Worden v Worden - [2004] SASC 350

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
WORDEN v WORDEN AND ORS
Judgment of The Honourable Justice Perry
10 November 2004
WILLS, PROBATE AND LETTERS OF ADMINISTRATION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS
CONSTRUCTION OF OPTION TO PURCHASE REAL ESTATE GIVEN IN A WILL
The plaintiff, one of the residuary beneficiaries of the estate of the testator, sought a declaration that an option to purchase the testator's real property made in favour of another beneficiary had been repudiated by that beneficiary, who had declined the trustee's offer of the property but then sought to retract, and accept it - held that in the circumstances, once declined, the offer could not then be accepted and the option to purchase could not be revived - declaration accordingly.
O'Neill v O'Connell and Anor [1945] 72 CLR 101; In re Cranstoun, deceased; Gibbs v Home of Rest for Horses [1949] 1 Ch D 523, considered.

WORDEN v WORDEN AND ORS
[2004] SASC 350
Civil

PERRY J. The plaintiff, Kevin Lloyd Worden (“Kevin Worden”), is one of three sons of Jack Worden deceased (“the deceased”), late of Wasleys, who died on 7 November 1994.
In his last will, the deceased directed his trustees to offer to another of his sons, John Elliott Worden, an option to purchase the whole of the real property forming part of the deceased’s estate, being farm land (“the land”) comprised in two parcels, one at Wasleys and the other at Reeves Plains, on terms which I will explain in due course.
In the proceedings, Kevin Worden claims a declaration that his brother John Worden has “repudiated” the option to purchase. He seeks consequential orders that the administrators of the deceased’s estate sell the land by public auction and distribute the proceeds on the footing that they form part of the residuary estate of the deceased.
John Worden disputes the entitlement of Kevin Worden to a declaration in those terms, and maintains that he has validly exercised the option.
The third son, Robert Worden, died on 5 December 2002. The administrators of his estate, Tower Trust Ltd (previously Executor Trustee Australia Ltd) (“Tower Trust”) and his widow, Alice Margaret Worden, are together named as the second defendant to the proceedings. Tower Trust did not appear at the trial, but intimated that it would abide the outcome of the action.
Alice Worden did not appear at the trial. In an affidavit received in evidence she said that she supported the plaintiff Kevin Worden’s claim.
In earlier proceedings instituted in this Court by the executors of the estate of Robert Worden,[1] the plaintiffs claimed that the clause of the will providing for the option to purchase now in question, was void for uncertainty. Doyle CJ dismissed the claim, holding that the clause was not void for uncertainty.[2]
[1] Tower Trust Ltd and Worden v Worden and Worden, action No SCCIV-04-392.
[2] Judgment No [2004] SASC 159, 8 June 2004.
At the trial both Kevin and John Worden gave evidence.
Family circumstances meant that both brothers had limited educational opportunities, and took up work, largely manual rural work, from an early age. Both had limited powers of expression, and it was clear that neither of them had a complete understanding of the operation of the provisions of the will, or of other relevant documentation. They relied substantially on the advice of their lawyers and others.
Affidavits from both of them were tendered as part of their evidence in chief. I treat the detail of the affidavits with a good deal of caution, as I think that both were very likely led to agree with matters of expression and concepts which were foreign to their own experience. In making that observation, I am in no way critical of their advisers. That circumstance is simply a product of the fact that both them were drawn into the need to participate in legal proceedings, the formalities of which were unfamiliar to them.
Likewise, I have been circumspect in taking their oral evidence literally, as both of them were easily confused by questions.
I accept both as honest witnesses, but I reach the view that the evidence of Kevin Worden is more reliable and to be preferred in those areas where there was conflict between them.
I gained the impression that Kevin Worden exhibited a stronger personality, and that John Worden was easily influenced by or prepared to yield to Kevin Worden’s wishes.
Mr Bills, a solicitor practising at Gawler in the firm known as Rudall & Rudall, was the solicitor for the estate, and participated in various discussions between the parties relevant to the issues raised in the proceedings. He gave evidence and produced his file, which contained notes of some of the meetings and other dealings in which he participated. I accept his evidence, although on one issue, namely, the circumstances in which a letter dated 10 May 2000, to which I refer in due course, was written, I find that he must have been mistaken.
There were no other witnesses called.
The narrative account which I give as to the facts may be taken as my factual findings based on the evidence.
