform the Heads of Agreement in a manner substantially inconsistent with his obligations under it, evidencing a lack of readiness or willingness to perform, and he thereby repudiated the Heads of Agreement.
In their closing address, beyond reference to this plea, Jack and Nola advance only cursory submissions in support of this species of renunciation.
Nola and Jack plead that Grant refused to provide details of finance approval in response to letters dated 14 May, 5 August and 24 October 2019 and this manifested the pleaded lack of readiness or willingness to perform. Grant responded to the first letter with his proposal dated 16 May; did not refuse to provide the details requested on 5 August but simply did not respond; and provided a limited response to the request of 24 October on 28 October 2019 and a detailed response on 9 January 2020. Grant was not required by the terms of the Heads of Agreement to provide details in relation to finance, at least at this point when the requisite order approving a release had not been made. Even if, contrary to my conclusion, Grant’s conduct in response to the letters were capable of comprising renunciation, that was superseded by the provision of the detailed response on 9 January 2020 and it was too late in March 2020 for Nola and Jack to rely on earlier conduct in this respect.
Nola and Jack plead that Grant provided the draft Supplementary Agreement on 16 May 2019 and this manifested the pleaded lack of readiness or willingness to perform. The proposed Supplementary Agreement was merely an offer to vary the Heads of Agreement. The letter under which it was provided made it clear that it was a matter for Jack and Nola to respond to the offer and either accept or reject it. This proposal was preceded by three letters from Jack’s solicitor inviting a proposal. Grant did not indicate that, if the proposal was rejected, he would not perform the Heads of Agreement on its terms. Even if, contrary to my conclusion, Grant’s conduct in proffering the proposed Supplementary Agreement were capable of comprising renunciation, no further steps were taken by Grant in relation to that document after 22 May 2019 when his offer was rejected. It was too late thereafter for Nola and Jack in March 2020 to rely on any earlier conduct in this respect.
Nola and Jack plead that, by reason of the terms of the finance approval from Westpac stated in Boylan Lawyers’ letters of 9, 16 and 17 January 2020 and the fact that those terms did not enable performance of the terms under the Heads of Agreement, this manifested the pleaded lack of readiness or willingness to perform. Boylan’s Lawyers’ letters in January 2020 proposed a variation of the terms of the Heads of Agreement without stating that, if the proposal was rejected, Grant would not perform the original terms of the Heads of Agreement. The position is the same as in respect of the proffering of the Supplementary Agreement.
Whether considered individually or in combination, the pleaded matters did not evince a lack of readiness or willingness (or inability) to perform the terms of the Heads of Agreement.
Renunciation by factual inability to perform
Nola and Jack plead that, by reason of six pleaded matters, Grant was wholly and finally disabled from performing the Heads of Agreement and thereby repudiated it. This is pleaded primarily as a matter of objective fact, and in the alternative that Jack and Nola reasonably inferred that Grant was wholly and finally disabled from performing the Heads of Agreement and he thereby repudiated it.
In Sunbird Plaza Proprietary Limited v Maloney[79] the High Court held that a party could, at least in some circumstances, rely on this species of renunciation (wholly and finally disabled from performing) even though unaware of that fact and even though the party terminated the contract on another ground. This indicates that the test whether a party is wholly and finally disabled from performing is purely objective assessed by reference to the objective facts and is not assessed by reference to the facts known to the other party. I proceed on that basis.
[79] (1988) 166 CLR 245.
The six pleaded matters relied on by Jack and Nola are as follows:
·the provision of the draft Supplementary Agreement;
·the failure of Grant to comply with the orders made in the New South Wales Supreme Court proceeding;
·Grant’s alleged delay since execution of the Heads of Agreement, which was in all the circumstances unreasonable;
·the alleged refusal of Grant to provide details of the finance applications or approvals in response to the letters referred to above;
·the declining of Grant’s applications for finance referred to above; and
·the terms of the finance approval from Westpac stated in Boylan Lawyers’ letters of 9, 16 and 17 January 2020 and the fact that those terms did not enable performance of the terms under the Heads of Agreement.
