Wise v Wise
[2024] WASC 217
•17 JUNE 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: WISE -v- WISE [2024] WASC 217
CORAM: WHITBY J
HEARD: 8 - 12 & 15 - 18 APRIL 2024
DELIVERED : 17 JUNE 2024
FILE NO/S: CIV 3024 of 2018
BETWEEN: STEPHEN LESLIE WISE
First Plaintiff
KATHY WISE
Second Plaintiff
AND
KEILO JANE WISE as executrix of the estate of AUDREY VERA WISE
First Defendant
KEILO JANE WISE as beneficiary of the estate of AUDREY VERA WISE
Second Defendant
Catchwords:
Equity and trusts - Estoppel - Proprietary estoppel - Farming family - Proprietary estoppel by encouragement - Whether deceased mother made a promise to plaintiffs - Expectation of inheritance - Detrimental reliance
Legislation:
Family Provision Act 1972 (WA)
Limitation Act 2005 (WA)
Rules of the Supreme Court 1971 (WA)
Trade Practices Act 1974 (Cth)
Result:
Plaintiffs' claim dismissed
Category: B
Representation:
Counsel:
| First Plaintiff | : | J F Park & S D Tribble |
| Second Plaintiff | : | J F Park & S D Tribble |
| First Defendant | : | L A Tsaknis |
| Second Defendant | : | L A Tsaknis |
Solicitors:
| First Plaintiff | : | Dentons Australia |
| Second Plaintiff | : | Dentons Australia |
| First Defendant | : | Cullen Macleod Lawyers |
| Second Defendant | : | Cullen Macleod Lawyers |
Case(s) referred to in decision(s):
Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Awad v Awad [2019] NSWSC 385
Bedshed Franchising Pty Ltd v Battersby [No 2] [2015] WASC 281
Browne v Browne [No 2] [2017] WASC 375
Currie v Currie [No 2] [2017] WASC 312
Dillwyn v Llewelyn [1862] 45 ER 1285
Equititrust Ltd v Francis [2009] NSWCA 128; (2009) 258 ALR 388
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363
Lehrmann v Network Ten Pty Ltd [2024] FCA 369
Priestley v Priestley [2017] NSWCA 155, 22
Ramsden v Dyson (1866) LR 1 HL 129
Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505
Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603
Watson v Foxman (1995) 49 NSWLR 315
Webb v GetSwift Ltd (No 5) [2019] FCA 1533
Webb v Ryan [2012] VSC 377
WHITBY J:
Leslie and Audrey Wise had two children - Stephen Leslie Wise and Keilo Jane Wise. Leslie and Audrey jointly owned a farm 45 km north of Albany at 141 Takenup Road, Napier (the farm). Leslie and Audrey are both deceased. As was done throughout the trial, I will refer to individuals by their first names. No disrespect is intended by doing so.
These proceedings concern the inheritance of the farm. Leslie and Audrey's accountant, Sandra Knight, sent Stephen and Keilo a letter in 2009 setting out options and concerns in relation to the inheritance of the farm. Sandra Knight ended that letter with the following words '[w]ill a good memory turn into a nightmare & debt when it could be sold & each beneficiary is substantially better off?' It seems that Sandra Knight foreshadowed the unfortunate future that was ahead of the Wise family.
Stephen is married to Kathy Wise. Stephen and Kathy are the plaintiffs in this action. Stephen and Kathy say that, in May 2008, Audrey promised Stephen and Kathy that if they returned to the farm, Stephen would inherit the farm upon her passing.
Stephen and Kathy say that Audrey reassured them that Stephen would inherit the farm by her continuing conduct and representations between May 2008 and September 2016.
Stephen and Kathy say that, in reliance upon that promise and Audrey's continuing conduct and representations, they moved to the farm in June 2009, thereby making life altering changes with irreversible consequences.
Leslie died on 2 June 2009. Audrey became the sole owner of the farm. Audrey died on 11 February 2018. By her last will, Audrey appointed Keilo as executor and effectively divided her estate equally between Stephen and Keilo.
Stephen and Kathy say that it would be now unconscionable for Audrey, by her estate, to be permitted to depart from her promise that Stephen would inherit the farm.
Stephen and Kathy seek a declaration that the farm, and income received from the farm since Audrey's death, are held on constructive trust for Stephen.
Keilo, in her capacity as executor of Audrey's will, is the first defendant and, in her capacity as beneficiary of the will, is the second defendant. Keilo denies that Audrey made a promise to Stephen and Kathy that Stephen would inherit the farm upon Audrey's death. Keilo says that, even if a promise was made, Stephen and Kathy have not relied upon the promise to their detriment.
For the reasons that follow, I find that Audrey did not, in May 2008, promise Stephen and Kathy that Stephen would inherit the farm if they moved to, and managed the farm. In the absence of this promise being made, Stephen and Kathy's case fails. Their action is dismissed.
Overview
Leslie and Audrey started living on the farm in around 1970. Leslie cleared the land on the farm and created paddocks which became live stocked with sheep for wool producing.
Leslie and Audrey adopted two children - Stephen in 1972 and Keilo in 1973. Stephen and Keilo grew up on the farm. As children, Stephen and Keilo assisted Leslie with work on the farm.
Around 1978, Leslie was diagnosed with non‑Hodgkin's lymphoma.
In 1987, when he was 15 years old, Stephen left the farm to pursue further education. In 1988, Stephen completed a rural traineeship in the Kimberley. In 1989, Stephen worked in the Kimberley.
In 1991, after returning from the Kimberley and staying on the farm for a short time, Stephen moved to Albany to do a Certificate of Business Studies. After Stephen obtained that certificate, he moved to Perth with the intention of becoming a stockbroker. Keilo also moved to Perth in 1991 for work opportunities.
Around 1991, the farm had been turned into a pine tree plantation, for which Leslie and Audrey received an income. Also, around this time, Leslie and Audrey ceased living on the farm full time.
In 1991, Stephen started a relationship with Kathy and they later married.
Stephen and Kathy say that, in May 2008, they met with Leslie and Audrey at Leslie and Audrey's home in Joondalup. Stephen and Kathy say that, at this meeting, Audrey promised Stephen and Kathy that, if Stephen and Kathy moved to the farm and took over management of the farm, Stephen would inherit the farm upon her death.
Leslie died on 2 June 2009. On 1 July 2009, Audrey became the sole registered proprietor of the farm. Four days later, Stephen and Kathy moved to live full time on the farm.
Audrey died on 11 February 2018, leaving a will dated 16 May 2017. This will provided as follows:
(1)Keilo was appointed executor; and
(2)the residuary of the estate was left equally between Stephen and Keilo.
On 23 November 2018, Stephen initiated proceedings in the Supreme Court of Western Australia, by writ of summons, with Keilo in her capacity as executor named as first defendant. By consent orders filed on 19 February 2019, Stephen was granted leave to amend the writ of summons to include Keilo in her capacity as beneficiary of the estate of the deceased as second defendant.
On 28 September 2022, the court ordered, pursuant to O 18 r 6(2)(b) of the Rules of the Supreme Court 1971 (WA) (RSC) that Kathy be added as a plaintiff to the proceedings.
Stephen and Kathy assert a cause of action in proprietary estoppel and say that the farm is held on constructive trust for Stephen.
Keilo, in her capacity as beneficiary of the estate, filed a notice of intention to abide by the decision of the court.
Keilo, as first defendant, denies that the plaintiffs have a cause of action. Unless otherwise indicated, a reference to Keilo in these reasons, is a reference to Keilo in her capacity as the first defendant.
On 19 December 2018, Stephen commenced separate proceedings in this court seeking an order under s 6 of the Family Provision Act 1972 (WA) that Audrey's will dated 16 May 2017 be amended so that there be a devise of the farm in favour of the first plaintiff and the balance of the estate be left to Keilo (Family Provision Proceedings). Stephen filed an affidavit sworn on 12 December 2018 in support of the Family Provision Proceedings (Family Provision Proceedings Affidavit). The Family Provision Proceedings have been adjourned pending the outcome of these proceedings.
Application to amend statement of claim
On 2 April 2024, six days before the first day of the trial, Stephen and Kathy applied to reamend their statement of claim. By their proposed amendments, they sought to, inter alia, include an independent and alternative claim by Kathy for equitable compensation.
This application was heard by me on the first morning of the trial.
Counsel for Keilo opposed the proposed amendments to the statement of claim to the extent they raised an independent claim on behalf of Kathy, but otherwise neither opposed nor consented to the amendments.
I made orders granting Stephen and Kathy leave to reamend their statement of claim save for the amendments which sought to include an independent and alternative claim on behalf of Kathy. Consistent with the overarching principles of case management and fairness,[1] I refused to grant leave to reamend the statement of claim by adding a new and independent claim for equitable compensation by Kathy given the late stage at which the application was made and the failure to provide any evidence to explain the delay in making the application.
First defendant's application to cross‑examine Stephen on the Family Provision Proceedings Affidavit
[1] Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 [95], [98], [112].
Counsel for Keilo sought to cross‑examine Stephen upon the Family Provision Proceedings Affidavit. Counsel submitted that leave ought to be granted for Stephen to be questioned on the contents of that affidavit, because it was in the interests of justice to do so.
Stephen's counsel objected to the application on the grounds that Stephen's affidavit was protected by the Harman[2] obligation, that the solicitors for Keilo had made an election not to include the affidavit in the trial bundle from they cannot resile, and that, in any event, it was not in the interests of justice to grant leave to cross‑examine on the affidavit.
[2] Harman v Secretary of State for Home Department [1983] 1 AC 280.
The Harman obligation applies where one party to the litigation is compelled, whether by reason of a rule of court or by reason of a specific order of the court or otherwise, to disclose documents or information. In such a situation, the party obtaining the disclosure cannot, without the leave of the court, use that document for any purpose other than for which it was given, unless it was received in evidence or appears in a transcript of judgment.
This court does have a discretion to dispense with or modify the Harman obligation, and may exercise that discretion if there are special circumstances which make it just to do so. This means that some good reason must be shown why the affidavit filed in the Family Provision Proceedings should be used in these proceedings. In Bedshed Franchising Pty Ltd v Battersby [No 2],[3] Beech J outlined the considerations that may be relevant to the exercise of the court's discretion. Those are:
(1)the nature of the document;
(2)the circumstances under which the document came into existence;
(3)the attitude of the author of the document and any prejudice the author may sustain;
(4)whether the document existed before the litigation, or was created for that purpose and therefore expected to be in the public domain;
(5)the nature of the information in the document - in particular, whether it contains personal data or commercially sensitive information;
(6)the circumstances in which the document came into the hands of the applicant; and
(7)the likely contribution of the document to achieving justice in this proceeding.
[3] Bedshed Franchising Pty Ltd v Battersby [No 2] [2015] WASC 281 [21].
His Honour said, at [22] of the judgment, that the last of these considerations - that is, the likely contribution of the document to achieving justice in this proceeding - has been recognised as being the most important.
There is a public interest in ensuring that all relevant material is before a court to enable it to discharge its function. Where the use of documents discovered in proceedings is reasonably required for the purpose of doing justice between the parties in other proceedings, this gives rise to sufficiently special circumstances which justify modification of the Harman obligation.
Stephen and Kathy discovered the Family Provision Proceedings Affidavit in these proceedings. That is sufficient to establish that the affidavit may either directly or indirectly enable a party to advance its own case or to damage the case of their adversary. The affidavit is Stephen's own affidavit, and it was filed in proceedings where the defendants are the same defendants as in these proceedings. There is no issue of confidentiality of any third party that must be considered.
In these proceedings, Stephen and Kathy's case is that Audrey, at a meeting between Stephen, Kathy, Leslie and Audrey in May 2008 (May 2008 Meeting), made an express promise to Stephen and Kathy that Stephen would inherit the farm when she died. It is in dispute in these proceedings whether that promise was made. In the Family Provision Proceedings Affidavit, Stephen deposes to circumstances surrounding a meeting he and Kathy had with Leslie and Audrey at Leslie and Audrey's house in Joondalup in May 2008. It is not in dispute that this is the same meeting that is referred to in these proceedings - that is the May 2008 Meeting.