The Provisions of the Will
The relevant provisions of the last will of the deceased, being a will executed on 22 April 1988, are as follows:
“4.     I GIVE DEVISE AND BEQUEATH         unto my trustees the whole of my estate upon the following trusts
(1)    AS REGARDS any motor car I may own at the date of my decease upon trust for my wife for her own use and benefit absolutely
(2)    AS REGARDS my real estate to allow my wife to have the use and occupation thereof or to receive the rents and profits therefrom during her lifetime and from and after her decease upon trust subject to clause 7 hereof for such of my sons as shall be living at the date of my decease and if more than one in equal shares as tenants in common PROVIDED THAT during her lifetime my wife shall pay the rates taxes and any other lawful assessments or impositions raised or charged in respect of my said real estate and properly chargeable against income and shall keep my said real estate including all improvements thereon in good condition and repair and shall repay to my trustees premiums of insurance on policies which my trustees may effect and keep on foot over the said improvements from time to time
(3)    AS REGARDS the rest and residue of my estate upon trust to sell call in and convert the same into money and after the payment therefrom of all my just debts funeral and testamentary expenses TO STAND POSSESSED of the balance (hereinafter called ‘my residuary estate’) to invest the same in manner authorised by law and to pay the income arising from such investment to my wife during her lifetime and from and after her decease TO HOLD such investment for such of my sons as shall survive me and if more than one in equal shares as tenants in common
……
7.I DIRECT my trustees to offer the whole of the real estate owned by me at my death to my said son JOHN for purchase of the same by him at a price which shall be unanimously agreed between him and the other trustees or failing agreement at a price fixed by a licensed valuer appointed by agreement between him and the other trustees or failing agreement as to such an appointment by a licensed valuer appointed by the President for the time being of the Real Estate Institute of South Australia at the request of any one of my trustees such offer to be made in writing within twelve months after the date of my death or the date of death of my wife whichever shall last occur and the cost of any such valuation to be a charge against my estate and I FURTHER DIRECT that my said son JOHN subject to him complying with the directions contained in clause 8 hereof shall have five years after the date of my death or the date of death of my wife whichever shall last occur in which to accept such offer and I DECLARE that such option of purchase is personal to my said son JOHN to be exercised by him during his lifetime and not by any person after his death
8.I DIRECT that during the whole of the period from the date of my death or the date of death of my wife whichever shall last occur until the completion of the purchase of my real estate or the date my said son JOHN shall notify my other trustees that he declines the offer so to purchase it (as the case may be) he shall sharefarm my real estate and shall pay to my said sons ROBERT and KEVIN in equal shares one half of the net proceeds from such sharefarming after deducting council rates water rates insurance premiums repairs and all other recurring expenses whatsoever for and associated with the farming and maintenance of my real estate and a sum equal to depreciation at current income tax allowable rates on his plant necessarily used to carry out such sharefarming and I FURTHER DIRECT that an account shall be taken for the purposes hereof and the payment to ROBERT and KEVIN made upon the receipt of harvest proceeds each year
9.…..”
In his will, the deceased appointed his three sons to be the executors and trustees of his estate. Probate was granted in their favour by this Court on 12 January 1995.
On 14 May 1999, the deceased’s widow, Blanche Winifred Worden, died.
From the practical point of view, in the events which happened, the way in which clauses 7 and 8 of the will were to operate may be summarised as follows:
·The obligation cast on the trustees to offer the real estate to John Worden arose on the death of the deceased’s widow, who until then had a life interest in the land.
·Given that she died on 14 May 1999, it was then incumbent upon the plaintiff Kevin Worden and his brother Robert Worden, to see whether a price for the purchase of the land by John Worden could be agreed by all three. Failing that, the price was to be fixed by a licensed valuer appointed by all three trustees, or failing agreement between them as to the valuer, the appointment was to be made by the president for the time being of the Real Estate Institute of South Australia.
·An offer in writing by the other two trustees to John Worden, to sell the land to him at the price fixed in that way, was to be made within 12 months of 14 May 1999.
·Subject to his compliance with the directions contained in clause 8 of the will, John Worden had five years from that date within which to accept the offer.
·Pursuant to clause 8, for the whole of the period from 14 May 1999 to the date upon which, if the offer was accepted, the purchase of the real estate by John Worden was completed, or if declined, the date upon which he declined the offer, John Worden was to sharefarm the land and pay to his two brothers in equal shares one half of the net proceeds derived from the sharefarming, after deducting the expenses and allowing for the depreciation referred to in clause 8.
Dealings between the parties after 14 May 1999
On 3 June 1999, Kevin Worden rang Mr Bills to advise him of the death of his mother. Kevin Worden explained to Mr Bills that his brother John wanted to buy the land for $650 per acre, but said that in his view it was worth more than that. Mr Bills suggested that the three brothers come in to see him, after Robert Worden had finished seeding.
In accordance with that suggestion, all three executors attended on Mr Bills at his office on 9 July 1999. John Worden attended with his solicitor, Ian Charman.
There was a discussion, during the course of which Mr Bills referred to the will, more particularly the effect of clauses 7 and 8.
It was clear that the parties could not agree on a price. It was agreed by all three executors that a valuation of the land would be carried out by a local valuer, Wayne Clarke, who was to be instructed for that purpose by Kevin Worden. There was then to be an offer in writing made to John Worden on the basis of the valuation.
At that stage the parties were proceeding in accordance with the deceased’s directions, more particularly those which found expression in clause 7 of the will.
But there was also discussion at the meeting as to a possible variation of the provisions in clause 8 of the will dealing with the basis upon which John Worden was to continue to farm the land, and as to his use of plant on the farm. That this was so was confirmed in a letter dated 15 July 1999 from Mr Charman, John Worden’s solicitor, to Mr Robert Worden. The letter reads in part:
“As you are aware I act for your brother John in relation to his interests arising out of your late father’s estate.
I confirm that at our recent meeting at the offices of Rudall & Rudall with Mr Tony Bills, the solicitor handling the Estate, an agreement was reached whereby John would purchase from the Estate the seed and super bins and the Bedford truck for the sum of $5,000 and the front-end loader for $3,500. He will pay the sum of $8,500 into the Estate’s account to reflect payment in pursuit of this agreement.
Pursuant to your late father’s will, and in particular pursuant to clause 8 of the Will, John has the right to sharefarm the property for up to five years from the date of your mother’s death. …” (emphasis added)
In the remainder of the letter Mr Charman sets out a proposal which, if accepted, would mean that in lieu of John Worden claiming depreciation on his plant and equipment used in carrying out the sharefarming under the provisions of the will, the proceeds of the sharefarming would be paid into the estate, from which, after actual expenses were paid by the estate, John Worden would share the proceeds equally with his two brothers.