Although the first three matters are pleaded, Jack and Nola in their closing address do not advance any contention in respect of them. I address them briefly.
In relation to the first matter, the provision of the draft Supplementary Agreement did not evidence that Grant was wholly and finally disabled from performing the Heads of Agreement and by March 2020 had long been superseded by further developments.
In relation to the second matter, the Heads of Agreement was conditional on the grant of approval by the New South Wales Supreme Court of the release by Grant of any right to make an inheritance family provision claim against Jack and Nola’s estates. Although this was not explicitly stated as a condition precedent or subsequent of the Heads of Agreement, this was the necessary consequence of the combination of clauses 1, 7 and 8 which provided that the initial payment of the purchase price of $3,500,000 was not payable until 30 days after approval by the New South Wales Supreme Court of such a release.
It is clear from clause 13 that it was the obligation of Jack and Nola to make the application to the New South Wales Supreme Court, or at least to prepare the necessary documents for that purpose. They did not do this until August 2019 and did not file the necessary affidavits concerning the relevant circumstances until December 2019. It is true that Grant did not file his own affidavit by 24 January 2020 as ordered by the New South Wales Supreme Court. However, shortly after that date, Nola instituted the secondary action in this Court seeking a declaration that she was entitled to terminate the Heads of Agreement and the New South Wales Supreme Court adjourned the hearing of the proceeding in that Court to await the hearing and determination of Nola’s action. In those circumstances, the fact that as at 26 March 2020 Grant had not filed his affidavit is of no consequence.
In relation to the third matter, Grant was not responsible for the delay since October 2018. This was due to Jack and Nola failing to make application to the New South Wales Supreme Court until August 2019 and file the requisite affidavits until December 2019. But for Nola’s conduct in instituting the action, Grant would have been responsible for delay after 24 January 2020 but his not filing an affidavit after 4 February is explicable for the reasons given above.
Jack and Nola in their closing address contend that, as at 26 March 2020, Grant had still not obtained an unconditional offer of finance that would satisfy the Heads of Agreement despite many attempts, there is no evidence to support that he could have done so and the evidence shows a complete inability to obtain satisfactory finance. Jack and Nola do not rely on the last three matters referred to at [746] above as such but as indicative of this contention.
Grant contends that, in order to complete the purchase and obtain title to Pulgamurtie under the Heads of Agreement, he was only required to pay $3,500,000 and he had obtained approval from Westpac and Avenue Finance to borrow at least that amount. However, Westpac’s offer was conditional on a contract of sale for Pulgamurtie on terms acceptable to Westpac. It is clear from Mr Lowe’s evidence, and I find, that this required Jack and Nola to agree not to take a second mortgage over Pulgamurtie to secure their vendor finance and to reduce the purchase price to $5,000,000, which Jack and Nola were not prepared to do.
Grant had received an offer of finance from Avenyou Finance dated 16 January 2020 offering conditionally to lend $3,500,000 for the purchase of Pulgamurtie plus $100,000 working capital plus $135,000 for the application fee plus $765,000 prepaid interest. This was not commercially attractive because the offer was only for finance for 12 months and at an indicative interest rate of 17 per cent per annum. It was subject to conditions precedent. Unlike Westpac, as at 24 March 2020, Avenyou Finance had agreed to registration of a second mortgage.
Grant was not required by the Heads of Agreement to pay the initial purchase price of $3,500,000 until 30 days after approval by the New South Wales Supreme Court of his release. As at 26 March 2020, the time for Grant to perform, and even an unconditional obligation of Grant to perform, had not arrived and was not imminent. It was not inevitable that Grant would not be able to pay $3,500,000 if and when he was required to do so in accordance with the terms of the Heads of Agreement and he was not wholly and finally disabled from doing so.
As at 24 March 2020, it appears that the New South Wales Supreme Court had decided to defer hearing and determining the application for approval of Grant’s release until this Court had heard and determined Nola’s action seeking a declaration that she was entitled to terminate. It is likely therefore that, in the absence of termination by Nola and Jack, it would have been at least several months before the New South Wales Supreme Court heard and determined the application and then a further 30 days before Grant would have been required to pay $3,500,000 in return for the transfer of title to Pulgamurtie.