As to the element of injustice, surprise or ambush that was raised by counsel for Stephen and Kathy, the Family Provision Proceedings Affidavit was discovered by Stephen and Kathy in these proceedings. While Keilo, though her solicitors, consented to the affidavit not being included in the tender bundle, that does not remove the affidavit from discovery, nor does it preclude Keilo's counsel from calling upon the affidavit in these proceedings.
Further, the Family Provision Proceedings Affidavit was originally included in the tender bundle, (I recognise that was prior to Stephen and Kathy's current solicitors coming on the record on 24 January 2024), and it was later agreed between the parties that the affidavit be removed from the tender bundle only. In these circumstances, Stephen and Kathy's solicitors were on notice as to the potential relevance of the affidavit to these proceedings. I therefore found that special circumstances did exist to justify modification of the Harman obligation, such that there was a good reason why the Family Provision Proceedings Affidavit could be put to Stephen in cross‑examination in these proceedings.
Plaintiffs' case
Stephen and Kathy say that at the May 2008 Meeting[4] Audrey promised Stephen and Kathy that Stephen would inherit the farm upon Audrey's death. The reamended substituted statement of claim filed on 8 April 2024 (SOC) does not however refer to a 'promise'.
[4] The parties accept that the reference to a meeting in April 2008 pleaded in [9] of the reamended substituted statement of claim was incorrect and that the meeting occurred in May 2008.
By [10] of the SOC, Stephen and Kathy plead that, during the May 2008 Meeting, Audrey said to Stephen and Kathy words to the effect of:
(1)Leslie was becoming too unwell to manage the farm and he was not expected to live much longer;
(2)she and Leslie had investigated hiring someone to manage the farm but this was too costly and would not leave enough income from the Tree Farming Agreement (as defined in the SOC) to live on;
(3)unless a solution could be found then she and Leslie would have to the sell the farm; and
(4)did Stephen want the farm?
Stephen and Kathy plead, at [11] of the SOC, that Stephen said, at the May 2008 Meeting, in effect that he wanted the farm and then discussed what would be required of Stephen and Kathy in moving to and managing the farm.
By [12] of the SOC, Stephen and Kathy plead that, at the conclusion of the May 2008 Meeting, they had the expectation that:
(1)Stephen and Kathy would move to and live on the farm;
(2)Stephen and Kathy would be responsible for the management and upkeep of the farm, they would not be paid a wage or income for that work and they would charge any associated costs involved in the management and upkeep to the farm accounts;
(3)Audrey would retain during her lifetime the benefit of all the net income from the farm, including the Tree Farming Agreement; and
(4)in return, Stephen would inherit the farm from Audrey when she died, and Stephen and Kathy would remain free to live on the farm or deal with the farm as they wished,
(the Expectation).
Stephen and Kathy's case is that the Expectation was further assured and/or encouraged by Audrey by Audrey's continuing representations and conduct between May 2008 and September 2016.[5]
[5] SOC [13A], [17B].
Stephen and Kathy say that they relied on the Expectation to their detriment in that they:[6]
(1)left their lives in Perth and moved to the farm in June 2009;
(2)took over management of the farm and continued managing the farm;
(3)purchased and transported a sea container to the farm;
(4)acquired a utility vehicle for use at the farm;
(5)performed improvements and works to the house on the farm and the surrounding areas;
(6)implemented a trial in one paddock of the farm to investigate what was required to return the farm to pasture;
(7)Kathy did the bookkeeping work for the farm; and
(8)incurred reduced income, diminishment of their existing assets, loss of employment satisfaction and loss of opportunity to pursue alternative employment.
[6] SOC [15] - [17A], [18].
Stephen and Kathy claim that it would be against conscience to permit Audrey's estate to be administered in such a way as to deprive Stephen of the benefit of the Expectation and therefore, the farm should be transferred to him.[7] Alternatively, Stephen and Kathy rely upon the same matters to seek equitable compensation in lieu of making good the Expectation.[8] If Stephen and Kathy cannot establish that Audrey promised them that Stephen would inherit the farm if they moved to the farm and thereby created the Expectation, then Stephen and Kathy's claim for equitable compensation also fails.
[7] SOC [30].
[8] SOC [33].
Counsel for Stephen and Kathy, in written and oral submissions, referred to the 'promise' made by Audrey at the May 2008 Meeting to Stephen and Kathy that Stephen would inherit the farm upon her passing. The term 'promise' is a term which is consistent with an action predicated upon proprietary estoppel, that being a reference to a voluntary promise about the promisor's future conduct.[9]
[9] Equititrust Ltd v Francis [2009] NSWCA 128; (2009) 258 ALR 388 [73].
The word 'promise' however, does not appear in the SOC. The 'promise' has not been defined in the SOC. The 'promise' has been referred to in different terms at different stages of the proceedings. Firstly, the SOC refers to a discussion at the May 2008 Meeting where Audrey asked Stephen if he wanted the farm and Stephen said that he did want the farm. What follows, it is pleaded, is a further discussion about what would be required of Stephen and Kathy in moving to the farm. The SOC then pleads that as a result of that discussion, Stephen and Kathy had the Expectation. The SOC does not plead that Audrey made a representation or 'a promise' that Stephen would inherit the farm. What is missing from the SOC are pleaded facts that give rise to the Expectation that Stephen would inherit the farm - it appears that the only fact that is pleaded as giving rise to the Expectation is that Audrey asked Stephen if he wanted the farm and Stephen said that he wanted the farm. Assuming Audrey did ask Stephen if he wanted the farm and Stephen responded that he did want the farm - it does not follow, in my view, that Stephen and Kathy could have formed the reasonable expectation that Stephen would inherit the farm. 'Wanting' the farm does preclude Stephen from having to pay money for the farm.
However, Stephen and Kathy gave oral evidence that filled in that missing 'link' in the SOC. Stephen said that Audrey said to him, at the May 2008 Meeting, 'Stephen, if you return to the farm, we will give you the farm when we pass'.[10] Kathy gave evidence that Audrey said to her and Stephen, 'if you move back to the farm, you will get the farm when I pass at the end' or words to that effect.[11] Kathy said that 'in the end' meant when Leslie and Audrey had passed.[12]
[10] ts 158.
[11] ts 450.
[12] ts 452.
In closing submissions, counsel for Stephen and Kathy referred to the 'promise' made by Audrey at the May 2008 Meeting to Stephen and Kathy as being 'if Kathy and Stephen gave up their lives in Perth, returned to the farm for no pay, looking after the farm which they agreed to do and then the closing part of that promise was from Audrey that said: then you will get the farm on my passing'.[13]
[13] ts 938.
Therefore, what appears to constitute the 'promise', in accordance with the evidence of Stephen and Kathy and how their case was advanced at trial, is Audrey saying to Stephen and Kathy at the May 2008 Meeting that if Stephen and Kathy returned to the farm, Stephen would get the farm when Leslie and Audrey had both passed. I will, therefore, refer to this as 'the promise'. It is this promise that Stephen and Kathy must prove in order to succeed in their claim that the farm is held on trust for Stephen. Although the promise is not pleaded in the SOC, I do not consider that is fatal to Stephen and Kathy's case. I have considered the issues arising and the evidence adduced in this case on the basis that Stephen and Kathy's case is that Audrey made them this promise which led them to form the Expectation.
It is also important to note that Stephen and Kathy did not rely upon an estoppel by acquiescence. This is despite the fact that [17B(f)] of the SOC pleads that, from early 2009 until mid‑2011, Stephen advised Audrey that he held the Expectation and he and Kathy were proceeding on the basis that Stephen would inherit the farm when Audrey died and that, in response, Audrey never advised Stephen to the effect that he would not inherit the farm and, in so acting, Audrey implicitly assured the Expectation and/or acquiesced therein. This plea is dependent upon Stephen and Kathy having the Expectation. According to Stephen and Kathy's evidence, the promise made by Audrey caused them to have the Expectation that Stephen would inherit the farm if they moved to the farm.[14] Therefore, all roads for Stephen and Kathy lead back to the promise which is alleged to have been made by Audrey at the May 2008 Meeting. In the absence of a finding that the promise was made, Stephen and Kathy's case must fail.
[14] ts 161, 451.
The defence
Keilo denies that Audrey made the promise to Stephen and Kathy and therefore, says that Stephen and Kathy could not have held the Expectation.
Keilo also denies that Audrey made continuing representations and engaged in conduct to assure Stephen and Kathy of the Expectation.
Keilo says that even if the Expectation was held, Stephen and Kathy did not rely on the Expectation to their detriment.
Keilo says that, in any event, Stephen and Kathy's action is statute‑barred by s 27(1) of the Limitation Act 2005 (WA) (Limitation Act) and/or the doctrine of laches and/or acquiescence.
Legal principles
Stephen and Kathy's claim is in proprietary estoppel. The legal principles applicable to proprietary estoppel are well established and were not in dispute between the parties. Therefore, I provide only a brief summary of the applicable principles.
In Giumelli v Giumelli,[15] Gleeson CJ, McHugh, Gummow and Callinan JJ said the following in relation to proprietary estoppel:
In these cases, the equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant.
[15] Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 [6].
In Currie v Currie,[16] the Court of Appeal summarised the principles of proprietary estoppel, incorporating Le Miere J's outline of the principles at first instance (as they were not in dispute):
[16] Currie v Currie [No 2] [2017] WASC 312 [113] ‑ [121].
(1)Proprietary estoppel is a variety of estoppel and may found relief which requires the taking of active steps by the defendant.
(2)The elements of proprietary estoppel are:
(a)the plaintiff assumes the future acquisition of ownership of property;
(b)the plaintiff's assumption was induced, encouraged or acquiesced in by the defendant;
(c)the plaintiff has detrimentally relied upon his assumption; and
(d)it would now be against the conscience for the defendant to be permitted to depart from the assumed state of affairs.
(3)The fact that a plaintiff does not assume that a 'particular legal relationship' would exist between the parties is not determinative of a proprietary estoppel claim.
(4)There may be circumstances, particularly in domestic/family cases, where the parties did not contemplate that a particular legal relationship would exist, but simply that an interest in land would be granted.
(5)An assumption that land will be received by will is capable of giving rise to a proprietary estoppel.
(6)In order to found an estoppel in favour of a representee, the representation must be clear in the sense that the words used by the representor must be able to be understood by the representee in a particular sense, thereby providing the basis for the assumption or expectation upon which the representee acts. The words must be capable of misleading a reasonable person in the way that the representee claims he or she has been misled.
(7)To establish estoppel by encouragement it is not necessary that the defendant's conduct should be the sole inducement operating on the mind of the plaintiff setting up the estoppel. It is sufficient that the defendant's promises or assurances were an inducement to the plaintiff doing the things which constituted the detrimental reliance.
(8)Where assurances given were intended to be relied upon and were in fact relied on, it is not necessary to look for an irrevocable promise since it was the other party's detrimental reliance on the promise which made it irrevocable.
(9)If a proprietary estoppel is established, the appropriate relief depends on the facts. The court must look at the circumstances to decide in what way the equity can be satisfied. Relief may be moulded to recognise practical considerations, including the need to achieve a clean break so far as possible, and to avoid or minimise future friction.
(10)The court must also take into account the impact of its orders on relevant third parties and any hardship or injustice they would suffer.
(11)The court will enforce a reasonable expectation which the party bound created or encouraged, unless the circumstances require a different outcome.
(12)Conditions may be imposed on a plaintiff to take into account conditions subject to which the plaintiff assumed he or she would acquire ownership of the property.
(13)The circumstances may be such that the equity raised by the defendant's conduct can only be accounted for by declaring a constructive trust, or ordering the transfer of property, during the defendant's lifetime. That is notwithstanding that the relevant representation was that the property would be transferred by will upon the defendant's death, or that there was no representation as to the timing of the transfer, if the defendant has unconscionably disavowed or resiled from the assumed or expected position during the defendant's lifetime. However, in those circumstances 'the acceleration of the benefit the subject of the disappointed expectation' may be a factor relevant to the assessment of the scope of the relief granted.
