Evans v Braddock

Solicitors: Conomos & Spinak Lawyers (Plaintiffs) Michael Rogers and Co (Defendants) File Number(s): 2012/260707

Introduction

1. HIS HONOUR: This is a sad, and unfortunate, dispute involving, principally, the family of Robert Fitzgerald Evans ("Robert") and his wife, Sheelagh Macquarie Evans ("Sheelagh"), both of whom are now deceased. The first Plaintiff is their son, Timothy Fitzgerald Evans ("Timothy"); the first Defendant is their daughter, Margaret Gael Braddock ("Gae"); and the second Defendant is their only other child, Sheelagh Kerryn Evans ("Kerry"). (Throughout these reasons, I shall refer to the family members, where necessary, after introduction, by the name he, or she, is known within the family. This is for convenience and to avoid confusion, and I hope it will not be thought discourteous.) The other parties involved in the proceedings are the second Plaintiff, Mount Mill Pty Limited (to which I shall refer as "Mount Mill"), a company incorporated in 1957 by Robert, and the third Defendant, Philip King Hawley ("Philip"), who is a solicitor who had acted for Sheelagh from about 2004 until her death and who is one of the executors of Sheelagh's Will.
2. Timothy, first, filed a Summons on 21 August 2012, in which he sought a family provision order under the Succession Act 2006 (NSW) out of the estate and/or notional estate of Sheelagh and a declaration that the proceeds of sale of a property located at Eastbank Avenue, Collaroy ("the Collaroy property") were, and any asset into which those proceeds of sale had been transmitted was, notional estate of Sheelagh.
3. Initially, the matter came before the Registrar on a number of occasions. On 9 October 2012, the Registrar made an order, by consent, that Timothy file and serve a Statement of Claim. Timothy filed a Statement of Claim on 18 January 2013 (outside the time prescribed by the Registrar's order). In this document, he was the only Plaintiff named. He filed an amended Statement of Claim on 12 February 2014 in which Mount Mill was joined as the second Plaintiff, and a further amended Statement of Claim on 18 August 2014, upon which he, and Mount Mill, each now relies.
4. The Defendants filed one composite Defence to the Statement of Claim on 13 February 2013; a Defence to the amended Statement of Claim on 19 March 2014; an amended Defence to the amended Statement of Claim on 20 May 2014; and a Defence to the further amended Statement of Claim on 22 September 2014. It is the Defence to the further amended Statement of Claim upon which they now rely.
5. On 5 July 2013, when the matter was listed before me for directions, I noted that "although there is a claim for a family provision order, the thrust of the Plaintiff's case is for a declaration of trust based on an estoppel". In the events that occurred subsequently, Timothy did not proceed with his claim for a family provision order. He sought leave to discontinue that claim and that part of his case was dismissed on 7 March 2014.

The Relief Claimed by the Plaintiffs

1. In the further amended Statement of Claim, Timothy and Mount Mill articulated the relief sought in the following way: "1. A declaration that the defendants or some of them hold an amount equivalent to one-third of the net proceeds of sale of the Collaroy Property on a constructive trust for the first plaintiff and/or the second plaintiff. 2. An order that the defendants or some of them pay to the second plaintiff an amount equivalent to one-third of the net proceeds of sale of the Collaroy property. 3. In respect of [the] order referred to in paragraph 2, interest. 4. In the alternative (a) A declaration that the second plaintiff is entitled to an equitable charge over the estate of the deceased and/or the proceeds of sale of the Collaroy Property in such amount as is just having regard to the second plaintiff's contributions to the purchase, maintenance and expenses of the Collaroy property; and (b) An order that the defendants or some of them pay to the second plaintiff a sum that is just allowance for the contributions made by the second plaintiff … to the purchase, maintenance and expenses of the Collaroy property and to the welfare of the deceased and Robert Evans. 5. In the further alternative, an order that the defendants or some of them pay … equitable compensation to the first plaintiff and/or the second plaintiff. 6. In respect of any order for equitable compensation, interest. 7. Costs. 8. Such further or other order as the Court sees fit."
2. Counsel for the Plaintiffs, in summary, stated: "The plaintiffs have based their several claims on two grounds: proprietary estoppel and common intention constructive trust. The proceeds of sale of the Collaroy property came into Gael's and Kerry's hands, as will be noted later, either in their personal capacity or in the capacity of trustees and subsequently executors. It is the plaintiffs' contention that one third of those proceeds of sale (plus interest) is the minimum relief necessary to make good the detriment arising in the proprietary estoppel claim and this will be further discussed below. With regard to the common intention constructive trust claim, the plaintiffs' contention is that the proceeds of sale are part of the joint endeavour that is relied on…"
3. In fact, there was a third basis of the claim, although, I think, by the conclusion of the case, that it may have been subsumed in the claims set out above. The third basis was that the transfer of the Collaroy property, in 1981, from Mount Mill's ownership to the joint ownership of Robert and Sheelagh was made in breach of the duties that each owed, as directors, to Mount Mill.

The Defences Relied upon

1. In summary, the Defendants denied that Timothy and Mount Mill were entitled to any relief, with the result, they submitted, that the further amended Statement of Claim should be dismissed. They submitted that the elements to be proved for the claims of proprietary estoppel and common intention constructive trust to succeed were not established. They pleaded, in addition, that even if the factual bases of the claims could be established, all of the claims for relief were time-barred. They relied upon the six year limitation period prescribed by the Limitation Act 1969 (NSW) and by s 1317K of the Corporations Act 2001 (Cth), which, they submitted, applies by analogy to equitable claims (Gerace v Auzhair Supplies Pty Ltd (in liq) [2014] NSWCA 181; (2014) 310 ALR 85, at [70]). They also pleaded that the doctrines of laches, acquiescence and prejudicial delay were applicable. Finally, they submitted that there had been no breach of director's duties by either Robert or Sheelagh.
2. In broad terms, the Defendants relied upon the failure of Timothy, and of Mount Mill, to take any steps to challenge the transfer of the Collaroy property to Robert and Sheelagh, as joint tenants, until after the death of Sheelagh. They asserted that, even on the Plaintiffs' case, Timothy knew of the transfer of the Collaroy property from 1983, but he did nothing until he brought these proceedings.
3. Although each party sought an order for costs in the pleadings, which claim I would normally deal with in these reasons, they requested, at the conclusion of the oral submissions that I not deal with the issue of costs. Each declared that submissions may need to be made to determine the nature of the costs, and how the burden of those costs should be borne. I am prepared to abide the request and I shall make directions to enable any costs issue to be determined after the parties have had an opportunity to consider these reasons.

Background Facts

1. I begin by setting out some of the background. The facts which lie behind the issues require some elaboration. Some of the events I shall describe date back to the 1950's and 1960's, others to the 1980's and 1990's. I shall start by identifying the facts that are uncontroversial. I have taken these from admissions made in the pleadings relied upon at the hearing, from the affidavits, or from the submissions, where it is clear that there is no dispute about them.
2. Robert died on 6 September 2001. He was then aged almost 94 years, having been born in October 1907.
3. Sheelagh died on 24 August 2011. She was then aged 97 years, having been born in July 1914.
4. Robert and Sheelagh married in about 1935. Timothy was born in April 1936 and is now almost 79 years of age; Gae was born in July 1940 and is now 74 years of age; and Kerry was born in January 1947 and is now 68 years of age.
5. Robert left a duly executed Will made by him on 16 March 1994 and a codicil to that Will dated 13 August 2000. The executors named in that Will were Sheelagh, Timothy, Gae and Kerry. This court granted Probate in common form of that Will and codicil to those executors on 17 September 2002. (There were earlier testamentary instruments made by Robert upon which Timothy relies. I shall refer to parts of Robert's last Will and codicil, and to parts of the earlier testamentary instruments, later in these reasons.)
6. In the Inventory of Property attached to the Probate document, there was included as property owned by Robert at the date of death, a "Loan to T F Evans $100,000" (Timothy) and a "Loan to Mt Mill - $90,000". (The amount of $190,000 had, in fact, been loaned by Robert in about 1988. As will be read, Timothy borrowed $100,000 of the amount loaned to purchase Kerry's shares.)
7. In the affidavit of executors filed in support of the Summons for the grant of Probate (part of Ex. TFF), the liabilities of Robert's estate included $192,654, being a debt due to Mount Mill by Robert.
8. Timothy accepted that neither of the loans identified in the Inventory of Property as debts due to Robert at the date of death had been repaid by him or by Mount Mill. He also stated that Robert's debt to Mount Mill, which had been identified in the affidavit of the executors, had not been repaid either.
9. (There was a question raised during submissions about whether the loans were not repayable after six years from the date of the loan, since each appeared to have been a loan repayable on demand. It was submitted that a cause of action for its repayment would have arisen at the time of the advance, not when demand was made for it. The relevant limitation period for the commencement of a claim for the repayment of the loan is six years in accordance with s 14 of the Limitation Act. If more than six years had passed, the debtor would be entitled to plead s 14(1)(a) of the Limitation Act as a defence to the claim. Such a defence would defeat the claim for recovery of moneys lent: Faraday v Rappaport [2007] NSWSC 34, at [102]. Whether the parties to the loan transactions, either expressly or by necessary implication, demonstrated an intention that a demand was required in order to create a liability to repay, was not investigated.
10. The question identified proved somewhat of a distraction, as senior counsel for each of the parties, ultimately, seemed to accept, and, in any event, I am satisfied, that what the executors of Robert's Will, Timothy, and Mount Mill, probably agreed to, following Robert's death, was to treat the loans as off-setting each other. The result was that no amount was to be paid to Mount Mill out of Robert's estate, and no amount was to be paid, by either by Timothy or Mount Mill, to Robert's estate.)
11. In the Inventory of Property, the Collaroy property was disclosed as property jointly held by Robert and Sheelagh (with a disclosed value of $550,000). Thus, it did not form part of Robert's estate as it passed by survivorship to Sheelagh.
12. Sheelagh left a duly executed Will that she made on 14 April 2004 and a codicil that she made on 16 February 2011. This court granted Probate in common form of that Will and codicil to Kerry, Gae and Philip on 22 August 2012. (Timothy had been named as an executor in the Will but was removed as an executor in the codicil.) (I shall refer to parts of the last Will and codicil and to parts of an earlier Will made by Sheelagh later in these reasons.)
13. The gross value of Sheelagh's estate was estimated to be $513,627. The Collaroy property was not disclosed in the Inventory of Property as part of Sheelagh's estate at the date of death, as, a few months before, it had been sold by Sheelagh.
14. Robert had been a grazier. From about 1927, he had conducted a farming business on a property, comprising about 2,200 acres, known as "Coomber", near Rylestone, in the Central Tablelands region of New South Wales. He had been given "Coomber" by his father. Sheelagh and he had lived there during their marriage, and Timothy, Kerry and Gae grew up there.
15. In 1956, after completing his schooling and then spending 18 months as a jackeroo, Timothy returned to "Coomber" to work with Robert. He continued to do so until Robert's death and continues to do so.
16. At various times, after 1957, Mount Mill purchased other rural properties, namely "Glenmore" (778 acres) in 1960, "Johnson's Block" (about 430 acres) in the early 1970's, "Walsh's Block" (about 192 acres), in 1976 and "Kildare" (528 acres), which adjoined "Glenmore" and "Walsh's Block", in 1990.
17. At, or about, the time Timothy started working on "Coomber", he purchased land known as Ferndale North. Robert lent him the purchase price of £8,000, which he asserted he had repaid over about 9 years. In the early 1970s, Timothy also purchased a property known as "Mullholland's Block" (about 400 acres).
18. All of the properties owned by Mount Mill, and by Timothy, were used as part of Mount Mill's grazing operations. (Ferndale North was, for a short time, farmed by Timothy alone.) Timothy accepted that Mount Mill had paid £500 per year to him for the use of Ferndale North.
19. Mount Mill was incorporated on 30 May 1957. It is an Australian proprietary company limited by shares.
20. On 13 December 1957, Mount Mill resolved to adopt the current Articles of Association. Robert was appointed Governing Director, a position which he held until February 1997. The two other directors of Mount Mill, during that period, were Sheelagh and Timothy.
21. As was not uncommon at the time of Mount Mill's incorporation, the express purpose of incorporating Mount Mill was to shield the property and farming assets from death and estate duties, payable on the death of the founder of the company, which, then, were levied on deceased estates by both the Commonwealth and the State Governments: Robertson v Federal Commissioner of Taxation (1952) 86 CLR 463; Gorton v Commissioner of Taxation (Cth) (1965) 113 CLR 604. Under such a scheme, "the founder (in this case, Robert) owned shares which gave him (or her) control of the company for life. The founder could pay salaries and dividends to himself, and others (in this case, Sheelagh and the three children), during his lifetime, at his discretion, but the rights attached to those shares lapsed on death and their value accrued to other shareholders": Weinstock v Beck [2011] NSWCA 228; (2011) 252 FLR 462, per Handley AJA (with whom Giles JA agreed), at [106]. Also see, Schaeffer v Schaeffer (1994) 36 NSWLR 315, per Handley JA, at 319 - 320.
22. Mount Mill's objects are set out in Article 3 of the Memorandum of Association dated 30 May 1957. The objects include: "To sell lease surrender exchange or otherwise dispose of any real property or grant rights easements or options of purchase thereover and to sell let on lease or hire exchange or otherwise dispose of any personal property or any interest therein belonging to the Company on such terms as may be determined" (Art 3(5)); "To advance money with or without security …" (Art 3(10)); "To provide for the welfare of persons in the employment of the Company, or formerly engaged in any business acquired by the Company, and the wives, widows, and families of such persons, by grants of money, pensions, or other payments …" (Art 3(17)); "To sell, improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account, or otherwise deal with all or any part of the property, rights and effects for the time being of or belonging to the company" (Art 3(26)); "To distribute in specie or otherwise as may be resolved, any assets of the Company among its members, and particularly the shares, debentures, or other securities of any other company formed to take over the whole or any part of the assets and liabilities of this Company" (Art 3(29)).
23. Timothy acknowledged, in cross-examination, that he knew that Robert, as the Governing Director, "had the power and control to do what he liked with his company and its assets": T48.46 - T48.48. In fact, Robert was able to "control the business and management of the Company and [had] authority to exercise all the powers authorities and discretions …expressed to be vested in the Board or the Directors generally or individually and all the other Directors of the Company for the time being, if any, shall be under his control and bound to conform to his directions in regard to the Company's business": Article 51(a) of Mount Mill's Articles of Association.
24. Mount Mill had different classes of shares. Until February 1997, Robert held 6 of the issued A class ordinary shares, the only class of shares to which were attached voting rights. He also held 100 F class shares. Timothy held one A class ordinary share, 10,500 B class shares and (in 1957) 9,500 C class shares. Initially, Gae was issued with 500 C class shares (which Timothy later acquired), Kerry was issued with 500 D class shares (which Timothy also later acquired) and Sheelagh was issued with 100 E class shares. Pursuant to Mount Mill's Articles, the B, C, D, E and F class shares had no voting rights, but the holders were eligible to receive dividends at the discretion of the directors and were entitled to a share of the assets on a winding up.
25. Timothy accepted that "when the shares [in Mount Mill] were issued to [him], it was simply a round-robin of cheques" (T48.50 - T49.02) and that in December 1962, he did not have a lot of money to enable him to pay for those shares.
26. Between about 1960 and 2000, Mount Mill's income, at least in part, was used to make payments to, or for the benefit of, each member of the family, for personal expenses, such as for living expenses, for the cost of cars, or for housing renovations. There are multiple examples of advances made to one, or other, of the family members, including to Timothy, in the evidence.
27. In 1960, Timothy married Helen. They moved into a house that had been built for them on "Coomber". They had three children, Stephen, Anthony and Penelope. Only Stephen has played a part in these proceedings. He started working on the farm in the early 1980's. Anthony, commenced working on the farm in about 1985.
28. In 1993, Timothy purchased Kerry's 500 D class shares for $100,000, which amount he borrowed. (As previously mentioned, this is the amount shown as "Loan to T F Evans" in the Inventory of Property which formed part of the Probate of Robert's Will.)
29. Gae states that she transferred her shares to Timothy between 1967 and 1976. She says that she received cheques, as payment for those shares, but is unable to recall the amount she received or whether they were drawn on Mount Mill, or on Timothy's, bank account. Timothy states that the amount he paid, by instalments, for Gae's shares, was $3,380.
30. In February 1997, Timothy was appointed the Governing Director and Stephen, was also appointed a director. Robert and Sheelagh each then ceased to be a director. By a resolution dated 26 February 1997, Robert gifted his 6 A class ordinary shares and 100 F class shares, and Sheelagh gifted her 100 E class shares, to Stephen in trust for Timothy. Timothy then became the sole beneficial shareholder in Mount Mill, with all the issued shares in the company either held by him absolutely, or held by Stephen on trust for him.
31. By Conveyance dated 25 November 1960 (a copy of which is Ex. TFC), Mount Mill purchased, from Robert, the whole of "Coomber" for £53,650. The purchase price was paid from proceeds lent by Robert to Mount Mill. (Although the Conveyance refers only to the land, the parties agreed that Mount Mill also purchased the livestock, machinery and other plant and equipment used to conduct the farming operations.) There is no evidence that Robert was repaid this amount by Mount Mill.
32. Mount Mill remains the registered proprietor of the land comprising "Coomber". It is the entity through which the farming business is conducted.
33. In April 1965, Mount Mill purchased the Collaroy property for £13,000 (Ex. TFE). Mount Mill was registered as proprietor of an estate in fee simple in that land under the Real Property Act 1900 (NSW). The Collaroy property was purchased as a holiday house for the use, predominantly by Robert and Sheelagh, but also for use by Timothy, Gae and Kerry. Various family members continued to use it as a holiday house until about 2002. Timothy acknowledged that he and his family had the use of the Collaroy property "for short periods".
34. By a Contract for Sale dated 25 May 1981, Robert and Sheelagh agreed to purchase, and Mount Mill agreed to sell, the Collaroy property for $165,000. The Contract was executed under the seal of Mount Mill. Subsequently, the Transfer, which was dated 19 June 1981, was executed by Mount Mill, as transferor, under its common seal, attested by Robert, as Governing Director, and, by Robert and Sheelagh as the transferees.
35. Although the Transfer acknowledged receipt of the agreed consideration of $165,000, there was a dispute about whether, in fact, Mount Mill did receive the consideration disclosed in the Transfer. It will be necessary to return to the circumstances surrounding the purchase and sale of the Collaroy property later in these reasons.
36. Mount Mill paid some of the annual outgoings, including council and water rates, insurance, utilities, general maintenance and, from time to time, the costs of renovations. (Some of the costs associated with the Collaroy property were also paid by Robert and Sheelagh personally.) There is a summary of amounts evidencing the payments made from Mount Mill's bank accounts in respect of the Collaroy property for the period between 26 February 1965 and 30 July 1990 (Ex. TFA(7)). The total of the amounts identified in this summary, after May 1981 (the date of transfer to Robert and Sheelagh), according to my addition, is slightly more than $22,000.
37. On Robert's death, Sheelagh, by transmission, became the sole registered proprietor of the Collaroy property.
38. In 2002, Sheelagh moved from "Coomber" to a house, purchased in her name, in Mudgee. The purchase of that property was financed by a loan. Thereafter, the Collaroy property was rented and Sheelagh applied the rental income to repay the loan.
39. In 2011, Sheelagh decided to sell the Collaroy property. The Transfer, which was dated 10 March 2011, was signed by Sheelagh, as transferor, and her signature thereon was attested by Philip. The Transfer was registered on about 17 March 2011. The gross sale price of the Collaroy property was $1,550,000.
40. Shortly after the completion of the sale of the Collaroy property, pursuant to a direction to pay dated 16 February 2011, signed by Sheelagh, Kerry and Gae received, equally, the net proceeds of sale of the Collaroy property. Each received $709,679. Neither gave any consideration for the receipt of those proceeds of sale. Each has spent some part of the amount received.
41. (Despite a paragraph in the Defence to the further amended Statement of Claim, to the effect that Gae and Kerry "each spent the proceeds from the sale of the Collaroy property" and that each holds "none of the sale proceeds on trust", there is no issue that should an order for payment be made to Robert, or to Mount Mill, there will be sufficient funds to satisfy any order, and that Gae and Kerry will do so, from the balance of the proceeds of sale that each has received (T163.36 - T163.48; T181.15 - T181.16).
42. Timothy says that it was not until after Sheelagh's death, and when his solicitor carried out a title search on 16 August 2012, that he found out that the Collaroy property had been sold.

