Priestley v Priestley

The proceedings before the primary judge

1. In his Statement of Claim filed on 8 October 2013, Duncan relied essentially on two separate causes of action leading, in effect, to disregarding the 2012 Will and treating the 2004 Will as still being on foot. As a fall back, Duncan sought restitution in respect of alleged unjust enrichment on the part of Gordon at his expense.
2. The allegations in the relevant paragraphs of the Statement of Claim may be restated as follows: Testamentary contract
3. At or about the time of the Settlement Deed, and pursuant to cl 1(a) of the Settlement Deed, Gordon and Duncan agreed, or otherwise had the mutual understanding, that, in consideration of the work that Duncan had performed for Gordon for no or little remuneration and the financial and other support that Duncan had provided to Gordon prior to and during the Family Court Proceedings and the Equity Proceedings, Gordon would transfer to Duncan the remaining part of Caramba that he owned and would leave Salt Glen, Lot 10 and the Water Licence Share to Duncan by will when he died (the testamentary contract).
4. On 29 October 2004, Gordon executed the 2004 Will that revoked all prior wills and testamentary dispositions, appointing Duncan and Mr Ferrier as executors and providing for the whole of Gordon's estate to be given to Duncan.
5. At the time of the 2004 Will, Gordon was the registered proprietor of Salt Glen and Lot 10 and was the owner of the Water Licence Share and did not own any other assets of material value.
6. It was an implied term of the testamentary contract that Duncan would continue to work unremunerated for Gordon and make improvements to and maintain Salt Glen, including the homestead on Salt Glen, and to assist Gordon in managing and operating the operations on Salt Glen and Caramba and allow Gordon to agist stock on Caramba for no fee and that Gordon would not revoke the 2004 Will before he died.
7. From 29 October 2004 until Gordon's death, in performance of the testamentary contract, and to the knowledge of Gordon, Duncan continued to make improvements to and maintain Salt Glen and Lot 10 and to assist Gordon in managing and operating his farming operations on Salt Glen and Caramba and to allow Gordon to agist stock on Caramba for no fee.
8. On or about 30 August 2008, in part performance of the testamentary contract, Gordon arranged or procured for the grant of an easement for the benefit of part of Caramba which burdened part of Riverview (the Easement).
9. The Easement and the Water Licence Share were intended to facilitate and provide Duncan with access to water from the Macquarie River for Caramba and for Salt Glen.
10. On 11 February 2012, in breach of the testamentary contract, Gordon made the 2012 Will, which revoked the 2004 Will and provided for the whole of Gordon's estate to be given to Beverley. … Proprietary estoppel/constructive trust
11. At the time of the testamentary contract or the 2004 Will, Gordon represented to Duncan, or encouraged him to believe, expect or to understand, that he would obtain Salt Glen and Lot 10 and the Water Licence Share on Gordon's death, pursuant to the 2004 Will (the 2004 representation or encouragement).
12. On the faith of the 2004 representation or encouragement, Duncan continued to work unremunerated for Gordon, made improvements to and maintained Salt Glen and Lot 10 and assisted Gordon in managing and operating his farming operations, allowed Gordon to agist stock on Caramba for no fee and incurred expenses for Gordon, until Gordon's death.
13. Duncan relied on the 2004 representation or encouragement by taking no steps to register a caveat on Gordon's title to Salt Glen and Lot 10, altering his position to his detriment.
14. Duncan relied on the 2004 representation or encouragement by forbearing to sue Gordon in relation to his unpaid bill for work provided by him to Gordon in late 1999. …
15. By making the 2004 representation or encouragement and the matters referred to above, Gordon was estopped from revoking the 2004 Will and Beverley, as legal personal representative of Gordon, is estopped from denying Duncan the benefit of the 2004 representation or encouragement.
16. Accordingly, Beverley, as legal personal representative of Gordon, holds Salt Glen and Lot 10 and the Water Licence Share on trust for Duncan and is liable to transfer them to Duncan.
17. The fall back claims made by Duncan against Gordon's estate are characterised as quantum meruit and unjust enrichment claims. The allegations in that regard may be restated as follows:
18. Duncan claims against the estate of Gordon for the value of his work for Gordon in making improvements to and maintaining Salt Glen and Lot 10 and assisting Gordon in managing and operating his farming operations on Salt Glen and Caramba from 29 October 2004 until Gordon's death.
19. In November 2002, by the Mortgage, Gordon mortgaged the properties comprising Greater Salt Glen to Duncan to secure the sum of $15,000 and other advances made by Duncan to Gordon from time to time.
20. On 26 November 2002, Gordon and Duncan executed a caveat over the properties comprising Greater Salt Glen to protect Duncan's interest under the Mortgage.
21. By reason of the testamentary contract and the 2004 representation or encouragement, Duncan did not register the caveat.
22. Duncan made further advances to or on behalf of Gordon totalling $94,382.50 plus interest.
23. On 19 August 2013 Duncan, by written demand to Beverley, requested repayment of the loans.
24. Beverley has failed to repay the loans. …
25. From 29 October 2004 until the death of Gordon, Duncan incurred expenses for Gordon and paid debts owed by Gordon to third parties in the mistaken belief that he would obtain Salt Glen, Lot 10 and the Water Licence Share on Gordon's death pursuant to the 2004 Will.
26. From 29 October 2004 until Gordon's death, Duncan allowed Gordon to agist stock on Caramba for no fee.
27. The estate of Gordon has been unjustly enriched by Duncan incurring those expenses and paying those debts of Gordon to third parties and by agisting Gordon's stock on Caramba for no fee.
28. Gordon's estate has been unjustly enriched at the expense of Duncan in the sum of $113,108.80 and the value of a reasonable fee in relation to the agistment of Gordon's stock on Caramba.
29. Duncan made the advances to Gordon referred to above in the mistaken belief that there was a contractual obligation under the Mortgage for Gordon to repay the amounts to Duncan.
30. Gordon's estate has been unjustly enriched by Duncan having made the advances to or on behalf of Gordon in the sum of $94,382.50.
31. The primary judge accepted that, while mutual promises are the essence of a contractual relationship, they need not be express and that an agreement whereby mutual obligations are assumed can be inferred from the circumstances. [3] However, his Honour held, what must be capable of being inferred is a concluded bargain, not merely a common intention or expectation. His Honour was prepared to draw the inference that by October 2004, it was the intention and expectation of both Gordon and Duncan that Duncan would help Gordon in re-establishing himself on Salt Glen and would help him in maintaining and running the properties and that it was their common intention and expectation, at that time, that Gordon would leave Salt Glen to Duncan. However, his Honour was not prepared to draw the inference that there was any implicit agreement between them that Duncan was bound to help his father on Salt Glen and that Gordon was bound not to revoke the 2004 Will. His Honour concluded that Duncan and Gordon did not have any intention of entering into a contract and that the case was not one in which a contract could be inferred, without express promises. [4]
32. The primary judge found that Gordon knew that Duncan expected to inherit Salt Glen and that, in 1996, Duncan had refused to keep working on Salt Glen when told that Salt Glen would not be left to him but would be left to Beverley and the three children equally. His Honour considered that Gordon's failure to tell Duncan after September 2007 that he had made a new will must have been deliberate and that Gordon must have known that Duncan was continuing to act on the assumption that he would inherit Salt Glen. His Honour inferred that Gordon feared that, if he told Duncan that he had made a new will, Duncan would not have continued to do work on Salt Glen or make Caramba available for Gordon's stock without fee. His Honour considered that Gordon continued to take advantage of the use of Caramba on which to agist his stock. [5]
33. The primary judge did not consider that the fact that Duncan had not formed the opinion that Gordon would not be free to revoke the 2004 Will was a sufficient answer to Duncan's claim to be entitled to Salt Glen on the basis of an estoppel. His Honour considered that Duncan had acted to his detriment on the assumption, known to Gordon, that he, Duncan, would inherit Salt Glen on Gordon's death. [6] However, his Honour did not consider that that was, in itself, sufficient to establish an entitlement in equity to Salt Glen on the basis of proprietary estoppel. His Honour held that Duncan needed to have shown 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, that he had acted in reliance upon that belief and that that was a significant, although not necessarily the sole, inducement in his acting as he did. [7]
