32 On 26 July 1995 Imogen wrote to her grandfather and Mrs Shirley Stewart, enclosing photographs of the family and describing what she and other members of her family were doing. She concluded by asking her grandfather to keep in touch. Mr Stewart kept the letter.
33 Imogen Mayfield arranged for Mr and Mrs Stewart to spend Christmas 1995 at Tuloona. They arrived at Tuloona a few days before Christmas Day 1995 and joined the rest of the Mayfield family for Christmas Eve at Oakleigh. On Christmas Day, the plaintiff, her husband and their son Bradley drove to Tuloona for Christmas lunch with Christopher and Imogen and Christopher's parents. They stayed at Tuloona for about 5 days. At the time of the visit Imogen was pregnant with her first child, Oscar, who was born the following March. The plaintiff says, and I think it is probably true, that Mr Stewart expressed concern for Imogen's wellbeing and pleasure at the prospect of having his first great-grandchild. It would be odd if he did not.
34 After spending about a week with Christopher and Imogen at Tuloona, Mr and Mrs Stewart spent about 2 weeks with the plaintiff and her husband at Oakleigh before returning home to New South Wales.
35 Mrs Muriel Lloyd-Williams gave evidence that after the visit Mr Stewart told her that seeing the plaintiff again was just like meeting anybody and that he had no feelings for her or her children. I do not accept this evidence. If Mr Stewart said this, I do not think it reflected his true feelings as disclosed in the evidence of the plaintiff and of Imogen Dinges and, perhaps more importantly, by his subsequent conduct. Mr and Mrs Stewart visited the Mayfield's again over the following Christmas for about two to three weeks. On that visit they also spent a few days with Imogen and Christopher and their new son at Tuloona.
36 The plaintiff has produced four birthday cards from Mr and Mrs Stewart which she says were given to her "over the course of the 1990's". The last two were addressed to "Our darling daughter" and to "Darling Barbara" and were expressed to be from her "loving parents" or to be given with "all our love". There is a noticeable increase in the warmth of the affection expressed in these later cards from that shown in the card sent on the plaintiff's wedding.
37 Mr and Mrs Stewart took an extended overseas trip between June and September 1997. On 17 May 1997 Mr Stewart wrote to the plaintiff and her husband. He said that he and Mrs Stewart would not be coming down to Cavendish that Christmas but hoped that they would be down the following year, that is, at the end of 1998. Mr Stewart expressed the wish that perhaps in the meantime the plaintiff and her husband could visit him and Mrs Stewart. He described himself as the plaintiff's "loving father". The reason for not going to Oakleigh for Christmas in 1997 was that they planned to take things quietly after their extended overseas trip. Mr Stewart had some health problems at the time. He was then 82 and Mrs Stewart was in her late seventies.
38 On 1 March 1998 Mr and Mrs Stewart wrote to the plaintiff and her husband wishing them a happy grandparents day on 8 March. They gave them their love.
39 It seems to me that in the period from Christmas 1995 to at least March 1998 there is objective evidence, contained mostly in the form of correspondence from the deceased and Mrs Shirley Stewart and in photographs taken during the visits to Oakleigh and Tuloona, that the relationship between Mr Stewart and the plaintiff was stronger than it had ever been. There were clear feelings of affection and love expressed by the deceased to his daughter.
40 In her affidavit of 18 August 2003 Mrs Muriel Lloyd-Williams deposed that after the second Christmas visit Mr Stewart told her that he was taken into Mr Mayfield's office and asked a lot of personal questions about his finances. She states that Mr Stewart said that the Mayfields tried to get him to make a will and that he was unimpressed by their actions. He also said that Mrs Stewart had been treated shabbily and he had no intention of ever going back again. I do not accept this evidence. It is necessary now to say why I found the plaintiff generally credible, but Mrs Muriel Lloyd-Williams to be unreliable.
