Brose v Slade

Brose v Slade - [2023] NSWSC 1025 - NSWSC 2023 case summary — Zoe

[4]

THE NATURE OF THE CASE

Central features of the case, include the following: 1. First, the Slades have made headline representations of future benefits to the Broses (between 2013-2019 or thereabouts) about the conduct of farming operations on "Slade family land" at Quandialla with the intention of encouraging them to commit themselves to a life on the farm but they have, from time to time, expressed (or, at least, held) reservations which have not been brought home to the Broses in a timely manner, or at all, as a means by which the Slades might control or withdraw benefits to be enjoyed by them. 2. Secondly, although the Slades have held out the prospect of transfers of land and partnership interests to the Broses (beyond transfers in fact made) the precise terms upon which those transfers were to take place were left uncertain. 3. Thirdly, the representations of future benefit made by the Slades to the Broses to encourage the Broses to take up farming on land in Quandialla adjacent to their holdings were reinforced by ongoing encouragement in the Broses of a belief that they would acquire most of the land upon which Slade Pastoral Company operated, and the partnership business as a going concern, upon terms that would enable them to live and work with a growing family long term. 4. Fourthly, the Broses' reliance upon the Slades' encouragement to take up farming, and to remain "on-farm", is evidenced by the fact that Garreth (in particular) gave up and did not return to a lucrative professional career "off farm", as well as by their ongoing and oft expressed anxiety about their dependency upon the Slades' recurrent reassurances that they should exercise patience and "trust us". 5. Fifthly, the Slades did not fully take the Broses into their confidence in their decision to establish a self managed superannuation trust for themselves and, thereby, ostensibly to withdraw land (Gilgowrie and Misery) from the prospect of future benefits the Broses were encouraged to expect. 6. Sixthly, in the context of a falling out within the family (particularly on 29 October 2021 and 4 January 2022) and a sharp, unexpected appreciation in the commercial value of their land, the Slades diverted their attention from intergenerational land transfers in favour of the Broses to sales of property outside the Slade family (not only the five blocks in dispute in these proceedings, but also Willawa) so as to realise capital gains. 7. Seventhly, at the same time as they took steps to sell the five disputed blocks of land in 2022, the Slades (exercising effective control of the partnership business) arranged for essential plant and equipment to be sold at a clearance sale held on 29 July 2022 (the proceeds of which were used to retire debts secured on the land), effectively ending the working relationship between the families and forcing the Broses to acquire their own plant and equipment at a substantial cost ($1.3 million to date); the partnership ceased trading from about 2 February 2023 when the Slades caused the partnership bank facilities to be cancelled upon settlement of their sale of Willawa, leaving questions of accounting yet to be resolved. 8. Eighthly, in response to the Slades' disclaimer of what the Broses understood to have been particular assurances given to them by the Slades (in a succession planning meeting of 18 December 2018 and a confirmatory Deed of Family Arrangement of 13 June 2019) that the disputed blocks of land and the partnership business would be transferred to them in stages by 1 July 2026, the Broses in these proceedings seek orders accelerating enjoyment of the entitlements they claim upon an exercise of equitable jurisdiction (Q (a pseudonym) v E Co (a pseudonym) [2020] NSWCA 220; 383 ALR 469 at [172]-[177]), submitting to the Court's determination of what they must in equity do as the price of being granted equitable relief.
At the time the Slades encouraged the Broses to take up farming, and to remain on the land, at Quandialla they planned to maintain "the farm" within the family and to live in retirement off the income generated by the Broses on the farm.
There was a large element of generosity in the succession planning of the Slades that contemplated transfers of most of their farming land, and their partnership assets (including plant and equipment), to the Broses on ostensibly favourable terms over a period of time of flexible duration. However, the succession plans of the Slades were also beneficial to them, particularly as they maintained dominion over their land and the partnership business at the same time as they encouraged the Broses to live in a state of reliance upon their continued goodwill and assurances of future benefits. In giving up "the farm" to the Broses their intention was to move to a house "in town" (which they did in about July 2021); to retain an interest in Willawa as a capital asset; to generate an income through deployment of that property and, for a time, Slade Pastoral Co, increasingly under management by the Broses; and to have the Broses assume responsibility for all partnership debts. The Slades' generosity was qualified by burdens imposed upon the Broses (including, from the outset of the parties' farming venture in 2013, their guarantees of the indebtedness of Slade Pastoral Co) in a transition from one generation to the next.
When the Slades fell out with the Broses and high land prices were too good to pass by they determined to show the Broses that they remained in charge of their affairs by selling up, and by denying the Broses, the land thought by the Broses to be necessary for a viable farming operation and, certainly, less land than Slade Pastoral Company had had available to generate its profits.
There was an element of spite in this but it was borne out of frustration, hurt and confusion arising from intergenerational misunderstandings in what was otherwise a cohesive family.
The pre-emptive way in which the Slades have proceeded since their catastrophic falling out with the Broses (first, on 29 October 2021 and, then, on 4 January 2022) to liquidate their rural land holdings and partnership assets (denying to the Broses land they had expected to acquire and requiring them, on their own account, to acquire plant and equipment to replace that of Slade Pastoral Company to which they earlier had access) has left the Broses with a belief that they have been set up to fail and forced into a state of limbo, without either the farm they expected to acquire or the professional careers they gave up to take up farming.
In the early stages of these proceedings (before the proceedings were listed for hearing) the Broses disclaimed any reliance upon the equitable principles governing a failed joint venture commonly associated with Baumgartner v Baumgartner (1987) 164 CLR 137 and orders for the sale of property and the division of sale proceeds between joint venturers.
The Broses, rather, claim that the Slades hold the disputed land on trust for them pursuant to: 1. a remedial constructive trust, arising from principles governing a proprietary estoppel by encouragement (Sidhu v Van Dyke (2014) 251 CLR 505; Giumelli v Giumelli (1999) 196 CLR 101; Dillwyn v Llewelyn (1862) 45 ER 1285), based upon the Broses detrimental reliance upon representations made by the Slades; or 2. a common intention constructive trust (Galati v Deans [2023] NSWCA 13 at [53]-[59] and [149]; Shepherd v Doolan [2005] NSWSC 42; Green v Green (1989) 17 NSWLR 343 at 354E-356A; cf Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336 at [111] and [119]) evidenced by the Slades' representations; or 3. an express trust created when the parties executed the Deed of Family Arrangement of 13 June 2019 (Kauter v Hilton (1953) 90 CLR 86 at 97; Byrnes v Kendle (2011) 243 CLR 253 at [49] and [110]).
The Broses contend that the Slades represented to them that, if they moved from their home in Queensland to Quandialla, commenced working for the "Slade Pastoral Co" partnership and increased their share of the work in the partnership business over time, then they would obtain an interest in the partnership and in the land upon which the partnership business was conducted which would result in them becoming the sole owners of most or all of the land and the sole "owners" of the partnership.
The reference to "most" of the land can be understood as reserving to the Slades ownership of "Willawa", Bruce's ancestral home. It should also be understood that "Gilgowrie" and "Misery" did not come into the ownership of the Slades, and become properties farmed by the Partnership, until 2019, when they were unexpectedly (without debt) inherited from a neighbour.
The representations of future benefit made by the Slades to the Broses were intended by the Slades to be relied upon by the Broses and were in fact relied upon by the Broses: (a) in moving to Quandialla, and in remaining on the farm there, working for an income substantially less, and less secure, than that the Broses had enjoyed in their professional careers and could reasonably have been expected to earn had they remained engaged with their careers; (b) in guaranteeing debts of Slade Pastoral Company (between 2013-2022 or thereabouts) even when, in the early years at least, without any interest in the partnership business; and (c) in selling their Queensland residence and applying the proceeds of sale for the benefit of the Slades' succession planning, facilitating the Slades' acquisition of a house "in town", off the farm.

