Milling v Hardie

Judgment 1BEAZLEY P: I have had the opportunity of reading in draft the reasons of Macfarlan JA. I agree with his Honour's reasons and the orders he proposes. I agree with the additional remarks of Sackville AJA. 2MACFARLAN JA: Mr Milling, the appellant, is a farmer who was born in 1936. He has three children, of whom his daughter Tracey Hardie (the second respondent) is the second. His sons are James and Duncan Milling. Tracey Hardie is married to Mr David Hardie who is the first respondent. Mr Milling owns a rural property named "Weeraman" situated in the central west of New South Wales. His family company owns two other nearby properties, upon one of which he lives with his wife. 3In 1992, at Mr Milling's invitation, Mrs Hardie (who was then pregnant with her first child) and her husband moved into the homestead on Weeraman. In subsequent years, with Mr Milling's consent but at their own expense, the Hardies undertook improvements to the homestead and its grounds. Mr Milling continued to farm on Weeraman and did not let Mr or Mrs Hardie do so on their own account (although Mr Hardie provided paid farming assistance to Mr Milling's operations). They paid no rent for their occupation of the homestead and Mr Milling paid all relevant rates and taxes. 4In 2010 disputes arose, with the result that Mr and Mrs Hardie commenced the present proceedings claiming, on equitable grounds, an entitlement to the whole of Weeraman. 5After a four day hearing in the Equity Division, Lindsay J delivered a judgment dated 10 April 2013 favouring the Hardies' interests ([2013] NSWSC 310). On 29 May 2013 his Honour made declarations that Mrs Hardie is entitled to a non-exclusive licence during the lifetime of Mr Milling to use the homestead and its surrounds as a residence for herself and her immediate family, and entitled on Mr Milling's death to ownership of two of the three blocks comprising Weeraman, these being Lots on which the homestead and its surrounds are located. The Lots (Lots 110 and 118) have a total area of approximately 165 hectares, of which the homestead and its surrounds occupy approximately 10 acres. 6The primary judge did not accept the Hardies' case that Mr Milling made promises or representations to them that he intended to transfer Weeraman to them during his lifetime or leave it to them by will, but held that the Hardies were entitled to the relief he granted on the basis that Mr Milling's conduct in encouraging the Hardies to reside at and improve Weeraman gave rise to reasonable expectations on their part upon which they acted in reliance. 7For reasons given below, I have concluded that Mr Milling's conduct did not justify an expectation by the Hardies that Mrs Hardie would be entitled to inherit Weeraman (or to a transfer of it), although it did justify an expectation that they would be entitled to occupy the Weeraman homestead and surrounds during Mr Milling's lifetime. As a result, the appeal should be allowed in part.

Mr Hardie's evidence 8Mr Hardie's presently relevant evidence was to the following effect. 9In about 1991 Mr Milling asked the Hardies if they wished to move into the Weeraman homestead, which was then in a rundown state. He said to them "[i]f you think you can do something with it, you can have it and make a home out of it". After consulting a builder, Mr Hardie told Mr Milling that he would supply his labour to assist the builder in completing necessary repairs and renovations. Mr Milling said that he would pay the builder, as he did. Thereafter the Hardies occupied the homestead and Mr Hardie continued to conduct his transport business off the property. He also acted as a caretaker of Weeraman. 10In 1994 Mr Milling agreed to Mr Hardie constructing a new shed near the house, stating that it was fine with him for this to be done, as long as it did not cost him anything. 11Mr Hardie said that during the construction of the shed he had a conversation with Mr Milling in the following terms, with the consequence described by Mr Hardie: "I said: 'Ken, it looks to me like Jamie [one of Mr Milling's sons] is not happy with what we are doing here. I have noticed that he is looking quite upset about it. Who owns the land? Where are we going with all of this?' He said: 'Don't worry about Jamie, come and talk to me if there are any issues. Jamie will want what you have no matter what, that is how he is. I own the land, it has nothing to do with Dhu-Robin [Mr Milling's family company] and as long as it doesn't cost me anything, you can do what you like at Weeraman'. [Mr Milling] then said: 'I am only here for another five (5) years then I am out of here' I said: 'So we can keep on improving this place?' [Mr Milling] said: 'Yes, as long as it doesn't cost me anything'. As a result of that conversation, it was my belief that [Mr Milling] had a succession plan for 'Weeraman' under which he would transfer the whole of that property to Tracey and I at the end of the five (5) year period. I also expected that at the end of that period [Mr Milling] would no longer have any interest in farming 'Weeraman', that he was content for Tracey and I to continue to improve the property and that he would arrange for the whole of it to be transferred to us at the end of the five (5) year period". 12In 1997 Mr Milling agreed to the Hardies extending the farmhouse by the addition of four bedrooms, a bathroom and a laundry, saying "[t]hat's fine, as long as it's not coming out of my pocket". Similar conversations occurred in 1997, 1998 and 1999 in respect of the sinking of an additional bore, the installation of a swimming pool and the erection of a shed. Mr Hardie said that on the last of these occasions, after Mr Milling had given his consent, the following conversation occurred, again with the result described by Mr Hardie: "I said: 'OK, thank you. Ken, where are we headed with all of this? Where are we at with the five year plan we talked about some time ago? What's going on?' He said: 'The five year plan has to be extended. I still need the property for a little longer yet. You can go ahead and build your shed, though'. I said: 'Ken, have we still got a future here?' He said: 'Yeah.' After this conversation, I felt reassured that our future at 'Weeraman' was secure and I went ahead with the construction of the shed at the agreed location for that reason. The site of the shed is about 300 metres from the residence in a north east direction and adjacent to the access road for the cottage". 13In the period 2003 to 2006 Mr Hardie sought and was given approval, on the same basis, for the construction of a tennis court and a cricket pitch and the making of other improvements to the homestead and its surrounds. 14Mr Hardie's affidavit of April 2011 included the following: "I have at all times expected that the work which Tracey and I have put into 'Weeraman' at our expense would be of benefit to us in the long term and that [Mr Milling] would make good his promises that we would have a future on the property. ... I would not have undertaken the improvements to 'Weeraman' that are set out in this affidavit and [spent the time and money] required to complete these improvements if Mr Milling had not led me to expect that 'Weeraman' would be transferred to Tracey and I in due course". 15His affidavit of 18 December 2010 included the following: "I have had numerous conversations with Mr Milling regarding the future of myself and Tracey at the property. Tracey has been present and/or participated in these conversations at various times as we have become increasingly concerned over the years about the fact that we have occupied the property for a long time and spent a considerable amount of money on the property without Mr Milling fulfilling his promises to transfer the property to us. During these conversations with Mr Milling, we have been repeatedly assured by him that both Tracey and myself have a future at the property and, as a result of these conversations, Tracey and I have expected at all times that the property would by now have been transferred to us by Mr Milling or, alternatively, that he would leave the property to us on his death". 16Mr Hardie was asked in cross-examination whether he thought at any time that Mrs Hardie might inherit some part of Mr Milling's properties. When he responded in the affirmative, he was asked when he first thought that and he replied "[a]fter [the] conversation we had in 1994 with Ken when our shed was going up" (Transcript p 95). Later he said that after the conversation in 1994 he came to expect that Weeraman would be transferred to or left to Mrs Hardie (Transcript p 139).

