Mona: 'We won't change it, we have given our word. What more can you want. You won't get anything else.'
160 Between mid 2000 and late 2002 there were about 9 or 10 conversations between Mona and I or between John and Mona and I in which I again asked for a succession plan to be put in place and in which Mona said words to the effect:
'We have shown you our wills. That is your security. We won't do anything else.'"
37 From about March 2001 differences arose between Wayne and his wife on the one hand and John, Mona and Greg on the other over numerous matters including a succession plan under which ownership of the properties and the farm enterprise would pass to Wayne and Greg. It is unnecessary to refer to the details. It is sufficient to note that on 20 July 2001, over Wayne's opposition, the situation had developed to the point where John, Mona and Greg voted to sell the properties.
38 On 6 September 2001 Wayne caused a caveat to be lodged over the properties in which he claimed an equitable estate in fee simple as a tenant in common to the extent of one half share of the land. The facts relied upon, so far as are relevant, were stated to be:
"An equitable estate in fee simple as a tenant in common to the extent of one half share pursuant to agreements made orally between the Registered Proprietor, its directors and shareholders John Percival Kerr, Mona Kerr, Gregory Kerr and the Caveator, firstly, in about 1979 and to the effect that property described (… 'Billabidgee') was being purchased for farming in the beneficial ownership of John Percival Kerr, Mona Kerr, Gregory Kerr and the Caveator and secondly, the agreement made orally between those parties in about 1985 to the effect that the property described (… 'Warrawool') was being purchased for Gregory Kerr and the Caveator, alternatively the aforesaid equitable interest as a beneficiary under a constructive trust arising from those agreements, the common intention and understanding of those parties, the Caveator's work and capital contributions to the Land and farming enterprise to his detriment in reliance on those agreements, intentions and understandings to the knowledge of the Registered Proprietor, John Percival Kerr, Mona Kerr and Gregory Kerr, alternatively the said equitable interest arising under the doctrine of proprietary estoppel based upon those facts, alternatively an equitable charge over the Land to the value of the Caveator's contributions arising under that doctrine and based upon those facts."
39 On 12 October 2001 the property was put up for auction but no bids were received.
40 Subsequently, attempts were made to resolve the differences between family members, but without success.
41 On 3 December 2002 Mona executed a will which, subject to a gift to her granddaughter, and to the payment of debts, expenses and duties, left her estate to John provided he survived her for a period of 30 days failing which the estate was to pass to Wayne, Gregory and Barry in equal shares as tenants in common. John's evidence (T pp 132, 133) was that it was likely he made a will on the same date in similar terms.
42 On 23 April 2003 Wayne and his family left their home at Towool Cottage on "Billabidgee" to live elsewhere. Since then he has taken no part in the conduct of the farming business.
Wayne's case
43 As to the interests in "Billabidgee", Wayne claims that he and Greg each presently have a 37.5 percent interest in the property in addition to a 12.5 percent interest subject to a life interest of John. As to the interests in "Warrawool", Wayne claims that he and Greg each presently have a 50 percent interest in the property.
44 I turn first to the "Billabidgee" claim. It is submitted that the discussion in September 1979 in which they decided to buy the property resulted in the common intention, and represented, that John, Mona, Wayne and Greg would each have a one quarter share interest, and that upon the death of a parent one half of that parent's share would pass to each of Wayne and Greg, the proposition being that each parent's share was for life only. Thus it was put that, upon Mona's death, Wayne and Greg became entitled to one half of her interest so that each now has a 37.5 percent interest in the property, and become entitled to the same division of John's share when he dies.
45 It was submitted that the common intention and representation to this effect is evidenced in the conversations and discussions set out in Wayne's affidavit of 21 September 2005 (particularly paras 36-48, 53, 55, 56) and in his oral evidence, with which John, in cross-examination, substantially agreed, as did Greg to the extent his recollection allowed. Reliance was also placed on the wills of John and Mona made on 13 January 1996 and 25 September 2000. I understand that Wayne acknowledged that provision should be made for Barry to receive the sum of $100,000 from his portion of John's share.