[5]

THE PROAGTIVE MEDIATION MEETINGS, 6-7 OCTOBER 2015 and 27 JULY 2016

The ProAgtive "succession planning" meeting held in Young on 6-7 October 2015 resulted in a highly qualified document that included a section entitled "Family In-Principle Agreement". That section of the document recorded the Slades' "present intentions" about the disposition of the land then held in Bruce's name. Were they to die at that time, they intended that Melissa would acquire Willawa and Tegan would acquire Ostenleigh, but Kellie would acquire the balance of the land and partnership assets, with provision for the three daughters to share off-farm assets. Significantly, the Slades' "present intentions" were recorded as including a plan that within 10 years Kellie would acquire legal ownership of all the land then held in the name of Bruce, together with stock and plant, leaving Melissa and Tegan to share their parents' off-farm assets.
In cross-examination, Bruce accepted that it would have been reasonable for Kellie, looking at the ProAgtive "Family In-Principle Agreement" of October 2015, to form the view that in 10 years' time she would be the legal owner of all the farmland then owned by the Slades in the name of Bruce.
The ProAgtive meeting of 27 July 2016 at Dubbo produced no agreement or family harmony. The tone of the meeting is evident in the following extract from "Meeting Minutes" prepared by ProAgtive: "Wills and Estate Update Bruce and Donna advised that they have sought additional advice since the original meeting [in Young on 6-7 October 2015] and have found an advisor who has made sense about what they wish to deliver going forward. As a result of these discussions, they have determined that they will move more assets to superannuation and the long-term picture has changed. They have set up and made a contribution to the super fund for the last tax year and this will be part of the ongoing business plan. The real effect of the changes to be made is that a house to be purchased and superannuation will be split three ways, a transfer of a parcel of land into the superfund may be an outcome. Bruce and Donna advised that the plan was to update the will [that is, their wills] in the next few weeks and the will is to be reviewed on a frequent basis. The decision to amend their initial plan of 12 months ago was after much thought about the fairness of the plan and also only opened up as a result of the meeting with the adviser the prior week. It is acknowledged that if time permitted a discussion about this change in advance of the meeting would have been preferred, but was not possible given the timing. Garreth and Kellie expressed disappointment about only finding out this change at the meeting and the reaction they felt 'blindsided' by the new information. A heated discussion followed that set the tone somewhat for the day. Ultimately Bruce and Donna own the assets, they wish to be fair to all children, and also wish to work collaboratively with those in and outside the family business. Bruce and Donna, as business owners, have a desire to see the business grow. They are willing to support this plan which also needs to provide for their requirements as the first priority. This includes building assets off farm, future housing and a level of property development to support operational and productivity improvements. …"
The Slades were motivated to establish a self-funded superannuation fund in mid-2019 because it was at that time that they inherited Gilgowrie and Misery from their neighbour (property that had nothing to do with the Slade Pastoral Company) and, from a taxation perspective, they had but a limited time "to put [the properties] into [their] super fund".
The distress of the Broses arising from their disappointment at the outcome of the second ProAgtive meeting was heightened by what they perceived to be the increased burdens placed upon Garreth in day-to-day management of the family farm as the Slades left more of that work to Garreth. The anxieties of the Broses were not assisted either by an experience of drought in 2018.
Their anxieties were allayed by the meeting with Ms Officer on 18 December 2018 which, in due course, provided a foundation for the Deed of Family Arrangement executed on 13 June 2019.
That the meeting with Ms Officer and the execution of the Deed both came about because Kellie, in particular, pressed her parents for clarification of their succession plans provides corroboration of the Broses' reliance upon expectations reinforced by the Slades' assurances of future benefits.

[6]

THE DEED OF FAMILY ARRANGEMENT, 13 JUNE 2019

The basic dynamic of the Deed of Family Arrangement was that, with financial adjustments to accommodate the interests of all parties in the farming business as a going concern, the Slades would progressively transfer to the Broses their interest in their land and their interest in the partnership business so that by 1 July 2026 the Broses would be the registered proprietors of the land, would have a 100% interest in the partnership and would be responsible for the partnership debt; the Slades would not be responsible for any debt, would not own any of the property the subject of the Deed, would have no interest in the partnership and would have withdrawn their "equity" from the partnership.
In outline, milestones in the timetable for the transfer of property contemplated by the Deed of Family Arrangement, by reference to minutes of the meeting held on 18 December 2018 (looking back to 2013 and forward to 2026), were the following: 1. first, in December 2013 the Broses acquired title to Sandridge Home (Sandridge South) and one half of Sandridge Farm (Sandridge North). 2. secondly, by 1 July 2019 the Slades were to transfer to the Broses title of their one half share of Sandridge Farm (Sandridge North) and a 25% interest in the partnership. 3. thirdly, by 1 July 2021 the Slades were to transfer to the Broses' title to Glendlyn and a further 25% interest in the partnership, taking the Broses' interest in the partnership to 50%. 4. fourthly, by 1 July 2024 the Slades were to transfer to the Broses title to Ozone Park and a further 25% interest in the partnership, taking the Broses' interest in the partnership to 75%. 5. fifthly, by 1 July 2026 the Slades were to transfer to the Broses title to Reserve, Ostenleigh and Misery and a further 25% interest in the partnership, taking the Broses' interest in the partnership to 100%.
Some uncertainty attached to the timing of the transfer to the Broses of a one third interest in Gilgowrie because the "timeline entry" against the name of Gilgowrie was "TBC" (to be confirmed) rather than a specific date and Bruce wrote against that entry the word "flexible".
In cross-examination Bruce agreed that it would have been reasonable for the Broses to read the minutes of the meeting of 18 December 2018 and to believe that at the milestone dates referred to in the meeting minutes they would have the stipulated interests in land and in the partnership.
In a manner consistent with the milestones (if not precisely the timetable going forward): 1. the Slades transferred their one half interest in Sandridge Farm to the Broses in July 2019. 2. the Slades transferred Glendlyn to the Broses in October/November 2021.
In the wake of the catastrophic falling out between the two families (in the two episodes, first, on 29 October 2021 and, then, on 4 January 2022) the Slades renounced any obligations they might have to the Broses under the Deed of Family Arrangement and proceeded, unilaterally, to arrange for Ostenleigh, Ozone Park, Reserve, Gilgowrie and Misery to be sold (subject to the outcome of these proceedings), pre-emptively disclaiming any intention to meet the milestones scheduled for 1 July 2024 and 1 July 2026.
At the time the Deed of Family Arrangement was executed the title to Gilgowrie and Misery was held by the Slades personally. IJAAMOTT Pty Ltd was incorporated on 6 June 2019, a week or so before the Deed of Family Arrangement was executed together with ancillary documentation in the office of the Slades' solicitor, Pat O'Kane. The Slades transferred Gilgowrie and Misery to IJAAMOTT Pty Ltd on 19 November 2019, subject to a lease back to the partnership.
At the time the Slades and the Broses signed the Deed of Family Arrangement on 13 June 2019 they also signed a "Partnership Agreement" and a document styled "Acknowledgement of Gift" post dated 1 July 2019. The Partnership Agreement attributed to the Slades a 75% share of net profits of the partnership business (each holding a 37.5% share) and 25% to the Broses (12.5% each). The "Acknowledgement of Gift" was explained to the Broses as a formality for taxation purposes. It purported to characterise the Slades' transfer of their half of Sandridge Farm to the Broses as a sale for $405,000, $55,000 of which was satisfied by a gift by the Slades to the Broses, leaving what was said to be a debt of $350,000 owed by the Broses to the Slades. The Broses, for their part, believed that their contribution to "the family" of the proceeds of sale of their Townsville unit in August 2019 was not a payment of a debt but a contribution to the common cause, unaccompanied by the formally expressed gift of $55,000.
Paragraphs 4 and 5 of the Acknowledgement are in the following terms: "[4] On 1st July 2019, we executed a Transfer in favour of the Purchasers [the Broses] and Part 'Sandridge' … was transferred to Kellie Lisa Brose and Garreth Owen Brose on that date. [5] It is expressly agreed between the Vendors [the Slades] and the Purchasers [the Broses] that the gift of $55,000 is not a commercial transaction but a family arrangement between us to ensure the succession of our family farming assets."
Although the operative effect, if any, of the acknowledgement is debatable, the declaration of its purpose in furthering "a family arrangement … to ensure the succession of our family farming assets" is consistent with the text of the Deed of Family Arrangement.
The Deed of Family Arrangement was expressed to be a deed, signed, sealed and delivered by each of the Slades and the Broses, the execution of which was witnessed by Mr O'Kane.
The Deed of Family Arrangement comprises three recitals and three operative paragraphs to the following effect (with emphasis added): "WHEREAS A. Bruce, Donna, Garreth and Kellie are partners in a mixed farming/grazing partnership trading as 'Slade Pastoral Co' (the partnership) and includes livestock, plant and equipment which operates in the Quandialla District. B. Bruce and Donna have now transferred their interest in property known as "Part Sandridge" [Sandridge Farm] to Garreth and Kellie by way of an initial farm succession plan. C. All parties have consulted their accountant, Jennifer Officer of Toomeys Young in relation to formulating a succession plan acceptable to all parties that will ensure that Bruce and Donna are able to have a secure retirement that will also provide some long-term financial provision for their daughters, Melissa and Tegan and also enable Garreth and Kellie to progressively acquire various lands owned by Bruce and Donna on fair terms to all concerned. NOW THE PARTIES AGREE 1. That they will adopt as a guideline those meeting notes that were formulated at a meeting held on 18 December 2018, a copy of which is attached and marked 'A'. 2. In doing so all parties acknowledge that circumstances may change beyond the control of each of them, whereby, despite the best intentions of the parties the agenda previously agreed to marked 'A' cannot be complied with. However all parties agree to make ever [sic] endeavour to comply with that agenda in the future. 13 The terms of this agreement shall be binding as far as possible upon the heirs, executors and assigns of all the parties hereto."
Annexure "A" to the Deed comprised Ms Officer's "Meeting notes" prepared in relation to the "Succession Planning Meeting" attended by her, the Slades and the Broses on 18 December 2018. Those notes incorporated the milestones earlier set out as well as financial and other information.
The Deed adopted the meeting notes as "a guideline" about seven months after the notes were "formulated" at the meeting held on 18 December 2018. The purpose of the notes, read in the context of the Deed as a whole, was to outline "a succession plan acceptable to all parties that will ensure that Bruce and Donna are able to have a secure retirement that will also provide some long term financial provision for their daughters, Melissa and Tegan and also enable Garreth and Kellie to progressively acquire various lands owned by Bruce and Donna on fair terms to all concerned".
In adopting the notes as a guideline, the parties acknowledged that "circumstances may change beyond the control of each of them whereby despite the best intentions of the parties the agenda previously agreed [as set out in the notes] cannot be complied with however all parties agree to make ever [sic] endeavour to comply with that agenda in the future", accepting that "the terms of this agreement shall be binding as far as possible upon the heirs, executors and assigns of all the parties" to the Deed.
The Deed's reference to "the agenda previously [on 18 December 2018] agreed" is a reference, particularly, to the milestones for the transfer of the Slades' land and partnership to the Broses. For the purpose of the succession planning identified in the preamble to the Deed, the financial information contained in the meeting notes is indicative of the financial implications anticipated to flow from the transfer of property. It is not to be read with such particularity as to constitute an agreement for the transfer of property at fixed prices.
The financial information contained in the notes attributed a notional value to each block of land the subject of a transfer or prospective transfer (going back to the Broses' acquisition of Sandridge Home in 2013) and matched it with changes to shares in Slade Pastoral Co and debt levels.
As events transpired, in a rising market the values attributed to particular blocks of land fell short of market values and the Slades held on to effective control of the partnership until, in 2022, they had sold up Willawa and the partnership's plant and equipment and eliminated external debt. By selling up the plant and equipment of the partnership they imposed debt on the Broses, upon whom it was incumbent to buy replacement plant and equipment if farming operations on their land were to continue.
The one constant of the meeting notes, read in the context of the Deed, is the agreement for land to be transferred by the Slades to the Broses at given dates, coupled with the declared purpose of the Deed. The first milestone pre-dated the Deed. The second milestone for the transfer of land was met contemporaneously with entry into the Deed. The third milestone for the transfer of land was also met near enough to time.
These proceedings concern the renunciation by the Slades of any obligation to transfer land as contemplated by the fourth and fifth milestones and to transfer Gilgowrie within a similar time frame.