Mrs Hardie's evidence 17Mrs Hardie's relevant evidence was to the following effect. 18When Mr Milling invited her and Mr Hardie to move into the homestead on Weeraman, Mr Milling said "If you think you can make something of it, you can have it and make a home out of it". She gave evidence similar to Mr Hardie's evidence concerning the initial renovations. 19She said that the conversation in 1994 concerning construction of a new shed included the following: "My father said: 'I own the land. It has got nothing to do with Dhu Robin. As long as it doesn't cost me anything you can do what you like here (Weeraman). I am only going to be here another five (5) years and after that I will be gone'. David said: 'So we can keep on improving the place?' My father said: 'Yep as long as it doesn't cost me anything'." 20She went on to say: "I had never heard my father say anything about a five (5) year plan before that conversation took place and, as a result of that conversation, assumed that he meant a plan which involved David succeeding to his interest in 'Weeraman' at the end of that period. I understood from that conversation that he was planning on leaving the farm to retire from that type of work at the end of the five (5) year period and that he was happy for David and I to continue to improve 'Weeraman' at our expense on the basis that we would be given the property in due course. I also assumed that, as he was happy for David and I to continue to improve the property at our expense, he would transfer it to us at the end of the five (5) years". 21Mrs Hardie recalled another conversation (seemingly the 1999 conversation referred to by Mr Hardie) as follows: "I said: 'Dad, we need to know what's going on with this plan. If there is no future here for us we may as well go now and start again somewhere else'. He said: 'What would you do?' I said: 'Well if there is no future for us here we will just have to move to Dubbo or somewhere'. He said: 'You can't afford to do that'. I said: 'Well we need to know what's going in here!'" 22She added: "As a result of that conversation, it was my belief that my father would look after my family and that he would not allow us to continue to make improvements to the property if we had no future in remaining there". 23Mrs Hardie said that when differences between the parties emerged in 2010 and Mr Milling asserted that there had been "a big misunderstanding": "I did not feel that there was, in fact, any misunderstanding at all. David and I had carried out extensive improvements to the cottage on 'Weeraman' over many years with his encouragement and he had led me to believe that my family had a future there and that he had a plan for us to succeed to his interest in the property. David and I have continued to carry out improvements at 'Weeraman' over the years that we have occupied the property with the expectation that 'Weeraman' would eventually be transferred to us". 24In her affidavit of 13 September 2011, Mrs Hardie said: "David and I would not have remained on 'Weeraman' and continued to effect improvements on the property 'Weeraman' unless we believed that the property was to be transferred to us. I would not have put time, money and energy into making the cottage and surrounds at 'Weeraman' our family home unless I believed that our future at the property was safe". 25In response to a question in cross-examination of whether Mrs Hardie thought that Mr Milling had ever "not done the right thing by you", Mrs Hardie said: "A. Tricky question because if we did not have a future there, why - why would he allow me to put so much time, effort and money into something that was never ever going to be my home for permanent? I mean, I never thought that he would allow me to do what I've done if I never had a future at Weeraman" (Transcript p 31). 26In cross-examination Mrs Hardie said that in 2007 she and her husband had purchased a house in Dubbo where they lived from Monday to Friday whilst their children attended school. They subsequently bought a larger house in Dubbo, retaining and renting out the first house. They sold both houses in 2009 but at the time of the hearing at first instance had a weekender in or near Wellington (Transcript pp 34 - 35). 27The following exchange occurred during Mrs Hardie's cross-examination: "Q. Would you accept that there was nothing in [your conversations with Mr Milling] that gave you any reasonable basis to expect that he would give you the Weeraman farm? A. I did expect. Q. Yes, but, there was, would you accept that there was nothing that gave you a reasonable basis for that expectation? A. Sorry say again. Q. Nothing your father said to you, ever gave you any reasonable basis to expect you would receive the Weeraman farm, would you agree? A. Yes. I did expect that in due course, it would come to me yes. Q. Was your reason for expecting that, just that you knew that your father loved you and you were his daughter? A. Yes. Q. Did you have any other basis for expecting that you would be given the Weeraman farm? A. Yes. I did. I did. Q. You have set that out in your affidavit have you? A. Yes, by paying everything ourselves, and yes, I expected it. I do believe that he would have said to stop now and don't put any more money in this; where do you think you are going? It was never said. Q. I am suggesting to you, that you certainly had no basis to expect anything before your father's death would you agree with that? A. Well not back from the conversation in 1994. Q. Is that what you relied on, the 1994 conversation? A. Yes. Q. I am suggesting to you that your father, never promised to give you even the Weeraman cottage and grounds? A. There were no promises made. Q. I am suggesting to you that you had no basis in anything your father said to you, to believe that he would give you the Weeraman cottage and grounds. Do you accept that? A. No, because the 1994 conversation is what I based this on: That I was it would happen in five years, five years. By 2000 I thought it would be sorted. Q. What did you think the situation would be by 2000? A. By 2000 that we would have Weeraman" (Transcript pp 67 - 68).

Mr Milling's evidence 28Mr Milling's relevant evidence was to the following effect. 29Mr Milling did not deny that prior to the Hardies moving into the Weeraman homestead a conversation occurred to the general effect of that to which they deposed. He did however deny the 1994 and 1999 conversations to which they deposed (see [11] - [12] and [19] - [21] above). He said that he had never said anything to Mr or Mrs Hardie that anyone could reasonably understand to mean that he would transfer Weeraman, or leave Weeraman by will, to either of them (affidavit of 8 June 2011, [64]). 30Mr Milling was asked in cross-examination whether he had at some stage assured the Hardies that they had a future at Weeraman. He responded that he "assured them they had a future there as far as living there" (Transcript p 215). 31The following exchanges later occurred. The first occurred in cross-examination and the second in re-examination: "Q. You, according to you, if you chose to, you could tell your daughter, and her husband the children for that matter, to leave Weeraman as a matter of right. Is that correct? A. I suppose as the landlord, I have that right. But there's been never any discussion about them ever leaving, even up to the present day. Considering these proceedings and all. They have never been asked to leave. Or I might add pay rent. ... Q. Can you tell us under what circumstances, if any, would you ask your daughter to leave the farm house and grounds at Weeraman? A. What circumstances. I don't think I would ask my daughter to leave. I haven't asked her up to date, even in view of what's happening at the moment. And I have got no intentions of asking her to leave at the present time" (Transcript p 219).