41 There were occasions in the plaintiff's evidence where she was shown to have embellished or exaggerated events. I thought the most significant of these was her evidence in paragraph 59 of her affidavit of 20 April 2003 where she stated that in the 1990's her father and Mrs Stewart started making trips from Sydney to Oakleigh to see her and her family. Her affidavit continued "as time went on and they reduced their overseas travel, they spent more time at "Oakleigh". They would stay for between four and six weeks over most Christmas periods". I think that paragraph of the affidavit was intended to convey an impression of more frequent and longer lasting contact between the plaintiff and her father than was the fact. Mr and Mrs Stewart stayed twice at Oakleigh for periods of two or three weeks. In cross-examination the plaintiff readily accepted that the affidavit gave a misleading impression. Notwithstanding the exaggeration in her affidavit, I was on the whole favourably impressed by the plaintiff. I thought she gave her oral evidence honestly. Accordingly I have generally accepted her evidence.
42 Mrs Muriel Lloyd-Williams was 82 when she swore her affidavit and 83 when she gave oral evidence. I think her age coupled with her dislike for the plaintiff has adversely affected the accuracy of her recollection. There is a number of respects in which her affidavit does not ring true. She said that the deceased took both his daughters from Melbourne to Sydney in 1954 and that the plaintiff initially stayed with her sister Iris and then with Mr Stewart. She says that the plaintiff went to school at Penrith and then to a local public school near Earlwood, where Mr Stewart had bought a house in 1954. She described the plaintiff as a troublesome twelve year old, who was returned by her father to her mother when she was fourteen because she was insolent and gave endless trouble. The plaintiff denied living with her father at this time or going to school in Sydney. She and her mother both swore that she lived with her mother in Melbourne at this time. There is corroborative evidence showing that in 1954, when according to Mrs Lloyd-Williams the plaintiff was living in Sydney, being troublesome, and attending school at Penrith or a local public school at Earlwood, she in fact was enrolled at McKinnon High School in Victoria. The school newsletter lists her as having attended the school in that year. I could attribute Mrs Lloyd-Williams' mistake about where the plaintiff was living between 1954 to 1956 to frailty of memory. But her evidence that the deceased described the plaintiff at this time as living with him and as being insolent and troublesome to himself and his housekeeper, was not due to frailty of memory. I think it was born of antagonism or dislike.
43 Mrs Lloyd-Williams said that when the Olympic Games were held in Melbourne, the plaintiff and her sister remained in Sydney whilst Mr Stewart went to Melbourne for the Olympics. However the plaintiff says that during the Olympic Games she was living with her mother in Melbourne and her father came down and took her to the Games. She has three photographs of herself at the Olympic Games when she was 14 which she says were taken by her father. The person in the photographs is recognisably the plaintiff and I believe her version of events. Mrs Muriel Lloyd-Williams refused to countenance the suggestion that she might have been in error.
44 In paragraph 32 of her affidavit Mrs Muriel Lloyd-Williams said that the deceased told her after the visit to Oakleigh over Christmas 1996 that Mrs Stewart had been treated shabbily and he had no intention of ever going back there again. I cannot conceive that Mr Stewart would have made that statement but a few months later explained to the plaintiff and her husband that he and his wife would not be able to go down to Cavendish for the 1997 Christmas because of their extended overseas trip, but that "God willing we would be down next year" and invited the Mayfields to visit him.
45 In her oral evidence Mrs Lloyd-Williams described her brother as being very conservative and very formal. The photographs which were Exhibit BIM8 and the correspondence which is exhibit BIM9 are inconsistent with that depiction of Mr Stewart.
46 I do not consider Mrs Muriel Lloyd-Williams to be a reliable witness. I think her testimony was coloured by dislike of and antagonism towards the plaintiff.
47 The plaintiff and Mr Mayfield both gave evidence that when Mr Stewart visited Oakleigh over the 1996 and 1997 New Year, Mr Stewart said that he had made a lot of money from shares and that the plaintiff would be the main beneficiary of his estate. The plaintiff said that he told her that he wanted his wealth to be passed on to her so that it would maintain the family for generations. It is not inherently unlikely that the topic of inheritance would have arisen at least on the second visit. I am not satisfied that the deceased said that the plaintiff would be the main beneficiary of his estate. His wife, who was about 4 years his junior, was still living. He had another daughter whom he had brought up, even though there is some evidence that he disapproved of her conduct in separating from her first husband. Nonetheless I accept that Mr Stewart contemplated that the shares which he had acquired would form part of his estate and that Mrs Mayfield and indirectly through her, her children and grandchildren, would obtain an unspecified benefit from his estate and those shares in particular.
