Plaintiffs v Defendant

2 In the submissions before me, two major issues were in dispute between the parties, namely:

(1) The appropriate orders which I should make in relation to the interests of the defendant in the Hopefield property. (There was no dispute as to the orders which should be made in relation to the associated water rights).

(2) The orders which should be made as to the costs of the parties.

The relief in relation to the Hopefield property

3 Two matters were in dispute in relation to the orders, which should be made in relation to the defendant's interest in the Hopefield property, namely:

(a) Whether the interests to be transferred to the plaintiffs in the Hopefield property are to be subject to the mortgage to the National Australia Bank Ltd ("NAB").

(b) Whether, as a condition of any order in favour of the plaintiffs, they should be required to indemnify the defendant in respect of a proportion of his responsibility for the debt secured over the Hopefield property.

4 Mr Waddell, who appeared on behalf of the plaintiff, submitted that the plaintiffs should take their interests (which collectively amount to 30%) in the interest of the defendant in the Hopefield property, unencumbered by the mortgage to NAB. Alternatively, he submitted that, if the plaintiffs take their interests subject to the mortgage, any obligation by them to contribute to any liability of the defendant, under the mortgage, should be capped.

5 On the other hand, Mr Shepherd, who appeared on behalf of the defendant, submitted that the plaintiffs should take their interests subject to the NAB mortgage, and that there should be no cap on their obligations to contribute proportionately to any liability of the defendant under the mortgage.

6 It appears, from information provided by Ms Binny on behalf of NAB, that the Hopefield farm consists of 42 parcels of land, which themselves comprise 56 titles. The defendant has an interest in 41 of the 56 titles. He is the sole proprietor in respect of nine of those 41 titles, and he is a registered proprietor, with his three uncles, as tenants in common, in respect of the other 32 titles. Eight of the titles, of which the defendant is either the sole proprietor, or of which he is a registered proprietor as a tenant in common, are mortgaged to NAB. The other 33 titles, of which the defendant is either the sole proprietor, or of which the defendant is a registered proprietor as a tenant in common, are not mortgaged to NAB.

7 It follows that, if I were to accede to Mr Waddell's submission that his clients should be transferred interests in the Hopefield property unencumbered by the NAB mortgage, an appropriate order could be structured, directed only to the 33 titles, in respect of which the defendant has a registered interest, and which are not subject to the NAB mortgage. Alternatively, if I were to reject that submission, then I would order that the defendant transfer the three prescribed interests (totalling 30%) to the plaintiffs, as tenants in common with the defendant, subject to the NAB mortgage. Ms Binny acknowledged to me that if I were to make either such orders, they would not prejudice, or adversely affect, the security held by NAB over the relevant titles.

8 Mr Waddell made two submissions in support of his contention that his clients should take their interests in the Hopefield property unencumbered by the NAB mortgage, and that they should not be liable to contribute to any liability of the defendant under the mortgage. First, he asserted, from the Bar table, that since the death of Kenneth Harrison, the accounts with the NAB, which were secured by the mortgage, have been closed. Thus, he stated, any liability of the estate of Kenneth Harrison in respect of those debts had been discharged. Subsequent mortgages, all executed on 30 July 2008, had been granted by the defendant over the land. The obligations under those mortgages, he submitted, should solely rest with the defendant. Mr Waddell submitted that, pursuant to s 97(4)(a) of the Administration and Probate Act 1958 ("the Act"), an order made under Part 4 of the Act has the effect of a codicil. As a Will and codicil operate from the date of death of the deceased, any relief ordered by the Court in favour of the plaintiffs should have the same effect. Secondly, Mr Waddell submitted that the debt, secured over the land, was incurred by CB Harrison & Sons Pty Ltd ("CB Harrison"), in which the plaintiffs have no interest. The plaintiffs have not derived any benefit from the borrowing comprising the debt.

9 Based on those two arguments, Mr Waddell submitted that the plaintiffs should take their interests unencumbered by the NAB mortgage. Alternatively, if they are to be encumbered by the mortgage, any obligation by the plaintiffs to indemnify the defendant in respect of his liability under the mortgage should be capped at the liability which Kenneth Harrison had in respect of the NAB at the date of his death, namely, $112,000.