On his receipt of the letter, Robert Worden consulted a rural counsellor named Rick Henke. Mr Henke wrote to Mr Charman by a letter of 3 August 1999. Part of Mr Henke’s letter is as follows:
“I am assisting Mr Robert Warden (sic) in his consideration of his options under the terms of the will of the late Jack Warden.
To that extent we acknowledge your office’s letter of 15^th July 1999.
In my discussions Mr Robert Warden a number of guiding principals underly (sic) all communications from this point on:-
1.Mr Robert Warden wishes to minimise any family arguments, disputes and potential for conflict.
2.Any arrangement put in place needs to be commercially realistic but allowing for the following of their late father’s wishes.
3.Mr Robert Warden wishes to minimise the legal costs to ensure that the potential benefits to all three brothers is not eroded by legal fees.
That said, we have discussed the options raised in your letter.
Mr Robert Warden’s first preference would be for the property to be sold with the net proceeds divided between the three beneficiaries and the estate wound up.
The reasoning behind this is simple.
On the assumption that the property is valued at $1000 / acre and is some 641 acres less 2 acres in Allotment 150 Hundred of Grace, which is John’s house block - a total of some $639,000.
Current returns to the estate is some $25,000 per annum.
This equates to only some 3.91%p.a. - a return that can be comfortably achieved with no risk (such as weather) and with no arguments.
Even looking at the situation from John’s perspective, the return to him of our estimate of $25,000 to $30,000 equates to a return on investment of only 11% p.a. ($25,000 divided ($639,000 divided by 3) times by 100/1) prior to allowing for wages. If John’s time and efforts are factored in, a net return of 3-4% is once again achieved. Still with significant risk.
Those arguments put, if John wishes to manage the property for the next five years we would make the following proposition.
®That all the beneficiaries agree to alter the terms of the will to allow the following:-
Instead of a sharefarm arrangement that the estate lease the property to John at an agreed value (say between $20,000 and $25,000 p.a.). These proceeds would then be paid into the estate and then distributed net of the estate’s costs (rates and taxes, insurance on buildings, fence, maintenance, legal and accounting costs) on an annual basis to the three beneficiaries.
The lease would dictate the terms and conditions (such as maximum cropping levels, minimum fertiliser levels, weed control etc) to ensure that the property is not run down over the next five years. …”
In the letter, Mr Henke proceeds to set out various advantages which he suggests would accrue to the three brothers if his proposal was to be accepted. He concludes the letter with the following:
“Hopefully this gives an alternative view of how we may handle the period of the next five years until either John purchases the property or if it is sold on the open market. …” (emphasis added)
The next development was the preparation of a valuation by Wayne Clarke.
Wayne Clarke attended at the properties, in the presence of all three brothers, following which he prepared a written valuation dated 18 August 1999. In his valuation he dealt separately with the Wasleys property and the property of Reeves Plains.
He valued Wasleys at $356,600 and Reeves Plains at $207,600, a total of $564,200, which he rounded off as a total of $564,000.
I accept the evidence of Kevin Worden that he collected the written valuation from Mr Clarke. He posted one copy to Robert Worden and hand-delivered the other to John Worden at the latter’s house.
Either on the occasion when he delivered the copy of the valuation to John Worden or subsequently, John Worden told Kevin Worden that the valuation was “too high”.
By letter of 31 August 1999, Mr Charman wrote again to Robert Worden. In the letter he acknowledged having received the letter from the rural counsellor, Mr Henke. Mr Charman’s letter continues as follows:
“We have sought instructions from our client your brother, John.
With the greatest of respect to Mr Henke, the letter [from Mr Henke] makes several proposals which are totally unrealistic.
First, your late father’s will cannot be ‘changed’. Only your late father could have done that before his death.
We can agree to a Deed of Family Arrangement, but why should our client agree to such a thing on the terms as outlined by Mr Henke, on your behalf? The proposal does not accommodate the reality of the fact that our client has four years in which to accept the recently obtained valuation of Wayne Clarke and complete his purchase of the property.
It fails to take into account the income to be derived by our client from the sharefarming during that period of time in which he has to consider the option to purchase.
The only way such a proposal could be countenanced by our client, would be in terms where there would be financial compensation for our client for the lost income from the sharefarming. To fail to take that account is unrealistic and is not attractive to our client.
Our client is considering the valuation at present and we anticipate that we may well be in further contact with you in the near future, but at this point in time your offer is rejected and our client’s previous offer remains open.
If we cannot reach some agreement, then clearly the terms of the Will would dictate not only our client’s right to sharefarm, but the terms of the sharefarming during the period of time as set out in the Will.
We suggest that you obtain competent legal advice with respect to your position.
We may be in further contact with you in the near future.” (emphasis added)
The next development was a further conference between the parties which took place on 21 September 1999 at Mr Bills office. The three brothers attended, together with Mr Charman.
I am satisfied that at that meeting, John Worden stated that he thought the valuation to be too high and that he could not afford to buy the land at that price.

A discussion ensued, at which John Worden attempted to justify his assertion that the valuation was too high by reference to the average income which had been derived over the past four years from the Wasleys and Reeves Plains parcels of land.