[8]

PROCEDURAL HISTORY

On or about 14 September 2022 the Broses lodged caveats (numbered AS469600 and AS469601) against the title to the disputed blocks of land.
These proceedings were commenced by a statement of claim filed by the Broses on 6 October 2022, subsequently amended. The current form of statement of claim (described as the "second further amended statement of claim") was filed on 1 May 2023.
The relief claimed in the second further amended statement of claim comprises two distinct classes of claim. The first relates to claims for declarations that each disputed block of land is held on trust for the Broses (subject to any conditions that might be imposed by the Court) and orders for the transfer of land to the Broses or equitable compensation. The second class of claims relates to the constitution and dissolution of the partnership.
The orderly succession plan for which the Deed of Family Arrangement provided was tested by the Slades' transfer of Gilgowrie and Misery to IJAAMOTT, but not abandoned. The Slades anticipated that the partnership would continue to farm those two blocks on a lease back from IJAAMOTT Pty Ltd which would generate income for their self managed superannuation fund. The Broses took exception to the transfer because they anticipated that subjection of the land to a superannuation trust fund would limit its availability as security for borrowing loan funds.
The transfer of Glendlyn to the Broses in late 2021 occurred at a critical time in the parties' personal relationships. The contract underlying the transfer of the land was dated 21 October 2021. On 29 October 2021 the Slades visited the Broses at Sandridge Home ostensibly to give their grandson a birthday present. Recriminations about the open conflict between Bruce and Garreth that erupted during the visit continue to this day. In the heat of the moment the Slades declared that their partnership with the Broses was at an end.
The Slades resolved to go ahead with the transfer of Glendlyn to the Broses but they prevaricated about the Broses' interest in the partnership and their subsequent sales of the disputed blocks of land demonstrate a determination not to implement further any succession plan for the transfer of farmlands. For good reason, or bad, they decided upon their own form of succession plan (selling up the farm), cutting the Broses out and denying their expectations.
In mid October 2022 the Slades and IJAAMOTT Pty Ltd served upon the Broses lapsing notices under section 74J of the Real Property Act 1900 NSW, to the effect that their caveats would lapse 21 days after service of the notices unless extended by orders of the Court.
On 24 October 2022 Bruce exchanged a contract for the sale of Ostenleigh, Ozone Park and Reserve (and IJAAMOTT Pty Ltd exchanged a contract for the sale of Gilgowrie and Misery) with a third party (Johnston Ag Holdings Pty Ltd), for a total consideration of just over $10.18 million, with completion of the contracts due on 2 February 2023.
The date for completion has been extended, on terms that permit the purchaser to work the land, pending the determination of the Broses' claims to beneficial ownership of the properties the subject of sale.
The contract entered into by Bruce for the sale of "Ostenleigh", "Ozone Park" and "Reserve" identifies only the first two properties by name, implicitly treating "Reserve" as part of "Ozone Park", as is plain by title references.
The contract entered into by IJAAMOTT Pty Ltd for the sale of "Gilgowrie" and "Misery" mentions only "Gilgowrie" by name, implicitly treating "Misery" as part of "Gilgowrie", as is made plain by title references.
The sale price for "Ostenleigh", "Ozone Park" and "Reserve" is $6,442,013, roughly $3,850 an acre. The sale price for "Gilgowrie" and "Misery" is $3,741,122, roughly $3,855 an acre. The total sale price is $10,183,135.00.
Each contract disclosed the existence of the Broses' caveated claims on the title of the disputed blocks of land the subject of a sale.
The contracts are not expressed to be interdependent. On their face, completion of one contract is not conditional upon completion of the other.
As has been noted, on 25 November 2022 Bruce exchanged a contract for the sale of Willawa which has been completed without the impediment of any claim by the Broses. The property was sold for $3,668,910, roughly $3,500 an acre.
By a notice of motion filed on 7 November 2022, the Broses sought orders from the Court for extension of the operation of their caveats.
On 23 December 2022, for reasons published as Brose v Slade [2022] NSWSC 1785, Kunc J made orders the effect of which was to permit the Broses to maintain a caveat over each of the disputed blocks of land notwithstanding that the registered proprietors (Bruce and IJAAMOTT Pty Ltd) had subsequently contracted to sell the land. The operation of caveat AS469600 (over Bruce's land) was extended until further order. Caveat AS469601 (over IJAAMOTT Pty Ltd's land) was declared to have lapsed but on terms that permitted the Broses to lodge a replacement caveat, which they did in the form of caveat AS824049.
Each of the caveats discloses on its face the substance of the claims made by the Broses in these proceedings, incorporating narrative statements of events commencing in or about 2013 and extending beyond the parties' entry into the Deed of Family Arrangement of 13 June 2019.
A copy of caveat AS469600 was annexed to the contract dated 24 October 2022 for Bruce's sale of "Ostenleigh", "Ozone Park" and "Reserve". A copy of caveat AS469601 was annexed to the contract dated 24 October 2022 by which IJAAMOTT Pty Ltd sold "Gilgowrie" and "Misery".
Under case management the proceedings found their way into the Expedition List where Parker J made orders for expedition based upon an understanding that what would be expedited was a hearing of the Broses' claims to beneficial ownership of the disputed blocks of land, reserving disputes about the partnership for a later determination if necessary.
On the first day of the hearing before me (on 30 May 2023), after some debate about the terms of an order for the separate determination of questions made by the Expedition Judge, I made an order in the following terms: "ORDER, pursuant to rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW, subject to further order, that the question whether the plaintiffs are entitled to the relief claimed in prayers 1-5A of the second further amended statement of claim filed on 1 May 2023, and any consequential relief, be decided separately from and before the decision of any other question in the proceedings."
The practical effect of this order is that the parties have agreed that any disputation by them about the constitution and dissolution of the partnership is to be reserved for further consideration after the determination of questions about land ownership. Prayers 1-5A of the second further amended statement of claim are those that, in similar terms, claim in relation to each disputed block of land a declaration of trust and an order for transfer of land to the Broses or an order that they be paid equitable compensation.

