Priestley v Priestley

Supreme Court of NSW|2015-08-20|Before: White J

Background to 2004 Settlement Deed

Gordon inherited Salt Glen from his father in about 1952. Over a number of years Gordon acquired adjacent properties known as Caramba, Riverview, Glen Acre and Wombullion. Together the properties were known as Greater Salt Glen. Salt Glen was the main property. From about 1976 farming operations were conducted by Gordon and Beverley Priestley as trustees of a trust known as the GW Priestley Family Trust, the beneficiaries of which were Gordon and Beverley Priestley, their three children, and two grandchildren.
Duncan Priestley worked on the properties from the time he left school in 1979 until 1996, save for a few intermittent periods when he was either studying an engineering course or working for a surveying firm, or working for the Department of Main Roads in Bourke. In about early 1986 when he was about 23, his father told him that one day "this will all be yours". Not long thereafter he resigned from the Department of Main Roads and started to work full time on the farm in the belief that if he worked full time on the farm he would inherit Salt Glen and the neighbouring property Caramba and a share of the other properties. He worked extensively on the properties and improved them, including by installing pumps on the property known as Riverview that provided water to Salt Glen and Caramba. He had obtained engineering qualifications which he used for this work.
Riverview had been acquired in about 1985 or 1986 and was purchased in the name of Christopher. The property known as Caramba had been purchased in 1979 in Duncan's name. They were all farmed as part of the same enterprise. In 1992, on Gordon's demand, Christopher transferred Riverview to his father. Duncan gave evidence to the effect that whilst he worked full time with his father on the properties, Christopher did little to help.
By 1996 Duncan felt that he was doing all of the work on the farm and was not being properly remunerated for it. He was being paid about $400 per week which was barely enough for him and his wife to live. He considered that Christopher showed no interest in farm work and he was upset that Christopher was refusing to help.

2004 Settlement Deed

Following a mediation held in August 2004 a deed of settlement was executed on or about 3 September 2004 that resolved both proceedings. The deed recited, amongst other things, that: "F The parties have agreed to settle the Family Court Proceedings, the Equity Proceedings, the industrial relations claims, the prospective family provision claims and all other actual, potential, associated or incidental claims that have arisen or may arise against the other, on the terms set out in this Deed."
The parties to the deed were Gordon, Duncan, Beverley, Christopher and Claire. The "industrial relations claims" were claims Christopher and Claire alleged against Gordon and Beverley as trustees of the GW Priestley Family Trust in relation to family and other work carried on by them on Greater Salt Glen (being the properties known as Caramba, Salt Glen, Riverview, Glenacre and Wombullion). The "prospective family provision claims" were claims that Gordon and/or Duncan might have against the estates of Beverley, Christopher and/or Claire in the event of the death of any of them, or, claims that Beverley, Christopher and/or Claire might have against the estates of Gordon and/or Duncan in the event of the death of either of them (Recital E).
Clause 1 provided: "The parties agree that the properties comprising 'Greater Salt Glen' be divided between them and transferred, where necessary to give effect to this agreement, in the following manner:- (a) The properties that comprise the whole of Property 1 in schedule A ('Caramba') and the whole of Property 2 in Schedule A ('Salt Glen') including the homestead standing on Salt Glen and the whole of Lt 10 in DP 751574 ('Lot 10'), to remain the property of Gordon or Duncan, as the titles to those properties presently designate or as they may otherwise agree between themselves, but subject to the agreement for exchange of lands referred to in (e) below; (b) The properties that comprise the whole of the Property 6 in schedule A ('May Glen') to remain the property of Duncan; (c) Christopher is to retain registered and beneficial ownership of or receive a transfer, as the case may be, of the whole of Property 3 in schedule A ('Riverview') from Gordon, save and except Lot 10 and a strip of land 50 metres wide running along the western boundary of 'Riverview' from the southern boundary of Lot 10 to the southern boundary of 'Riverview', in accordance with the agreement for exchange of lands referred to in (e) below; (d) Claire is to receive a transfer of the whole of Property 4 in schedule A ('Glen Acre') and the whole of Property 5 in schedule A ('Wombullion') from Gordon. (e) In exchange for Christopher transferring to Gordon the strip of land 50 meters wide running along the western boundary of 'Riverview' from the southern boundary of Lot 10 to the southern boundary of 'Riverview', Gordon shall transfer to Christopher a portion of 'Salt Glen' being that part of Lt 10 DP 751545 as abuts the southern boundary of 'Riverview' enclosing the developed cotton lands by following the existing fence line to its most southerly point and then extending easterly to the eastern boundary of the said Lot 10 50 metres north of the point where the bore drain intersects the eastern boundary of the said Lot 10."
The deed provided that Gordon would exercise his powers as appointor of the trust to appoint Christopher and Claire as trustees of the trust, and that Gordon and Beverley would then resign as trustees and Gordon would resign as appointor (Clause 13). Beverley, Christopher and Claire agreed to be responsible for all unpaid debts arising from the farming operations carried on by them on Greater Salt Glen from 20 October 2002 (clause 14). Christopher and Claire agreed to arrange for the discharge of the mortgage to the Primary Industries Bank of Australia ("the PIBA mortgage") over Salt Glen and Caramba so that Gordon and Duncan would be released from any further liability pursuant to the PIBA mortgage and would own those properties unencumbered (clause 6). Beverley was to retain a unit in O'Sullivan Road, Rose Bay.
Clause 19 provided: "Upon completion of the Contracts, but subject to the due performance of the obligations of each of the parties hereinbefore provided, each party shall (Gordon and Beverley both in their personal capacities and as trustees of the Trust), unconditionally release and discharge each other party from all or any claims, actions, suits, demands, costs, damages and expenses whatsoever or howsoever arising which they may now have or at any time hereafter may have but for their execution of this Deed, by reason of or arising directly or indirectly out of the Trust, the industrial relations claims or any claims made in the Family Court proceedings or in the Equity proceedings."
The result of the settlement was that: Duncan retained May Glen, which is 240 kilometres from Salt Glen. Christopher retained Riverview, subject to the land swap agreement provided for in clause 1(e) under which he was to transfer a strip of land running along the western boundary of Riverview to Gordon in return for a portion of Salt Glen. The strip of land that was to be transferred to Gordon would have provided access to the Macquarie River for Salt Glen and hence access to water. Claire was to receive Glenacre and Wombullion. Beverley was to retain a unit in Rose Bay. In return for receiving most of Riverview, Glenacre and Wombullion, Christopher and Claire were to arrange the discharge of the existing PIBA mortgage so that Salt Glen and Caramba were unencumbered.
At the time of the settlement Gordon was 80. The settlement allowed him to regain possession of Salt Glen and to resume farming operations on it. Almost two years had passed since Gordon had been on Salt Glen. Given his age and the support Duncan had provided to him in the family dispute it is a reasonable inference, and one that I draw, that both Gordon and Duncan expected that Duncan would provide help and support to his father in his being re-established on Salt Glen.

Events after the settlement

At some time after the settlement Duncan and Gordon met with Mr Butler at the office of Cole & Butler and Mr Butler said to Gordon words to the effect: "Now that you have transferred the properties to Christopher and Claire, how about the remaining part of Caramba to Duncan?" Gordon agreed and a lot in Caramba that had been registered in Gordon's name was later transferred to Duncan.
Pursuant to the deed of settlement Gordon entered into a contract for the sale of the property known as Riverview to Christopher, save for lot 10 which was on the north-east corner of Riverview and fronted the Macquarie River. He also entered into a contract for the sale of Wombullion and Glenacre to Claire. The Riverview property abutted Salt Glen to the east and north-east of Salt Glen. Glenacre lay to the north of Riverview and Wombullion to the east and south east of Riverview. Caramba lay to the west of Salt Glen.
These contracts for sale were completed on 29 October 2004. At that time the mortgages over the properties known as Salt Glen and Caramba were discharged.
The land swap contemplated by clause 1(e) of the settlement deed did not proceed. The reason or reasons for that did not emerge in the evidence, but I was told that at least one of the reasons was that the consent of the new mortgagee, the National Australia Bank, to the land swap was required and I infer that it was not forthcoming.
After the settlement had taken place on 29 October 2004 and Gordon was in Mr Butler's office there was a conversation to the following effect: "Butler: It is time to fix up your will. We can do it now. I assume that everything you have left goes to Duncan." Gordon said words to the effect: "Yes, the others have got more than their share. Whatever is left is Duncan's inheritance." Duncan was not present.
Under Gordon's previous will of 11 October 2002 Gordon had left his estate to Beverley, Duncan, Christopher and Claire equally, subject to a legacy to Duncan for any debt that Duncan might owe him or any company or trust with which he was associated, including the GW Priestley Family Trust.
By his will of 29 October 2004 Gordon appointed his accountant, Mr David Ferrier, and Duncan as his executors and left all his estate to Duncan.
On the same day Gordon executed the documents necessary to transfer the portion of Caramba which Duncan did not already own to Duncan.
After Gordon had signed the transfer and had signed the will, Butler asked him if he would like him to telephone Duncan to tell him what had been done. Gordon agreed. In Gordon's presence, Butler telephoned Duncan and said words to the following effect: "Duncan, it's Roger Butler here. Your father and I have just settled all the land transactions and transferred the rest of Caramba to you. He has also changed his will so that everything goes to you. Apart from the land swap with Christopher, everything is wrapped up." Duncan said, "Good, thank you."
When Duncan received Butler's telephone call he was working on a bridge in Condoblin. After he got off the telephone he immediately wrote in his diary the words "DEAL DONE".
Duncan deposed that: "After the settlement deed was signed in early September 2004, I assumed because of all that we had been through together, that my father would leave Salt Glen, the remaining part of Caramba and lot 10 of Riverview which were in his name, to me when he died. We did not speak about it directly."
He said that after he heard the conversation between his father and Mr Butler in which Gordon agreed to transfer the remaining part of Caramba to him, and after his conversation with Mr Butler in which Mr Butler told him that things were finally settled and Gordon had made a will leaving everything to him, and having regard to all the work he had done on the properties over the years which he thought his father appreciated, and the outcome under the settlement deed, he believed that he would inherit Salt Glen and Lot 10 on Riverview when his father died.
Gordon was an uncommunicative man. A friend, a Mr Leonard Gillett, said that Gordon was not very demonstrative of his feelings and often found it difficult to express how he felt. He said that whilst Gordon did not say it aloud to Duncan, he would frequently say to him words to the effect of "Duncan's done a great job". Mr Gillett said that Gordon was also one of the rudest men he had met and often used foul language and he never got too friendly with people. A Mr John Lord, who had done contracting work for Gordon and Duncan, said that Gordon was a stubborn man and that he never actually heard Gordon say to Duncan that he had done a good job or give him any praise, it was nonetheless clear to him that Gordon thought highly of Duncan.