In his note of his attendance upon them of that day, Mr Bills recorded that John Worden had asserted that the average income over that period had been $20,617. His note continued:
“4.John offers $700 per acres (including improvements) for Wasleys. Kevin indicates he would accept but Bob wants to think further. The offer is subject to Reeves Plains selling for + $1,000 per acre.
5.Bob - would John pay $300,000 including wheat silo … seed?”
By reference to that note and the evidence of both Kevin and John Worden, I am satisfied that John Worden followed up his refusal to buy the land at the valuation of $564,000 with an offer to buy the Wasleys parcel of land for $700 per acre, on the footing that the Reeves Plains parcel of land would be put on the open market for sale at no less than $1,000 per acre.
Mr Bills said in evidence that his recollection was that Kevin Worden was happy to go along with John Worden’s suggestion in that respect, but that Robert Worden wanted some time to consider. This is consistent with the evidence of Kevin and John Worden. I accept that to have been the case.
According to Mr Bills, the meeting adjourned on the understanding that Robert Worden would be seeing his accountant for some further advice, and that there would be another meeting after that.
A further appointment was made for them all to meet with Mr Bills on Friday 1 October 1999.
The next day, that is, 22 September 1999, Lyn Worden, John Worden’s wife, rang Mr Bills. His note of her call reads:
“John has asked her to call to say he will not be buying but wishes to continue with the lease.
He will advise the others and still come in on Friday 1.10.99.”
My findings as to what transpired at the meeting of 21 September 1999 are confirmed by a letter from Mr Charman to his client John Worden dated 23 September 1999. The letter reads as follows:
“I refer to our telephone conversation of 21/9/99.
I confirm that you have had your meeting with Tony Bills and your two brothers.
The current proposal to be considered by your brothers is that Reeves Plain be sold for in excess of $1,000 per acre, and that you retain the Wasleys property, paying the Estate the sum of $300,000. In addition, a silo is to be transferred to your ownership from the Estate.
There is a further meeting to be held at Rudall & Rudall next Friday 1/10/99 and you will advise me at that stage whether or not your brother Bob will agree to the offer. Your brother Kevin has already accepted the offer.
I look forward to hearing from you as to the outcome of that meeting.”
The further meeting took place as arranged on 1 October 1999. The three brothers attended at Mr Bills’ office. Mr Bills’ evidence as to what transpired is in part:
“… John had indicated then that he was not prepared to purchase the land now but he did say that he was not saying that he didn’t want to purchase at all. Then discussion diverted to terms on which the arrangement could continue, either on the basis of a lease or a sharefarming arrangement, and there was discussion on the merits of each. … I made a note … of some of the relevant prices that were broken down on each basis of continuing operating the land, and it came down ultimately to a new form of sharefarming agreement. … They all went away to consider what would happen.”
Tentative arrangements were made for a further meeting on 8 October 1999, but Kevin Worden rang Mr Rudall on 6 October 1999 to cancel that arrangement, on the footing that Robert Worden was having discussions with his rural counsellor.
Kevin Worden called Mr Bills again on 14 October1999 to advise him, to quote Mr Bills’ evidence:
“… that the sharefarming arrangement as indicated in the will would proceed with the changes that had been discussed at the previous meeting and as recommended by Ian Charman.”
Mr Bills then proceeded to draw up two documents. One was a deed of arrangement between the three executors on the one hand and John Worden and his wife Lynette Worden, described in the deed of arrangement as “the sharefarmers”, on the other.
The other document was described as a sharefarming agreement in which John and Lynette Worden agreed to sharefarm the land for five years from 14 May 1999 for a period of five years or such other period as might be agreed between the parties on the agreed terms.
The deed of arrangement provided that instead of the provisions contained in clause 8 of the will insofar as they related to the arrangements for John Worden to sharefarm the land, a substituted set of provisions, the detail of which was set out in the deed of arrangement, would apply.
Paragraph 2 of the deed of arrangement reads:
“2.In all other respects the provisions of the will are confirmed.”
The deed of arrangement and the sharefarming agreement were both executed by the parties on 14 January 2000.
Mr Bills’ evidence was that there was no further communication between him and any of the parties, until he was advised of Robert Worden’s death late in 2002.
I think he must be mistaken.
Kevin Worden wrote a letter to John Worden dated 10 May 2000 which reads as follows:
“Dear John
In accordance with our late fathers will I am required to advise you before the first anniversary of our late mothers death of the valuation of dad’s real estate. This valuation was undertaken be (sic) a licensed valuator Wayne Clarke which was also in accordance with dad’s will. The total value of the two properties amounted to $564211.
Hoping this information is satisfactory.”
The letter was typed out. It is expressed in terms which do not accord with my impression of how Kevin Worden would have expressed himself if he had prepared the letter, unassisted.
When asked to explain how the letter came to be written, Kevin Worden’s evidence was:
“John and me had to go into Bills’ offices to do something, some business for the estate. In the will it said there had to be a letter written giving him the valuation and offer him that for sale within twelve months of mum’s death, which I think we’d already done. I didn’t know how to write a letter and John said he didn’t know how to write a letter, so I asked Bills to do it and Bills did it in his office and I signed one. This is a copy of the one I signed, handed that to John in his kitchen and he had the other copy. He had a copy of one himself, as Bills did two of them. … It was about 10 May according to this, because he put a date on it and I wouldn’t type a letter because I haven’t got a typewriter.
Q.… Who did type it up.