The Wills of Robert and Sheelagh

1. There was really no dispute about the contents of the various Wills that Robert and Sheelagh had each made, a copy of which was in evidence.
2. Senior counsel submitted that the testamentary documents to which reference has been, and will be, made, were "not inconsistent", and that the Plaintiffs "certainly draw some comfort from the nature of those testamentary dispositions to the extent they're not inconsistent with the case put forward by the plaintiff. We can draw some assistance by way of corroboration": T158.38 - T158.41. It is only necessary, therefore, to refer in detail, to the part of the Wills that provide for the devise of the Collaroy property.
3. By a Will dated 1 April 1981, Robert did not specifically refer to the Collaroy property (as the Will predated the purchase of the property). After bequeathing all of his shares in Mount Mill to Timothy (upon a certain condition) and leaving a pecuniary legacy of $1,000 to each of his grandchildren alive at the time of his death, he left the rest and residue of his estate, after the payment of debts, funeral and testamentary expenses, to Sheelagh.
4. There is a codicil to a Will that Robert made on 20 February 1982, but a copy of that Will was not in evidence.
5. By a Will dated 21 October 1988, Robert purported to devise the Collaroy property to Timothy, Gae and Kerry as joint tenants. (I have used "purported" because it will be remembered that the Collaroy property had been purchased by Robert and Sheelagh as joint tenants.)
6. By a Will dated 8 June 1990, Robert purported to devise the Collaroy property to Timothy, Gae and Kerry as joint tenants.
7. By his last Will, dated 16 March 1994, Robert purported to devise the Collaroy property, together with the furniture and furnishings at the property, solely to Kerry. However, by the codicil dated 13 August 2000, Robert revoked the purported devise of the Collaroy property and furniture and furnishings to Kerry, and purportedly made a devise of that property, together with the furniture and furnishings at the property, "unto my children equally".
8. By a Will dated 28 July 2000, Sheelagh devised "any real estate and contents I may own at the date of my death to my three said children in equal shares as tenants in common".
9. By her last Will, Sheelagh devised her real property at Mudgee, and the Collaroy property as well, to Kerry and Gae as tenants in common in equal shares. The Will stated in Clause 7: "I DECLARE that I have made the bequests as set out in Clause 5 of this Will as I believe that my son, the said TIMOTHY FITZGERALD EVANS, has been adequately provided for with respect to his absolute ownership of the "COOMBER" Property and the shares of Mt Mill Pty Limited during my lifetime and because there is particular reference in my late husband's Will wherein he Bequeaths the property at Collaroy, NSW, 2097, to my said daughter SHEELAGH KERRYN EVANS should I have predeceased my Husband and that my said daughter's welfare shall in all ways possible be looked after by my said son as long as she shall remain unmarried. I now wish to provide for my said daughter by the particular bequest in Clause 5 (b) of this Will."

Introduction to Additional Findings of Facts

1. Having set out the facts which were not seemingly the subject of any dispute, I turn now to other background facts which it is necessary to determine because they are not agreed. Unravelling these facts will provide the answers to the present case.
2. It is necessary to come to a concluded view about the circumstances surrounding the purchase of the Collaroy property, and then its sale, by Mount Mill, to Robert and Sheelagh since these events are of some importance. It will be necessary to determine the facts cautiously because the events occurred so long ago.
3. Similarly, it will be necessary to carefully consider the evidence of the conversations upon which the substance of the Plaintiffs' case is based, it being accepted by counsel for the Plaintiffs that there is no contemporaneous document in evidence, and no other direct corroboration, which supports the making of any promise or assurance as is relied upon by the Plaintiffs.
4. It will also be necessary for the Court to determine what conduct of the Plaintiffs, if any, was in reliance on any alleged promise or assurance made to Timothy, and whether any detriment was suffered by either of the Plaintiffs.
5. Also, because the conversations about the Collaroy property are said to have been with Robert and/or Sheelagh, it is necessary to bear in mind the need for careful scrutiny to which that evidence should be subjected since those conversations are said to have been with a person who is deceased at the date of the hearing: Plunkett v Bull (1915) 19 CLR 544, per Isaacs J at 548 - 549. Neither is available, at the hearing, to admit, or directly deny, Timothy's specific allegations.
6. McLelland CJ in Eq cited Plunkett v Bull in Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785, at 789, in which case, his Honour wrote that "in a claim based on communications with a deceased person, the court will treat uncorroborated evidence of such communications with considerable caution". Whilst there is no absolute legal requirement for it, the court should look for some corroboration: Re Hodgson (1885) 31 Ch D 177, at 183; Day v Couch [2000] NSWSC 230, at [9]; Weeks v Hrubala [2008] NSWSC 162, at [20]).
7. Whelan J in Webb v Ryan [2012] VSC 377, at [22], referred to the difficulties in assessing evidence, in such circumstances, stating: "An important matter which may arise in these kinds of cases is the difficulty of assessing evidence concerning things allegedly said by a person who is dead. The court can never be certain it knows all the circumstances, and more often than not one may be sure that the court knows few of them. It is impossible to hear what the other party to the conversation, the deceased, says about it. There is a significant risk of reconstruction. There are dangers in relying on evidence of what may have been a casual observation made to a person who at the time had no reason to remember the exact words used. In the light of these concerns, a substantial burden is placed upon an applicant whose case relies upon such evidence. Such evidence must be very carefully examined."
8. As was observed by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315, at 318 - 319: "Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances … Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience."
9. In that case, his Honour was talking of a cause of action founded on s 52 of the Trade Practices Act 1974 (Cth) or s 42 of the Fair Trading Act 1987 (NSW): see the discussion by McDougall J in Harbour Port Consulting v NSW Maritime [2011] NSWSC 813, at [10] - [18]. However, as McLelland CJ in Eq also pointed out, the views apply to all types of litigation.
10. I also remember what was said by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56, at [48]: "When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2)."
11. The credibility of a witness and his, or her, veracity may also be tested by reference to the objective facts proved independently of the evidence given, in particular by reference to the documents in the case, by paying particular regard to his, or her, motives, and to the overall probabilities: Armagas Ltd v Mundogas S.A. (The "Ocean Frost") [1985] 1 Lloyd's Rep 1, per Robert Goff LJ, at 57. Also see, In the matter of Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547, per Black J, at [7].
12. A court, in cases involving events which occurred long before the litigation, usually prefers to rely upon contemporaneous, or near contemporaneous, documents, which will often provide valuable and, usually, more revealing, information than what may be flawed attempts at recollection of those facts by persons with an interest in the outcome of the litigation: Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200, per Jagot J, at [1247]. Greater weight is usually accorded to such documents, as often they provide a safer repository of reliable fact, particularly when it is clear that they have been prepared by a person with no reason to misstate those facts in the documents and where there is no suggestion that the documents are other than genuine: Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160, per Kenneth Martin J, at [157].
13. In this regard, I have also found useful what Lord Pearce wrote, in his dissenting speech in Onassis v Vergottis [1968] 2 Lloyd's Rep 403, at 431: "Credibility involves wider problems than mere 'demeanour' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person, telling something less than the truth on this issue, or, though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so, has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by overmuch discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness, and motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process and in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part."
14. The circumstances of this case, make what was written by Tamberlin J in Lake Cumbeline Pty Ltd v Effem Foods Pty Ltd (trading as Uncle Ben's of Australia) (Federal Court of Australia, Tamberlin J, 29 June 1995, unrep), at 122 - 123 (in a passage cited with approval by the High Court when it upheld his Honour's decision: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd [1999] HCA 15; (1999) 161 ALR 599, at [15]) appropriate to remember: "[Given the lapse of time] between the events and conversations raised in evidence and the hearing of the evidence before me, the only safe course is to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence. In circumstances where the events took place so long ago, it must be an exceptional witness whose undocumented testimony can be unreservedly relied on. The witnesses in this case unfortunately did not come within that exceptional class. The discussions referred to in evidence were capable of bearing quite opposed meanings depending on subtle differences of nuance and emphasis, and a proper appreciation of the significance of those matters must necessarily be considerably diminished over such a long period of time."
15. Finally, I should mention an article by the former the Chief Judge at Common Law, P McClellan entitled "Who Is Telling the Truth? Psychology, Common Sense and the Law" (2006) 80 ALJ 655, in which he wrote, at 665, quoting a passage from the "Guidelines Relating to Recovered Memories" (2000) of the Australian Psychological Society: "Memory is a constructive and reconstructive process. What is remembered about an event is shaped by how that event was experienced, by conditions prevailing during attempts to remember, and by events occurring between the experience and the attempted remembering. Memories can be altered, deleted and created by events that occur during and after the time of encoding, during the period of storage, and during any attempts at retrieval."
16. In relation to the events surrounding the purchase, and then the transfer of the Collaroy property, there are some contemporaneous, or near contemporaneous, documents available. The documents were in evidence and were relied upon by one party or the other.
17. In this case, there is no sound basis for refusing to accept, at face value, the contents of the contemporaneous, or near contemporaneous documents, relied upon, to which documents I now shall turn. The parties proceeded upon the basis that the documents were genuine and that they accurately reflected the steps actually taken or the events that had occurred. I shall also do so. (Unless otherwise recorded, a copy of the documents formed part of the affidavit evidence.) I shall now turn to these documents.

Additional Findings of Fact

1. In relation to the purchase of the Collaroy property, a journal entry, apparently in Robert's handwriting, regarding cheques drawn, contains a notation, dated 2 April 1965, which states "Mt Mill Ltd - Loan to help buy Collaroy house - £9,000". There was no evidence that Robert was repaid.
2. At the hearing, Timothy tendered three original cheque butts for cheques drawn on the bank account of Mount Mill (Ex. TFE), each of which is in Robert's handwriting. The first in time, dated 1 March 1965, shows the amount £1,267, and bears the notation "Dalziel & Vivers Pty Ltd Deposit on [Collaroy]". The second, dated 6 April 1965, shows the amount £11,746/7/3, and bears the notation "Cutler Hughes Harris & Garwin [Solicitors], Balance on Collaroy house (£11,700) and rates (£46/7/3)". The third, dated 26 April 1965, shows the amount £89/18/5, and bears the notation "Cutler Hughes Harris & Garwin Solicitors acting on [Collaroy] purchase".
3. The first document relevant to the events surrounding the Transfer of the Collaroy property to Robert and Sheelagh is described as an "Aid Memoir" (sic). It is a typewritten document, which appears to be a copy of a document, created some months earlier (23 April 1981), with typewritten alterations which, I infer, were added on, or about, 2 June 1981. That document, as amended, which appears to have been created by Ralph Larkins, Solicitor, is in the following form (after amendment): "AID MEMOIR (sic) FOR R.F. AND S.M. EVANS June 2nd, 1981. 1. Mount Mill Pty. Limited makes an interest free loan to Mr Evans of an amount of money to cover - 2. Loan should be interest free. 3. Prior to 30/6/1981 Company should resolve to forgive the loan. 4. The exact amount of loan will be determined when valuation of property is to hand and Sale and Transfer is able to proceed. 5. Loan can be effected by cross cheques i.e. Company draws cheque in favour of R.F. Evans by way of loan for say (on above figures) $170,000.00 and he pays the same to credit of his Bank Account and at the same time he draws a cheque in favour of Mount Mill Pty. Limited for say $160,000.00 $165,000.00 and he pays that to credit of account of Mount Mill Pty. Limited for and in satisfaction of purchase price of property by Mr. And Mrs. Evans. 6. The balance of loan of namely $4,000.00 $5,000.00 will be retained by Mr. Evans to cover expenses as above. 7. Adjustment of Rates Municipal Water and Land Tax if any can be left in abeyance. 8. Mr. and Mrs. Evans acknowledge that Ralph Larkins as solicitor acting for both Seller and Buyer will not in any way investigate the Title to the property being sold and purchased. On basis that purchase price now $165,000 and expenses now 4,165 Total: $169,165 but amount of loan (should not be $165,000) but subject to discussion with Bob Hunter should be either $170,000 or $169,500."
4. (I should mention that in 1980 Robert James Hunter (referred to as "Bob Hunter") is described as the "Principal Accounting Officer" in the firm of Chartered Accountants who prepared the financial records of Mount Mill and in 1981 he is described as the Secretary of Mount Mill in 1981 (Ex. TFL).)
5. The next document is a copy typewritten letter, dated 4 June 1981, from Mr Larkins to Robert. It is in the following terms: "I confirm my telephone call to you the other evening advising that valuation of property is $165,000. I enclose herewith copy of valuation for your information. I also enclose herewith a further copy of Aid Memoir (sic) duly amended in red by way of up dating (sic) having regard to change in purchase price, variation of stamp duty and valuation fee. Subject to my conference with Bob Hunter which I hope will be to-morrow morning, Friday, June 5, I draw your attention to the undermentioned on the enclosed Aid Memoir (sic) as updated by me in red - 1. In relation to paragraph 3, whether this date or 30/6/82 might be a more appropriate date for forgiveness of loan from company? 2. I will advise you of Bob's comments on my note at end of Aid Memoir (sic) as to which of the three amounts set out therein would be the appropriate loan figure from the company to you. I shall be in touch with you further, probably by phone and after you have had the benefit of reading this letter."
6. The next document is a copy handwritten letter, dated 5 June 1981, from Mr Larkins to Robert. It is in the following terms: "Since writing you yesterday the 4th I confirm that I conferred with Bob Hunter this morning. The result of our meeting was: (1) He advised that the loan from the Company should be $170,000. (2) Forgiveness by the Company of your debt by way of Loan should not occur in the year ending 30.6.81. (indecent haste) but suggested a Board Meeting in his office with both you and Tim (say January-February-March 1982 ("when your [sic] down for the cricket") at which meeting the Company would resolve to forgive the debt. (3) Contract of Sale Mount Mill Pty Ltd to you and Sheelagh of … Collaroy for the sum of $165,000.00 was executed under the Common Seal of the Company as will the Transfer. The Contract bears date the 25th May 81 being date of Valuation. The Transfer will be dated the date you in fact pay the Company $165,000 in accordance with the procedure set forth in the "Aid Memoir" (sic). Now Robert after you receive the cheque from Mount Mill Pty Limited for $170,000 and have paid back loan $165,000 you will have credit in your account of $5,000.00 out of this sum of $5,000. Please, at your convenience, ask your Bank to arrange a Telegraphic Transfer for the sum of $4165.00 for credit a/c "Ralph Larkins Trust a/c - no. xxxxx - Bank of NSW. Spit Junction NSW" This amount is detailed in Aid Memoir (sic). The balance to your credit out of the deal of $835 should, after due deliberations be spent wisely but not returned to the Company. Please also let me know the date when you paid the Company $165,000.00 as that will be the date of Transfer. Please forgive me if my instructions to you appear pedantic but such deals can be confusing. I am certain the Bank manager will assist."
7. The next document is a copy cheque butt, (No. 591580), bearing date 19 June 1981, which includes the notation "R F Evans Loan $170,000.00". It may be inferred, from a subsequent document, that the cheque was drawn on Mount Mill's bank account.
8. The next document is a copy of a receipt, dated 22 June 1981, which confirms the receipt, from Robert, into Mr Larkins' Trust account, of an amount of $4,165 "on account of Stamp Duty, fees and costs you from Mount Mill Pty Ltd - purchase Collaroy property". (A copy of the Memorandum of Costs from Mr Larkins states how the amount of $4,165 was disbursed.)
9. The next document appears to be a copy of the front cover of a bank book, with a notation in Robert's handwriting, which states: "Mount Mill Pty Ltd 23/12/80 to 25/6/81 19/6/81 Cheque 580 Showing loan to me $170,000 for Collaroy House"
10. The next document (Ex. D4) is the Mount Mill "Balance Sheet as at 30th June 1981", which shows, under the heading "Sundry Debtors" "R F Evans $172,193". On the front cover, there is a notation, in Robert's handwriting, stating "Showing my debt to Company after purchase of Collaroy House".
11. The next document is a copy typewritten letter dated 3 July 1981 from Mr Larkins to Robert. It is in the following terms: "Purchase of dwelling house … Collaroy - Mount Mill Pty. Limited to Robert Fitzgerald Evans and Sheelagh Macquarie Evans. I am now writing to confirm that all has gone well with this purchase and that the present position is as follows namely - 1. Purchase Price - The property was purchased by you and Sheelagh under Contract of Sale dated May 25, 1981, for the sum of $165,000.00. 2. The said sum of $165,000.00 was paid by you on behalf of yourself and Sheelagh to Mount Mill Pty. Limited on June 19, 1981. 3. Stamp Duty - The Commissioner of Stamp Duties has accepted the valuation of Ian Fox dated May 25, 1981, in the sum of $165,000.00 and the Contract for Sale was duly stamped on that figure. 4. Transfer - The transfer from the Company to you both of the property was dated June 19, 1981, which date is recorded as the settlement date and the date from which you both become the owners. 5. Registration of Transfer - This remains outstanding but the Transfer with the Title Deed will be lodged with the Registrar General some time next week. It will probably be four to eight weeks before registration to you both is effected and before I can pick up the Title Deed showing the Registered Proprietors as both of you as Joint Tenants. 6. Neither Municipal Rates nor Water Rates nor Land Tax (if any) were adjusted as at date of settlement, June 19, 1981. This adjustment is a matter between yourself and the Company. 7. Notices of Sale or Transfer - Notices of Sale have been sent by me to the Warringah Shire Council, the Water Board and the Valuer General. After these Notices of Sale have been recorded by these three Statutory bodies all future Municipal Rates, Water Rates and Valuer General's Notices will be sent to you both as owners. When the Title Deed is uplifted by me I will then have available the following to hand to you both namely - 1. Certificate of Title in your names. 2. Copy of Memorandum and Articles of Association of Mount Mill Pty. Limited. 3. Copies of Balance Sheet and Accounts as at June 30, 1980, to which is attached a summary of the present share capital of the Company. Perhaps it is better that I retain these in my Safe Custody Box at the Bank of New South Wales, Spit Junction, until an appropriate time when you are down in Sydney."
12. The next document is one described as "Reports, Balance Sheet and Supporting Accounts of Mount Mill for the financial year ending 30 June 1980" (Ex. D3). On the front cover of this document, in Robert's handwriting, the following statements appear: "Showing Collaroy house as Company asset, which is wrong. No company money went into the Collaroy house. In any case, the Company was mine and formed by me."
13. A copy of the Balance Sheet of Mount Mill for the financial year ending 30 June 1996 disclosed Robert as a debtor to the company ($192,654.30). The Directors Report and the Statement by Directors was signed by Robert, Sheelagh and Timothy.
14. The Defendants rely upon what is said to be an admission in a letter dated 25 October 2011, from Timothy's solicitor, addressed to Kerry, as one of the executors of Sheelagh's estate, which letter included: "In relation to the Collaroy property, this property was purchased originally by Mount Mill Pty Limited and later transferred to our client's parents as joint tenants. The purchase price for the Collaroy property was treated as a loan from Mount Mill Pty Limited and during [Robert's] lifetime the loan by Mount Mill Pty Limited was forgiven."
15. Timothy's evidence was to the effect that all but the part of the paragraph quoted, relating to the forgiveness of the loan by Mount Mill, accurately recorded the true facts. He denied that he had told his solicitor that the loan had been forgiven (T91.26 - T91.29).
16. Despite the denial by Timothy, and despite senior counsel for the Plaintiffs suggesting that the solicitor who prepared, and sent, the letter might be called (T109.08 - T109.25), this did not occur. Whilst senior counsel for the Defendants submitted, faintly, that the court should accept the fact asserted, namely the forgiveness of the loan, I am satisfied, on the whole of the evidence, that the loan referred to, in fact, was not forgiven in 1982 or 1983. I have dealt with my conclusion regarding how the executors of Robert's Will, Timothy and Mount Mill treated the various loans by way of set-off earlier in these reasons.
17. On the third day of the hearing, the Plaintiffs tendered the Balance Sheet, Income Account and Investments Schedule for Robert, for the financial year ending 30 June 1981 (Ex. TFM). This document confirms that Robert was prepared to have the whole of the purchase price and associated costs and expenses of the Collaroy property ($172,193) treated as having been borrowed, from Mount Mill, solely by him, and to have Sheelagh's interest in that property treated as a gift to her by him.
18. Senior counsel for the Plaintiffs did not suggest that the sale price of $165,000 was less than market value. In any event, whilst a copy of the valuation was not produced, it is clear from the contemporaneous documents written by Mr Larkins, that a valuation had been carried out to enable the purchase price to be ascertained, that the purchase price accorded with the valuation, and that the Commissioner for Stamp Duties had accepted the valuation in stamping the Contract.