As is evident from the elements of proprietary estoppel articulated in Currie, there are two types of proprietary estoppel: proprietary estoppel by encouragement and proprietary estoppel by acquiescence. Proprietary estoppel by encouragement originates from the case of Dillwyn v Llewelyn.[17]Proprietary estoppel by acquiescence, also referred to as estoppel by standing by, originates from the case of Ramsden v Dyson.[18]
[17] Dillwyn v Llewelyn [1862] 45 ER 1285.
[18] Ramsden v Dyson (1866) LR 1 HL 129.
Stephen and Kathy's case relies on proprietary estoppel by encouragement. To succeed, Stephen and Kathy must prove, on the balance of probabilities, the following:[19]
(1)Audrey encouraged or induced an expectation of a future transfer of an interest in property;
(2)Stephen and Kathy relied on that expectation in the form of a change of their position; and
(3)there has been an identifiable detriment to Stephen and Kathy as a result of the change of position, where the expectation is not fulfilled.
[19] Wantagong Farms Pty Ltd as Trustee for the Bulle Family Trust v Bulle [2015] NSWSC 1603 [62] referred to in Browne v Browne [No 2] [2017] WASC 375 [85].
Proprietary estoppel is a cause of action which is designed to prevent a person from unfairly departing from an expectation which they have induced or encouraged another to rely upon to their detriment if that expectation it not fulfilled.[20] Proprietary estoppel is not a cause of action that is based upon enforcement of a promise. The subjective state of mind of the person making the promise is irrelevant - it is the detrimental reliance on the promise by another that is foundation of proprietary estoppel.[21]
[20] Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505 [2].
[21] Priestley v Priestley [2017] NSWCA 155 [13].
A representation that land would be gifted by will can give rise to proprietary estoppel.[22] The expectation is that the gift would take effect on the death of the representor, not that a revokable testamentary instrument would be made.[23]
[22] Currie [116].
[23] Currie [116].
Issues to be determined
Stephen and Kathy accept that their case is properly characterised as one of proprietary estoppel by encouragement, not be acquiescence. The 'encouragement' is said to be the promise made by Audrey to Stephen and Kathy. As I have previously outlined at [51], counsel for Stephen and Kathy referred to the 'promise' made by Audrey at the May 2008 Meeting to Stephen and Kathy as being 'if Kathy and Stephen gave up their lives in Perth, returned to the farm for no pay, looking after the farm which they agreed to do and then the closing part of that promise was from Audrey that said: then you will get the farm on my passing'.[24] As I have detailed, Stephen gave evidence that Audrey said to him, at the May 2008 Meeting, 'Stephen if you return to the farm, we will give you the farm when we pass'.[25] In the context of this submission and this evidence, I have referred the promise as Audrey saying to Stephen and Kathy at the May 2008 Meeting that if Stephen and Kathy returned to the farm, Stephen would get the farm when Leslie and Audrey had both passed.
[24] ts 938.
[25] ts 158.
Therefore, Stephen and Kathy's case depends upon the court finding, on the balance of probabilities, that Audrey made them the promise. Whether the promise was made was the major issue in dispute in this trial. If I am not satisfied, on the balance of probabilities, that Audrey made Stephen and Kathy the promise, then there is no basis upon which Stephen and Kathy could hold the Expectation, specifically the expectation that Stephen would inherit the farm upon Audrey's death. In the absence of a finding that the promise was made, Stephen and Kathy's case fails.
If I find that the promise was made, than it is necessary to consider the following issues:
(1)Whether the promise made by Audrey, and any subsequent conduct and representations made by Audrey, induced and encouraged Stephen and Kathy to hold an expectation that Stephen would inherit the farm?
(2)Whether Stephen and Audrey relied on the promise and the expectation to their detriment?
(3)Whether it would now be unconscionable for Audrey, by her estate, to depart from her promise?
(4)Whether Stephen and Kathy's claim for relied is barred by the Limitation Act or should be denied on the basis of the equitable defence of laches or acquiescence?
(5)What is the appropriate relief?
Onus and standard of proof
Stephen and Kathy bear the onus of establishing each of the elements of proprietary estoppel - the onus does not shift to Keilo in relation to any of the elements.[26]
[26] Awad v Awad [2019] NSWSC 385 [40].
The standard of proof is the balance of probabilities. As Lee J said in Lehrmann v Network Ten Pty Limited[27] in relation to the concept of the 'balance of probabilities':
It does not mean a simple estimate of probabilities; it requires a subjective belief in a state of facts on the part of the tribunal of fact. A party bearing the onus will not succeed unless the whole of the evidence establishes a 'reasonable satisfaction' on the preponderance of probabilities such as to sustain the relevant issue: Axon v Axon (1937) 59 CLR 395 (at 403 per Dixon J). The 'facts proved must form a reasonable basis for a definite conclusion affirmatively drawn of the truth of which the tribunal of fact may reasonably be satisfied': Jones v Dunkel (1959) 101 CLR 298 (at 305 per Dixon CJ). Put another way, as Sir Owen Dixon explained in Briginshaw v Briginshaw (1938) 60 CLR 336 (at 361), when the law requires proof of any fact, the tribunal of fact must feel an actual persuasion of its occurrence or existence before it can be found.
[27] Lehrmann v Network Ten Pty Ltd [2024] FCA 369 [98].
The evidence and the witnesses at trial
Stephen and Kathy were called to give evidence at the trial for the plaintiffs. Keilo, Scott Paisley and Sandra Knight were called to give evidence at the trial for the defendants. Each was cross‑examined.
The parties tendered documents which were received as part of the evidence at trial. There is, however, nothing in writing which evidences the promise. I accept that in cases such as this, where family relationships are the basis for a promise, it is not unusual for the promise not to be recorded in writing. I also accept that it is not inherently unusual for parties to a promise not to tell others of the promise for fear of disrupting family harmony. None of these features, in and of themselves, are fatal to a finding that the promise was made.
There are, however, documents that I consider to be relevant to the issue of whether the promise was made, and I refer to those documents in these reasons. If I do not refer to a document in evidence that is because I do not consider it to be a document which is relevant to the issue of whether Audrey made the promise.
General observations on the nature of the evidence
Stephen and Kathy were the only witnesses who could give evidence of the alleged promise made by Audrey at the May 2008 Meeting. Leslie and Audrey, the only other people present, are deceased.
When assessing evidence of this nature in Webb v Ryan,[28] Whelan J said:
An important matter which may arise in these kinds of cases is the difficulty of assessing evidence concerning things allegedly said by a person who is dead. The court can never be certain it knows all the circumstances, and more often than not one may be sure that the court knows few of them. It is impossible to hear what the other party to conversation, the deceased, says about it. There is a significant risk of reconstruction. There are dangers in relying on evidence of what may have been a casual observation made to a person who at the time had no reason to remember the exact words used. In light of these concerns, a substantial burden is placed upon an applicant whose case relies upon such evidence. Such evidence must be very carefully examined.
[28] Webb v Ryan [2012] VSC 377 [22].
The May 2008 Meeting occurred over 10 years before these proceedings were commenced and nearly 16 years before Stephen and Kathy gave their evidence at trial. As was observed by McLelland CJ in Eq in the often‑cited case of Watson v Foxman:[29]
Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances … Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the process of memory are overlaid, often subconsciously by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
[29] Watson v Foxman (1995) 49 NSWLR 315, 318 ‑ 319.
Although McLelland CJ in Eq was considering a cause of action of misleading and deceptive conduct under the Trade Practices Act 1974 (Cth), his observations are apposite to the circumstances in this case.
More recently, in Webb v GetSwift Ltd (No 5),[30] Lee J said:
… what matters most in the determination of the issues in cases such as this is the analysis of such contemporaneous notes and documents as may exist and the probabilities that can be derived from these documents and any other objective facts. ...
As Leggatt J said in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) at [15]‑[23], there are a number of difficulties with oral evidence based on recollection of events given the unreliability of human memory. Moreover, considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial … [T]he surest guide for deciding the case will be as identified by Leggatt J at [22]:
'… the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on the witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts'.
[30] Webb v GetSwift Ltd (No 5) [2019] FCA 1533 [17] ‑ [18].
I accept that this is a case in which family is involved, rather than a 'commercial case'. Nonetheless, the observations of his Honour provide a useful guide, rather than a rigid rule to be applied, to the assessment of the witnesses' evidence in this case.
Even if I do not accept the evidence of a witness, that does not establish that the contrary position to that evidence is true or that another witness's evidence must be accepted.[31]
[31] Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 [60].
Against the backdrop of the promise being made by a person who is deceased and the significant time that has elapsed since the promise is said to have been made, the credibility of Stephen, and to a lesser extent Kathy, is of paramount importance in this case. Stephen and Kathy are the only witnesses who can give evidence of the promise which was alleged to have been made by Audrey at the May 2008 Meeting. Therefore, my findings of fact depend, to a substantial degree, on my assessment of the credibility of Stephen and, to a lesser extent, Kathy.
In saying that Stephen and Kathy's credibility is paramount, it is important to recognise that a witness's credibility is not the same as their honesty. A witness may come to believe a version of events that did not happen or convince themselves of a version of events that represents what they consider gives rise to a 'fair' outcome. In this sense, the witness may be honest but simply wrong. Alternatively, having regard to the other evidence adduced, the witness's evidence may be honest but simply unreliable.
Counsel for Stephen and Kathy submitted that the demeanour of a witness matters when assessing credibility. Counsel submitted that the court should find that Stephen was earnest and honest and gave responsive answers to questions put to him and therefore, I can accept his evidence as honest, accurate and reliable.
The pitfalls of assessing a witness's evidence based on demeanour are that the court may believe someone who is lying to be telling the truth, or the court may not believe someone who is telling the truth. A witness's demeanour may be deceptive. A witness may be anxious out of fear of not being believed. Such demeanour may be confused for evidence of lying. A witness may have elevated emotions due to the setting and circumstances in which they are giving evidence, and this may be mistaken for untruthfulness. For these reasons, judges should be reticent to make credibility findings based on demeanour.[32]
[32] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [31].
In my view, the plausibility of a witness's evidence in the context of the surrounding facts which I do find and the consistency of a witness's evidence with the evidence of other witnesses and/or documents, ought to be afforded greater weight in assessing the credibility of a witness than their demeanour. The weight that the demeanour of a witness plays, if any at all, in assessing credibility is that it may bolster the drawing of an inference which is available from other evidence.
Stephen, Kathy, Keilo and Scott all had an interest in the outcome of the proceedings. Each gave evidence about events that occurred many years ago. Much of their evidence about key events is diametrically opposed - by way of just one example, Keilo and Scott say that a meeting occurred in October 2011 at which all four of them and Audrey were present. Stephen and Kathy say this meeting did not happen. While having an interest in proceedings is not, of itself, sufficient to undermine a witness's credibility - it is one factor to be taken into account.
Both Stephen and Keilo gave long answers that expanded upon questions they were asked both in examination‑in‑chief and cross‑examination. I would not classify either witness as being non‑responsive or as attempting to avoid giving evidence against their interests. It is entirely understandable, given the passage of time, that all of the witnesses would be reconstructing their evidence to some extent, rather than relying on actual memories of the events. However, due to the passage of time, the interest that the parties have in the proceedings and the role that preparing for litigation plays in interfering with the actual memory of witnesses, I find the evidence of each of Stephen, Kathy and Keilo to be unreliable. This does not reflect at all upon their honesty, rather it is a consequence of the difficult task they faced in giving evidence of events that happened some time ago.
I also found the tenor of Stephen's evidence to be predicated upon a sense of entitlement to the farm and what he considered to be 'fair'. One telling example was when Stephen gave evidence about Sandra Knight taking on Leslie and Audrey as her clients. Stephen said:[33]
But why would my accountant be having a meeting with my parents regarding my inheritance when the CPA clearly say that is a breach of conduct? (emphasis added)
[33] ts 324.