A.Tony Bills or one of his girls. .. I was in his office … I seen him write the letter and he took it out and gave it to one of his girls and they typed it. They typed up two copies of it.” (emphasis added)
I accept that evidence.
The terms of the letter, and that it was written at all, is a somewhat puzzling aspect of the matter.
In the first place, Kevin Worden was adamant in his evidence that the offer to sell the farm to John Worden in accordance with the provisions of the will had been made in 1999, after the valuation was prepared, and culminated in John Worden’s refusal of the offer at the meeting at Mr Bills’ office which took place on 21 September 1999. His evidence was that, notwithstanding John Worden’s refusal of the offer, Kevin Worden and his brother Robert agreed to John continuing to sharefarm the land for five years, as it would bring them in some income, and they were in no particular hurry to sell.
As I have explained, both Kevin and John Worden had limited education. Against that background and having regard to the evidence, I would construe the letter of 10 May 2000 as the expression of an imperfect understanding by both Kevin and John Worden of the legalities of the situation. The letter was no more than a formality which they thought it necessary to perform.
What is important for present purposes is that I am unable to construe the letter as a document which is inconsistent with the other evidence in the case which, as will be seen, in my view, should lead to the conclusion that there was an earlier offer of the land to John Worden at the valuation, and that that offer was rejected.
At all events, after the letter of 10 May 2000, it does not appear that anything more was done about the matter until after Robert Worden’s death on 5 December 2002.
Mr Bills’ evidence was that he had a discussion with John Worden in 2003, probably early 2003, after he had been advised of Robert Worden’s death. He said that John Worden inquired as to whether or not Robert Worden’s widow, Margaret Worden, succeeded to Robert Worden’s entitlements under the will.
Mr Bills also gave evidence that John Worden inquired whether the option to buy was still open. Mr Bills’ evidence was:
“I felt disinclined to advise in relation to that situation. … He [John Worden] indicated that he was considering buying a part of the land, using the valuation which Wayne Clarke had given on those figures. He did not indicate what part he had in mind, but he asked Mr Bills whether the option could effectively be split and that he might take one part and not another.” (emphasis added)
Kevin Worden’s evidence was that after his brother Robert died, he had some discussions with John Worden about the matter. Kevin Worden told John Worden that he wanted to put the land in the hands of Elders for sale, and that John had responded by saying that he wanted to have another firm, Dalgetys, involved as well. That discussion did not lead any further.
On 30 March 2003, Kevin Worden was at a clearing sale where he met John Worden. He asked him what his intentions were about the farm. His evidence, which I accept, was that John Worden said that he wanted to keep 200 acres himself and that he understood that Robert Worden’s widow, Margaret, wanted to keep 200 as well. Kevin Worden said that he was not agreeable to that and told John Worden that “it wasn’t any bloody good”. Kevin Worden said that he then consulted his solicitor, Mr Rod Jones of Tindall Gask.
Kevin Worden’s evidence was that towards the end of April at another sale, at Truro, he met John Worden who said that he wanted to “use his option”, to which Kevin Worden responded that he could not do so and that as far as he was concerned he had “repudiated” it.
John Worden consulted other solicitors. I think it likely that he did so as a result of the fact that the discussions which were taking place between him and Kevin Worden were not leading anywhere.
Boltons Lawyers wrote to Kevin Worden by letter of 6 May 2003 in the following terms:
“We advise that we are instructed by Mr John Worden in regard to estate matters. We request that all future correspondence be directed to our Gawler office.
The late Jack Worden died on 7 November 1994 leaving a Will dated 22 April 1988 (the “will”).
The trustees of the deceased estate were directed, by clause 7 of the will to offer the whole of the real estate owned by the deceased to our client, Mr John Worden, for purchase. By the terms of clause 7 the purchase price was to be the price either agreed between the trustees or failing agreement the price fixed by a licensed valuer. The offer to purchase was to be made within twelve months of the date of death of the deceased or the date of death of the surviving spouse of the deceased; whichever was the last to occur.
Further, pursuant to clause 7 Mr John Worden has a period of five years from the death of the survivor of Mr Jack Worden and Mrs Blanche Worden within which to accept the offer.
The surviving spouse of the deceased, Blanche Winifred Worden died on 5 May 1999.
An independent valuation of the real property was obtained and an offer in writing made to Mr John Worden.
Further, pursuant to clause 8 of the will the property of the deceased is presently managed under a sharefarming agreement. The sharefarming agreement has been formalised by way of deed dated 14 January 2000. The term of the deed is a period of five years.
The (sic) within which our client can exercise his rights arising under the will expires on 5 May 2004.
The market valuation obtained pursuant to the terms of the will fixes the price of the whole of the real estate at $564,000.00.
We advise that our client wishes to accept the offer to purchase the whole of the real property at the stated price. Further our client seeks to finalise the purchase of the real estate by February 2004.
We look forward to receiving your response.”
Before Kevin Worden had a chance to respond, two days later, by letter dated 8 May 2003, Boltons wrote another letter to Kevin Worden indicating that John Worden had decided not to proceed with the purchase of the property. Their letter reads:
“We refer to our correspondence dated 6 May 2003.
We advise that for health reasons our client Mr John Worden has decided not to proceed with the purchase of the estate property. He therefore withdraws his acceptance of the offer to purchase contained in correspondence dated 6 May 2003 from this office.
In our view, given our client’s declining the offer to purchase the said real estate, the property should be offered for sale by public auction. It is anticipated that the property would not be listed for sale until toward the end of 2003, in say November. This would require listing in September with an auction say in November.