10 In response, Mr Shepherd submitted that the claim made by the plaintiffs was not made under Part 4 of the Act, but, rather, was made pursuant to the principles of proprietary estoppel. Thus, the relief to be given by the Court is not governed by s 97(4)(a) of the Act. Further, he submitted that, based on the findings of fact in my judgment, the plaintiffs were first minded to access their rights under Part 4 of the Act in about 2007. Any claim by them under Part 4 would have been determined in accordance with the position of the estate of Kenneth Harrison at the time of trial, which probably would not have taken place until 2008, or later. In addition, Mr Shepherd submitted that, by taking an interest in the Hopefield property, the plaintiffs will benefit from the work and efforts contributed by the defendant to improve the farm, and to make it viable. The property itself was farmed by CB Harrison, and its debt to the NAB was incurred to maintain the viability of the family farming operation, which itself has benefited the land. Finally, Mr Shepherd submitted that the orders, which are now sought by Mr Waddell, were not the basis of any submission by him at trial, and, indeed, the plaintiffs now seek a result which is contrary to conclusions in my judgment.

11 The starting point, for resolving the dispute, in my view, is to be found in my reasons for judgment. It is, I consider, clear from the reasons, and from the manner in which the case was argued before me, that I concluded that the plaintiffs should take their respective interests (totalling 30%) of the defendant's interest in the Hopefield property, subject to the NAB mortgage. The conclusion which I reached was that the plaintiffs should have 30% of that interest. I twice stated[2] that the orders, in favour of the plaintiffs, would be subject to them undertaking a proportionate responsibility for the debt secured over the Hopefield property, for which the defendant is liable. I also noted that it would be necessary for the NAB to have a right to be heard, in order that its interests, under the existing mortgages, be protected. Those observations, and in particular the requirement that the plaintiffs take the interests subject to a proportionate responsibility for the mortgage debt, make it clear that my decision was that the plaintiffs should take their interests encumbered by the NAB mortgage. Indeed, having re-read the transcript of the final submissions, I note that Mr Waddell[3] expressly acknowledged to me that the plaintiffs would take the interests, claimed by them in the Hopefield property, subject to the NAB mortgage.

12 It was, perhaps, in light of that concession, that Mr Waddell has now sought to put before me the information relating to the discharge of the previous accounts, and the new mortgages executed by the defendant on 30 July 2008. That submission should fail for two reasons. First, the factual matters, relied on by Mr Waddell, were not the subject of any evidence before me. The date of the current mortgage over the property coincides with the date, upon which the defendant became registered proprietor of the interest held by Kenneth Harrison in the Hopefield property. The effect of the ongoing debt of the farming operation, secured over the property, was the subject of a not insignificant amount of evidence before me. There was no suggestion in the evidence that that debt had ever been discharged. In those circumstances, if a point were to be made by Mr Waddell concerning the fact that the current mortgages, over the defendant's interest in Hopefield, were executed on 30 July 2008, it would need to be the subject of evidence, to which the defendant should have a right to respond by further evidence. Mr Waddell did not seek to place any such evidence before me.

13 Secondly, and in any event, the factual point made by Mr Waddell would not alter the conclusion which I have reached. First, if the plaintiffs' claims in the proceeding before me were under Part 4 of the Act (which they are not), as Mr Shepherd correctly observed, such a proceeding would not have come before the Court, at the earliest, until some time in 2008. As I stated in my judgment,[4] the question of the quantum of provision, to be ordered under Part 4 of the Act, is determined by reference to the circumstances of the plaintiffs and the defendant, and the estate, at the time of the hearing. In determining that question for the purposes of this case, I took into account the current market value of the Hopefield property and of the water rights.[5] In those circumstances, equally, a Court would take into account the current liabilities of the estate. It is not suggested that any part of the NAB debt, secured over the property, constituted personal borrowings by the defendant. Rather, the NAB debt constituted the debt of the farming operation, just as it did at the date of the death of Kenneth Harrison.

14 Further, the case was not an application under Part 4 of the Act. Rather, the claims of the plaintiffs were based on the principles of proprietary estoppel. It was by reference to those principles that I reached the conclusion, to which I still adhere, that the appropriate order to be made in this case is one which results in the transfer to the plaintiffs of their respective interests, which collectively total thirty per cent of the defendant's interest, but subject to the NAB mortgage.