At that point in time, that is September 2008, Stephen and Kathy had not moved to the farm, Leslie was still alive, and the farm was an asset of Leslie and Audrey's. In my view, Stephen's evidence was affected by that sense of what he considered to be 'fair', and I find that it made him more likely to reconstruct or remember events in a manner favourable to him, that is consistent with him receiving the farm upon Audrey's death.
For all these reasons, I only accept the evidence of Stephen, Kathy and/or Keilo where it is against their interest or if it is both plausible and consistent with other facts that I do find to be established on the evidence, particularly having regard to the documents adduced in evidence.
Scott Paisley, although not a party to the proceedings, is Keilo's husband and naturally has an interest in the proceedings. I do, however, find Scott to be a reliable witness. Scott was much more willing to say he did not remember in response to questions he was asked and therefore, I consider his evidence to be far less open to reconstruction. He was very thoughtful and deliberate in giving his evidence. He did not embellish his answers. I therefore, accept Scott's evidence of the key events about which he did give evidence.
That leaves the evidence of Sandra Knight. Sandra was the only witness who did not have a personal interest in the outcome of the proceedings. I reject any suggestion that she was on 'Keilo's team'. I accept Sandra's evidence when she said 'I don't know whose team I'm on, to be honest. I didn't think I was on anyone's team'.[34] Sandra's lack of alignment to any 'team' was reinforced when Sandra gave evidence that she had spent a 'lifetime' on the phone with Keilo's solicitors preparing for the giving of her evidence.[35] Being required to give evidence at this trial was clearly not a process that Sandra enjoyed or did with an agenda. I find that Sandra gave evidence that was honest, regardless of whether it could be perceived to be to the detriment of Keilo.
[34] ts 883.
[35] ts 892.
I accept Sandra's evidence as honest, accurate and reliable. She was a credible witness, prepared to say when she did not remember. Sandra gave the following evidence:[36]
PARK, MR: And that's why the lifetime spent with Keilo's team, you reconstructed your memory of these events for the purpose of this trial, didn't you?
KNIGHT, SANDRA: Some of the information would have been reconstructed from documents provided, mostly as a recall of actual memory.
[36] ts 893.
Refreshing one's memory from contemporaneous documents is, in my view, far more reliable evidence, than reconstructing evidence of an oral conversation which is not recorded in any document. Given Sandra's honesty and willingness to admit when she reconstructed evidence or did not remember something, I accept Sandra's evidence on those matters which she clearly recollected. I also accept Sandra's evidence in relation to key documents that she created and as to the circumstances in which they were created.
Counsel for Stephen and Kathy says that Sandra gave evidence of what 'would have been', rather than what actually happened. Although Sandra did commence answering questions on occasion with the phrase 'It would have been …' when she was questioned about whether that happened, she gave evidence that it did. I accept that her words 'it would have been …' were merely a turn of phrase and do not establish that the things that followed in her evidence were not reliable.
Although Audrey was not alive to give evidence, much evidence was given about her and the many documents in evidence either written by her, sent to her or recording her instructions. Each Christmas Audrey sent a 'Christmas letter' to her family and friends. The Christmas letters were typed by Keilo as dictated to her by Audrey. It was evident in each letter that Audrey had a loving and warm relationship with both Stephen and Keilo, and their respective spouses.
All of the witnesses gave evidence that Audrey was a woman of her word and was an honourable woman. In closing submissions, counsel for Stephen and Kathy submitted that, given that Audrey was a woman of her word, Stephen and Kathy saw no need for the promise to be recorded in writing. However, the fact that Audrey did not give effect to the promise in her last will and did not ever tell Sandra Knight about the promise, is not consistent with Audrey being a woman of her word. What does, however, sit comfortably with Audrey's conduct and being a woman of her word was that Audrey never made the promise to Stephen and Kathy, or said any words at the May 2008 Meeting that could be construed by Stephen and Kathy as giving rise to an expectation that they would inherit the farm if they moved to the farm.
Facts not in dispute
It was not in dispute between the parties that Stephen and Kathy moved from their rental house in Perth to the farm in June 2009. It is also not in dispute that Stephen and Kathy completed work on the farm.
I now set out the unchallenged evidence in relation to the work that Stephen and Kathy did on the farm and their employment over the years.
Stephen's work on the farm was described as follows:
(1)in 2008, Stephen did barely any work on the farm, only a brief visit to help Leslie get the firebreaks done quickly;[37]
[37] ts 224.
(2)after moving to the farm, Stephen did the following work on the farm:
(a)maintaining the firebreaks - two weeks of full time work each year in November;[38]
(b)2009: approximately 20 hours per week on the farm;[39]
(c)2010: approximately 20 hours a week on the farm;[40]
(d)2011: approximately 15 hours a week on the farm;[41]
(e)2012: below 15 hours a week on the farm;[42]
(f)2013: working on the farm only on the weekends - equivalent of 10 ‑ 15 hours a week;[43]
(g)2014: 10 ‑ 15 hours per week working on the farm;[44]
(h)2015: 10 ‑ 15 hours per week working on the farm;[45] and
(i)2016: Stephen left his employment at Bluescope and worked full‑time on the farm which was approximately 50 ‑ 60 hours per week.
[38] ts 226.
[39] ts 225.
[40] ts 225.
[41] ts 225.
[42] ts 225.
[43] ts 225.
[44] ts 225.
[45] ts 225.
In summary, in addition to maintaining the firebreaks each year, Stephen built a shed,[46] did work in getting the farm ready for pasture,[47] cleared internal compartments on the farm,[48] seeded,[49] constructed two new bedrooms in the farmhouse[50] and did general tidying.
[46] ts 226.
[47] ts 185.
[48] ts 124.
[49] ts 458.
[50] ts 208.
Stephen's employment history is as follows:
(1)1987: automotive pre‑apprenticeship with TAFE Albany;[51]
[51] ts 98.
(2)1988: traineeship in the Kimberley related to agriculture, mustering, fencing and cattle farming;[52]
[52] ts 99.
(3)1989: post‑traineeship worked for Alice Downs Station north of Halls Creek. This role involving fencing and breaking in horses.[53] Stephen also worked at Moola Bulla, the biggest station in the Kimberley;
[53] ts 100.
(4)1990: farmhand work with Rex Herbert in Ongerup.[54] Leslie was in the process of converting the farm from sheep pasture to pine plantations which meant there was no role for Stephen;[55]
[54] ts 104.
[55] ts 103.
(5)1990: completed Certificate of Business studies;[56]
[56] ts 104.
(6)1991: casual work with Southside Scaffolding Service in Perth;[57]
[57] ts 105.
(7)1992 ‑ 1998: worked for Sorrento Plant Hire, Troubleshooters Available, a casual agency through which he worked for Resolute Construction on and off. Stephen then got a semi‑permanent role with Asset Systems Tony Hardware for 12 months working in concrete repair. Stephen spent 12 months at Asset Systems Tony Hardware;[58]
[58] ts 106.
(8)1998: Stephen and Kathy travelled to the UK for a working holiday;[59]
[59] ts 103.
(9)1999: worked for Troubleshooters Available and also returned to Resolute Construction for a short casual stint;[60]
[60] ts 111.
(10)1999 ‑ 2003/2004: worked for Resolute Construction as a finishing foreman full‑time;[61]
[61] ts 112.
(11)2004: Stephen injured his back and could not continue to work for Resolute Construction;[62]
[62] ts 112.
(12)2005: started degree in finance studying part‑time at Murdoch University;[63]
[63] ts 113; exhibit 268.
(13)2006: received final settlement for worker's compensation for his back injury;[64]
[64] ts 112; exhibit 30.
(14)2007: worked at Mercer Mooney;[65]
[65] ts 112.
(15)2008: January, worked for Chep as an afternoon shift supervisor on a full‑time basis;[66]
[66] ts 122.
(16)2008: travelled to Sydney for training around ANZAC day;[67]
[67] ts 149.
(17)2008: ceased employment with Chep, and began working at AusPost Canning Vale casually;[68]
[68] ts 173.
(18)2009: around November, did basic military training with the Army Reserves and was paid $15,000 per annum as basic infantry.[69] This training occurred on weekends once every 6 weeks and every Tuesday night for 3 ‑ 4 hours;
[69] ts 190.
(19)2009 ‑ 2010: worked for Ranbuild making sheds earning $30,000 per annum on a casual basis;[70]
[70] ts 204.
(20)2010: worked for Upright Scaffolding for approximately 6 months earning $20,000 per annum on a casual basis;[71]
(21)2010: worked with Plantagenet Sheds in Mount Barker for approximately a month on a casual basis;[72]
(22)late 2010 to late 2011: worked with Wauters Enterprises; earning approximately $25 per hour on a casual basis, then at Commander Ag‑Quip before being rehired by Waters Enterprises for a 3‑month project earning $47 per hour on a casual basis;[73]
(23)late 2011: commenced full‑time employment at Bluescope Steel earning approximately $45,940 per annum;[74]
(24)2013 ‑ 2014: worked at Bluescope Steel as truck driver and storeman earning approximately $49,047 per annum;[75]
(25)2014 ‑ 2015: worked at Bluescope Steel as storeman and truck driver earning approximately $53,389 per annum;[76]
(26)2015 ‑ 2016: worked at Bluescope Steel as storeman and truck driver earning approximately $43,864 per annum;[77]
(27)March 2016: worked full‑time on the farm;[78]
(28)January 2017: commenced work at Ausand as a casual employee and ceased most farm work - down to 2 hours per week worked on the farm;[79] and
(29)September 2019: started employment with WorkPac; an agency that responds to Rio Tinto and eventually transferred to working directly with Rio Tinto on a current salary of $150,000 per annum.[80]
[71] ts 204.
[72] ts 205.
[73] ts 205.
[74] ts 206.
[75] Plaintiffs' chronology filed 3 April 2024, page 6.
[76] Plaintiffs' chronology filed 3 April 2024, page 6.
[77] Plaintiffs' chronology filed 3 April 2024, page 6.
[78] Plaintiffs' chronology filed 3 April 2024, page 7.
[79] Plaintiffs' chronology filed 3 April 2024, page 7.
[80] ts 286.
Kathy did the following work on the farm:
(1)performed a bookkeeping role;[81]
(2)2009: log removal, washouts, weeds/grass removal; worked approximately 10 ‑ 15 hours per week;[82]
(3)2010 ‑ 2012: cleared front paddock, seeding, mowing, whippersnipping, assisting Stephen with the firebreaks, washouts and fences, planting fruit trees and native bushes, lawn mowing; worked approximately 20 ‑ 25 hours per week on the farm;[83]
(4)2013 ‑ 2016: post maternity leave worked 10 ‑ 15 hours per week on the farm;[84] and
(5)2017: only did the basics required on the farm, that being keeping the grass down and the firebreaks maintained and did not start any new projects.[85]
[81] ts 463.
[82] ts 559.
[83] ts 559 - 560.
[84] ts 561.
[85] ts 562.
Kathy was employed in the following roles:
(1)2000 ‑ 2003: studied for a Certificate of Tourism at night while working for Action Armadale as front‑end controller;[86]
(2)2003 ‑ 2010: commenced work with Canning Vale Travel and eventually became corporate manager earning $45,000 per annum;[87]
(3)2010 (9 months after moving to Albany): began part‑time role with Travel World Albany (Wednesday, Thursday, Friday);[88] and
(4)March 2022: commenced full‑time work at Department of Health.
[86] ts 456.
[87] ts 455.
[88] ts 457.
It is not in dispute that Leslie and Audrey, and after Leslie's death, Audrey, received all the income derived from the tree plantation on the farm. The parties have also agreed the amount of tree farm income received by Audrey's estate after her death.[89]
[89] First defendant's notice to admit facts filed 3 April 2024; ts 68.