Initial basis for Duncan's belief he would inherit Gordon's estate

Prior to 29 October 2004 Gordon had not said anything to Duncan to the effect that he would make a will in Duncan's favour, apart from the conversations in 1986 referred to at para [5] above from which he had resiled in April 1996. Duncan was asked whether he maintained a claim in these proceedings on the basis that things his father had said to him in 1986 or thereabouts and replied "There's a relationship there, but everything was - was re-set after the agreement" (referring to the settlement in September 2004). He said that it was his understanding that he had reached an agreement with his father that Gordon would make a will in his favour for the whole of his estate and would not revoke that will before he died and that in return for that Duncan would do things to assist him in continuing the farming operations on Salt Glen. He was asked when that agreement was made and responded "It was made after the settlement in 2004 and, yeah, by the agreement and also by the telephone conversation I had with Roger Butler afterwards, who confirmed it."
However, there was no exchange of promises that Gordon would make a will in Duncan's favour and not revoke it, nor that Duncan would help his father by doing work on the Salt Glen property or otherwise assist him. It is Duncan's case that these things were tacitly understood between him and his father.
Duncan gave the following evidence in cross-examination: "Q. In fact, the only communication to you that your father had or would make a will in your favour of his entire estate was the message that Roger Butler conveyed to you in that phone call. Correct? A. True. Q. After the 29 October 2004, your father never discussed his will with you again, did he? A. No. Q. After the 29 October 2004, your father never said anything to you to the effect that he would not revoke that will, did he? A. No. Q. But you knew, from your previous experience, in particular, when you look back at what you say your father said to you in 1986 about all of this being yours, and then what he said to you in 1996 when you asked him point blank and he said, 'It's going to be shared between you and Chris and Claire,' that he could change his mind about these things. A. There'd been a lot of water under the bridge since then. Q. In particular since then there'd been a serious falling out between your father on the one side and your mother and Chris and Claire on the other. Correct? A. Yes. Q. Your belief that your father would not change his will rested on your belief that that antagonism between your father and your mother and Chris and Claire would continue. Correct? A. No. Q. It wasn't based on anything your father had said to you, was it? A. It was based on the agreement that we had and the phone call I had from Roger Butler. Q. You separate the two concepts, the agreement you had and the phone call from Roger Butler, when and how did this agreement arise? A. Sorry? Q. I asked you whether your belief that your father would not revoke his will rested on your knowledge of his or belief that his antagonism towards your mother and your siblings would continue, and as I recall you said, 'No, it was based on the agreement we had and on the phone call from Roger Butler.' But in saying that you separate the agreement you had with your father from the phone call from Roger Butler, do you? A. No. Q. When was this agreement with your father made? A. Well, we've just been talking about it for a little while. Q. But your father never said anything to you, on your evidence, that he'd make a will in your favour, did he? A. No. … Q. Apart from the message conveyed to you by Mr Butler by phone on the 29 October 2004, your father never said that he would make a will leaving his entire estate to you, did he? A. That's true. Q. When you refer to the agreement between yourself and your father, is it correct that, in your view, that agreement included a promise by your father that he would make a will in your favour of his entire estate? A. The agreement says that everything that was left over was to be divided between us as we saw fit. Q. Which agreement are you referring to there? A. The agreement in 2004 settlement."
In that evidence Duncan was referring to clause 1(a) of the settlement deed quoted at para [23] above that Caramba and Salt Glen would remain the property of Gordon or Duncan as the titles to those properties were presently designated or as they might otherwise agree between themselves. I understood Duncan to say that on his understanding this meant that Gordon could not dispose of Salt Glen to a third party, and in particular to Beverley, Christopher or Claire, without his agreement.
I do not accept that construction of clause 1(a). Nor has Duncan pleaded that the testamentary contract on which he relies is contained in clause 1(a) of the settlement deed. It is arguable that clause 1(a) means that Gordon could not dispose of Salt Glen and that Duncan could not dispose of Caramba, while they were both alive, without the other's consent. But because Salt Glen was to remain the property of Gordon, it followed that it could be disposed of by Gordon by his will or would otherwise pass in accordance with the laws of intestacy. That is, even if cl 1(a) meant that except with Duncan's agreement, Salt Glen was to remain Gordon's property, the clause could only so operate during Gordon's life.

Further basis for Duncan's belief he would inherit Gordon's estate

Gordon moved back into the house on Salt Glen shortly after 29 October 2004. The house was very dirty and covered in dust. Gordon's personal belongings had been jammed into a small room. It brought Gordon to tears. Duncan deposed that from the time his father moved back into the house on Salt Glen he did cleaning up work on the property because it had not been adequately maintained since he had left in 1996. He said that this task took him several months and included repairing the silo and fixing the foundations of the shower house of the shearer's quarters. He said that there was also mechanical work and repairs, sheep and cattle work, sowing and stripping wheat and improvements to the watering system on Salt Glen. He did other work referred to in more detail below. He said that he worked an average of 20 hours per week over seven and a half years maintaining the Salt Glen property and farming equipment, including attending to Gordon's stock. In addition he allowed Gordon to agist stock on Caramba for no fee. He says that he incurred expenses for Gordon's benefit for which he did not seek reimbursement which he personally funded and that he discharged debts that Gordon owed to third parties.
After 29 October 2004, when Gordon moved back to the house at Salt Glen, he did not have access to the river water pumping system that Duncan had installed on Riverview in the 1990s. For water to be supplied to Salt Glen and to Caramba it was necessary to use a bore on the Salt Glen property and to install pumps, pipes, tanks and troughs. Duncan did extensive work in this regard in 2005 and 2006 that was of benefit to Gordon, and also provided for the supply of water for the stock on Caramba. (There was no house on Caramba.)
I accept that Duncan worked for his father on Salt Glen, made Caramba available for the agistment of Gordon's stock and for the agistment of stock of third parties for which Gordon received the payments, and paid expenses on Gordon's behalf, in the belief that he would inherit Salt Glen and any water licence attached to it on Gordon's death. Gordon made no express promise to that effect.
In cross-examination Duncan accepted that his belief that he would inherit Salt Glen and lot 10 on Riverview arose because Mr Butler had told him by phone on 29 October 2004 that his father had made a will leaving everything to him. His belief that the water access licence would come to him when his father died also stemmed from the statement made to him by Mr Butler on the phone that his father had made a will leaving everything to him. However, Duncan also gave the following evidence: "Q. You then say, in paragraph 148, that certain events made you believe that your father would honour his intention to leave Salt Glen to you in his will. Do you see that? A. Yes. Q. You'd already been told that he'd made a will leaving everything to you. Correct? A. Yes. Q. The fact that he, as you say, allowed you to continue to work on Salt Glen had nothing to do with that belief, did it? A. I think it had everything to do with it."
Duncan Priestley did not attempt to gild the lily. I accept him as an honest and credible witness. As his counsel submitted, not once when pressed in cross-examination did he seek to advance some conversation or some communication or event in order to address what he must have perceived was something that was potentially critical against him. He made numerous concessions against interest. Duncan came across as a taciturn man in the same way as the evidence suggests his father was. I accept the submission of Duncan's counsel that the taciturn and undemonstrative character of both men must be taken into account in determining what (if anything) they agreed, believed, or assumed. They were also both hard men. One witness, a Mr Thomas Mulcahy, said: "In my experience, Gordon was a man of little words, especially when you did something right, but he was not shy to let you know if he did not like something you were doing, or in his view, if you were doing it wrong. Based on my interactions with Gordon over many years, I thought his behaviour was typical of a lot of men of his era, in that only his way of doing something was the right way. I never got involved in the family politics of Gordon's life, but I do know he was a very hard taskmaster."
This evidence was admitted without objection, no doubt because there was no real issue about Mr Mulcahy's depiction of Gordon's character. Likewise, Duncan had made it clear to his mother and father that he expected to be paid or otherwise rewarded for the work that he did on the family properties.

Events in 2007

Claire gave evidence that she started to help her father in finding contract musterers and crutching contractors and with his bookwork from about March and April 2007 and spent her birthday with him at Salt Glen in March 2007. Her father told her in March 2007 that Duncan was not talking to him after Duncan found out that his father was talking to her. Gordon was disappointed that Duncan refused to forgive his mother, brother and sister.
On 15 September 2007 Gordon Priestley made a new will. Under that will he appointed his accountant, Mr Ferrier, and his then solicitor, a Mr Lindsay Moore, as his executors. He left his property in equal shares to his wife and three children. He did not tell Duncan that he had changed his will.
Duncan agreed in cross-examination that in 2007, for a period of about one month or a little bit longer than that, he and his father were not talking. Duncan said that the reason for this was that he did not think that Gordon was being loyal to him. The reason for the perceived disloyalty was that Gordon was then socialising with other members of the family. He knew in 2007 that Gordon was engaging in reconciliation with Claire and Christopher and Beverley. Duncan was not happy about that. Duncan gave the following evidence in cross-examination: "Q. You weren't happy about that because you thought he might change his will, weren't you? A. I thought that he'd probably stick with me but I didn't think he'd really change anything, but it annoyed me that he would, you know, hang around with them. Q. You just said you thought, "He'd probably stick with me"? A. Mm hmm. Q. What do you mean by that? A. Well, I thought he'd remain loyal to me. Q. By remain loyal to you, you mean he would continue to regard you as his sole heir and not do anything to change his will? A. Yes. Q. You knew then that he could revoke that will if he chose to, didn't you? A. He could. Q. As far as you were aware he knew he could too. A. Yes. … Q. You didn't want him to do that, did you? A. No. Q. There wasn't anything you could do to stop him, was there? A. I don't know."

Water Agreement

On or after 30 August 2008 Gordon arranged for Christopher to sign an instrument setting out the terms of an easement for water supply and water storage along the boundary of the Riverview property. The benefited lot was part of Caramba. I was advised that in the events which happened the easement was not registered because in addition to the consent of mortgagees, other consents from the local authority were required and were not obtained. I was told that the Riverview property has since been sold to a third party, apparently by the bank in exercise of its power of sale as mortgagee. Caramba does not have access to a supply of water from the Macquarie River.
On 4 April 2010 Gordon and Duncan entered into an agreement in relation to the supply of water to both properties. The agreement was for a term of 25 years renewable by either party for a further term of 25 years. The agreement provided that Gordon would permit water from the identified bore which is on the southern part of Salt Glen to be conveyed to Caramba in 263 millimetre polythene pipes to the intent that Duncan would be entitled to the quantity of water from the bore that those pipes could deliver, either by bore pressure or, if necessary, by pumping. Duncan agreed to permit water from the bore to be conveyed to Salt Glen in 2-inch polythene pipe to the intent that Gordon would be entitled to the quantity of water from the bore that those pipes could deliver, either by bore pressure or, if necessary, by pumping. If there were a reduction in the quantity of water available for distribution from the bore such that the water was insufficient for the needs of both parties, they would be entitled to the available water in equal shares. Duncan and Gordon agreed to bear equally any licence fees, water rates, electricity and other charges payable by Gordon to any authority in relation to the licensing, flow of water from or maintenance of the bore. The parties agreed to bear equally the cost of repairs and maintenance of the fittings, pump and bore. Gordon was required to maintain in good working order the pipes on Salt Glen and Duncan was required to maintain in good working order the pipes on Caramba. Pipes leading to the northern portion of Salt Glen passed through Caramba.
Duncan did not refer to this agreement in his evidence in chief. In cross-examination he was asked why he needed his father's signature on an agreement guaranteeing the supply of water from Salt Glen to Caramba if he believed he was going to inherit Salt Glen from his father. Duncan said that they needed to have an agreement in place to get a subsidy for the water scheme. He agreed that he and his father did not apply for the subsidy. He said that they started to prepare an application but by the time they had prepared the application it was too late and the time for obtaining the subsidy had run out. He said that the primary reason for preparing the agreement was that it was a requirement of the Water Commission for the payment of a subsidy. However, he agreed that one of the concerns was to ensure a supply of water to Caramba. He said that this was in the context of their father discussing the fact that they might put both Salt Glen and Caramba on the market and having a good water agreement in place would be important if both properties were to be sold. He agreed that the bore on Salt Glen provided sufficient water for the watering of stock up to the carrying capacity of Caramba. Duncan said that his father was resistant to signing a water agreement because he did not want to have anything more to do with solicitors. By the time Gordon agreed to sign it it was too late to obtain the subsidy.
I accept that evidence. That is to say, I accept that the primary reason for the preparation of the water agreement was in the hope of obtaining a government subsidy. But I also consider that one of Duncan's concerns was to ensure a supply of water to Caramba. I think that Duncan was aware that there was a risk that the supply of water to Caramba from the bore on Salt Glen might not be assured, and the agreement was entered into to address that risk.