48 That that was his intention is corroborated by the evidence of Mr John Bartlett who knew Mr Stewart from the 1970's through their participation at Masonic Lodge meetings and who became quite familiar with Mr and Mrs Stewart over the last two years of Mr Stewart's life. Mr Bartlett gave evidence by affidavit, upon which he elaborated orally, of being present at the Stewart's house in Earlwood in November or December 1999 when there was a news item on the television or radio about an increase in the value of Commonwealth Bank shares. Mr Stewart was reading the business pages of the newspaper at the time. Mr Stewart said that the Commonwealth Bank shares had gone to $23.30; that he had earmarked the shares for the plaintiff; and that the plaintiff would never want again for the rest of her life. Mr Stewart told Mr Bartlett that he had 10,000 Commonwealth Bank shares, a statement about which Mr Bartlett was understandably sceptical. In fact at his death he and Mrs Stewart jointly owned 105,000 Commonwealth Bank shares. I accept Mr Bartlett's evidence about these matters.
49 The defendant claimed that the circumstances surrounding the death of the plaintiff's sister Judith reflected upon the plaintiff's relationship with the deceased. Judith was admitted to hospital in Melbourne in August 1998 and died suddenly on Thursday 13 August 1998. Mrs Muriel Lloyd-Williams gave evidence to the effect that the deceased did not learn of his daughter's death until told about it by the plaintiff three weeks after the funeral, a circumstance which made him angry with the plaintiff. The plaintiff gave evidence that after getting a call from her half-sister, Teree Ann Sutterby, that Judith was in a serious condition she and her husband drove to the hospital in Melbourne. The plaintiff deposed that she was shocked at her sister's condition, and immediately rang her father and told him that Judith was in a coma and dying in hospital. The plaintiff's evidence in this respect was corroborated by Teree, by her mother, Mrs Irene Holschier, and by her husband.
50 Judith died the following day. The plaintiff said that she again rang her father from the hospital to inform him of that fact. The funeral was arranged for the following Monday, 17th August 1998. On either the Friday or Saturday the plaintiff rang her father a third time to see how he was and tell him about the funeral arrangements. He said that his Lodge had said a prayer for Judith on his behalf, but he did not think he would be up to going to the funeral.
51 The telephone accounts of the plaintiff's mobile phone were produced in evidence. They did not show that she made any calls on that phone to her father over this period. The plaintiff's explanation was that as to at least one of the calls within the hospital, she believed she was not allowed to use a mobile phone and that she made an interstate call on the hospital's landline. She maintained that on another occasion or occasions she used somebody else's phone. This is not inherently improbable. I do not think the plaintiff or her half-sister who gave oral evidence on the topic were lying. I do not think that this incident resulted in an estrangement between the plaintiff and her father.
52 On Saturday August 15 1998 and Monday August 17 1998 notices were placed in the Herald Sun newspaper of Judith's death from members of her family and friends. The notices made no mention of Judith being Mr Stewart's daughter. Nor was there a notice from her father. It is not possible to say who placed the notice from the family in the newspaper of 15 August. I infer in relation to the notices on 17 August that Mrs Irene Holschier placed one of them in which she referred to Judith as her daughter and made no mention of Judith's father. The plaintiff placed a separate notice in memory of her sister which referred to her own family members. There could have been no intended slight on her father from the terms of the notice placed by the plaintiff. I do not find that the newspaper notices are of assistance in deciding whether or not the plaintiff spoke to her father at the time of Judith's death, and if she did not, whether her father was later justifiably angry. For the reasons I have given I am satisfied that she did telephone her father as she has deposed to.