In the intervening period, it remained possible that Grant might be able to complete. It was a theoretical possibility that Grant might win the lottery or otherwise unexpectedly come into a large amount of money. Although this might be regarded as fanciful, and certainly highly unlikely, Nola and Jack were not entitled to deprive Grant of the ability to purchase Pulgamurtie pursuant to the Heads of Agreement merely on a basis (if it be the case) that it was unlikely that, when the time came, Grant would be able to complete. Grant was not required to complete until that time and was entitled to any chance that by that stage he might be able to do so.
In addition, although undesirable, it remained an option for Grant to proceed with obtaining finance from Avenyue Finance in the hope that 12 months later a bank (such as Westpac) might be prepared to pay out Avenyue Finance even though it was not prepared to advance the funds for the original purchase. Avenyou Finance’s offer was subject to conditions, including satisfactory investor funding to be obtained by members, but there is no reason to think that they would not have been satisfied if Grant had proceeded. Again, Nola and Jack were not entitled to deprive Grant of the opportunity to purchase Pulgamurtie in this manner before the condition to which the parties’ obligations were subject was satisfied and Grant was required to make a final decision about finance.
On an objective assessment, Grant was not wholly and finally disabled from performing the Heads of Agreement.
Even if, contrary to my conclusion above, the test for this species of renunciation is not purely objective assessed by reference to the objective facts but rather is to be assessed by reference to the facts known to Nola and Jack, the conclusion is the same. Nola and Jack were well aware that the time for completion had not yet arrived. They knew or should have known that there remained a possibility that Grant may be able to pay $3,500,000 at completion. On the facts as known to them, Grant was not wholly and finally disabled from performing the Heads of Agreement.
I am satisfied that Grant had not repudiated the Heads of Agreement as at 24 March 2020.
Repudiation by Nola and Jack
Ordinarily, wrongful termination of a contract by a party amounts to repudiation and entitles the other party to terminate the contract on that ground.
In some circumstances, if a party asserts in good faith an erroneous construction of the terms or an erroneous belief as to the parties’ legal rights or obligations under the contract, or even acts on that erroneous belief, its conduct will not, on an assessment of the whole of the circumstances, be characterised as repudiatory.
In DTR Nominees Proprietary Limited v Mona Homes Proprietary Limited[80] the High Court held that the vendor was not entitled to terminate the contract on the ground that the purchaser had repudiated it by terminating on the ground of the vendor’s repudiation because the vendor itself was not ready, willing and able to perform its obligations in accordance with the contract. Stephen, Mason and Jacobs JJ said:
No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him…
In this case the appellant acted on its view of the contract without realizing that the respondents were insisting upon a different view until such time as they purported to rescind. It was not a case in which any attempt was made to persuade the appellant of the error of its ways or indeed to give it any opportunity to reconsider its position in the light of an assertion of the correct interpretation. There is therefore no basis on which one can infer that the appellant was persisting in its interpretation willy nilly in the face of a clear enunciation of the true agreement.
… on the evidence this Court would not be justified in finding that the appellant acted otherwise than in accordance with a bona fide belief as to the correctness of the interpretation which it sought to place upon the contract. Consequently it is a case of a bona fide dispute as to the true construction of a contract expressed in terms which are by no means clear. In these circumstances the Court is not justified in drawing an inference that the appellant intended not to perform the contract according to its terms or that it repudiated the contract.
…The actions of the parties must now be considered in the light of the true interpretation of the contract. The purported rescission of 19th July did not evince an intention not to proceed with the contract correctly interpreted; it did no more than evince an intention not to proceed with the contract on the basis of the incorrect interpretation then being advanced by the appellant. That cannot be regarded as a repudiation which would entitle the appellant to rescind when it was itself the party in error. A party in order to be entitled to rescind for anticipatory breach must at the time of rescission himself be willing to perform the contract on its proper interpretation. Otherwise he is not an innocent party, the common description of a party entitled to rescind for anticipatory breach, and indeed could profit from his misinterpretation of the contract, as the appellant seeks to do in this case when it claims forfeiture of the deposit and damages. By insisting on its incorrect interpretation of the contract to the point of claiming to rescind because the respondents were relying on the different but correction interpretation, the appellant by that stage showed that “definitive resolve or decision against doing in the future what the contract” [required] which is referred to by Dixon CJ in Rawson v Hobbs.[81]
[80] (1978) 138 CLR 423.