Gordon's final will

Gordon was admitted to Dubbo Hospital in January 2012 and suffered a stroke on 29 January 2012. On about 3 February 2012 he was transferred to Brewarrina Hospital. He had previously been diagnosed with lung cancer and had also contracted pneumonia before his stroke. On 5 February 2012 Duncan asked Gordon who was the executor of his will and Gordon told Duncan that he thought Duncan was the executor. On the following day, 6 February 2012 Gordon told Duncan that there was another will in Condoblin and that "everything's equal". This was the first time that Duncan learned that he was not the sole beneficiary of his father's estate.
On 10 February 2012 Gordon's accountant, Mr Eric Gardener, had a conversation with Claire to the effect that he, Mr Gardener, realised that Gordon was very sick and he was concerned that if Claire and Christopher were to inherit anything, the National Australia Bank would take what they inherited and Gordon's farm would be lost as well. He asked Claire if she knew whether she was a beneficiary under Gordon's will. She saw her father in Brewarrina Hospital shortly thereafter and asked him whether he had a will. Gordon said he did not know. Claire said that she hoped that Gordon had not left Christopher or her anything because anything left to them would be taken by the bank. She said "I don't care what you do but we can't let the bank get Salt Glen as well. Leave it to Duncan if you have to." Gordon responded that Duncan had had enough and he just wanted it to be fair. Claire suggested that in that case he leave his property to Beverley and she could divide it. Thus it was that Gordon came to make his last will on 11 February 2012 in which he left his estate to Beverley.

Work done by Duncan for Gordon and benefits provided to Gordon

Duncan deposed that his father moved back into the home on Salt Glen shortly after 29 October 2004. He said that initially his work on Salt Glen included cleaning up the property, including repairing the silo and fixing the foundations of the shower house at the shearers' quarter. This took several months. Over the years that followed he carried out mechanical work and repairs, sheep and cattle work, sowing and stripping of wheat and improvements to the watering system on Salt Glen.
Duncan prepared a spreadsheet, initially in 2012, based on his diary entries, bank and credit card statements, phone records, invoices and receipts in which he gave a brief description of work he performed on particular days and an estimate of time spent working for his father. The initial spreadsheet he prepared commenced with an item for travel on 22 December 2004 and with general work and travel for seven days in February 2005 and five days in March 2005. His diary for 23 and 24 March 2005 refers to tidying up the house paddock and fencing work. He estimates that he worked 10 hours per day on every day. On 4 and 5 April 2005 he spent two days working at Salt Glen. He categorises the work that he did on these days as general farm work that could involve anything on the farm. To get to Salt Glen he travelled from his property at May Glen, a distance of 240 kilometres.
From 13 to 16 April 2005 Duncan installed twin pipelines from the bore at Salt Glen to the electric pump at the Salt Glen house and installed multifunction outlet pipework for the supply of water to both Salt Glen and Caramba. This was necessary because after 29 October 2004 neither Salt Glen nor Caramba had access to the river water pumping systems on Riverview that Duncan had installed in 1987 and 1996. The installation of the watering system was of benefit to Salt Glen, but also provided a supply of water for the stock on Caramba.
Between 17 and 23 December 2005 Duncan installed water pipelines from the bore at Salt Glen to parts of Salt Glen and Caramba to provide water for stock on both properties. He deposed that from the time this work was done, that is, after 23 December 2005, he allowed Gordon to agist his stock on Caramba without fee. He only used a small portion of Caramba for his own purposes, which was primarily for growing a wheat crop in 2008. Duncan used his engineering skills in installing the pumping and pipeline system. He spent a further two days in January 2006 installing a new pressure pump. On 12 February 2006 he extended the water system on Salt Glen and Caramba by adding extra pipes, pipe tanks and troughs.
From about 12 to 14 July 2006 Duncan worked on repairing the final drives on Gordon's bulldozer. Again, he said that he worked 10 hours on those days. His diary for 17 to 19 November 2006 includes notes for his being at Salt Glen doing work with a surveyor, a Mr Ogden. In his affidavit he said that at that time he helped Gordon with Mr Ogden with some levels on the tank drains on that part of Caramba that Gordon regularly used for the grazing of his livestock.
Duncan deposed that from about 14 March to 17 April 2007 he worked fulltime on repairing Gordon's bulldozer with a mechanic named Wally Irving. He paid about $24,000 for Mr Irving's work and for parts. His schedule referred to his collecting parts for the bulldozer in Dubbo on 14 March, travelling to Salt Glen and carrying out repairs on 17 days up to 17 April. The bulldozer was used to clear the pipeline for the laying of the pipes for the water system on Salt Glen and Caramba. Duncan took possession of the bulldozer after Gordon's death.
On 18 and 19 April 2007 Duncan worked fulltime helping Gordon shear wethers on Salt Glen. Between 30 April 2007 and 4 May 2007 Duncan extended the water pipelines on Salt Glen and Caramba. On 6 April 2007 he did stock work on Salt Glen in checking cattle and sheep.
On 9, 10 and 31 January and 1 February 2008 Duncan worked at Salt Glen. He said he could not recall the jobs that he did on those days but they probably included checking water levels and doing repairs on water pipes. He could not say whether most of the work was done on Caramba or on Salt Glen and said it would have depended where the stock were.
On 22 February 2008 Duncan arranged for the transport of a tractor to Salt Glen to prepare fields for the winter crop. Gordon owned the tractor. It was transported from Duncan's May Glen property near Gilgandra where it had been for about six months. Duncan took possession of the tractor in 2012.
Gordon engaged a worker who was paid by Gordon about $500 a week for the work he was doing. The worker used the tractor for ploughing. Duncan spent days fixing the tractor that he said was constantly breaking down. Duncan said that his father purchased a newer tractor that is now on Caramba.
Duncan spent a day on 17 April and another day on 11 May 2008 ploughing fields. He agreed that the ploughing work would have been done on both properties.
Duncan deposed that on 11 September 2008 he travelled to Salt Glen and hooked up water to many different paddocks which was a large job involving laying new pipes underground to extend the watering system. He said that between 17 October and 10 November 2008 he extended the water pipeline from the northern paddock in Caramba easterly to an additional paddock in Salt Glen and installed more troughs on both farms.
A difficulty with this evidence is that an identification plan of the watering system prepared in 2007 showed the construction of this extension to the pipeline system as having been constructed by 2007. But that plan was prepared by his solicitor on his instructions. Duncan agreed that it was possible that the solicitor got the line leading into the northern section of Salt Glen wrong by showing it as a completed pipe rather than as a proposed pipe. I accept his evidence that this extension back to Salt Glen was carried out in October and November 2008.
On 17 November 2008 Duncan and Gordon drove to Moree where he bought and paid for a header at a cost of approximately $30,000 to strip wheat that had been grown both on Caramba and Salt Glen. He grew approximately 14,000 acres of wheat and about 500 acres of wheat was grown on Salt Glen. Duncan has kept possession of the header. Gordon obtained the benefit of its use for his crop on Salt Glen.
Duncan's schedule refers to an item for 30 November 2008 for the stripping of Gordon's wheat for 600 acres at $15 per acre. He claims not an hourly rate but a per acre rate coming to $9,000 for this work. The plaintiff called a chartered accountant, a Mr Johnson, with extensive experience in dealing with the accounting and taxation requirements of rural businesses. Mr Johnson reworked that item by instead allowing $348 based on 20 hours' work by a plant operator, which seems to be an extraordinarily low rate as it was based on a charge of $15 per hour, whereas he allowed $50 per hour as a general labouring rate. Nor does it allow for the use of Duncan's header. There was no evidence specifically directed to the reasonableness of the $15 per acre charge made by Duncan and he was not asked about it. Although he did not say so expressly, I infer from the fact that the figure was included in the table that he asserted that $15 per acre was a reasonable charge for the labour and use of his equipment. In the absence of any contrary evidence and any challenge, I accept that as a reasonable rate of charge.
Duncan said that stripping Gordon's wheat would have taken more than a day and would probably have taken a week, but he only put it down as a cost on that day. I prefer his opinion on this matter to that of the accountant.
In his schedule Duncan had entries for 10 hours per day on 9, 10, 11, 12 and 18 December 2008 for loading wheat trucks to go to Walgett. He said that they "might" have loaded one or two trucks a day. He agreed that that would not have taken 10 hours, but added "but it doesn't mean I was sitting on my backside in the meantime. I would be doing other things." I accept that evidence. He said that he was "pretty sure" in preparing his schedule that he had subtracted the time that he spent on his own work in loading the wheat harvested from Caramba. He took the proceeds of sale of the wheat harvested from Caramba and Gordon received the proceeds from the wheat harvested from Salt Glen. He was not 100 per cent sure, but I accept on the balance of probabilities that his schedule in this respect did not involve a doubling up. He also said "but in any case, I might spend a few hours loading the truck and then I wouldn't be doing nothing in the meantime. I'd be doing work for Dad in some form or another. I don't really stop much." I accept that evidence.
On 11 January 2009 Duncan loaded Gordon's sheep on Salt Glen into a truck so they could be transported to Dubbo for sale. He then spent the rest of the day cleaning a silo on Salt Glen and finished at 8pm. This work all related to Gordon's sheep.
On 22 and 23 January 2009 Duncan commenced repairs on shearers' accommodation at Salt Glen. This involved moving a shower block with a crane attached to a bulldozer, removing part of the roof, driving piles, reinstalling the shower block with the crane and reconnecting pipework. The work took him approximately seven days to complete.
On 17 May 2010 Duncan finalised plans for a new seed box to be installed on Gordon's disc plough. It took him approximately 40 hours to draw up and finalise the plans and then to arrange for the seed box to be installed. He deposed that the new seed box cost him close to $30,000. Duncan does not say that these were moneys paid on Gordon's behalf. They are not included in his schedule of such payments. I understand him to say that he owns the seed box which was taken from May Glen in 2010 after wheat crops sown on Salt Glen and Caramba failed in 2010 owing to floods. Duncan's point is that the seed box was made available for no charge to Gordon for sowing wheat crops on Salt Glen. Both the disc plough and seed box are now with Duncan at his property at Gilgandra.
From 18-21 October 2010 Duncan worked at Salt Glen doing mainly stock work, including marking, shearing, crutching lambs and sheep, and marking calves. Other people were employed by Gordon to assist in that work. Their wages were paid by Gordon. Duncan was not paid for his work.
Duncan deposed that from 24-28 October 2010 he undertook repairs to a truck that he had bought for the purpose of transporting Gordon's wheat and his wheat to Walgett for sale. The truck was normally kept at May Glen.
For most of January 2011 Duncan worked on both Salt Glen and Caramba. He did burr spraying on both properties. Some of the time was spent stripping what wheat was left on Caramba after the 2010 flood. Duncan gave the remaining wheat on Caramba to Gordon, but that wheat was destroyed by rain and given as feed to pigs. For a period of about 28 days in January 2011 Duncan spent about half his time on Salt Glen and half his time on Caramba.
Between February and March 2011 and in June and July 2011 Duncan paid almost $17,000 to shearers for shearing and crutching Gordon's sheep.
On 17 August 2011 Duncan travelled to Salt Glen to be present at a meeting between his father and an employee of Elders Rural Bank at the latter's request in connection with a renewal of Gordon's loan.
In September 2011 Duncan registered his Nissan Navara car for Gordon to use and put a steel tray on it for him. On 18 October 2011 he carted 50 bales of Gordon's wool to Bathurst.
Duncan also gave Gordon $4,400 on 21 November 2011 which were agistment moneys paid to Duncan by a Mr Dunn for the agistment of his sheep on Caramba. The agistment was for approximately 500 head of sheep at 50 cents per head per week for about four months. The moneys were paid as a gift to allow Gordon to purchase another Nissan Patrol car.
Duncan deposed that there were five other occasions on which third parties agisted stock on Caramba and on each of those occasions he gave Gordon the proceeds from the agistments. The agistments were at what Duncan considered to be market rates at the time of 50 cents per head per week for sheep and approximately 10 cents per lamb per week. A Mr Rushden deposed that he agisted stock twice on Gordon and Duncan's properties and paid for the agistments, relevantly, about 40-50 cents per sheep per week and about 10 cents per lamb per week.
From 3-19 January 2012 Duncan did stock work for Gordon, including marking his lambs, drafting, jetting and drenching his sheep.
It was put to Duncan that his travel to Salt Glen was not just in order to assist his father, but was also for him to perform work on his own property, Caramba. He agreed with that proposition and said that it would have been a mixture. Duncan also agreed that the most significant items of work that he carried out was the laying of the water system. The water system benefited both Caramba and Salt Glen and became the subject of the water agreement of 4 April 2010 referred to at para [56] above.
In addition to doing work for his father, Duncan paid various expenses for his father. Some have been referred to above, for example the payment to the shearers. Duncan said that he paid various expenses for his father and debts owed by him to third parties in the belief that ultimately those moneys would have to be paid by him anyway when he inherited Salt Glen. He produced a spreadsheet listing the expenses and debts that totalled $217,081.81. However, of this amount $105,372.41 related to debts and expenses paid for Gordon prior to the settlement deed of September 2004, including legal costs. To the moneys listed on the schedule there should be added $400 cash paid by Duncan for crutching on 22 January 2010, $3,332.75 paid to Top Notch Shearing on 20 May 2010 and $3,686.05 paid to Top Notch Shearing on 9 August 2010. The payments include items described as "Contract Farming GW Priestley Living Expenses" of $2,000 on 23 May 2005 and $10,000 on 11 June 2010. A further payment was made to Gordon of $1,000 on 14 November 2011 described as "GP cash". I accept that after the settlement Duncan made payments to Gordon of $13,000 to help Gordon with his living expenses, and in addition paid a further $111,709.40 towards Gordon's debts.
That is not to say that Duncan paid all of Gordon's expenses. Gordon himself engaged contractors or casual employees and paid their expenses or wages. He also made payments for materials used in the piping system. He drew a cheque to Darling Irrigation of Narromine for $23,403.35 on 30 March 2006 and made a further payment of $3,397 to Darling Irrigation for pipes on 2 September 2007.
Duncan allowed Gordon to agist his sheep on Caramba without fee. Duncan's sheep were not agisted on Gordon's property. Duncan only had one mob of sheep of 250 ewes and only had them on Caramba for a few months.
By 1 December 2005 Gordon owned 2,636 sheep and 700 lambs. By 14 August 2011 he owned 202 cattle comprising 157 adult beasts and 45 calves.
Mr Rushden said that in 2009 and 2010 he agisted cattle on both of the Priestley Properties at $4-$5 per cow per week and $1-$2 per calf per week. Duncan claims that because Gordon's stock had the run of Caramba as well as Salt Glen, and because he allowed Gordon to agist his stock on Caramba in the belief that he would inherit Salt Glen, unless Salt Glen is held on trust for him, the estate is liable to pay him agistment fees based on the above numbers calculated as $405,752 as agistment fees for 2,636 sheep and 700 lambs from 1 December 2005 to 19 February 2012 and $17,802 as agistment fees for cattle from 11 August 2011 to 19 February 2012.
This assumes that the stock numbers for sheep as at 1 December 2005 and cattle as at 14 August 2011 represent the average sheep and cattle numbers agisted on Caramba for the periods in question. It also assumes that the same rate that Mr Rushden paid for agisting his stock on both Caramba and Salt Glen is a reasonable rate to apply to the agistment of stock on Caramba alone.