53 The plaintiff and Mr Mayfield visited Mr & Mrs Stewart in Earlwood in August 1999 and again in September 1999. I infer that this was on their way to and from Noosa.
54 Mr Stewart was admitted to hospital for surgery in October 1999. The plaintiff said that she telephoned her father and offered to come up and help look after him. Her evidence was that Mr Stewart said that that was not necessary, that John Lloyd-Williams (his nephew) was coming up to stay for a holiday and would be able to help him and that he would see the plaintiff at Christmas. I accept that evidence. The defendant submitted that if there were a close relationship, the deceased would have been eager to accept the plaintiff's offered assistance. He had however seen her in August and September and expected to see her at Christmas. I do not think Mr Stewart's acceptance of his nephew's proffered help indicates that his relationship with the plaintiff was cold or distant.
55 Mr Stewart died on 31 December 1999.
56 There was a good deal of evidence about friction between Mrs Muriel Lloyd-Williams and the Mayfield family at the time of Mr Stewart's funeral. Mrs Stewart, then 81, was ill at the time and in shock. Mrs Muriel Lloyd-Williams said that the plaintiff showed no compassion to Mrs Stewart. The plaintiff was distressed to see that Mrs Lloyd-Williams and two of her children had taken the front pew of the funeral service next to Shirley. The Mayfields thought that Mrs Muriel Lloyd-Williams had taken charge of Mrs Stewart.
57 The plaintiff was cross-examined about her relationship with Mrs Stewart and about the events following the funeral. These were relevant circumstances under s 9(3)(b) and (c) of the Act. The plaintiff claimed that she had a warm and loving relationship with Mrs Stewart. Cross-examination sought to establish that that was not the case. I understood the questions to go primarily (although not solely) to the plaintiff's credit. Two things in particular were put in cross-examination of the plaintiff about her relationship with Mrs Stewart at this time. The first was that in her affidavit of 21 October 2003 the plaintiff said that she arrived with her husband and daughter Imogen at Mrs Stewart's home the day before the funeral. The funeral took place on 6 January 2000. It was established by reference to telephone records that the plaintiff was in Sydney by 3 January 2000. It was therefore suggested that she waited for two nights before making face-to-face contact with her father's widow; something that would be inconsistent with their having a warm relationship. The plaintiff's evidence in cross-examination about this issue was somewhat confusing. She said that she saw Mrs Stewart as soon as the Mayfields arrived but she also said that she couldn't remember. The second point made in cross-examination was that just before the plaintiff left Sydney to return home to Victoria she asked Mrs Muriel Lloyd-Williams if she knew the name of her father's solicitor and stated that she would like to see the will before she went home. Mr Mayfield also asked Mrs Muriel Lloyd-Williams who Mr Stewart's solicitor was and told her that the plaintiff wanted to know where the will was before they went home. According to both the plaintiff and Mr Mayfield they were rebuffed by Mrs Muriel Lloyd-Williams who was staying with Mrs Stewart. A solicitor with whom the Mayfields were staying, a Mr Stephenson of Lane and Lane, wrote a letter on 11 January 2000 demanding a copy of Mr Stewart's last will and threatening action if the demand was not satisfactorily responded to within ten days. I do not regard the plaintiff as responsible for the tone of the letter. It is clear that relations between the Mayfields and Mrs Lloyd-Williams at this time were antagonistic and that the former regarded Mrs Stewart, who was ill at the time, as being under Mrs Lloyd-Williams' control. That, I think, is the principal explanation for the Mayfields'demand to see the will. I do not think that the plaintiff was exaggerating when describing her relationship with Mrs Stewart or her father.
58 Mrs Muriel Lloyd-Williams stayed with Mrs Stewart for three and a half months after the funeral. On 19 January 2000 Mrs Stewart made a will in which she appointed Suzy Lloyd-Williams, Mrs Lloyd-Williams' daughter, her executrix and left her all her estate.
59 According to Mrs Muriel Lloyd-Williams, Mrs Stewart dealt with the deceased's papers. No will was found. On 7 March 2001 letters of administration were granted to Mrs Stewart.