[9]

QUESTIONS OF CREDIT

The hearing of these proceedings proceeded on affidavit evidence supplemented by cross examination, together with documentary evidence. The principal witnesses (in the order of their cross examination) were Kellie, Garreth, Donna and Bruce. The Broses read an affidavit of the family accountant, Jennifer Officer. The Slades read an affidavit of Tegan Slade. Neither of those two deponents was cross-examined.
Family tensions were on display throughout the process of cross examination. To my observation each deponent spoke the truth as she or he perceives it to be, but they have very different perspectives of "succession planning" and, however well intended, the Slades' engagement of their extended family in the formal discussions mediated by ProAgtive, between about March 2015 and July 2016 left the Broses feeling overborne by the Slades, isolated and humiliated. The Slades, for their part, felt that the Broses were disrespectful, ungrateful for what had been done for them, pushy and greedy for more.
Dissatisfaction with the process of succession planning coloured the evidence of all four witnesses cross-examined. The most forceful of the witnesses on opposite sides of the record were the women: Kellie, a daughter, who felt that she had been betrayed by her parents; Donna, the mother convinced of her daughter's ingratitude and greed. Despite these harsh assessments of one another an underlying respect was never entirely submerged.
For Garreth, his cross examination was a cathartic experience. From his perspective, he had sacrificed a lucrative, promising and secure career in order to support his much adored wife. His experience of working with Bruce, or under the supervision of Bruce, exposed him to allegations of incompetence (not pressed in these proceedings) and left him feeling humiliated and, with an uncertain future, increasingly anxious. Under these pressures his relationship with Kellie faulted for a short time. He had agreed to relocate from Townsville to Quandialla and to give up his career only because of the promise that he and Kellie would be able to establish themselves on the land. He remained on the land after his dispiriting experiences, working for an income much less than that to which he had been accustomed, only because of ongoing assurances of future benefits. I accept his evidence on that score.
In giving his evidence, Bruce was less forceful (more subdued) than portrayed in the evidence generally. That was, at least in part, a reflection of his deteriorating health and, one might reasonably apprehend, his increasing reliance on his devoted wife Donna. He felt disrespected by what he perceived to be Garreth's failure to defer to his directions in the conduct of farming operations. In cross-examination he made concessions about the reasonableness of expectations of Kellie and Garreth that demonstrated a preparedness to see the other side of an argument.
The bad blood between the two branches of the family which illustrated itself in the evidence was manifested in the way the Slades unilaterally took steps to wind up the partnership, and to force the Broses to incur expense in the acquisition of plant and equipment, in the shadow of litigation.
This is not a case in which disputation between the parties can be resolved by simply accepting one side's version of events over another. That is particularly so in relation to the parties' personal confrontations in word or deed. I decline to attribute blame to either side in confrontations between Garreth and Bruce on 29 October 2021 and 4 January 2022. In my assessment, that conflict was the product of tensions arising from reciprocal anxieties associated with the process of succession.
Nevertheless, in my assessment the narrative of events presented by the Broses is more likely to present a true picture of the parties' dealings than that presented by the Slades.
Three points of criticism of the reliability of the Slades' evidence here illustrate my concerns about their narrative, accepting that (according to their lights) they have endeavoured to do right by the Broses.
First, the evidence of the parties about their early conversations in late 2013, in contemplation of a move by the Broses from Townsville to Quandialla, points to a fundamental difference between them. The evidence of the Broses is that the Slades offered to pay Garreth for work done as an employee of the Slade Pastoral Company partnership a wage of $50,000 per annum net of tax (an amount about one third of his then current salary with the ANZ Bank) because he would be trading "income for equity" (that is, the prospect of acquiring an interest in the Slades' land and partnership as an inducement to work for wages the equivalent of an unskilled farmhand). The Slades gave evidence to the contrary. Their evidence is that they offered the Broses no prospect of future equity and Garreth himself volunteered that he be paid $50,000 per annum as a farm worker.
In my assessment, the Slades' evidence on this topic is not credible. Objectively, Garreth is unlikely to have abandoned his lucrative bank career (and, with Kellie, to have assumed liability as a guarantor for debts of Slade Pastoral Company) for a labouring job unattended by a prospect of substantial gain in the form of an interest in the Slades' farming operations. The Slades were conscious of an inability to match Garreth's commercial salary and, mindful of a need to plan for their own retirement, they are more likely than not to have held out the prospect of the Broses having an interest in their farming operations as an inducement to Garreth to uproot his established pattern of life.
The Slades' contention that the Broses moved to Quandialla with no more than a hope that they might one day acquire the Slades' farmlands attributes to the Broses, and to Garreth in particular, an otherworldly generosity of spirit that does not accord with reality. In a proposal prepared by the Broses (with input from the Slades, although the Slades deny any role in its preparation) in support of an application made to the National Australia Bank for a loan in October 2013 the Broses wrote the following (with emphasis added): "Proposal To purchase additional cropping and livestock country in conjunction with Bruce and Donna Slade in the Quandialla and Bland areas nearby to existing land holdings for ease of management, efficiencies and utilisation of existing farming machinery. The strategic acquisition of additional country to form part of a, as yet undefined, succession plan with the following purposes in mind:

retain the existing and any new holdings within the family group.
allow for the relocation of Kellie and Garreth from Qld back closer to the family unit.
begin a framework to allow Bruce and Donna to work towards semi/retirement.
continue a successful, profitable and sustainable small/medium mixed cropping and livestock operation into the future to meet all interested parties' financial requirements. Kellie and Garreth will bring a wide range of skills to the proposed partnership with both having had gainful employment in the Agribusiness financial sector for the past nine years. The current plan is for Kellie to maintain her current role with NAB as a Agribusiness Credit Analyst and Garreth working in conjunction with Bruce and Donna in the day-to-day running of the proposed operation … Subject Property As part of this proposal the property known as 'Sandridge' has been identified as a potential acquisition for the following reasons:
the subject property is relatively closely located to the home block of Ostenleigh … Financing requirements … [the debt rising from a loan] would be funded by BR & DM Slade t/as Slade Pastoral Company (existing borrowing and trading entity. … Security The property is to be purchased under the following structure: [The proposal here identified the parties' co-ownership plans for Sandridge Home and Sandridge Farm] The view with a secondary block [that is Sandridge Farm] would be to transfer this holding to Kellie and Garreth on 01/07/2016 pending completion of a number of conditions to be tabled within a Family Agreement (see below). Garreth and Kellie will pledge the home block as security to the total borrowings under BR & DM Slade t/as Slade Pastoral Company via a G & I [guarantee and indemnity] in conjunction with their share in the other block which can be utilised as direct security given ownership. Post hand over of Bruce and Donna's share of the secondary block on the 01/07/2016, this block will remain within the current and proposed security pool to support any outstanding borrowings under BR & DM Slade t/as Slade Pastoral Company (existing security already pledged to NAB by Bruce and Donna Slade to remain in place and supporting total proposed debt levels with Willawa remaining unencumbered). Debt Servicing Given the proposed funding entity and security structure, the property known as Sandridge will be brought into line with the existing Slade Pastoral Company operation. All income and expenses will be funnelled back through the Slade Pastoral Company for the immediate and foreseeable future. Based on historical performance, Slade Pastoral Company [would] be able to absorb any new expenses associated with converting the property back into mixed cropping and livestock operation as well as bringing the new property into line with existing operation framework. It is assumed that once the property has been converted back into arable land, the acquisition of the property will bring a further 1070 acres of cropping country into the operational framework and enable the increase in existing sheep numbers. … Family Agreement between Bruce and Donna Slade and Garreth and Kellie Brose An internal document is to be drawn up between the two parties mentioned above to cover the following:

Although Bruce denied seeing this proposal before the commencement of the proceedings before the Court, he agreed, in cross-examination, that at the time the proposal was written in 2013, it was an intention of his (it was "a possibility that was in [his] mind") that "the existing and any new holdings [of land would be retained] within the family group".
Garreth and Kellie drafted the proposal in consultation with Bruce and Donna. It may in a formal sense have been the Broses' document but (given the collaboration necessary for the purchase of the Sandridge properties, the Broses' move to Quandialla and the engagement of Garreth by Slade Pastoral Company, as well as the cordial relations between all family members in 2013) it is more probable than not that the document was the product of the thinking of all four family members, in whose interest it was to present a positive outlook to the Bank in aid of an application for a loan which was to be taken out by Slade Pastoral Company.
From the outset of the parties' discussions about the Broses moving to Quandialla "succession planning" was very much in mind, as evidenced by the terms of the Deed of Family Arrangement (and the "Acknowledgement of debt") executed on 13 June 2019.
Secondly, in giving their evidence each of the Slades was overly dismissive of the contributions made by the Broses to their shared business interests. Although the Slades undoubtedly assisted the Broses in their acquisition of Sandridge Home, and interests in Sandridge Farm, they discounted the significance of the Broses providing a guarantee for the whole of the debt of the Slade Pastoral Company partnership of which they were not then members.
On their own evidence Bruce and Donna discounted entirely Garreth's expertise in rural finance and treated him as no more than an ordinary farm labourer. That said, in cross-examination Donna readily accepted that Garreth "was capable of managing the farm's affairs in 2018", a drought year and one in which the Slades enjoyed a six week trip away.
Bruce and Donna together were inconstant in holding out to the Broses, and withholding from the Broses, an interest in the partnership. Having earlier prevaricated about implementation of promises of a 50% interest in the partnership from 1 July 2021, on 27 April 2023 they instructed their solicitors to send a letter to the solicitors for the Broses to confirm that they do not oppose a finding in these proceedings that the Broses held a 50% interest in the partnership from 1 July 2021. This belated shift in attitude was explained as arising from a realisation that if they adhered to their case that the Broses hold no more than a 25 percent interest in the partnership they will ostensibly have to bear a larger burden of a tax liability for the years ending 30 June 2022 and 30 June 2023.
Thirdly, having entered into a Deed of Family Arrangement on 13 June 2019, prepared by their solicitor on the joint instructions of the parties, they have dismissively regarded it as having no legal significance. They have held that view, not because (as might a lawyer) they have thought it a poorly crafted instrument, but because it is expressed to have operated as a set of guidelines (which they have had no intention to treat as binding upon them despite the supposed solemnity of a deed).