Finally, it is not in dispute that Audrey paid for all operating expenses on the farm,[90] this included paying for the concrete pad and electrical work on the shed that Stephen and Kathy erected, while Stephen and Kathy paid for the shed.[91] In 2012, Audrey purchased a ride on lawn mower for the farm and paid for the fuel for the lawnmower in the following years.[92] In 2018, Audrey obtained a loan for the purchase of a skid steer and Audrey paid the loan repayments.[93]
[90] ts 159.
[91] ts 178.
[92] ts 219 - 220.
[93] ts 209, 264, 471, 579.
Facts in dispute
The fundamental fact in dispute is whether Audrey made the promise to Stephen and Kathy at the May 2008 Meeting.
Only Stephen and Kathy can give evidence that the May 2008 Meeting occurred and what was said at the meeting. For the reasons I have outlined, while I accept Stephen and Kathy's evidence that they did meet with Leslie and Audrey in May 2008, I do not accept either of their evidence in relation to the promise unless their evidence is both plausible and otherwise consistent with facts which are not in issue, facts which I do find to be established and/or documents in evidence.
In order to determine whether Stephen and Kathy's evidence as to the promise is plausible and consistent, the parties adduced evidence and tendered documents that refer to and evidence events that occurred before and after May 2008.
There is dispute about whether many of these events occurred, and even if it is not in dispute that an event did occur, then it is in dispute what was said at the event. As to a number of, what I describe as, key documents, there is a dispute as to what those documents mean and when they were created.
Key events and key documents
The first and fundamental issue that I must determine is whether I am satisfied, on the balance of probabilities, that Audrey made the promise to Stephen and Kathy at the May 2008 Meeting. Stephen and Kathy's case of proprietary estoppel by encouragement cannot succeed if I do not find that the promise was made, as the first element of the cause of action, that is that Audrey encouraged or induced an expectation of a future transfer of the farm, would not be made out.
In determining whether I am satisfied that Audrey made the promise, I will consider the key events and the key documents which, in my view, are relevant to that determination.
1999/2000 meeting at Cheynes Beach between Audrey, Leslie, Kathy and Keilo
Keilo gave evidence that a meeting took place at Cheynes Beach between Audrey, Leslie, Stephen, Kathy and Keilo.
Keilo gave evidence that, at that meeting:
(1)Stephen said he wanted the farm;
(2)Stephen said Keilo can have the property owned by Leslie and Audrey at Cheynes Beach;
(3)Keilo said there was inequality with this; and
(4)Leslie said 'Well, maybe we could think about some of the pine money to make it a little bit more equal then'.[94]
[94] ts 638 ‑ 639, 707, 730 ‑ 731.
Stephen does not recall the meeting, although he said he did remember a meeting around the 1990s to establish trusts to protect assets.[95]
[95] ts 315 ‑ 316.
Kathy vaguely recalled the conversation referred to by Keilo at this meeting, although she does not remember talking about equal division, nor any values, nor Leslie's alleged proposal.[96]
Early-2002 meeting at Joondalup between Keilo, Audrey, Leslie, Stephen and Kathy
[96] ts 587 ‑ 589.
Keilo gave evidence that a meeting took place at Joondalup Village, where Leslie and Audrey were then living, after Leslie and Audrey had sold their Cheynes Beach property, between Audrey, Leslie, Stephen, Kathy (Keilo thinks Kathy was there) and Keilo.
Keilo says she raised the subdivision of the farm, which Leslie and Audrey said they would look into now that Cheynes Beach was sold.[97]
[97] ts 641.
Neither Stephen nor Kathy recalls the meeting.[98] Kathy gave evidence that things changed slightly in her mind when the Cheynes Beach house sold.[99]
Mid-2002 meeting at Joondalup between Keilo, Audrey, Leslie and Stephen
[98] ts 317 ‑ 318.
[99] ts 589 ‑ 590.
Keilo gave evidence that a meeting took place at Joondalup Village between Audrey, Leslie, Stephen (Keilo thinks Stephen was there) and Keilo.
Keilo gave evidence that, at this meeting, the subdivision of the farm was discussed, and that Leslie and Audrey said it would cost $50,000 to get electricity brought in from the main road on top of subdivision costs and everyone thought that was too much money.[100]
[100] ts 642.
Neither Stephen[101] nor Kathy recall the meeting.[102]
Early 2008 meeting (before May 2008 Meeting)
[101] ts 318 ‑ 319.
[102] ts 513, 589 ‑ 590.
Keilo and Scott gave evidence of a lunch meeting taking place at Joondalup Village between Audrey, Leslie, Stephen, Kathy, Scott (Keilo says Scott was probably there, but she cannot specifically remember) and Keilo.
Keilo gave evidence that the meeting was prompted by a break‑in that had occurred at the farm. Keilo gave evidence that:[103]
(1)Leslie and Audrey said they were thinking about having a caretaker on the farm;
(2)Leslie said there was not much to be done on the farm and maybe they could have somebody on the farm;
(3)Stephen and Kathy said 'well we've been thinking of a change, and we would like to go down';
(4)Audrey said that Stephen had a bad back and that she was concerned about whether the fencing and firebreaks would be an onerous task for him;
(5)Leslie said that Stephen would probably be able to do it; and
(6)nothing was ever said about inheritance.
[103] ts 643.
Scott's evidence of the meeting is consistent with Keilo's evidence.[104]
[104] ts 798.
Neither Stephen[105] nor Kathy[106] remember this meeting.
Findings on events prior to May 2008
[105] ts 319 ‑ 322.
[106] ts 591 ‑ 592.
I do not make any positive findings of fact in relation to any of the meetings that were alleged to have occurred prior to May 2008. I do not accept Stephen's, Kathy's or Keilo's evidence as reliable in relation to whether these meetings occurred or what was said at them as there are no facts consistent with those meetings which I find to be established or documents which evidence those meetings.
May 2008 Meeting at Joondalup between Leslie, Audrey, Stephen and Kathy
Stephen and Kathy are the only witnesses who are alive to give evidence of the May 2008 Meeting. Given the promise is alleged to have been made at the May 2008 Meeting, it is important to reproduce substantial portions of Stephen and Kathy's evidence as to what said at this meeting.
In examination‑in‑chief, Stephen gave the following evidence as to what was said at the May 2008 Meeting[107]:
[107] ts 150 ‑ 161.
PARK, MR: And do you recall whether after the trip to Sydney with Shep (sic) - do you recall whether you had a meeting with your mum and dad?
STEPHEN: Yes. So in May we went up but there was - wasn't a special meeting. It was just - started out as the usual fortnightly dinner that we had generally on a Tuesday night. We would either have it at our place or have it up with Mum and Dad. And we headed up to Joondalup to the Lifestyle Village. We got there, Mum was still making dinner. So I sat down at the table with Dad, had a chat. Kathy went to the kitchen. She would generally help Mum in the kitchen with those sort of things. And we - it wasn't long, we sat down. We had dinner. Mum said that she had some news to tell us after dinner. …
…
Mum had said that Dad was unwell. And this led to, 'We are selling the farm'.
PARK, MR: Who said that?
STEPHEN: Mum said that.
PARK, MR: And did anyone respond to that?
STEPHEN: I did.
PARK, MR: And what did you say, to the best ... of your recollection?
STEPHEN: Well, words to that effect of, 'Why? Why are you selling the farm?'
…
PARK, MR: And to the best of your recollection, what did your mum say?
STEPHEN: My mum said that Dad was having trouble keeping up with the demands of the Forest Products contract and the maintenance of the farm.
…
PARK, MR: And what, to the best of your recollection, did you say?
STEPHEN: I said, to the best of my recollection, words to that effect of, 'Can't we get a manager or someone else to look after these tasks?'
…
Dad responded.
PARK, MR: And to the best of your recollection, what did Dad say?
STEPHEN: Dad said that they had investigated getting a farm manager to run the farm, but it was too expensive. And that did not leave enough money for them.
… I said, 'How much is it to get a manager?' And they said - well, Dad said - Dad or Mum, I can't recall which, said that it was in the region of $35,000 to get a manager to look after the farm.
…
I responded. I thought that was a lot of money for what - what the task was.
…
Dad … explained what was required.
PARK, MR: What did he say, to the best of your recollection?
STEPHEN: He said that to get someone to live on the farm and maintain the firebreaks, look after the compartment breaks, maintain the fences and the equipment, would cost that much money.
PARK, MR: And what did you say, to the best of your recollection?
STEPHEN: I said there must be other options, that we shouldn't sell the farm, that - and I don't recall exactly, but I remember throwing lots of different options at my parents regarding what they might do instead of selling the farm.
PARK, MR: And do you remember any of those options?
STEPHEN: It was just reducing the role of the manager and allowing me to take on some of that role, to try and reduce it, trying to do it from Perth.
PARK, MR: Do you remember words you said?
…
STEPHEN: No. No, I don't remember that part of the conversation.
PARK, MR: Well, you don't need to reconstruct it?
STEPHEN: I do remember - I do remember ‑ ‑ ‑
PARK, MR: You remember the gist of it?
STEPHEN: … which led to Mum saying, 'Stephen, do you want the farm?'
PARK, MR: And did any - was there - did you answer that question?
STEPHEN: I did.
PARK, MR: And how did you answer that question?
STEPHEN: I said, 'Of course I want the farm'.
PARK, MR: And was there any response to that comment?
STEPHEN: Yes, by Mum.
…
Mum said, 'Will you move to the farm?'.
PARK, MR: And was there a response to that?
STEPHEN: There was a response from me. I said, 'How will you pay me? You just said you can't afford a manager'.
PARK, MR: And was there a response to that?
…
STEPHEN: There was a not a direct response to that. Then we discussed - again, I said - well, we started talking about further options, which ‑ ‑ ‑
…
Mum said, 'Will you return to the farm?'. Well, there was, 'Stephen, do you want the farm?'. 'Yes, I want the farm'. 'Will you return to the farm?', and then I questioned, 'Mum, it doesn't seem that you're able to pay me to return to the farm. I can't live on air, it's 50 kilometres out in the middle of nowhere'. So that was pretty obvious what I was saying there, because we had just discussed the fact that they couldn't afford to pay me, or pay a manager, so how are they going to pay me to take on that role, and they ‑ ‑ ‑
PARK, MR: And after that, did anyone say anything?
STEPHEN: I believe Mum said, 'We cannot afford to pay you'.
…
This led into a discussion about other options.
PARK, MR: Who was the discussion between?
STEPHEN: So I came back to, 'There must be another way to do this'.
PARK, MR: Did you say that?
STEPHEN: I said - I went back to, 'Can this role be performed by me living in Perth?'. They - you know, trying to break it down again and just try and work out - because they couldn't afford to pay me, so we had to look at another option because it didn't seem that I could move back there with no money. Albany is notorious for its low employment rates, and so there was a bit of to and fro, and every time I came up ‑ ‑ ‑
PARK, MR: Do you remember what was said in this to and fro?
STEPHEN: I remember then Dad explaining clearly that he wanted someone on the farm. That was where we were falling down.
PARK, MR: Do you remember the - can you remember what words he used?
STEPHEN: He - I can't remember the words that he said. I remember him telling me various things that he was unhappy with about no one being on the farm to supervise it.
PARK, MR: And what did he say?
STEPHEN: He said that he - to the effect that he was concerned that people were coming there on the weekends. There was evidence he saw of camping. There was evidence of people using dirt bikes on the property, and every time he would go back, the locks were not on the gates, whether that was the people from the plantations not putting the locks on properly, but he would not get back there very often, and when he got back there he didn't know how long the gates had been unlocked for, but there was clear evidence that he thought other people were on his property.
PARK, MR: And he told you that?
STEPHEN: He told me that.
…
… That was when it became clear that he needed someone on the property. And that sort of ‑ ‑ ‑
PARK, MR: But was there any response to that?
STEPHEN: Not that I can recall.
…
… There was a - Mum and Dad conferred briefly, but the - not by words. I think they looked at each other. And then Mum said, very clearly, 'Stephen, if you return to the farm, we will give you the farm when we pass'.