60 Mrs Stewart died on 7 May 2001. Probate of her will was granted to the defendant on 21 September 2001.
The Oakleigh Farm and Talasea
61 In 1998 Imogen and Christopher Dinges left Tuloona and purchased a property known as Talasea which is one property removed from Oakleigh. They did so with the financial assistance of Mr & Mrs Mayfield and Christopher's parents, together with their own savings. The Oakleigh partnership (to which I refer below) borrowed $100,000.00 to assist in the purchase of Talasea. $80,000.00 of that debt has been repaid.
62 Oakleigh and Talasea are farmed by the plaintiff and her husband, their daughter and son-in-law Imogen and Christopher Dinges, and their son Bradley. That simple statement does not reveal the complexity of the business arrangements for the farming of the properties.
63 Oakleigh is now 2,767 acres (or around 1,120 hectares) in area. It has grown to that size over the years. The first acreage of about 600 acres was acquired by Mr Mayfield's father in 1929. Mr Mayfield grew up on the property. His father extended it in 1941 through the purchase of another 360 acres of adjoining land. There were further acquisitions in 1953. In 1965 Mr Mayfield made an agreement with his father and sisters that on the understanding that the land would pass to him on his father's death, he would pay his father an annuity equivalent to $6,000.00 per annum, which his father would invest and the investment proceeds would be left to be shared between his sisters after his death. He also agreed to pay the premiums on a policy of life insurance taken out on his father's life. Subsequently Mr Mayfield purchased another 403 acres in 1966 and another 181 acres in 1967. In 1969 and 1974 his father transferred his land to Mr Mayfield. In 1982 Mr Mayfield purchased another 606 acres. Another 606 acres was purchased in 1992 by Mr & Mrs Mayfield jointly. As a result of these various acquisitions 2,161 acres of Oakleigh is owned by Mr Mayfield. He and the plaintiff own 606 acres jointly. Oakleigh (that is, the property comprising 2,767 acres), has been valued as at 1 May 2004 at $3,043,700.00. That valuation has been accepted by both parties for the purpose of these proceedings. There is no separate valuation of the 606 acres of which the plaintiff is a co-owner.
64 The Talasea property, approximately 373 acres (151.1 hectares), is owned by Christopher and Imogen Dinges. Oakleigh and Talasea are worked as one farm by the Oakleigh partnership.
65 The Oakleigh partnership was formed in October 1989. The original partners were Mr Mayfield, the plaintiff, their children and Oakleigh Pastoral Co Pty Limited. Oakleigh Pastoral Co Pty Limited was incorporated on 25 September 1989. Mr Mayfield holds 45,747 A class ordinary shares in that company, the plaintiff holds 22,874 B Class ordinary shares and the children own C, D and E class shares. All classes of shares are entitled to participate in profits of the company distributed by way of dividend. Only A and B Class shares are entitled to participate in the distribution of capital profits by way of dividend or on a winding up. Participating shareholders are entitled to a distribution of income or capital as the case might be according to the amount paid up on each of the shares.
66 Originally, the partnership profits were divided into thirty-two parts. Oakleigh Pastoral Co Pty Limited had a 75% share in the partnership. Mr Mayfield had a 12.5% share, the plaintiff had a 6.25% share and the children held the balance. In 1998 changes were made to accommodate Imogen and Christopher Dinges. A superannuation fund was established. A discretionary family trust was also established. The trustees of the trust are Mr Mayfield, the plaintiff, Bradley Mayfield, Imogen Dinges and Christopher Dinges. Mr Mayfield and the plaintiff jointly have the power at any time to remove any trustee and appoint new trustees. The trustees have a discretion in relation to the distribution of income between the beneficiaries. The capital of the trust fund is to be distributed on the "distribution date" between such of the beneficiaries as the trustees determine. They have a discretion to appoint any date within eighty years as the distribution date. As is customary in such instruments, there is a wide range of beneficiaries. It includes the plaintiff and her husband, their children and their spouses, and their grandchildren.