Timothy's Evidence

1. For the reasons I have identified above, it is necessary to consider Timothy's evidence carefully, since, as he correctly acknowledged, he is the only person who is able to give any evidence of the conversations that he had with Robert and Sheelagh about the Collaroy property.
2. It was not in dispute that Timothy had the onus of proving each of the necessary elements required to establish the case pleaded.
3. In their written submissions filed following the conclusion of the evidence, the Defendants submitted that the court would need to determine, at least, the following facts in dispute: (i) whether Timothy had knowledge of the transfer of the Collaroy property before the property was transferred from Mount Mill to Robert and Sheelagh; (ii) whether Timothy approved or consented to the transfer of the Collaroy property from Mount Mill to Robert and Sheelagh; (iii) whether Robert made any "promise" or "assurance" to Timothy in 1983 that the Collaroy property "will be left to you and Gael and Kerry one third each"; (iv) whether Sheelagh made any "promise" or "assurance" to Timothy in the same terms as that allegedly made to Timothy by Robert; (v) whether Timothy had a continuing belief, after the alleged "promise" or "assurance" was made, that he would receive a one third share of the Collaroy property upon the death of both Robert and Sheelagh.
4. Timothy was extensively cross-examined. This was unsurprising because the Plaintiffs' case depends upon the acceptance of his evidence. I had the opportunity to observe him closely whilst he was giving his evidence. He was almost 79 years old at the time of the hearing. He had an impressive command of some of the details of his own case. When asked, he stated that the affidavits that had been relied were all, truthful, accurate and complete; that he had a good memory; that he had a good recall of the events recorded in his affidavits; and that he could remember the details of the conversations that he had with Robert and Sheelagh accurately and completely: T30 - T31. Whilst giving his evidence, I did not observe signs of any cognitive deficits.
5. Having considered his affidavit and oral evidence very carefully, I have concluded that his recollection, about some of the events, is unreliable, and his evidence, in part, was tailored, not necessarily intentionally, to what he perceived to be the best advantage for his case. In stating this, and despite the strong attack against credibility in submissions made on behalf of the Defendants, I do not conclude that he deliberately attempted to fabricate evidence, or to mislead the court.
6. Rather, I consider that there was clearly a very strong emotional overlay to the case; that Timothy is convinced of the righteousness of that case and has a strong belief in the Plaintiffs' cause and what he sees as his entitlement, with the result that these matters have affected some of the evidence given by him. That emotional overlay is even more significant since he is contending, principally against his two sisters, that a promise was made, and relied on, and in circumstances where he is seeking to make good his sense of disappointed hope.
7. I have borne in mind that throughout the proceedings, Timothy and Mount Mill were legally represented. It seems reasonable to infer, as I do, that Timothy's two affidavits, to which I shall refer, were prepared with the assistance of his lawyers. Therefore, in expressing these conclusions, naturally I have also considered the possibility of fault lying with the person(s) who drafted the affidavits rather than with Timothy (especially since he asserted that the statement regarding the forgiveness of the debt in his solicitor's letter was incorrect). However, I do not believe that such fault exists because the variations demonstrated by documents created prior to the commencement of these proceedings, some in Timothy's own hand, are so marked and are of such substantial significance. They contradict some important parts of the evidence upon which Timothy must have given instructions. In addition, I cannot say that I found some of Timothy's evidence on the disputed matters convincing. I am unable to safely rely on all his evidence.
8. In his affidavit in chief, Timothy relied, principally, upon the following conversations with Robert, which conversations he stated in his only affidavit in chief read at the hearing (at paragraphs 53 and 73): (a) In about 1983: "Mount Mill has transferred the Collaroy property into both my name and your mother's name. It will be left to you and Gael and Kerry one-third each." (b) In about June 1995: (I said) "Did you change your will to leave Collaroy to Kerry?" (He said) "Yes". (I said) "That is not what you had promised."
9. In relation to the conversation said to have taken place in 1983, other than stating the relatively few words that he stated had been uttered by Robert, Timothy provided no context whatsoever. During oral submissions, when I raised this as a "problem" with senior counsel for the Plaintiffs, he seemed to accept, or at least understand, correctly in my view, that this could be so: T212.32 - T212.36.
10. Timothy also stated, in his affidavit in chief, that following the conversation in 1983, he "was shocked and disappointed" and that "[i]t had never occurred to me that Collaroy would not remain part of Mount Mill".
11. Timothy stated that he had no knowledge of the contents of the letters from Mr Larkins (a copy of which he had annexed to his affidavit) until after his father's death. He maintained, under oath, that he had no knowledge of the transfer of the Mount Mill property to Robert and Sheelagh until 1983, when Robert had told him about it. This is despite the assertion in his affidavit, that from the late 1970's, Robert had limited his "productive participation" to office work, including doing the cash book, paying bills and wages, and doing the banking, and that during the periods that Robert and Sheelagh went to the Collaroy property, it was he (Timothy) who "was responsible for the office work as well as the farming work". Later, in the same affidavit, he had also stated, however, that Robert "exercised almost total control over Mount Mill" until about 1990.
12. In relation to the conversation said by Timothy to have taken place in June 1995, the only context provided in his affidavit was that it had occurred "following a conversation with my wife". Timothy's wife, Helen, gave no evidence, and what the conversation between them was about is not disclosed. Accordingly, again, there is no context. Only the words said to have been spoken by Timothy are stated.
13. Furthermore, there is no response, by Robert, in answer to the statement "That is not what you had promised", said to have been made by Timothy, given in Timothy's affidavit. It is highly unlikely that no response was made by Robert. Yet, the statement by Timothy as to what he said is all that the evidence reveals.
14. It was not until his only affidavit in reply, made on 30 January 2015, less than 2 weeks before the hearing, that Timothy gave evidence that the "subject [of the Will] came up again in or about the late 1990s (sic)", at which time Robert is alleged to have said: "I will do what I said I would do previously and change my will back so that Collaroy is left three ways. As I mentioned in an earlier will, following my death I would like you to look after Kerry's welfare if need be".
15. In the same affidavit, Timothy added, also for the first time, that in about late 2000, Robert also said "[e]ach of your mother and I have made wills that leave Collaroy to you and your sisters equally as originally promised".
16. I am not able to accept that either of these conversations, with Robert, in fact, occurred. As stated, neither was referred to in Timothy's affidavit in chief. To omit each of these conversations from that affidavit is a serious omission. In relation to the second conversation, because there had been a specific reference in his earlier affidavit, to the codicil made by Robert in August 2000, and the Will made by Sheelagh in July 2000, but not to the conversation said to have taken place, the omission is even more serious and even less explicable.
17. In relation to Sheelagh, all that Timothy asserted in his affidavit in chief was that she had been present during the first of the conversations and that she did not say anything. In his oral evidence in chief, leave for which was granted, he added (T24.33 - T26.02): "…Do you recall in your affidavit that you gave evidence of conversation with your father in 1983 in the kitchen at Coomber? A. Yes. Q. You said "your father said Mount Mill has transferred the Collaroy [property] into both my name, and your mother's name. It will be left to you, and Gael and Kerry one-third each"? A. Correct. Q. You said that your mother was present? A. Yes. Q. This took place, you say, in the kitchen at Coomber? A. Yes. Q. Were you[r] parents standing or sitting? A. Sitting at the kitchen table. Q. How big is the kitchen table or was it? A. It's about 5 foot long and 2 foot wide. Q. In relation to your mother and father, were they sitting opposite each other, side by side or what? A. They were sitting on one side and I was on the other. Q. How close were they together? A. As close as normal chairs are. Q. When your father was speaking, did you look at your mother? A. Yes. She was listening to him. OBJECTION HIS HONOUR: Mr Evans, I think if you could focus on who was doing what. I think Mr Willmott asked you whether you were able to observe your mother. The answer is either "yes" or "no". WITNESS: Yes. WILLMOTT Q. When your father was speaking did you notice where your mother was looking? OBJECTION HIS HONOUR: He can say where she was looking directly; to the side, up in air, or at book WITNESS: [She] (T55.20) was looking at my father. WILLMOTT Q. How long did she remain looking at your father for? A. While he was speaking. Q. Did she look at anywhere else? A. Yes, at me occasionally. Q. When was that? A. When my father wasn't talking. Q. Did you notice anything about your mother? A. Nothing unusual. Q. Did she have anything in her hands? A. No. Q. There was no papers or anything else in front of her or, anything like that? A. No."
18. Timothy relied upon the following conversations with Sheelagh, also set out in the affidavit to which I have referred: (a) In or about October 2004: (She said) "Gael and Kerry had told me that you had been given Coomber and lots of houses. I am tired of being pressured about Collaroy all the time. I have changed my Will and am leaving Collaroy to your sisters. I am embarrassed and sorry. (I said) "Why did you do this?" (She said) "Gael and Kerry told me that Vicki Yeates (my mother's solicitor) was sick and I should see someone else about my will and that they will look after me now. You were given Coomber and they got nothing." (b) When he found that Sheelagh had changed her Will in 2004: (I said) "That's not right. I was supposed to get 1/3 of the Collaroy property." (c) In July 2005, when he and Sheelagh visited Philip: (I said) "The Collaroy property was transferred from the company without my knowledge or approval." (Philip said) "Mount Mill who your father's company and he could do what he liked."
19. Timothy added in his oral evidence in chief, leave for which was granted, at T26.04 - T26.28: "Q. I want to ask you in relation to the meeting you had with Mr Hawley and this deals with your affidavit in reply, you say that you were certain that she said to Mr Hawley "After my father transferred Collaroy out of the company, he promised that Collaroy would be left to me and my sisters in equal shares". At the time of this meeting, your mother was present? A. Yes. Q. This meeting was in Mr Hawley's office I understand? A. Yes. Q. Were you all sitting down? A. Yes. Q. Where was your mother sitting in relation to you when you said these words? A. I can't recall. Q. It was all in the same room? A. Yes. Q. Around the table? A. I'm pretty sure it was. Q. When you said those words, did you mother say anything? A. No."
20. During cross-examination, Timothy acknowledged that another, different, version of the first conversation said to have occurred with Robert, in Sheelagh's presence, had been given by him. In an affidavit sworn on 2 April 2013 (which affidavit he did not read in these proceedings), filed in support of his claim for a family provision order, he had stated (the relevant paragraphs of which are set out in Ex. D5): "26. On or about 1983, my father said to me, words to the following effect: 'I will be leaving Collaroy a third each to your two sisters and to you' [Sheelagh] was present during that conversation."
21. He had earlier stated, in the same affidavit: "23. In about 1981, Mount Mill transferred the Collaroy property into both my Father's name and the deceased's name. Exhibited to me at the time of swearing this affidavit and marked TFE 94-95 is a copy of the executed transfer form. My father did not tell me about the transfer at the time. After the transfer took place, my father said to me that "you will get a third of the Collaroy property." My father also said to me at that time "Mount Mill has transferred the Collaroy Property into both my name and your mother's name."
22. The difference between the two versions of the conversation said to have taken place with Robert was explored in cross-examination, during which Timothy gave the following evidence (at T31.39 - T31.50; T36.38 - T37.33): "Q. You don't have any doubt that the words that he said was "Mount Mill has transferred the Collaroy property to both my name and your mother's name. It will be left to you and Gael, and Kerry one third each". That, you say, was precisely what your father said? A. Yes. Q. Is that your sworn evidence? A. Yes. Q. Have you ever said anything different about what your father said on that occasion? A. No. … Q. My question to you is which of the statements between paragraph 26 of the affidavit of 2 April 2013 and paragraph 53 of your affidavit of 23 October 2014, which statement is true and which statement is false? A. 53 is true and 26 is false. Q. 26 is false, you say, because you say your father did not say "I will be leaving Collaroy", et cetera, you say he did not say that. Is that now your evidence? A. No, it's just that the Q. No, please. Is that now your evidence that your father did not say, in or about 1983 "I will be leaving Collaroy, a third each, to your sisters and to you". Your father did not say that, is that your sworn evidence? A. That's what I'm saying, yes. Q. Mr Evans, when you came to swear this affidavit may we take it that you read it carefully? A. Yes. Q. And may we take it that you knew that this conversation was a very important part of your case? A. Yes. Q. How does it come about, Mr Evans, that you swore a false statement about such a crucial event? How did you come to swear a false affidavit? A. I was mistaken. Q. I beg your pardon? A. I made a mistake. Q. What was the mistake that you made? A. Well, the wording wasn't quite correct. Q. But you see, you were the only one present weren't you, your mother and father are now dead. You are the only one that's still alive? A. Yes that's right. Q. And you say you made a mistake. Is that what you want his Honour to believe that you made a mistake? A. I didn't get my wording quite right. Q. Come Mr Evans, you knew perfectly well that this was a crucial part of your case and you say now you just didn't get your wording quite right, is that what you want his Honour to believe? A. Well, I'm just saying that my wording is more accurate in the latest affidavit than the first one."
23. This evidence raises a real doubt whether Timothy recalled, with precision, the words used by Robert.
24. Timothy was also asked some questions about the assertion in his affidavit in chief, which was read in the proceedings, that he did not know about the transfer of the Collaroy property until 1983. I shall set out relevant parts of the cross-examination (commencing at T38.16 and ending at T45.04): "Q. Look at paragraph 55 of that affidavit. This is what you swore in your affidavit. Paragraph 55 this is immediately following the conversation about which you say you made a mistake. You say "I was shocked and disappointed." Is that statement true? A. Yes. Q. Because you go on to say "until that point I had no knowledge that Collaroy had been transferred out of Mount Mill." Is that statement true? A. Yes. Q. Do you want his Honour to believe that until 1983 you had no knowledge that the Collaroy house was transferred to your mother and father out of the possession of Mount Mill? Is that what you want his Honour to believe? A. I didn't know until Q. Is that what you want his Honour to believe? A. Yes. Q. That you did not know and when you found out in 1983 you were shocked and disappointed, is that your evidence? A. Yes. Q. Is that evidence true? A. Yes. Q. So that what you're saying there in paragraph 55 is that until this conversation in 1983, you had no knowledge that the Collaroy property was transferred into your mother and father's name. Is that your sworn evidence? A. Yes. Q. Mr Evans, that evidence I suggest, is false and false to your knowledge. What do you say about that? And the reason that it's false is that you knew long before 1983 that this property had been transferred away from Mount Mill? A. No. Q. Isn't that the truth? A. No, I didn't know. Q. You didn't know? Long before 1983 that the property had been transferred away, is that your evidence? A. Yes. Q. Is that what you want his Honour to believe? A. Yes. … Q. Did you write to Mr McGeogh and say to him "I think it would be useful to clarify the position with regard to the house at Collaroy"? A. Yes. Q. And in that context were you seeking to put facts to McGeogh which you thought would be relevant both to the house at Collaroy and the house at Mudgee? A. Um, certainly about the house at Collaroy, yes. Q. What you went on to say was "Collaroy was originally acquired by Mount Mill in 1965." That statement was accurate was it? A. Yes. Q. You go on to write to him and say "and transferred to my mother and father in 1981." A. Yes. Q. Was that statement to McGeogh accurate? A. Yes. Q. Then you said, "I agreed to this transfer." Was that statement true? A. Well, after speaking to my father, yes. Q. So that in 1981 you agreed to the transfer on a particular condition? A. No, I didn't agree to it in '81. I agreed to it when my father told me what he had done. Q. Is that your considered answer? A. Yes. Q. Are you swearing to his Honour that you did not know in a date earlier than 1983 about the fact that the Collaroy property was acquired by your mother and father from Mount Mill, is that your evidence? A. Yes. Q. You see, what you said to Mr McGeogh is that "I agreed to this transfer on the condition that I would retain a one third share of this property." So you actually agreed to the transfer did you not? A. No, what I agreed to was when my father told me he transferred I agreed to accept one third. Q. No, you said I agreed to this transfer? A. Well, it had already been transferred, so. Q. Mr Evans, do you not understand the words that I am putting to you "I agreed to this transfer". Is that statement correct? A. As I said I didn't agree to it prior to him telling me he transferred it. Q. Is that statement true? A. Yes. I accepted what he told me. Q. Just so I'm clear about what it is that you are saying about your knowledge of this transfer, is it your evidence that you did not know until 1983 of the transfer? A. Yes. Q. Might I approach. (Mr Stitt and Mr Willmott approached the witness box.) Mr Evans, would you look at this document. Is that your handwriting? A. Yes. Q. And is that your signature? A. Yes. Q. (Mr Stitt and Mr Willmott returned to the bar table.) Do you remember writing a letter to your mother and to Mr Philip Hawley? A. Yes. Q. And in that letter did you set out the true facts as you understood them to be? A. Yes. Q. Relating to the Collaroy