34. However, his Honour considered that Duncan had to establish that, but for his having been induced to adopt a particular assumption by Gordon's conduct, he would not have acted (or refrained from acting as the case might be) to his detriment. [8]
35. The primary judge concluded that, for Duncan to establish detrimental reliance on the assumption that Gordon encouraged (that he would inherit Salt Glen on Gordon's death) it was necessary for Duncan to show that he would have acted differently if Gordon had not encouraged him in that belief. [9] His Honour observed that 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 Gordon would leave Salt Glen to him in his will, including that Gordon allowed him to continue to work Salt Glen for no remuneration and agisted stock on Caramba without any fee. [10]
36. The primary judge considered that Duncan's previous conduct showed that he would not have wished to continue to work on Salt Glen and his Honour was satisfied that Duncan would not have wished to make Caramba available to Gordon for agistment, if he was not to inherit Gordon's estate. [11] However, his Honour considered that Duncan would not have refused Gordon help if he perceived that Gordon really needed his help and could not have obtained help from elsewhere. His Honour observed that no party attempted to show that any of Claire, Christopher or Beverley was willing to support Gordon financially or with labour or, if willing, was able to do so. Relevantly, Claire and Christopher had lost their properties to their bank. [12]
37. The primary judge referred to the fact that in the financial years ended 30 June 2005, 2006, 2007 and 2008, Gordon had a primary production loss of $38,674, a taxable loss of $10,927, a net primary production income of $18,581 and a primary production loss of $27,848 respectively. However, in the financial year ended 30 June 2009, Gordon's financial position improved materially when he derived net primary production income of $58,082, after deducting expenses of $192,438 from gross primary production income of $250,520. 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. [13]
38. The primary judge observed that, while Gordon's net income might be regarded as modest, he lived a frugal life and Duncan expected that he would live a frugal life. His Honour was not satisfied that, before the financial year commencing 1 July 2008, Duncan would have acted differently from the way he did had he known that he would not inherit Salt Glen from Gordon. His Honour considered that the improvement evident in the year ended 30 June 2008, coupled with Duncan's complaint in 2007 that his father was disloyal to him by resuming relations with other members of the family, indicated that, if Duncan had not believed that he would inherit Salt Glen, at some time in 2008 he would have ceased to do work for Gordon and to pay expenses on Gordon's behalf and make payments to Gordon and to make Caramba available for agistment of Gordon's stock. His Honour considered that, at some point in 2008, Duncan would have drawn the line, although it was not possible to say exactly what would have happened or when it would have happened. Nevertheless, his Honour was satisfied that, from as late as 1 July 2008, Duncan would not have continued to provide gratuitous benefits to Gordon if he had known Gordon had ceased to be loyal to him by not naming him as the sole beneficiary of his estate. His Honour considered that 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. [14]
39. However, the primary judge considered that much of the work done by Duncan for Gordon's benefit should not be regarded as a detriment to Duncan. Further, his Honour did not consider that Duncan's conduct was solely induced by his assumption that he would inherit Salt Glen. Duncan's work on Salt Glen was regular, but episodic and he acknowledged that the most significant work that he did was the installation of the water system. His Honour held that that was for his benefit as well as Gordon's. Gordon also made a contribution to that endeavour by entry into the water agreement of 2010. His Honour considered that that part of the work involved no relevant detriment. His Honour also found that, while Duncan had spent considerable time repairing Gordon's farming equipment, he had been compensated for that by taking possession of the equipment after Gordon's death. Beverley has agreed not to dispute his entitlement to the machinery. [15]
40. The primary judge found that Duncan did work for Gordon not only under the expectation that he would inherit Salt Glen but also as a filial duty, and that he would have done the work for Gordon and provided the other benefits to Gordon if he had perceived that Gordon would otherwise not have been unable to carry on farming at Salt Glen. His Honour found that it was not until the year ended 30 June 2009 that Gordon's financial position improved to such an extent that he could have carried on without Duncan's help. [16]
41. The primary judge considered that Duncan should reasonably have expected that Gordon would wish to heal the division with his children. In 2007, Duncan was aware of the rapprochement between Gordon and the other members of his family and thought that Gordon was being disloyal to him. His Honour considered that it was not reasonable for Duncan to assume that Gordon would not seek an end to the estrangement and might not give concrete effect to his changed relationships by making a new will. [17] His Honour therefore concluded that Duncan's continued reliance upon his assumption that he would inherit Gordon's estate was not reasonable. His Honour did 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. [18]
42. The primary judge also observed that, even if he had reached a different conclusion on that question, he would not have considered that the appropriate remedy would be to make good the assumption that Duncan adopted by requiring Beverley to hold Salt Glen and the Water Licence Share on trust for Duncan. His Honour considered that the estimated value of Salt Glen, of $2 million, was disproportionate to the value of the services and other benefits provided by Duncan to Gordon after 2004. His Honour considered that, if the elements of proprietary estoppel had been established, 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 Beverley. His Honour concluded that, if Duncan's claim for proprietary estoppel had been established, it would be satisfied by the awarding of monetary compensation. [19]
43. In final submissions, Duncan accepted that the amounts advanced by him to Gordon under the Mortgage totalled $58,882.50. The advances were made between 13 November 2002 and 2 July 2004 as partial payment of legal fees incurred by Gordon in connection with the Family Court Proceedings and the Equity Proceedings. However, the primary judge held that Duncan's claim in respect of those advances was released by cl 19 of the Settlement Deed, set out at [50] above.
44. His Honour considered that 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. His Honour concluded, therefore, that Duncan's claim against Gordon's estate in respect of the advances was released by cl 19 of the Settlement Deed. [20]
45. In relation to the claim for unjust enrichment, Duncan asserted that Gordon's estate had been unjustly enriched by his incurring expenses for Gordon, paying debts owed by Gordon, making advances to Gordon, doing work for Gordon and allowing Gordon to agist cattle on Caramba for no fee. Duncan accepted that, for each such claim, he needed to prove that a benefit was obtained by Gordon, that it was obtained at Duncan's expense and that the circumstances were such that it would be unfair, unjust, unconscionable or inequitable for Gordon's estate to retain that benefit without giving restitution to Duncan. [21]
46. The primary judge formulated the question as being whether, notwithstanding that Duncan acted gratuitously, he was 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. The reason he believed he would inherit Salt Glen was that he understood that he had been named as beneficiary under the 2004 Will and believed that the 2004 Will had not been revoked. His Honour found that Duncan performed work for Gordon, paid expenses for him and made Caramba available for agistment gratuitously on the assumption that Gordon would leave Salt Glen to him when he died, and that Duncan's assumption was mistaken. Thus, his Honour held, from September 2007, Duncan laboured under a mistake of fact, namely, that he was the sole beneficiary named in Gordon's last will. [22] Even before 2007, when Gordon revoked the 2004 Will, Duncan's mistaken assumption was one that Gordon encouraged him to adopt. [23]
47. The primary judge found that it was clearly unconscientious for Gordon to continue to accept the benefit of Duncan's services, the use of Caramba and payments made on his behalf and to him, without disclosing that the 2004 Will had been revoked. His Honour found that Gordon knew that Duncan considered himself to be the sole beneficiary of his estate and was aware from Duncan's previous conduct that Duncan thought it unfair if anyone other than he inherited Salt Glen. Gordon knew from Duncan's past actions that Duncan was prepared to walk away if he believed his expectation would not be met. [24]
48. The primary judge dealt with Duncan's claim for restitution on the basis of unjust enrichment under four heads, being:

• reasonable remuneration for services provided to Gordon on Salt Glen;
• agisting Gordon's stock on Caramba without fee;
• paying expenses for Gordon or discharging Gordon's debts; and
• providing Gordon with money. [25]

1. His Honour considered that 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. [26]
2. The single largest item of work carried out by Duncan for Gordon's benefit after October 2004 was the establishment of the water system. The primary judge did not accept that Duncan was entitled to a quantum meruit claim in respect of the work and contribution to materials for the water system. [27] His Honour considered that there was no evidence that Gordon received a substantially greater benefit from the implementation of the water system than did Duncan. His Honour did not consider that it could 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. On the other hand, his Honour did not consider 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. [28]
3. The primary judge declined to allow any part of Duncan's claim for time and money spent on repairing Gordon's farming equipment because it was impossible to say to what extent Gordon was enriched by that work. As indicated above at [84], Duncan took possession of the equipment after Gordon's death and Beverley informed the Court that she would not make any claim against Duncan for the return of the equipment. Therefore, his Honour concluded, it was not possible to say that Gordon's estate was unjustly enriched by the work done by Duncan in repairing farm machinery. [29] However, his Honour concluded that Gordon was entitled to claim on a quantum meruit basis for work done from November 2008 to 19 February 2012, totalling $166,862. That amount was allowed in various amounts under the headings civil, farming, labouring, stock and travel. [30]
4. The primary judge then embarked on a calculation of reasonable agistment fees for the use of Caramba for Gordon's own stock. His Honour held that there was no evidence that the agistment income derived by Gordon from third parties was substantially attributable to agisting stock on Caramba. [31] However, his Honour concluded that Duncan was entitled to reasonable remuneration for making Caramba available to Gordon for the agistment of Gordon's sheep from 1 July 2008, and for the agistment of Gordon's cattle from 11 August to 19 February 2012. His Honour concluded that Duncan was entitled to $50,825.93 for allowing Gordon to agist his stock on Caramba.
5. The primary judge found that 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. His Honour found that those payments were made under a causative mistake of present fact. [32]
6. The primary judge therefore concluded that, in respect of the claim for unjust enrichment, Duncan was entitled to judgment in the sum of $293,071.98 for provision of Caramba for the agistment of stock for Gordon's benefit, for monies paid to Gordon and monies paid on Gordon's behalf and for work done for Gordon's benefit. His Honour found that all such things were done at Gordon's express or implied request. Although they were provided gratuitously, they were provided under causative mistake. [33]

The Appeal

1. Duncan relied on nine grounds of appeal under four heads. The grounds may be restated as follows: Testamentary contract: Grounds 1 and 2: The primary judge erred in failing to find that Gordon was bound not to revoke the 2004 Will and should have found on all of the evidence that Gordon was contractually obliged not to revoke the 2004 Will. Proprietary estoppel: Grounds 3 and 5 The primary judge erred in finding that Duncan would not have continued to provide gratuitous benefits from 1 July 2008 if he had known that he would not be inheriting Salt Glen, that Gordon's financial position improved such that he could have carried on without Duncan's help and by failing to find that Duncan would have acted differently towards Gordon before the financial year commencing 1 July 2008 had he known that he would not be inheriting Salt Glen. The primary judge also erred in finding that it was not reasonable for Duncan to continue, after 2007, to rely on his assumption that he would inherit Gordon's estate, that it was not unconscionable for Gordon to depart from the state of affairs that Duncan assumed would remain, that a remedy that made good Duncan's assumption was not appropriate, that the value of Salt Glen was out of proportion to the value of the services and other benefits provided by Duncan and that giving effect to the prima facie entitlement of Duncan to inherit would exceed what could be justified by the requirements of conscientious conduct. The primary judge should have found that Duncan's assumption that he would inherit Salt Glen was reasonable and that it was unconscionable for Gordon to depart from the position that Duncan was encouraged to assume would remain. Release of claim under mortgage: Ground 6 The primary judge erred in finding that Duncan's claim against Gordon's estate under the November 2002 mortgage was released by cl 19 of Settlement Deed. Unjust enrichment - quantum: Grounds 7 to 9 The primary judge erred in finding that the mistake causing Duncan to pay money, provide services and allow Caramba to be used for agistment, operated from the financial year commencing 1 July 2008, rather than from 29 October 2004. The primary judge erred in finding that Duncan was not entitled to restitution in respect of his work and contribution to materials for the water system on Salt Glen and erred in the calculation of reasonable remuneration for making Caramba available for agistment for Gordon's stock.

Consideration

1. I do not consider that the primary judge made an error in concluding that Duncan and Gordon did not have the intention of entering into contractual obligations at any relevant time. However, his Honour erred in concluding that Gordon was not estopped from revoking the 2004 Will. His Honour also erred in concluding that allowing Duncan to succeed to Gordon's estate would not be the appropriate remedy.
2. In the light of those conclusions, it is not strictly necessary to deal with the remaining grounds. However, I propose to address all of the grounds raised in the appeal.