67 On 15 June 1998 the Oakleigh partnership deed was amended so that the partners became the Oakleigh Pastoral Co Pty Limited as to a 10% share and the trustees of the Mayfield family trust, in that capacity, as to a 90% share.
68 Hence the plaintiff's entitlement to share in the profits from the farming of Oakleigh and Talasea arises in her capacity as a discretionary object of the Mayfield family trust and as a shareholder of Oakleigh Pastoral Co Pty Limited.
69 One of the reasons for the establishment of this structure was to permit the minimisation of tax and the maximisation of allowances between members of the family so that the burden of taxation of the family overall would be minimised. That observation only emphasises that the arrangements are intended to operate according to their tenor. In considering what provision ought to be made for the proper maintenance and advancement in life of the plaintiff, the legal edifice cannot be ignored. (45 Flers Avenue Pty Limited v Morgan (1987) 5 ACLC 222 at 225).
70 The partnership operates an overdraft account with the National Australia Bank. The plaintiff and her husband and the Oakleigh partnership have minimal cash resources. Purchases for everyday living expenses are made on credit cards which are paid by the Oakleigh partnership. Where the expenses paid by the partnership are for the private purposes of family members and are not business expenses associated with the running of the farms, the amounts paid by the partnership are debited to the loan accounts which family members have with the partnership.
71 According to the draft balance sheet of the Oakleigh partnership as at 30 June 2003, the plaintiff and her husband owed the Oakleigh partnership $243,666.14 on loan account.
72 Ninety per cent of the annual profits of the partnership are earned by the trustees of the Mayfield family trust. Ten per cent of those profits are earned by Oakleigh Pastoral Co Pty Limited. The profits earned by the trustees are fully distributed each year to the beneficiaries. No cash changes hands between the partnership and the trustees, or between the trustees and the beneficiaries. Instead distribution of trust income to the beneficiaries is accounted for by crediting their accounts with the trustees. By the same token the trustees stand in credit with the Oakleigh partnership.
73 The draft accounts for Oakleigh Pastoral Co Pty Limited as at 30 June 2003 show that each of the family members is a creditor of the company in various amounts. The plaintiff is a creditor in the amount of $15,600.00. The company's assets consist entirely of its investment in the Oakleigh partnership, although according to the draft accounts it stands as a debtor to the partnership in the amount of $75,254.35.
74 The draft financial statements of the Mayfield family trust as at 30 June 2003 provide that the "trust" received a gift in that financial year of $912,232.03. That item relates to the release of credit balances in the adult beneficiaries' accounts with the trustees, the release of loans from the plaintiff and her husband of $471,255.00 and the release of a loan from Bradley Mayfield of $16,766.00. In the case of the plaintiff, apart from the release of her interest in the "loan" from her and her husband to the trustees, there is an entry recording a "transfer to corpus" of $119,244.67. According to the family's accountant, Mr Struck, this represented the opening credit balance in her beneficiary account which, the accountant said, was released. The reason for the releases (or "gifts" as they are called in the draft accounts) was to "clean up" the accounts of the trusts because banks did not like having loan or beneficiary accounts with large credits.
75 The Mayfield family is happily ignorant of these complexities. It is all left to their accountant, Mr Struck.
76 The profitability of the farm is reflected in the accounts of the Oakleigh partnership. Because the Oakleigh partnership not only pays the expenses of the farm but also the private debts of the family members, there is the potential for the partnership accounts to understate the profits of the farming operations by including non-business expenditure as partnership expenses. However I do not find, and it was not suggested, that this has occurred. Imogen Dinges analyses the credit card payments and, I infer, the payments made by partnership cheque, between farm expenditure and private expenditure. She keeps a computer record of the partnership expenses. The allocation of expenses between the private expenses of the individuals and business expenses is reviewed by the accountants. No suggestion was made that expenses have been inappropriately allocated. Some expenditure is described as private and it is not included as a partnership expense. The description of the other expenses suggests that they are all appropriate business expenses to be taken into account in assessing the net profits of the farming venture.