We note that there is a subdivision in process whereby Mr John Worden will purchase approximately 1.5 hectares from the Wasley’s property which adjoins Mr John Worden’s personal real estate. We note that this process should be allowed to be finalised prior to the listing of the remaining property for sale by public auction.
It will be necessary for the respective executors of the estate to agree the listing date and reserve sale price.
We look forward to your response in due course.”
Before Kevin Worden could respond, there was yet another change of heart by John Worden. By a further letter dated 12 May 2003, Boltons wrote:
“We refer to our previous correspondence in this matter.
Notwithstanding that our client has previously exercised his rights pursuant to the will of the deceased, we advise that the letters dated 6 May 2003 and 8 May 2003 be disregarded.
We advise that our client accepts the offer to purchase the estate pursuant to clause 7 of the will. Further, we confirm that our client relies on the valuation dated 18 August 1999.
We look forward to your response.”
Duncan Basheer Hannon wrote to Boltons in reply by letter of 13 May 2003:
“We are instructed by Mr Kevin Worden and have to hand your correspondence addressed to our client dated 6 May 2003 and 8 May 2003.
We note your client’s offer to repudiate the option to purchase granted to him in the Will, an offer we are instructed was repudiated by your client in September 1999 in any event.
While we have canvassed at length all issues raised in your earlier correspondence, it would now appear unnecessary to address those issues.
Disposal of Real Estate
We understand that the deceased’s real estate consists of several titles, being Volumes 5260 Folios 2, 77, 78 and 79, Volume 5259 Folio 932 and Volume 5319 Folio 774.
Subject to the consent of the executor for the deceased estate of Robert James Worden, our client consents to the offering of all of the above titles at public auction in one allotment.
To that end, our client suggests Elders Real Estate Roseworthy be appointed as the selling agents with a view to the commencement of marketing the property on 1 September 2003 and an auction date of 6 November 2003. These dates will allow your client sufficient time to finish harvesting by say December 2003, with a view to settling on a sale in approximately January or February 2004.
We would expect Elders Real Estate to be able to advise all executors of an appropriate reserve price.
Sub-division of Portion of Wasleys
Subject to appropriate consideration being paid by your client to the estate, our client has consented to the sub-division of a portion of Wasleys. We understand that Barossa Conveyancers and a Nuriootpa based surveyor are presently attending to the deposit of such a plan of division at the Lands Titles Office.
We would expect in due course Barossa Conveyancers to be instructed to prepare a Memorandum of Transfer conveying the relevant portion to your client for the appropriate consideration. If your client has not already obtained a valuation for that portion, it may be appropriate that Elders Real Estate Roseworthy be appointed to value same as part of their general assessment of real estate.
In terms of payment by our client, we are instructed that there be an adjustment between the residuary estate beneficiaries at settlement of the estate property generally.
Residuary Estate
In circumstances where your client has repudiated the option to purchase, it is our view that the Will does not provide for the destination of the real estate property. It is our reading of the Will that the real estate does not fall into the residuary estate and accordingly there is a partial intestacy. Therefore, pursuant to the provisions of the Administration and Probate Act 1919, the net proceeds of the sale of the real estate is to be divided amongst the children of the deceased, being our client, your client and the estate of Robert James Worden deceased.
Please take your client’s instructions concerning the matters herein and advise accordingly.”
The letter of 13 May 2003 from Duncan Basheer Hannon crossed the letter of 12 May 2003 from Boltons, which was referred to Duncan Basheer Hannon after they had posted the letter of 13 May 2003.
They corresponded again with Boltons by facsimile transmission dated 15 May 2003:
“We refer to our correspondence dated 13 May 2003 and acknowledge receipt of your letter dated 12 May 2003 received by our client on 14 May 2003.
Your client’s repudiation of the alleged option under cover of your letter dated 8 May 2003 has been accepted by our client, and subject to confirmation, understand that is also the view of Tower Trust.
Further, your client has repudiated the option as long ago as September 1999 following a written invitation from the estate. We are instructed that this was conveyed by your client to Mr Tony Bills of Rudall & Rudall and is recorded in his account to the executors of the estate dated 20 April 2003. We forward a copy of page 1 of that account and draw your attention to the notes with respect to September 1999 wherein it is noted a change of mind by your client’s wife with respect to the sale. Hence the sharefarming agreement.
We invite your client to reconsider his position and request that you provide your client’s instructions with respect to the matters raised in our letter of 13 May 2003.”
There was no further correspondence between the parties or their solicitors relevant to the issues now falling for determination.
It will be seen from my account of the correspondence and other dealings between the parties that Kevin Worden has consistently maintained that as from the meeting of 21 September 1999 at the office of Mr Bills, John Worden repudiated the option to purchase and that the land would have to be sold on the open market. On the other hand, John Worden’s position fluctuated markedly between accepting that position, expressly declining to proceed with the purchase, maintaining that the option to purchase was still open, and eventually asserting that he had accepted it.
The difference between the parties expressed in money terms is substantial.
If John Worden’s contentions are correct, he is entitled to buy the land on the basis that its value is $564,000.
If Kevin Worden’s contentions are correct, the land stands to be sold and is likely to fetch on sale an amount which is almost double that figure. A valuation by another valuer, Lindsay Wapper dated 4 December 2003, which was tendered in evidence, valued the land at $923,600.