[10]

ARRANGEMENT(S), TEXT and CONTEXT

The outcome of these proceedings depends in large measure upon what is to be made of the Deed of Family Arrangement dated 13 June 2019 and the "meeting notes" that were formulated at the meeting of 18 December 2018, incorporated in the Deed as an attachment, in a broader context encompassing events before and after the meeting and execution of the Deed. Context is important because it locates the Deed in a pattern of assurances of future benefit given by the Slades to the Broses and the Broses' continuing reliance upon those assurances in moving to Quandialla, selling up their Townsville residence and investing the proceeds of sale in the family business, and remaining on the farm despite working conditions less attractive than those of their sacrificed careers in banking.
The meeting of 18 December 2018 between the Broses, Slades and Ms Officer came about because of an outburst of frustration on the part of Kellie and an endeavour on the part of her parents to calm her anxieties.
Kellie's frustration at this time (trauma would perhaps be a better word) was a product, not only of her personal anxiety about the Slades' succession planning process, but also the level of stress being suffered by Garreth which placed such pressure upon him that he went missing for a time until he re-composed himself, with Kellie's help, and returned home.
That dramatic episode, in mid-October 2018, followed upon the Slades' summary rejection of a proposal by the Broses that they be permitted to farm Sandridge by themselves (and to take over the debt associated with it) and to lease Ozone Park from Bruce to provide them scope for independent operations. Kellie reports Donna as saying "What would you want to do that for? This will all be yours anyway", and Bruce saying, "That won't work. You'll go broke … Trust us Kellie. Have faith, this will all be yours. Just keep doing what you're doing".
On or about 10 November 2018 Kellie wrote a handwritten letter to her parents in the following terms: "This cannot continue as it is. It has been five years and we just feel like we've been used and let down. You have done everything that you said you wouldn't five years ago. After five years we have no direction for the future other than always working for you. You did not include us, or let us in. We are simply workers. We [brought] it up months ago to try work out something and you told me the idea you had was to let us have Sandridge on our own. So we came up with a plan, gave it to you and you make us wait and wait and wait then shot it down. You then said we should become part of the partnership but you didn't know how it would work. After five years how do you not have an idea. I personally do not have a lot of faith in a partnership. You will always retain control and in five years' time nothing, again, will have changed. At the time we feel very hamstrung. All Garreth does is work because your health is not what it was and works for nothing more than basic living costs. We have no time to go away or socialise or holiday and no real excess funds to do anyway. That would be fine if we knew what we were working towards but we don't because you haven't decided. It just seems you put it in the too hard basket and just want to keep stringing us along longer and longer. After five years of being strung along and five years of never being right or having the right idea because it is not what was done 40 years ago, you have actually pushed us both too far. Right now, the only solution is we either sell and leave or we have Sandridge by ourselves and Garreth, myself go back to work. We would prefer to struggle and be poor instead of having no control over our future and our family's future. I am 6½ months pregnant and have two small children. I cannot do this any longer. We are not children. We are not idiots. Please give us the respect we deserve. It's not all one way."
Kellie's letter was not well received initially (as the following texts between Donna and Kellie illustrate) but, to their credit, the Slades endeavoured to deal with the Broses' concerns constructively.
Donna's immediate response to the letter was: "Please note that your 'please read' has been read. Thank you for jumping on the current bandwagon & pointing out our faults as awful people. It will take a lot of digesting."
To that text Kellie responded by her own text in the following terms: "It's not designed to tell you you are awful people because you are not. It's trying to tell you why we are struggling and not to cause any more fights and issues because we do not want that again. Unfortunately, there is no good time and we have waited and waited to try tell you both how we feel but now we've waited too long and don't know how to proceed any more like things are as we don't want any more fights. There needs to be a level of respect that is lacking on all sides".
Kellie gave the following evidence about her letter in cross examination: Q. And in that letter you express your feelings to your parents? A. Mm-hmm. Q. You agree with that? A. Yes. Q. And when you said, 'That would be fine if we knew what we were working towards, but we don't because you haven't decided' that was a reflection of your understanding at that time? A. It was a reflection of the understand [sic] at the timing. The timeline for what we were working towards. We didn't know if we were just continuing to tread water as we were for the next 20 years, or if it was, when it was going to happen. Q. You've said, 'if we knew what we were working towards' didn't you, Mrs Brose? A. I did write that to say what, but I was referring to the timeline. We knew we were working towards taking over a viable farm in operation and the family farms. We just didn't know when. Q. You've expressed in this letter, is that you've felt that you've been strung along by your parents. Isn't that right? A. Yes. Q. Where they've told you what they hope to do but never, ever told you what they would do? A. No, they told us what they would do. They wouldn't tell us a timeline to when. Q. Then after that, you had a meeting in December 2018 with Jenny Officer. Isn't that right? A. Yes. Q. And that led to some minutes of a succession planning meeting, didn't it? A. Yes … Q. You saw those minutes around 18 December 2018? A. Yes. Q. They reflected your recollection of what occurred at the meeting. A. Yes."
The meeting of 18 December 2018 with the accountant came about as a means of settling the anxieties of the Broses and, in particular, the heavily pregnant Kellie. The Broses needed reassurance, on this as on other occasions, to remain fully engaged with work on the farm. The Slades needed the Broses to remain engaged with that work because Bruce was no longer capable of doing it all himself and they were turning their attention to retirement living away from the farm.
The "minutes" or "meeting notes" of 18 December 2018 recorded the "purpose" of the meeting as being "To develop a succession plan for the future and to provide clarity". In answer to the question "What will a successful succession plan looked like?" Ms Officer's document records the following points:

continued conversations and consultation with B & D [Bruce and Donna].
continued input and support from B & D - respect knowledge.
slow down B & D, B & D come and go prior to full retirement.
farm as a going concern.
secure retirement B & D.
some long term financial provision for Melissa and Tegan.
B & D free to attend school events for the grandchildren.
everyone to 'have enough' is to live comfortably.
be able to support 2 families.
fair outcome - outcome itself may change over time.
fair is not necessarily equal.
B & D wills need to be updated regularly.
plan wil [sic] provide clarity, security, direction, deadlines and timeframes.
right place at the right time.
G & K [Garreth and Kellie] want to feel like they have worked for and not been given farm.
relationships intact.
B & D debt free house in town."

In the perception of Ms Officer, the meeting was a constructive one. In distributing her "meeting notes" she expressed gratitude to both the Slades and the Broses in an email sent at day's end on 18 December 2018: "Thank you for the [sic] entrusting me to meet with you this morning to discuss the future of your farming business. I congratulate you on engaging in the challenge of the succession discussion, and commend you on being able to have such an honest, caring, respectful and fair conversation."
One of the entries in the meeting notes under a heading styled "Actions" read "Formalise matters agreed to as per meeting notes (wills need to mirror formal agreement)". This was a task that Bruce agreed to undertake by instructing his solicitor (Mr O'Kane) to formalise the parties' agreement.
Events hastened slowly. It was not until 13 June 2019 that the parties met with Mr O'Kane to execute the Deed and associated documents (the Partnership Agreement and the Acknowledgement of Gift document, both post-dated 1 July 2019 and a Memorandum of Transfer in favour of the Broses for the Slades' one half share of Sandridge Farm, which was taken to have been transferred to the Broses on 1 July 2019).
In cross-examination Bruce accepted that it was reasonable for the Broses to seek clarity about the timing of the transfer of property to them and, in light of the meeting of 18 December 2018, to seek something in writing. In about, and from, May 2019 Kellie "pressured" her parents for "something in writing", as a result of which Bruce arranged for his accountant (Ms Officer) and his solicitor (Mr O'Kane) to prepare what became the Deed of Family Arrangement and associated documents.
Bruce also accepted that he "engaged Ms Officer to draw up an agreement which reflected what [he was] willing to agree to" and he executed the Deed with the benefit of advice from Mr O'Kane.
Bruce and Donna agreed between themselves that execution of the Deed might help to resolve conflict Bruce was then experiencing with Garreth. Donna counselled Bruce to proceed with the Deed. Both viewed the Deed as intended to reflect the agreement between themselves and the Broses made on 18 December 2018.
The Deed embodies an agreement of a nature falling short of a contract. Its terms, and the circumstances in which it was prepared and executed, do not manifest an intention to create legal relations of a type necessary to sustain a finding that the parties' agreement constitutes a legally binding contract. In any event, that is not the Broses' case.
Nor do the terms of the Deed permit a finding that the document was intended to embody the whole of the parties' agreement so as to preclude reference to evidence of intention extrinsic to it.
Nevertheless, the fact that the parties' agreement was embodied in the form of a "deed", prepared by a solicitor and accorded the status of a "family arrangement" points in the direction of an agreement intended by the parties to be taken to be, and to be relied upon as, a serious statement of intention and an acknowledgement of expectations to be respected on the part of all concerned.