Mr Milling's wills 32By his will of 24 August 2009, Mr Milling left Lots 110 and 118 of Weeraman to trustees to be held on a testamentary discretionary trust for the benefit of Mrs Hardie. In cross-examination Mr Milling said that it was an oversight that the will did not confer a right of residence on Mrs Hardie (Transcript p 199). 33By his will of 7 June 2010, Mr Milling provided for those lots to be left to his son Duncan Milling. There having been reference to the 2009 will in cross-examination, Mr Milling's counsel sought to ask him in re-examination why he chose, by the 2010 will, to give Lots 110 and 118 to Duncan. The question was rejected.

The valuation report 34For the purposes of the hearing at first instance, the parties jointly appointed Herron Todd White of Dubbo to provide a valuation report. 35Their report, prepared as at 19 January 2012, valued Weeraman at $1,350,000, and the improvements effected by the Hardies at $175,000. The valuers estimated that, when account was taken of the improvements made by the Hardies, the rental value of the homestead and surrounds in the period 1992 to 2012 ranged from $60 per week in 1992 to $200 per week in 2012. If those improvements were disregarded, they said that the range was $60 per week to $100 per week.

THE JUDGMENT AT FIRST INSTANCE 36The primary judge commenced by noting that the Hardies' case was based upon an allegation of "estoppel by encouragement", a type of proprietary estoppel described by this Court in Delaforce v Simpson-Cook [2010] NSWCA 84; 78 NSWLR 483 at [21] as coming 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". 37His Honour noted that the Hardies gave evidence that they effected improvements to the property in reliance upon representations made in the 1994 and 1999 conversations (referred to in [12] to [13] above) and that Mr Milling denied making those representations (Judgment [41] and [44]). 38Having concluded that there was a possibility that there was miscommunication between the parties in relation to those alleged representations, his Honour said: "50 I proceed on the basis that the defendant may have said something like the words attributed to him in 1994, without reference to any words that could justify the plaintiffs' self-interested assumption that he had a 'five year plan' for retirement, and without any objective significance other than that of a casual remark about the vicissitudes of life for a hard working man approaching his sixties. 51 If and to the extent there was any subsequent discussion between the plaintiffs and the defendant along similar lines - which the plaintiffs suggest did in fact occur in about 1999 - I proceed on the basis that the parties' capacity for miscommunication remained intact. 52 I do not accept that the defendant, ever, represented to the plaintiffs that he had an intention to retire, that he had a 'five year plan' or the like as he moved towards retirement age, or that he intended to transfer land to the plaintiffs during his lifetime. 53 The primary significance of the evidence given by the plaintiffs to the contrary of my findings is its probative value as evidence of the plaintiffs' state of belief. Rightly or wrongly, they believed that they had received from the defendant an assurance, which he subsequently confirmed, that 'Weeraman' would be transferred to the second plaintiff within the foreseeable future. Nothing which the defendant, in fact, expressly said, could, of itself, justify such a state of mind. 54 That is not, however, the end of the matter. What he said, and the way he said it (about his grant of permission to undertake improvements provided there was no cost to him), was sufficient, in its context, to excite in the plaintiffs a reasonable expectation that the second plaintiff would in due course inherit from the defendant at least the Weeraman House Paddock. By his invitation to the plaintiffs to live in the Weeraman homestead, and by his express acquiescence in development of both cottage and curtilage, as a means of providing a secure home for the second plaintiff, her husband and the three children of their marriage, the defendant encouraged the plaintiffs both to remain at 'Weeraman', and to improve it, on the reasonable understanding, an assumption on their part: first, that the Weeraman House Paddock would be left to the second plaintiff in the defendant's will; and, secondly, that, in the meantime, she and her family could reside there with a secure right of occupancy" (emphasis as in judgment). 39His Honour then said that, but for Mr Milling's encouragement, the Hardies would not have effected the improvements and would have moved to another location well before now (Judgment [55] and [56]), and that the Hardies could not reasonably have expected to conduct farming operations on Lots 110 and 118 because Mr Milling had consistently denied their requests to do so, thereby exercising his "sovereignty over farming operations" (Judgment [58] - [60]). 40His Honour continued: "62 The defendant could not but have been on notice that his encouragement of the plaintiffs to make their home on Weeraman had been, and was continuing to be, taken by them as an assurance of ongoing security of residence and, in due course, title to their home environs". 41His Honour concluded that Mr Milling's making of his 2010 will disinheriting Mrs Hardie in respect of Lots 110 and 118 "was a decisive repudiation of the assumption that he had until then encouraged the plaintiffs to make" (Judgment [67]). 42His Honour further concluded: "72 The evidence establishes to my satisfaction the elements of an estoppel operating against the defendant, requiring him to adhere to the assumption of the plaintiffs (referred to in paragraph 54 above) that the Weeraman House Paddock would pass to the second plaintiff on the death of the defendant and that she and her family would be able to reside there, with security of occupancy, in the meantime: Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at 491 [41]-[44]." 43His Honour said that Mr Milling's repudiation, since the breakdown of his relationship with them in 2010, of that assumption or expectation of entitlement on the part of the Hardies warranted equitable intervention "to protect them against unconscientious conduct, on his part, evidenced by that repudiation and his ongoing threat to give effect to it" (Judgment [73]). As noted earlier, orders to give effect to these findings were made on 29 May 2013.

THE ISSUES ON APPEAL 44The issues arising out of the Notice of Appeal and parties' submissions were to the following effect. 45The first issue was what, if any, expectation the Hardies were reasonably entitled to derive from Mr Milling's conduct and whether they did in fact derive it. The related question, to which a corresponding answer will almost inevitably be appropriate, is what, if any, expectation a reasonable person in Mr Milling's position would have realised that the Hardies were entitled to derive from his conduct. Consideration of these questions requires identification of the property the subject of any such expectation. 46The second issue is whether the Hardies proved reliance upon the conduct that the primary judge found Mr Milling had engaged in, as distinct from reliance upon alleged representations by Mr Milling which the primary judge was not satisfied were made. 47The third issue is whether Mr Milling repudiated, or threatened to repudiate, any equitable obligations that he had, so as to warrant the Court's intervention at this stage. 48The fourth issue is, assuming the elements of an estoppel by encouragement were established, what relief should have been granted, bearing in mind matters to which Mr Milling refers such as the benefits received by the Hardies from their occupation of the Weeraman homestead and surrounds. 49The fifth issue is whether the primary judge erred in failing to order Mr Hardie to pay Mr Milling's costs of the proceedings.