15 Mr Waddell also submitted that such an order would result in the plaintiffs having the burden, but not enjoying the benefit, of the NAB loan. However, he was not able to point to any benefit, which the defendant had received from the loan either. Indeed, Mr Shepherd correctly pointed out that, while each of the plaintiffs was making her own way in life, the defendant had dedicated a significant part of his working life to the farm, for little or no reward. The evidence, which I accepted, demonstrated that it was the defendant's efforts which significantly improved the viability of the farm, and which has thus benefited all those who hold registered interests in the property, which will include the plaintiffs.

16 For the above reasons, Mr Waddell has not persuaded me that I should depart from the conclusion, which I had already reached, namely, that the plaintiffs should take their interests in the Hopefield property, subject to the NAB mortgage.

17 For the same reasons, I also adhere to the same conclusion, which I expressed in my earlier judgment, namely, that the plaintiffs should undertake a proportionate responsibility for the mortgage debt secured over the Hopefield property, and for which the defendant is liable. The orders take effect as at the present time. If the plaintiffs are to take their interests in the property subject to the mortgage, as tenants in common with the defendant, Mr Waddell has not advanced any valid reason why they should not, proportionately, be liable to contribute to any liability of the defendant pursuant to the mortgage.

18 It therefore follows that I shall make orders declaring that the defendant holds on constructive trust for the first plaintiff a 15% interest, for the second plaintiff a 10% interest, and for the third plaintiff a 5% interest, as tenants in common with the defendant as to 70%, in the land, contained in the 41 certificates of title to which I have referred, subject to the mortgages and other encumbrances noted thereon. I shall also order that the defendant do all such things and execute all such documents as are necessary to effect a transfer to the plaintiffs of their respective interests, subject to the mortgages and encumbrances noted on them. In addition, I shall make orders that, upon the defendant being called upon by NAB to pay to it any sum secured by the securities over the property, presently provided by the defendant to secure the accommodation provided by the NAB to CB Harrison, the three plaintiffs shall indemnify the defendant in respect of 15%, 10% and 5%, respectively, the sum claimed by the bank.

19 The parties have reached agreement as to the appropriate orders to be made in respect of the water rights. The NAB debt secured over the water rights, currently owned by the defendant, constitutes a personal borrowing by the defendant. Therefore, Mr Shepherd acknowledged that the plaintiffs should take their 30% collective share in those rights, free of the NAB mortgage. Ms Binny, on behalf of NAB, has indicated that if I were to make orders which, in effect, divided the defendant's water rights, so that the plaintiffs were, collectively, to receive 30% of them, NAB would not seek to take security over the plaintiffs' new water rights. The position taken by the NAB in that respect has simplified the type of order which I shall make.

20 I was informed by counsel that the water rights, currently owned by the defendant, consist of one share of high reliability water, and one share of low reliability water. The relief, which I shall order in relation to those two shares, will be effected by the Water Authority recalling the defendant's single share, and issuing, in its place, four shares, one to each of the plaintiffs and one to the defendant. The share of each party will contain rights in proportion to the percentage entitlements, which I determined each plaintiff should have in the rights formerly pertaining to the single share. Upon issuing the new shares, the Water Authority will make all the necessary adjustments regarding fees and costs. After the issue of the new shares to the plaintiffs and the defendant, they will each be billed accordingly for future use of the shares by the Water Authority.

21 In the course of submissions, an issue arose concerning the status of the "delivery share" relevant to those rights. Dr R. Sadler, of the Victorian Bar, who has some specialised knowledge concerning the nature of water rights, assisted by attending Court, and explaining the nature of that right. Based on the information provided by Dr Sadler, the parties were able to agree on appropriate orders, and, at Mr Shepherd's request, I shall note, briefly, in the "other matters", the effect of Dr Sadler's advice to the Court. It is appropriate that I acknowledge, with gratitude, the assistance given by Dr Sadler to the Court in relation to that aspect of the case.

22 The second matter in issue between the parties concerned the question of costs. Mr Shepherd submitted that I should not order that the defendant bear the whole of the costs of the plaintiffs. Rather, he submitted that I should apportion costs in accordance with the success, or otherwise, of the respective parties in respect of the issues, which were in contention at the trial.