property? A. Yes. Q. And you knew, of course, that Mr Hawley was a solicitor? A. Yes. Q And you were writing to your mother trying to get clarity and precision into this whole Collaroy property question, were you not? A. I just wanted to explain to Mr Hawley what I, my interpretation of what happened. Q. What you set out in that letter was also a statement of events in which you were involved in relation to the Collaroy property? A. Yes, right. Q. Let me read to you what you sent to Mr Hawley and to your mother. Let me read to you what you wrote and tell me whether it is true: "When Collaroy belonged to the company, it would have ultimately come to me." Is that statement true to your belief when you wrote it? A. Yes. Q. I'll read it again so you're at no A. I was referring to Mount Mill. Q. No, "when Collaroy belonged to the company" - that's Mount Mill "it would have ultimately come to me"? A. Yes. Q. Was that a statement which you believed to be true? A. Yes. Q. Then you said: "Then in 1980 when dad told me he was transferring it to into yours and his names as joint tenants" just stopping there, is that statement true? A. I've got the date of it wrong. … Q. Is that statement true? A. No, the date is not correct. Q. "Then in 1980 when dad told me he was transferring it into yours and his names as joint tenants he told me it would be left to the three of us." Is that statement true? A. Most of it is but I've got the dates incorrect. Q. Beg your pardon? A. The date is incorrect. Q. The date is incorrect. And this is another mistake is it? A. You said 1980 there. Q. That's what you wrote? A. Yeah, right. Q. This is another mistake, is it? A. Yes, in that context, yeah. Q. You knew perfectly well that this property had been transferred from the company to your mother and father, you knew at or shortly before the time it happened? A. No, I did not. Q. Let me read to you again what you said to your mother and her then solicitor, "then in 1980 when dad told me he was transferring it into yours and his names" ‑ that was telling you that it was something that was going to happen in the future, he was going to transfer it. Isn't that what you wrote? A. Well, if that's what I said, that's correct, but it's not ‑ I didn't know it till he told me in '83. Q. But you see, Mr Evans, what we now have are statements which are inconsistent with your sworn evidence and I'm suggest[ing] to you that you will say whatever you want to say that you think might advance your case. And this is another example of that. You're retreating behind the assertion that you've just made another mistake, isn't that the truth? A. Yeah, well I made a mistake with that date, yes. Q. You knew and you consented to this transfer? A. No, I did not. Q. That's what you told your mother and that's what you told McGeogh. Did you lie to both of them? A. I repeat, I did not know about the transfer‑‑ Q. Did you lie to both of them? A. Well, if you call it lying, yes. Q. You did? And you lied to them for a particular purpose did you not? A. No, I did not. … Q. The purpose was you wanted to try and to get a third share of Collaroy and you were prepared to lie about it? A. That was always my hope but I didn't lie to try and achieve that."
25. During his submissions, Mr Willmott SC submitted that the last answer given, and the use of the words "That was always my hope" was not determinative of the Plaintiffs' claim. He submitted "That's a matter of words. You can't fix a technical word o[f] expectation on a witness": T176.37 - T176.38. With respect, I disagree. I find the answer to be a true indication of Timothy's mental state. To the extent that he said otherwise, I tend to think, he was influenced as set out earlier.
26. I find rather odd Timothy's statement that it had never occurred to him that the Collaroy property "would not remain part of Mount Mill" since the undisputed evidence is that the Collaroy property was used by all members of the family as a holiday house. It had never formed part of the farming operations of Mount Mill. He did not explain in his affidavit, and he was not cross-examined on, the reasons for expressing that view.
27. The letter about which Timothy was cross-examined was one dated 31 March 2002 (a copy of which was Ex. D1), which he had written to Roderick H McGeoch, a solicitor and family friend, who Gae and Kerry had consulted. Mr McGeoch had written a letter dated 7 February 2002 (part of Ex. D1) to which Timothy's letter responded.
28. In his letter in response, Timothy had written: "I think it would be useful to clarify the position with regard to the house at Collaroy and also the house, which my Mother is buying in Mudgee. Collaroy was originally acquired by Mount Mill in 1965 and transferred to my Mother and Father in 1981. I agreed to this transfer on the condition that I would retain a 1/3 share of this property. A debt owed by my Father to Mount Mill in relation to the purchase and other matters of $192,000 has never been repaid and nor has any interest. In addition Mount Mill paid all the costs of maintaining Collaroy until the early 1990's and still pays some."
29. Timothy's letter dated 5 October 2005 (Ex. D2), was addressed to Sheelagh. In that letter he had written: "When Collaroy belonged to the company it would have ultimately come to me, then in 1980 when Dad told me he was transferring it into yours and his names as joint tenants he told me it would be left to the three of us 1/3 each…"
30. I have referred to his answers in cross-examination.
31. It is extremely difficult to accept Timothy's stated lack of knowledge until 1983, when, for example, Ex. TFM (the Balance Sheet Income Account and Investments Schedule for 30 June 1981 for Robert), tendered by him, revealed the "Collaroy property (Half Share)" as an asset, and a debt to Mount Mill of $172,193. Timothy had been a director of Mount Mill since it was incorporated. He had, by 1981, been involved with Mount Mill for over 20 years. He did not give any evidence that he had not seen the Balance Sheet Income Account and Investments Schedule at, or about, the time it had been prepared or subsequently during the lifetime of Robert and Sheelagh.
32. Timothy also stated that he recognised, at the time of the conversation with Robert in 1983, that Mount Mill had lost a valuable asset and that it was only because Robert had made the promise that he did not take any further steps. The statement is difficult to accept because it ignores the fact that, in 1983, there was no reason to believe that the debt due by Robert to Mount Mill, which was for an amount that included the purchase price of the Collaroy property, was not repayable by Robert to Mount Mill (unless it was forgiven). In those circumstances, Mount Mill had not, in fact, lost a valuable asset. It had simply sold the Collaroy property and had a debt owed to it by one of the purchasers for the purchase price.
33. There was other cross-examination of Timothy that did not paint him in the most favourable light and which confirms my view that I cannot have confidence in his evidence. Again, documents which were written by, or to, him, during Robert's lifetime, were relied upon to found the cross-examination.
34. I should mention that these were documents, a copy of each of which was annexed to the affidavit sworn on 1 November 2014, of Timothy's son, Stephen. Senior counsel for the Defendants submitted that I should not regard this disclosure as evidencing Timothy's compliance with an obligation to disclose the whole truth. To the contrary, it was submitted that the significance of the correspondence had not been appreciated by the Plaintiffs at the time the affidavit was served. There is probably some merit in this submission although it is not necessary to determine the issue either way.
35. The documents to which I have referred concerned one, or more, applications, made by, or on behalf of, Mount Mill, to the NSW Rural Assistance Authority, commencing in or about November 1995, for a Drought Exceptional Circumstances Certificate. To obtain such a Certificate, an application for either Drought Relief Payment through the Department of Social Security, or Austudy through the Department of Employment, Education and Training, was required.
36. In a letter dated 28 December 1995, addressed to Mount Mill, following receipt of the application, it was noted that "Mr R F Evans & Mrs S M Evans are partners in the company, and that their off farm assets exceed $163,500.00". In response, Timothy in an undated letter, signed by him, wrote, stating amongst other things: "My Mother & Father who are directors of our company, together with myself, are 80 & 88 years old and play no part in the running of the property, except in a supportive role. Their assets & or liabilities are enclosed & my understanding from what they have told me is that their private assets have nothing to do with our Property (Company) & are promised to my two sisters."
37. When confronted in cross-examination with the terms of this letter, Timothy admitted that he had written it in order for there to be rural assistance granted to Mount Mill and because he thought it would be to the financial wellbeing of Mount Mill and that of his family to obtain rural assistance. He said that what he had stated he believed to be true at the time. However, when faced with what he had written about what he had been told, he, at first, said "I don't recall it", but then, when pressed further, said, at T71.16 - T71.27: "Q. How does it come about that you say in this letter that "My understanding from what they have told me is", et cetera? What were you referring to there? A. Well, they'd told me previously. Q. They told you? A. Not in relation to this application. Q. They told you, what, previously to 1995? Is that when they told you? A. Yes. Q. Certainly after 1983? Isn't that the truth? A. Yes."
38. He had not included in his affidavit in chief any conversation with either parent, after 1983 and prior to 1995, in which he had been told that Robert's and Sheelagh's "private assets have nothing to do with our Property (Company) & are promised to [his] two sisters".
39. In a letter dated 19 April 1996, from the NSW Rural Assistance Authority addressed to Mount Mill, which is headed "Your appeal for Exceptional Circumstances for Drought Relief" the following passage appears: "The appeal, against the Authority's refusal of the application for Drought Exceptional Circumstances interest subsidy, has been considered by the relevant Authority Appeal Committee. The Committee took into consideration information provided in a personal interview. It noted that the house at Collaroy is a personal asset of Mr R F and Mrs S M Evans, and that their other assets will be bequeathed to their daughters. The Committee however further noted that Mr R F and Mrs S M Evans are both shareholders of Mount Mill Pty Limited and that over one third of the total farming land is owned by Mr R F Evans. In assessing eligibility for assistance, all assets of Mr R F and Mrs S M Evans must therefore be fully taken into consideration. On this basis, the net off-farm assets of all members of the farming enterprise exceed the threshold eligibility level of $167,500."
40. There is no doubt that Timothy read this letter as it bears his handwriting.
41. In a letter dated 21 May 1996, from the NSW Rural Assistance Authority addressed to Mount Mill, which is headed "Appeal - Application for Drought Exceptional Circumstances Interest Subsidy Grant" states: "The Authority noted the revised information outlining that the land indicated in the original application owned by Mr RF Evans, had been owned by Mount Mill P/L since 1963. However, it also noted from an executed Statutory Declaration dated 7 March 1996 that Mr RF Evans is the Governing Director of Mount Mill PL and receives a dividend of $15,000 per annum from the company. In this situation Mr RF Evans' overall position must be fully considered in assessing eligibility. Accordingly, the decision to refuse the above mentioned application for assistance is confirmed."
42. The Statutory Declaration, which is one signed by Robert, to which reference is made is in the following terms: "I, ROBERT FITZGERALD EVANS of Coomber, Rylstone, Grazier, make oath and say as follows:- 1. I am the Governing Director of Mt Mill Pty Limited but the Company is now run by my son TIMOTHY FITZGERALD EVANS and his sons. 2. I have lent the Company $90,000.00 on which interest is paid at 7 1/2% per annum and I have also lent my said Son $100,000.00 at similar interest. I receive a small dividend of $15,000.00 per annum from Mt Mill Pty Limited. 3. I say that what real estate and shares I own (either in my name or jointly with my wife SHEELAGH MACQUARIE EVANS) are completely separate from the Company Mt Mill Pty Limited. 4. I say further that my assets are not bequeathed to my said Son or his family in my will but to my wife and daughters and neither my said Son or Mt Mill Pty Limited will benefit financially upon my death."
43. There is another Statutory Declaration, signed by Sheelagh, which is in the following terms: "I, SHEELAGH MACQUARIE EVANS of Coomber, Rylstone, Grazier, make oath and say as follows:- 1. I am a Director of Mt Mill Pty Limited but the Company is now run by my son TIMOTHY FITZGERALD EVANS and his sons. 2. I know that my husband has lent the Company $90,000.00 on which interest is paid at 7 1/2% per annum and has also lent my said Son $100,000.00 at similar interest. My husband and I receive a small dividend of $15,000.00 per annum from Mt Mill Pty Limited. 3. I say that what real estate and shares I own (either in my name or jointly with my husband ROBERT FITZGERALD EVANS) are completely separate from the Company Mt Mill Pty Limited. 4. I say further that my assets are not bequeathed to my said son or his family in my will (other than some money which I have saved in the Westpac Bank at Rylstone) but to my husband and daughters and neither my said Son or Mt Mill Pty Limited will benefit financially upon my death."
44. There was a large amount of time spent cross-examining Timothy about these documents. It would unnecessarily further encumber these reasons to set out, in detail, that cross-examination. For the most part, the answers he gave confirm that Timothy is not a reliable witness. I am unable to accept his assertion that he had forgotten, completely, the events that had occurred and what had been done by, and on behalf, of Mount Mill, to obtain drought relief assistance.
45. I set out the substance of the evidence given by Timothy during that cross-examination to justify the conclusions I have reached: (a) He stated that his belief since 1983, had always been that both Robert and Sheelagh would each leave to him in his, and her, will a one third share in the Collaroy property: T59.42 - T59.44; (b) He asserted that he did not recall (and on occasions denied) any statements made by Robert and Sheelagh that that they would not be leaving him a share of the Collaroy property: T60.09 - T60.16; (c) He accepted that an application to the NSW Rural Assistance Authority had been rejected because the assets of Robert and Sheelagh exceeded the permissible limit; that he had spoken with them about how this problem could be overcome; he had taken advice about that from his accountant and business advisor: T61 - T62; (d) He stated that he could not remember either of the Statutory Declarations and denied that they had been brought into existence under circumstances about which he knew: T62.43 - T64.07; yet, later, accepted that the preparation of each of them was done carefully and deliberately in support of the application for rural assistance: T65.11 - T65.14; (e) He denied that he had seen the final application that was submitted to NSW Rural Assistance Authority: T66.03 - T66.36; (f) Despite the contents of the Statutory Declarations, and what he, himself had written to the NSW Rural Assistance Authority, he stated that he did not know that his parents were not proposing to leave him any interest in the Collaroy property: T66.38 - T66.41; T67 - T68; (g) He admitted that, after 1983, he had been told that Robert and Sheelagh would not leave him any property, including real estate, on his and her death: T71.46 - T72.08; (h) He did not believe that omitting from his affidavit in chief any reference to the correspondence that he himself had written, or to the Statutory Declarations, was misleading: T74.23 - T74.24; (i) He admitted that from 1995, he had a clear understanding that neither Robert, nor Sheelagh would be leaving any real estate to him on their death and that from then, his understanding from the conversation with them, was that the real estate assets other than the Mount Mill properties were promised to his two sisters: T77.21 - T77.31; (j) He was aware, by 19 April 1996, that one of the things that the NSW Rural Assistance Authority was taking into consideration in relation to Mount Mill's application for drought relief was that the Collaroy property was a personal asset of Robert and Sheelagh and that all their off farm assets would be left to their daughters: T78.37 - T79.23; (k) Whilst he understood that in order for the application to be successful, at least, Robert and Sheelagh had to relinquish their shares and Robert had to resign as Governing Director, he could not recall that Robert and Sheelagh each had to state that they would not leave any assets to him in their wills: T81.03 - T 81.23; (l) He stated, despite the fact his handwriting appeared on various documents to, or from, the NSW Rural Assistance Authority, that he did not take any part in making the application by Mount Mill, which Stephen had made: T80.01 - T80.04.
46. Furthermore, some of the evidence given by Timothy was not supported by his son, Stephen. Importantly, Stephen stated that Timothy had the overall say in the running of the property by 1995, and that the applications which were made for drought relief were made with Timothy's assistance, authority and approval: T98.16 - T98.28. He stated that it would have been wrong to say that Timothy "played relatively no role at all in these applications": T99.08 - T99.10. To the contrary, Timothy "played a significant role" in the preparation of the applications: T99.12 - T99.17.
47. No adequate explanation was provided by Timothy for the significant inconsistencies between the facts of the case propounded by him and the contents of a number of the letters and the Statutory Declarations. It may be that he did not examine the contemporary documents in depth before giving his evidence.
48. I should mention, also, that Timothy did not state that he expected that Robert and Sheelagh would not be free to withdraw what he alleged was said by Robert in the presence of Sheelagh and upon which Timothy said that he had relied. Even if that evidence were given, it would have been impossible to accept in the light of the documents to which reference has been made.
49. Earlier in these reasons, I set out some of the disputed questions of fact that were dependent upon acceptance of the evidence of Timothy. I now set out my specific findings in relation to those disputed facts: (i) Timothy was likely to have had knowledge of the transfer of the Collaroy property at, or about, the time it was transferred from Mount Mill to Robert and Sheelagh; (ii) Timothy did not object to the transfer of the Collaroy property from Mount Mill to Robert and Sheelagh; the purchase price of $165,000, was proper value of the Collaroy property at the time of its transfer; (iii) Robert did not make any irrevocable "promise" or "assurance" to Timothy in 1983 (or at any other time) that the Collaroy property "will be left to you and Gael and Kerry one-third each"; (iv) Sheelagh did not make any irrevocable "promise" or "assurance" to Timothy in the same terms as that allegedly made to Timothy by Robert; (v) Timothy did not have any continuing belief that he would receive a one third share of the Collaroy property upon the death of both of Robert and Sheelagh.