Testamentary contract

Mr Alexis SC, who appeared with Ms Cairns for Duncan, submitted as follows: "50. The plaintiff submits that at the time of the settlement deed, the deceased and the plaintiff entered into a contract with the following terms (based upon mutual consideration): (a) in consideration for (b), the plaintiff would continue to work unremunerated in: (i) maintaining and improving the testamentary properties; (ii) working the deceased's farming operations; (iii) providing agistment services for the deceased's stock on Caramba for no agistment fee; and continuing to cover the deceased's living expenses and pay his third party debts; and (b) in consideration for (a), the deceased would: (i) transfer the remaining lot in Caramba to the plaintiff and make a will leaving the testamentary properties and his water licence share (related to those properties) to the plaintiff; and (ii) not revoke any such will before he died."
It is not in dispute that no mutual promises in those terms were exchanged. Duncan's counsel cited Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-118 where McHugh JA (with whom Hope and Mahoney JJA agreed) said: "… A contract may be inferred from the acts and conduct of parties as well as or in the absence of their words … the question in this class of case is whether the conduct of the parties viewed in the light of the surrounding circumstances showed a tacit understanding or agreement."
McHugh JA went on to say: "The conduct of the parties, however, must be capable of proving all the essential elements of an express contract … Care must also be taken not to infer anterior promises from conduct which represents no more than an adjustment of their relationship in the light of changing circumstances." (Citation of authority omitted.)
In Brambles Holdings Limited v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 Heydon JA observed that many contracts are made that cannot be fitted into a paradigm of offer and acceptance. After considering various authorities, including what was said by McHugh JA in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd quoted above, his Honour posed the question whether: "… in all the circumstances can an agreement be inferred? Has mutual assent been manifested? What would a reasonable person in the position of the Council and a reasonable person in the position of the defendant think as to whether there was a concluded bargain?" (at [81]).
Mutual promises are the essence of a contractual relationship. They need not be express. An agreement whereby mutual obligations are assumed can be inferred from the circumstances, as in Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd where the parties' conduct was only explicable on the basis of a binding agreement. But what must be capable of being inferred is a concluded bargain, not merely a common intention or expectation. In the present case, by 29 October 2004 it can be inferred that it was the intention and expectation of both Gordon and Duncan that Duncan would help his father in re-establishing himself on Salt Glen and would help him in maintaining and running the farm. It was also their common intention and expectation at that time that Gordon would leave Salt Glen to Duncan. But I cannot infer that there was any implicit agreement between them that Duncan was bound to help his father on Salt Glen and Gordon was bound not to revoke his will.
The parties' later conduct is not consistent with their having intended that they were bound by such a contract. The conduct of Gordon in making a new will in 2007 and the entry by Gordon and Duncan into the water agreement in 2010 are not consistent with their believing that there was a binding testamentary contract. This is not a case in which the parties' conduct is only explicable on the basis of their having reached a concluded bargain. Indeed, Duncan conceded that in 2007 he knew that his father could revoke the 2004 will if he chose to, but thought that Gordon would "probably stick with me". Gordon's conduct in revoking the 2004 will suggests that he also believed that he was not under any obligation to Duncan not to change his will.
Subsequent conduct is always admissible to determine whether there was an intention to contract (Air Great Lakes Pty Ltd v KS Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at 324-325; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 550 and 551; Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313 at [118]-[125]).
Although the parties' intention to contract is to be ascertained objectively, in a case where an alleged contract is based upon the parties' conduct, or upon their conduct and discussions, evidence as to their subjective beliefs as to whether a contract had been made and as to its terms can be relevant to the objective ascertainment of the position. This point was made by Lord Hoffman, with whom Lords Goff and Jauncey agreed, in Carmichael v National Power plc [1999] 1 WLR 2042 at 2049-2051. His Lordship said: "…The tribunal took into account the language of the letters (see paragraph 5(f) of their extended reasons, in which they underlined the words 'on a casual as required basis' and said that they were 'important to note'), but they also took into account the subsequent conduct of the parties, some of which pointed to employment and some of which did not, and the evidence of both the applicants and Mr. Lovatt for the C.E.G.B. as to what they had understood their respective obligations to be. Ward L.J. said [1998] I.C.R. 1167, 1185 g, that was a mistake. The terms of the contract must be objectively construed. 'What they thought they had achieved is of no consequence.' Chadwick L.J. likewise said, at p. 1194, that 'The question was not what the parties thought their obligations were.' This austere rule would be orthodox doctrine in a case in which the terms of the contract had been reduced to writing. But I do not think that it applies to a case like the present. In a case in which the terms of the contract are based upon conduct and conversations as well as letters, most people would find it very hard to understand why the tribunal should have to disregard the fact that Mr. Lovatt and Mrs. Carmichael both agreed that the C.E.G.B. were under no obligation to provide work and the applicants under no obligation to perform it. It is, I think, pedantic to describe such evidence as mere subjective belief. In the case of a contract which is based partly upon oral exchanges and conduct, a party may have a clear understanding of what was agreed without necessarily being able to remember the precise conversation or action which gave rise to that belief. As the Court of Appeal pointed out, the tribunal did not make any specific findings about what was said at the interviews or on any other occasion. But the terms of the engagement must have been discussed and these conversations must have played a part in forming the views of the parties about what their respective obligations were. The evidence of a party as to what terms he understood to have been agreed is some evidence tending to show that those terms, in an objective sense, were agreed. Of course the tribunal may reject such evidence and conclude that the party misunderstood the effect of what was being said and done. But when both parties are agreed about what they understood their mutual obligations (or lack of them) to be, it is a strong thing to exclude their evidence from consideration. Evidence of subsequent conduct, which would be inadmissible to construe a purely written contract (see Whitworth Street Estates (Manchester) Ltd. v. James Miller and Partners Ltd. [1970] A.C. 583) may be relevant on similar grounds, namely that it shows what the parties thought they had agreed. It may of course also be admissible for the same purposes as it would be if the contract had been in writing, namely to support an argument that the terms have been varied or enlarged or to found an estoppel."
In the present case I do not consider that the parties had any intention of entering into a contract. This is not a case in which a contract can be inferred, even though express promises are absent.