23 In particular, Mr Shepherd pointed out that the principal factual issue, with which much of the evidence at trial was concerned, related to the promises or representations alleged to have been made by the defendant to the plaintiffs. In detail, he identified each promise which was alleged to have been made by the defendant. He noted that the plaintiffs failed to satisfy me that the defendant had made a large number of those representations to them. In particular, Mr Shepherd pointed out that the amended statement of claim, which was filed during the trial, significantly expanded the ambit of the representations alleged against the defendant, but that, ultimately, the plaintiffs did not succeed in establishing any of the further representations, which were added to the pleading by reason of that amendment.

24 Mr Shepherd further pointed out that the representations, which were alleged to have been made by the defendant to the plaintiffs at the "kitchen meeting" in April 2003, were the subject of a significant amount of evidence at trial. Each of the plaintiffs, and Paul Somerville, gave evidence in support of the plaintiffs' case. The defendant responded to it. The representations, alleged to have been made at that meeting, were of some significance, because the plaintiffs, in effect, alleged that the defendant, in one way or another, confirmed or reinforced the representations on a number of occasions in the following years. Mr Shepherd noted that, ultimately, I was not satisfied that the defendant made the representations alleged by the plaintiffs at that kitchen meeting.

25 Finally, Mr Shepherd sought to rely on the fact that during the trial, the defendant had made a Calderbank offer to pay the plaintiffs' party/party costs, if the proceedings were dismissed by consent. He submitted that, in light of the findings which I made, the offer was not unreasonable, and that it is relevant to the orders which I should make in relation to costs.

26 In response, Mr Waddell submitted that I should make the usual order for costs, in accordance with the longstanding principles that costs should follow the event.[6] He submitted that, ordinarily, that rule should be adhered to, unless there is some wrongdoing by the party, which succeeds in the litigation, which would justify an order to the contrary.

27 Mr Waddell submitted that it was appropriate that the plaintiffs gave their evidence, in full, as to the representations which they recollected had been made to them by the defendant. He pointed out that I did not find that any of the plaintiffs (nor, indeed, the defendant) had deliberately fabricated their evidence. He referred to the caution, expressed by Jacobs J in Cretazzo v Lombardi,[7] namely, that the ultimate ends of justice may not be served if a party is dissuaded, by the risk of costs, from canvassing all issues, which might be material to the decision of the case. Mr Waddell submitted that if I were to apportion the costs in the case, according to the success or otherwise of the individual factual issues, such an approach would constitute a restriction on parties running a trial, where a party or a witness is recounting a series of historical events in evidence.

28 Mr Waddell also submitted that Mr Shepherd, at trial, had indulged in unnecessary cross-examination in relation to the kitchen incident, and also in relation to two collateral issues, relating to Andrew Harrison and the Vic Super offer. Mr Waddell submitted that the cross-examination was not justified, because Mr Shepherd knew that he was able to call Mr Tamblyn and Mr John Harrison, whose evidence supported the position of the defendant on those two issues.

29 The ordinary rule, of course, is that costs should follow the event, so that the successful party to a proceeding should be awarded all the costs of the action, notwithstanding that that party has not established the whole of the claims asserted by it.[8] However, it has been recognised that, in the exercise of its discretion, the Court may depart from that rule, where a plaintiff has failed to establish distinct heads of claim, or has not succeeded on issues, which it pursued in making its claim. In this context, as Redlich JA stated in Spotless Group Ltd v Premier Building and Consulting Pty Ltd & Anor,[9] the word, "issue", is "... not used in a technical pleading sense, but refers to any disputed question of fact or law".

30 It is now not uncommon for an award of costs to be adjusted, to reflect the fact that the losing party was, nevertheless, successful on some of the issues, which were pursued as part of the plaintiffs' claim.[10] There have been a number of cases, in recent decades, in which courts have departed from the ordinary rule, that costs follow the event, by making allowance for the fact that the successful party did not succeed on all the issues raised by its claim (or defence, as the case may be).