[81] At 432-433. (Citations omitted)
In Woodar Investment Development Ltd v Wimpey Construction (UK) Ltd[82] the purchaser (Wimpey) purported to terminate the contract under an express power to terminate if a compulsory acquisition were commenced. In fact, it was not entitled to terminate on the proper construction of the contract because the compulsory acquisition had already commenced before entry into the contract. The House of Lords held by majority that the purchaser had not repudiated. Lord Wilberforce said:
So far from repudiating the contract, Wimpey were relying on it and invoking one of its provisions, to which both parties had given their consent. And unless the invocation of that provision were totally abusive, or lacking good faith, (neither of which it contended for), the fact that it has proved to be wrong in law cannot turn it into a repudiation.
…
Wimpey manifested no intention to abandon, or to refuse future performance of, or to repudiate the contract. … I shall simply state that the proposition that a party who takes action relying simply on the terms of the contract and not manifesting by his conduct an ulterior intention to abandon it is not to be treated as repudiating it.[83]
[82] [1980] 1 All ER 571.
[83] At 574-576.
In Sopov v Kane Constructions Pty Ltd[84] the Victorian Court of Appeal held that the test for repudiation is objective and the subjective state of mind of the alleged repudiator is irrelevant. Maxwell P and Kellam JA said:
In our view, the objective test of repudiation, as stated by Brennan J in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (“Laurinda”), leaves no room for consideration of whether the party in breach – the alleged repudiator – held the honest belief that its action was justified by the contract. Axiomatically, the repudiator’s state of mind is irrelevant. What matters is the character of the repudiator’s conduct.
…
That the touchstone is conduct, not state of mind, emerges clearly from the authorities dealing with erroneous interpretation.[85]
[84] [2007] VSCA 257, (2007) 20 VR 127.
[85] At [9], [11]. (Footnotes omitted)
Nola and Jack contend that Nola was entitled to make the claim bona fide that Grant had repudiated the Heads of Agreement, even if wrong, and the purported termination of the Heads of Agreement did not itself comprise repudiation.
The mere fact that Nola and Jack acted in good faith (if it be the case) is irrelevant if, objectively assessed, their conduct indicated that they were acting in good faith, but this is a factor (objectively assessed) that can be taken into account in determining whether their conduct was repudiatory.
Nola and Jack did not terminate the Heads of Agreement on the basis of any term of the contract or on the basis of any erroneous construction of the contract or erroneous belief as to the parties’ legal rights or obligations under the contract. They simply purported to terminate when they were not entitled to do so and were wrong in asserting that Grant had repudiated his obligations. In addition, by instituting the secondary action in February 2020 seeking a declaration that she or Jack was entitled to terminate, Nola recognised that terminating the contract risked adverse consequences. In March 2020 she decided to proceed willy nilly (to adopt the words of Maxwell P and Kellam JA in Sopov) with termination notwithstanding that risk.
If, contrary to my conclusion above, the question whether Nola and Jack acted in good faith is subjective, they did not give any evidence about their state of mind in deciding to terminate the Heads of Agreement. There is no basis on which to find that they were acting in good faith or to assess their conduct in this respect insofar as it may be relevant to the question whether they repudiated the Heads of Agreement.

The purported termination comprised a repudiation of Nola and Jack’s obligations under the Heads of Agreement.
Causation and quantum of loss
Grant claims that, by reason of the wrongful termination, he lost the chance of completing the purchase of Pulgamurtie simultaneously with a back to back sale to a third party.
Grant formulates his claim[86] on the following basis.
1If the Heads of Agreement had not been terminated, Grant would have sought out a third party interested in purchasing Pulgamurtie with a view to on-selling Pulgamurtie to a third party purchaser simultaneously with purchasing from Jack and Nola.