Testamentary contract

1. Duncan contended that the primary judge ought to have inferred a tacit agreement that obliged him to help Gordon re-establish, maintain and run the operations conducted on Salt Glen and Caramba and obliged Gordon not to revoke the 2004 Will. Duncan contends that the only reasonable explanation for the conduct of Duncan and Gordon at the time was a binding agreement between them. He complains that his Honour focussed on the parties' later conduct rather than their conduct at the time.
2. As a matter of principle, it is possible to infer a real intention, expressed through, or to be found in, a body of conduct, including communications, even if the parties do not consciously advert to, or discuss, some aspect of their relationship, such that they say "we hereby agree to be bound". The essential question is whether the conduct of the parties, including what is said and what is not said, and including the evident commercial aims and expectations of the parties, reveals a manifestation of mutual assent that bespeaks an intention to be legally bound to the essential elements of a contract. [34]
3. A contract may be inferred from the acts and conduct of parties as well as, or in the absence of, specific words of promise. The question is whether the conduct of the parties, viewed in the light of surrounding circumstances, demonstrates a tacit understanding or agreement. However, the conduct of the parties must be capable of proving all of the essential elements of an express contract. [35]
4. Duncan points to conduct on his part and on the part of Gordon that, he says, in the background circumstances, establish mutual assent. He complains that the conduct and circumstances in question were overlooked by the primary judge.
5. First, he says, the complete financial separation of Gordon and Duncan from Beverley, Christopher and Claire, by the operation of the Settlement Deed, had the consequence that Gordon and Duncan would be undertaking farming operations on Salt Glen and Caramba together. Gordon had not been back to Salt Glen for two years prior to the time of the Settlement Deed. He was then 80 years of age and his health was such that he had no prospect of re-establishing, maintaining or running Salt Glen without Duncan. He had no income and no financial capacity to maintain and run Salt Glen and was incapable of physical work. Further, Gordon had been estranged from Beverley and his two other children for some years and no party suggested that any of Beverley, Christopher or Claire was willing to support Gordon financially or with labour or was able to do so.
6. Next, Duncan contended, the work and time involved in re-establishing, maintaining and running the farming operations, which were open-ended, would have been seen as imposing a significant financial burden on him, apart from taking him away from his home and interfering with his usual occupation as a civil engineer. It was inevitable, Duncan contends, that he had to support Gordon financially, since Gordon had no one else.
7. Further, Duncan strongly believed that he should inherit Salt Glen from Gordon because of the work that he had done with little or no remuneration since leaving school in 1979 and because he was the only family member supporting Gordon. Gordon fully understood that. Duncan had left Salt Glen in 1996 because Gordon had gone back on his promise that Duncan would inherit most of the properties. The primary judge found that, while Duncan was loyal to Gordon, he was also dogged in pursuit of what he perceived to be his own rights.
8. Duncan contended that he would not have undertaken the burden of re-establishing, maintaining and running Salt Glen for nothing without his inheritance being assured. Because of the taciturn and undemonstrative character of both Gordon and Duncan, they did not discuss that matter expressly. Nevertheless, Duncan contends, Gordon wanted and needed him for the rest of his life and could not have rebuilt and run the operations without Duncan. It was manifest, Duncan contends, that that was the essence of the bargain between him and Gordon.
9. Duncan also relies on the terms of cl 1(a) of the Settlement Deed, which provided that Caramba and Salt Glen were to remain the properties of Gordon and Duncan "as the titles to those properties presently designate or as they may otherwise agree between themselves". He asserts that the intention on his part and Gordon's part to hold Caramba and Salt Glen together into the future was manifestly clear, such that, for example, neither could be sold without the consent of the owner of the other. That, he says, gave Duncan a degree of control over Salt Glen during Gordon's lifetime.
10. In addition, Duncan says, the release of prospective family provision claims by cl 20 of the Settlement Deed demonstrated an intention on the part of Gordon and Duncan to maintain financial separation from Beverley, Christopher and Claire. Significantly, there was no mutual release between Gordon and Duncan. That, Duncan contends, gives rise to the inference that Duncan alone would inherit Salt Glen.
11. Duncan contends that the alleged testamentary contract was put into effect by Gordon transferring the remaining part of Caramba to Duncan on 29 October 2004 and by making the 2004 Will, which had the effect that Salt Glen would become Duncan's on Gordon's death. Thus, Duncan says, unless the 2004 Will was irrevocable, the consideration being provided by Gordon for what he was to receive from Duncan in the future, potentially for many years, would have been totally illusory. Duncan says, therefore, that a reasonable person in the position of Gordon and Duncan would think that they had reached a concluded bargain that bound Gordon not to revoke the 2004 Will.
12. While the circumstances outlined above are of critical importance in relation to the question of a proprietary estoppel binding Gordon and his estate, I do not consider that they are such as to give rise to an inference that Gordon and Duncan, by their conduct and communications, evinced an intention to be bound by a contractual obligation. In the context of the Settlement Deed, it is difficult to find in cl 1(a) mutual promises between Duncan and Gordon, as distinct from promises between Duncan and Gordon, on the one hand, and Beverley, Christopher and Claire, on the other hand. Clause 1(a) does not, of itself, support such an inference. It provided that Caramba and Salt Glen would remain the property of Duncan and Gordon according to the then registered titles. The most that could be said is that Duncan and Gordon may otherwise agree as to whether Caramba and Salt Glen were to remain as their respective properties.
13. To establish a contract such as that alleged by Duncan, it must be shown that Duncan believed that a contract existed, that his conduct evidenced the contract alleged, that Gordon believed that such a contract existed and that Gordon's conduct also evidenced the alleged contract. It must be possible to infer not merely a common intention or expectation but a concluded bargain between Gordon and Duncan.
14. The fact of financial separation between Beverley, Christopher and Claire, on one side, and Gordon and Duncan, on the other, does not lead inexorably to any conclusion that Gordon would leave Salt Glen to Duncan. In fact, farming operations on Salt Glen and Caramba were conducted separately after 29 October 2004, in the sense that Gordon and Duncan each carried on his own operations on his own property. The fact that Duncan helped Gordon with the farming operations on Salt Glen does not lead to the conclusion that their operations were being conducted jointly. Gordon maintained separate accounts for the farming operations on Salt Glen. Indeed, there was evidence that Gordon used contractors to carry out some work on Salt Glen. Thus, while Gordon may have been 80 years old at the time of the Settlement Deed, he was capable of hiring contractors to do work and did so. He maintained his own farming business on Salt Glen up until 2012.
15. After Gordon made the 2004 Will, Duncan did not ever ask for payment for the work that he did to assist Gordon and did not seek any other assurance from Gordon as consideration for the work that he did in assisting Gordon. On the other hand, in March 1999 he sent to Gordon's accountant the bill for $500k for work done. Beverley contends that Duncan's actions in helping Gordon were as consistent with filial duty as they were with the existence of a contract such as that alleged.
16. Beverley asserts, that while Duncan may have believed that he should inherit Salt Glen, and while it may be the case that he only helped Gordon with Salt Glen after the Settlement Deed was executed because he thought that by doing so he might secure inheritance of Salt Glen, there was no direct evidence that Gordon shared those views. Certainly, there was no evidence that Gordon reached a concluded bargain with Duncan to that effect. On the other hand, while there may have been no direct evidence that Gordon shared those views, an inference to that effect is clearly open.
17. The only express agreement between Gordon and Duncan is to be found in the Settlement Deed. There was certainly no express promise by Gordon to make a will in Duncan's favour or not to revoke any such will if one was made. Gordon made the 2004 Will also and informed Duncan that he had done so. There was no request by Gordon to Duncan at that time to provide him with assistance on Salt Glen and certainly no express promise by Gordon not to revoke the 2004 Will. The communications that occurred on 29 October 2004 do no more than reflect the putting into effect of the arrangements evidenced by the Settlement Deed. So far as Gordon and Duncan were concerned, that was limited to the transfer to Duncan of the part of Caramba that was registered in Gordon's name.
18. The suggestion that Gordon should make a new will on 29 October 2004 came from Mr Butler and not from Gordon. Gordon agreed to Mr Butler's suggestion because he held the view, as he expressed it, that the others had "got more than their share". There was nothing in Mr Butler's evidence to suggest that Gordon made the 2004 Will because of some agreement he had with Duncan. Having regard to Gordon's character as a taciturn man of few words, an inference might well be drawn that Gordon would not have told Duncan about the 2004 Will but for Mr Butler's suggestion.
19. All Gordon did on 29 October 2004, apart from executing the documents necessary to conclude the express promises contained in the Settlement Deed, was to make a new will at Mr Butler's suggestion. There is nothing in Mr Butler's evidence to suggest that, in addition to making the 2004 Will, Gordon was promising not to exercise his testamentary power to revoke that will. Indeed, the making of a new will in 2007 indicates that Gordon believed that his testamentary power remained unfettered. While he did not tell Duncan about the will made in 2007, there is no basis for drawing an inference that he believed he was acting in breach of a contractual obligation in making the will in 2007.
20. While Duncan relies on conduct after 29 October 2004 as evidencing a contractual intention, it cannot be said that his and Gordon's conduct after that time were consistent only with the existence of mutual contractual obligations. Duncan's acceptance that he believed that Gordon could alter the 2004 Will, coupled with the water agreement of 2010, tend to undermine the drawing of an inference that Gordon and Duncan entered into contractual relations of the nature alleged. I do not consider that the primary judge erred in concluding that there was no testamentary contract as alleged by Duncan.

