Therese Violette McKenzie v Olivia Pearl Nydegger

[2000] NSWSC 982

CITATION:	Therese Violette McKenzie v Olivia Pearl Nydegger [2000] NSWSC 982 revised - 15/12/2000
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 4378/1999
HEARING DATE(S):	4, 5, 6, 7, 8 September 2000
JUDGMENT DATE:	25 October 2000
PARTIES :	Therese Violette McKenzie (Plaintiff/First Cross Defendant) Olivia Pearl Nydegger (Defendant/Cross Claimant) Registrar General (Second Defendant) Colin McKenzie (Second Cross Defendant)
JUDGMENT OF:	Bergin J

COUNSEL :	J Sexton SC/M Bradford (Plaintiff/First and Second Cross Defendants) A McInnes QC/A Hill (Defendant/Cross Claimant)
SOLICITORS:	Booth Brown Samuels & Olney (Plaintiff/First and Second Cross Defendants) Kenneth Harrison (Defendant/Cross Claimant)
CATCHWORDS:	EQUITY - Undue influence and duress - Whether transfers into joint tenancies from tenancies in common were executed under duress - Whether defendant was at a special disadvantage or under inappropriate pressure to execute transfers. ESTOPPEL - General principles - Whether promises were made to the plaintiff leading to an expectation upon which the plaintiff acted to her detriment - Promises made in circumstances with no reservation of capacity to change mind - Whether there was a common assumption or common expectation that the plaintiff would be left certain rural properties and cattle stud - Detrimental reliance by plaintiff - Requirement for court to decide in what way equity can be satisfied.
CASES CITED:	Bridgewater v Leahy (1998) 194 CLR 457 Crabb v Arun District Council [1976] 1 Ch 179 Flinn v Flinn [1999] VSCA 109 (4 August 1999) Giumelli & Anor v Giumelli (1999) 196 CLR 101 Louth v Diprose (1992) 175 CLR 621 Muschinski v Dodds [1984-1985] 160 CLR 583 Taylor v Dickens [1998] 1 FLR (UK) 806
DECISION:	Promises made and expectation encouraged and acted upon to plaintiff's detriment. Trust imposed over defendant's interest in properties and cattle stud.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BERGIN J

WEDNESDAY 25 OCTOBER 2000

4378/99 - THERESE VIOLETTE MCKENZIE v OLIVIA PEARL NYDEGGER

JUDGMENT

1    This litigation arises out of disputation between the plaintiff and the defendant in relation to the transfer of certain rural properties into the names of the plaintiff and the defendant as joint tenants and the proposed severing of these joint tenancies by the defendant.

2    The plaintiff, Therese Violette McKenzie, is the daughter of Olivia Pearl Nydegger, the defendant. The plaintiff is the youngest of the four children of the defendant and Emile Marcel Nydegger, who died on 13 August 1991 (the deceased). The other children in order of birth are Robert Ross Nydegger (Robert), Leon Marcel Nydegger (Leon) and Christine Roffey (Christine).

3    The plaintiff and her husband, Colin McKenzie, whom she married in 1975, have three children, Grahame and Matthew who are both in their twenties and Max who is eleven. During the early years of their marriage they lived at South Windsor, and in 1979 they sold their home and purchased a five acre property at Pitt Town on which they lived for about seven years.

4    During the seven years at the Pitt Town property the plaintiff and her husband ran up to one hundred goats. This was not a viable farming enterprise but provided the plaintiff and also the defendant with enjoyment in taking the goats to various goat shows. During this period the plaintiff’s husband drove a truck and also operated his own fish supply truck.

5    The defendant has always had an interest in cattle since operating a dairy in Kellyville which ran Illawarra Shorthorns. The dairy was sold in 1956 when the defendant and the deceased moved to Pennant Hills Road, Parramatta. The deceased retired from his practice as a dentist in 1977 and at about that time the deceased and the defendant established a cattle stud in partnership with Michael and Robin Fraser (the Frasers) which became known as the Toonga Murray Grey Stud (the Toonga stud).

6    The Toonga stud was established at the Frasers’ property “Toonga” at Tarcutta. The deceased and the defendant travelled to Tarcutta to visit the stud quite frequently. The defendant selected the cattle for purchase for the partnership and became quite expert in such selection. The Toonga stud cattle were exhibited at shows and some of the cattle achieved quite a deal of success. The Toonga stud won a lot of ribbons at the Royal Shows and in one year was named as the most successful Murray Grey Breeder in the Melbourne Show.

7    During these years the defendant made quite a number of friends in the Murray Grey Society and the Toonga stud was featured in magazines and rural papers with the defendant’s photograph. Her involvement in the Murray Grey Society and the Toonga stud gave her a great deal of pleasure.

8    In late 1985 at the Pitt Town property the plaintiff, the defendant and the plaintiff’s husband had a conversation during which the plaintiff alleges the defendant said:

If you two want to have a go at farming and sell your home here and work on the farm, then I’m prepared to help you by putting in half the money to buy a farm for you. If you decide to take it on, and you do all the work, the property will be yours in the end.

Warrawong

9    In early 1986 as a result of this conversation with the defendant, the plaintiff, the plaintiff’s husband, the defendant and the deceased inspected a property at Elong Elong, New South Wales known as “Warrawong”.

10    Warrawong is a 611.5 hectare property and in 1986 consisted of a house, sheds, fences and other improvements. Although the house was livable, the shed, fences and other improvements were in what the plaintiff described as a very dilapidated condition. After inspection and discussion it was decided to purchase the property.

11    Warrawong was purchased by the plaintiff and the plaintiff’s husband as to a one-half share and the defendant as to the other half share as tenants in common. The purchase price was $226,000. A little over half of the purchase price was provided by the defendant, who had available cash, and the other half was provided by the plaintiff and her husband by bridging finance until they were able to sell the Pitt Town property.

12    In February 1986 the plaintiff and her husband moved to Warrawong. Between 1986 and 1989 they ran goats on a fairly large scale. Towards the end of this period they moved progressively out of goats and into sheep. The business was conducted in partnership with the defendant, such partnership being referred to in the proceedings as the “Warrawong account”.

13    Between 1986 and 1987 the plaintiff’s husband worked on a neighbouring farm in order to make ends meet. The plaintiff was working seven days a week on Warrawong and the plaintiff’s husband worked on Warrawong in his spare time. This work mainly involved looking after the stock and replacing dilapidated fences and sheep yards.

14    The defendant did not work on Warrawong nor did she advance any money to the plaintiff for the operation of the property. The plaintiff and her husband did not take any wages from the Warrawong account and their only drawings were for basic living expenses and necessities. Whilst living on Warrawong they had no holidays and worked seven days per week.