Proprietary estoppel

Duncan submitted that Gordon represented to him and encouraged him to believe that he would inherit Salt Glen and Gordon's share of the water licence on Gordon's death and that in reliance on that representation and encouragement he acted to his detriment by doing unremunerated work for Gordon, by providing agistment services to Gordon for no fee, by incurring expenses for Gordon without reimbursement, by not taking steps to register a caveat to protect his right to repayment under the mortgage, and by forbearing to sue Gordon in relation to the outstanding bill for work done that Duncan issued in 1999. Duncan submitted that Beverley as executrix of Gordon's will is estopped, in the same way as Gordon would be estopped, from denying the assumption that Duncan was induced to adopt. Counsel for Duncan referred to Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 per Handley JA at [21] where his Honour said that an estoppel by encouragement: "…comes into existence when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed his or her position to their detriment. If these matters are established equity may compel the owner to give effect to that expectation in whole or in part."
Mr Evans, who appeared for Beverley, submitted that the plaintiff's claim to the benefit of an estoppel arose from acquiescence, rather than encouragement or representation. He submitted that in relation to such a claim there was an additional requirement that the plaintiff hold a mistaken belief as to his rights and that the defendant must know of the plaintiff's mistaken belief as to his rights (Milling v Hardy [2014] NSWCA 163 per Macfarlan JA with whom Beazley P and Sackville AJA agreed at [50]-[52], applying Willmott v Barber (1880) 15 Ch D 96 at 105). In the present case Duncan said that he believed there was an agreement between him and Gordon which required Gordon to leave the property to him. However, there is no evidence Gordon was aware of that mistaken belief.
Nonetheless, Gordon knew that Duncan expected that he would inherit Salt Glen. He knew that in 1996 Duncan had refused to keep working on Salt Glen when told that Salt Glen would not be left to him, but that Gordon's estate would be left to his wife and children equally. Gordon's failure to tell Duncan from September 2007 that he had changed his will must have been deliberate. He must have known that Duncan was continuing to act on the assumption that he would inherit Salt Glen. I infer that he feared that if he told Duncan that he had changed his will, Duncan would not have continued to do work on the Salt Glen property or make Caramba available for Gordon's stock without payment. Gordon continued to take advantage of the use of Caramba on which to agist his stock.
In my opinion the same basal principles apply at least to cases of proprietary estoppel, whether the estoppel be characterised as estoppel by encouragement, being based upon a representation by the party claimed to be estopped that induced the plaintiff to change his position to his detriment, or estoppel by acquiescence consisting of the person claimed to be estopped standing by whilst the plaintiff alters his position to his detriment in the belief that he has or will acquire an interest in the subject property. The act of standing by without correcting the plaintiff's mistaken belief is itself an act of encouragement. In Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 Brennan J stated his six probanda as applicable to cases of equitable estoppel generally (at 428-9). Mason CJ and Wilson J discerned a common principle linking cases of promissory estoppel and proprietary estoppel, whether by encouragement or acquiescence, as being that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party has played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it (at 404). In his formulation of the propositions to be derived from Waltons Stores (Interstate) Ltd v Maher Priestley JA identified the same necessary condition for equitable estoppel to operate whether as estoppel by encouragement, estoppel by acquiescence, proprietary estoppel or promissory estoppel (Austotel Pty Ltd v Franklins Self-Serve Pty Ltd (1989) 16 NSWLR 582 at 610-612 (propositions 4 and 5)). In Sidhu v van Dyke [2014] HCA 19; (2014) 251 CLR 505 the High Court referred to "the category of equitable estoppel" that was derived from both Dillwyn v Llewellyn (1862) 4 De GF & J 517; 45 ER 1285 and Ramsden v Dyson (1866) LR 1 HL 129.
I agree with the submission of the plaintiff that there is little utility in distinguishing between estoppel by encouragement or estoppel by acquiescence or standing by on the facts of the present case where the encouragement was performed by Gordon's standing by or acquiescing in the plaintiff's work on Salt Glen. In Doueihi v Construction Technologies Australia Pty Ltd [2016] NSWCA 105 Gleeson JA (with whom Beazley P and Leeming JA agreed) said (at [109]) that the conduct of the defendant in that case in standing by in silence whilst the plaintiff installed manufacturing plant on the defendants' land also served as an element of assurance and noted that in Thorner v Major [2009] UKHL 18; [2009] 1 WLR 776 Lord Walker had referred with approval to the observation of Lord Eldon LC in Dann v Spurrier (1802) 7 Ves 231 at 235-236 that: "… this Court will not permit a man knowingly, though but passively, to encourage another to lay out money under an erroneous opinion of title; and the circumstance of looking on is in many cases as strong as using terms of encouragement." The distinction between encouragement by acquiescence or standing by and encouragement by representation is not so clear that different principles should apply. I do not think that what was said in Milling v Harding at [50]-[52] was part of the ratio of the decision, and in any event, it must now be understood in the light of the Court of Appeal's decision in Doueihi v Construction Technologies Australia Pty Ltd.
Mr Evans also submitted that I should follow the view expressed by Young CJ in Eq (as his Honour then was) in Barnes v Alderton [2008] NSWSC 107; (2008) 13 BPR 25,281 at [58] that: "[58] … The general view of the cases I have referred to indicate that the court infers unless there is evidence to the contrary that people are well aware that everyone can change their will as often as they like. That is the ordinary case and in an ordinary case a testamentary promise is very difficult to form the basis of a proprietary estoppel. As Gillett v Holt and Flinn v Flinn show, this is not impossible but one has to show circumstances that the promise was given and understood to be irrevocable. That may be shown by circumstances short of an explicit statement that the promise is irrevocable."
Gillett v Holt [2001] Ch 210 does not support the proposition that to establish a proprietary estoppel the plaintiff must show a promise that was understood to be irrevocable that the plaintiff would receive property. To the contrary in Gillett v Holt Robert Walker LJ (as his Lordship then was) rejected the statement in Taylor v Dickens [1998] 1 FLR 806 at 821 that: "It is not sufficient for A to believe that he is going to be given a right over B's property if he knows B has reserved the right to change his mind. In that case, A must show that B created or encouraged a belief on A's part that B would not exercise that right."
His Lordship went on to refer with approval to a comment by Mr William Swadling [1998] RLR 220 that in this respect Taylor v Dickens: "… is clearly wrong, for the judge seems to have forgotten that the whole point of estoppel claims is that they concern promises which, since they are unsupported by consideration, are initially revocable. What later makes them binding, and therefore irrevocable, is the promisee's detrimental reliance on them. Once that occurs there is simply no question of the promisor changing his or her mind."
Robert Walker LJ after referring to this and other criticisms of Taylor v Dickens, said (at 227-228): "In my judgment these criticisms of Taylor v Dickens are well founded. The actual result in the case may be justified on the other ground on which it was put (no unconscionability on the facts); or (as Mr Swadling suggests later in his note) the gardener's unremunerated services might have merited some modest restitutionary relief. But the inherent revocability of testamentary dispositions (even if well understood by the parties, as Mr Gillett candidly accepted that it was by him) is irrelevant to a promise or assurance that 'all this will be yours' (the sort of language used on the occasion of The Beeches incident in 1975). Even when the promise or assurance is in terms linked to the making of a will (as at the 1974 Golf Hotel dinner) the circumstances may make clear that the assurance is more than a mere statement of present (revocable) intention, and is tantamount to a promise."
A proprietary estoppel was established in Thorner v Major notwithstanding that there was no finding that the testamentary promise was understood to be irrevocable (see my discussion of this in Construction Technologies Australia Pty Ltd v Doueihi [2014] NSWSC 1717; (2015) 17 BPR 33,457 at [190]).
In Construction Technologies Australia Pty Ltd v Doueihi I said that the better view is that it is not an essential requirement for the establishment of a proprietary estoppel for the plaintiff to prove that he assumed that a particular legal relationship then existed between him and the defendant, or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship. That is to say, I said that the first of the criteria formulated by Brennan J in Waltons Stores (Interstate) Ltd v Maher was not necessarily a pre-requisite to the establishment of a proprietary estoppel, although, as Priestley JA said in Austotel Pty Ltd v Franklins Self-Serve Pty Ltd at 615-616, if the criteria stated by Brennan J were not established it would be necessary to think thoroughly about why they were not. In Doueihi v Construction Technologies Australia Pty Ltd the Court of Appeal upheld that conclusion in the context of a case in which the parties did not intend to enter into a contract or otherwise formalise their legal relationship (at [150], [159], [165]-[168]). This is also such a case.
In my view it is not a sufficient answer to Duncan's claim to be entitled to Salt Glen on the principles of proprietary estoppel that he did not form the opinion that Gordon would not be free to revoke his 2004 will. (See Duncan's evidence quoted at para [54]). Duncan did not act on an assumption about his legal rights. Many people do not, but they may still change their position to their detriment by having been induced to adopt an assumption about what the defendant will do for them in circumstances that makes it unconscionable for the defendant to resile from that assumption. Duncan nonetheless acted to his detriment on the assumption known to Gordon that he would inherit Salt Glen after Gordon's death.
But that is not in itself sufficient to establish an entitlement in equity to Salt Glen on the principles of proprietary estoppel. Duncan must show that he was induced by Gordon's conduct in encouraging him to continue to hold the belief that he would inherit Salt Glen on Gordon's death and acted in reliance upon that belief and that this was a significant, although not necessarily the sole, inducement in his acting as he did (Sidhu v van Dyke at [58] and [71]-[73]).
If this means that reliance can be established if Duncan were significantly influenced, in the sense of motivated, to act as he did because of his belief that he would inherit Salt Glen after Gordon's death, then such reliance is clearly established. However, I think the better view of the plurality's reasons in Sidhu v van Dyke is that the plaintiff must establish that, but for his having been induced to adopt a particular assumption by the defendant's conduct, the plaintiff would not have acted (or refrained from acting as the case might be) to his detriment. This was certainly the view of Gageler J (at [90]-[93]).
In Sidhu v van Dyke the primary judge was not satisfied that the plaintiff would not have continued to live on the property she had been promised and done the work on the property she in fact carried out, even if the promises had not been made (see passage quoted at [29]). In overturning that finding the plurality ultimately characterised the question as being: "Whether the respondent would have committed to, and remained in, the relationship with the appellant, with all that that entailed in terms of the effect upon the material well-being of herself and her son, had she not been given the assurances made by the appellant" (at [76]).
This formulates the question in the same way as the primary judge had done, and in the same way as Gageler J did, of asking whether the plaintiff had shown that she would have adopted a different course had the promises not been made to her. This is the "but for" test of causation. That question is difficult to answer in this case because Duncan admitted that he was not sure what he would have done if he had not held the belief that he would ultimately be the owner of Salt Glen (see paras [138] ff. below).
In Sidhu v van Dyke the plurality held that it would be remarkable if the defendant's promises did not have "some influence" upon the plaintiff's decision to stay on and work at the property (at [69]). They continued by saying that it was unlikely that the plaintiff would have acted as she did if the defendant had not made the promises which he made (at [69]). The second finding is a finding of reliance in the sense that but for the defendant's promises the plaintiff would not have acted as she did. However, the plurality went on to address the question in a way which, on one reading, does not require a "but for" causal relationship between the inducement and the plaintiff's change of or adherence to his position. The plurality said (at [71]-[73]): "[71] Her Honour's finding that the appellant's promises 'played a part in her willingness to spend time and effort in the maintenance and improvement of The Oaks Cottage and assisted on the Burra Station property' warranted the conclusion that the respondent had discharged the onus she bore on the basis that to establish estoppel by encouragement it is not necessary that the conduct of the party estopped should be the sole inducement operating on the mind of the party setting up the estoppel [Handley, Estoppel by Conduct and Election, (2006) at 170 [11-011]]. Counsel for the appellant disputed this proposition but did not cite any authority in support of their position. The respondent's position is amply supported by authority. [72] In Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Ltd [[1982] QB 84 at 104-105. See also Gillett v Holt [2001] Ch 210 at 226-227], Robert Goff J said that: the question is not whether the representee acted, or desisted from acting, solely in reliance on the encouragement or representation of the other party; the question is rather whether his conduct was so influenced by the encouragement or representation … that it would be unconscionable for the representor thereafter to enforce his strict legal rights. (emphasis in original) [73] Similarly, in Steria Ltd v Hutchison [[2007] ICR 445 at 465 [117]], Neuberger LJ said that it is sufficient for the representee to show that 'the representation was a significant factor which he took into account when deciding whether to [act as he did].' This approach conforms to that taken by the High Court as long ago as Newbon v City Mutual Life Assurance Society Ltd [(1935) 52 CLR 723 at 735], where it was said that the 'supposed belief' of the representee as 'a contributing cause' of the representee's conduct was a 'sufficient connection between the assumption and the position of detriment'. It is the view which continued to prevail in Gould v Vaggelas [(1984) 157 CLR 215 at 236 and 250-251]."
There is here, with respect, an elision between the notion that the conduct of the party estopped need not be the sole operative inducement on the mind of the party setting up the estoppel, and the requirement that but for the inducement the plaintiff would have acted differently. Thus a person may recover damages for loss suffered "by" the defendant's misleading conduct engaged in in contravention of s 18 of the Australian Consumer Law if the misleading conduct was a cause of the plaintiff's embarking on the transaction that occasioned loss, in the sense that had the plaintiff not been misled by the defendant, he would not have entered into the transaction, even though there was another operative cause for which the defendant was not responsible, such that the transaction would not have been entered into but for it (e.g. Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 per McHugh J at [107]-[111]).
It does not follow that because "the conduct of the party estopped need not be the sole cause of the detriment relied on, it is enough that it is a cause …" (Handley, Estoppel by Conduct and Election (2006) p 170 [11-011]) that the conduct of the party estopped is "a cause" of the detriment relied upon if the party asserting the estoppel would have acted in the same way in any event.
The full passage from the judgment of Robert Goff J in Amalgamated Investment & Property Co Ltd (in liq) v Texas Commerce International Bank Limited [1982] QB 84 at 104-105 cited in Sidhu v van Dyke (at [72]) is: "… it is, in my judgment, no bar to a conclusion that the other party's conduct was so influenced, that his conduct did not derive its origin only from the encouragement or representation of the first party. There may be cases where the representee has proceeded initially on the basis of a belief derived from some other source independent of the representor, but his belief has subsequently been confirmed by the encouragement or representation of the representor. In such a case, the question is not whether the representee acted, or desisted from acting, solely in reliance on the encouragement or representation of the other party; the question is rather whether his conduct was so influenced by the encouragement or representation (I take the word 'influenced' from the judgment of Bowen LJ in Edgington v Fitzmaurice (1885) 29 Ch D 459, 481) that it would be unconscionable for the representor thereafter to enforce his strict legal rights."