Proprietary estoppel

1. The primary judge found that Duncan's mistake as to his inheriting Gordon's estate was causative of his paying money and providing services and allowing Caramba to be used for agistment, but only from 1 July 2008, when operations on Salt Glen became profitable for Gordon. His Honour also found that Gordon's conduct was unconscionable from September 2007, when he continued to accept benefits from Duncan without disclosing that he had revoked the 2004 Will. Further, his Honour found that Duncan's expectation of inheriting Gordon's estate was encouraged by Gordon before September 2007 and that it was unconscientious for Gordon to have encouraged that expectation before September 2007 without disclosing that Gordon considered himself to be entitled to revoke the 2004 Will.
2. The extent to which it was unconscionable for Gordon to resile from the position expressed from 29 October 2004 may be gauged by considering Duncan's likely response if Gordon had told him at that time that he might revoke the 2004 Will if it suited him. On the evidence as a whole, if Gordon had told Duncan immediately after he made the 2004 Will that he regarded himself as free to revoke the 2004 Will at any time if he wished, there is little doubt that Duncan would not have worked unpaid on Salt Glen, would not have provided Gordon with money and paid his debts, would not have allowed Gordon to use Caramba to agist sheep and cattle without fee and agist sheep and cattle of third parties from whom Gordon would receive income. For the reasons indicated above, the previous reaction of Duncan indicates that any filial duty that he felt would not have resulted in the provision of those benefits to Gordon if he did not feel assured that he would inherit Gordon's estate.
3. The primary judge found that Duncan worked for Gordon on Salt Glen, on average, for 20 hours per week. Duncan made Caramba available for the agistment of Gordon's stock as well as for the agistment of stock of third parties, for which Gordon received payment. Duncan also paid expenses on Gordon's behalf. His Honour found that Duncan did all of those things in the belief that he would inherit Salt Glen and the Water Licence Share. His Honour found that Gordon knew that Duncan expected to inherit Salt Glen and that Duncan continued to act on the assumption that he would inherit Salt Glen. Gordon was aware from Duncan's previous conduct that Duncan thought it unfair if anyone other than he inherited Salt Glen. Gordon knew from Duncan's previous conduct that he was prepared to walk away if he believed that his expectation would not be met.
4. The primary judge also found that Gordon feared that, if he told Duncan in 2007 that he had revoked the 2004 Will, Duncan would not have continued to work on Salt Glen or make Caramba available for Gordon's stock without fee. Further, his Honour found that Duncan acted to his detriment on the assumption, known to Gordon, that he would inherit Salt Glen on Gordon's death. Duncan was significantly influenced to act as he did because of his belief that he would inherent Salt Glen on Gordon's death. His conduct demonstrates that he would not have continued to work on Salt Glen and would not have made Caramba available to Gordon for agistment if he were not to inherit Salt Glen.
5. Thus, Duncan's continued work on Salt Glen, his making Caramba available for agistment of Gordon's stock, his payment of Gordon's expenses and his making payments to Gordon from 1 July 2008 were acts of detriment in which Duncan would not have engaged but for his belief, induced by Gordon, that he would inherit Salt Glen on Gordon's death. The primary judge concluded that it was clearly unconscionable 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 fact that the 2004 Will had been revoked.
6. Despite those findings, the primary judge was not satisfied that, before the financial year commencing 1 July 2008, Duncan would have acted differently had he known that he would not inherit Salt Glen from Gordon. Implicit in that conclusion is that his Honour was satisfied that Duncan would not have acted differently towards Gordon for the first four years after making the 2004 Will if he knew that he would not be inheriting Salt Glen. I consider that that conclusion was erroneous.
7. Before the primary judge, Duncan contended initially, that the proprietary estoppel for which he contended was that founded on Dillwyn v Llewellyn, [36] namely 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. [37]
8. Beverley, on the other hand, contended the correct characterisation of Duncan's claim to the benefit of proprietary estoppel arose from acquiescence in the Ramsden v Dyson [38] sense, rather than encouragement or representation, such that Duncan had to establish an additional requirement that Duncan held a mistaken belief as to his rights and that Gordon knew of that mistaken belief. [39]
9. The primary judge held that Duncan had established that requirement as Gordon knew that Duncan expected that he would inherit Salt Glen and had refused to keep working on Salt Glen in 1996 when told that Salt Glen would not be left to him, but to Gordon's wife and children equally. He found that Gordon's failure to tell Duncan from September 2007 that he had changed his will must have been deliberate and that he must have known that Duncan was continuing to act on the assumption that he would inherit Salt Glen. [40]
10. Having made that finding, the primary judge approached the proprietary estoppel claim on the basis that the same basal principles applied to the cases of proprietary estoppel the parties propounded. There was no challenge to his Honour's approach in this Court, although both parties' submissions had the flavour of a Dillwyn v Llewellyn proprietary estoppel.
11. There being no controversy as to the characterisation of Duncan's proprietary estoppel case, it is sufficient to approach the issue by reference to the basal principles for a proprietary estoppel as the primary judge did.
12. The purpose of the doctrine of estoppel is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to an assumption upon which the former acted or abstained from acting. The detriment or harm from which the law seeks to give protection is the detriment or harm that would flow from the change of position if an assumption that led to that position is abandoned. So long as the assumption is adhered to, the party who altered her or his situation upon the faith of the assumption cannot complain. The complaint is that, if afterwards the other party makes a different state of affairs the basis of an assertion of right against her or him, the original change of position will operate as a detriment. If the action or inaction of the person complaining is such that, if the assumption upon which she or he proceeded was shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of that person and the opposite party, the consequence would be that the original action or inaction is a source of prejudice. [41] That is to say, the fundamental purpose of equitable estoppel is to protect a person who acts to her or his detriment from the detriment that would flow from resiling from a promise or representation. Accordingly, the relief granted may require the taking of active steps by the representor or promisor, including the performance of the promise or representation or the performance of the expectation generated by the promise or representation. [42]
13. It is conduct of a promisee or representee that is induced by reliance on a promise or representation by a promisor or representor that is the foundation for equitable intervention. Reliance is a fact to be found. It is actual reliance by the promisee or representee on the state of affairs so created, that gives rise to an equitable estoppel, by dispensing with the need for consideration, if a promise or representation is to be enforceable as a contract. It is not the breach of a promise or non-fulfilment of a representation but the responsibility of the promisor or representor for the detrimental reliance by the promisee or representee that makes it unconscionable for the promisor or representor to resile from her or his promise or representation. [43]
14. The question is not whether the promisee or representee acted, or desisted from acting, solely in reliance on the promise or representation of the other party. Rather, the question is whether the conduct of the representee or promisee was so influenced by the promise or representation that it would be unconscionable for the promisor or representor thereafter to enforce her or his strict legal rights. It is sufficient for the promisee or representee to show that the promise or representation was a significant factor taken into account by the promisee or representee when deciding whether to act or not to act. If the belief of the promisee or representee is a contributing cause of the conduct of the promisee or representee, that will be a sufficient connection between the assumption induced by the belief and the detriment. [44] The question is whether the promisee or representee would have committed to and continued in particular conduct that had a detrimental effect on the promisee or representee if the relevant promise or representation had not been given to the promisee or representee by the promisor or representor. [45]
15. A promisee or representee has the onus of establishing that she or he believed the promise or representation made by the promisor or representor and of establishing that, on the faith of that belief, the promisor or representee took a course of action or inaction that would turn out to be to her or his detriment, were the promisor or representor to be permitted to depart from the promise or representation. The promisee or representee does not need to establish that the belief to which she or he was induced by the promise or representation was the sole or predominant cause of the course of action or inaction engaged in by her or him. It is only necessary to establish that the belief was a contributing cause. [46]
16. The primary judge held that, for Duncan to establish detrimental reliance on the assumption and belief that Gordon encouraged, namely that he would inherit Gordon's estate on his death, it was necessary for Duncan to show that he would have acted differently if Gordon had not encouraged him in that assumption and belief. The test is not whether Duncan would have acted differently if Gordon had not encouraged his assumption and belief but whether he was influenced, in a significant or material way, such that it was a contributing cause to his conduct or made a difference to his action or inaction, so that it would be unconscionable for Gordon to resile from the assumption and belief that he induced in Duncan.
17. Beverley contends that the critical point of principle is that the onus of proof of reliance rests on Duncan and does not shift to her, in her capacity as Gordon's legal personal representative. That is to say, she contends, Duncan had the onus of showing that his actions from 29 October 2004 were based on his reliance on some promise or representation by Gordon, not merely on the fact that Gordon had made the 2004 Will in Duncan's favour. He must, Beverley contends, point to reliance upon a representation or promise made by Gordon that he would not revoke the 2004 Will. Accordingly, Beverley contends, it was necessary for Duncan to prove that the action or inaction that he relies on as giving rise to the estoppel was engaged in by him in reliance on the alleged promise or representation made by Gordon and it was incumbent upon Duncan to show that the action or inaction relied upon as giving rise to the alleged estoppel was not action or inaction that he would have engaged in in any event, even if the alleged promise or representation had not been made.
18. The primary judge referred to Duncan's own evidence that he was not sure what he would have done if he had not held the belief that he would inherit Salt Glen from Gordon. That is to say, Beverley contends, his Honour was not satisfied that Duncan had discharged the onus of demonstrating that his action after 29 October 2004 was based upon his reliance upon some promise or representation made by Gordon.
19. Beverley also contends that Duncan's contentions fail to address the requirement to prove some promise or representation on the part of Gordon that was sufficient to ground an estoppel in the first place. A party claiming the benefit of an estoppel must establish a promise or representation by the party said to be bound that conveys the relevant meaning in clear and unambiguous terms. [47] Further, the conduct of the party seeking to establish an estoppel, in relying on the alleged words or conduct said to constitute a promise or representation, must be reasonable. [48] In addition, the promisor or representor must be shown to have known or intended that the promise or representee or would act or abstain from acting in reliance upon the words or conduct said to constitute the promise or representation. [49]
20. Beverley contends that the only conduct on the part of Gordon said to constitute a promise or representation was the statement made by Mr Butler to Duncan over the telephone on 29 October 2004 that Gordon had changed his will "so that everything goes to you", coupled with Gordon's silence as to that matter in the period from that time until about mid-2007. Duncan did not say that Gordon made any promise or representation to him to that effect. Rather, Duncan said, he assumed that, after the Settlement Deed had been executed, Gordon would leave Salt Glen to him when he died because of all that they had been through together. Duncan said his assumption was based on the terms of the Settlement Deed, particularly cl 1(a). Beverley contends that cl 1(a) does not provide a reasonable basis for the assumption made by Duncan. Further, the other parties to the Settlement Deed had an input into its terms and, she contends, cl 1(a) should not be understood as a representation or promise by Gordon alone.