15    After they moved into sheep, the plaintiff and her husband started to make a little money, all of which went into the Warrawong account and was put back into the property or into the acquisition of more stock. By approximately 1990/1991 the plaintiff and her husband started to run a few cattle on Warrawong. That herd has been built up over the years and there are now about 115 head of commercial cows on the property (the commercial herd). Warrawong also carries approximately 1,100 breeding ewes and 750 lambs. Crops such as wheat, barley and oats are also grown on Warrawong.

16    In the first years on Warrawong the plaintiff and her husband erected approximately two kilometres of hinged joint and electric fencing in the paddocks for the goats. They also completed a lot a repairs to the shearing shed. The following year they erected about 10 kilometres of electric fencing for the goats at a cost of approximately $2,500.

17    The plaintiff described the work of erecting the 10 kilometres of electric fencing as extremely difficult, mainly because they did not have the appropriate tools and equipment. For instance, it was necessary for them to clear about 10 kilometres of fence line with a whipper-snipper when such work would usually be done by a tractor and blade. The deceased assisted the plaintiff and her husband with this work.

18    In addition to erecting new fences the plaintiff and her husband also did a great deal of repair work to the existing fences on Warrawong. The plaintiff’s husband also completed the “massive job” of building sheep yards over a period of two or three years, the materials for which cost approximately $10,000.

19    In 1989 a family company which was controlled by the deceased, in which the plaintiff and her siblings had an interest, liquidated its assets. The funds were distributed and the plaintiff and Christine each received approximately $187,000 and Robert and Leon each received a little more than $200,000.

20    The plaintiff invested this money and used the interest, which was about $33,000 per annum at that time, to further improve Warrawong and acquire plant and equipment for use on the property. The plaintiff described some of these items at a cost of $40,000.

Bela

21    In 1989 the deceased purchased a property known as “Bela” at Elong. Bela consists of 459.7 hectares and is situated about 5 kilometres to the north east of Warrawong. The property is apparently a rough bush block with one little shed and very few improvements on it. The purchase price was approximately $160,000. The Warrawong account ran some sheep on Bela.

22    The plaintiff and her husband had considerable success in breeding up the sheep flocks and by about 1991 they had about 5,000 sheep running between Warrawong and Bela with total sheep purchases being well under 1,000. The Warrawong account also purchased a set of portable sheep yards for Bela at a cost of about $4,000. The Warrawong account also paid contractors about $4,000 to do some clearing work on Bela.

23    The plaintiff and her husband attended the Technical College two nights a week for two years in 1988 and 1989 and completed a wool classing course. The plaintiff and her husband employed contractors each year to do the shearing on Warrawong but did all the shed work themselves. The deceased assisted with the shed work and the defendant also assisted by providing lunches to the workers.

Coleraine I

24    In about 1990 the Frasers’ marriage broke down and their property Toonga was sold. It was necessary to purchase another property on which to locate the Toonga stud. At about this time the defendant was staying at Warrawong and had just concluded a telephone conversation with Mr Fraser. She then said to the plaintiff:

Fraser is looking at a property near Dubbo to buy with me. I can’t see it being any use to you. Its so far away.

The plaintiff said:
I’ll say.

The defendant said:
It would have to be close to you to be of any use. If he can find something close I’ll be interested to have a look at it.

25    About a week after this conversation Mr Fraser apparently telephoned the defendant again who after the conversation said to the plaintiff “he’s coming to have a look at another property called Coleraine”. The plaintiff responded “you won’t believe it Coleraine is next door to us”. The defendant said “well let’s see what happens”.

26    A few weeks later the defendant said to the plaintiff:

Fraser has come back to me. He wants to know whether I’m interested in buying 300 acres next to Warrawong. If I go ahead you can use them to run your stock. Michael has told me that he does not need the 300 acres to run the stud.

The plaintiff replied, “That’s good.”

27    Sometime later a further conversation occurred between the defendant and the plaintiff in the following terms:

Michael cannot afford to buy the rest of the property. He has asked me take 900 acres. I will allow him to use about 600 acres of that to help run the stud. You can use the other 300.

The plaintiff replied “that’s good”.

28    Coleraine in its initial form was a property which consisted of about 2,500 acres. The defendant acquired a 900 acre block and Mr Fraser acquired the other 1600 acres. The defendant’s arrangement with Mr Fraser was that the Toonga stud would be run on part of Mr Fraser’s 1600 acres and on 600 acres of the defendant’s land. The plaintiff and her husband were to run the commercial herd on the other 300 acres.

The Coleraine stud

29    In the first twelve months after the defendant purchased Coleraine I, the defendant and the plaintiff had a conversation in relation to the starting up of their own stud. The defendant said “I think we should start our own stud now that we have some extra land”. The plaintiff said “I think its a good idea Mum. Michael will be able to give us a hand”. The defendant then said, “If you two do all the work, it will be yours in the end.”

30    The defendant purchased the initial stud cattle which were of very good quality. The defendant is the registered owner of those cattle (the Coleraine stud). The defendant purchased about fifteen of the stud cattle and the plaintiff and her husband purchased four head in March 1996 for $6,400 which have also been registered in the defendant’s name.

31    A Coleraine bank account was opened in the defendant’s name with the plaintiff and her husband as joint signatories with the defendant. No money has ever been taken out of that account in the form of drawings for wages and the Warrawong account has paid most of the operating expenses incurred by the Coleraine stud.

32    A short time after the Coleraine stud was commenced, and about twelve months after Coleraine I was purchased by the defendant, there was a falling out between the defendant and Mr Fraser. As a result of this falling out the Toonga stud was physically divided. The defendant received thirty seven of the Toonga stud cows which were added to the Coleraine stud stock.

33    The official journal of the Murray Grey Beef Cattle Society is known as “Murray Grey World”. In June 1992 that journal (Ex. E) reported upon some recent purchases made by the Coleraine stud, referring to it as the newly formed Coleraine stud “owned in partnership” by the defendant and the plaintiff and her husband. It is apparent that the Coleraine stud is now very highly regarded and considered to be one of the top ten studs in New South Wales. It currently consists of approximately 135 breeders most of which have been bred on Coleraine over the years.

34    The plaintiff described the amount of work and commitment to run a successful stud these days as “huge”. The plaintiff said that, except for shearing time, she had worked on the stud seven days a week and often seven nights a week since the stud began. The plaintiff’s husband has also had to do a huge amount of work for the stud including mixing feed, one day with a hammermill, artificial insemination, a lot of fencing, building cattle yards, the insertion of bull rings, tattooing, breaking in and sowing pastures.

35    In years of drought which were experienced in 1994/1995, cattle numbers had to be cut back. The plaintiff and her husband sold 80 calves from the commercial herd at very low prices so that they did not have to reduce the numbers of the Coleraine stud.

36    In about October 1994 the plaintiff and the defendant had a conversation in which the plaintiff informed the defendant that she was worried that they were running out of water and that she had telephoned some drillers. The defendant informed the plaintiff “its your place you make the decision what to do. You have some money in the Coleraine account. You go ahead and do want you think you need to”. The plaintiff and her husband proceeded to drill on Coleraine I and found a small quantity of water which is only used in times of drought.