Conclusions

Mr Costello for the plaintiff put his client’s case forward on the basis that in the circumstances, the delivery of Mr Clarke’s valuation to John Worden in August 1999 amounted to an offer to sell the land to him at the amount of the valuation, and that the offer was rejected at the meeting at Mr Bills’ office on 21 September 1999. He further contended that if it was not rejected then, it was rejected by the letter from Boltons dated 8 May 2003.
In the first place, I do not think that it is right to speak in terms of “repudiation” of the option, which is the language used in the statement of orders sought, in some of the correspondence, and in some of the submissions put to me by counsel.
It is not a question of repudiation of the option to purchase. Rather, it is a question as to whether an offer was made in accordance with the provisions of the will, and whether it has been declined.
Essentially, the case gives rise to two issues:
(a)Did the trustees make an offer in writing to John within twelve months after the death of Blanche Worden, as required by clause 7 of the will?
(b)If so, has John Worden declined the offer within the meaning of clause 8 of the will?
I will address each of those issues in turn.
Was an offer made complying with clause 7 of the will?
It must be accepted that there was no offer made which complied literally, in the sense that there is no document which answers to the description of an “offer … made in writing” to John Worden to purchase the land at a price fixed by the licensed valuer, Wayne Clarke.
However, Mr Clarke’s written valuation was delivered to John Worden, and discussions then took place between the parties as to whether he was prepared to purchase the land at the amount of the valuation. In those circumstances, it would be pedantic to hold that there had been a failure to comply with this aspect of the direction made by the deceased.
It was always open to the parties to waive strict compliance, at least as to the manner in which the offer was to be conveyed. In my view, by their conduct the parties must be taken to have waived the requirement in the sense that they treated the delivery of the written valuation as amounting to the offer in writing.
That Kevin and John Worden later thought that in order to comply with the directions in the will a further communication was necessary, as a result of which the letter of 10 May 2000 was written by Kevin Worden to John Worden and delivered to the latter, does not deflect me from that conclusion. The letter was not expressed in terms of an offer, and the offer had effectively been made much earlier, in the manner in which I have indicated.
Has John Worden declined the offer within the meaning of clause 8 of the will?
This is the critical question in the case.
I have already indicated the position of the parties as to this issue.
It might be thought that the entry into the sharefarming agreement on the footing that it would operate for a period of five years or such other period as might be agreed between the parties, commencing on 14 May 1999, lends support for the view that at the time the sharefarming agreement was entered into, the parties must be taken to have thought that the offer was still open.
Furthermore, as I pointed out, the deed of arrangement entered into on the same date, after referring to the variation of the sharefarming arrangements, states:
“In all other respects the provisions of the will are confirmed.”
But to say that the provisions of the will are otherwise confirmed does not mean that one must necessarily conclude that the offer to purchase was still open. The offer might well have been declined, but in lieu of the provision in clause 8 the parties might nonetheless agree that John Worden would continue to sharefarm the land for the period of five years. Certainly that was how Kevin Worden viewed the matter. His evidence as to the effect of the discussions which took place at Mr Bills’ office on 21 September 1999 was, to quote his evidence:
“He [John Worden] couldn’t get the finance and he couldn’t afford to buy it so then it left it up to sharefarming for five years which we were quite agreeable to because it was going to bring us in a bit of income.”
Later he was asked, in examination in chief:
“Q.As far as sharefarming is concerned are you saying ‘He’s refused it, that’s it’ but you were content for him to sharefarm, were you.
A.Yes.”
After all, if the offer for him to purchase the land at valuation had been declined, he could not remain in possession for any further period of time sharefarming the land without an agreement between the parties. In this case, such an agreement was reached, formalised by the deed of arrangement.
By agreement between the parties as recorded in the deed of arrangement, the consequences of John Worden declining the offer were postponed for a period. But there is no reason to construe the deed of arrangement and subsequent dealings between the parties as having any further consequence than that.
In reaching the view which I have expressed I have not overlooked the fact that in the letter of 15 July 1999 from Mr Charman to Robert Worden, in Mr Henke’s letter of 3 August 1999 in reply and in the further letter from Mr Charman to Robert Worden of 31 August 1999, expressions are used indicating a belief that notwithstanding the arrangements as to sharefarming which were being discussed, John Worden had a further four years within which to accept or reject the “offer”.
But in my view, notwithstanding those observations, the position of the parties was defined for present purposes by the terms of the discussion which took place subsequently, on 21 September 1999. At the conference on that day, John Worden made it plain that he was not prepared to purchase the land for the amount of the valuation. The counter offer he made of $700 per acre was confined to the Wasleys land and was put forward on the basis that the Reeves Plains land would be sold off on the open market for $1,000 plus per acre. His counter offer, therefore, departed significantly, apart from the question of price, from the directions contained in the will.
John Worden’s position was made clear when his wife rang Mr Bills on 22 September 1999 to confirm that her husband “will not be buying but wishes to continue with the lease”. The reference to “lease” was either an inaccurate description of the sharefarming arrangement, or a reference to the suggestion which had been made in Mr Henke’s letter of 3 August 1999 to the possibility that the estate lease the property to John Worden instead of the sharefarming arrangement.
I have already dealt with the letter of 10 May 2000, which in my view had no impact on the position which had by then been reached.
When there was a resumption of communications between the parties following the death of Robert Worden, there is no indication that at that stage John Worden was prepared to buy the whole of the land at the valuation.