31 There must, of course, be an appropriate basis for a departure by the Court from the ordinary rule that the party, which succeeds in the litigation, ought to be awarded its costs. Certainly, it has been recognised that, where there are issues, on which the successful party has failed, and which are distinct and severable, it may be appropriate to make an allowance for the success of the losing party.[11] In making such an adjustment, it is important to bear in mind the warning given by Jacobs J in Cretazzo v Lombardi:[12]

"But trials occur daily in which the party, who in the end is ultimately substantially successful, nevertheless fails along the way on particular issues of fact or law. The ultimate ends of justice may not be served if a party is dissuaded by the risk of costs from canvassing all issues, however doubtful, which might be material to the decision of the case. There are, of course, many factors affecting the exercise of the discretion as to costs in each case, including in particular, the severability of the issues, and no two cases are alike. I wish merely to lend no encouragement to any suggestion that a party against whom the judgment goes ought nevertheless to anticipate a favourable exercise of the judicial discretion as to costs in respect of issues upon which he may have succeeded, based merely on his success in those particular issues."

32 Finally, it has been recognised that, where it is appropriate to apportion costs by taking into account the fact that the party, who ultimately succeeded, failed on some issues, it is convenient to make orders which notionally set off the costs incurred by the parties on the issues on which they each succeeded, so as to produce an order for a proportion of one party's costs.[13]

33 In the present case, it is clear, as Mr Shepherd pointed out, that a significant portion of the trial was devoted to the issue whether the plaintiffs had established that the defendant made to them representations to the effect that he would ensure that provision was made for them from the estate of Kenneth Harrison. The proof of those representations was an essential step, or element, in the establishment by the plaintiffs of their rights under the principles of proprietary estoppel, on which they relied. In the end, I was satisfied that the defendant made some of the representations which were alleged by the plaintiffs, which were sufficient to establish that element of the claim in proprietary estoppel.

34 It would be simplistic to approach the question of costs on the basis that the plaintiffs succeeded in establishing that element of their claim. A considerable part of the evidence and submissions at trial were dedicated to the question, whether the plaintiffs had established, on the balance of probabilities, the various particular representations which they alleged the defendant made to them. There were other matters, which the plaintiffs were required to establish in order to prove their claim in proprietary estoppel. Nevertheless, in a sense, the issue of reliance was a corollary of the issue whether the representations were made. The issue of detriment, namely, the loss by the plaintiffs of their rights under Part 4 of the Administration of Probate Act, was the subject of some evidence. However, because that issue was not significantly in dispute, the evidence-in-chief of each of the plaintiffs was contained, largely, in their witness statements. There was some cross-examination in relation to that issue, but it was quite limited.

35 Accordingly, as I stated, a considerable proportion of the trial, including the final addresses, was concerned with the critical issue whether the defendant made to the plaintiffs the representations to the effect alleged. Indeed, the proportion of the trial, dedicated to that issue, is reflected by the amount of attention it received in my reasons for judgment.

36 It is not necessary for me to rehearse, at length, the findings which I made. Essentially, I was able to deal with the question, whether the representations were made, by reference to three periods. I was not satisfied that any of the representations, alleged by the plaintiffs, were established, in respect of the first two periods, namely, from April 2003 to September 2005, and from September 2005 to April 2007. I was satisfied, on the balance of probabilities, that three of the representations, alleged by the plaintiffs in the period April 2007 to 2008, were established.

37 The plaintiffs gave evidence as to a number of different representations, allegedly made by the defendant, in each of the three periods to which I have just referred. There was some connection between some of the representations, in the sense that, on some occasions, the representations alleged to have been made by the defendant were couched in terms, which contained an implicit confirmation that the defendant had made a similar representation on a previous occasion. However, in respect of most of the representations, the evidence given by the plaintiffs was quite specific as to time, place and what was said. Thus, in my reasons for judgment, I dealt with each of the alleged representations on an individual basis.