Relevant equitable principles 50I have already noted the statement of principle in Delaforce v Simpson-Cook quoted by the primary judge (see [36] above). To that I add reference to 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, 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] HCA 43; 71 CLR 531 at 542. 51This fourth element is referred to in Meagher, Gummow and Lehane's Equity: Doctrines and Remedies, (4th ed 2002, Butterworths LexisNexis) at [17-105] as knowledge by the defendant of the plaintiff's expectation or belief (see element (b)). 52The element is of particular importance in the line of authority which descends from Ramsden v Dyson (1866) LR 1 HL 129, as distinct from that which descends from Dillwyn v Llewelyn (1862) 4 De GF & J 517; 45 ER 1285 (as to which see Meagher, Gummow and Lehane at [17-075]). In the latter type of case the defendant has made a promise or representation and the principal issues are whether the plaintiff has relied upon the promise or representation and what relief should be granted. Many of the recent cases concerned with proprietary estoppel are of this type: for example, Giumelli v Giumelli [1999] HCA 10; 196 CLR 101; Flinn v Flinn [1999] VSCA 109; 3 VR 712; Donis v Donis [2007] VSCA 89; 19 VR 577; Delaforce v Simpson-Cook; Sullivan v Sullivan [2006] NSWCA 312; 13 BPR 24,755; Waddell v Waddell [2012] NSWCA 214; 292 ALR 788 (where the representation was communicated indirectly) and Sidhu v Van Dyke [2014] HCA 19. In this type of case, because the defendant has made a promise or representation, it is usually clear what expectation the plaintiff might reasonably derive from it. 53On appeal in the present case Mr Rayment QC, who appeared with Mr Bradford for Mr and Mrs Hardie, understandably characterised the present case as of a Ramsden v Dyson type. In that case, there was no promise or representation by the defendant but, as in the present case, other conduct was alleged to amount to encouragement of an expectation on the part of the plaintiff. 54Another case of this type is Inwards v Baker [1965] 2 QB 29. In that case the defendant was invited by his father to build a bungalow on the father's land and to make it bigger than the defendant could have afforded if he had had to buy land. To the father's knowledge, the defendant built the bungalow and lived in it continuously thereafter. After the father's death, the trustees of his will brought proceedings to eject the defendant. On appeal, the Court held that a proprietary estoppel had arisen and the defendant was entitled to a licence to remain on the property as long as he desired to use it as his home. As put by Lord Denning MR, it was "quite plain that the father allowed an expectation to be created in the son's mind that this bungalow was to be his home. It was to be his home for his life or, at all events, his home as long as he wished it to remain his home" (at 37). 55Other principles that have potential relevance to the present case are as follows: (1)"A proprietary estoppel by encouragement may be established where the conduct of the party estopped did not define the expectation" (Delaforce v Simpson-Cook at [55]). In a Ramsden v Dyson type of case such as the present, particular attention needs to be given to determining whether the plaintiff's expectation was reasonably capable of being derived from the defendant's conduct. If it was, the corollary will be that the defendant should have realised that his or her conduct could lead to that expectation being formed. (2)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 thus looks backwards rather than forwards (Delaforce v Simpson-Cook at [81]; Waddell v Waddell at [53]). 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. On the other hand, in a contract action supervening events would not relieve the defendant of contractual obligations unless those events were catered for in the express or implied terms of the contract or amounted to frustration of the contract. (3)It follows from these principles that when a proprietary estoppel is sought to be enforced, the court may consider the extent to which the plaintiff's equity has been diminished by time (Delaforce v Simpson-Cook at [61]). Thus, whilst a plaintiff's effecting of improvements in reliance upon a defendant's conduct may be of considerable significance soon after the improvements are made, the passage of time before the estoppel is sought to be enforced may indicate that the plaintiff has had the full benefit of those improvements and that they have effectively been amortised (ibid; Duic v Duic [2013] NSWCA 42 at [32]; Sledmore v Dalby [1996] EWCA Civ 1305; 72 P & CR 196). (4)The court must look at all the circumstances of the case to determine in what way the plaintiff's equity may be satisfied (Delaforce v Simpson-Cook at [57]; Giumelli v Giumelli at [49] - [51]; Sullivan v Sullivan at [21] - [22]). This requires consideration of practical matters such as the impact of the court's orders on third parties (Delaforce v Simpson-Cook at [60]). Nevertheless, the court should, prima facie, enforce a reasonable expectation which the party bound created or encouraged (Sidhu v Van Dyke at [85]; Delaforce v Simpson-Cook at [63]) but relief should not be "out of all proportion to the detriment" suffered by the plaintiff (Van Dyke ibid and Delaforce at [62]).