2The market value of Pulgamurtie in 2020 was $10,453,000 in accordance with Mr Hickey’s unchallenged evidence.
3Grant would have had a 90 per cent chance of finding a third party purchaser at a $1,000,000 discount, giving an on-sale price of $9,453,000.
4If Grant found such a third party purchaser, Grant and the third party purchaser would have entered into an agreement for Grant to sell Pulgamurtie to the third party for $9,453,000 contemporaneously with the purchase by Grant of Pulgamurtie under the Heads of Agreement.
5The net present value of the future payments totalling $7,250,000 payable by Grant to Jack and Nola under the Heads of Agreement is not more than $5,686,000 by applying a discount rate of five per cent per annum.
6Grant could have attended a simultaneous settlement of a purchase from Jack and Nola and sale to the third party purchaser at which he would receive $9,453,000 million from the third party purchaser, out of which he could have used $5,686,000 to pay to Jack and Nola to acquire title to Pulgamurtie.
7Grant in that event would have made a capital profit of $4,767,000[87] ($9,453,000 less $5,686,000), which is the gross loss that he suffered by reason of the wrongful termination of the Heads of Agreement.
8Discounting the gross loss to 90 per cent to reflect the probability that Grant would have sold Pulgamurtie to a third party purchaser in this manner for $9,453,000 gives a net loss of $4,290,000.[88]
[86] Paragraphs [28.6] and [7A.2] of his Defence as modified in closing address.
[87] This figure arithmetically should be $3,767,000 million.
[88] This figure arithmetically should be $3,390,000 million.
The first step in this chain is that, if the Heads of Agreement had not been terminated, Grant would have been willing to purchase Pulgamurtie not for himself but for immediate resale to a third party and that he would have sought out potential third party purchasers for this purpose.
In a loss of opportunity claim, it is necessary to distinguish between hypothetical (or future) facts that go to causation of loss, that must be proved on the balance of probabilities, and hypothetical (or future) facts that go to valuing that loss, that are assessed by reference to the percentage likelihood of occurrence and result in a discount by reference to that assessed percentage. There is a rule of thumb that, if the hypothetical fact involves a decision by the applicant, it goes to causation; whereas if it involves a decision by a third party (or another external factor), it goes to the assessment of loss. However, ultimately the question is decided by reference to the identification of the opportunity lost.[89]
[89] See my analysis in ACN 115 918 959 Pty Ltd v Hoeys Lawyers Pty Ltd [2021] VSC 79 at [761]-[769].
The first step in the chain involves a decision by Grant, the applicant. The opportunity lost was the opportunity for Grant to enter into a back to back sale transaction with a third party purchaser. Grant must prove on the balance of probabilities that he would have sought out a potential third party purchaser for this purpose.
Grant did not give evidence that he would have so acted. The surrounding circumstances are not such that it can be inferred that he would have so acted in the absence of evidence from him. On the contrary, the general effect of Grant’s evidence was that he had worked his whole life so that he could acquire Pulgamurtie if he were the last sibling left on Pulgamurtie, he worked and conducted his life from March 2012 onwards on the basis that he would be acquiring Pulgamurtie, and he was devastated when Jack told him in October 2017 that he required payment of $8,300,000. In addition, the entire rationale for entry into the Heads of Agreement was for Grant to acquire Pulgamurtie for himself; it was not to enable Grant to on-sell Pulgamurtie for a capital profit. For Grant to have turned around and immediately on-sold Pulgamurtie for a capital profit would have involved moral issues (assuming that legally there was nothing that would have prevented his so doing). Grant did not in fact take any steps with a view to on-selling Pulgamurtie up to March 2020 when the Heads of Agreement was purportedly terminated.
Grant points out in closing address that in his defence filed on 4 Mach 2020, before termination of the Heads of Agreement, it had been pleaded (paragraph 28.6) that he could settle on the purchase of Pulgamurtie by the mechanism summarised at [773] above. However, a plea that Grant could have so acted is not that he would have and, in any event, the pleading is not evidence.