Other Witnesses

1. Stephen was cross-examined. I have noted the relevant transcript references at paragraph 143 above and need not say anything further in relation to his evidence.
2. Gae and Kerry each was cross-examined. Whilst each gave the impression of being somewhat defensive, I find that she was endeavouring to recollect, to the best of her ability, the events that had occurred.
3. Gae gave evidence of several conversations with Robert about the terms of his Will. She said that on one or two occasions in the 1980's, he had said to her that on his death Timothy would be getting Mount Mill, the property and the stock and that she and Kerry would receive "the remainder of my property, the shares, the Collaroy property and any other property left over" so that they were looked after.
4. Later, in the late 1980's or early 1990's Robert told her that he was thinking of changing his Will to leave the Collaroy property solely to Kerry. She stated that Robert did not tell her of the codicil made in 2000.
5. Kerry referred to a conversation that she had with Robert about his testamentary intentions, so far as they related to her and her siblings. She confirmed his intention to leave Mount Mill, the property and stock to Timothy and to leave the rest of his assets to her and Gae. She, also, was unaware of the codicil made by Robert in 2000 until after his death.
6. Each corroborated the substance of the statement made by Timothy, to which I have referred above, that he "hoped" to receive a one third share of the Collaroy property. Each also stated that it was only after the death of Robert, that Timothy had asserted that there was "a promise" by both Robert and Sheelagh to leave him that share of the Collaroy property. Each also stated that Robert had not told her of any "promise" made to Timothy in respect of the Collaroy property and that she had never heard either Robert, or Sheelagh, use the word "promise" in relation to his, her or their future intentions.
7. It is useful to remember the evidence, in cross-examination, given by Gae at T113.20 - T113.44: "…you understand that your brother Timothy is saying that your father, in the presence of your mother, made a promise to him about the Collaroy property in 1983. You're well aware of that, aren't you? A. From Tim's affidavit, yes. Q. You're aware that is what he is claiming? You understand that? A. I understand that's what Tim's claiming. Q. You say your father never discussed any promise with you, is that correct? A. My father never discussed any promise to Tim with me. Q. That was because your father was secretive about these things, wasn't he? He didn't discuss everything with the children. A. About his wills? Q. Yes. A. On occasions, yes. Q. But what he said to you about the Will, having left the property to you and Kerry, was not, in fact, quite true, was it, because he'd included Tim in this disposition from the 1988 will? A. What he said to me in the late 80s was that it was Kerry's and mine. In the early 90s he said he would - he asked me what I would think if he gave Collaroy - left Collaroy, the property, to Kerry because she was not married. I had my husband to take care of me and Tim had all the property."
8. Interestingly, the assertions of fact seem to accord with the true facts, albeit, that in the early 1990's the shares in Mount Mill owned by Robert and Sheelagh had not been transferred to Timothy. However, there was never a suggestion that they were not going to be.
9. And at T123.31 - T125.16, Gae gave the following evidence: "Q. Can I take you back to your affidavit, Mrs Braddock, and that's behind guide card 7? In paragraph 55 on page 11 you say that in about 2004 your mother told her that she had changed her will so that Collaroy would be left to you and your sister, do you see that? A. Yes. Q. Then some time later, and this is in paragraph 57, she said to you, "I told Tim about my decision with Collaroy, he was not very pleased and he said he would like to see a copy of my new will". Did she tell you why Timothy wasn't pleased? A. No. Q. Did you ask her? A. I knew. Q. I'm sorry? A. Yes. I knew. Q. No, I didn't ask you whether you knew, I said did you ask her? A. No, I didn't ask her. … Q. Why would you know that Timothy wouldn't be very pleased? A. Well, I just did. Q. You knew he wouldn't be pleased did you not, because he …had indicated that there was a promise made to him that he would get one-third of Collaroy, isn't that the case? A. I knew of no promise. HIS HONOUR Q. I think the question that Mr Willmott asked you, Mrs Braddock, is, that you knew that he would be unhappy because he believed that there was a promise? A. Yes. Q. Do you understand? A. Yes, I do. Q. Is that what you knew? A. Knew he'd be unhappy. Q. Why? A. Because he always asserted he had been promised. WILLMOTT: I didn't hear her answer. HIS HONOUR: He always asserted that he had been promised. WILLMOTT: Yes. Q. By your mother and father? A. No. To my sister and me. He always said he had been promised to my sister and me. Q. When did this happen? A. When did what happen? HIS HONOUR Q. Promised by whom I think is the question? Who had promised him, did he tell you? Did he tell you who had promised him? A. He would have said my mother and father. … Q. Have I captured that correctly, Mrs Braddock, that your brother had said to you and to your sister more than once that he had been promised a third of Collaroy by your parents? Have I understood your evidence? A. After our father's death, yes. Q. After your father's death, thank you? A. I've never heard him mention it before."
10. Senior counsel for the Plaintiffs commented upon the fact that there was no denial by Sheelagh of the assertions made by Timothy in his correspondence, firstly to Mr McGeoch (part of Ex. D1), and then to Sheelagh, the original of which was sent to Philip (Ex. D2).
11. In relation to the letter to Mr McGeoch, I note that there is no "promise" alleged, but rather an assertion is made that Timothy had "agreed to" the transfer by Mount Mill of the Collaroy property in 1981 "on the condition that I would retain a 1/3 share of this property", an agreement that he subsequently denied as to the date in cross-examination. (Of course, Timothy had never owned a one third share of the Collaroy property so, in truth, there was nothing to "retain".)
12. I note, also, Timothy's evidence that in about October 2004, Sheelagh told him that she had changed her Will and that she was leaving the Collaroy property to Kerry and Gae. The response he says he gave does not include an assertion of any promise, but simply that "I was supposed to get 1/3 of the Collaroy property" and that it "was transferred from the company without my knowledge or approval".
13. In relation to the letter dated 5 October 2005, addressed to Sheelagh, I note, again, that there is no assertion of any promise, or any reliance on any promise. Rather, Timothy states that Robert "told me it would be left to the three of us 1/3 each". He also stated that if Sheelagh "did not want to leave me a share … that it be held in trust for Kerry so that any money accrued from that legacy could go to Kerry if needs be… [and then] following Kerry's passing on that legacy go to my three children… This would also fulfill (sic) [the] spirit of Dad's earlier Wills when Collaroy belonged to the Company that it would be for the use of & or benifit (sic) of all the family".
14. Furthermore, despite a conversation asserted by Timothy that he said to Kerry in 2003, in the presence of Sheelagh, "[a]ll I want is what Dad promised; that is, a one third share in the Collaroy property", I do not accept that Timothy asserted any such promise. Interestingly, all he states is that Sheelagh said that she would not do anything without discussing it with him first.
15. What is described above is inconsistent with any belief held by Timothy that Sheelagh was bound by what Robert is alleged to have said in her presence and that she would not be free to withdraw what had been said by Robert in her presence. It suggests that what was to happen with the Collaroy property on Sheelagh's death could be the subject of discussion and how it would pass then may be changed from the terms of any alleged promise.
16. In any event, in relation to the letter addressed to Sheelagh (Ex. D2), Gae wrote to Philip a letter dated 2 November 2005 (Ex. TFG) in which she explained that Sheelagh was "very happy with things the way they are and would simply like to be left alone", and that "she doesn't want to be faced with all these family problems, she's made her decision that she feels is the right one and would just like a bit of respect for that". It was not suggested to Gae that what she had said did not reflect Sheelagh's views as expressed to Gae.
17. Kerry, also, acknowledged that Sheelagh had told her that Timothy would not be happy about the terms of her last Will because he had indicated he wanted, or would like, a third share of the Collaroy property. Again, what is said reveals a hope, rather than an expectation based upon an irrevocable promise.
18. It is interesting to note that each of Gae and Kerry admitted, without any prevarication, that she knew that Robert's, and Sheelagh's, long held, and expressed, intention was for Timothy to receive all of the shares in Mount Mill. Each, however, denied any knowledge of the alleged promise.
19. Where there is any conflict of evidence between that of Timothy and that of Gae or Kerry, I prefer the evidence of Gae and Kerry.
20. Philip was cross-examined briefly. He confirmed that there was a meeting, in his office, at which Sheelagh and Timothy had attended. The purpose of the meeting was that Timothy wanted to discuss the Collaroy property and the fact that it had been left to his sisters and that he would take no benefit under Sheelagh's Will.
21. Philip confirmed that Timothy may have said that the Collaroy property had been transferred from Mount Mill without his knowledge and approval, but he had no recollection of Timothy saying "anything about a promise": T138.47 - T138.50. Philip also confirmed that Sheelagh had "never mentioned … the details of any promise made by her or her late husband to [Timothy] about the disposition of the Collaroy property, such as that she had promised him a one third share of the Collaroy property upon her death". Finally, he stated that Sheelagh, when discussing her testamentary intentions, was "very definite that she wanted her daughters to receive the entirety of her estate (aside from the small bequest to [Timothy] and the gift to Helen Evans)".
22. Philip's contemporaneous diary note states that she was "most adamant" about leaving her property at Mudgee and the Collaroy property to the "girls" and that "Tim had been well taken care of in his lifetime with Coomber etc…". Objectively, this was factually accurate.
23. It is inconceivable that if there were the number of conversations, said by Timothy to have taken place, about the transmission of one third of the Collaroy property to Timothy upon Robert's and Sheelagh's death, that Sheelagh would not have mentioned it to Philip. It is also inconceivable that if a promise had been raised with Philip, he would not have discussed it with Timothy.
24. There is no reason at all to doubt Philip's evidence. In the case of any conflict of evidence, I prefer Philip's evidence.

The Plaintiffs' Submissions

1. I have earlier set out the broad submission made on behalf of the Plaintiffs. I shall now turn to the submissions, in more detail, on which they relied. I have taken these, principally, from the written outline of submissions filed prior to the hearing.
2. On the proprietary estoppel claim, the Plaintiffs submitted that Robert's words "(i)t will be left" rather than "I will leave it" clearly suggested that both Robert and Sheelagh (who is said to have been present, listened to, and did not dissent from what her husband had said), promised Timothy that the survivor would ensure that one third of the Collaroy property would pass to Timothy. Sheelagh adopted Robert's promise by her silence, so that were she to survive Robert, as occurred, she would be bound by that promise. Implicit in Robert's words was the promise that each would organise his and her testamentary dispositions such that the survivor would devise the Collaroy property to Timothy and his two sisters in equal shares. As stated, the Plaintiffs submit that Robert's words amounted to "estoppel by encouragement".
3. Then, it is submitted, that the court should accept that Timothy relied on the promise through his conduct of accepting the transfer of the Collaroy property out of Mount Mill because of the promise and that he did not turn his mind to what he would have done if the promise had not been made. He stated, and the court was asked to accept, that he "recognised that Mount Mill … had lost a valuable asset. I think that had my father not made the promise I would at least have sought legal advice."
4. It is then submitted that there was detriment suffered by Mount Mill because it took no action to recover the Collaroy property. It suffered that detriment in reliance, by its agent Timothy, on Robert and Sheelagh's promise. It suffered further detriment by continuing to pay all of the outgoings on, and the utilities connected to, the Collaroy property up until 1990 and the costs of insurance up to 2003.
5. It is also submitted that Timothy suffered detriment as the value of the shareholding was diminished.
6. It was next submitted that the necessary relief to do justice between the parties is that Gae and Kerry should be required to pay to the Plaintiffs the sum of $473,119 (being one third of the net proceeds of sale of the Collaroy property), plus interest calculated from 10 March 2011 to date.
7. In relation to the common intention constructive trust, it was submitted that Timothy, Robert, Sheelagh and Mount Mill had agreed, understood and arranged, to use the income and profits from the farming operation for the benefit of the family as a whole. Mount Mill's acquisition of the Collaroy property was for the benefit of the members of the family.
8. The joint relationship or endeavour between Robert, Sheelagh and the Plaintiffs was said to have continued until it ended "without applicable fault" when Robert died.
9. The Plaintiffs also stated, in their oral submissions that the joint endeavour ended upon the resignation of Robert and Sheelagh as directors of Mount Mill in 1997. Thus, Robert and Sheelagh held the Collaroy property on common intention constructive trust until it was sold and when Sheelagh as the survivor would have received the proceeds of sale, which would have been held on the same trust. Those sale proceeds remained impressed with the trust when they passed into the hands of Gae and Kerry.
10. The appropriate relief in the circumstances, it was submitted, was a declaration that one third of the net proceeds of sale of the Collaroy property received by Gae and Kerry is, or was, held on constructive trust by them for Timothy and/or Mount Mill and an order that Gae and Kerry pay to Timothy and/or Mount Mill an amount equivalent to that sum plus interest. In the alternative, it was submitted that the equity could be satisfied by an order for equitable compensation in the same amount plus interest.
11. Finally, it was submitted that Robert and Sheelagh, as directors of Mount Mill, each breached what was described as "the no conflict rule as well as the no profit rule" when Robert arranged for the title to the Collaroy property to be transferred into their joint names. Their duties to Mount Mill, so it was said, included the duty to act in all matters concerning the company in good faith and for a proper purpose. They chose to put their own interests ahead of the interests of Mount Mill; and they made a profit using their fiduciary positions. It was submitted that Robert, in short, exercised his voting power so as to deprive Mount Mill of its property and diverted it to himself and his wife. The 'round robin' involving the issue of the cheques recorded above was, presumably, designed to conceal this. Thereafter, they held their interests in the Collaroy property on constructive trust for Mount Mill.
12. In addition, it was submitted, that Timothy, as a shareholder of Mount Mill, in circumstances where the board of directors (namely Robert and Sheelagh) would not commence proceedings against themselves, could have brought a claim on behalf of Mount Mill against the directors. Yet it is accepted that "[w]hen he learned of his father's acts in causing the title to the Collaroy property to be transferred into his and his mother's name, Timothy took no action". The lack of action was based upon his reliance on the promise made by Robert, as discussed above. It is then submitted that had he brought an action, the relief sought would have been the restoration of the Collaroy property to Mount Mill.