38 The principal representation, alleged in the first period (April 2003 to September 2005), concerned a conversation between the plaintiffs and the defendant, at which their mother was present, in the kitchen of the family home after the death of Kenneth Harrison. The evidence, and cross-examination, relating to that conversation, was quite lengthy. Mr Waddell submitted that I should conclude that Mr Shepherd indulged in excessive cross-examination of the plaintiffs on that conversation. Mr Waddell based his submission on the fact that Mr Shepherd was able to call two independent witnesses, Mr Tamblyn and Mr John Harrison, as to two important events (the Andrew Harrison issue, and the Vic Super offer), which affected the reliability of the accounts given by the plaintiffs as to what had been said by the defendant in the kitchen meeting. I reject that submission by Mr Waddell. The kitchen meeting was an important part of the plaintiffs' claim. The plaintiffs gave evidence about it, and their evidence was supported by Paul Somerville to some extent. It was quite appropriate for Mr Shepherd to test that evidence in cross-examination. Certainly, the cross-examination by Mr Shepherd was more lengthy than might have been desirable. However, it was relevant, and it was directed, as I say, to an important part of the plaintiffs' case. It would have been imprudent for him to rely, simply, on the fact that he had two witnesses, who could contradict some aspects of the evidence given by the plaintiffs.

39 Apart from the kitchen meeting, the plaintiffs gave evidence as to six other separate representations alleged to have made to them by the defendant during the first period. I was not satisfied, on the balance of probabilities, that the defendant made the representations, which were alleged, on any of those six occasions.[14]

40 In the second period, commencing in September 2005 (with the email of 13 September 2005 by the first plaintiff, Louise Harrison), the plaintiffs alleged that the defendant, on two occasions, made representations to them. I was not satisfied as to either of those representations.[15]

41 The third period commenced in April 2007, following the death of Michael Skirka in Tasmania. In respect of that period, I was satisfied that the defendant made three of the representations alleged against him, namely, representations in Hobart in April 2007, when the family assembled after the death of Michael Skirka,[16] in January 2008, at the home of the second plaintiff, Sue Harrison,[17] and during 2008, in a number of conversations with Sue Harrison.[18] On the other hand, I was not satisfied, in respect of that period, in relation to two other representations alleged to have been made by the defendant to the first plaintiff, Louise Harrison.[19]

42 The foregoing analysis demonstrates that, notwithstanding that the plaintiffs did succeed on the issue, whether the defendant made to them representations that he would ensure that they have provision out of their father's estate, nevertheless, they did not succeed in respect of a substantial number of the individual representations alleged to have been made by the defendant. Further, the representations, which I found were made by the defendant, were specific to a particular period, namely, the period following the death of Michael Skirka in Tasmania. As I indicated in my judgment, there were four factors which, I considered, were relevant, and which, in a sense, differentiated that period from the two periods, which preceded it. Mr Waddell submitted that it was necessary for the plaintiffs to give their evidence concerning the representations which they recalled to have been made to them in the two earlier periods. However, it is clear, from my reasons for judgment, that the establishment of the earlier representations was not necessary, or a pre-condition, to the proof of the three representations, which, I was satisfied, were made to the plaintiffs by the defendant. It was necessary for Mr Shepherd, on behalf of the defendant, to address each of the individual representations alleged to have been made by the defendant. While, in a sense, they all formed part of the evidence relied on by the plaintiffs to prove the first element of proprietary estoppel, on which they ultimately succeeded, nevertheless it was not necessary for the plaintiffs to prove all those representations.

43 Furthermore, the representations, attributed by the plaintiffs to the defendant in the first two periods, raised two other issues, namely, the question as to when Andrew Harrison made a financial demand on the farm partnership, and the question as to when the offer to purchase the Hopefield property was made by Vic Super. Each of those two issues were the subject of evidence, including testimony from Mr Tamblyn and Mr John Harrison. Each of those issues were determined by me in favour of the defendant.

44 Based on the matters, to which I have referred, in my view, the ordinary rule, that costs follow the event, would fail to do appropriate justice between the parties on the question of costs. The inescapable fact is that the plaintiffs did not succeed on a substantial number of factual issues, which arose in respect of the first element of the claim in proprietary estoppel, namely, the proof of the representations. Those issues which occupied a large part of the trial, including final addresses. Further, as I have demonstrated, while those issues were all directed to proving the making of the representations alleged against the defendant, nevertheless, each of the representations, which were alleged, were the subject of specific evidence, and were the subject of distinct findings of fact by me. The three representations made by the defendant, of which I was satisfied, all fell within the one period of time. They were not, either in point in time, or in context, necessarily connected with the evidence relating to the representations, of which I was not satisfied. In that sense, the issues, on which the plaintiffs failed, are sufficiently separate and discrete, to enable a just and fair apportionment of costs in respect of them.