37    To assist in the running of the stud the plaintiff and her husband also completed an intensive five day artificial insemination course and an intensive five day pregnancy testing course. This has assisted the Coleraine stud in reducing its veterinary expenditure.

38    The costs of operating the Coleraine stud have been met mostly from the Warrawong account. The major costs have been for feed, shows and fencing. One of the Coleraine stud cattle won the Reserve Champion Broad Ribbon at the Royal Easter Show in 1998. The plaintiff claims that it has taken many years of very hard work to build up the reputation of the Coleraine stud. The plaintiff estimates that the stud cattle alone are presently valued at about $200,000. It was not until recent times that the Coleraine stud commenced to make any profit.

Coleraine II

39    In about May 1997 the defendant was intending to purchase another 900 acres of the Coleraine property which adjoined Coleraine I. The defendant requested the plaintiff to take her to Parramatta to see her solicitor, Tony Clarke of Champion and Partners. Whilst at the premises of the solicitors the plaintiff waited in the reception area but was later invited by Mr Clarke into the office with the defendant.

40    Mr Clarke said to the plaintiff, in the defendant’s presence, “your mother wishes this property to be purchased in joint tenancy with you. It is your mother’s wish that you will have this property on her death. Do you understand, Therese, that you don’t have to will the property and your mother does not have to will it either”.

41    On the way home to Coleraine the defendant said to the plaintiff “well you should be set for life now Therese. You’ve got enough land there now to support yourselves and Grahame’s family after he marries.”

42    Coleraine II was acquired with money borrowed from the Colonial State Bank in Dubbo. The land was taken as security for the debt and the plaintiff was co-borrower of the amount of the loan, a sum in the order of $280,000. The defendant repaid that amount of the loan when she sold her house at Parramatta in about October 1997.

43    Soon after its purchase the defendant moved to Coleraine II to live. The plaintiff’s family also moved into the homestead on Coleraine II. Although there is some dispute about how this came about I am satisfied the defendant invited the plaintiff and her family to live on Coleraine II.

44    Prior to moving to Coleraine II the defendant had lived next door to Christine and Leon has lived with the defendant for ninety percent of his life. This seems to have been the first time for many years that the defendant had been dislocated from Christine and Leon. It is apparent that the defendant lived a happy and interesting life on Coleraine II with the plaintiff and her family from October 1997 to early 1999 when events leading to this litigation occurred. It is also clear that until these events the plaintiff and the defendant enjoyed a very close, supportive and trusting relationship.

The Alpaca Partnership

45    From about 1995 to 1998 the plaintiff, the defendant and Christine operated an Alpaca stud in partnership on Coleraine I and then apparently on Coleraine II which was known as the Eldorado Alpaca Stud. In 1998 there was a falling out between Christine and the plaintiff’s husband which was caused by the way in which Christine purported to give orders to the plaintiff’s husband.

46    Although it is apparent that Christine apologised to the plaintiff’s husband the plaintiff decided to withdraw from the partnership and a break up of the stud was organised with certain of the Alpacas being collected from the property by Christine and her brother Leon. This process of collection became somewhat controversial in the hearing when Christine alleged that the plaintiff’s husband “threw” an Alpaca over the fence.

47    Christine claimed in an affidavit that “Colin was very aggressive and I was afraid to go on my own. Colin went and got the Alpaca and threw it over the fence”. Christine denied that such claim was an exaggeration but was confronted with photographs which the plaintiff had taken of the process (Exs. PP, QQ, and RR). Those photographs depict a process that is far from aggressive and does not evidence any throwing but a passing of an Alpaca to Leon who is then depicted walking to the vehicle parked in the driveway. Leon gave evidence and did not make any claim of the throwing of Alpacas or aggression.

48    After the break up of the Eldorado Stud the plaintiff and the defendant operated an Alpaca stud in partnership which became known as the Andes Alpaca Stud.

A warning to keep records

49    During the latter part of 1997, Leon had a number of discussions with the plaintiff in respect of their siblings’ concern about the defendant’s provision for the plaintiff. Leon informed the plaintiff that it would be wise for her to keep a diary of all the work that she was doing on the properties because “when Mum dies you are going to have trouble. Robert and Christine are unhappy. They think that she is giving you an unfair advantage”.

50    The plaintiff and the defendant discussed the concerns that Leon had raised with the plaintiff. The plaintiff claimed that the defendant informed her “in about August” of 1997 in words to the following effect “look, about the only solution that I can see to this problem is to put the rest of the properties into joint tenancy too”.

51    Darcy Kennedy Pty Ltd, Accountants of Dubbo (Darcy Kennedy), were retained to act as accountants for the plaintiff and her husband in their individual capacities and for the Warrawong account in about 1990. Vicki Mary O’Connor (Ms O’Connor) was the accountant at Darcy Kennedy who handled these matters for the plaintiff and the defendant.

52    It is apparent that the plaintiff and the defendant discussed the concern that Leon had raised with the plaintiff. The plaintiff gave evidence that she and the defendant visited Ms O’Connor in March 1998 to discuss the partnership structure for the purpose of cocooning it from any dispute that may arise with the plaintiff’s siblings. The plaintiff gave evidence that it was decided that the defendant would withdraw from the partnership as she had only been involved as “namesake” in any event.

53    Ms O’Connor’s memory of this meeting was non-existent, however the Darcy Kennedy time costing documents record: “26/03/98 Vicki O’Connor: Interviews 0.70 77.00 Change of Partnership Discussed”. I have little doubt that the plaintiff and the defendant attended upon Ms O’Connor on that day for a conference that lasted about three quarters of an hour to an hour and that the purpose of the discussion was as the plaintiff claimed.

Joint Tenancies

54    On 18 May 1998 Kenneth Ian MacDougall (Mr MacDougall), solicitor of Nelson Keane and Hemmingway, solicitors at Dubbo, was requested by Mr Peter Duffy (Mr Duffy) a solicitor of MJ Duffy & Son of Dubbo, to provide independent legal advice to the defendant. Mr MacDougall consulted with the defendant for that purpose at his office in Dubbo on 18 May 1998 .

55    Mr MacDougall gave evidence that he consulted with the defendant alone, although the plaintiff was sitting in the reception area. Mr MacDougall’s evidence was that the defendant struck him as a “very vibrant, worldly and intelligent woman”. He also said that he had the impression that she seemed a little irritated by Mr Duffy’s suggestion that she ought to speak to him for independent advice about the matter. He could not recall how long he spoke with the defendant but he estimated that it was around half an hour or more. He had no independent recollection of the meeting but was assisted by a letter that he had written to Mr Duffy after consulting with the defendant.