First issue: the nature of the expectation reasonably engendered 56It needs to be borne in mind when considering this issue that the primary judge did not accept that the 1994 and 1999 representations to which the Hardies deposed were made (Judgment [52] quoted in [38] above). The matters that the primary judge in fact relied upon in concluding that Mr Milling had excited in the Hardies the reasonable expectations that he found they had (see Judgment [54]) were: (1)Mr Milling's invitation in about 1991 to the Hardies to live in the Weeraman homestead; (2)Mr Milling's express consent to development of both the homestead and its curtilage "as a means of providing a secure home" for Mrs Hardie and her family; (3)Mr Milling's encouragement to the Hardies both to remain at Weeraman and to improve it; (4)What Mr Milling said "and the way he said it (about his grant of permission to undertake improvements provided there was no cost to him)". However, there is no basis for thinking that this factor relied on by the primary judge involves more than the proposition that Mr Milling gave his approval on the basis that it would not involve him in any cost. 57In my view there was nothing in Mr Milling's proven conduct that justified an expectation on the part of the Hardies that one or both of them would inherit any part of Weeraman from him. Shorn of the alleged representations that were not established, his conduct spoke only to the Hardies' occupation of the homestead and its surrounds. When account is taken of the capital nature of most of the improvements, Mr Milling's approval of them can readily be regarded as carrying with it an assumption that the Hardies would be able to occupy the homestead for a substantial period to enable them to obtain the benefit of the improvements, but that is different from an assumption that the Hardies would inherit any part of the property or have it transferred to them. 58To my mind, an assumption that Mr Milling was implicitly communicating that ownership of any part of the property would pass to the Hardies was unreasonable and not justified by his conduct. It may well be, as the evidence suggests, that the Hardies hoped, or indeed assumed, that Mr Milling would leave the whole or at least part of Weeraman to them by will. Whilst this may have been a reasonable expectation arising out of the relationship of father and daughter between Mr Milling and Mrs Hardie, the existence of their children who needed a home in which to live and a special connection to the home that may have developed out of their lengthy occupation of it, the expectation could not fairly be said to have arisen from Mr Milling's conduct described in [56] above and could not therefore be regarded as assisting the Hardies in their proprietary estoppel claim. 59A further difficulty for the Hardies is that, even if Mr Milling's conduct was reasonably capable of exciting an expectation that one or both of the Hardies would receive an inheritance, that expectation could not in my view have reasonably been regarded as relating to more than the Weeraman homestead and its surrounds, Mr Milling having made it clear, to use the primary judge's expression, that he continued to exercise sovereignty over the farming operations on Weeraman (see [39] above). There was nothing in the evidence accepted by the primary judge to suggest that Mr Milling led the Hardies to expect that he would do otherwise than retain the right to dispose by will of the property (and therefore of the right to farm it). That being the case, the Hardies' case based on their inheritance expectation was doomed to complete failure (that is, even in respect of the homestead and its surrounds). It is therefore unnecessary to consider whether the Hardies' case based on their inheritance expectation faced further difficulties because, as Mr Rayment QC accepted, disposition of the ownership of the homestead and its surrounds separately from the remainder of Weeraman or of Lots 110 and 118 would have constituted an illegal subdivision in the absence of relevant approvals. The Hardies did not contend that Mr Milling expressly or impliedly assumed an obligation to attempt to obtain subdivision approval (compare Sidhu v Van Dyke where there were promises to that effect at [86]). 60Again leaving aside the alleged 1994 and 1999 representations referred to in [11] to [12] and [19] to [21] above which were found not have been proved, the most Mr Milling appears, relevantly, to have said is that he agreed to the Hardies making the Weeraman homestead their home (see [29] to [30] above). He conveyed this when they first took up residence and referred to no more than their occupation of the homestead, albeit for a lengthy period. Likewise, the implication in Mr Milling's approval of the Hardies' improvements was no more than that they would have the enjoyment of them through their residence at the Weeraman homestead. Neither aspect of Mr Milling's conduct carried the implication that the Hardies would be entitled to have, or to use, the remainder of Weeraman, this being suitable only for farming. 61It follows from the above that although Mr Milling's conduct was not reasonably capable of leading the Hardies to have the expectations identified by the primary judge, it was capable of exciting an expectation that they would be entitled to occupy the Weeraman homestead and its surrounds as their home for a lengthy period. Assuming for the moment that they did come to have that expectation as a result of Mr Milling's conduct, the question is to what period of time did the implication in Mr Milling's conduct relate. This is a question to which I return below when addressing the fourth issue.

Second issue: reliance 62It is clear that for many years the Hardies have believed that they have a right to use the Weeraman homestead as their home. Mr Milling however submitted that the Hardies did not prove that that belief arose out of conduct in which the primary judge found he had engaged, as distinct from Mr Milling's alleged representations which the primary judge was not satisfied were made. 63It is true that the Hardies placed considerable emphasis in their reliance evidence on the 1994 and 1999 conversations in which the alleged representations were made (see [11] to [12] and [19] to [22] above). However, I do not consider that the sources of the Hardies' beliefs can be dissected as finely as Mr Milling seeks. The fact is that Mr Milling's conduct was, in an objective sense, calculated to lead the Hardies to believe that they had a right of residence and that the Hardies did come to so believe. The inference of a causal connection between the two can readily be made (see Gould v Vaggelas [1984] HCA 68; 157 CLR 215 at 236; Sidhu v Van Dyke at [50] - [61]). The fact that the Hardies have broader expectations (extending to entitlements to ownership of Weeraman, or at least two of its three lots) which do not have a reasonable basis in Mr Milling's conduct does not in my view affect the inference that their core belief as to a right of residence flowed, at least in part, from conduct of his that was well able to give rise to that belief.

Third issue: whether repudiation by Mr Milling 64The primary judge found that Mr Milling's execution of a new will in 2010 amounted to a "decisive repudiation" of the Hardies' expectation based on Mr Milling's conduct that they were entitled to acquire ownership of Weeraman (Judgment [67] quoted in [41] above). In light of my view that there was no reasonable basis in Mr Milling's conduct for such expectation, the correctness of his Honour's conclusion that the expectation was repudiated does not arise for consideration. 65The primary judge said in relation to the Hardies' right of residence that whilst Mr Milling did not have any present intention to evict the Hardies from Weeraman, "he has at all material times reserved a right to do so at will" (Judgment [67]). Mr Milling's Notice of Appeal did not challenge this finding, nor, in address on the appeal, did Mr Milling's counsel seek to contradict it. Rather, counsel emphasised the absence of any intent of Mr Milling to evict the Hardies and submitted that, due to the broad nature of the Hardies' claims in the proceedings, Mr Milling had never been asked to take a stance on the narrower question of whether the Hardies have a present right of occupation. Counsel indicated that if an answer to that question had to be given, Mr Milling would have great difficulty in resisting an affirmative answer. 66I would be very reluctant to conclude, after so much time and expense has been devoted to this family dispute through these proceedings, that the substantive question raised by the Hardies as to whether they have a right to reside in the Weeraman homestead should not be answered because the proceedings, at least in this respect, are premature in that no dispute about this matter has been crystallised. 67Whilst the matters to which counsel referred may have a bearing on what costs orders should be made, I do not consider them sufficient to deter the Court from granting such relief concerning the right of residence as it considers appropriate. The parties have for some time been at loggerheads over a number of issues relating to Weeraman. The question of residence is bound up in these disputes, as is illustrated by the asking of questions on the topic in cross-examination and re-examination (Transcript p 219) and Mr Milling's response that he supposed that he had the right to evict the Hardies from Weeraman as he was "the landlord".