PARK, MR: And was there any response to that?
…
STEPHEN: I conferred with Kathy and looked over to her, to see how this was going. And she expressed big concerns.
PARK, MR: Did you - sorry. Did you speak with Kathy at that time?
STEPHEN: I didn't speak. We had a conversation, similar to my parents, where we looked at each other and conferred. She gave me a - what I ‑ ‑ ‑
…
(judge describes witness nodding up and down)
PARK, MR: But at this meeting, you look at Kathy. And Kathy, sort of, nods at you?
STEPHEN: Yes.
PARK, MR: And then after that … Nodding?
STEPHEN: After that, I accepted. But ‑ ‑ ‑
PARK, MR: How did you accept?
STEPHEN: I said to the effect, 'All right, then'. But I also expressed that we were very concerned about how we were going to come up with - you know, how we were to find employment.
PARK, MR: And did anyone respond to that?
STEPHEN: Dad then offered that he would, if - because ‑ ‑ ‑
… To pay farm expenses, but they had to be justifiable. And they had to be reasonable. And they had to be related to the operation of the farm, which I took to mean ‑ ‑ ‑
…
PARK, MR: … did anyone respond to your dad saying that?
STEPHEN: Not in words. I think we accepted - I think there was nodding and confirmation that we understood what he offered and that was to be part of the arrangement …
PARK, MR: So was there any more conversation at this meeting?
STEPHEN: Dad had said that they would meet farm expenses.
…
PARK, MR: Who spoke?
STEPHEN: Then it became a conversation - the conversation seemed to become me and Dad about what the requirements were. …
PARK, MR: Did you ask him questions?
STEPHEN: He just started telling me what was required with the farm.
PARK, MR: And can you recall what he told you was required?
STEPHEN: So Dad started speaking about the things that we had been discussing about, the access issues, his concerns there. He wanted the place locked up tight again. And that meant putting locks back on all the gates. We talked about a one‑key system because he was frustrated with always trying to have to dig through the - he had a little wallet that the keys used to sit in. His frustration with that - so we talked about a one‑key system and how he would be willing to pay for that. Then we went onto the compartment breaks and the fire breaks. He was very concerned that, because he had been unable to work effectively on the farm as he was going down there, that he was - the fallen logs on the fire breaks getting on top of them. He told me about how they should be prepared to go to Manorbar. He told me about some other things. There's concerns about the fences. But he also stated that the fences were not to be fully repaired. They were old fences, and if you went to - I used to strung fences very tightly, it was a good habit to be in, but he said that if I get it like that, I would just pull the posts out of the ground. He said that he thought that we should just maintain them as a visual barrier to the public at this stage because we weren't going to be running livestock, and if that changed we would address that, but he was going to leave - they needed a big renovation, and that was to happen in 2018 when the pines were harvested.
PARK, MR: And after this interaction about things that needed doing, was there any further conversation at this meeting?
STEPHEN: That went on for quite a while, talking about the bits and pieces he wanted done. He had lots to tell me. He told me that the shearing shed was full of stuff, and we needed to come up with some solution to that. He had concern about the condition of an old silo there. So we stayed - we talked for probably over an hour on bits and pieces that he required. Mum and Kathy spoke about the house and what was required there.
PARK, MR: Well, did you hear your mum and Kathy speaking?
STEPHEN: Only in the background. The stuff that Mum - I think Kathy basically knew everything ‑ ‑ ‑
PARK, MR: Can you recall any words?
STEPHEN: There was talk about the - in the hot stove and how they were having problems with that. I think it had a blocked flue, which meant that if you opened the door all the smoke would come back into the house, concerns about the damp that was - we were having problems with, that - it was a conversation with them. I was concentrating on what Dad was saying. They're only the few things that sort of overlapped in the conversations.
PARK, MR: And was there any further conversation between the four of you?
STEPHEN: We - as we were leaving, I asked Mum about what should happen ‑ ‑ ‑
PARK, MR: Do you remember what you said to your mum?
STEPHEN: Words to the effect of what would be pass on to Scott and Keilo about this, and Mum said, 'I will speak to Scott and Keilo', words to that effect. 'I will speak to Scott and Keilo. That is not for you to do'.
PARK, MR: And did anything else occur in the conversation at this time?
STEPHEN: No, I think that was the end of the night and we went home. I had a conversation with Kathy in the car on the way home.
PARK, MR: Well, when you left your mum and dad's house, what was your understanding of the effect of this conversation?
STEPHEN: The effect of that conversation was that we would return to the farm, we had agreed to that. We were to get - not - we were not to get paid for that. The costs of the farm were to be met by the farm, Mum and Dad, and that in exchange for that, when Mum and Dad passed away, I was to get the farm.
PARK, MR: Were you surprised by the outcome of this meeting?
STEPHEN: Yes, I was surprised. I was surprised because it was something that I hadn't anticipated.
PARK, MR: In response to this meeting, did you move to the farm?
STEPHEN: I moved to the farm the following year in June 2009.
In cross‑examination, Stephen gave the following evidence in relation to the promise:[108]
So [Audrey] has asked me whether I want the farm, because it's clear that I'm trying to come up with reasons to keep the farm with the manager options, and I said, 'Of course I want the farm'. She said, 'Will you be - will you move to the farm?', and I explained to her that we had just been through that, that she couldn't - I said, 'What are - are you going to pay me?', and she said, 'We cannot - we can't pay you'. That led into other options being discussed, whether I could perform the role remotely from Perth. We went through the manager thing again, whether we could divide the role up and just do firebreaks, get someone to do the firebreaks for Dad. Then it became clear that Dad wanted someone to be located at the farm, that was why he had looked for a manager or a caretaker - manager particularly, I think, because they wanted someone to look after the - the forestry obligations. By then - then we discussed whether I could do the role remotely, breaking the role down. We looked at the manager part of it again through various things, and then Mum asked me - said, 'Stephen, there's an offer. If you move - return to the farm for us, we will give you the farm when we pass'.
[108] ts 373.
Kathy's evidence about the May 2008 Meeting was as follows:[109]
[109] ts 448 ‑ 452.
PARK, MR: And can you tell her Honour why you moved to the farm?
KATHY: Yes. I moved to the farm after a dinner at Les and Audrey Wise's house in Joondalup, in around ‑ ‑ ‑
… in May 2008. At that dinner, we had just come back from Sydney so we discussed - the normal sort of chat.
PARK, MR: Can you remember what was said?
KATHY: Just ANZAC Day, and we had been to - out to Bathurst and to the Blue Mountains, had a usual chit chat about travel. After dinner, we discussed that a bit more, sat down. At - after dinner, Audrey explained that Les' cancer was getting worse.
PARK, MR: Do you recall the words that she used?
KATHY: Words to the effect of that, you know, Les' cancer was getting - getting more serious. It had got into his bones. Yes, getting worse.
PARK, MR: And did anyone respond to that?
KATHY: Well, would have - you know, yes. Obviously, that's not a good thing. He had been struggling with cancer for a very long time, but the fact that it had got into his bones was - I think we all knew that was not a good - good outcome.
PARK, MR: … And did anyone next speak in this discussion?
KATHY: Yes.
PARK, MR: Who was that?
KATHY: I think it was Les, sort of - that he was a bit worried, you know, he couldn't maintain the farm any further, and that they were thinking about selling the farm.
PARK, MR: Did anyone respond to that comment by Les?
KATHY: Yes. … I think Stephen said, you know, 'Well, what could be done about this?'. You know, 'Have you looked at getting a manager?'. Yes, they had looked at getting a manager.
… Audrey responded that yes, they had looked into getting a manager.
… They expressed that they couldn't afford to pay a manager.
PARK, MR: Who expressed that?
KATHY: Audrey - so, yes. They looked into the cost of that.
…
PARK, MR: Who spoke next?
KATHY: I believe Audrey asked Stephen if he was still - wanted the farm.
…
PARK, MR: Did Audrey say that?
KATHY: Yes. She asked if - or the words to the effect of, you know, 'Stephen, are you - do you want the farm?'. Stephen expressed, yes, he did want the farm. I think he ‑ ‑ ‑
PARK, MR: Did anyone respond to Stephen?
KATHY: … I think they - Steve, sort of, said, maybe, you know, somebody - he could go down on the weekends, possibly, to try and look after the farm. And Les said, 'No. Somebody needs to be there' or words to the effect of 'need to be there on a more permanent basis to take care of the farm'. It was getting run down with nobody being there for any length of time.
… Audrey asked … if Stephen would consider moving back to the farm. And ‑ ‑ ‑
PARK, MR: Did anyone respond to that question?
KATHY: Stephen asked something along - words to the effect of, 'Well, you know, how would we - would you be able to pay us'. And Audrey - I'm not sure if it was Audrey or Les replied, 'Well, we have already looked into the cost of a manager. We can't afford to pay you'. Steve, from my recollection asked, 'What - well, what is it that you're - you need?'. You know, 'What is it you want done? What's - what needs to be done down there?'. And then Audrey asked - said, 'If you move back to the farm, you will get the farm when I pass at the end', or words to the effect of.
PARK, MR: And did anyone respond in any way to that?
KATHY: I think it was more discussion about what they - what they wanted, what they were hoping would get done by somebody moving down there.
PARK, MR: Who had that discussion?
KATHY: It was Steve, Les - you know, just on what, you know, the fences, what, you know, the forestry contract obligations. Would we go back. Steve and I sort of looked at each other, thinking, well, we could - yes. I nodded - nodded at Steve. Steve nodded at me. Right. Yes. We will accept. There is, obviously, a lot of details to be worked out, like, workwise.
Audrey's will dated 16 May 2017
By her last will and testament dated 16 May 2017 (May 2017 Will), over which probate was granted on 16 July 2018, Audrey effectively divides her estate equally between Keilo and Stephen.[189]
[189] Exhibit 196.
Audrey dies in February 2018
Audrey died on 11 February 2018.
Correspondence between Stephen and Keilo in June and July 2018
On 19 June 2018 Stephen sent an email to Keilo in which he proposes that they try and resolve the matter of how Audrey's estate should be divided without engaging in a costly legal battle. In his email Stephen says:[190]
[190] Exhibit 227
I understand that over the years we have come to a stalemate regarding this issue many times.
I hope that you may propose a solution more reflective (than proposed by Mum's will) of the efforts I have made throughout my life to the farm at Wanigela and also the efforts by Kathy particularly in the time since we have returned.
On 24 June 2018, Keilo responded to Stephen:[191]
[191] Exhibit 227.
I am aware that your view on how the estate is to be divided differs from Mum's Will, however, I feel that Mum's Will reflects how she valued both of us equally in her (and Dad's) life rather than focussing on an individual asset.
I am willing however, to consider any detailed proposal you wish to put forward before executing her wishes as per her Will, as I too have grave concerns that this will become a costly legal battle.
On 5 July 2018, Stephen responded to Keilo:[192]
[192] Exhibit 227.
Over the years many options have been discussed and put forward by family friends, accountants, myself, mum, dad and lawyers. To be frank you have not found any of them acceptable.
What is it you want?
As executor it would be appropriate for you to put forward a proposal.
Stephen's reference to a 'stalemate regarding this issue many times' and 'over the years many options have been discussed', without any mention of a promise that Audrey made to him and Kathy that if they moved to the farm, he would inherit the farm, is entirely consistent with Audrey not having made the promise and conversely, entirely inconsistent with Audrey having made the promise.
Stephen commences proceedings in November/December 2018
Stephen commenced these proceedings by writ of summons filed on 23 November 2018.
The writ of summons filed in this action on 23 November 2018 pleaded at [17] ‑ [19]:
17.In or about 2008 ('the 2008 Meeting') the Plaintiff and Kathy met with Leslie and Audrey at the latter's house in Perth during the course of which either Leslie or Audrey or both stated:
(i)that Leslie's health was failing and he was having difficulty in managing the Farm and in particular Leslie and Audrey's obligations in respect to the various plantation agreements; and
(ii)that they would have to sell the Farm if Leslie and Audrey could not find anyone to manage it at a cost affordable to them.