56    Mr MacDougall said that he explained to the defendant in conference the effect of creating the proposed joint tenancies with the plaintiff and the impact that the creation of the joint tenancies would have on the defendant’s will. He also advised the defendant that if there were other calls on the defendant’s estate than the assets the subject of the joint tenancies would not form part of the estate. He recalled that the defendant said to him “that’s all right - I have made provision for my other children in another way.”

57    Mr MacDougall said that he was satisfied that the defendant fully understood the effect of the transfers and that his impression was that she was totally comfortable about them. The defendant signed the transfers on 18 May 1998 transferring her half share in Warrawong, and the whole of Bela and Coleraine I into her name and the plaintiff as joint tenants. In his letter to Mr Duffy Mr MacDougall stated:

Mrs Nydegger produced valuations and Crown Plans in respect of each of the titles transferred.
The writer was satisfied that Mrs Nydegger well understood the effect of the transfers and that they were not being executed under duress or undue influence.
Mrs Nydegger indicated that her intention in making her daughter Therese Violette McKenzie a joint tenant of each of the properties was to preserve the properties from possible obligatory sale in the event of her (Mrs Nydegger’s) death.
Withdrawal from Partnership letter

58    Ms O’Connor did recall speaking to the plaintiff in September 1998 on the telephone when she advised the plaintiff that she was concerned there should be a document reflecting the defendant’s withdrawal from the partnership. A handwritten letter to Darcy Kennedy which was signed by the defendant reads as follows:

“Coleraine”
Elong Elong N.S.W. 2831
14-9-98
To Darcy Kennedy,
I Olivia Nydegger acknowledge that my partnership between myself, Colin and Therese McKenzie ceased to operate in March 1998.
I accept no entitlement to the livestock, plant and machinery.
Yours Sincerely,
Olivia P Nydegger

59    The defendant’s pleading claimed that the letter had been signed under duress and the defendant’s affidavit evidence was that she sometimes signed documents without reading them. The defendant made an additional claim in her oral evidence. The following evidence was given:

Q. Well, let me suggest to you that you talked to her (Ms O’Connor) about the partnership in March 1998, and that as a result of the advice she gave you, you agreed then, with Therese, that the partnership would be wound up?
A. No, I have got no recollection at all of that, or ever going to see her on that subject.
Q. .. Mrs Nydegger, this is Annexure A to Vicki O’Connor’s affidavit, (shown) (the letter of 14-9-98).
A. Yes, I saw this letter at the court meeting, when they had the last meeting at the court. This was presented to me there, and I have never seen it before in my life, but it has got my signature on it.
Q. So you must have seen it before in your life?
A. No, I don’t think so. When they brought me papers, I would often sign it and if there was an extra paper there, I would sign my name, but I didn’t look to see what it was. I have never seen it before.
Q. Is that your grandson, Grahame’s writing (Indicated)?
A. No, I thought it was my daughter’s writing.
Q. So, you don’t know?
A. No.
Q. Am I correct in understanding that you may have signed a blank piece of paper and somebody else put the words in afterwards?
A. Yes, but I never saw it until I saw it here at the courthouse.
Q. Was that something that somebody suggested to you that might have happened?
A. No
Q. You thought of that yourself, did you?
A. Yes.
(tr. 192-193)

60    In her later evidence the defendant said that if she had read the letter she would have understood it but she would not have signed it (tr. 269). Her case is that she had not seen the letter until the commencement of this litigation.

61    In response to this evidence over the objection by Mr McInnes QC, which I overruled in a separate judgement, Mr Sexton SC then called Grahame McKenzie. He gave evidence that he wrote the letter at the plaintiff’s request and that at the time he wrote the letter the defendant’s signature was not on the piece of paper on which he wrote the letter. He gave the letter back to the plaintiff and was not aware of what happened to the letter thereafter.

62    The plaintiff’s evidence was that the letter was prepared because Ms O’Connor advised her in September 1998 of the necessity to have documentary evidence of the defendant’s withdrawal from the partnership. Ms O’Connor expressed a view in cross examination that she had some doubts about the advice said to have been tendered in relation to the partnership because she felt that she would not have been concerned about the partnership in the event of the defendant’s death. However Ms O’Connor’s lack of any real memory, the fact that the letter is addressed to Darcy Kennedy at about the time Ms O’Connor said she advised the plaintiff to document the defendant’s withdrawal and the time costing records persuade me that the matter of withdrawal from the partnership was discussed with the defendant.

63    I am also satisfied that the letter was written at the request of Ms O’Connor and that the plaintiff discussed it with the defendant before it was signed by the defendant. I am satisfied that at the time the defendant signed the letter she did so in the hope of avoiding disputation between the plaintiff and her siblings after the defendant’s death.

Disputation commences

64    On 9 January 1999, the defendant’s 81st birthday, Robert and Leon arrived unexpectedly at Coleraine. Christine had arrived at the property the previous day. At about lunch time, in the defendant’s presence, the plaintiff’s siblings announced that they wished to have a family discussion. Although it is not clear which particular sibling made each of the claims, it is apparent that there was a very heated discussion during the course of which allegations were made that the plaintiff had the defendant under her thumb, that she was “ripping the stud off blind”, that she was taking her mother’s assets and that she was “a thief”. The defendant did not take part in any of this ‘discussion’.

65    The argument became more intense and the plaintiff decided to go outside. The plaintiff’s siblings followed her outside and the argument continued for the rest of the afternoon and well into the night. The plaintiff’s siblings left the following morning, only after the defendant said that she would arrange a “civil meeting” to discuss the issues.

66    After the plaintiff’s siblings left, the defendant became very distressed and said to the plaintiff “what have I done wrong, its all my fault, all I want is for you people to be friends”.

67    Approximately 4 - 6 weeks later Robert came to Coleraine and had a discussion with the plaintiff. He informed the plaintiff that he wanted his inheritance and that he had asked the defendant the previous week who owned Bela and the defendant had told him that she owned it. Robert then informed the plaintiff that he had found out that the plaintiff owned half of Bela with the defendant.

68    In about June or July 1999 the defendant had a further conversation with the plaintiff in which the defendant informed the plaintiff that she was now only going to give her half the stud. The plaintiff then said:

You’ve always promised the whole of the stud to me. Look at all the work that Colin and I have put into it. You wouldn’t have a stud now if it wasn’t for us.

To which the defendant responded:
I know that, I know, but they’ve told me that I have given you over a $1.1 million worth of properties, so how can I give you the whole stud too? What do you expect me to do? I’ll only be able to give you half the stud.

Mediation

69    On 9 August 1999 a mediation was arranged with Ms Vicki O’Connor, accountant, in Dubbo. The plaintiff and her husband refused to attend that mediation but advised Ms O’Connor that any documentation in relation to the operation of the properties could be provided to her siblings at that mediation. The plaintiff decided not to attend as it appeared to her that her siblings had already made up their minds.