Fourth issue: relief 68As counsel for Mr Milling emphasised, in considering relief the Court looks backwards rather than forwards (see [55(2)] above). Determination of the period for which the Hardies were and are entitled to reside in the Weeraman homestead would have been more difficult at the time, commencing in 1993, when the relevant improvements were made, than it is now. In making the determination now the Court is entitled to take advantage of hindsight. 69The Hardies have had the benefit of occupation of the Weeraman homestead for over 20 years and, depending on when the improvements were effected, they have had use of them for a decade or, in some cases, considerably more. In that time, their two eldest children have grown to adulthood and their third has reached about 16 years of age. They have paid no rent to Mr Milling for their occupation and he has paid all relevant rates and taxes. Effectively, the Hardies' expenditure on improvements can be regarded as having been largely, if not wholly, amortised over the period of their occupation (see [55(3)] above). 70The Hardies gave evidence, and the primary judge found, that but for their beliefs that they would acquire ownership of Weeraman they would have moved elsewhere (Judgment [55]). This was not relevant detriment because I have found that those beliefs were not reasonably based upon any conduct of Mr Milling. In any event, the evidence provided no explanation of how that move would, considered in hindsight, have worked to the Hardies' disadvantage. There was thus no evidence as to when they would have moved and what alternative accommodation arrangements they would have made. For all the evidence revealed, they may have purchased a property which gave rise to a profit, whether realised or unrealised, exceeding the value of the alleged entitlements to Weeraman. 71As I noted earlier (see [55(4)] above), the Court should prima facie enforce a reasonable expectation which the party bound created or encouraged. In a case such as the present where the encouragement was not in the form of a promise or representation, the determination of the precise ambit and nature of the reasonable expectation involves a question of judgment and is intimately bound up with the nature of the relief that should be granted. It is sufficient for me to state that, taking into account all of the circumstances of the case, my view is that the Hardies' equity would be satisfied by holding that Mr Milling is estopped from denying an entitlement of Mrs Hardie and her invitees to occupy the Weeraman homestead and its surrounds during his lifetime. 72As the Hardies are considerably younger than Mr Milling, this is prima facie less favourable relief for them than that for which they contended as their "fallback" position in the event that the appeal was allowed. The latter relief sought was effectively a right of occupation during their lifetimes or that of the survivor of them. 73I do not consider a grant to them of the more favourable relief is warranted as the probabilities are that Mr Milling will predecease the Hardies and that the estoppel would therefore continue to operate after Mr Milling's death, a consequence for which I do not consider there to be any support in his conduct. 74As my conclusion substantially conforms with the primary judge's orders as to the position to obtain during Mr Milling's lifetime, as distinct from that to apply upon his death, that part of the orders should, subject to one qualification stand, and the part concerned with inheritance should be set aside. The qualification is that I would remove "non-exclusive" in Order 2(a)(i) made by the primary Judge (see the form of order as set out in the judgment at [85] below). The inclusion of that word is or may be inconsistent with the restraint imposed on Mr Milling by Order 3 made by the primary Judge, which order is to remain in force.

Fifth issue: whether a costs order should have been made against Mr Hardie 75This issue was raised by Ground 18 in the Notice of Appeal. The only written submission made on behalf of Mr Milling was that a costs order should have been made against Mr Hardie and that "[t]his follows from the position adopted by [Mr Hardie] until his cross-examination" ([65]). No oral submission was made and the Court was not provided with a copy of, nor was its attention directed to, the costs judgment that the primary judge presumably delivered, his Honour not having dealt with costs in his judgment of 10 April 2013. In these circumstances, I consider that Ground 18 should be treated as abandoned.

ORDERS 76As the orders that I propose in some respects uphold but in other respects set aside the primary judge's orders, and the parties have not yet had the opportunity to address relevantly on costs, they should now be given that opportunity. 77Mr Milling requires a short extension of time for the filing of his Notice of Appeal. As he gave a good explanation for the delay and the Hardies did not oppose the extension sought, it should be granted. 78I propose the following orders: (1)Extend to 28 June 2013 the time for Mr Milling to file his Notice of Appeal. (2)Appeal allowed in part. (3)Vary the orders contained in subparagraph (a) of paragraph 2 of the orders made by Lindsay J on 29 May 2013 by deleting the word "non-exclusive". (4)Set aside subparagraphs (b) and (c) of paragraph 2 of those orders. (5)Set aside paragraphs 9 and 10 of those orders. (6)Grant Mrs Hardie a certificate under the Suitors' Fund Act 1951 (NSW), if qualified. (7)Direct that the parties file and serve submissions, concerning the costs orders to be made in respect of the proceedings at first instance and on appeal, in accordance with the following timetable: (i)Mr Milling within seven days of the date of this judgment. (ii)Mr and Mrs Hardie within a further seven days. (iii)Any reply within a further seven days. 79SACKVILLE AJA: I have had the advantage of reading the judgment of Macfarlan JA. I gratefully adopt his Honour's account of the factual circumstances.

The Pleaded Case and Orders at Trial 80The principal case pleaded by the respondents (Hardies) was that the appellant (Mr Milling) represented to them in 1994 and subsequently that he had a five year plan under which they would acquire the whole of "Weeraman". (Weeraman comprised the land described by the primary Judge as Lots 20, 110 and 118, comprising about 310 hectares in all. Lot 20, about 145 hectares in size, was located a kilometre or so from Lots 110 and 118.) The Hardies alleged that by reason of the representations made by Mr Milling they carried out extensive renovations and extensions to the homestead on Weeraman in the expectation that Mr Milling would transfer the whole of that property to them. The homestead and its curtilage, which were on or near the boundary between Lots 110 and 118, comprised about four hectares (the Homestead Area). The Hardies did not plead or conduct a case that limited their claim to the Homestead Area. 81As Macfarlan JA has explained, the primary Judge rejected the principal case pleaded by the Hardies. His Honour did not accept (at [52]) that Mr Milling ever represented to the Hardies that he intended to retire or that he had a "five year plan". Nor did Mr Milling represent to the Hardies that he intended to transfer Weeraman to them during his lifetime. The primary Judge did accept that the Hardies believed that Mr Milling would transfer the land to them within the foreseeable future, but nothing expressly said by Mr Milling could have justified such a state of mind (at [53]). 82The Hardies pleaded an alternative case in their Statement of Claim: "22. Alternatively ... [Mr Milling] has actively encouraged the [Hardies] to assume or expect that, if they remained on "Weeraman" and carried out improvements to the cottage on "Weeraman", they would have a future on "Weeraman" and he is, by reason of those facts, estopped from denying that he is under an equitable obligation to transfer "Weeraman" to them as tenants in common in equal shares on the conditions specified in the Summons ..." The alternative claim involved the whole of Weeraman and was not confined to the Homestead Area. 83The relief sought by the Hardies included a declaration that Mr Milling held his interest in Weeraman on trust for the Hardies as tenants in common, subject to a life interest in Mr Milling (but so as to exclude the "house block on Lot 118"). In addition, the Hardies sought an order that Mr Milling transfer Weeraman to them, subject to Mr Milling's life interest. 84The primary Judge, in substance, accepted the Hardies' alternative case, except that he rejected their claim to Lot 20. His Honour based his conclusion on the findings set out at [54]-[56] of the primary judgment. Macfarlan JA has reproduced [54] of the primary judgment (at [38] above) and summarised [55]-[56] (at [39] above). 85The primary Judge made a declaration that Mr Milling held Lots 110 and 118 on trust: (a) during Mr Milling's lifetime: (i) for Mrs Hardie to have an "irrevocable, non-exclusive licence" to occupy the Homestead Area (as defined in Order 2(a)(i)) as a residence, together with access to and from the Homestead Area as may be "reasonably required to permit [her] to enjoy quiet possession" of the Homestead Area; (ii) subject to Mrs Hardie's licence, for Mr Milling to enjoy quiet possession of the whole of Weeraman, on the basis that he is bound to pay rates, taxes and other outgoings; (b) on Mr Milling's death, for Mrs Hardie to possess and enjoy, for her own absolute use and benefit, Lots 110 and 118, subject to some presently irrelevant exceptions. An order (Order 3) was also made restraining Mr Milling from interfering with Mrs Hardie's "quiet enjoyment of the right of occupancy" granted by the licence. 86As was discussed in argument on the appeal, it is not entirely clear how Mrs Hardie's "non-exclusive licence" of the Homestead Area would confer on her a right to quiet possession. Nor is it clear whether the order restraining Mr Milling from interfering with Mrs Hardie's right of quiet enjoyment is intended to preclude him or his agents from entering the Homestead Area under any circumstances. 87Consistently with the pleadings, the primary Judge was not asked by either party to make orders limited to the Homestead Area. Moreover, the proceedings were conducted on the express basis, communicated to the primary Judge, that there was no practical prospect of effecting a subdivision of Weeraman so as to create a separate lot encompassing only the Homestead Area. As will appear, this assumption turned out not to be entirely accurate.