18.As a consequence of the comments made by Leslie and Audrey at the 2008 Meeting it was discussed and agreed between them that the Plaintiff and Kathy would give up their employment in Perth and move back to the Farm and undertake the management thereof including certain specific duties.
Particulars
(e)(sic) Maintenance of farm equipment and in particular the Chamberlain C670;
(f)Repair of all fences located on the Farm which were in poor condition;
(g)Removal of trees which had fallen over various breaks in the area of the plantation located on the Farm;
(h)Upgrade and maintenance of firebreaks and clearance areas around all farm buildings;
(i)Upgrade and maintenance of security locks and chains on various gates to eliminate access to the Farm by uninvited third parties;
(j)Liaising with APFC and subsequently FPC in respect to the plantation agreements held with those organisations and complying with the obligations imposed on Leslie & Audrey pursuant to those agreements;
(k)Rebuilding the trailer mounted firefighting equipment so it could be used in the event of a fire;
(l)Relocating all excess materials located near the shearing shed to a less prominent position;
(m)Maintaining all pasture areas to ensure that they were not overgrazed when agisted to third parties and to minimise or eliminate any risk of erosion and washout in those areas; and
(n)Generally maintaining the Farm in good order and condition and ensuring the obligations of Leslie and Audrey as set out in their agreements with APFC and subsequently FPC were met.
19.During the course of the discussion between the Plaintiff, Kathy, Leslie and Audrey at the 2008 Meeting Leslie stated that the Farm and the business operated thereon would be eventually owned by the Plaintiff which statement was consistent with the previous statements made by Leslie and/or Audrey to the same effect as hereinbefore detailed. At the time such statement was made Audrey was present and heard the statement and made no comment to the contrary and by implication agreed with the statement made by Leslie.
20.As a consequence of the statements made at the 2008 Meeting and in particular the statement made by Leslie that the Plaintiff would eventually own the Farm and the business located thereon, the Plaintiff and Kathy moved back to the Farm shortly after the aforementioned meeting.
(emphasis added)
The writ of summons refers to Leslie making the promise at the 2008 Meeting (it is accepted that this was the May 2008 Meeting). The reference in [19] to Leslie and/or Audrey making statements is a reference to 'previous statements' - and not to statements made at the May 2008 Meeting.
The SOC (in its final version before me at trial) pleads that the promise was made by Audrey. Stephen and Kathy both gave evidence at trial that the promise made at the May 2008 Meeting was made by Audrey - they were both certain of the words that Audrey had said to them at the May 2008 Meeting which constituted the promise.
The inconsistency between what was on the one hand first pleaded in the writ of summons, and on the other hand the last version of the SOC and the evidence of Stephen and Kathy, reinforces my view that Stephen and Kathy's evidence in relation to the promise has been compromised by the process of reviewing documentation during the discovery process and preparing for trial.
I find Stephen and Kathy's evidence as to the promise made by Audrey at the May 2008 Meeting is unreliable and cannot be accepted unless I find that their evidence is consistent with facts that I do accept.
Stephen swears the Family Provision Proceedings Affidavit
Stephen commenced the Family Provision Proceedings by originating summons filed on 19 December 2018.
On 12 December 2018, Stephen swore the Family Provision Proceedings Affidavit. I granted leave for the affidavit to be put to Stephen in cross‑examination for the reasons I have outlined earlier.
At [11] of the affidavit, Stephen deposed:
My parents also left the Farm and relocated in Perth in or about 2000 and attempted to manage the farm from Perth but increasingly had difficulty in doing so. As a consequence thereof, Kathy and myself met with my parents in 2008 to discuss the future of the Farm. My parents indicated to me that unless they could find someone to manage the Farm they intended to sell it. It was agreed that Kathy and I would manage the Farm and as a consequence thereof both Kathy and I gave up our employment in Perth and returned to the Farm and continued to manage it from then until the current date. In consideration of our agreement to take up management of the Farm my father reiterated the previous promises made by him and/or my mother to the effect that I would end up inheriting the farm and all stock and plant and equipment located thereon. (emphasis added)
Stephen gave the following evidence in relation to the affidavit:[193]
[193] ts 417.
TSAKNIS, MR: And you filed this affidavit in the proceedings in which is shown, CIV 3159 of 2018, in an application for a Family Provision Act?
STEPHEN: Yes. My lawyer, Dennis Beere, at the time did.
TSAKNIS, MR: On your behalf. Do you believe the contents of this affidavit - or did you believe the contents of this affidavit were true and correct at the time you executed the affidavit?
STEPHEN: I think so. Now, obviously, it's information that I've relayed to my lawyer, and he has - Dennis Beer, at the time - and he has put it into this document, and I've read it and - yes, yes. I've signed ..
TSAKNIS, MR: You believed it was true and correct at the time you signed it?
STEPHEN: Yes. There's somethings that I probably don't understand the way he pens them, but he's the lawyer. That's why I employ him.
TSAKNIS, MR: Did you believe it to be true and correct at the time you signed it?
STEPHEN: Yes, to the best of my knowledge.
Although the affidavit refers to either Leslie and/or Audrey having made the promise that Stephen would end up inheriting the farm, I do not find that the matters deposed to by Stephen are inconsistent with Audrey having made a promise at the May 2008 Meeting that Stephen would inherit the farm. Therefore, I do not draw any adverse inferences against Stephen on the basis of the matters he deposed to in the affidavit.
Sandra Knight's knowledge of the promise
In cross‑examination, Stephen was asked on more than one occasion if he told Sandra Knight about the promise. In one response, he said that he did not.[194] His evidence in response to a further question was:[195]
[194] ts 377.
[195] ts 436.
TSAKNIS, MR: So my question to you is you didn't say it in any discussions to Keilo, Scott, or Sandra Knight - you never made any mention of the promise to them at any time. Do you agree or disagree?‑‑‑
STEPHEN: I mentioned it to Sandra Knight. Well, I talked about the fact that Mum was wanting to give my sister a little more. But no, I didn't mention it. I was told not to. It became - it started out as a small thing, and it was pretty obvious that Mum wanted to speak to Keilo and Scott about what the agreement was, so I've left it to her. She wanted to explain it. Any time I asked about their behaviour, Scott asking my mum over the phone about it, I was told to leave it to her. So I did.
Stephen's evidence about not telling Sandra Knight about the promise is inconsistent with the SOC in the following respects:
(1)[13A(f)] of the SOC pleads that Stephen and Audrey discussed whether title to the farm should be transferred from Leslie and Audrey to Stephen at that time (that is in period between May 2008 and February 2009), or whether the transfer should be made later by way of inheritance from Audrey, and Stephen sought financial advice from his accountant Sandra Knight in this respect; (emphasis added)
(2)particulars of [17B.e(sic)] provide that Stephen, in substance, asserted the Expectation that Stephen was to inherit the farm at a meeting with Audrey, Keilo and Sandra Knight in early 2009.
In cross‑examination, Kathy gave evidence that she assumed Sandra Knight was aware of the promise.[196]
[196] ts 593.
Sandra Knight gave evidence that neither Audrey, Stephen, Kathy nor Keilo ever told her that Audrey had said to Stephen that if he moved to the farm and managed the farm that he would inherit the farm when Audrey died.[197]
[197] ts 878 ‑ 879.
For the reasons I have outlined, I found Sandra Knight to be an honest and reliable witness. I find that neither Audrey, Stephen or Kathy ever mentioned the promise to Sandra Knight. Although this is consistent with Stephen's evidence at trial, it is inconsistent with the SOC, particularly the particulars to [17B.e].
Did Audrey make the promise to Stephen and Kathy?
Evidence which Stephen and Kathy say is consistent with the promise having been made
Exhibit 45 - Transfer of brand and earmark
Counsel for Stephen and Kathy submitted that the transfer of the earmark and brand associated with sheep to Stephen in January 2009[198] was 'a significant movement in accord with the promise'.[199] Counsel referred to the now repealed Stock Identification and Movement Act 1970 (WA)[200] which provides, by s 7(1):
[198] Exhibit 45.
[199] ts 940.
[200] In force as at January 2009.
7.One brand and one earmark to be allotted for each run
(1)Subject to subsection (2), but despite any other provision of this Act, a proprietor of stock on a run shall be allotted only one registered brand or one registered earmark, or one registered brand and one registered earmark, as the case requires, for the stock on that run.
A run is defined as 'any station, farm, freehold or leasehold property, or any place where stock are kept, or have been kept or depastured'.
I accept that, by that transfer of the brand and earmarks, Stephen would own any sheep that came to be on the farm in the future. There were no sheep on the farm at that time.[201] It is not surprising that Leslie and Audrey transferred the brands and earmarks to Stephen at that time in circumstances where they were not ever going to resume living on the farm. I find that, while the transfer of the brand and earmarks was not inconsistent with the promise, the transfer is not consistent only with the promise having been made. There is another inference that may be reasonably drawn - that being that Stephen and Kathy were going to live on the farm and it was appropriate that they have ownership and responsibility for any sheep they put on the farm.
[201] ts 175.
I also make the following observation in relation to the willingness of Leslie and Audrey to formally record the transfer of the brand and earmarks in writing. Such willingness is a factor that does not accord with Audrey being reluctant or unwilling to record her alleged promise in writing or a reluctance on Stephen's part to ask her to do so.
Exhibit 53 - List of responsibilities
Counsel for Stephen and Audrey submitted that this document cemented what was agreed between Audrey, Leslie, Stephen and Kathy in relation to the move to the farm and accords with the promise. I do not agree. The fact that Stephen wrote down the list of responsibilities of each party upon him and Kathy moving to the farm, but failed to include that a responsibility of Leslie and Audrey's was to leave the farm to him upon their passing is, in my view, more consistent with the promise having not been made than it is with it having been made.
Exhibit 56 - Letter from Audrey to Forestry Manager
Audrey signed this letter (which Stephen prepared) to the Forestry Manager dated 26 August 2009 informing the manager there had been a recent change in the structure of the farm business by Stephen and Kathy taking over day to day management of the farm and residing on the farm and requesting to reclaim areas of the farm adjacent to the house and shearing shed because Stephen and Kathy wished to run a small number of horses and livestock. Counsel for Stephen and Kathy submitted this letter, while not recording the promise, accords with the promise because it looks to a future where Stephen and Kathy run livestock on the farm - something that Stephen and Kathy would only do if they were to inherit the farm.
While I accept that this document is consistent with the promise, it is equally consistent with there being no promise, this letter is equally consistent with Stephen and Kathy remaining on the farm but paying Keilo an amount to reflect her share of the farm.
Exhibits 49, 50, 141 - correspondence from Stephen to Gary Treeby
Exhibit 49 is an email dated 21 May 2009 from Stephen to Gary Treeby, the plantation manager, advising that from 2 June 2009, he and Kathy would be moving to the farm to take over the role of farm manager. Stephen sets out his responsibilities and provides his contact details.
Exhibit 50 is an email dated 21 May 2009 to Gary Treeby advising him of concerns that Stephen had in relation to someone giving permission for a person in a caravan to stay on the farm.
Exhibit 141 is a letter dated 24 November 2015 from Stephen to Gary Treeby in relation to post harvest feedback.
Stephen and Kathy rely on these documents as being consistent with the promise in that they record Stephen was doing what he said he would do in return for inheriting the farm.
There is no dispute that Stephen and Kathy moved to the farm and completed work on the farm. What is in dispute is whether Audrey promised Stephen and Kathy that Stephen would inherit the farm if they moved to the farm and took over management of the farm. I find that these documents are neither consistent with, nor inconsistent with, the promise having been made.
Exhibit 133
Exhibit 133 is Audrey's Christmas 2014 newsletter which refers to Stephen and Kathy's son Greg as 'a little farmer in the making'. Kathy also gave evidence that Audrey said to her one day when they were working together on the farm and talking about the fences that 'will be Greg's problem in a few years'.[202]
[202] ts 534.