45 In my view, it would be unjust to the defendant, and it would over-compensate the plaintiffs, if the plaintiffs were to be awarded the whole of their costs of the proceeding, given the fate of a large number of the factual issues on which the plaintiffs relied. I am therefore satisfied that this is an appropriate case in which the award of costs, made by me, should take into account the fact that the plaintiffs did fail to establish a number of the representations alleged by them to have been made by the defendant.

46 Before considering what allowance I should make in respect of the issues on which the plaintiffs failed, I need to deal, briefly, with one matter raised by Mr Shepherd. He drew my attention to the fact that, on 23 August 2011 (in the third week of the trial), the defendant's solicitors had sent a "Calderbank" offer to the plaintiffs' solicitors, offering to pay the plaintiffs' costs of the proceedings on a party/party basis, and that the proceeding otherwise be dismissed. Obviously, the plaintiffs achieved, by judgment, a better result than that contained in the offer of compromise. Mr Shepherd, nevertheless, submitted that the offer was reasonable, and that I should take it into account. He also endeavoured to make a point that the plaintiffs had not responded to that offer with any corresponding Calderbank offer. However, as I stated to him, such a point must be treated with considerable caution. It would be entirely impermissible for counsel to suggest to me, at all, that offers were, or were not, made on a without prejudice basis. The fact that the defendant's Calderbank offer was not met with a corresponding Calderbank offer by the plaintiffs is not, of itself, a relevant factor to be taken into account on the discretion relating to costs. Further, the offer made by the defendant was less favourable to the plaintiffs than the result ultimately achieved by them. Thus, I do not take the "Calderbank" offer, made by the defendant, into account.

47 I return, then, to the question as to what allowance should be made, in the award of costs, for the fact that the plaintiffs did not succeed in respect of a significant amount of representations, which they alleged the defendant made to them. Mr Shepherd submitted that substantial justice would be done by awarding the plaintiffs 50% of their costs.

48 In Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2),[20] the Court of Appeal (Chernov JA, Ashley JA and Mandie AJA) noted:

"... where there is a mixed outcome in the proceeding, such as here, the apportionment of the comparative importance of the relevant claims in the proceeding ... can only be carried out on a broad basis, it being primarily a matter of impression and evaluation rather than arithmetic precision. It is also the case that the function of an order for costs is compensatory."

49 It would, in my view, be inappropriate for me to adjust the costs simply on the basis that, numerically, the defendant succeeded on a substantially greater amount of the representations than the plaintiffs. That fact is, of course, important. However, ultimately, the plaintiffs succeeded in proving sufficient representations to establish the first element of their claims in proprietary estoppel. Further, the plaintiffs have succeeded in the case. In addition, while the other elements of proprietary estoppel were not the subject of the same amount of evidence, or analysis, at trial, nevertheless, none of them were conceded by the defendant. The plaintiffs were required to establish each of those elements, and, as I have observed, some of them (in particular, detriment) were the subject of some cross-examination, albeit that it was quite limited. As my judgment reflects, a number of legal issues, raised by Mr Shepherd in final address, did not succeed.

50 Ultimately, it is, I consider, important to give some weight to the circumstance that the plaintiffs did win the case, and that they succeeded in establishing each of the elements of proprietary estoppel. That factor is important, in offsetting, to some extent, the point made by Mr Shepherd, namely, that his client did succeed in respect of a large proportion of the representations alleged to have been made by him. In the end, in my view, an appropriate synthesis of those competing considerations produces the result that the plaintiffs should be awarded 70 percentum of their party/party costs of the proceeding, including reserved costs.

51 It follows that the judgment of the Court should be as follows:

(1) The Court declares that the defendant holds on constructive trust for:

(a) the first plaintiff (Louise Harrison) a 15% interest,

(b) the second plaintiff (Sue Harrison) a 10% interest, and

(c) the third plaintiff (Kathryn Harrison) a 5% interest:

as tenants in common with the defendant, as to 70%, in the land owned by the defendant, more particularly described in the Certificates of Title in the schedule marked A [which sets out the 41 titles], subject to the mortgages and other encumbrances noted thereon.