The Defendants' Submissions

1. The principal submission made on behalf of the Defendants was that Timothy was "a very unsatisfactory witness" whose evidence should not be believed unless it was independently corroborated or was against his interests. Various examples were provided.
2. It was submitted that unless the disputed facts (referred to earlier) were established, the proceedings based upon an equitable estoppel must fail.
3. In relation to the submissions of the Plaintiffs that Robert and Sheelagh had acted in breach of their duty as directors to Mount Mill, the Defendants submitted that a review of Mount Mill's Memorandum and Articles of Association revealed that Robert was solely vested with the power to carry out Mount Mill's business. Furthermore, as expressly set out in the Memorandum of Association, the company's business (or objects) included providing for the welfare of persons in the employment of the company, as well as the wives, widows and families of persons in the employment of the company. In addition, the Memorandum of Association expressly provided that Mount Mill could exercise its powers and use its assets to benefit the company's employees and their families by "grants of money, pensions or other payments".
4. Given that Robert was an employee of the company and Sheelagh was his wife, it was entirely within the objects of the company for Robert, to use his power, as Governing Director, to transfer an asset of the company to benefit himself and his wife, just as it would have been had he used his power to transfer the Collaroy property into the names of his three children. There was no scope to read into Mount Mill's Memorandum or Articles some otherwise unexpressed limit to the objects or powers, on the basis of general fiduciary law. Even if each did owe a duty of care of a fiduciary nature to Mount Mill, one had to assess that duty and any conflict in the context of the circumstances of the company.
5. It was pointed out by the Defendants that the Plaintiffs did not allege that Robert, as Governing Director of Mount Mill, did not have the power to sell the Collaroy property. Nor did they allege that in exercising his power to sell the property Robert was actuated by some improper purpose. It was also submitted orally that even if there was a breach, there was no detriment as all shareholders, that is, all family members including Timothy, continued to enjoy the benefit of Collaroy as they had always done.
6. The Defendants compared Mount Mill's company structure to a Gorton scheme-type company: see, The Commissioner of Taxation (Cth) v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336. The Defendants referred to two paragraphs of the judgment of Aicken J (with whom Barwick CJ relevantly agreed), at 407 and 412, about the exercise of the powers of a Governing Director, and whether such exercise could be the subject of a successful derivative action by a shareholder.
7. Relevantly, Aicken J stated: "The critical difference between Ceedon and St. Helens Farm was, as Sheppard J. pointed out, that there was in Ceedon a power existing in the company to reconvert the preference shares held by Mr. Donald to ordinary shares. Since Mr. Donald was the governing director and the holder of 2,699 preference shares and had full voting rights in respect of those shares during his lifetime, he could convene and control an extraordinary general meeting for the purpose of passing a special resolution amending the articles so as to reconvert the preference shares to ordinary shares. Moreover as governing director he could control and indeed prevent the issue of any further shares. Sheppard J. rejected an argument that the powers conferred by art. 7 were invalid and in my opinion he was right to do so. He dealt also with a separate argument that the power given to Mr. Donald could not be exercised for his own benefit but only for the benefit of the company as a whole. I defer consideration of that point for the moment."
8. His Honour returned to the topic at 412: "It is now convenient to deal with the separate argument to which I adverted earlier. In Ceedon it was argued in relation to the operation of s. 18 (2) (c) that the power to call an extraordinary general meeting and cause a special resolution to be passed so as to reconvert the preference shares was one which could be exercised only for the benefit of the company as a whole and not merely for the benefit of one particular shareholder. Whatever the generality of that proposition may be it cannot be regarded as having an automatic operation. As Sheppard J. pointed out, no hypothetical purchaser, whether a member of the family or not, should be presumed to ignore the existence of the power upon the assumption that he would succeed in litigation designed to restrain or set aside its exercise. No sensible hypothetical purchaser would be likely to approach the matter otherwise than upon the basis that the power might be validly exercised and that any challenge to the exercise might involve expensive and unsuccessful litigation. Those considerations would exercise a powerful influence upon his decision as to what price he would be prepared to pay. In truth it seems to me that no comfort can be obtained from the possibility that it might be established that the power had been wrongly exercised. Moreover control of the company would still remain wholly in Mr. Donald's hands whatever might be the outcome of such litigation unless proceedings under s. 186 of the Companies Ordinance 1962 (A.C.T.) were launched and were successful."
9. The Defendants submitted, in conclusion, that in light of the Memorandum and Articles of Association of Mount Mill, and the powers given to Robert as Governing Director, "there could be no complaint made about the fact that he and his wife purchased the Collaroy property under the circumstances in which it occurred": T203.6 - T203.9.
10. It was also submitted that even if there was a breach of duty by Robert and Sheelagh, Mount Mill could not, in these proceedings, make any claim because the Collaroy property had been transferred in 1981. At that time, the Companies (New South Wales) Code (1981) applied to Mount Mill. Section 229(7) of the Companies Code provided a statutory cause of action for a company to recover from a director any profit made by that director as a result of a breach of duty. The Companies Code was replaced in 1992 by the Corporations Law found in the Corporations Act 1989 (Cth). Section 232(8) of the Corporations Law provided the same statutory cause of action. See now s 1317H of the Corporations Act.
11. Any proceedings relying upon the statutory cause of action needed to be commenced no later than 6 years after the contravention alleged: see s 1317K of the Corporations Act; and s 1317HD of the Corporations Law. The Companies Code did not contain any limitation period, but s 14(1)(d) of the Limitation Act applied a 6-year limitation period to "a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture". Therefore, the statutory cause of action has been subject to a 6-year limitation period.
12. Even if it were found that Timothy did not find out about the transfer of the Collaroy property to Robert and Sheelagh until 1983, this would not assist, as Mount Mill's claim was not adverted to until the filing of the amended Statement of Claim on 12 February 2014.
13. Reliance was placed upon Gerace v Auzhair Supplies Pty Ltd. (An application for special leave to appeal to the High Court was dismissed on 10 December 2014: Auzhair Supplies Pty Ltd v Gerace [2014] HCASL 231).
14. At [70], Meagher JA (Beazley P and Emmett JA agreeing) wrote: "The authorities referred to above, and in particular McNeil show that in purely equitable proceedings, where there is a corresponding remedy at law in respect of the same matter and that remedy is the subject of a statutory bar, equity will apply the bar by analogy unless there exists a ground which justifies its not doing so because reliance by the defendant on the statute would in the circumstances be unconscionable. They do not support the proposition that equity retains any broader discretion whether to apply the bar. The description of such a ground, or the conduct giving rise to or constituting it, as unconscionable or unconscientious leaves to be identified the principles according to which equity justifies that conclusion [citations omitted]."
15. (The two classes of cases, referred to by Meagher JA, at [35], in which courts of equity have declined to apply limitation periods by analogy, namely, claims by a beneficiary against a trustee for breaches of trust, and claims involving fraud or fraudulent concealment, are not relevant.)
16. It followed, so it was submitted, any cause of action that Mount Mill may have had for breach of duty by Robert or Sheelagh was time-barred.
17. In addition to relying upon the expiration of the limitation period, the Defendants relied upon laches and acquiescence. It was submitted that, even if the court accepted Timothy's evidence about when he first found out that Mount Mill had transferred the Collaroy property to Robert and Sheelagh, some 29 years had passed before the proceedings were commenced against the Defendants. Despite Timothy being the Governing Director and the controlling shareholder, Mount Mill was not, initially, a party to the proceeding, and no allegations had been made concerning unpaid loans or breaches of directors' duties until 2014 when Mount Mill was joined to the proceeding.
18. (A similar submission could have been, but was not expressly, made, for the period after 1995, since it was then that each of Robert and Sheelagh had stated that each would not devise the Collaroy property to Timothy, but would leave all of their off farm assets to Gae and Kerry.)
19. The prejudice to the Defendants, it was submitted, was "prejudice …resulting from the loss of potentially relevant evidence [which] has been held to be sufficient prejudice to establish laches, such as to disentitle a plaintiff from the equitable relief that he or she seeks". The loss of evidence was from both Robert (had the proceedings been commenced after 1983 and before his death in 2001) and from Sheelagh, after 2001 and before her death in 2011. The Defendants also submitted that there was written evidence which may have been lost and memories which may have faded.
20. The Defendants relied upon Timothy's and Mount Mill's acquiescence in standing by whilst Robert and Sheelagh treated the Collaroy property as their own, and then, after Robert's death, in Sheelagh treating it as her own.
21. In relation to the Plaintiffs' claim of equitable estoppel, the Defendants submitted that the Plaintiffs failed to establish the requisite elements.
22. Firstly, it is submitted that the conversation that allegedly took place in 1983 did not create a legal relationship between Timothy and his parents as there was no sufficiently clear promise or assurance in that: (1) Timothy did not know whether the alleged promise extended to Sheelagh's interest and therefore he could not know with any certainty what he was being promised; (2) Timothy did not know how the property would be left to him; (3) It is unclear how Sheelagh adopted the promise through her silence.
23. The Defendants submitted that the promise or assurance was simply too "vague and uncertain" to found their claim as it did not clearly and precisely set out what is the particular state of affairs presently existing or that would arise in this future.
24. The Defendants further submitted that no evidence has been led to establish that Robert and Sheelagh induced Timothy to adopt the assumption or expectation as Robert and Sheelagh never requested anything from Timothy in return for the promise being made. Furthermore, it was submitted that a statement of testamentary intention was a class of statement which ordinarily would not induce any person to adopt an assumption of expectation as it is ordinarily revocable at any time before the person died. As such, the representation of Robert did not suggest that the promise was in any sense binding; rather it was a declaration of intention with respect to his testamentary disposition, which he was free to change at any time before his death.
25. Finally, the Defendants submitted that the Plaintiffs' equitable estoppel claim must fail for want of detrimental reliance on any "promise" for two reasons.
26. Firstly, Timothy did not rely on any assumption or expectation to his detriment through allegedly giving up a valuable right to commence derivative proceedings on behalf of Mount Mill against his parents. As neither Robert nor Sheelagh breached any director's duties, any derivative proceedings commenced would have been unsuccessful. And even if the derivative proceedings had some value to Timothy, the Plaintiffs did not establish that Timothy's inaction was made in reliance on the promise of a one third share of Collaroy.
27. Secondly, Timothy did not rely on any assumption or expectation to his detriment through Mount Mill continuing to pay all outgoings on the Collaroy property, as well as the costs of maintaining and improving the property. The Plaintiffs did not prove that these payments were made in reliance on the promise, as Robert was the "controlling mind" of Mount Mill, with the result that it was Robert who caused payments to be made by Mount Mill. Clearly, he did not do so in reliance on any alleged promise made to Timothy.
28. The Defendants also submitted that the Plaintiffs' claim for the imposition of a constructive trust over one third of the proceeds of sale of Collaroy was misconceived and doomed to fail.
29. It was submitted that the Plaintiffs adduced no evidence of any "agreement, arrangement or understanding" between Timothy, Robert and Sheelagh, which could constitute a joint relationship or endeavour. Even if there were any such agreement, arrangement or understanding, it would have been entirely unnecessary because one of Mount Mill's objects was to benefit the members of the Evans family. In addition, it is highly unlikely that Robert would have entered into such an agreement, arrangement or understanding with Mount Mill as he was the "controlling mind" behind Mount Mill and would essentially be entering into an agreement, arrangement or understanding with himself.
30. Secondly, the Defendants submitted that Timothy is not entitled to any equitable relief as it is apparent that he only paid small contributions to Collaroy in 2002 which were repaid by Sheelagh.
31. Mount Mill, on the other hand, made some contributions to Collaroy between 1965 and 1990. However, as Mount Mill was the sole registered proprietor of Collaroy between 1965 and 1981, the company would not be entitled to an equitable interest for any contributions made during this period. After the transfer of Collaroy in 1981, there was no evidence to enable a finding that Mount Mill intended that Robert and Sheelagh should not be beneficially entitled to the payments made by Mount Mill to Collaroy or that it was the common intention of the parties that Mount Mill would be entitled to an equitable interest in Collaroy in return for money advanced. They put, again, that it was artificial to describe Mount Mill as having any such intention, given that Robert was the "controlling mind" of the company.
32. There was also nothing in the evidence to suggest that any of the parties intended Mount Mill to have any interest in Collaroy after it had been transferred to Robert and Sheelagh. Whatever payments were made by Mount Mill in 1981 were made in accordance with Mount Mill's objects. The whole family continued to enjoy the Collaroy property as they had always done until about 2002.
33. Next, the Defendants submitted that the Plaintiffs failed to prove when and in what circumstances the joint relationship or endeavour failed. They also had not established that the joint relationship or endeavour ended without attributable blame to either party. Thus the foundation for the Court's intervention, preventing the unconscionable exercise of legal rights, is missing.