21. Beverley contends that Duncan's evidence in cross-examination demonstrates that he knew that Gordon could revoke the 2004 Will at any time and that Duncan's behaviour in 2007 was consistent with that concession. That is to say, Beverley contends, there is a real and significant difference between acts done in reliance on a clear and unambiguous promise or representation that some benefit or right will be conferred by the promisor or representor on the promisee or representee in the future if the promisee or representee does certain things, on the one hand, and acts done by someone who knows or believes that he or she will receive some benefit in the future, such as a gift under a will, being acts that are carried out in the hope that the promisor or representor will continue to favour the promisee or representee as a result of carrying out those acts. Beverley contends that Duncan's actions after 29 October 2004 fall into the second category, not the first. If that contention is correct, it must follow that it cannot be said that Duncan's conduct was so influenced by the promise or representation that it would be unconscionable for Gordon thereafter to enforce his strict legal rights.
22. Beverley contends that the water agreement of 4 April 2010 reinforces that conclusion. Duncan said that the primary reason for his entering into the water agreement was to obtain a government subsidy, which, in the events that occurred, was never applied for. However, Beverley contends, Duncan in fact obtained from the water agreement a guaranteed supply of water to Caramba for 50 years. That raises the question, she says, of why Duncan needed such an agreement for 25 years with an option for a further 25 years if he held the strong view that he would inherit Salt Glen on Gordon's death.
23. As indicated above, [50] the primary judge was not satisfied that, before the financial year commenced 1 July 2008, Duncan would have acted differently from the way he acted had he known that he would not inherit Salt Glen from Gordon. On the other hand, his Honour considered that the evidence indicated that, if Duncan had not believed that he would inherit Salt Glen, he would have ceased, at some time in 2008, doing work for Gordon and paying expenses on Gordon's behalf and making Caramba available for agistment of Gordon's stock. His Honour accepted that it was impossible to say exactly what would have happened or when it would have happened, but was satisfied that, from 1 July 2008 at the latest, Duncan would not have continued to provide gratuitous benefits to Gordon if he had known that Gordon had ceased to be loyal to him by not naming him as the sole beneficiary of his estate. His Honour found that 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 Gordon would not have made if he had not believed that he would inherit Salt Glen. Beverley accepts that this Court should accept those findings.
24. Duncan complained about the conclusion of the primary judge that it was only from the time when Salt Glen resumed producing positive income that Duncan relied upon his assumption that he would inherit Gordon's estate. Duncan contends that the inference drawn by the primary judge, to the effect that Duncan would not have acted differently between 2004 and 2008, is not supported by the evidence. When it was suggested to Duncan in the course of cross-examination that the fact that Gordon allowed him to continue to work on Salt Glen had "nothing to do" with Duncan's belief that Gordon had made a will leaving everything to him, his response was "I think it had everything to do with it. He said in re-examination that, if he was not going to be the ultimate owner of Salt Glen, he could not have afforded to keep working there and that, if Gordon did not want it to end up that way, he should not have let him work there.
25. Duncan asserts that, if he did not hold the belief after October 2004 that he would inherit Gordon's estate, he would have acted differently. It is not fatal to Duncan's case that he was not able to articulate precisely how he would have acted differently in different hypothetical circumstances. The primary judge accepted that Duncan was circumspect and addressed fairly the dilemma that he would have found himself in had he understood that he was not inheriting Salt Glen. Duncan's evidence necessarily demonstrates that he would have conducted himself in a materially different way. It is not fatal to Duncan's case that he was unable to state categorically, with the benefit of hindsight, how he would have acted differently. [51]
26. Further, it was not put to Duncan in cross-examination that he would not have acted differently towards Gordon or would have acted in the same way after October 2004 if he had known from that time that he would not be inheriting Salt Glen. His response in cross-examination that he thought that inheriting Salt Glen "had everything to do with it", that is to say, with assisting Gordon, was not challenged in cross-examination. Duncan was not cross-examined to distinguish work said to have been done "as a filial duty" from the work that was done because he expected to inherit Salt Glen. It was never put to Duncan that he continued to work for Gordon because he felt a filial duty to do so, as the primary judge found. Nor is it clear what the content of such a duty would be. Such findings should not have been made against Duncan's interest in circumstances where he was not given a fair opportunity to address such issues. [52]
27. The primary judge's conclusion that he was not satisfied that, before the financial year commencing 1 July 2008, Duncan would have acted differently from the way he did had he known that he would not inherit Salt Glen from Gordon, is premised on Gordon's tax returns and the net profit position stated at the end of each financial year up to 30 June 2010. That, however, ignores the fact that the profitable results of Gordon's operations after 30 June 2008 would not have occurred if Duncan had not believed, from October 2004 onwards, that he would inherit Salt Glen. Gordon's improved financial position after 30 June 2008 was founded on Duncan's unremunerated work and the financial support that he provided to Gordon with the agistment income from Salt Glen and Caramba, assistance with his expenses and money to make ends meet. The finding that Gordon's financial position improved by the year ended 30 June 2009, such that he could have carried on without Duncan's help, overlooks entirely the fact that Gordon would not have generated that income without Duncan's work and financial support.
28. Duncan's earlier actions demonstrate, as his Honour found, that Duncan was dogged in his pursuit of what he perceived to be his rights and thought it unfair if anyone other than he inherited Salt Glen. The notion that he would have engaged in all of the acts of detrimental reliance from the outset and over the following years if he had known that he would not inherit Salt Glen is contrary to the evidence.
29. The primary judge found that Duncan's continued reliance upon the assumption and belief that he would inherit Gordon's estate was not reasonable. That finding is clearly affected by the errors involved in the finding just dealt with. It is also at odds with his Honour's finding that Duncan was "significantly influenced" by his belief that he would inherent Salt Glen and the finding that Gordon deliberately concealed the revocation of the 2004 Will in 2007. However, his Honour found that, in 2007, after some rapprochement between Gordon and the other members of his family, it became unreasonable for Duncan to assume that Gordon would not revoke the 2004 Will. Those events resulted in Duncan not speaking to Gordon for only a month or so because he was not happy about Gordon socialising with other members of the family.
30. Nevertheless, Duncan thought that Gordon would "stick with" him in the light of all that they "had been through together". In the circumstances, it was entirely reasonable for Duncan to assume that Gordon would "stick with" him, particularly where that was an assumption that Gordon encouraged Duncan to adopt.
31. An uncommunicated change of position by a promisor or representor cannot cause the continued reliance by a promisee or representee to become unreasonable. That Gordon deliberately concealed the revocation of the 2004 Will supports a finding that it was reasonable for Duncan to continue to assume that the 2004 Will would remain until Gordon died. The primary judge erred in concluding that Duncan's continued reliance on his assumption and belief was unreasonable.
32. The primary judge concluded that much of the work done by Duncan for Gordon's benefit should not be regarded as a detriment to Duncan because the work involved with the installation of the water system involved no relevant detriment. From 2005 to 2008, Duncan did all the survey and planning work for the water pipeline and installed the system from the bore on Salt Glen across the paddocks of both Salt Glen and Caramba. The system was quite an involved project and used about 20 km of pipework. It was configured so that both Caramba and Salt Glen could operate as one farm. For example, the water pipeline from the northern paddock in Caramba was run easterly into the north-eastern part of Salt Glen. Although Caramba received the benefit of bore water from Salt Glen, Duncan installed and maintained the water system for the primary purpose of Gordon being able to run stock and to agist stock for third parties on both Salt Glen and Caramba and earn all the income generated from that enterprise. The work in question clearly improved Salt Glen and provided an income for Gordon, as Duncan intended.
33. Duncan gave evidence, which was not challenged, that the whole idea of the water scheme was to upgrade the water supply for Salt Glen and Caramba so Gordon could run more livestock in his own interest. Duncan said that he did not want Gordon to be old and poor, so he set everything up so that Gordon could be well off in his old age. Duncan could work and get another income so he did not need to take anything off the farming operations. Duncan said that the object was to supply water to both Salt Glen and Caramba so that more stock could be run and Gordon could get more money. Duncan would not derive any benefit from the water system on Caramba if the use of bore water from Salt Glen was denied. He did not receive any corresponding benefit from the water system on Salt Glen, although he accepted that eventually he would be able to benefit from the work as well, because he would inherit it all. I consider that the finding that the work involved in establishing the water system involved no relevant detriment to Duncan was erroneous.
34. Beverley contends, on the other hand, that the water agreement had the effect of guaranteeing that Duncan would be able to carry on profitable farming operations on Caramba for 50 years from April 2010. She contends that while it is true that Duncan carried out the work and paid for the materials to install the water system and that the water system was laid out on both Salt Glen as well as Caramba, the benefit to Duncan to potentially 50 years of profitable farming on Caramba outweighed the detriment to him of the work he carried out on Salt Glen, some of which was solely for his benefit.
35. It is clear that Duncan would not have carried out the work in building the water system in the way that he did had he been aware that Gordon regarded himself as free to revoke the 2004 Will. The water agreement was brought into existence with the intention of applying for a government subsidy, albeit the application never went forward. There was no suggestion that Duncan entered into the water agreement or persuaded Gordon to do so to ensure that Duncan would have the benefit of it if he did not inherit Salt Glen. If he inherited Salt Glen, as he expected, the water agreement would be irrelevant. There can be little doubt that Gordon benefitted from the water system by reason of the advantages that it gave to Salt Glen.
36. The primary judge held that it was clearly unconscionable for Gordon to continue to accept the benefit of Duncan's services, the use of Caramba and payments made on his behalf and to him, without disclosing the revocation of the 2004 Will. His Honour found that Gordon knew that Duncan considered himself to be the sole beneficiary of Gordon's estate and that Gordon was aware from Duncan's previous conduct that he thought it unfair if anyone other than he inherited Salt Glen. His Honour found that Gordon knew from Duncan's past actions that Duncan was prepared to walk away if he believed his expectation would not be met. His Honour fell into error by finding that Duncan's continued reliance upon his assumption that he would inherit Gordon's estate was not reasonable. It was unconscionable for Gordon to depart from the state of affairs that Duncan assumed would obtain.
37. In my view, Gordon was estopped from 2004 from departing from the representation he made to Duncan that he would inherit Salt Glen, a representation upon which Duncan continuously acted to his detriment and from which he was not disabused until February 2012, shortly before Gordon's death.