(2) The defendant do all such things and execute all such documents as necessary to transfer to:

(a) the first plaintiff (Louise Harrison) a 15% interest,

(b) the second plaintiff (Sue Harrison) a 10% interest, and

(c) the third plaintiff (Kathryn Harrison) a 5% interest:

as tenants in common with the defendant as to 70%, in the land owned by the defendant, more particularly described in the Certificates of Title in the schedule marked A, subject to the mortgages and other encumbrances noted thereon.

(3) The Court declares that the defendant holds on constructive trust for:

(a) the first plaintiff (Louise Harrison) a 15% interest,

(b) the second plaintiff (Sue Harrison) a 10% interest, and

(c) the third plaintiff (Kathryn Harrison) a 5% interest:

as tenants in common with the defendant as to 70%, in the high and low reliability water shares recorded in the Victorian Water Register as owned by the defendant.

(4) The defendant do all such things and execute all such documents as necessary to transfer to:

(i) of the total number of the high and low reliability water shares recorded in the Victorian Water Register as owned by the defendant;

(5) The defendant execute all documents and do all things necessary to provide to the National Australia Bank Ltd a fresh mortgage over the remaining 70% of the high and low reliability water shares recorded in the Victorian Water Register as owned by the defendant.

(6) After the date of the transfer of the land described in Paragraph (2):

indemnify and adjust with the defendant any sum paid by him or claimed from him by any Shire or other water authority relating to any charges or outgoings incurred after the date of the transfers in respect of the land transferred to them or any of them.

(7) After the date of the transfer of the water shares, described in Paragraph (4):

indemnify and adjust with the defendant any sum paid by him or claimed from him by any water or other authority relating to any charges or other amounts incurred after the date of the transfers in respect of the water shares transferred to them or any of them.

(8) Subject to compliance by the defendant with Paragraph (2) of this Order, upon the defendant being called upon by the National Australia Bank Ltd ("the Bank") to pay to it any sums pursuant to the securities over the land presently provided by the defendant to secure the financial accommodation provided by the Bank to CB Harrison & Sons Pty Ltd (ACN 069 722 621):

(a) the first plaintiff (Louise Harrison) shall indemnify the defendant in respect of 15% of the sum claimed by the Bank;

(b) the second plaintiff (Sue Harrison) shall indemnify the defendant in respect of 10% of the sum claimed by the Bank; and

(c) the third plaintiff (Kathryn Harrison) shall indemnify the defendant in respect of 5% of the sum claimed by the Bank.

(9) Order that the defendant pay 70% of the plaintiffs' costs of the proceeding, including reserved costs.

52 Further, and as requested by Mr Shepherd, I shall include in "other matters", the following notation:

"The Court was informed that the orders, contained in this judgment, do not affect the delivery share which attaches to the Hopefield property."

[1] Harrison & Anor v Harrison [2011] VSC 459.

[6] Ritter v Godfrey [1920] 2 QB 47.

[7] (1975) 13 SASR 4, 16.

[8] Ritter v Godfrey [1920] 2 KB 47.

[9] [2008] VSCA 115, [15].

[10] See, for example, Byrns & Anor v Davie & Anor [1991] VicRp 93; [1991] 2 VR 568; Hughes v Western Australian Cricket Association Inc [1986] FCA 382; (1986) ATPR 40-748 at 48, 136 (Toohey J); Spotless Group Ltd v Premier & Consulting Pty Ltd & Anor (above); McFadzean & Ors v Construction Forestry Mining & Energy Union & Ors (2007) 20 VR 250; [2007] VSCA 289; BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2) [2007] FCA 557; Orrong Strategies Pty Ltd v Village Roadshow Ltd (No 2) [2007] VSC 205, [15] (Habersberger J).

[11] BHP Billiton Iron Ore Pty Ltd v National Competition Council (No 2) [2007] FCA 557, [27] (Middleton J); GT Corporation Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296, [59] (Robson J).

[12] (1975) 13 SASR 4, 16.

[13] McFadzean & Ors v Construction Forestry Mining & Energy Union & Ors [2007] VSCA 289; (2007) 20 VR 250, 291 [158].

[14] [2011] VSC 459, [221], [222], [224], [226], [227], [228] and [231].

[20] [2006] VSCA 114, [5].