It is, in my view, a long bow to draw from these comments that Audrey had promised Stephen that he would inherit the farm. These comments are equally consistent with Stephen paying a sum to Keilo to retain the farm upon Audrey's death and remaining on the farm. Again, while these comments do not contradict the promise, they do not provide evidence of the promise.
Stephen and Kathy's moving to and doing work on the farm
Stephen and Kathy say their moving to the farm, leaving their jobs in Perth and their subsequent work on the farm is consistent with the promise having been made. They rely especially on the work they did in rehabilitating the farm by returning the front paddock to pasture and planting an orchard near the house. All of this work was done with Audrey's knowledge and approval and therefore, Stephen and Kathy say that the reasonable inference to be drawn is that Audrey made the promise and Stephen and Kathy were planning, with Audrey's approval, a long‑term future on the farm relying upon that promise. This inference is reinforced, they say by the fact that Audrey purchased shearing clippers and the skid steer for stump removal on the front paddock.
The work that Stephen and Kathy did on the farm, while consistent with the promise having been made, is equally consistent with Stephen paying a sum to Keilo to retain the farm upon Audrey's death and remaining on the farm. It is also important to note that Stephen and Kathy do not bring a cause of action other than for proprietary estoppel by encouragement - the threshold issue is whether the promise was made by Audrey at the May 2008 Meeting.
Exhibit 191
Counsel for Stephen and Kathy submits that, by the March 2017 Will, Audrey is honouring the promise.[203] Counsel submitted that Stephen was right to trust his mother, 'a lady of her word, an honourable lady'.[204]
[203] Exhibit 191.
[204] ts 966.
However, Audrey makes a will only two months later which does not leave the farm to Stephen. By the May 2017 Will, Audrey effectively divides her estate equally between Keilo and Stephen.[205]
[205] Exhibit 196.
While the March 2017 Will is consistent with the promise, it is not proof that the promise was made. The weight that can be placed on the March 2017 Will corroborating the promise is significantly reduced given that the Jeff Glance Will and the May 2017 Will do not accord with the promise. I find that the fact that Audrey made a number of wills after Stephen and Kathy had moved to the farm is simply evidence that is consistent with Audrey trying to grapple with her concerns about how to divide her estate equally while giving Stephen the opportunity to remain on the farm.
Is the evidence consistent with the promise?
Although there is no one piece of evidence relied upon by Stephen and Kathy that would cause me to find that the promise was made, that is not the end of the matter. I must also consider whether all the evidence, taken together, makes it more likely than not that Audrey made the promise at the May 2008 Meeting.
In my view, Stephen and Kathy's evidence that, at the May 2008 Meeting, Audrey promised them that if they returned to the farm, the farm would be Stephen's when her and Leslie passed, is implausible and inconsistent with the surrounding facts which I do accept. I find this to be the case for the following reasons.
Firstly, there are inconsistencies between the first and last versions of the statement of claim filed in these proceedings - documents which were filed on Stephen's instructions. The first version of the statement of claim pleads that Leslie stated that the farm would eventually be owned by Stephen. The last version (the SOC) pleads Audrey asked 'did Stephen want the farm?' and Stephen said that he wanted the farm. No version of the statement of claim pleads the promise that Stephen and Kathy gave evidence about, that being Audrey saying to them that if they returned to the farm, the farm would be Stephen's when they passed. In my view, the promise is properly described as one which 'evolved' during the proceedings. The 'evolution' of the promise is consistent with Stephen and Kathy reconstructing their evidence as they prepared for trial. I make no criticism of them in doing so - it is simply a product of the time that has passed, the fallibility of human memory and the litigation process. I also note that the solicitors instructed by Stephen and Kathy during the trial of this action came on the record for Stephen and Kathy on 7 February 2024 - only two months before the trial was heard.
Secondly, I find it implausible that Stephen, on his evidence, sought financial advice from Sandra Knight about how to give effect to the transfer of the farm to him either during his parents' lifetime or after their death[206] without telling Sandra about the promise Audrey had made him.
[206] ts 166 - 170.
Thirdly, I find it improbable that Stephen would not have asked Audrey to record the promise in writing. I accept that promises between family members are often not written down and that is not a sufficient reason alone to doubt the promise was made. However, in this case, I still make this finding. That is because both parties displayed a willingness to record relevant matters in writing on other occasions:
(1)Stephen wrote down the list of responsibilities of each party upon him and Kathy moving to the farm - he did this after the promise was allegedly made;[207]
[207] Exhibit 53.
(2)Leslie and Audrey recorded the transfer of the earmarks and brand in writing;[208]
[208] Exhibit 45.
(3)Stephen wrote down notes recording values of Audrey's assets and how they may be divided between Stephen and Kathy;[209]
[209] Exhibit 7.
(4)in 2001 Stephen asked Leslie and Audrey for a loan to purchase a property and to be co‑guarantors for another loan to purchase that property.[210] Audrey handwrote a letter addressed to 'whom it may concern' confirming that the sum of $23,000 was a gift to Stephen to go towards his first home and Leslie, Audrey and Stephen signed the letter;[211] and
[210] ts 374.
[211] Exhibit 17.
(5)Audrey kept a yearly diary recording her appointments and wrote, with Keilo's assistance, a yearly Christmas newsletter.
I do not accept Stephen's evidence that he did not ask Audrey to record the promise in writing because she was a woman of her word and it was not required. In closing, counsel for Stephen and Kathy posed the question that, given all the parties accepted that Audrey was a woman of her word, 'Why then would anyone suggest that there was a need for her to record the finer details of this promise?'[212]
[212] ts 940.
It is not accurate to suggest that it was only the finer details of the promise which were not recorded - no details of the promise were recorded at all. Based on Stephen's evidence, I am satisfied that there were many reasons that would have caused him concern about whether the promise would be honoured and therefore, prompted a request from Stephen to Audrey to record the promise in writing. That is because of the following matters about which Stephen gave evidence:
(1)in February 2009, Audrey gave Stephen a copy of a letter from Sandra Knight to Leslie and Audrey which sets out concerns about how to equitably divide their estate between Stephen and Keilo and provides various options to address those concerns - none of which are consistent with the promise. It must have been particularly concerning for Stephen, if the promise was made, that this letter is shown to him less than a year after the promise was made and before he and Kathy had moved to the farm;
(2)in mid‑2009, again before Stephen and Kathy had moved to the farm, at a meeting between Audrey, Leslie, Keilo, Scott, Kathy and himself just before Leslie passed away, Stephen said that he gets the farm when Audrey passes and Leslie and Audrey 'shut him down' from talking about it because they felt uncomfortable;
(3)Audrey showed Stephen a copy of the Jeff Glance Will in early 2011 which did not honour the promise. This is shortly after Stephen attended a meeting with Jeff Glance and Keilo to talk about Audrey's will;
(4)on the same day he is shown the Jeff Glance Will, Stephen wrote down some notes (exhibit 7) to justify to Audrey why it was equitable to Keilo if he inherits the farm; and
(5)in 2014, following a fire on the farm, Audrey tells Stephen that Scott had called her to talk about the will which caused Stephen to question her whether everything had been settled.
Fourthly, Stephen gave evidence that he did not discuss the promise with anyone because Audrey said to him that she would deal with Scott and Keilo and asked Stephen not to raise it with them. His evidence in this regard is inconsistent with the following matters which Stephen gave evidence about:
(1)Stephen met with Keilo and Jeff Glance in late 2010/early 2011 to discuss Audrey's will and what Stephen expected to be in the will;
(2)Stephen said that, at a meeting around Easter 2011, between Audrey, Kathy, Keilo, Scott and Stephen, Audrey started the meeting by saying we need to sort out the will and during that meeting Stephen said 'I get the farm'; and
(3)Stephen gave evidence that he believed Audrey had told Keilo and Scott about her promise to Stephen and Kathy that Stephen would inherit the farm if Stephen and Kathy moved to the farm and took over management of the farm[213] - if Stephen had this belief, then it does not make any sense that he would not talk about the promise in the presence of Audrey and Keilo on later occasions when the issue of the inheritance of the farm was discussed.
[213] ts 374.
I find that, based on Stephen's own evidence, Audrey was seeking to involve both Stephen and Keilo in discussions about her will in the presence of each other. If Audrey had made the promise and asked Stephen not to mention it to Keilo, I find it implausible that Audrey would have instigated these discussions with both Stephen and Keilo present.
Fifthly, add to this the following evidence which, in my view, makes it more likely than not that Audrey, a 'woman of her word' on Stephen's evidence, was seeking to divide her assets equally between Keilo and Stephen, as opposed to giving effect to an alleged promise she made to Stephen that he would inherit the farm:
(a)exhibit 46 - Sandra Knight's letter dated 9 February 2009 in which Sandra Knight records concerns Leslie and Audrey had expressed to her about equally dividing their estate between Keilo and Stephen;
(b)exhibit 73 - a client questionnaire dated 21 January 2011 prepared by Jeff Glance which records:
Stephen provides labour for management of property and is unpaid. Audrey wants to compensate Stephen via her will by the attached annexure A.
Annexure A: Renumeration to Stephen for unpaid work on farm 'Wanigela'
Annexure B: Bequest to Keilor (sic) Balance of estate 50/50 to Stephen and Keilor (sic) with option for Stephen to 'buy' Keilor's (sic) share of the farm.
A further handwritten document entitled Annexure A was attached to the questionnaire:
(c)exhibit 76 - the Jeff Glance Will, which I find was executed by Audrey and which does not reflect the alleged promise.
Sixthly, in correspondence from Stephen to Keilo in June and July 2018, after Audrey had died, Stephen refers to the fact that he and Keilo have previously reached a 'stalemate' many times regarding the inheritance of the farm and that 'many options' have been discussed. Stephen still does not mention the promise, despite the fact that Audrey has died and he is now in a dispute with Keilo about the division of Audrey's assets. If the promise had been made by Audrey at the May 2008 Meeting, it is inconceivable that Stephen would not mention it to Keilo at this point in time.
Finally, I have left the most compelling evidence until last. Not only is there insufficient evidence to establish that, on the balance of probabilities, the promise was made, there is overwhelming evidence given by Stephen himself which I find supports the contention that the promise was not made.
That evidence is exhibit 7 - a note written by Stephen at some time after the promise is alleged to have been made. This note refers to an equal division of Audrey's assets between Stephen and Keilo, a value of the farm 'inclusive' of Stephen and Kathy's inputs and to 'Keilo's share … 200,000 Cheque (Steve)'. In my view, the last of these references is the most telling - it is entirely inconsistent with the alleged promise. I find that Audrey and Stephen were discussing how Stephen could retain the farm and still achieve an equitable division of Audrey's estate between them. An equal division required a payment, based on the notes that Stephen himself wrote, from Stephen to Keilo in the amount of $200,000.
In summary, I find Stephen and Kathy's evidence that the promise was made by Audrey at the May 2008 Meeting to be inherently implausible and inconsistent with the surrounding facts which I do accept. In find that Stephen and Kathy have not established, on the balance probabilities, that the promise was made. In the absence of this promise being made, Stephen and Kathy's case fails.
I also note, for the sake of completeness, that I find, for the same reasons as outlined above, that Stephen and Kathy have failed to prove that, at the May 2008 Meeting, Audrey asked Stephen whether he wanted the farm and that Stephen said he wanted the farm such as to create a reasonable expectation that Stephen would inherit the farm upon Audrey's death.
Conclusion and final orders
Stephen and Kathy have failed to prove, on the balance of probabilities, that Audrey promised them, at the May 2008 Meeting, that if Stephen and Kathy moved to the farm, Stephen would receive the farm when she died. Stephen and Kathy's case fails and their claim is dismissed.
I will hear the parties as to final orders and costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RP
Associate to the Honourable Justice Whitby
17 JUNE 2024
Wise v Wise [2024] WASC 217
Wise v Keilo Jane Wise as executrix of the estate of Audrey Vera Wise [2024] WASC 217 (S)
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