Proportionality

1. There may be circumstances in which the potential damage to an allegedly estopped party is disproportionately greater than any detriment that would be sustained by the other party, to the extent that good conscience could not reasonably be seen to be precluding a departure from the assumed state of affairs if adequate compensation were made or offered by the allegedly estopped party for any detriment sustained by the other party. [53] If a person is induced to make a relatively small, readily quantifiable monetary outlay on the faith of another person's assurances, it might not be unconscionable for the second person to resile from her or his assurances to the first person on condition that she or he reimburse the first person for the relevant outlay. However, where the detriment suffered is of a kind and extent that involves life changing decisions and irreversible consequences of a profoundly personal nature, beyond the measure of money, it may be that the equity raised by the promisor's conduct can only be accounted for by substantial fulfilment of the assumption upon which the promisee's actions were based. [54]
2. The primary judge considered that, even if he had concluded that it would be unconscionable for Gordon to resile from the state of affairs constituted by the 2004 Will, to require Beverley to hold Salt Glen and the Water Licence Share on trust for Duncan would be out of proportion to the value of the services and other benefits that Duncan provided to Gordon after 2004. I consider that his Honour erred in relying on the estimated value of Salt Glen for the purpose of the grant of probate of the 2012 Will in determining proportionality. There was no reference, in Beverley's submissions to his Honour, either to the value asserted for the purpose of the probate application or any proportionality of relief argument based on such values.
3. Beverley contends that the onus lay with Duncan to prove the actual detriment that he alleges that he suffered. She asserts that Duncan obtained the benefit of a 50 year water agreement in favour of Caramba in circumstances where Caramba has no other source of water. She asserts that Duncan did not show that the detriment he suffered from providing assistance to Gordon outweighed the benefit that he will derive from the water agreement of 2010.
4. Beverley asserts that that evidence shows that Duncan acted to his detriment in some ways, by performing work on Salt Glen solely associated with Gordon's farming activities on Salt Glen, by providing Gordon with financial assistance from time to time and by permitting Gordon to agist stock on Caramba without charge. However, she asserts, the evidence demonstrates that Duncan also acted for his own benefit in some of the work that he did, particularly in constructing the water system from the bore on Salt Glen and by using it. He also retained valuable farming equipment belonging to Gordon.
5. The principle of proportionality applies only in unusual cases where proprietary relief would be out of all proportion to the detriment. The proper measure of relief in a case where the detriment to a promisee or representee is something substantial is performance of the promise or representation. The detriment or harm required to ground an estoppel can be any material disadvantage, so long as it is substantial. It need not be quantifiable in the same way as an order for damages. [55] Detriment is not a narrow or technical concept and need not be a quantifiable financial detriment so long as it is something substantial. The evaluation of the substantiality of the detriment must be approached as part of a broad inquiry as to whether repudiation of a promise or representation is or is not unconscionable in all the circumstances. [56]
6. It is not necessary to mould a remedy in the case of equitable estoppel to reflect the minimum relief necessary to remove the detriment. [57] On a fair view of the evidence before the primary judge, it would not be wholly inequitable or unjust to make good the assumption and belief on which Duncan relied for nearly eight years.
7. The primary judge erred in failing to determine that Duncan's work on Salt Glen and his financial support to Gordon over seven years was substantial and in evaluating the detriment on the basis of accounting evidence led in support of the alternative quantum meruit claim. Evaluating detriment in proprietary estoppel is an entirely different task from that of evaluating restitution in a quantum meruit claim. It is to be evaluated as the opportunity cost to the promise or representee in continuing to rely on the relevant promise or representation. [58]
8. Detriment for the purposes of determining the appropriate relief in the case of proprietary estoppel should not be evaluated as the cost to the promisor or representor in obtaining similar services to those provided by the representee or promisee. Duncan's detrimental reliance was very significant to him and substantial. The detriment that he suffered was of a kind and extent that involved life changing decisions and irreversible consequences of a profoundly personal nature, beyond the measure of money.