to have a plan for the future.
to work out how to keep the family farm because that is very important to me.
to ensure the retirement plan allows for Donna and I to live at least as comfortably as we are now.
to work out how to bring the family into the farm.
to make provision for all the family within the plan.
the plan needs to be flexible.
to keep the family together

Another illustration of the family farming tradition valued by the Slades can be found in a standard clause contained in each of the four mirror wills they executed between January 2017 and March 2020 (on 30 January 2017, 17 December 2019, 26 November 2021 and 9 March 2022).
Each will is predicated upon the will-maker's spouse having predeceased the will-maker and the survivor's estate being divided between their three children (or, in the case of the wills dated 9 March 2020, between Melissa and Tegan to the exclusion of Kellie). The standard clause reads as follows: "IT IS my wish (but not as such as to create a binding trust) that my daughters retain their respective interests in real estate as provided for herein for at least five (5) years following my death and should they be unable or unwilling to farm such lands themselves, that they give to their siblings or either if [sic] them the opportunity to either lease those lands at market value, or alternately that they negotiate the sale of those lands to their siblings or either of them upon favourable terms, so as to ensure that such lands remain within the Slade Family for future generations."
The typographical error evident in use of the word "if" instead of the word "of" noted in this extract demonstrates in a small way the standard nature of the clause used in the eight wills executed by the Slades, including the last one in which each will-maker excluded Kellie from a testamentary benefit.
The last will included the following declaration: "I DECLARE that I have purposefully failed to provide for my daughter KELLIE LISA BROSE in this my Last Will and Testament as I firmly believe that my [husband/wife] and I have more than adequately provided for KELLIE LISA BROSE and her husband by way of property transfers, gifts made to them and under the terms of the Dissolution of our Partnership trading as 'Slade Pastoral Co' over recent times".
The reference to "the Dissolution of our Partnership" reflects the temper of the Slades' thinking after family conflict on 29 October 2021 and 4 January 2022. Despite this declaration of their increasing marginalisation of the Broses from the partnership, the timing of "dissolution" of the partnership remains in issue.
Although the Slades and Broses all acknowledge the importance of an intergenerational succession arrangement that makes provision for the Slades' retirement "off the land" and for Melissa and Tegan, the evidence demonstrates that, of the Slades' three daughters, the only serious contender to take over the family farm was Kellie. Melissa and her husband pursue a farming life away from Quandialla and Tegan, as a single woman, has not yet committed herself to a life which, in her parents' assessment, requires a team of two equally committed to the land.
The terms of the Slades' first three mirror wills are broadly consistent with the course of their succession planning meetings that engaged the Broses. This reflects a seriousness of purpose in the process of succession planning.

[11]

Legal Principles

Any entitlement the Broses may have to claim beneficial ownership of the five disputed blocks of land fits most comfortably within the matrix of principles governing proprietary estoppel (estoppel by encouragement, in particular) although, by reason of the Deed of Family Arrangement and its character as a formal expression of an actual mindset of the parties, an entitlement in the Broses might be accommodated by the principles governing a common intention trust approximating (as discussed in Clayton v Clayton [2023] NSWSC 399 at [534]-[543]) those governing proprietary estoppel. The terms of the deed do not, however, support a finding of an express trust, words of trust being absent from the text of the Deed and no extrinsic evidence overcoming that deficiency.
In a passage adopted in PW Young, C Croft and ML Smith, On Equity (Lawbook Co, Sydney, 2009) at [12.220] as a general statement of the requirements of proprietary estoppel by encouragement Mason CJ and Wilson J in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 404 made the following observation: "… a person whose conduct creates or lends force to an assumption by another that he will obtain an interest in the first person's land and on the basis of that expectation the other person alters his position or acts to his detriment, may bring into existence an equity in favour of that other person, the nature and extent of the equity depending on the circumstances."
That passage was elaborated by their Honours (on the same page) in the following terms (with case citations set out in full): "One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has 'played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it': per Dixon J in Grundt v Great Boulder Pty Goldmines Ltd (1937) 59 CLR 641 at 675; see also Thompson v Palmer (1933) 49 CLR 507 at 547. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption."
Proprietary estoppel by encouragement may be established even where the conduct of the party estopped does not define the interest the other party is to expect: Plimmer v Mayor of Wellington (1884) 9 App Cas 699 at 713. It is not necessary that the interest be defined with the degree of certainty required to establish a contract: Young, Croft and Smith, op cit, page 822; Meagher, Gummow and Lehane, Equity: Doctrines and Remedies, (LexisNexis Butterworths, Australia, 5th ed, 2015) paragraph [17-115].
In Giumelli v Giumelli (1999) 196 CLR 101 at 123 [42] Gleeson CJ, McHugh, Gummow and Callinan JJ made the following observations by reference to what Deane J had written in The Commonwealth v Verwayen (1990) 170 CLR 394 at 443 and 445 (with case citations set out in full): "Deane J emphasised: 'prima facie, the operation of an estoppel by conduct is to preclude departure from the assumed state of affairs. It is only where relief framed on the basis of that assumed state of affairs would be inequitably harsh, that some lesser form of relief should be awarded'. His Honour added that ultimately: 'the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted'. The prima facie entitlement to which his Honour had referred would be qualified if that relief would 'exceed what could be justified by the requirements of conscientious conduct and would be unjust to the estopped party'; an appropriate qualification might be a requirement that the party relying upon the estoppel do equity: Verwayen (1990) 170 CLR 394 at 442. See, as to the imposition of terms in such a case, S&E Promotions Pty Ltd v Tobin Bros Pty Ltd (1994) 122 ALR 637 at 653, 656-657."
In distinguishing common law and equitable estoppel, the Full Court of the Federal Court of Australia (constituted by Neaves, Gummow and Higgins JJ) in a passage from S&E Promotions Pty Ltd v Tobin Bros Pty Ltd cited by the High Court wrote: "… the price of equitable relief may be the imposition of terms upon the successful party, on the footing that because it seeks equity, it must be prepared to do equity. There is no comparable common law precept of such wide application".
In dealing with the imposition of conditions on equitable relief on the "acceleration" of expected benefits in a case not wholly dissimilar from the present one Meagher JA (with the concurrence of Leeming and Payne JJA) wrote the following in Q v E Co [2020] NSWCA 220 at [172]-[177] (with emphasis added): "The imposition of conditions on the "acceleration of the expectation" [172] It remains, however, necessary to distinguish the holding/inheritance expectation from that expectation as accelerated. Making good the former would involve requiring Q to hold the farm properties and allow them to be leased by E Co for use in its farming business until his death, and then to leave them to his sons by will. It is not submitted by Q that the expectation should not be accelerated in the event it is held that B and C are entitled to have it made good. But the sons are not entitled as a matter of course to relief giving effect to the accelerated expectation, which is substantially more generous to them, and asks more of Q, than the measure of relief that is prima facie appropriate. [173] The sons will receive $20 million of farmland immediately rather than on their father's death. Practically speaking, they will be free to put an end to the business of E Co and realise the present value of the farm properties (subject to any estoppel of E Co itself, which, given the acceleration of the transfer of the properties, may be at an end: cf J4 [641]). For his part, putting the rental value of the properties to one side, Q will be deprived during his lifetime of the use of the farm properties as a residence and as security. It is not necessary to consider the precise contours of the sons' understandably imprecise expectation to observe that it contemplated both possibilities, at least to some extent. [174] In that circumstance to impose "conditions" on relief, as the primary judge initially proposed, need not involve any "idiosyncratic" exercise of discretion and does not press the maxim "he who seeks equity must do equity" into improper service: cf the objections recorded at J4 [627]. Her Honour ultimately accepted that those objections precluded the imposition of two of the conditions initially proposed, "unless perhaps [the conditions were] necessary to prevent disproportionality" (J4 [647]). [175] So to reason involves treating the accelerated expectation as the expectation which the sons were prima facie entitled to have made good, taking account of any disproportionality. But there is no need to identify disproportionality before imposing conditions on relief that would otherwise be more generous than the appropriate measure. Conscience neither requires Q to make nor entitles his sons to receive an unqualified present gift of the farm properties. In that circumstance, placing conditions on the acceleration of relief, which all parties accept is otherwise appropriate, is necessary because "to grant unqualified relief... would exceed any requirements of good conscience and be unduly oppressive of the other party": see Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 442 (Deane J); [1990] HCA 39; Giumelli at [42]; AFSL v Hill at [153]-[154] (Gageler J). [176] To do so does not "substitute moral for legal standards" (cf Langman v Handover (1929) 43 CLR 334 at 351; [1929] HCA 42) or require terms which do not "flow from the legal or equitable rights of the defendant to the suit" (cf Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44 at [67]). It may be accepted that the reference in Giumelli at [42] to requiring a party seeking relief to do equity has no broader meaning. But to impose conditions on relief in this case is to do no more than shape relief according to the requirements of conscience, in circumstances where it is accepted that the making good of the encouraged expectation should be brought forward. In substance there is no distinction between qualifying relief by imposing a condition on the party relying on the estoppel and qualifying relief by giving effect only in part to the underlying expectation. So understood the conditions sought to be imposed flow not from any distinct right of Q but from the limits of the respondents' equity: see eg Crabb v Arun District Council [1976] Ch 179 at 189-190 (Lord Denning MR); Flinn v Flinn [1999] 3 VR 712 at 750-751; [1999] VSCA 109. [177] Nonetheless the appropriate conditions are not at large. What good conscience requires must be understood by reference to the position which would have obtained had the holding/inheritance expectation been made good, but not accelerated. As Robert Goff J suggested in Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [1984] QB 84 at 108, it would be contrary to principle for a party to "obtain the benefit of rights without incurring the burden of corresponding obligations which he would have incurred if the rights had been enforceable without the aid of the doctrine of estoppel" or, one might equally say, if the otherwise appropriate measure of relief had been enforced."