In Edgington v Fitzmaurice (1885) 29 Ch D 459 the plaintiff sued in deceit for a misrepresentation in a prospectus upon which he said he relied in deciding to make an investment. In making the decision to invest he also acted in the belief that the loan moneys he subscribed would be secured by a charge, but that belief was mistaken and the defendants were not responsible for it. Cotton LJ (not Bowen LJ) said (at 480-481): "But it was urged by the counsel for the Appellants that the Plaintiff himself stated that he would not have taken the debentures unless he had thought they were a charge upon the property, and that it was this mistaken notion which really induced the Plaintiff to advance his money. In my opinion this argument does not assist the Defendants if the Plaintiff really acted on the statement in the prospectus. It is true that if he had not supposed he would have a charge he would not have taken the debentures; but if he also relied on the misstatement in the prospectus, his loss none the less resulted from that misstatement. It is not necessary to shew that the misstatement was the sole cause of his acting as he did. If he acted on that misstatement, though he was also influenced by an erroneous supposition, the Defendants will be still liable."
Nothing in this suggests that something less than the "but for" test to establish reliance would suffice.
On the other hand, Neuberger LJ in Steria Limited v Hutchison [2007] ICR 445 (part of whose reasons is quoted by the plurality in Sidhu v van Dyke at [73]) expressly addressed the "but for" test. His Lordship said (at 465 [117]): "117 In order to succeed in a claim based on estoppel, it is probably not necessary for a claimant to satisfy what is known in a somewhat different area of the law as the 'but for' test. In other words in the present case it does not appear to me that Mr Hutchison has to show that, if the representation in question had not been made, he would not have joined the scheme. He merely has to show that the representation was a significant factor which he took into account when deciding whether to join the scheme."
The plurality's endorsement of the last part of this passage, when read with paragraphs [71] and [72] may well suggest that they endorsed Neuberger LJ's statement that it is probably not necessary for a claimant to satisfy the "but for" test to establish reliance. However, Neuberger LJ distinguished between the plaintiff's establishing reliance and his establishing detriment. On the question of establishing detriment, his Lordship said (at [125]): "…The essential point of principle is that a claimant must establish relevant detriment. In Gillett v Holt [2001] Ch 210, 233 Robert Walker LJ approved the observation that 'the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it', quoting Dixon J in Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641, 674."
The plurality in Sidhu v van Dyke made the same point at [58] in which they said: "[58] In point of principle, to speak of deploying a presumption of reliance in the context of equitable estoppel is to fail to recognise that it is the conduct of the representee induced by the representor which is the very foundation for equitable intervention. Reliance is a fact to be found; it is not to be imputed on the basis of evidence which falls short of proof of the fact. It is actual reliance by the promisee, and the state of affairs so created, which answers the concern that equitable estoppel not be allowed to outflank Jorden v Money [(1854) 5 HL Cas 185 at 210, 212-213 [10 ER 868 at 880-881]] by dispensing with the need for consideration if a promise is to be enforceable as a contract. It is not the breach of promise, but the promisor's responsibility for the detrimental reliance by the promisee, which makes it unconscionable for the promisor to resile from his or her promise."
The emphasis of the primary judge in Sidhu v van Dyke was that no reliance to the plaintiff's detriment would have been established if she could not demonstrate that she would have acted differently had the defendant's promises not been made. The plurality's endorsement of what Neuberger LJ said in Steria Ltd v Hutchison in the passage quoted at [73] suggests that the plurality at that point in their Honours' reasoning was also addressing only the question of reliance, and not whether the reliance was detrimental to the plaintiff.
In Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 the plurality (Rich, Dixon and Evatt JJ) emphasised (at 734-5) that: "But what makes it unjust to permit the departure from an assumption so induced is that, were it permitted, the party so induced would through making the assumption find himself in a position occasioning material detriment to himself. Without this element there is no estoppel. It must appear that upon the faith of his belief by act or omission he has placed himself in a position which, if his belief proved incorrect, would be productive of loss."
It was in this context that their Honours said that "If it appeared that his supposed belief was a contributing cause of this inaction, sufficient connection between the assumption and the position of detriment would be established." What their Honours considered to be a "contributing cause" can be discerned from the earlier passage that the making of the assumption must occasion material detriment to the party asserting estoppel. If the party claiming the benefit of the estoppel would not have acted differently if he or she had not made the assumption then the adoption of the assumption would not be a contributing cause of either action or inaction.
In Sidhu v van Dyke the plurality went on to say (at [76]) that: "But the question here is whether the respondent would have committed to, and remained in, the relationship with the appellant, with all that that entailed in terms of the effect upon the material well-being of herself and her son, had she not been given the assurances made by the appellant."
Thus in deciding whether the plaintiff had established reliance to her detriment the plurality asked the same question as did the primary judge.
Gageler J agreed with the reasons of the plurality (at [89]) and added: "[91] To establish that the belief to which she was induced by the appellant's representations was a contributing cause to the course of action or inaction which she took, the respondent needed to establish more than that she had the belief and took the belief into account when she acted or refrained from acting. She needed to establish that having the belief and taking the belief into account made a difference to her taking the course of action or inaction: that she would not have so acted or refrained from acting if she did not have the belief. [92] The need for the respondent to establish such a difference stems from what Dixon J described in Grundt v Great Boulder Pty Gold Mines Ltd [(1937) 59 CLR 641 at 674] as the 'indispensable' condition that a party asserting an estoppel 'must have so acted or abstained from acting upon the footing of the state of affairs assumed' that the party asserting the estoppel 'would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption'. That is to say, 'the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted'. There can be no real detriment if the party asserting the estoppel would have been in the same position in any event. [93] The question of causation is therefore ordinarily appropriately framed, as it was implicitly framed by the primary judge in the present case, as being: 'Despite any other contributing factors, would the party seeking to establish the estoppel have adopted a different course (of either action or refraining from action) to that which [the party] did had the relevant assumption not been induced?' [Spence, Protecting Reliance: The Emergent Doctrine of Equitable Estoppel (1999), p 43. See also Spencer Power, The Law Relating to Estoppel by Representation, 4th ed (2004), pp 99-100]"
In my view, when properly analysed, there is no inconsistency between what was said by the plurality and what was said as to the necessary causal relationship by Gageler J. Therefore, for Duncan to establish detrimental reliance on the assumption that Gordon encouraged, that is, that he would inherit Salt Glen after Gordon's death, it is necessary for Gordon to show that he would have acted differently if Gordon had not encouraged him in that belief.
Duncan did not say in his evidence in chief what he would have done had he been informed that he would not inherit Gordon's estate. He gave a number of reasons for continuing to believe that his father would leave Salt Glen to him in his will. These included that his father allowed him to continue to work Salt Glen for no remuneration and his father agisted stock on Caramba and did not offer to pay an agistment fee. He did not ask for one. In cross-examination Duncan gave the evidence quoted at [49] above which it is convenient to repeat: "Q. You then say, in paragraph 148, that certain events made you believe that your father would honour his intention to leave Salt Glen to you in his will. Do you see that? A. Yes. Q. You'd already been told that he'd made a will leaving everything to you. Correct? A. Yes. Q. The fact that he, as you say, allowed you to continue to work on Salt Glen had nothing to do with that belief, did it? A. I think it had everything to do with it."
Duncan gave the following evidence in re-examination: "Q. Could you explain what you meant by that answer when you said that "it had everything to do with it"? A. Well if I wasn't going to be the ultimate owner of Salt Glen, I couldn't really afford to keep working there and if he didn't want it to end up that way, he shouldn't have let me work there. Q. Just looking back on things, if you didn't hold that belief after October 2004 would you have acted differently? A. Yes. Q. How would you have acted differently? A. Well I'd have to reconsider my position, it would've been very difficult. I'm not sure what I would have done. Q. Difficult in what way? A. Well on the one hand he wouldn't be able to look after himself and he wouldn't be able to keep the finances going because, you know, there was debt to pay off and so I'd have, on the one hand, worrying about him going broke and then, on the other hand, I'd be worrying about my own position when it was all finished up."
Many witnesses in Duncan's position would have said that if they did not believe they would be the ultimate owner of Salt Glen they would not have worked on the property for no reward and would not have made Caramba available to Gordon for agistment. It is to Duncan's credit that his answer was circumspect and fairly addressed the dilemma in which he would have been placed. It does not follow that he has failed to prove the necessary detrimental reliance. Had he given the answer that many witnesses would have given as to how he would have acted differently, such self-serving evidence would in any event be treated with a high degree of caution.
Duncan's previous conduct shows that he would not have wished to continue to work on Salt Glen, and I am satisfied he would not have wished to make Caramba available to Gordon for agistment, if he were not solely to inherit.
However, Duncan was loyal to his father. In my view Duncan would not have refused Gordon help if he perceived that his father really needed his help and could not have got it elsewhere. No party attempted to show that Claire, Christopher or Beverley was willing to support Gordon financially or with labour, or, if willing, was able to do so. Claire and Christopher lost their properties to the bank.
Gordon's tax returns disclosed that in the year ended 30 June 2005 he incurred a primary production loss of $38,674. This was substantially reduced by the receipt of $20,000, described in his tax returns as "allowances/earnings/tips/director's fees etc." This was money paid to him by Duncan.
In the financial year ended 30 June 2006 Gordon again made a taxable loss, this time of $10,927. His loss on his primary production activities was $11,005.
In the financial year ended 30 June 2007 Gordon had a net primary production income of $18,581 against which he was able to set off his earlier primary production losses. In the financial year ended 30 June 2008 Gordon had a primary production loss of $27,848 and a taxable loss of $17,792.
It was not until the financial year ended 30 June 2009 that Gordon's financial position materially improved. In that year, Gordon derived net primary production income of $58,082. He earned a gross primary production income of $250,520. His primary production expenses for that year were $192,438.
In the financial year ended 30 June 2010 Gordon earned a net primary production income of $41,897, consisting of gross income of $184,573 less expenses of $142,676.
There was no evidence of Gordon's income after 30 June 2010.
Gordon's financial position improved after 30 June 2008. Whilst his net income by most standards would be regarded as modest, I infer that he lived a frugal life and that Duncan expected that he would live a frugal life. It is clear from the detail of Gordon's income tax returns that the 30 June 2009 and 30 June 2010 financial years were more prosperous than the earlier years.
I am not satisfied that before the financial year commencing 1 July 2008 Duncan would have acted differently than he did had he known that he would not inherit Salt Glen from his father. But the improved farming conditions evident in the financial year commencing 1 July 2008, coupled with Duncan's complaint in 2007 that his father was disloyal to him by resuming relations with other members of his family, indicates that if Duncan had not believed that he would inherit Salt Glen, then at some time in 2008 he would not have continued to do work for his father, or pay expenses on his father's behalf or make payments to his father, or make Caramba available for agistment of his father's stock. Having regard to his earlier actions, and what I perceive to be Duncan's character, that is, being loyal to his father, but also dogged in pursuit of what he perceived to be his own rights, at some point in 2008 Duncan would have drawn the line. It is impossible to say exactly what would have happened or when it would have happened. But I am satisfied that from at least 1 July 2008 Duncan would not have continued to provide gratuitous benefits to his father if he had known that his father had ceased to be loyal to him by not naming him as the sole beneficiary of his estate. Duncan's continued work on Salt Glen, the provision of benefits to Gordon in the form of making Caramba available for agistment of Gordon's stock, the payment of Gordon's expenses, and the making of payments to Gordon, were acts of detrimental reliance that Duncan would not have made if he had not believed that he would inherit Salt Glen.
The reasonableness of Duncan's reliance on his assumption that he would inherit Salt Glen is relevant to the ultimate question of whether it would be unconscionable to allow Gordon, and through him, the defendant, to depart from the assumption that Duncan was induced to adopt (Commonwealth v Verwayen (1990) 170 CLR 394 at 445 per Deane J; Milling v Hardie; Construction Technologies Australia Pty Ltd v Doueihi at [220]-[225]). Duncan did not assume that Gordon could not revoke his 2004 will.
It is also relevant that much of the work done by Duncan for Gordon's benefit should not be regarded as a detriment to Duncan. Nor was Duncan's conduct solely induced by his assumption that he would inherit Salt Glen. Duncan's work on Salt Glen was regular, but episodic. He acknowledged that the most significant work that he did was the installation of the water system. But that was for his benefit as well as Gordon's. Gordon also made a contribution to the endeavour and it resulted in the entry into the water agreement of 2010. That part of the work involved no relevant detriment. Duncan spent considerable time repairing Gordon's farming equipment, but he has been compensated for that by taking possession of Gordon's equipment after his death, which possession the defendant has agreed not to dispute.
Moreover, Duncan did work for Gordon as a filial duty as well as because he expected to inherit Salt Glen. He would have done the work for Gordon and provided the other benefits to Gordon if he perceived that Gordon would otherwise have been unable to carry on farming at Salt Glen. It was not until the financial year ended 30 June 2009 that Gordon's financial position improved such that he could have carried on without Duncan's help.
Duncan should reasonably have expected that his father could wish to heal the division between at least his children. In 2007 Duncan was aware of the rapprochement between Gordon and the other members of his family. He thought that Gordon was being disloyal to him. But it was not reasonable for him to assume that Gordon would not seek an end to the estrangement and might not give concrete effect to his changed relationships by changing his will.
Having regard to all of these circumstances I do not consider that Duncan's continued reliance upon his assumption that he would inherit Gordon's estate was reasonable, and I do not consider that in all of the circumstances it would be unconscionable for Gordon to be permitted to depart from the state of affairs that Duncan assumed would obtain.
If I had reached a different conclusion on this question, I would nonetheless not have considered that the appropriate remedy would be to make good the assumption that Duncan adopted by requiring the defendant to hold Salt Glen and its associated water licence on trust for Duncan. The grant of probate disclosed an estimated value of Salt Glen of $2 million. There was no other evidence of value. That is out of proportion to the value of the services and other benefits provided by Duncan to Gordon after 2004.
If the elements of proprietary estoppel had been established, let alone those relating only to the work done after 1 July 2008, giving effect to the prima facie entitlement of Duncan to inherit Salt Glen, would exceed what could be justified by the requirements of conscientious conduct and would be unjust to the defendant (Commonwealth v Verwayen per Deane J at 442 and 445; Giumelli v Giumelli [1999] HCA 10; (1996) 196 CLR 101 at [42]-[50]; Sidhu v van Dyke at [84]). If Duncan's claim for proprietary estoppel had been established it would be satisfied by the awarding of monetary compensation. For the reasons which follow I am satisfied that he is entitled to monetary compensation for work done and benefits provided after 1 July 2008 pursuant to his claim for unjust enrichment.