Release of claim under mortgage

1. The primary judge erred in his construction of cl 19 of the Settlement Deed in holding that the loans and advances made by Duncan to Gordon for costs in connection with the Family Court Proceedings and the Equity Proceedings constituted "claims, actions, suits, demands, costs, damages or expenses … by reason of or arising directly or indirectly … out of claims made in" those proceedings. I consider that, on its proper construction, cl 19 of the Settlement Deed does no more than release claims made in those proceedings or claims arising out of or in connection with claims made in those proceedings. It should not be construed as extending to advances made against Gordon and Duncan or to assist in the payment of costs incurred in the prosecution of the claims made by Gordon and Duncan in those proceedings. I do not consider that such advances are claims arising out of or in connection with the claims actually made in the proceedings. However, the matter becomes irrelevant in the light of the conclusion reached in relation to the estoppel.

Unjust Enrichment - Quantum

1. These grounds do not arise if Duncan is successful on either the testamentary contract contention or the proprietary estoppel question. They are irrelevant in the light of the conclusion reached in relation to the estoppel. However, it appears that his Honour may have overlooked some of the evidence in calculating reasonable remuneration for agistment of Gordon's sheep on Caramba from 1 December 2005. The parties agreed on a calculation of reasonable remuneration for agistment that would increase the judgment sum for unjust enrichment by $77,681.97 plus interest. The calculation is set out in Schedule 1 to these reasons.

Conclusion

1. For the reasons indicated above, I consider that the appeal should be allowed. The orders made by the primary judge should be set aside and, in lieu of those orders, orders should be made declaring that Beverley holds the right, title and interest of Gordon in Salt Glen and in the Water Licence on trust for the Duncan absolutely and requiring Beverley to transfer those interests to Duncan. Beverley should pay Duncan's costs of the proceedings at first instance and of the appeal. The parties should bring in short minutes to give effect to those orders.
2. That leaves the question of whether Beverley's costs, including the costs that she has to pay Duncan, should be paid out of Gordon's estate. That may depend upon the extent to which the estate has assets beyond Salt Glen and the Water Licence Share. The appropriate course is to direct that the parties within 21 days make such submissions in writing as they wish as to that question.

SCHEDULE 1 Agistment of Gordon's sheep on Caramba from 1 December 2005 1/12/2005 3,336 (2,636 sheep + 700 lambs) 1/7/2008 1,202 sheep (as per tax returns) 1/7/2009 700 sheep 1/7/2010 1,633 sheep October 2011 2,946 sheep (shearing invoice) Average No: 1,963 sheep (1,551 sheep and 412 lambs) Thus, the calculation is: (1,551 sheep x $0.45 x 323 weeks = $225,437.85) plus (412 lambs x $0.10 x 323 weeks = $13,307.60) x 0.5 = $119,372.72 The judgment sum would be increased on this scenario by $77,681.97 plus interest.

Endnotes

1. Priestley v Priestley [2016] NSWSC 1096 at [8]-[9] ('Priestley v Priestley').
2. Ibid at [50].
3. Ibid at [101].
4. Ibid at [105].
5. Ibid at [108].
6. Ibid at [117].
7. Ibid at [118].
8. Ibid at [119]. See also Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 at [58]; [71]-[73] (per French CJ, Kiefel, Bell and Keane JJ); [90]-[93] (per Gageler J) ('Sidhu v Van Dyke').
9. Priestley v Priestley at [137].
10. Ibid at [138].
11. Ibid at [141].
12. Ibid at [142].
13. Ibid at [143]-[147].
14. Ibid at [150].
15. Ibid at [152].
16. Ibid at [153].
17. Ibid at [154].
18. Ibid at [155].
19. Ibid at [157].
20. Ibid at [159]-[160],
21. Ibid at [162]-[163].
22. Ibid at [168]-[169].
23. Ibid at [171]-[172].
24. Ibid at [173].
25. Ibid at [174].
26. Ibid at [176].
27. Ibid at [177]-[178].
28. Ibid at [179].
29. Ibid at [180].
30. Ibid at [184]-[185].
31. Ibid at [186].
32. Ibid at [198].
33. Ibid at [199].
34. Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [369] per Allsop J (Drummond and Mansfield J agreeing).
35. Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-118 per McHugh JA (Hope and Mahoney JJA agreeing).
36. (1862) 4 De GF & J 517; 45 ER 1285.
37. Priestley v Priestley at [106].
38. (1866) LR 1 HL 129.
39. Priestley v Priestley at [107].
40. Ibid at [108].
41. See Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674-5; [1937] HCA 58 per Dixon J.
42. See Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 at [6], [40]-[48] per Gleeson CJ, McHugh, Gummow, and Callinan JJ.
43. Ibid at [72] per French CJ, Kiefel, Bell and Keane JJ, quoting Amalgamated Investment & Property Co Ltd (In liq) v Texas Commerce International Bank Ltd [1982] QB 84 at 104-5 per Goff J.
44. Sidhu v Van Dyke at [73] per French CJ, Kiefel, Bell and Keane JJ, citing Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 at 735; [1935] HCA 33 per Rich, Dixon and Evatt JJ.
45. Sidhu v Van Dyke at [76] per French CJ, Kiefel, Bell and Keane JJ.
46. Ibid at [90] per Gageler J citing Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 at 735; [1935] HCA 33 per Rich, Dixon and Evatt JJ.
47. Legione v Hately (1983) 152 CLR 406 at 435-7; [1983] HCA 11 per Mason and Deane JJ.
48. See Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2010] NSWSC 776 at [42] per Pembroke J; Re Motasea Pty Ltd [2014] NSWSC 69 at [25] per Black J.
49. Franks v Equitiloan Securities Pty Ltd [2008] NSWSC 33 at [72] per Brereton J and see generally Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2011] NSWCA 149 at [9] per Macfarlan JA (Campbell and Young JJA agreeing).
50. At [83].
51. See Sidhu v Van Dyke at [95] per Gageler J.
52. See Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134; [1999] FCA 773 at [51] per curiam (Lee, Hill and Sundberg JJ); Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 at [69] - [72] per Heydon, Crennan and Bell JJ.
53. See Commonwealth v Verwayen (1990) 170 CLR 394 at 441; [1990] HCA 39 per Deane J.
54. See Sidhu v Van Dyke at [85] per French CJ, Kiefel, Bell and Keane JJ.
55. See Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 at [147] per Bathurst CJ (McColl and Meagher JJA agreeing) ('Ashton v Pratt').
56. See Gillett v Holt [2001] Ch 2010 at 232 (D); [2000] 3 WLR 815 per Walker LJ (Waller and Beldam LJJ agreeing).
57. See Ashton v Pratt at [142] per Bathurst CJ (McColl and Meagher JJA agreeing).
58. See principles cited in relation to Sidhu v Van Dyke above at nn 8, 44-6, 51, 54. 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: 27 June 2017