[14]

Representations

In my opinion, the Slades clearly and unambiguously did represent that the Broses would receive their properties. The clearest formal expression of this is in the agreement minuted in Ms Officer's notes of the meeting of 18 December 2018, embodied in the Deed of Family of Arrangement dated 13 June 2019 prepared by Mr O'Kane on instructions of the Slades, confirmed by steps taken by the Slades in implementation of the agreement made on 18 December 2018.
Significantly, that agreement acknowledged a plan for the transfer of Gilgowrie and Misery to the Broses as well as the blocks of land in Bruce's name alone.
With a different timeline (of 10 years), and allowing for the fact that the Slades did not then own Gilgowrie or Misery, the record of their then "present intentions" reflected in "the estate plan" recorded in the "family in principle agreement" prepared by ProAgtive in October 2015 is to a similar effect.
The representations recorded in the documentation of 2015, 2018 and 2019 have their origins in representations made by the Slades at and about the time, in late 2013, the parties discussed the prospect that the Broses would move from Townsville to Quandialla, contemplating a "succession plan" with "purposes in mind" that looked to the retention of "existing and any new holdings within the family group" and collaboration of the two generations in farming operations.
References to estimates of the market value of land and the indebtedness of the Slade Pastoral Co from time to time in the documentation of 2015, 2018 and 2019 are subsidiary to the headline representations in the documents bearing upon the fact and timing of proposed transfers of land and interests in the partnership. They related to the means by which an end (the progressive transfer of land) might be attained.
This is confirmed by evidence of Kellie, in particular, that Bruce from time to time expressly confirmed to her, and to Garreth, that they were "working for equity" in working on the farm. An example of that can be found in the conversation between Bruce, on the one hand, and Garreth and Kellie on the other hand, in relation to funding the purchase of a new hay baler in September 2015 for use by the partnership and by Garreth to earn separate contracting income. In the course of that conversation (I accept) Bruce represented to the Broses that they "will get all the business and most of the land", and they were "working for equity and most of [the land] will be yours".
The documentation of 2015, 2018 and 2019 must be read in a context which includes assurances given by the Slades to the Broses orally from time to time. These assurances were of particular importance to the Broses because they needed them, and relied upon them, in order to remain "on track" to take over the farm. Assurances given by the Slades were also important for them personally because they needed to keep the Broses on track in order to progress their personal plans for moving towards retirement.

[18]

Relief

The question of "relief" posed by counsel for the Slades involves a series of subsidiary questions relating to: 1. whether the relief sought by the Broses is disproportionate to what may be necessary to satisfy the equity established as a ground for a grant of relief; 2. whether (and, if so, upon what terms) the Broses' enjoyment of the entitlements they claim upon an exercise of equitable jurisdiction should be accelerated; and 3. whether any (and, if so, what) terms should be imposed upon a grant of relief to the Broses to ensure that they do equity as well as seek it.
In answering each of these questions (which overlap and are subsumed in considerations of unconscionability) importance attaches to the fact that the succession planning in which the Broses and Slades were engaged was not a commercial transaction despite endeavours made by the Slades in these proceedings to attribute to it that character.
This point is made by clause 5 of the Acknowledgement of Gift dated 1 July 2019 which was part of the suite of documents executed by the parties on 13 June 2019. It confirmed that the particular transaction there described was "not a commercial transaction but a family arrangement between [the parties] to ensure the succession of our family farming assets".
The same point is also confirmed, more generally, by recital C of the preamble to the Deed of Family Arrangement dated 13 June 2019 which referred to the formulation of "a succession plan acceptable to all parties that will ensure that Bruce and Donna are able to have a secure retirement that will also provide some long term financial provision for their daughters, Melissa and Tegan and also enable Garreth and Kellie to progressively acquire various lands owned by Bruce and Donna on fair terms to all concerned".
The parties did not, by their reference to "fair terms" intend to refer to commercial terms but to terms designed to ensure that Bruce and Donna would be able to have a secure retirement that would also provide some long term financial provision for Melissa and Tegan and also enable Garreth and Kellie progressively to acquire the land identified in the Deed as intended for Garreth and Kellie. That was the purpose they sought to achieve, not a transfer of property on commercial terms.
Upon consideration of what might be "fair terms" in the context of the questions the Court has to consider about (dis)proportionality and a need for the Broses themselves to "do equity", regard must be had to a variety of factors including the fact that the Broses worked for the better part of a decade on the basis that they were "working for equity", allowing the Slades more leisure time than they otherwise would have had; the fact that neither Melissa nor Tegan had a comparable working relationship with the family farm; the fact that the Broses committed themselves and Garreth's "life savings" to the Slades' succession plan; the fact that, as contemplated by all their plans, the Slades were able to transition themselves to a new house "in town" and, by their sale of Willawa (if not other property), they were able to secure for themselves a substantial capital sum to fund their retirement and provision for Melissa and Tegan.
Upon a consideration of each of the questions of (dis)proportionality, "doing equity" and the acceleration of enjoyment by the Broses of any "entitlement", regard must be had to the fact that the Slades, for reasons thought to them to be best, renounced the arrangements by which property was to be transferred to the Broses over time in a manner synchronised with changes in the operation of the business of the Slade Pastoral Company. The Slades never surrendered effective control of the partnership business until they had sold the partnership's plant and equipment, having caused a cessation in trading by cancellation of the partnership's banking facilities, forcing the Broses to incur substantial expense and to be deprived of land upon which to conduct their farming operations pending the determination of these proceedings.
In my opinion, the relief claimed by the Broses could be said to be disproportionate only if: (a) those claims are not dealt with on a basis (to which the Broses submit) that terms be imposed on the relief to be granted to the Broses to ensure that they do equity as well as seek it; and (b) the rights of the parties are to be determined by reference to the current market value of the disputed land on the basis of an arms' length sale rather than the availability of the land for ongoing farming operations within the Brose/Slade family, as was the intention of all parties until the Slades' renunciation of the Deed of Family Arrangement.
Upon an assessment of the terms upon which relief might be granted to the Broses an allowance must be made for the fact that what the Broses seek is an acceleration of enjoyment of the title to the farmland they were led by the Slades' representations to expect would be theirs, allowing also for the fact that because of the Slades' renunciation of the Deed of Family Arrangement they have been deprived of physical enjoyment of that land in the conduct of their continuing farming operations and required to incur substantial extraordinary expenses to maintain those operations.
A formulation of appropriate terms upon which to condition a grant of relief to the Broses is not, in all the circumstances of these proceedings, a precise mathematical exercise. Of necessity, it involves an element of evaluation of the competing interests of the parties in the context of the purpose which the Deed of Family Arrangement (as evidenced by its preamble) was intended to serve.