On the contrary, for example, I accept Mr Bills’ evidence that when he was asked whether the option to buy was still open, John Worden indicated that he was considering buying a part of the land only. He specifically asked Mr Bills whether the option could “effectively be split and that he might take one part and not another”.
In his subsequent discussions with Kevin Worden early in 2003, John Worden was still suggesting that the land be divided in some way, albeit on a different basis.
It is true that when he consulted Boltons, as a result of which they wrote to Kevin Worden by the letter of 6 May 2003, Boltons indicated that their client “wishes to accept the offer to purchase the whole of the real property” at the earlier valuation.
But John Worden very soon afterwards resiled from that position, and in the letter written on his behalf by Boltons dated 8 May 2003, he unequivocally “withdrew” his acceptance of the offer to purchase and declined the offer, accepting that the property should be offered for sale by public auction.
Although there was a further change of heart which found expression in the letter from Boltons of 12 May 2003, in my view, it was then too late to recant.
I should say that I have not overlooked the argument put by counsel for John Worden that his client was entitled to change his mind and revoke his withdrawal of the offer to purchase, provided that no other party concerned had altered their position to their detriment in the meantime. He further contended that Kevin Worden had not altered his position to his detriment during the period between the letters of 8 and 12 May 2003 from Boltons, and was not otherwise prejudiced by his client’s change of heart.
Reference was made during the course of argument to several authorities which were said to bear on the question.
The nature of an option to purchase contained in a will has been discussed in a number of cases. The leading Australian authority on the topic appears to be the decision of the High Court in O’Neill v O’Connell and Anor.[3] In that case the question was whether the acceptance by the appellant of an offer by executors of the estate of the deceased, which they were directed to make, for the purchase by the appellant of a business owned by the deceased at valuation, conflicted with certain national security regulations which prevented the purchase of land or the taking up of an option for the purchase of any land, without the consent in writing of the Treasurer.
[3] [1945] 72 CLR 101.
In the course of his judgment in that case, Dixon J observed:[4]
“The manner in which the option in the present case is expressed makes it plain that it was intended to confer upon the appellant an immediate right, if he should so elect, to become the owner of the land at the fixed price of £6,500. Such a provision imparts to the donee of the option a beneficial right in reference to or an interest in the land. Substantially the same result might be produced by a devise of the land conditional upon the devisee paying the sum named. A not very different result might be produced by a direction to the executors or trustees to propose a contract of sale to the intended donee of the option upon terms and conditions stated in the will or to be settled in some manner indicated by the will.
But in form the disposition now in question stands between a conditional devise and a direction to propose a contract. It gives an immediate, though innominate, beneficial interest, one of the many miscellaneous rights and interests which under the wide power of testamentary disposition allowed by English law a testator may create.
…..
The exercise of a testamentary option by the donee makes absolute his immediate right to the property, except in so far as the will makes payment of the price or the performance of any other obligation laid upon him an essential condition.”
[4] Ibid 119-120.
While that dictum might support the view that in this case John Worden had, as from the date of death of the deceased, some sort of innominate equitable beneficial interest in the land, it does not throw any light upon the question whether, by declining to purchase in accordance with the provisions of the will, whatever rights he had were lost. In this case, the answer to that question depends upon a proper construction of the will, rather than the application of some overriding general principle.
Reference was also made to the case of In re Cranstoun, deceased; Gibbs v Home of Rest for Horses and Ors.[5]
[5] [1949] 1 Ch D 523.
In that case, following the death of the testatrix, who had bequeathed the residue of her estate to the defendant institution, the institution executed a formal renunciation of the gift. They did so in the belief that there were onerous liabilities and that the gift was of little, if any, value.
Later, when it was found that in fact the residue was of substantial value, the defendants formally withdrew their renunciation and claimed the benefit of the gift. Roma J held that, given that no-one had altered their position in reliance upon renunciation of the gift, it could be retracted.
For present purposes, that decision should be distinguished. As I have said, in this case, the question must be resolved by reference to the terms of the will. The provisions of the will, properly construed, meant that upon John Worden declining the offer to purchase at valuation, the land was to be sold and the proceeds dealt with as part of the residuary estate of the deceased. In that sense, the testator, in his directions, specifically provided for the consequences if John Worden was to decline the offer to purchase.
In those circumstances, I do not think that it was open to John Worden to blow hot and cold.
Returning to the question whether John Worden declined the offer, if I am wrong in my view that he declined the offer at the meeting on 21 September 1999, there can be no doubt that he declined it in the letter from Boltons of 8 May 2003.
For the reasons which I have given, it would clearly not be in accordance with the directions of the testator as contained in the will that he should be permitted to decline the offer but then attempt to resuscitate it.
Kevin Worden is entitled to relief substantially in accordance with the claim which he advances in the proceedings. The sharefarming agreement entered into on 14 January 2000 has now come to an end. The consequences of John Worden declining the offer to purchase at valuation must now take effect.
In light of these reasons:
1.I order and declare that the defendant John Elliott Worden has declined an offer to purchase the real estate forming part of the estate of Jack Worden deceased.
2.I order:
(a)that the executors of the estate of the deceased offer the real estate for sale by public auction; and
(b)that the proceeds of such sale form part of the residuary estate of the deceased.
3.Liberty to apply for such further order or direction as may be necessary to ensure the full and effectual carrying out of this order.
I notice that in his statement of orders sought Kevin Worden does not seek costs of the proceedings against John Worden but seeks an order that costs be paid out of the estate.
I will hear the parties as to costs.