Equitable Estoppel

1. An executory promise, unsupported by consideration, is, prima facie, revocable. However, some subsequent conduct of the intending donor, encouraging or inducing the intended donee to act to his prejudice on the footing that property, or some interest in it, will become his, may make it unconscionable for the donor to withhold the property or the interest in it from the donee, and equity, on that ground, may hold the donee to be entitled to the property: Olsson v Dyson (1969) 120 CLR 365, per Kitto J, at 376.
2. Promissory estoppel, as its name indicates, is based on a non-contractual promise or assurance which, in its orthodox form, becomes binding in equity, so as to restrain the promisor from enforcing his strict legal rights: Equititrust Ltd v Franks [2009] NSWCA 128; (2009) 258 ALR 388, per Handley AJA, at [70].
3. (I have not, and shall not, use the word "representation" which, it has been suggested, should be used to refer to statements about an existing or past fact. I shall refer to "promise or assurance" to describe the statements of future conduct which can give rise to an estoppel: Equititrust Ltd v Franks, per Handley AJA, at [73].)
4. In this case, the Plaintiffs plead an active form of estoppel referred to as estoppel by encouragement, the essence of which type of estoppel is that the person seeking to assert it has been led to alter his, her, or its, position, detrimentally, in the belief that he, she or it would have an interest in the property of the promisee: Ashton v Pratt [2015] NSWCA 12, at [108].
5. In Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, Mason CJ and Wilson J, stated at 404, "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". Their Honours added, at 406, that a departure from the basic assumptions underlying the transactions must be unconscionable. That element was fulfilled by the party encouraging the opposite party in the assumption that a promise would be performed with knowledge that the other party was relying on that assumption to his, or her, detriment.
6. Brennan J wrote, at 419, that: "The element which both attracts the jurisdiction of a court of equity and shapes the remedy to be given is unconscionable conduct on the part of the person bound by the equity, and the remedy required to satisfy an equity varies according to the circumstances of the case."
7. His Honour added, at 423 - 424, that: "The object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfulfilled, will be suffered by the party who has been induced to act or to abstain from acting thereon. If this object is kept steadily in mind, the concern that a general application of the principle of equitable estoppel would make non-contractual promises enforceable as contractual promises can be allayed."
8. At 428 - 429, his Honour summarised the elements to be established as follows: "In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise."
9. The fifth element was expanded upon by Priestley JA in Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466, at 472, that: "For equitable estoppel to operate … there must be the creation or encouragement by the defendant in the plaintiff of an assumption that a contract will come into existence or a promise be performed, and reliance on that by the plaintiff, in circumstances where departure from the assumption by the defendant would be unconscionable."
10. Equitable estoppel was described by Mason CJ in Commonwealth of Australia v Verwayen (1990) 170 CLR 394, at 409, as "a label which covers a complex array of rules spanning various categories". His Honour saw the various categories as having the same fundamental purpose, namely "protection against the detriment which would flow from a party's change of position if the assumption (or expectation) that led to it were deserted" (cited in Sidhu v Van Dyke [2014] HCA 19; (2014) 251 CLR 505, at [1]).
11. In Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101, at [6], it was said that the category of equitable estoppel that is usually traced back to the decisions in Dillwyn v Llewelyn (1862) 4 De GF & J 517; (1862) 45 ER 1285, and Ramsden v Dyson (1866) LR 1 HL 129, is now a "well recognised variety of estoppel as understood in equity", which affords relief "found in an assumption as to the future acquisition of ownership of property … induced by representations upon which there had been detrimental reliance by the plaintiff".
12. The joint judgment of Gleeson CJ, McHugh, Gummow and Callinan JJ, at [35], endorsed the explanation given by McPherson J in Riches v Hogben [1985] 2 Qd R 292, at 301, of the distinction between equitable principles and the enforcement of contractual obligations: "What distinguishes the equitable principle from the enforcement of contractual obligations is, in the first place, that there is no legally binding promise. If there is such a promise, then the plaintiff must resort to the law of contract in order to enforce it, it being the function of equity to supplement the law not to replace it. The second distinguishing feature is that what attracts the principle is not the promise itself but the expectation which it creates ... Finally, the equitable principle has no application where the transaction remains wholly executory on the plaintiff's part. It is not the existence of an unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it gives rise."
13. To these references may be added the not inconsistent fourth requirement of an estoppel by encouragement, stated by Fry J in Willmott v Barber (1880) 15 Ch D 96, at 105 - 106, and recently referred to by Macfarlan JA in Milling v Hardie [2014] NSWCA 163, at [50] - [52], that "the defendant, the possessor of the legal right, must know of the plaintiff's mistaken belief of his rights". Fry J's description of the elements of the estoppel was approved by the High Court in Svenson v Payne (1945) 71 CLR 531, at 542.
14. In Barnes v Alderton [2008] NSWSC 107; (2008) 13 BPR 25,281, Young CJ in Eq dealt with whether one could get relief in a proprietary estoppel case of a promise to leave money by will. His Honour wrote, at [51] - [54]: "It also seems clear from the authorities that where one has the situation that the detriment is incurred in circumstances where the person incurring the detriment knows that the other person may change their mind, there is no relevant representation; see eg Attorney General (Hong Kong) v Humphreys Estate (Queen's Gardens) Ltd [1987] AC 114 at 124. It was for this reason that it was thought for some years that a person could not get relief in a proprietary estoppel case of a promise to leave money by will unless there was also an assurance by the promisor that she would not revoke her will; see Taylor v Dickens [1998] 1 FLR (Eng) 806. However, in Gillett v Holt [2001] Ch 210 at 227, the English Court of Appeal rejected that proposition. The leading judgment was given by Robert Walker LJ as his Lordship then was, with whom Waller and Beldam LJJ agreed. Robert Walker LJ said: "The inherent revocability of testamentary dispositions ... is irrelevant to a promise or assurance that 'all this will be yours'. Even when the promise or assurance is in terms linked to the making of a will ... the circumstances may make clear that the assurance is more than a mere statement of present (revocable) intention, and is tantamount to a promise." His Lordship continued at 228 by reference to the judgment in Gillett's case at first instance by Carnwath J [1998] 3 All ER 917, when in following Taylor v Dickens Carnwath J said at 929-930: "I think that homely expression [not to count his chickens before they were hatched] is an apt statement of how, in normal circumstances, and in the absence of a specific promise, any reasonable person would regard - and should be expected by the law to regard - a representation by a living person as to his intentions for his will. Subject to specific statutory exceptions (such as for dependants), the right to decide, and change one's mind as to, the devolution of one's estate is a basic and well understood feature of English law. The law allows one to disappoint the expectations of those who have no more than a moral claim on one's affections, however strong. During the lifetime of the potential testator, that is a risk which anyone seeking to rely on such a representation necessarily faces." In the Court of Appeal at 228, Robert Walker LJ said of that statement: "In the generality of cases that is no doubt correct, and it is notorious that some elderly persons of means derive enjoyment from the possession of testamentary power, and from dropping hints as to their intentions, without any question of an estoppel arising." However, his Lordship went on to say that in the instant case there had been assurances repeated over a long period, usually before an assembled company on special family occasions some of which were completely unambiguous. The plaintiff after speaking with his wife decided he could rely on Mr Holt's assurances because "Ken was a man of his word". On the facts, the assurances were intended to be relied upon and were relied on to the detriment of the plaintiff. The same result was reached in the Court of Appeal in Victoria in Flinn v Flinn [1999] 3 VR 712; [1999] VSCA 109. At 736 Brooking JA said that it all depends on the circumstances. Everyone knows that people can change their wills, but the circumstances may show that the promise was intended to be, and was reasonably understood to be, not of a revocable testamentary instrument but of a gift by will taking effect on death. Charles and Batt JJA agreed."
15. His Honour added, at [58]: "…There is no evidence that the plaintiff ever thought that that was an irrevocable promise. The general view of the cases I have referred to indicate that the court infers unless there is evidence to the contrary that people are well aware that everyone can change their will as often as they like. That is the ordinary case and in an ordinary case a testamentary promise is very difficult to form the basis of a proprietary estoppel. As Gillett v Holt and Flinn v Flinn show, this is not impossible but one has to show circumstances that the promise was given and understood to be irrevocable. That may be shown by circumstances short of an explicit statement that the promise is irrevocable."
16. (I should also mention that his Honour stated, at [42]): "No equity arises to raise a proprietary estoppel unless the person in whose favour it is being raised, has acted to their prejudice or detriment in some way whether in terms of direct expenditure or on some other basis: Greasley v Cooke [1980] 1 WLR 1306 at 1314. However, the detriment may not necessarily be expenditure of money, commonly a claimant leaves her job, moves in with the promisor and does his housekeeping for many years, such as in Jones v Jones [1977] 1 WLR 438. However, as set out in Pawlowski on the Doctrine of Proprietary Estoppel (Sweet & Maxwell, London, 1996) at pp 69 and following, minor expenditure such as day to day living expenses or minor repairs will not qualify.")
17. His Honour returned to the topic in Weeks v Hrubala, in which he wrote, at [34]: "As I said, with reference to authority in Barnes v Alderton [2008] NSWSC 107, there are a number of cases where a person makes a promise to leave someone property if they die and that sort of promise is usually completely unenforceable for a number of reasons, the main reason being that there is no equity to perfect an imperfect gift. Further, prima facie everyone in the community knows that there is freedom of attestation and that promises to leave people property after they die is always subject to someone changing their will. However, as Robert Walker LJ said in Gillett v Holt [2001] Ch 210, it is possible that a promise to leave property after death can be enforced under the doctrine of proprietary estoppel by encouragement if the facts and circumstances show that despite the general rule that wills are irrevocable, this promise was made on the basis that it was to be implied that the promise was irrevocable. There is some flavour in the evidence that this was so, but it seems to me that without the detailed evidence that one would expect given by both Mrs McDonald and the second plaintiff of the actual terms of the promises and of them saying that had they not believed the promises, they would not have continued to work and that they considered the promises to be irrevocable, the case is very flimsy."
18. In Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483, at [21], Handley JA stated that an estoppel by encouragement "comes into existence when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed his or her position to their detriment. If these matters are established equity may compel the owner to give effect to that expectation in whole or in part."
19. His Honour, at [36], also reached the same conclusion as Young CJ in Eq had in Barnes v Alderton: "The plaintiff knew that a will can be revoked at any time, and Mr Harper submitted that a promise about an existing or future will had to be understood in the same way. In some cases this could be the proper finding but testamentary promises are not always revocable. This is clear from the cases on testamentary contracts, and it is denied for estoppels by encouragement based on testamentary promises by Flinn v Flinn [1999] 3 VR 712 at 736 per Brooking JA and by Gillett v Holt [2001] Ch 210 CA at 227-228…"
20. His Honour also quoted, with approval, at [81], the comment by Hoffmann LJ in an unreported judgment of Walton v Walton (Court of Appeal of England and Wales, 14 April 1994, unrep), that was adopted in Thorner v Major [2009] 1 WLR 776; [2009] UKHL 18, by Lord Walker, at [57] and Lord Neuberger, at [101]: "... equitable estoppel [by contrast with contract]... does not look forward into the future … [i]t looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept."
21. Allsop P (with whom Giles JA agreed) said, at [5]: "The importance of keeping a party to a representation or encouragement previously made is all the stronger where, as here, the encouragement or representation has been relied upon by a party to abandon a course of conduct that could possibly have led to a different outcome. This can be described in the language of loss of a chance that is not fanciful or unrealistic, or in the language of proceeding thereafter on the basis of a new or changed convention or conventional basis. Such expression of the matter is not different to how Dixon J put the matter in Grundt v Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641 at 674-675. For instance, if, as here, in reliance upon a representation or encouragement, a court case is abandoned and the representation or encouragement is later sought to be resiled from, the party to whom the representation or encouragement was made and in whom the expectation was raised is left in the position not only of the loss of the entitlement to pursue his or her rights in the case in the past, but also is likely to be in the position of being unable to demonstrate what would, or even may, have happened in the case, it being an alternative, complex and now hypothetical body of human conduct. That the party encouraged cannot show that he or she would have been better off in the posited alternative reality is not fatal to the making out of the estoppel. Indeed, the inability to prove such things reveals a central aspect of the detriment: being left, now, in that position. Of course, if it is self-evident or can be clearly demonstrated that the case was fanciful or otherwise doomed to fail, there may be no real detriment; but that was not the case here."
22. The question was also considered in Evans v Evans [2011] NSWCA 92, at [107] - [110], in which Campbell JA (with whom Giles JA and Sackville AJA agreed) wrote: "The expectation that Peter and Sophie could reasonably derive from Robert's words and actions need not depend on the words of a single conversation, but could arise from conduct over a period of time. The equity involved in proprietary estoppel operates by considering whether it would be contrary to good conscience (measured according to equity's standards) for a defendant to disappoint the expectation that the plaintiffs have. The relevant time for the consideration is the time that the defendant seeks to disappoint that expectation. In Delaforce v Simpson-Cook [2010] NSWCA 84 at [81], Handley AJA (Allsop P and Giles JA agreeing) quoted with approval a remark of Hoffmann LJ in an unreported judgment of Walton v Walton (Court of Appeal of England and Wales, 14 April 1994, unreported), that had in turn been adopted in Thorner v Major [2009] 1 WLR 776 by Lord Walker at 794 and Lord Neuberger at 805… Similarly, in Green v Green (1989) 17 NSWLR 343 at 355-356 Gleeson CJ (Priestley JA agreeing) pointed with apparent approval to an aspect of the reasoning in Grant v Edwards (1986) Ch 638: "Mustill LJ (at 651) observed that although a number of judgments in this area refer, for simplicity of expression, to intention or conduct 'on acquisition' of the relevant property, in a given case the relevant events leading to a finding of an interest in the claimant may occur after the acquisition, and beneficial interests may change in the course of the relationship between the parties. This observation was expressly approved by the Privy Council in Austen v Keele [(1987) 10 NSWLR 283; 61 ALJR 605; 72 ALR 579] 290; (at 609; 587)." That enables all the conduct up to the time of Robert's disappointing or attempting to disappoint the expectation to be taken into account. The expectations that Peter and Sophie show that they had from time to time, and the extent to which Robert knew about them or induced or encouraged them, are relevant to deciding whether it would be contrary to good conscience for Robert to disappoint the expectation that Peter and Sophie had come to have. This is because it is acts done in reliance on the expectations which the plaintiffs have from time to time that generate an equity in their favour. Thus, even if the judge's remark at [54] (quoted at [101] above) that "I think that expectation arose, not immediately upon occupation of the property, but progressively over the years" is regarded as a finding, it does not tell against the existence of an equity arising from proprietary estoppel."
23. In Thorner v Major, Lord Scott, at 783 - 784, wrote: "... inherent in every case in which a representation about inheritance prospects is the basis of a proprietary estoppel claim, is that ... the circumstances of the representor ... may change ... If, for example, [the promisor] had become, before his death, in need of full time nursing care, so that he could not continue to live at [the farm] or continue as a farmer and needed to sell [the farm] or some part of it in order to fund the costs of necessary medical treatment and care, it seems to me questionable whether [the claimant's] equity ... would have been held ... to bar the realisation of [the farm], or some sufficient part of it, for those purposes ... For my part, I doubt it."
24. Lord Neuberger, at 802, also allowed for the possibility of a change of mind if this "… could be justified by, a change of circumstances."
25. In Sullivan v Sullivan [2006] NSWCA 312; (2006) 13 BPR 24,755, at [25], Handley JA also noted that, "[r]elief may be refused or reduced if the plaintiff's equity has been diminished by later events. In Sledmore v Dalby (1996) 72 P & CR 196 CA the Court held that the plaintiff's equity based on his improvements had been fully amortised over 18 years of rent free occupation."
26. The events that occurred in 1996 and 1997 relating to the applications to the Rural Assistance Authority involving Robert, Sheelagh, Timothy, Stephen and Mount Mill, make the question whether equity would permit Robert and Sheelagh to change their minds and renege on any promise, should it be found that a promise had been made, of some significance in the present case.
27. It is often said that a promise or assurance must be "clear" or "clear and unambiguous" before it can found an equitable estoppel (see Foran v Wight (1989) 168 CLR 385, per Mason CJ, at 410 - 411). The promise may, however, lack sufficient certainty or specificity to satisfy the requirements of an enforceable contract at law. In this regard, one assesses the question of clarity and certainty practically and sensibly as well as contextually.
28. As was written by Dodds-Streeton JA in Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86; (2008) 66 ACSR 325, at [135]: "Equity does not shrink from ascribing meaning to a representation and mere imprecision or loose definition will not preclude a remedy for unconscionability, at which proprietary estoppel is ultimately directed."
29. Generally, a promise will support an estoppel if it was reasonable for the promisee (in this case, Timothy) to interpret the words used in the way contended for and to act in reliance on that interpretation: per Hodgson JA (McColl JA agreeing) in Sullivan v Sullivan, at [85].
30. When addressing whether conduct is reasonably capable of giving rise to a particular representation or promise it is necessary to have regard to the context in which it occurred and to consider what it would have conveyed to a person in the position of the recipient: Hammond v JP Morgan Trust Australia Ltd [2012] NSWCA 295; (2012) 16 BPR 30,901, at [53]. There can be no doubt that the meaning to be ascribed to words passing between parties will depend, often, very much, on their factual context.
31. The first question involves a consideration of the conduct engaged in by the promisor, and the impression it would have on a reasonable person, being the promisee. The second question involves a consideration of the action taken by the promisee, and whether it was reasonable for him or her, to have adopted the relevant assumption and to have taken the (ultimately detrimental) action which was taken. If it was unreasonable for the promisee to rely on the meaning he or she attributes to the promise or assurance, then it cannot be unconscionable for the promisor to deny responsibility for the detriment that the promisee sustains because of that unreasonable reliance.
32. In Galaxidis v Galaxidis [2004] NSWCA 111, a dispute involving family members, Tobias JA (with whom Giles and Hodgson JJA agreed), at [95], wrote that, in considering the intention of the person alleged to have made a promise or an assurance and its effect on the person to whom it was made: "...it is both appropriate and necessary to consider the whole history of the relationship [between the parties] … in order to provide a context against which the conversations ... are to be understood."
33. In the case of Sheelagh, there is no evidence that she said anything during the conversation said to have taken place in 1983, between Robert and Timothy. However, conduct, including silence, may give rise to an implied assurance. Where silence is relied upon, normally it would be necessary to show that the silence was maintained in circumstances where the court considers that the party in question ought to have spoken: Thompson v Palmer (1933) 49 CLR 507, per Rich J, at 520; Waltons Stores (Interstate) Ltd v Maher, at 427 - 428. Yet, the court must consider all of the circumstances to determine whether there has been a promise or assurance by silence.
34. The action or abstaining from action in reliance upon the assumption or expectation encouraged is what invites the intervention of equity: Giumelli v Giumelli, at [35] - [36]; and the detriment that makes the estoppel enforceable is that which "would flow from the change of position if the assumption were deserted that led to it": per Dixon J in Grundt v Great Boulder Proprietary Gold Mines Ltd (1937) 59 CLR 641, at 674. Although that statement was made in relation to common law estoppel, it has been held to apply equally to promissory and proprietary estoppels: Delaforce v Simpson-Cook, at [1], [6], [43], [44].
35. In Sidhu v Van Dyke, the High Court (French CJ, Kiefel J, Bell J, Keane J (Gageler J agreeing)), observed, at [77]: "This category of equitable estoppel serves to vindicate the expectations of the representee against a party who seeks unconscionably to resile from an expectation he or she has created."
36. The plurality, at [61], also made clear that the legal burden of proof borne by a plaintiff did not shift and that it was the plaintiff who "at all times bore the legal burden of proving that she had been induced to rely upon the appellant's promises". Gageler J, at [90], stated, "[p]araphrasing Dixon J in Thompson v Palmer… the respondent bore the onus of establishing that she believed the appellant's representations and that, on the faith of that belief, she took a course of action or inaction which would turn out to be to her detriment were the appellant to be permitted to depart from those representations".
37. It can be seen from these formulations, that in the present case, the Plaintiffs bear the onus of establishing that a promise was made, or an assurance was given, by Robert and Sheelagh; that Timothy believed the promise or assurance; and that, on the faith of that belief, he took a course of action or inaction which would turn out to be to his, or Mount Mill's, detriment, were the Defendants, as the executors of Sheelagh's estate, to be permitted to depart from the promise or assurance. In so doing, he must also establish a sufficient causal link between the promise relied upon and the detriment asserted.
38. However, it must also be remembered, as was written by Robert Walker LJ (with whom both Waller and Beldam LJJ agreed) (now Lord Walker SCJ) in Gillett v Holt [2001] Ch 210, at 225, that: "... the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments. Both sides are agreed on that, and in the course of the oral argument in this court it repeatedly became apparent that the quality of the relevant assurances may influence the issue of reliance, that reliance and detriment are often intertwined, and that whether there is a distinct need for a 'mutual understanding' may depend on how the other elements are formulated and understood. Moreover the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round."
39. This passage has since been approved by the House of Lords (see especially the speech of Lord Neuberger, with which the rest of the House agreed, in Fisher v Brooker [2009] 1 WLR 1764; [2009] UKHL 41, at [63]). Also see, Pitt v Holt; Futter v Futter [2013] 2 AC 108; [2013] UKSC 26, at [128].
40. As was put by Macfarlan JA in Milling v Hardie, at 55: "To determine whether equitable intervention is required, the court needs to consider whether circumstances have arisen which would render it unconscionable for the defendant to depart from a promise or representation that he or she has made or to disappoint an expectation that has arisen reasonably from the defendant's conduct… The court may therefore take account of a supervening circumstance, such as a defendant's unexpected financial reverse, which might justify departure from a promise that has given rise to a proprietary estoppel". Generally, the question is whether the party against whom the estoppel is raised said, or did, something that led the claimant to take a certain course of action in circumstances that rendered it unconscionable to estop the former party from resiling from his earlier position.
41. Also, as Deane J held in Commonwealth of Australia v Verwayen, at 445, and approved by the High Court in Giumelli v Giumelli, at [42]: "… 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 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."
42. I note what was said by Corboy J in Como v Helmers [2011] WASC 179, at [78]: "Cases in which courts have recognised a proprietary estoppel in a domestic or family context generally involve acts of reliance and the prospect of detriment that extend beyond what would ordinarily be attributable to natural love and affection and/or the recognition of family ties and obligations. It is that extra dimension in the facts that will often mark the departure or proposed departure from a representation or assumption as unconscionable. It will also stamp the relevant representation or promise with the clarity required for an estoppel and indicate that what was said or done was intended to affect legal relations between the parties."

Common Intention Constructive Trust

1. It is clear that the elements required to be established to found this claim overlap with the elements required to be established for equitable estoppel. Each is concerned with equity's intervention to provide relief against unconscionable conduct. The constructive trust in this context is based on a common intention that the other party is to have an interest in the property, which is acted upon to the detriment of the alleged beneficiary. There is an intention that the other party is to have an equitable interest in the land. In equitable estoppel, the main emphasis is that the landowner has to have acted in an unconscionable manner taking the entire set of circumstances into account. There is no clear intention that the other party is to have an equitable interest in the land. The other important difference lies in the remedies.
2. In Grant v Edwards [1986] Ch 638, Browne-Wilkinson V-C said, at 656: "In both, the claimant must to the knowledge of the legal owner have acted in the belief that the claimant has or will obtain an interest in the property. In both, the claimant must have acted to his or her detriment in reliance on such belief. In both, equity acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner."
3. A common intention trust is based on actual intention, which is either expressly stated by, or is to be inferred from the conduct of, the parties. The elements to be established are that: (a) the parties formed a common intention as to the ownership of the beneficial interest in the identified property; (b) the party claiming a beneficial interest must show that he, she, or it, has acted to his, her, or its, detriment; (c) it would be a fraud on the beneficiary for the trustee to assert that the claimant had no beneficial interest in the property.
4. The legal principles in relation to a constructive trust were set out by Deane J in Muschinski v Dodds (1985) 160 CLR 583, at 619 - 620: "Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct: cf. Story, Commentaries on Equity Jurisprudence, 12th ed. (1877: Perry ed.), vol. 2, par. 1316; Legione v. Hateley. The circumstances giving rise to the operation of the principle were broadly identified by Lord Cairns L.C., speaking for the Court of Appeal in Chancery, in Atwood v. Maude: where "the case is one in which, using the words of Lord Cottenham in Hirst v. Tolson, a payment has been made by anticipation of something afterwards to be enjoyed [and] where ... circumstances arise so that future enjoyment is denied". Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf. Atwood v. Maude, and per Jessel M.R., Lyon v. Tweddell [footnotes omitted]."
5. In Rasmussen v Rasmussen (1995) VR 613, Coldrey J, at 615, wrote: "In determining whether there is a common intention that a claimant was to have a beneficial interest in the property the court will look firstly for direct evidence of any express communications between the parties or the making of admissions by them. In addition, the common intention may be inferred from the conduct of the parties, for example, contributions to the cost of the property claimed or its maintenance. Such conduct is also of factual importance in determining whether a claimant has acted to his or her detriment. However, what is to be enforced is an actual intention inferred as a matter of fact."
6. The real question is the question of unconscionability and in this regard the Court is guided by equitable principles.
7. The principles were considered by the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137, per Mason, Wilson & Deane JJ, at 148: "His Honour pointed out that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention "to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle" … In rejecting the notion that a constructive trust will be imposed in accordance with idiosyncratic notions of what is just and fair his Honour acknowledged that general notions of fairness and justice are relevant to the traditional concept of unconscionable conduct, this being a concept which underlies fundamental equitable concepts and doctrines, including the constructive trust [Footnotes omitted]."
8. Campbell J put the matter succinctly in West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431, at [58] - [59], and [62]: "Before any particular asset can become subject to a constructive trust in accordance with the Baumgartner principle, one needs to have a joint relationship or endeavour, and an asset acquired in the course of, and for the purposes of, that joint relationship or endeavour … In accordance with this approach, a plaintiff needs to establish that there is indeed a joint endeavour between the parties, in which expenditure is shared for the common benefit. It is also necessary to identify what the scope of that joint endeavour is. It is a question of fact, for any couple, what the scope of the joint endeavour they are engaging in is … Part of the justification for imposing the Baumgartner constructive trust is that the parties have jointly been building up assets, on the basis that those assets will be available for the joint endeavour in [the] future. Part of the reason why it can be unconscionable to let the legal title lie where it falls, if the relationship fails, is that each knew that the other was contributing to a common pool on the basis that the pool, and assets acquired from it, would be used for their ongoing common benefit. It is unconscionable for the party who ends up, at the end of the relationship, with a disproportionate share of the assets which were built up during the relationship, to keep those assets when he or she knew that that was the basis on which the assets were being built up."
9. Since I do not accept the evidence of the conversations relied upon by Timothy, it is not necessary to discuss the principles relating to the Limitation Act, laches or acquiescence.