[19]

CONCLUSION

In my opinion, the Slades have made out a case for a grant of equitable relief, based upon principles governing proprietary estoppel, conditional upon them "doing equity". Provided they are (as they submit, they are) prepared to "do equity", it would be unconscionable for the Slades to disappoint the reasonable expectations they encouraged the Broses to have in ordering their affairs.
The Slades' renunciation of the Deed of Family Arrangement and their entry into contracts for the sale of the disputed blocks of land require, in conscience, that satisfaction of the expectations which the Slades encouraged in the Broses should be brought forward, accepting that what good conscience requires of the Slades must be understood by reference to the position which would have obtained had the expectations of the Broses been made good, but not accelerated.
An assessment of that measure of relief is complicated by the facts that the expectations in the Broses encouraged by the Slades were based upon a common assumption that the disputed land would be retained "within the family" rather than sold on the market and adjustments would be made to accommodate external debt. That paradigm was displaced by the Slades' exclusion of the Broses from the disputed land, their entry into contracts for the sale of the land outside the family (at prices beyond the reach of the Broses), and the discharge of all external debt.
If the Slades' representations to the Broses (as evidenced in the Deed of Family Arrangement) were to be honoured in performance, the Broses would have acquired title to the disputed land progressively leading up to 1 July 2026, subject to an assumption by them of the external indebtedness of the Slade Pastoral Company partnership, with the benefit of farming operations on the land in the meantime.
As events transpired, the Slades took it upon themselves to discharge partnership debts, leaving the Broses to incur debts in their own names for the acquisition of plant and equipment to replace that of the Slade Pastoral Company sold on a clearance sale.
In my opinion, what is required of the Slades in these circumstances, by the dictates of good conscience, and what is required of the Broses in doing equity, is to be approached by adjustments that involve the following elements: 1. a payment by the Broses to the Slades, within a reasonable time, of the sum of $500,000. 2. releases by the Broses of their claims to Misery and (a one third share of) Gilgowrie, permitting the Slades' sale of those properties (through IJAAMOTT) to proceed to completion for the benefit of the Slades. 3. a vesting of Ostenleigh, Ozone Park and Reserve in the Broses, subject to a charge to secure their payment of the sum of $500,000 and an obligation to share the net proceeds of any sale of those properties should the properties be sold within five years of the date of the Court's orders.
The factors taken into account in fixing the sum of $500,000 to be paid by the Broses include the requirement that they release Misery and Gilgowrie from any claim to ownership and the fact that, courtesy of the Slades' insistence that Slade Pastoral Company's plant and equipment be sold in haste, the Broses have been forced to incur extraordinary expenses (of at least $1.3 million) in the acquisition of replacement machinery in order to maintain farming operations which had been commonly expected to be conducted on the "family farm".
The requirement that the Broses share the net proceeds of any sale of Ostenleigh, Ozone Park and Reserve effected within five years of the date of the Court's orders represents an acknowledgement of the fact that the Broses' acquisition of those properties is predicated on their doing so as part of a succession plan and an expectation on the part of the Slades (manifested in their wills) that land acquired by the Broses under their succession plan would be held by the Broses for at least five years within a context that accommodated family concerns.
In fixing the quantum of the Slades' share of the net proceeds of any sale of the subject properties within a five year period I regard a 75:25 split of net proceeds of sale, in all the circumstances of the case, to be just and equitable.
In a practical sense (upon an assumption of partition of Gilgowrie), in giving up any claim to Gilgowrie and Misery the Broses will be giving up their claim to the 250 acres of Misery and 240 acres (one third of 720 acres) of Gilgowrie. At the present market value of those properties (evidenced by the contract for their sale by IJAAMOTT) that involves a concession worth to the Slades something in the order of $1,886,500.
I anticipate that the Broses will need time to make arrangements to borrow the sum of $500,000 but, on my present understanding of the evidence and submissions made by the parties, that is an amount of money within their reach, provided they have security, which a transfer of Ostenleigh, Ozone Park and Reserve to them should be available. I remain open to the possibility that the pragmatic course would be for the Slades themselves to take a charge over Ostenleigh, Ozone Park and Reserve for $500,000 and any interest that might accrue. Although it would be wise for the two families to have as clean a break as possible in their financial interaction, adoption of this course might facilitate an earlier settlement of the Slades' conveyancing commitments than a procedure that requires the Broses to obtain independent finance to pay out the Slades.
A difficulty in dealing comprehensively with the financial adjustments required for the parties to go their separate ways is that questions relating to the winding up of the Slade Pastoral Company partnership remain to be determined. The parties presently have divergent views about what is likely to be the outcome of any taking of accounts on a winding up of the partnership.
No party has invited the Court to consider whether a condition of a grant of relief to the Broses could properly, or should, be that they jointly and severely grant of a release of any rights they may have to apply for a family provision order (with a Court approval of such a release under section 95 of the Succession Act 2006 NSW) in relation to the estates of the Slades. The imposition of such a condition might go beyond what is contemplated by the maxim "Those who seek equity must do equity": Meagher, Gummow and Lehane op cit, paragraph [3-050].

[20]

PROPOSED ORDERS

Subject to allowing the parties an opportunity to be heard about the form of orders to be made, and the costs of the proceedings, I propose to make orders to the following effect in disposition of the claims for relief made in prayers 1-5A of the Broses' second further amended statement of claim and consequential claims for relief: 1. UPON condition that: 1. the Broses jointly and severally submit to an order that their claims against Gilgowrie and Misery be dismissed, to the intent that any claim they may otherwise have had against, or in respect of, those properties and each of those properties, be released; 2. the Broses jointly and severally give to the Court an undertaking (for the benefit of the Slades jointly and severally and their successors and assigns) that: 1. they will, no later than a date to be fixed by the Court (about three months hence), pay to the Slades, or as the Slades may in writing direct (or allow the Slades security over Ostenleigh, Ozone Park and Reserve in) the sum of $500,000, such sum to bear interest from that date, if not earlier paid, at the rate from time to time prescribed pursuant to section 101 of the Civil Procedure Act 2005 NSW; and 2. if any or all of Ostenleigh, Ozone Park and Reserve, or any part of those properties, are sold within five years after the making of these orders, they will pay to the Slades, or as the Slades may in writing direct, 25% of the proceeds of sale, net of ordinary expenses of sale including legal costs, advertising expenses and agent's commission; and 1. the Broses jointly and severally submit to an order that their obligations under the undertaking for which order 1(b) provides be charged against their interests in the properties known as Ostenleigh, Ozone Park and Reserve, DECLARE that Bruce holds on trust for the Broses, as tenants-in-common in equal shares, the freehold of Ostenleigh, Ozone Park and Reserve unencumbered save for the charge for which orders 1(c) and 2 of these orders provides. 1. ORDER that the obligations of the Broses to comply with the undertakings referred to in order 1(b) of these orders be charged against the interests of the Broses in Ostenleigh, Ozone Park and Reserve. 2. ORDER that, subject only to the charge for which orders 1(c) and 2 of these orders provide, Bruce transfer to the Broses, as tenants-in-common in equal shares, Ostenleigh, Ozone Park and Reserve. 3. ORDER, subject to further order, that the Slades be at liberty to lodge a caveat against the title of the Broses to Ostenleigh, Ozone Park and Reserve for the protection of the charge for which orders 1(c) and 2 of these orders provide. 4. ORDER that the claims for relief made by the Broses against Gilgowrie and Misery be dismissed. 5. ORDER that the Broses forthwith withdraw their caveats over Gilgowrie and Misery, with no orders for compensation arising from lodgement of the caveats. 6. NOTE that nothing in Order 1(b)(ii) of these orders is intended to operate in respect of a mortgage, lease or licence granted by the Broses in the ordinary course of a farming business. 7. RESERVE to the Broses and the Slades liberty to discharge or vary the undertakings recorded in order 1(b) of these orders by an agreement made by them in writing. 8. RESERVE to the parties liberty to apply for further or other consequential relief in the working out of these orders (including, if required, orders for the Slades to deliver up to the Broses vacant possession of Ostenleigh, Ozone Park and Reserve). 9. ORDER that each party pay or bear his, her or its own costs of these proceedings to date, including any costs referable to the balance of the proceedings reserved for consideration by the order made under rule 28.2 of the Uniform Civil Procedure Rules 2005 NSW on 30 May 2023.
It is not necessary for the purpose of this judgment to determine precisely when a trust attached to the disputed blocks of land by reason of the equity residing in the Broses by reason of a proprietary estoppel. However, prima facie, an equitable interest in the land, co-extensive with the Broses' equity to relief, arose at the time when the Slades (between 29 October 2021 and 4 January 2022 or thereabouts) renounced any ongoing obligation to transfer land to them: Meagher, Gummow and Lehane, ibid, paragraph [17-130]; DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728 at [72]-[73]; Q v E [2020] NSWCA 220; 383 ALR 469 at [80].
I am conscious that, pending the determination of questions relating to the title to the disputed blocks of land, the Slades have leased Ostenleigh, Ozone Park and Reserve to their prospective purchaser and that there is evidence that the purchaser has removed internal fencing, the replacement of which may (on the evidence of Garreth) cost about $154,000. I proceed on the basis that any dispute between the Broses and the Slades arising out of the purchaser's possession or use of the land may be dealt with on an application made under the Court's reservation of liberty to apply.
I propose, in due course, to invite the parties to consider what directions should be given for the determination of the balance of the proceedings (relating to the winding up of the Slade Pastoral Company partnership) and to invite them to consider whether they might benefit from an order that they proceed to a mediation.

At a glance

Court

Decision date

Before

Source

Judgment (21 paragraphs)

Parties

Cases Cited (24)

Cited By (1)