70    Christine took the defendant to the mediation and a report of the content of that mediation is in evidence. The plaintiff’s siblings expressed concern that the transfers of the properties into joint tenancies would result in a distribution of the defendant’s estate which was unfair to them and too advantageous to the plaintiff.

71    The defendants assets were listed during the mediation to include a large parcel of BHP shares, the various properties the subject of these proceedings, the Coleraine stud, cash and other real property amounting to over $2.6 million. The value attributed to the properties the subject of these proceedings and the Coleraine stud was $1.18 million.

72    The notes record the following:
· Olivia stated that if the issues cannot be resolved, she would like to sell one property and move closer to other family members.
· The farming land assets were changed into joint tenancy because Olivia wanted to do so at the time. She was advised by Peter Duffy to seek independent legal advice and did so at the time.

73    The notes of the mediation contain recommendations for a further meeting to be held in September 1999 for the purpose of discussion of the options for the future of the Coleraine stud. It was also noted that the family would approach Mr Duffy, solicitor, to discuss the possibilities of undoing the joint tenancy arrangements, and with the defendant’s consent, ascertaining the terms of the defendant's will.

74    After the mediation the siblings and the defendant attended upon and were advised that the joint tenancies “could be undone” for a fee of $67 each. Investigations were also made with the State Bank in relation to the accounts held and the signatories of those accounts.

75    On 10 August 1999, Christine left a copy of a handwritten note with the plaintiff and informed her that she had to give $340,000 to her siblings by way of one-third payment immediately and the rest in twelve months. Christine informed the plaintiff that if she did not make those payments all the properties would be transferred into tenants in common with herself and Leon. The following day the defendant informed the plaintiff that she would never split up the properties and that she would sell some pictures to satisfy the plaintiff’s siblings.

76    Later in August 1999 the defendant left Coleraine to visit Christine’s home for the weekend but has not returned to Coleraine. The plaintiff lodged caveats on Warrawong, Bela, Coleraine I and Coleraine II. On 6 September 1999 the plaintiff received Notices of Severance of the Joint Tenancies.

The Competing claims

77    Although the plaintiff’s pleading makes claims in contract, estoppel and trust, the case ultimately relied upon was the plaintiff’s claim that she is entitled to a declaration that the defendant’s interests in the properties, Warrawong, Bela, Coleraine I, Coleraine II and the Coleraine stud are held by the defendant on an express, or alternatively, constructive trust for the plaintiff. The plaintiff claims that the alleged promises were made to her by the defendant and that from these promises she had an expectation that the properties were to be hers. The plaintiff claims that this expectation was created or encouraged by the promises and conduct of the defendant and that she has acted to her detriment in reliance upon the expectation to the knowledge of the defendant. The Notices of Severance evidence the clear intention or threat that the expectation will not be fulfilled.

78    Alternatively the plaintiff submits that even if the Court does not find the promises or representations were made, there was a common expectation or common assumption on the part of both the plaintiff and the defendant that the plaintiff would be left the properties. It is submitted that the relationship of the parties was conducted on the basis of this assumed state of facts.

79    The plaintiff claims that in respect of each of the properties and the Coleraine stud that the defendant is estopped from denying the properties and Stud were to be transferred to the plaintiff and that the defendant holds her share in them on trust for the plaintiff.

80    The defendant’s pleading denied the claims made by the plaintiff in respect of Warrawong and pleaded that the defendant’s commitment was limited to assisting with the purchase of the property on the basis that the defendant would be entitled to a one-third share of the profits earned from the running of the property.

81    The defendant’s pleading also denied the plaintiff’s allegations in respect of the Coleraine stud. The pleading claimed that there was an agreement between the parties that if the plaintiff and her husband operated the Stud, the profits from the Stud would be shared between the plaintiff and her husband as to one share and the defendant as to the other share.

82    The defendant’s pleading alleged that the plaintiff and her husband induced her to transfer her interests in Warrawong, Bela, Coleraine I and Coleraine II under duress. The defendant also claimed that the plaintiff induced her to sign the letter of 14 September 1998 withdrawing from the partnership under duress. The particulars of duress are that:
· the plaintiff and her family, against the wishes of the defendant, moved into the house on Coleraine II to live with the defendant;

· that the plaintiff represented to the defendant that unless she signed the transfers the properties could be subject to a Native Title claim;

· the defendant suffered from heart problems and felt under pressure from repeated requests to sign the transfers;

· the defendant was overborne by such pressure and signed the transfers.

83    The defendant seeks an order removing the caveats from each of the properties, an order setting aside the transfers together with other ancillary relief including a declaration of entitlement to and assessment of profits earned from the properties.

The Promises

84    The promises or representations relied upon by the plaintiff include the statement by the defendant in 1985 that if the plaintiff and her husband were willing to work the property it would be theirs “in the end”; the statement by the defendant in 1994 when discussing the drilling of Coleraine I that “it is your place you make the decision what to do”; the statement by the defendant to the plaintiff in about 1991 when discussing the commencement of the Coleraine stud that if “you do all the work, it will be yours in the end”; and the statement by the defendant in 1997 on the return journey from the solicitors’ office in Parramatta that the plaintiff “should be set for life now” and that she “had enough land there to support yourselves and Grahame’s family after he marries”.

85    In addition the plaintiff relies upon the circumstances that pertained at the time the statements were made in that all of the land, Warrawong, Bela and Coleraine I, was worked by her and her husband and in the latter years her family with the running of sheep and the commercial herd, the Coleraine stud and the planting of crops. Mr McInnes QC, in cross examining the plaintiff’s husband, established that without the addition of Bela and Coleraine I and II, Warrawong would not have been viable (tr.89).

86    In addition to these specific statements and circumstances the plaintiff gave evidence that the defendant had said to her throughout the years of the operation of the Coleraine stud, and previously, that she did not want the properties to be broken up after she died. The defendant informed the plaintiff:

I have seen families where one of the children works on the farm for many years while other children go their own way. Their parents die and the farm is sold and each of the children get an equal share. I think that this is very wrong. The farm should not be sold or divided up. It should be left to the child who has done the work on it. The ones who work the properties get the properties, and the ones who don’t work them don’t get them.

87    The plaintiff gave evidence of other instances when the defendant had expressed similar views in particular in relation to the family of a Mr Harry Stephens and the dissolution of the “Michaelong Murray Grey Stud”. During these conversations the defendant informed the plaintiff that she was of the view that the breaking up of properties was “dreadful” and that she would never let it happen. The defendant said “my stud and the properties will be staying together and going to those who have worked them, not to the others who have gone their own way”.

88    The defendant denied that she said to the plaintiff, “if you two do all the work, it will be yours in the end”, or any words to such effect. The defendant claimed that she intended to live on Coleraine II for the rest of her life and did not wish the properties to be sold during her lifetime. She also said that she expected that she would receive income from the properties and stud.