Claim under 2002 mortgage

Duncan pleaded that he made advances to or on behalf of Gordon pursuant to the mortgage entered into on 26 November 2002 that secured a sum of $15,000 and such further or other advances as Duncan might make to Gordon from time to time. In his statement of claim Duncan pleaded that he had made further advances to or on behalf of the deceased that were secured by the mortgage that totalled $94,382.50. However, in his submissions Duncan accepted that the amounts advanced by him to Gordon under the mortgage totalled $58,882.50 and were made between 13 November 2002 and 2 July 2004. The payments were made as partial payment of legal fees incurred by Gordon in connection with the proceedings in the Family Court and the Supreme Court between 2002 and 2004. He claims $58,882.50 pursuant to the mortgage and interest.
I do not accept this claim. In my view it was released by clause 19 of the deed of settlement entered into on or about 3 September 2004 which is set out at para [25] above. By clause 19 each party to the deed released each other party to the deed from all claims etcetera that he or she might have arising directly or indirectly out of, amongst other things, the Family Court Proceedings and the Equity Proceedings. Although Gordon and Duncan had sided together in the litigation against Beverley, Claire and Christopher, clause 19 expressly provided that each party to the deed released each other party from all such claims. Clause 19 expressly covered any claim that Gordon might have against Duncan, or Duncan might have against Gordon in respect of any of the matters referred to in the clause. Duncan's claim against Gordon for advances made to Gordon to cover the legal costs of the proceedings, or for payments made on Gordon's behalf in respect of Gordon's liability for such costs, arose out of the claims made in the Family Court proceedings or the Equity proceedings. The release extended to expenses incurred in respect of "any claims made" in those proceedings, which included expenses incurred in respect of the claims made by Beverley, Christopher and Claire against Gordon.
Accordingly, Duncan's claim against Gordon's estate in respect of the moneys he contends were secured by the November 2002 mortgage were released by the September 2004 settlement.
This follows from the express terms of the settlement. Duncan did not seek an order for rectification of clause 19 of the deed of settlement so as to exclude claims between Duncan and Gordon from the scope of the release. Nor would such a claim have had any prospect of success. In cross-examination Duncan was asked whether he maintained a claim in these proceedings on the basis of things his father had said to him in 1986 or thereabouts in which Gordon had said that he would leave Salt Glen to Duncan. He said "There's a relationship there, but everything was - was reset after the agreement."