Breach of Duty by Directors

1. I have earlier referred to the allegation of breaches of duty by Robert and Sheelagh. It seems to me that the following principles are relevant: (a) A director of a company, as a recognised category of fiduciary, owes fiduciary duties to a company as a separate legal entity, and not to that company's shareholders or creditors: Pilmer v The Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165, at [18]; Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd [2015] VSCA 9, at [57] and [221]. It follows that, a director must exercise his or her powers in the general interests of the company: In re Cawley & Co (1889) 42 Ch D 209, at 233. A director's duties include a duty to act in good faith and in the interests of the company, a duty to avoid conflicts of interest, and a duty not to exercise powers for an improper purpose: Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd, at [58]. These duties also include a duty not make a profit out of his trust or act for his own benefit or the benefit of a third person without the informed consent of his principal: Bristol and West Building Society v Mothew [1998] Ch 1, at 18. The "no conflict rule" is, in substance, that a fiduciary is under an obligation, without informed consent, not to promote his or her personal interest by making or pursuing a gain in circumstances where there is a conflict, or real or substantial possibility of a conflict, between those personal interests and those to whom the duty is owed: Pilmer v Duke Group Ltd (in liq), at [78]. The "no profit rule", in substance, provides that a fiduciary cannot obtain a profit from his or her fiduciary position without the principal's consent. The two rules may overlap. (b) The existence and scope of the duties that a director owes to a company are defined and limited by the company's constitution: see Whitehouse v Carlton Hotel Pty Ltd (1987) 162 CLR 285, at 292; Levin v Clark [1962] NSWR 686, at 700 - 701. The duty "must be moulded according to the nature of the relationship and the facts of the case": Hospital Products Ltd v United State Surgical Corporation (1984) 156 CLR 41, per Mason J, at 102. Thus, one must assess any duty and any conflict in the context of the circumstances of the company and its objects. (c) In a company like Mount Mill, which was a closely held family company, where the Governing Director was given such wide powers and the objects included benefitting family members, the requirement to prevent self-interested dealing is less acute: Australian Securities and Investments Commission v Maxwell [2006] NSWSC 1052; (2006) 59 ACSR 373, at [103]. (d) A court does not presume impropriety and where the transaction is within the powers of the directors, the onus is on the party who challenged the action of the directors to establish that they did not act bona fide for the benefit of the company: Richard Brady Franks Ltd v Price (1937) 58 CLR 112, per Latham CJ, at 135.

Limitation Period Applicable to Breach of Director's Duties

1. As stated, the Defendants relied upon Gerace v Auzhair Supplies Pty Ltd, at [70], submitting that the Plaintiffs had not pleaded any facts that might constitute concealed fraud or any other unconscionable conduct on the part of the Defendants with the result that the Defendants were not precluded from relying on the 6-year limitation period set by the Limitation Act and s 1317K of the Corporations Act, which applies by analogy to equitable claims.
2. In the recent decision of Issa v Issa [2015] NSWSC 112, White J commented on Gerace v Auzhair Supplies Pty Ltd, including paragraph 70 upon which the Defendants have relied. His Honour stated, at [56]: "… it is not at all clear that the authorities to which his Honour referred show that when a claim is brought in equity's exclusive jurisdiction to which no statutory limitation period is directly applicable, but where there is an analogous claim to which a statutory bar is applicable, the bar will always be applied by analogy unless reliance by the defendant on the statute would in the circumstances be unconscionable, as distinct from doing so unless the application of the statute by analogy would be unjust".
3. His Honour concluded, at [79], that: "If the circumstances of the case make it unjust to apply the statute of limitations by analogy to prevent a plaintiff from obtaining an equitable remedy arising from the defendant's breach of fiduciary duty so that it would be against conscience for the court to apply a rule founded on the analogy, it is arguable that it would be unconscientious for the defendant to rely on the analogical application of the statute."
4. Because of the conclusion to which I have come in regard to the alleged breach of directors' duties, it is unnecessary to further consider this aspect of the defence raised

Determination

1. I have dealt with the family and the creation of Mount Mill earlier in these reasons. It is within the context described that the Plaintiffs' case must be determined.
2. The Plaintiffs' claim is not a "typical" equitable estoppel claim which sometimes arises amongst members of rural families, such as in Giumelli v Giumelli, Flinn v Flinn [1999] VSCA 109; [1999] 3 VR 712, and Thorner v Major, in which a family member, or other person, works on a family farm for reduced wages for many years in reliance on a promise that the farm will be given to him at some time or left to him by will. Nor is it a claim in which a person expends money, effort and other resources on improving another's property in reliance on a promise from the property-owner that the person expending the money, effort or other resources will obtain a proprietary interest in the property. Nor is it a claim made by family members to reflect care arrangements for the care and accommodation of an elderly relative. Like many of those cases, however, this is a case where what is alleged as having been a promise or a common intention has not been recorded in writing.
3. In relation to the equitable estoppel claim, I am not satisfied that the words attributed to Robert, and said to have been heard by Sheelagh, identified by Timothy in his affidavit in chief read in the proceedings, were, in fact, said. The different versions of the conversation, as well as other contradictory evidence, lead me to doubt that the words stated in Timothy's affidavit were said by Robert. Accordingly, I am not satisfied that there was a clearly articulated promise, or assurance, as alleged by Timothy.
4. The suggestion of a "promise" made by Robert and/or Sheelagh did not find its way into any pre-litigation correspondence written by Timothy. One would have expected him to put the allegation of a promise at the forefront of his explanation of the events surrounding the transfer of the Collaroy property. His allegations are also inconsistent with the correspondence and other documents written, and relied upon, in about 1996 and 1997. In this regard, "subsequent events throw retrospective light upon the meaning of past events": Thorner v Major, per Lord Hoffman, at [8].
5. However, even if the words alleged were said in the precise terms stated, isolated from any context as they were in the affidavit, and not explained otherwise, the question is what would objectively have been conveyed by the terms of the conversation. I am not satisfied that Timothy could reasonably have taken it to be a promise, or an assurance, that he would receive a one third share of the Collaroy property on the death of the survivor of Robert and Sheelagh. Accordingly, the words, if said, could not, have reasonably, given rise to the expectation that Timothy said he held following the conversation.
6. To my mind, any assumption held by Timothy that Robert was communicating, and Sheelagh (assuming she heard it and did not say anything), was implicitly agreeing with, by way of promise or assurance, that one third of the Collaroy property would pass to Timothy, was unreasonable and unjustified. The words, if spoken, appear to have been no more than a statement of Robert's, and Sheelagh's (assuming she heard it and did not say anything), then intention. What was being spoken of was an intention to leave property by a will, an intention that Timothy must have appreciated could change over time.
7. There are no circumstances revealed by Timothy that, in my view, could reasonably lead to the conclusion that the words, if spoken, were tantamount to an irrevocable promise or assurance.
8. There is no evidence that after 1983 (assuming that to be the date of the conversation relied upon by Timothy), Robert told Timothy that he had, in fact, made a Will in which the Collaroy property had been left to Timothy, Gae and Kerry. There is no evidence that Robert or Sheelagh showed any Will to Timothy, at that, or at any other, time. I have earlier concluded that I am not satisfied that the other conversations to which reference was made in Timothy's affidavit in reply occurred.
9. The subsequent conversation, alleged to have occurred with Robert in 1995, followed a discussion between Timothy and his wife, Helen. The terms of that conversation, or what preceded it was not explained. Again, there is no context.
10. In relation to Sheelagh, there is no acceptable evidence of any conversation in which she told Timothy that she had made a Will in which the Collaroy property had been left to Timothy, Gae and Kerry. Thus, this is not a case in which it could be said that, in accordance with an alleged promise relied upon, Robert or Sheelagh made a Will to fulfil that promise and that either told Timothy that he and she had done so.
11. To the contrary, there are examples in the evidence of Robert and Sheelagh changing their testamentary intentions and disclosing that change to one, or other, of their children. The events of 1996 and 1997 relating to the applications to the Rural Assistance Authority, well known to Timothy, demonstrate that clearly so far as he is concerned.
12. Furthermore, Timothy's evidence about what he "hoped" is noteworthy. I am unaware of any particular event that could have marked the transition from such a hope to an expectation. In any event, I am not even sure that it was a reasonable hope, bearing in mind the existence of Gae and Kerry, at least one of whom might require assistance from her parents, in circumstances where Robert's long held testamentary intention was that Timothy would inherit all of Robert's and Sheelagh's shares in Mount Mill. This would provide him with significant property.
13. Even if I am wrong about this, the equity involved in a claim of estoppel operates by considering whether it would be contrary to good conscience (measured according to the standards of equity) for the promisors to disappoint the expectation that the promisees have. The relevant time for the consideration is the time that the promisors (accepting Sheelagh's involvement) seeks to disappoint that expectation. As stated above, this allows the court to consider, and take into account, all the conduct up to the time of Robert and Sheelagh disappointing the expectation. What is required is that Timothy and Mount Mill point to, and the court accepts, the reason why the impugned conduct is said to be unconscionable: Tory v Tory [2007] NSWSC 1078, at [58].
14. Any expectation (as opposed to a hope) that Timothy showed that he held from time to time, and the extent to which Robert and Sheelagh knew about it, or induced or encouraged it, are relevant to deciding whether it would be contrary to good conscience for Robert and/or Sheelagh to disappoint the expectation said to be held by Timothy. In this regard, the events of 1996 and 1997 are telling, and the established facts satisfy me that Timothy, in truth, held no expectation that he would come to receive a one third share of the Collaroy property at the death of the survivor of Robert and Sheelagh.
15. Thus, looking backwards from the moment when the alleged promise fell due to be performed, and asking whether, in the circumstances which have actually happened, it would be unconscionable for the alleged promise not to be kept, the answer must be in the negative.
16. This also gives rise to another problem. If Robert and Sheelagh made a promise, or gave an assurance, that the Collaroy property would be devised equally to their three children, the question would still arise whether the Plaintiffs needed to establish that they assumed that each of Robert and/or Sheelagh was, or were, not free to withdraw that promise or assurance: EK Nominees Pty Ltd v Woolworths Limited [2006] NSWSC 1172, per White J, at [231] - [267]. Because of other evidence, I am unable to infer that Timothy assumed that Robert and Sheelagh would not change his or her mind as to how the Collaroy property should be devised.
17. Timothy did not give any evidence that he had assumed that Robert and/or Sheelagh was, or were, not free to withdraw any promise, or assurance, given. To the contrary, the evidence reveals that Timothy accepted that each could do so, as all seemed to have done in Robert's conversations identified in the correspondence to the Rural Assistance Authority and as evidenced in Robert's and Sheelagh's Statutory Declarations.
18. In any event, I do not consider that Timothy or Mount Mill could reasonably have made any such assumption based upon the conversations on which he has relied. One might think that Robert and/or Sheelagh might change his and her mind, because their circumstances, or the circumstances of others involved (Timothy, Gae and/or Kerry), and that change of mind might bring about a change of testamentary intentions.
19. If that were not enough, I am not satisfied that there were any acts of detrimental reliance by either Timothy or Mount Mill. Each ought to be able to point to an alternative course, or courses, which might have been open to him, or to Mount Mill. All that is put forward is that there might have been a challenge to the transfer of the Collaroy property out of Mount Mill.
20. I do not accept that Timothy or Mount Mill did not challenge the transfer of the Collaroy property from Mount Mill because of any alleged promise made, or assurance given, by Robert, acquiesced in by Sheelagh, to Timothy. It was not challenged because there was no need to challenge it and because any challenge would, in all probability, have been futile. The objects of Mount Mill and the powers of its Governing Director permitted such a course to be taken, particularly in circumstances where the consideration paid to Mount Mill was proper consideration.
21. Next, in case I am wrong, I must consider Robert's and Sheelagh's knowledge of the reliance by Timothy on what is said to be the promise about which he gave evidence. I cannot be satisfied that either had such knowledge. To the contrary, I am of the view that Robert did not consider, for one moment, that Timothy, or Mount Mill, could challenge the decision to transfer the Collaroy property to himself and Sheelagh, for proper consideration or that Timothy might consider doing so. This is evidenced by what he wrote on Ex. D3, including that "the company was mine and formed by me". In relation to Sheelagh, there is simply no evidence that she knew of any such reliance.
22. There is yet another reason for the Plaintiffs' estoppel claim to fail. The thrust of Timothy's submissions in relation to the transfer of the Collaroy property out of Mount Mill, seems to proceed upon the basis that Mount Mill transferred the Collaroy property for no consideration, when the evidence is clearly to the contrary. The contemporaneous evidence reveals that a valuation of the Collaroy property was obtained and that the purchase by Robert and Sheelagh of the Collaroy property was for the amount identified in that valuation. There was no submission that the amount was not at least equal to the market value of the Collaroy property.
23. Whether the repayment of the loan could, or could not, be required because of the expiration of six years from its creation is not important for the simple fact is that Robert, and Mount Mill, effectively, received what each was owed, since together he and it did not have to repay an equivalent total amount owed to Robert's estate.
24. It follows that I am not satisfied that Timothy or Mount Mill suffered any detriment. Even if I were wrong in reaching this conclusion, I am not satisfied that any detriment suffered was as a consequence of reliance on the specific promise or assurance alleged by Timothy.
25. That Mount Mill paid, until about 1990 amounts totalling slightly more than $22,000, does not alter the position, since it is accepted that all of the shareholders of Mount Mill received the benefit of that expenditure by the continued use of the Collaroy property until about 2002. There is no suggestion that Timothy, as a director of Mount Mill, at any time, made a word of complaint about the expenditure. Again, to do so would have been futile bearing in mind the objects of Mount Mill.
26. The statement made by Gageler J in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 88 ALJR 552, at [150], that the detriment or harm required to ground an estoppel can be any material disadvantage but such material disadvantage must be substantial, although it need not be quantifiable in the same way as an order of damages, was repeated in Ashton v Pratt, per Bathurst CJ, at [147].
27. All things being considered in the present case, any expenditure by Mount Mill in the period after 1981 was not substantial and does not establish the detriment required to ground a proprietary estoppel.
28. In my view, Timothy and/or Mount Mill have failed to establish that he and/or it suffered any substantial detriment as a result of Robert and Sheelagh resiling from any promise or assurance said to have been given by Robert and accepted by Sheelagh, such as to give rise to the relief claimed.
29. Finally, when one considers all of the events, including the continued use of the Collaroy property by members of the family, including Timothy, after 1981, the events of 1996 and 1997 relating to the applications to the Rural Assistance Authority, and the transfer of Robert's shares in Mount Mill to Timothy, it is not unconscientious for the Defendants, as executors of Sheelagh's Will, to deny any assumption by Timothy that he would have a one third beneficial interest in the Collaroy property on the death of Sheelagh.
30. In summary then, I am satisfied that: (a) Timothy has not established that either Robert or Sheelagh made any clear and unequivocal promise to him (or to Mount Mill) that one third of the Collaroy property would be left to him. (In this regard, I do not accept Timothy's evidence;) (b) any conversation between Robert and Timothy about the Collaroy property, even if heard by Sheelagh to which she did not respond, was not intended to be understood by Timothy (or Mount Mill) to be an irrevocable promise; (c) it was not objectively reasonable for Timothy (or Mount Mill) to interpret what was said as a promise and to act in reliance on that interpretation; (d) neither Robert nor Sheelagh knew, or intended, that Timothy (or Mount Mill) would act in reliance on what was said; (e) neither Timothy nor Mount Mill suffered any detriment; (f) neither Robert nor Sheelagh acted unconscionably in not honouring what was said.
31. Accordingly, I do not consider the elements of equitable estoppel are established. This aspect of the Plaintiffs' claim fails.
32. In the Plaintiffs' submissions in reply, junior counsel submitted that the "constructive trust which arose in 1983 is defined by a promise". I have earlier concluded that there was no such promise.
33. Also, I cannot be satisfied that the requirements of a common intention, or a common assumption as to a state of affairs, and reliance upon that intention or assumption, to Timothy's, or Mount Mill's, detriment has been established. It is difficult to conclude that there was any "joint relationship or endeavour" as alleged by Timothy "to use the income and profits from the farming operation they conducted to benefit themselves as well as [Gae and Kerry]".
34. No evidence of any discussion involving Timothy appears in his evidence. The Memorandum and Articles of Association of Mount Mill provided for the purposes for which the income and assets of the company could be used. There is no suggestion, otherwise, of any joint relationship or endeavour.
35. Even if there were a joint relationship or endeavour, it is difficult to ascertain when it failed. There is no allegation of fact in the pleadings as to when, or in what circumstances, the failure of the joint relationship or endeavour is said to have occurred.
36. Nor am I satisfied that Mount Mill, the claimant, to the knowledge of the legal owners, Robert or Sheelagh, acted in the belief that Mount Mill would obtain an interest in the Collaroy property. After all, the promise, as alleged, did not mention Mount Mill, but only mentioned the three children of Robert and Sheelagh.
37. Next, it is difficult to see what property was contributed by Mount Mill on the basis and for the purposes of the relationship or endeavour that would otherwise be enjoyed by Robert and Sheelagh in circumstances in which it was not specifically intended, or provided, that they should so enjoy it. In this regard, it cannot be forgotten that Robert gave proper consideration (based upon a valuation) to Mount Mill. Any contribution to the purchase of the Collaroy property by Mount Mill (and there is no evidence that the amount advanced by Robert to enable this to occur was repaid to him) was met by the payment of the proper consideration identified in the Transfer.
38. In the circumstances, I am not satisfied that there was any unconscionable conduct by Robert and/or Sheelagh which would justify the imposition of a constructive trust in favour of Mount Mill.
39. It follows that the Plaintiffs' claim based upon a common intention constructive trust also fails.
40. In these circumstances, it is unnecessary to deal with the Limitation Act defences or the defence of laches, acquiescence and delay.
41. For the same reasons set out above, the claim of breach of duty by Robert and Sheelagh as directors of Mount Mill fails. In particular, the transfer, by sale of the Collaroy property to Robert and Sheelagh, for market value, was not an uncommercial transaction, but one into which Mount Mill was entitled to enter. What was done was clearly within the scope of the objects of Mount Mill and within the power of Robert as its Governing Director. The unlimited extent of the powers, authorities and discretions vested in Robert as the permanent Governing Director of Mount Mill by the Articles made clear that he bore the responsibility for the total control and direction of every aspect of Mount Mill's operations.
42. In addition, there was simply no evidence that it was not in Mount Mill's best interests to sell the Collaroy property to Robert and Sheelagh. Nor was there any evidence of any advantage gained by them or any loss suffered by Mount Mill.
43. There was no depletion of Mount Mill's assets since the whole of the consideration was recorded in the books and records of Mount Mill as a debt owed by Robert. That consideration was at least equal to the then market value of the Collaroy property. In those circumstances, it could hardly be found that Robert had exercised any such powers that he had for an ulterior, or impermissible, purpose.
44. Finally, there is nothing in the evidence which would support a finding that the sale of the Collaroy property by Mount Mill was made clandestinely. I have found that the sale was not kept concealed from Timothy. He, himself, stated in correspondence that he had been informed of it by Robert.
45. All of the claims by Timothy and by Mount Mill fail.
46. The Court orders that the further amended Statement of Claim is dismissed. The argument on the issue of costs is stood over to a suitable date unless the parties are able to reach agreement on how the costs of the proceedings are to be borne.

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