89    The defendant also gave evidence that it was her intention and always had been that her estate would be divided fairly between her children. She claimed that what she said to the plaintiff about families was:

When a son or daughter was running a family property and does not receive an income and only keep, maybe they are entitled to the property on their parents’ death.

The defendant claims that she didn’t say that where children worked upon a property and shared the profits over a number of years, that they were necessarily entitled to have the property on their parents’ death.

90    The defendant said that after the disputation on her birthday in 1999 she realised that she had done something which meant that the plaintiff would receive “far more than a fair share of the distribution” of her estate.

91    An aspect to the defendant’s case is her claim that she did not understand the difference between purchasing property as joint tenants or as tenants in common. This is important because if I find that the defendant did understand the difference, the transfers into joint tenancies and the purchase of Coleraine II in joint tenancy with the plaintiff would (subject to the claim of duress) be evidence weighing in favour of a finding that the promises were made.

92    The defendant gave the following evidence in relation to the purchase of Coleraine II:
Q. In 1997, what you knew you were doing was buying a property in your name and in Therese’s name?
A. Yes.
Q. Did you understand the way you were doing that would mean the property, your half of the property would go to Therese when you died?
A. Yes, I had every intention that it should at that stage.
Q. You had that intention without any pressure from Therese?
A. Yes, absolutely.
Q. You spoke to Mr Clarke about that?
A. Yes.
Q. But you have subsequently decided, have you, that you do not want that property, or your half share of that property to go to Therese when you die?
A. No I will still leave that part of the property to her, there was never any argument over that.
Q. Are you aware that one of the claims that you are making in these proceedings is for the joint tenancy in relation to that to be changed to a tenancy in common?
A. It still would not make any difference what that property was under, she would still get it when I died because I believed that was her section. That was what - dividing up the family, my money against the family, that would be her share.
(tr. 153)
93    The defendant was shown a copy of her will (now revoked) made in June 1997 (Ex KK). She had previously given evidence that there was no pressure from the plaintiff at this time and gave the following evidence:
Q. You read that will just now. You know that in clause 8 you leave your property Coleraine and your share in the property known as Bela and Warrawong, and your stud cattle, to your daughter Therese, that is what you did in June 1997.
A. Yes.
Q. And there is no mention in this - the reference to your property Coleraine there is to the first block that you bought isn’t it?
A. Yes, I presume so.
Q. And that is because you knew that the second part of Coleraine, which you bought about a month earlier, would go to Therese when you die because it was a joint tenancy?
A. Yes.
(tr. 171)


94    The defendant also gave the following evidence:
Q When you were giving evidence on Wednesday you said that you knew in 1987 that Therese expected to be left your interest in the Warrawong property when you died?
A Yes, I expected to leave, I hadn’t, I didn’t want the Warrawong property split up.
Q But you knew that Therese expected to get it didn’t you?
A Well, I don’t know whether she expected it or not but I expected that I wouldn’t divide my share up in it.
Q On Wednesday you said that you knew that, you said that you knew that Therese expected to be left the Warrawong property, do you remember saying that?
A Yes I do.
Q That was true then, wasn’t it? It is true, isn’t it?
A That she expected, yes, I suppose she did.
Q You knew that, didn’t you?
A Yes.
Q You knew that all along?
A That she expected to get half of Warrawong, yes, I never had any dispute with her over Warrawong.
(Tr.263)
……

Q From 1986 up until 1989 when this dispute arose, it was always your assumption that Warrawong would be left to your daughter Therese?
A Yes
Q And for each of those years 1986 through to 1998 or 1999 you knew that it was Therese’s expectation that the property would be left to her?
A At Warrawong?
Q Yes?
A Yes.
(Tr.264-265)
Q You knew when you bought Coleraine II that Therese had a half interest in that property?
A In Coleraine II yes.
Q You knew that she expected to get the other half interest when you died because it was a joint tenancy?
A No, she did not expect anything, she was just pleased that that was the way I did it.
Q But your intention was that she would receive the property?
A That was my intention, that she would receive Coleraine II, it is still my intention.
(Tr.265-266)

95    The defendant made wills in 1987 (Ex. HH), 1992 (Ex. JJ) and 1997 (Ex. KK). In these wills Warrawong was given to the plaintiff in 1987, and to the plaintiff’s husband and children in 1992 and the plaintiff in 1997. Bela was given to the plaintiff’s husband and children in 1992 and to the plaintiff in 1997. Coleraine I was given to the plaintiff in 1992 and 1997. The Coleraine stud was given to the plaintiff in 1997. These provisions are consistent with the promises the plaintiff alleges the defendant made to her.

96    In assessing whether the defendant did make the statements alleged by the plaintiff it has been necessary to assess the reliability of the evidence of the plaintiff and the defendant.

97    The plaintiff impressed me as an honest and careful witness doing her best to give as accurate a history as possible covering some fifteen years. The plaintiff’s husband also impressed me as a careful and honest witness. Neither seemed to me to have any hint of exaggeration.

98    The defendant finds herself in a very uncomfortable situation in which she now feels that she has not achieved a fair distribution of her estate. I have little doubt that the steps the defendant took in 1997 and 1998 in transferring these properties into joint tenancies and purchasing Coleraine II in joint tenancy, the defendant believed that she had achieved what was fair. I am of the view that her present feeling, however it has been engendered, has affected the evidence she has given.

99    It is also apparent that there is inconsistency between the claims as pleaded and the evidence given by the defendant. Although the pleading seeks orders for the setting aside of the transfers in respect of Warrawong and Coleraine II the defendant’s evidence is that the only matters about which she complains now are Coleraine I and Bela.

100    The steps the defendant took in firstly purchasing Coleraine II with the advice of Mr Clarke; the advice given to the defendant by Mr MacDougall in May 1998 in respect of the transfers of the properties, Warrawong, Bela and Coleraine I into joint tenancies; the provisions of the defendant’s wills and the statement made at the mediation are all matters that I have taken into account in reaching the conclusion that the defendant’s claim of a lack of understanding must be rejected.

101    In all the circumstances of the objective evidence together with my observations of the plaintiff and her husband and the defendant in the witness box I am satisfied that the defendant did make the promises as alleged by the plaintiff.

102    The next question to be considered is whether the defendant has made out her case that the transfers of the properties into joint tenancies in May 1998 were executed under duress.

Duress


103    Mr McInnes QC submitted that the Court would be satisfied that the defendant’s position fits within the “concatenation” of the three factors identified by Brennan J, as His Honour then was, in Louth v Diprose (1992) 175 CLR 621 at 626, to justify its intervention to set aside the transfers.

104    Mr McInnes QC submitted that the relationship between the plaintiff and the defendant was one which placed the defendant at a special disadvantage and that this was known to the plaintiff. In this regard Mr McInnes QC submitted that the defendant was dependent upon the plaintiff in a number of ways for her to pursue a reasonable lifestyle. As the defendant put it she wanted a “quiet life” and did not want to be “hassled” to sign documents.