Monetary claim for unjust enrichment

Duncan pleaded that if Beverley as executrix of Gordon's estate is not obliged to perform the alleged testamentary contract or is not estopped from denying Duncan the benefit of an alleged representation or encouragement that he would inherit Salt Glen after Gordon's death, then he was entitled to a claim against the deceased's estate as a quantum meruit, for the value of his work for Gordon in making improvements to and maintaining Salt Glen and assisting Gordon in managing and operating Gordon's farming operations on Salt Glen and Caramba from about 29 October 2004 until Gordon's death. He also pleaded that from 29 October 2004 until Gordon's death he incurred expenses for Gordon and paid debts owed by Gordon to third parties in the mistaken belief that he would obtain Salt Glen and the water licence on Gordon's death pursuant to his 2004 will. He pleaded that he allowed Gordon to agist stock on Caramba for no agistment fee and that Gordon's estate has been unjustly enriched by Duncan's incurring such expenses and paying Gordon's debts to third parties and by agisting Gordon's stock on Caramba for no fee. Duncan pleaded that he made advances to Gordon under the mistaken belief that there was a contractual obligation under the mortgage for Gordon to repay the amounts to him until the making of the alleged testamentary contract and the representation or encouragement made or given in 2004 that Duncan would obtain Salt Glen and an associated water licence on Gordon's death pursuant to his 2004 will. Duncan pleaded that Gordon's estate has been unjustly enriched by the incurring of expenses for Gordon and paying debts owed by him, by the making of advances to him, by work done for Gordon and by allowing Gordon to agist cattle on Caramba for no fee.
Duncan submitted that for each such claim he needed to prove three elements: that a benefit was obtained by Gordon; that it was obtained at Duncan's expense; and an element of injustice, that is, the existence of circumstances where it would be unfair, unjust, unconscionable or inequitable for Gordon's estate to retain the benefit without making restitution to the plaintiff.
In his submissions Duncan accepted that the third element of "unjustness" does not call for the exercise of judicial discretion, but is a generalisation of all the factors which the law recognises as calling for restitution, such as mistake, compulsion or total failure of consideration.
Duncan submitted that the scope and extensive breadth of the work he performed for Gordon led to the conclusion that he performed work for Gordon on the mutual understanding that he was not providing his services gratuitously, but on the understanding that there was an implicit promise by Gordon not to revoke the 2004 will.
But I have not accepted that there was any such implicit promise or bargain. I consider that Duncan did perform work for Gordon, pay expenses for him and make Caramba available to him for agistment, gratuitously, but on the assumption that Gordon would leave Salt Glen to him when he died. Duncan's assumption was mistaken.
In the absence of mistake, Duncan could have no claim at common law based on principles of quasi-contract or restitution for the value of the services and money he provided because he was acting gratuitously. Because Duncan acted gratuitously, if Gordon had not changed his 2004 will but had left his estate to Duncan, Duncan could not have claimed as a creditor in competition with any other creditors that Gordon might have had for the value of the services he provided to Gordon or the moneys he paid on Gordon's behalf.
The question is whether, notwithstanding that Duncan acted gratuitously, he is entitled to a monetary claim on the basis that Gordon was unjustly enriched because in so acting gratuitously Duncan acted under the mistaken belief that he would inherit Salt Glen. In this area of the law such a mistaken belief is characterised as a misprediction of future events, rather than a present mistake of either fact or law (Birks, An Introduction to the Law of Restitution (1985 ed) pp 147-148; Cadorange Pty Ltd (in liq) v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26 at 32, 40; Dextra Bank & Trust Co v Bank of Jamaica [2002] 1 All ER (Comm) 193 at [29]; Lahoud v Lahoud [2010] NSWSC 1297 at [179]-[180]; Pitt v Holt [2013] 2 AC 108 at [109]-[113]). In Mason and Carter, Restitution Law in Australia, 3 ed at [431] the learned authors say that: "Mistake must be distinguished from misprediction. A misprediction as to some future matter may be nothing more than the conscious taking of a risk of error that comes home. Absent conduct by the defendant that created or encouraged the expectation, the plaintiff will not recover money paid or the value of services rendered."
Duncan had a more particular belief. The reason he believed that he would inherit Salt Glen was that he understood that he had been named as the beneficiary under Gordon's will made on 29 October 2004 and continued to be the beneficiary named in Gordon's last will. That is to say, he knew that he had been named as the beneficiary of Gordon's estate and believed that the will had not been revoked. Considered this way, from September 2007 Duncan laboured under a present mistake of fact, namely that he was the sole beneficiary named in Gordon's last will. This was more than a mere misprediction of future events.
This illustrates the point made by the United Kingdom Supreme Court in Pitt v Holt at [109] that the distinction between a misprediction relating to some possible future event and a legally significant mistake relating to some past or present matter of fact or law may not be clear on the facts of a particular case. In Gough and Jones, The Law of Unjust Enrichment, 8 ed, the authors say (at [9-11]) that as a legally operative mistake: "… requires a belief about some past or existing state of affairs which is incorrect when acted upon, the availability of relief for mistake can turn on the precise time when circumstances change, and the claimant's belief is falsified."
In the present case, circumstances changed in September 2007 when Gordon changed his 2004 will.
In any event, even before September 2007, when Duncan's mistake was a mere misprediction of future events, Duncan's assumption was a prediction that Gordon encouraged him to adopt.
It is probably not relevant at this stage of the analysis to ask whether Gordon's acceptance of the services and payments made by Duncan without advising Duncan of the change to his will was unconscionable (Mason and Carter, Restitution Law in Australia, 3 ed at [123] p 25 and p 29). However, if it be relevant, it was clearly unconscientious for Gordon to have continued to accept the benefit of Duncan's services, the use of Caramba and payments made on his behalf and to him, without disclosing the change to his will. Gordon knew that Duncan considered himself to be the sole beneficiary of his estate. Gordon was aware from Duncan's previous conduct that Duncan thought it unfair if anyone other than he inherited Salt Glen and he knew from Duncan's past actions that Duncan was prepared to walk away if he believed his expectation would not be met.
Duncan's claim falls under four headings, namely, his claim for reasonable remuneration for services provided to Gordon on Salt Glen, for agisting Gordon's stock on Caramba, paying expenses for Gordon or discharging Gordon's debts, and providing Gordon with money.
In Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177 the High Court allowed recovery where the payment was made under a mistake of fact that was "fundamental" (at 186-7, 191, 204). In David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 the High Court said that it was enough that the mistake was causative, but did not elaborate on the test to be applied. In Salib v Gakas [2010] NSWSC 505 Ward J (as her Honour then was) said (at [328]): "[328] In David Securities the High Court did not expressly address the appropriate test for causation in this context, remitting the case to the trial judge to determine whether the payments were made 'because of' the mistaken belief (David Securities, at 386). Nevertheless, it could be inferred from the High Court's rejection of the requirement of fundamentality the question would turn on whether the mistake was a 'significant' or 'dominant' cause of the relevant payment. By way of analogy in Gould v Vaggelas (1985) 157 CLR 215, at 216, per Wilson J; at 250-251, per Brennan J; San Sebastian Pty Ltd v Minister (1986) 162 CLR 340, at 366, per Brannan J; Henville v Walker (2001) 206 CLR 459, at 493, per McHugh J, the test was whether the mistake was a reason for the enrichment." (Emphasis in original.)
The authors of Mason and Carter, Restitution Law in Australia, 3rd ed opine (at [429]) that the "but for" test of causation applies unless the mistake was induced by misrepresentation or undue pressure by the defendant. I agree. I consider that this is the test applicable to the analogous case of proprietary estoppel considered above. Coherence would be enhanced if the same test were applicable to the recovery of moneys paid or services provided under mistake. For the reasons given in respect of the proprietary estoppel claim, Duncan's mistake was causative of his paying money and providing services and allowing Caramba to be used for agistment only from the financial year commencing 1 July 2008.
I deal first with the provision of services for Gordon's benefit. That work is summarised above at paras [61]-[89]. Duncan accepted that the single largest item of work after October 2004 was the establishment of the water system. Much of that work was carried out before 1 July 2008 when Duncan was not labouring under a mistake that was causative of his continuing to do work for his father. However, Some of the work done in extending the water pipeline to an additional northern paddock of Salt Glen was done in the 30 June 2009 financial year.
I do not accept that Duncan is entitled to a quantum meruit claim in respect of his work and contribution to materials for the water system on Salt Glen. The installation of that system was for the benefit of both properties and ultimately led to the entry into the water agreement of 2010 that, if enforceable against new registered proprietors of Salt Glen, should guarantee the supply of water to Caramba for 50 years, or for as long as the bore supplies water. Gordon also supplied materials for that system.
Mr Evans submitted that all of the work Duncan did for Gordon should be regarded as a quid pro quo for the benefits Gordon provided to Duncan, in particular in agreeing to the provision of water from the bore on Salt Glen to Caramba. I do not accept this submission. There was no actual agreement, and there can be no implied agreement, between Gordon and Duncan to that effect. To the contrary, Duncan carried out the work he did, made payments to and on behalf of Gordon and made Caramba available to Gordon for the agistment of stock because he mistakenly believed that he was the sole beneficiary under Gordon's will and would inherit Salt Glen on Gordon's death. He did not provide those benefits to Gordon as a quid pro quo for the implementation of the watering system. There is no evidence that Duncan received a substantially greater benefit from the implementation of the water system than did Gordon. I have concluded that it cannot be inferred that Duncan's work on the implementation of the water system enriched Gordon to any materially greater extent than the benefits Duncan obtained from the implementation of the water system and the entry into the water agreement in 2010. But it does not follow that everything else that Duncan did for Gordon should be regarded as a quid pro quo for the benefits of the watering system that Duncan received.
I do not allow any part of Duncan's claim for time and money spent on repairing Gordon's farming equipment. It is impossible to say to what extent Gordon was enriched by that work. Duncan adopted a self-help remedy after his father's death by taking possession of the equipment to which he had carried out repairs. Mr Evans for the defendant advised that she would not make any claim against Duncan for the return of the equipment. Whilst the repair of the equipment benefited Gordon, because the equipment was used in Gordon's farming operations, it also benefited Duncan. It is not possible to say that Gordon was unjustly enriched by the work done by Duncan in repair of Gordon's farm machinery.
The work Duncan did for Gordon for which he is entitled to claim on a quantum meruit was other work done from November 2008 to 19 February 2012 as set out in the schedules to Duncan's affidavit.
This includes the amount claimed by Duncan for stripping 600 acres of Gordon's wheat with an allowance of $15 per acre, rather than the lesser amount provided for in Mr Johnson's affidavit. I accept that the work claimed by Duncan in annexure B to his affidavit of 16 September 2014, that removed items of work appearing in the earlier schedule that did not relate to the work that was performed on Salt Glen, is a reliable statement of the work Duncan did for his father. I accept that fair remuneration for that work includes an allowance for Duncan's travelling time from May Glen to Caramba. I accept Mr Johnson's evidence as to the appropriate award rates for work he described as farming, labouring and stock work being the wage rates in the Pastoral Employees (State) Award for a "rural tradesperson". There was evidence that Gordon paid labourers he engaged at less than award rates. But I think Duncan's experience and skills were such that the award rates used by Mr Johnson are an appropriate measure of the fair value of Duncan's work. I also accept Mr Johnson's calculation of a reasonable amount to allow for travel that included the use of Duncan's own vehicle. However, the allowance must be apportioned to reflect the fact that Duncan was also working on Caramba. I have discounted Mr Johnson's allowance for travelling by 50 per cent.
There was one day's work in July 2011 in which Duncan used his skills as a civil engineer in relocating a septic tank on Salt Glen for which he should remunerated at the rates provided by Mr Johnson for work he classified as "Civil".
For these reasons Duncan's quantum meruit claim for his labour is allowed in accordance with the schedule to Mr Johnson's affidavit that is divided into separate categories as follows: Civil: the item of 1 November 2011 ($1,600). Farming: 30 November 2008 - "Strip GP wheat 600 acres at $15/acre" allowed at $9,000, and the balance of the farming items allowed as set out in Mr Johnson's schedule from 9 December 2008 to 28 June 2011 ($7,750). Labouring: the items from 3 January 2009 to 12 November 2011 ($57,750). Stock: the items from 11 January 2009 to 19 February 2012 ($31,962). Travel: the items from 30 November 2008 to 8 March 2010 ($58,800).
These items total $166,862.
Duncan's claim for agistment fees is an established cause of action in what is now called unjust enrichment. Bullen and Leake, Precedents of Pleadings, 3 ed at p 68 lists three indebitatis counts, including an "Indebitatis Count for the Agistment of Horses and Cattle" being "Money payable by the defendant to the plaintiff for the agistment, feeding, and taking care of horses and cattle by the plaintiff for the defendant at his request", and an "Indebitatis Count for the Use of Pasture" being "money payable by the defendant to the plaintiff for the defendant's use by the plaintiff's permission of pastureland of the plaintiff, and the eatage of the grass growing thereon for the depasturing of cattle". The only claim Duncan made for reasonable agistment fees for the use of Caramba was in respect of Gordon's use of Caramba for his own stock (Statement of Claim paras 40 and 41, and pre-trial outline of submissions, paras 148-162). Although a substantial part of Gordon's income was derived from agistment fees and although there was evidence that some stock of third parties was agisted on both Salt Glen and Caramba, there was no evidence that the agistment income derived by Gordon as shown in his tax returns was substantially attributable to his agisting stock on both Caramba and Salt Glen. No such claim was litigated.
As noted above (at [94] and [96]) Duncan sought agistment fees on the basis of a number of sheep and lambs that Gordon had owned on 1 December 2005 and for a number of cattle that Gordon acquired on 11 August 2011. In the absence of other evidence, I am content to assume that cattle numbers were unchanged between 11 August 2011 and 19 February 2012 when Gordon died (which is the period for which the claim is made). However, I do not accept the assumption that there was no material change to sheep and lamb numbers from 1 December 2005.
Gordon's income tax returns included opening and closing stock numbers (i.e. sheep and lambs) at the end and at the beginning of each financial year. The stock numbers at 30 June 2007 can be inferred to have been 2,343. This is on the basis that the same value of stock ($89,502) was shown as at 30 June 2006 and 30 June 2007 and there were no stock trading figures. Unlikely though it seems, I can only proceed on the basis that there was no change to the stock numbers between 30 June 2006 and 30 June 2007.
In Gordon's tax return for 2007-2008, the opening stock number at 1 July 2007 was 2,343. The closing stock numbers at 30 June 2008 had fallen to 1,202. Over that financial year there was a natural increase of 850, 300 deaths, and 1,691 sales. It is not possible to ascertain how many of the 1,202 were sheep and how many were lambs. This was probably a time of severe drought.
In the following financial year, 2008-2009, stock numbers were increased with purchases of 1,375. 1,467 stock were sold and there were 410 stock who died or were killed for rations, leaving closing stock of 700.
In the following financial year, 2009-2010, the opening stock of 700 was increased by purchases of 939 and a natural increase of 600. There were 281 sales and 325 stock died or were killed for rations leaving a closing stock figure as at 30 June 2010 of 1,633.
There is no evidence as to stock numbers after 30 June 2010.
Using the opening stock figures as at 1 July 2008 (1,202), 1 July 2009 (700) and 1 July 2010 (1,633), I derive an average figure of 1,178. There are no later figures. Taking the proportion of sheep to lambs contended for by the plaintiff on the basis of the purchases made in December 2005, in the absence of any other guidance, I assume that 21 per cent of the stock were lambs, i.e. the average figures are 247 lambs and 931 sheep.
I accept that the agistment fees contended for by the plaintiff are a reasonable figure for the value to a farmer of agisting stock on both Salt Glen and Caramba.
It is impossible to know to what extent Gordon's stock grazed on Salt Glen as opposed to Caramba. Stock were moved from paddock to paddock as was thought appropriate at the time. It does not appear that any records were kept. Counsel for the plaintiff submitted that in the absence of such evidence a reasonable estimate, and one favourable to the estate, would be that the stock spent 50 per cent of their time on each property. Such an assumption could be favourable to the estate because Caramba was the larger property. Mr Evans submitted that if there were to be any allowance for the value to Gordon of being able to agist his stock on Caramba, the appropriate division would be two-thirds to Salt Glen and one-third to Caramba, having regard to the extent to which the water system was built on Caramba and extended onto Caramba in stages. However, that work was substantially complete by the end of 2008 and the water system built on Caramba is approximately as extensive as the water system built on Salt Glen. I think an equal division is appropriate.
I conclude that Duncan is entitled to reasonable remuneration for making Caramba available to Gordon for the agistment of Gordon's sheep from 1 July 2008, that being the period for which I am satisfied Duncan was acting under a causative mistake. The period in question is 189 weeks. Applying the midpoint of $0.45 per sheep per week and $0.10 per lamb per week, and applying the average stock figure for the three-year period (noting the uncertainty in the figures) and applying a 50 per cent discount for the reason above, the resulting figure for such reasonable remuneration is ((931 x $0.45 x 189) + (247 x $0.10 x 189)) x 0.5 = $41,924.93.
In addition Duncan is entitled to reasonable remuneration for the agistment of Gordon's cattle from 11 August to 19 February 2012. The figure claimed by Duncan is $17,802. I accept his arithmetic, but the figure should be discounted by 50 per cent. The result is that Duncan is entitled to $50,825.93 for allowing Gordon to agist his stock.
Between 1 July 2008 and 21 January 2012 Duncan paid $75,384.05 either as payment of expenses incurred by Gordon or as payments to him by way of gift. For the reasons given these payments were made under a causative mistake of present fact.
For these reasons I conclude that under his claim at common law for unjust enrichment Duncan is entitled to judgment in the sum of $293,071.98 (plus interest pursuant to s 100 of the Civil Procedure Act 2000 (NSW)) for provision of Caramba for the agistment of stock for Gordon's benefit, for moneys paid to Gordon and moneys paid on Gordon's behalf, and for work done for Gordon's benefit. All such things were done at Gordon's express or implied request. They were provided gratuitously, but under causative mistake.
The services and payments for which Duncan is entitled to remuneration were provided and paid regularly but episodically over the period from 1 July 2008 to 19 February 2012. I think justice would be done by calculating interest under s 100 from the approximate midpoint of that period, namely, 26 April 2010.

Orders

For these reasons I give judgment for the plaintiff against the defendant for $293,071.98 plus interest pursuant to s 100 of the Civil Procedure Act calculated from 26 April 2010.
I order that the plaintiff's claims for relief be otherwise dismissed.
I will hear the parties on costs. 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: 15 August 2016

Civil Procedure Act 2000(NSW)

e Assurance Society Ltd (1935) 52 CLR 723 Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313 Pitt v Holt [2013] 2 AC 108 Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177 Ramsden v Dyson (1866) LR 1 HL 129 Salib v Gakas [2010] NSWSC 505 Sidhu v van Dyke [2014] HCA 19; (2014) 251 CLR 505 Dillwyn v Llewellyn (1862) 4 De GF & J 517; 45 ER 1285 Steria Limited v Hutchison [2007] ICR 445 Taylor v Dickens [1998] 1 FLR 806 Thorner v Major [2009] UKHL 18; [2009] 1 WLR 776 Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 Willmott v Barber (1880) 15 Ch D 96 Texts Cited: Birks, An Introduction to the Law of Restitution (1985 ed) Bullen and Leake, Precedents of Pleadings, 3 ed Gough and Jones, The Law of Unjust Enrichment, 8 ed Handley, Estoppel by Conduct and Election (2006) P 170 Mason and Carter, Restitution Law in Australia, 3 ed Category: Principal judgment Parties: Duncan James Priestley (Plaintiff) Beverley Joy Priestley as executor of the estate of the late Gordon Wedlock Priestley (Defendant) Representation: Counsel: T Alexis with M Cairns (Plaintiff) M B Evans (Defendant)

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