I am not satisfied that Grant would have sought out a potential third party purchaser for the purpose of a back to back sale of a type referred to above. Grant’s claim for substantial damages therefore fails at the first hurdle and he would only be entitled to nominal damages for breach of contract if he had failed in proprietary estoppel.
Given this conclusion, it is not necessary to address the subsequent steps referred to above. However, there are other difficulties with Grant’s claim.
First, the claim proceeds on the premise that Grant could have tendered to Jack and Nola $5,686,000 in full satisfaction of the total purchase price payable under the Heads of Agreement of $7,250,000 and Jack and Nola would either have been obliged to accept it or would have voluntarily accepted it. The Heads of Agreement provided for payment of the purchase price by instalments over several years. There is nothing in the Heads of Agreement that indicates that this was solely for the benefit of Grant. It may have been advantageous to Jack and Nola to receive deferred payments rather than an upfront lump sum. There is no provision in the Heads of Agreement giving Grant the right to pay $7,250,000 by an upfront lump sum,[90] let alone a lesser discounted amount.
[90] The general law does not give to a party a right to tender payment before the date provided by the contract: see in the context of tender by a creditor of payment of a debt Hyde Management Services Pty Ltd v FAI Insurances Ltd (1979) 144 CLR 541 at 542 per Barwick CJ and 543-544 per Mason J (with whom Gibbs, Stephen and Aickin JJ agreed).
Grant did not adduce any evidence from Jack and Nola whether they would have cooperated with him in accepting a lump sum payment in lieu of instalment payments or, if so, whether they would have agreed to discount the payment because they were receiving it as a lump sum payment. I have no basis on which I can assess the likelihood that Jack and Nola would have so agreed. It is not inherently likely that they would have so agreed because I infer that they would have considered that such an arrangement was morally repugnant. Even if I could have assessed the likelihood that Jack and Nola would have agreed to accept a lump sum payment in lieu of instalments, there is no basis on which I could assess whether they would have agreed to any discount and if so how much.
Secondly, the claim proceeds on the premise that a third party purchaser would have been prepared to enter into a contract to purchase Pulgamurtie on a back to back basis when the original vendor in the chain (Jack) was not likely to be cooperative. The third party purchaser would have needed to be willing to hand over to Grant two bank cheques totalling the postulated purchase price of $9,453,000 on the basis that Grant would hand to Jack a cheque for somewhere between $5,686,000 and $7,250,000 (depending on whether Jack would be willing to accept the discounted payment) in return for the title to Pulgamurtie, which Grant would then hand to the third party purchaser. Grant did not adduce any evidence on which I could assess the likelihood that a third party would have agreed to such a mechanism. I assume that Grant discounts the purchase price by $1,000,000 and the prospects by 10 per cent to reflect the risk that a third party purchaser would not have agreed to such a mechanism, but I have no evidence on which I can assess whether those discounts are appropriate.
Jack and Nola contend that an additional contingency that would need to be assessed is the contingency that the condition to which the Heads of Agreement was subject, namely approval by the New South Wales Supreme Court of a release by Grant of his inheritance family provision rights, would have been satisfied. They contend that in turn this contingency may depend on the likelihood of Grant being able to obtain finance in order to complete the purchase of Pulgamurtie under the Heads of Agreement. Given my conclusion above, it is unnecessary to consider these contentions.
Grant would only be entitled to nominal damages for breach of contract if he had failed on his proprietary estoppel claim.
Conclusion
Grant’s cause of action in contract fails because, objectively assessed, the parties did not intend to enter into a legally binding contract.
Grant’s cause of action of proprietary estoppel (and constructive trust) succeeds. The appropriate remedy is to order that Jack convey title to Pulgamurtie in return for payment of $3,808,350. I will hear the parties concerning the terms of the relief and whether it should be subject to any conditions.
If Grant had failed on his cause of action of proprietary estoppel, his cause of action for an equitable lien would have succeeded to the extent of $508,831.
If Grant had failed on his cause of action of proprietary estoppel, he would have succeeded in his claim for breach of the Heads of Agreement but I would have assessed only nominal damages.
I will hear the parties concerning orders to be made to finalise the proceeding, including costs.

[2021] SASC 72

17 June 2021