105    Mr McInnes QC developed this argument to submit that whilst living under the same roof at Coleraine II it would have been very difficult for the defendant to resist the request to sign the transfers and secure that quiet life. The defendant was also dependent upon the plaintiff for transportation to and from Dubbo as she had ceased driving motor vehicles in recent years.

106    Mr McInnes QC submitted that the plaintiff unconscientiously exploited the defendant’s disadvantage and that in consequence the defendant’s will was overborne whereby she was unable to make a worthwhile judgment as to what was in her best interests.

107    The defendant gave evidence that there was no pressure applied to her by the plaintiff between 1986 and 1998. However she claimed that there was some pressure applied to her in 1998. The defendant gave evidence that she was “vulnerable” at the time she was living at Coleraine II as she just wanted a quiet life and felt that she had to sign the transfers to secure that quiet life. This claim does not sit consistently with the notes of the mediation which record that the defendant transferred the properties into joint tenancies because she “wanted to at the time” after taking independent legal advice.

108    Mr MacDougall’s evidence was not really challenged. The defendant presented to him as an independent and vibrant person who knew what she wanted, with no suggestion whatever of any ambivalence about the transfer of the properties into joint tenancies. This is consistent with the view expressed in the notes of the mediation.

109    One other matter that is important in the assessment of the defendant’s position in 1998 at the time of these transfers is her then relationship with Ms O’Connor. The defendant had consulted Ms O’Connor on a number of occasions in 1996, 1997 and 1999 to discuss the distribution of her estate. Ms O’Connor’s unchallenged evidence was that there “was never any hint during my two conferences with Olivia in early 1999 that she was unhappy living on the farm with Therese, nor was there any hint that she was unhappy about the arrangements which she had made with respect to the farm properties”.

110    It is clear from Ms O’Connor’s evidence that the defendant was concerned that she may not have been “fair” to her son Robert and was considering what she might do in this regard. The previous wills of the defendant indicate that provision had been made for Robert in the will made (now revoked) on 24 November 1992 (Ex JJ). There was no provision for Robert in the will made in June 1997 (Ex KK).

111    It is apparent that Robert and Leon jointly funded the purchase of a property, the location of which is unclear. Both Leon and Robert gave evidence that there was a falling out between them as a result of the transaction. Apparently Robert did not put Leon’s name on the title and subsequently accepted that he had done the wrong thing. It was apparently after this falling out that the defendant removed any provision for Robert in her will.

112    The defendant denied that she was aware of the detail of the falling out and suggested that there was no connection between that event and the lack of provision for Robert in her will in 1997. This was a matter that seemed to me to be quite independent of the defendant’s approach to the way in which she was dealing with the plaintiff and the transfers of the properties. This view is supported by the terms of the 1992 will (Ex JJ) which made provision for Robert by way of a proportion of the defendant’s parcel of BHP shares, whilst the properties Warrawong, Bela and Coleraine I were given to the plaintiff and her children.

113    A further matter that seems to me to be consistent with the plaintiff’s case is the fact that the defendant did not request any income or drawings from the Warrawong account partnership during the 15 years it has operated the properties.

114    I am satisfied that the defendant was happy to transfer the properties into the names of herself and the plaintiff as joint tenants in 1998. The objective or independent evidence available from Mr MacDougall suggests that the defendant was astute and apparently under no pressure to complete the documentation to place the properties in the names of herself and the plaintiff as joint tenants.

115    It seems to me that the claims of duress have arisen as a direct result of the plaintiff’s siblings becoming aware of the transfer of the properties into joint tenancies and becoming dissatisfied with what they regarded as an unequal share of their mother’s estate. There is evidence of some pressure which the defendant perceived was being applied to her, however that pressure was perceived to have been applied to the defendant by the plaintiff’s siblings rather than by the plaintiff. It is evidenced in a letter from Mr Duffy to a solicitor, Mr Paine, to whom Robert and Christine took the defendant to see in early 1999. Mr Duffy’s letter is dated 12 April 1999. It states relevantly:
There seems to be a tug-of-war between the daughter who lives near Dubbo and the children who are in Sydney.
On the 6th April our client called to discuss the authority to hand over documents held by us on her behalf and after 30 minutes of discussing the matter in the absence of her daughter (Christine) and in the presence of another solicitor she cancelled the authority on the basis that her children in Sydney used some pressure to persuade her to sign the authority and that as she was living in Dubbo she needed a solicitor in the same town.
(Ex. MM)

116    I am not satisfied that the plaintiff exerted any inappropriate pressure on the defendant, nor am I satisfied that there was any undue influence on the defendant to transfer the properties into joint tenancies. However it is clear that the defendant now feels she has made a mistake and has a desire to “equalise” the distribution of her estate.

117    I am satisfied that in this case there has been no active extortion of a benefit nor any passive acceptance of a benefit in unconscionable circumstances: Bridgewater v Leahy (1998) 194 CLR 457. I am also satisfied that when the defendant made the promises and transferred the properties into joint tenancies she was not suffering any special disadvantage: Louth v Diprose.

Detriment


118    The plaintiff claims that on the faith of promises made by the defendant she and her husband have carried out significant improvements to each of the properties and “with careful management and sustained hard work” have developed the Coleraine stud.

119    Additionally the plaintiff and her husband, and in more recent years their son Grahame, with the encouragement of the defendant have sown hundreds of acres of improved pastures, built cattle yards, erected about eight kilometres of new fencing, constructed electrified paddocks for bulls, improved the productivity of the land by application of superphosphate and other chemicals to control and eradicate weeds. All of the funds required to pay for this work have been met from the Warrawong account.

120    The plaintiff and her family have not been paid any money over the last fifteen years by way of income over and above their expenses; they have worked every day of the year; they have invested money received by way of inheritance into the properties; they have sold their property in the city and relocated to a rural area; they have not developed, and have lost the opportunity of developing at a youthful age, their alternative skills in food technology and/or trucking businesses.

121    They have not worked to build up alternative assets and take up life’s opportunities to do so. Although attended with an element of prediction, it seems to me with their obvious capacity for sustained hard work and application it is probable that the plaintiff and her husband would have made a success of any opportunities they took up.

122    The properties, the Warrawong account partnership and Coleraine stud have provided a very modest living indeed for the plaintiff and her family. Between 1987 and 1998 the farming enterprises on Warrawong and Coleraine only made a profit in four of those twelve years.

123    Richard Victor Ivey, of Ivey ATP Agricultural and Management Consultants, gave evidence and provided two reports in respect of the assessment of inputs into the rural properties (Exs. A and B). From the financial statements available, some of which are in evidence (Exs. M, N, O, and P) Mr Ivey concluded that from 1987 until March 1998 the plaintiff and her husband withdrew $118,492 from the Warrawong account partnership.