The Appeal 88Mr Milling's notice of appeal challenged many of the factual findings made by the primary Judge. He sought orders that the appeal be allowed and that orders be made dismissing the proceedings. 89The Hardies did not file a notice of contention or a cross-appeal. In the course of argument the Court pointed out to Mr Rayment QC, who appeared with Mr Bradford for the Hardies, that an issue might arise as to whether, if the Hardies held any expectation concerning their entitlement to occupy Weeraman, it could reasonably have extended beyond the Homestead Area. Mr Rayment was asked whether he wished to press an alternative claim by the Hardies limited to the Homestead Area. His attention was also drawn to the absence of a notice of contention or cross-appeal. Mr Rayment's initial response to the question was that his clients' primary position was that they wished to maintain the judgment in their favour. 90In the course of this discussion, Mr McGrath, who appeared for Mr Milling handed up legible copies of documents that were tendered at the second hearing before the primary Judge, when the question of relief was argued, although understandably his Honour saw no need to refer to them. The documents describe a so-called "boundary adjustment" which received development approval from Warrumbungle Shire Council on 16 August 2010. The effect of the boundary adjustment is to amalgamate Lots 110 and 118, and to carve out a separate lot which more or less corresponds with the Homestead Area. It appears that the boundary adjustment was prepared and submitted to the Council as a consequence of discussions between the parties which, unfortunately, did not produce a settlement. 91Mr McGrath stated that he had received instructions that it was open to the Court to adopt what he described as a "middle course". By that he appeared to mean that it was open to the Court to decide that the Hardies were entitled non-exclusive licence to the Homestead Area, but not to any other part of Lots 110 and 118. Mr McGrath's instructions presumably reflected Mr Milling's evidence that he had no present intention of disturbing Mrs Hardies' occupation, together with her family, of the Homestead Area. 92Following the interchange with counsel, the Court invited Mr Rayment to obtain instructions as to whether the Hardies wished to advance an alternative claim for relief limited to the Homestead Area. In response to this invitation, the Hardies filed brief supplementary submissions attaching proposed orders to be substituted for the principal orders made by the primary Judge. The proposed orders were not accompanied by a notice of contention or cross-appeal, nor any substantive arguments supporting the proposed orders. 93The orders and declaration proposed by the Hardies were as follows: "2. DECLARE that [Mr Milling] holds [Lots 110 and 118] ... on the following terms: a. During the lifetime of the [Hardies] or the survivor of them: (i) [Mrs Hardie] (by herself and her invitees) has, free of any liability for payment of a licence fee or for any rates, taxes or outgoings - other than charges for telephone services to which she may subscribe and electricity supply to the farmhouse charged on the property, an irrevocable, non-exclusive licence to occupy (and, at her discretion and at her own costs, improve) as a residence for herself and her immediate family and for incidental purposes, that area of the property circumscribed by a notional boundary line enclosing the homestead, water tank, the house shed, the machinery shed, the swimming pool, the tennis court, the cricket practice net, the gardens and the bore presently erected as improvements on the property, together with access to, from and in the vicinity of that area as may be reasonably required to permit [Mrs Hardie] to enjoy quiet possession of the defined area. (ii) Subject to [Mrs Hardie's] entitlement to occupy the property pursuant to the licence referred to in order 2(i) above, and on the basis that [Mr Milling] is bound to pay or bear liability for any and all rates, taxes or other outgoings (including moneys secured by mortgage) charged or chargeable on, or referable to, the property other than any charges for telephone services provided to [Mrs Hardie] or her invitees and electricity supply to the farmhouse, [Mr Milling] is entitled to enjoy quiet possession of the whole of the property and the rents and profits thereof. b. If [Mr Hardie] should survive [Mrs Hardie], he shall upon her death have the same rights as [Mrs Hardie] has under paragraph a(i) hereof. c. In the event that any mortgagee to whom [Mr Milling] is indebted shall sell the whole of the property (ie lots 110 and 118) or any part thereof during the life of [Mr Milling] then [Mrs Hardie] is entitled to immediate payment by [Mr Milling] of fair compensation for the loss of her right to occupy the defined area for the remainder of the life of the [Hardies] or the survivor of them, such compensation to be determined by a licensed valuer jointly appointed by [Mrs Hardie] and [Mr Miller], or their respective legal personal representatives and, in default thereof, by the Registrar, Equity Division. 3. ORDER, subject to further order, that [Mr Milling] by himself, his servants and agents be restrained from interfering with the [Hardies'] quiet enjoyment of the right of occupancy identified in paragraph 2a(i) and 2b above. 4. ORDER, subject to further order, that the [Hardies] by themselves, their servants and agents be restrained from interfering with [Mr Milling's] quiet enjoyment of Lots 110 and 118 subject to the [Hardies'] entitlement to occupy the property pursuant to the licence referred to in order 2a(i) and 2b above. a. to have more precise area substituted for the area identified in order 2a(i) above if need be; b. in respect of any caveat in the event of [Mr Milling] refinancing, and c. generally, in respect of the operation of these orders." 94Orders 2(a)(i), 3 and 4 proposed by the Hardies correspond with the orders made by the primary Judge, except that: ● proposed Order 2(a)(i) grants a licence that would continue for the lifetime of the Hardies or the survivor of them (rather than a licence limited to Mr Milling's lifetime); and ● proposed Order 3 restrains Mr Milling from interfering with the Hardies' quiet enjoyment of their right of occupancy (including the right of Mr Hardie to occupy the Homestead Area, should he survive Mrs Hardie).