124    Based on the average withdrawals from the partnership, Mr Ivey estimated that the plaintiff’s drawings and her husband’s drawings over the period was $121,247. The plaintiff’s son Grahame drew a small wage of $13,589 whilst he was working on the property. The total drawings for the plaintiff and her family therefore were calculated as $134,836 over the whole period or just over $11,000 per year.

125    Although cross examined to suggest the contrary it is clear on the evidence that the plaintiff’s family’s lifestyle, including the use of “hand me down” clothing with little by way of spending, has been quite modest for the last fifteen years whilst they have worked very, very hard. I do not accept, as was suggested by the defendant, that the life of a farmer is an easy one - particularly for this plaintiff.

126    The plaintiff and her husband gave evidence that had the promises not been made by the plaintiff they would not have moved to the country and continued to work the properties for such low return over the years. Each claimed that they relied upon these promises to continue with the lifestyle they took up on these rural properties. I accept the evidence of the plaintiff and her husband in respect of these matters.

127    There is little doubt that the defendant wishes to be as fair to her children as possible. There is also no doubt that the defendant held the firm view that because the plaintiff and her husband had worked the properties so hard for the last fifteen years it was appropriate for them to have the properties on her death. It seems that she has been persuaded by the plaintiff’s siblings that such a distribution of her estate may not be fair. But this is a case involving whether the defendant made the promises, which I have found she did, and by those promises and her conduct encouraged such expectation in the plaintiff who acted in reliance upon them to her detriment.

128    Mr McInnes QC spent quite a deal of time in cross examination of the plaintiff suggesting that there had been no consideration or benefit to the defendant. The plaintiff rejected such a line of questioning and indicated that the defendant had indeed gained a benefit in having a place to live for the rest of her life with her daughter and her family, the capacity to view the Coleraine stud whenever she wished, the enjoyment of seeing the development of that stud and knowing that her wishes to have those properties worked and not split up after her death would be realised.

129    Of the lack of consideration which formed the basis of Mr McInnes QC’s line of questioning, Booking JA’s approach in Flinn v Flinn [1999] VSCA 109 (4 August 1999) seems apt:
As the review of the authorities over the last 200 years shows, uncertainty preventing the creation of a contract has never been regarded as necessarily preventing the beneficial intervention of equity. Time and again an equity has been held to exist where no contract had arisen. The Court often going a long way in giving effect to what the law of contract would ignore as an impossibly loose arrangement. The present case lies within the reach of the long and flexible arm of equity.

130    Notwithstanding this recognition of length and flexibility, it is important to remember that the extension of the arm of equity is limited by the caution issued in Muschinski v Dodds [1984-1985] 160 CLR 583 that equity should not intervene “merely” on the ground that it would be fair to do so in the circumstances of a particular case.

131    Mr McInnes QC submitted that the plaintiff and her family had received great benefit, and suffered no detriment, by reason of having accommodation made available to them, having the use of the land to grow crops and being provided with the capacity to develop the commercial herd and the Coleraine stud. This seems to ignore the matters previously outlined and the fact that they received no remuneration for managing the properties, which they have improved quite dramatically, and fulfilled what I am satisfied was a demanding and heavy workload over those years.

132    Although the defendant found the proceedings stressful and required an adjournment before completing her evidence I was impressed with her robust presentation and her desire to try to achieve a “fair” result. However I am satisfied that the defendant willingly, and without suffering any special disadvantage, transferred the properties to reflect the promises she had made in the hope of preventing an attack upon what she had decided was the plaintiff’s entitlement.

133    This is not a case in which there was any suggestion that the defendant wished to reserve an entitlement to change her mind: Taylor v Dickens [1998] 1 FLR (UK) 806; (1998) LQR 351. I am satisfied that the reason that the defendant now wishes to change her mind is because of the claims made upon her by the plaintiff’s siblings.

134    In this case the equitable relief to be granted is founded in an assumption as to the future acquisition of ownership of each of the properties which has been induced by the representations made by the defendant upon which there has been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel and the Court must decide in what way the equity can be satisfied: Giumelli & Anor v Giumelli (1999) 196 CLR 101 at 112 - 113; Crabb v Arun District Council [1976] 1 Ch 179 per Lord Denning at 188.

135    As Mr Sexton SC submitted, the issue of what is the appropriate relief is difficult in the circumstances of this case. He submitted that any structure to enable the defendant to live on Coleraine II may defeat the plaintiff’s equity which I have found to exist. That submission is based upon the apparent rift that has occurred between the plaintiff and the defendant as a result of the rivalry between the siblings and the defendant’s evidence that she felt that she could not return to Coleraine II. However, this view may not be irrevocable.

136    The defendant was not impressed with the plaintiff’s lack of attendance at the mediation in August 1999. However the plaintiff, through her solicitors, notified the defendant’s solicitors in June 2000 that she was willing to mediate. The defendant gave evidence that she was not aware of that offer, notwithstanding her solicitor’s letter to the plaintiff’s solicitors rejecting such offer. It seems probable that the defendant’s solicitors were advised by the plaintiff’s siblings to reject the offer. If that is so, it is a very unsatisfactory outcome as the defendant indicated that she would have been willing to mediate had she known about that offer.

137    Further evidence which persuades me that a reconciliation is a realistic expectation is the defendant’s evidence that she trusted the plaintiff and still trusted her (tr. 160) and the plaintiff’s evidence that she would like her mother to return to Coleraine II.

138    I can understand that the defendant would find the decision to return to Coleraine II somewhat difficult having regard to the competing claims that have been made upon her during the last eighteen months. However I am not convinced that such a decision is impractical or unable to be implemented. It will be the plaintiff and her siblings who must create an environment in which the defendant can comfortably return to Coleraine II to enjoy the lifestyle that she created and wished to enjoy at this stage of her life.

139    Notwithstanding Mr Ivey’s attempts to value the inputs of the plaintiff and her family to the properties and the business I am of the view that the most effective and fairest way in which to satisfy the plaintiff’s equity is to impose a trust in respect of the defendant’s interest in the properties Warrawong, Bela, Coleraine I and II, and the Coleraine stud.

140    In respect of the trust to be imposed on the defendant’s interest in the properties I am satisfied that it should be subject to the defendant having an entitlement to live with the plaintiff and her family on Coleraine II as had been the arrangement between 1997 and 1999 and, if the defendant avails herself of that entitlement, a requirement that the plaintiff maintain and support her for the remainder of her life.

141    In respect of the Coleraine stud, I am satisfied that the imposition of a trust over the defendant’s share of the stud should be subject to the defendant having an entitlement to fifty percent of any of the profits from the stud during her lifetime.

142    In the circumstances the defendant’s cross claim will be dismissed and the first defendant will be restrained from mortgaging, charging, encumbering, disposing of or otherwise dealing with her interest in the properties.

143    Counsel are to bring in Short Minutes of Order at which time I will hear any application in respect of costs if the parties are unable to agree upon a costs order.
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Last Modified: 12/18/2000