The Findings 95In my opinion, the orders made by the primary Judge cannot stand. For the reasons given by Macfarlan JA nothing Mr Milling did or refrained from doing could have engendered a reasonable expectation in the Hardies that he would leave Lots 110 and 118 to one or both or them by his will. Furthermore, as Macfarlan JA has also explained, any expectation created in the Hardies by virtue of Mr Milling's encouragement to them to undertake improvements and live in the homestead, could not have related to the whole of Lots 110 and 118. To the extent that Mr Milling's encouragement gave rise to an equitable or proprietary estoppel, it could not extend beyond the Homestead Area (including access to that Area).

The Case Limited to the Homestead Area 96Had Mr McGrath not indicated that it was open to the Court to take the "middle course", I would not have been inclined to permit the Hardies, after the hearing of the appeal had concluded, to advance for the first time a contention that orders should be made granting them a licence limited to the Homestead Area. They neither pleaded nor conducted such a case at trial. Neither Mrs Hardie nor her husband gave evidence that they had an expectation that they would become entitled to an interest (whether by way of transfer inter vivos, a gift by will or the grant of a licence) in the Homestead Area severed from the remainder of Lots 110 and 118. On the contrary, Mrs Hardie gave evidence that her expectation was that she would inherit the whole of Weeraman and not just the Homestead Area. Unlike Lot 20, which was physically distant from Lots 110 and 118, the Homestead Area formed part of Lots 110 and 118 and, on the way the trial was conducted, could not be created as a separate lot. The Hardies did not file a notice of contention or a cross-appeal seeking orders, in the alternative, limited to the Homestead Area. The written submissions on the appeal did not identify or support a claim limited to the Homestead Area. And, as I have indicated, the issue did not arise in oral argument until the Court raised the possibility of a claim limited to the Homestead Area. 97In view of the concession made on behalf of Mr Milling, however, the Court should approach the appeal on the basis that, if it is appropriate on the evidence, an order can be made granting the Hardies relief, but limited to rights in relation to the Homestead Area (including access to and from it). 98On the findings made by the primary Judge, Mr Milling invited the Hardies to live in the homestead shortly before the birth of their first child (Mr Milling's grandchild) in February 1993 (at [28]). Mr Milling, in his evidence accepted that at all material times he intended the Hardies to feel secure in the residence that had become their home (at [57]). 99The improvements undertaken by the Hardies were described by the primary Judge as follows (at [31]): "...the laying out of an extensive garden by [Mrs Hardie] and her mother (1992); the construction of a new shed ("the House Shed") in 1994; the installation of a water tank, providing a domestic water supply in about 1995; the installation of a cattle grid, coupled with a gate, at about the same time; extensions to the Weeraman homestead that doubled its size, in about 1997; an unsuccessful attempt to drill a new bore, on the site of an old bore, for the provision of a general water supply in 1997; the construction of a swimming pool in 1998; the construction of a machinery shed in 1999; extension of the garden, with a piped water supply system, in and following the year 2000; the successful sinking of a new bore in 2002; the installation of a tennis court, and a cricket practice net, in 2003; and sundry other improvements (including air conditioning in the homestead and shade sails over the pool) in subsequent years up to about 2006." 100There is no detailed evidence as to the cost of the improvements carried out by the Hardies, but the valuation in evidence attributes a market value to the improvements as at January 2012 of $175,000.00. The value attributed to Weeraman as a whole, including improvements, was $1,350,000.00. 101It is now accepted that in cases of equitable or proprietary estoppel there is no need to mould the remedy to reflect the minimum relief necessary to do justice between the parties: Giumelli v Giumelli [1999] HCA 10; 196 CLR 101 at 124-125 (Gleeson CJ, McHugh, Gummow and Callinan JJ); Sidhu v Van Dyke [2014] HCA 19 at [85] (French CJ, Kiefel, Bell, and Keane JJ, with whom Gageler J agreed). Those decisions make it clear that: "... because the fundamental purpose of equitable estoppel is to protect the plaintiff from the detriment which would flow from the defendant's change of position if the defendant were to be permitted to resile from his or her promise, the relief granted may require the taking of active steps by the defendant including the performance of the promise and the performance of the expectation generated by the promise." Sidhu v Van Dyke at [82], citing Giumelli v Giumelli at [6], [40]-[48]. 102The factors to be taken into account in determining the relief to be granted were stated succinctly by Allsop P in Delaforce v Simpson-Cook [2010] NSWCA 84; 78 NSWLR 483 at [3]: "... relief in such cases is not to be measured by weighing detriment too minutely in order that it be converted into some equivalent of cash or kind, as if one were measuring the consideration for a commercial bargain. Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character." 103The primary Judge found (at [49], [53]) that this was a case of "classic miscommunication", in which the Hardies formed a belief that Weeraman would be transferred to them within the foreseeable future, but Mr Milling had not said anything that could justify such a state of mind. Nonetheless, Mr Milling encouraged the Hardies to live in the homestead and to make extensive renovations and improvements to the dwelling and curtilage at their own expense. Mr Milling also accepted that when he was asked by his daughter whether she and her husband had a future there, he had replied "yes, so far as living here is concerned". When the matter is viewed at the time when these events occurred, they justified an expectation in the Hardies that they would be permitted by Mr Milling to live in the homestead as their home for a lengthy period and that the improvements would enure to their benefit for as long as they made the homestead their home. 104This is not, however, a case where the party estopped has made a representation or promise that the representee will receive a specific interest in land: cf Dillwyn v Llewellyn (1862) 4 De GF & J 517; 45 ER 1285; Donis v Donis [2007] VSCA 89; 19 VR 577. It is a case of estoppel by encouragement in which the conduct of the party estopped (Mr Milling) did not define the expectation in the other party: Delaforce v Simpson-Cook at [55] and cases cited there. Such cases can present greater difficulties in determining the extent of relief that should be granted to protect the party in whom an expectation has been created from the detriment that might flow from a change of position by the party estopped. In the present case, although the Hardies defined their expectation by reference to the whole of Weeraman, it is open to the Court to protect them from the detriment which would flow from a change of position by Mr Milling by framing relief confined to the Homestead Area. 105Macfarlan JA has identified the matters suggesting that any relief granted to the Hardies in relation to the Homestead Area should not extend beyond Mr Milling's lifetime. To these I would add that the Hardies never said at the trial that they formed an expectation that, if they had no entitlement to an interest in the whole of Lots 110 and 118, they nonetheless would be able to remain in occupation of the Homestead Area after Mr Milling's death (assuming one or both outlived him). As I have pointed out, the trial was conducted on the basis that Lots 110 and 118 could not be subdivided. Had the Hardies asserted that they believed that they were entitled to remain in occupation of the Homestead Area, separated from the rest of Lots 110 and 118, after Mr Milling's death, that assertion no doubt would have been tested by reference to the obstacles in the path of severing the Homestead Area from the remainder of Lots 110 and 118. 106In these circumstances, I agree with the orders proposed by Macfarlan JA.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 May 2014