46 I turn now to the "Warrawool" claim. For Wayne it was submitted that his evidence of the conversations between about 8 February and 20 March 1985 (affidavit 21 September 2005 paras 60-62, 65, 66, 82) demonstrate the common intention and representation to the effect that "Warrawool" would be bought for Wayne and Greg in which each was to have a one half beneficial interest to be held by the first defendant as a safeguard against claims arising from future divorce. It was put that statements, for example, by John (affidavit para 61): "By buying this place we will have a much bigger farm and a better future for Greg and you; you will have a liveable area each", and by Mona (affidavit para 68): "The land is for Greg and you. Putting the land in the name of the landholding company is to safeguard Greg and you from possible future claims in the event of divorce" clearly represented that "Warrawool" was purchased for Wayne and Greg in equal shares and would be held by the first defendant in trust for them as tenants in common in equal shares.
47 It was put that the "Warrawool" conversations should be understood in the context of a common concern that if Wayne and Greg were to have a secure future it was necessary to buy more land for them, in addition to the interests which they shared with their parents in "Billabidgee". It was argued that as the underlying purpose of the purchase of "Warrawool" was for Wayne and Greg it was consistent with what was said that from the time of its purchase it was intended that they should hold it in equal shares, and that neither John nor Mona were to hold any beneficial interest in it at all. It was submitted that the fundamental distinction between the family arrangement under which each property was bought was that "Billabidgee" was bought for all of John, Mona, Wayne and Greg whereas "Warrawool" was bought for Wayne and Greg only.
The defendants' case
48 As to "Billabidgee", the defendants accepted that the property was purchased for John, Mona, Wayne and Greg in equal one quarter shares, and was held in the name of the first defendant to protect the sons from a divorcing wife.
49 However, the defendants submitted that there was nothing in the relevant conversations which indicated that the parties had turned their minds to the question as to what was to happen to the share of a parent on his or her death, or which established a common assumption that the parents were to provide for their shares to pass to the sons in their wills. Although it was accepted that it was always intended that upon the death of the surviving parent Wayne and Greg would have the shares of the parents in the property, it was denied that it was the common understanding that each parent was bound to leave his or her share to them and was not free to leave it to the surviving parent. In support, reference was made to Mona's will of 15 July 1985, the terms of which were said to be inconsistent with the intention or understanding for which Wayne contended.
50 Furthermore, it was put that it was relevant that at the time of the "Billabidgee" conversations John and Mona were in their early 40s, happily married, living and working together, from which it may be inferred that, absent clear evidence to the contrary, it was contemplated that each would leave his or her estate to the other to better secure the retirement of the survivor.
51 Thus for the defendants it was submitted that it was consistent with the "Billabidgee" arrangement that Mona should have left her share to John in her will of 3 December 2004. It was put that having regard to all of the circumstances it could not be said that the statements and representations relied upon by Wayne were sufficient to establish his claim to a present entitlement to a one half interest in Mona's share.
52 As to "Warrawool" it was submitted that there was no evidence of a common intention or assumption that it was to be held on a different basis to "Billabidgee". It was put that nothing is to be found in the relevant conversations, taken with regard to the surrounding circumstances in which they took place, which indicates with sufficient clarity and unambiguously that from the outset Wayne and Greg were to own it in equal shares to the exclusion of the parents.
53 Reliance was put on the undisputed evidence that it was always intended that "Warrawool" would be held by the same company as "Billabidgee", and would be run with it, and that all the farming business was conducted upon both properties as if they were one, and that the approach of the parties to the business was that they were in it together on an equal basis. That is to say, the probability is that the parties had the same intention and acted upon the same assumptions when they bought "Warrawool" as they had and did when they bought "Billabidgee".
54 It was submitted that the evidence as to the manner in which the parties conducted themselves continuously over many years weighed strongly against Wayne's claim that "Warrawool" was bought and held in a substantially different way to "Billabidgee". Had it been intended that "Warrawool" was bought for the sons alone it would be reasonable to expect that an appropriate arrangement would have been made to identify and secure their interests accordingly. The fact that this did not happen is an indicator that there was no intention that this property would be held only for them and differently to "Billabidgee".
55 The defendants also made a general submission that evaluation of Wayne's evidence of the conversations referable to both properties should be undertaken with great caution having regard to the lapse of time between the times of the conversations and his first attempt to recall them when he saw his solicitor in about September 2001 and caused the caveat to be lodged. It was relevant to take into account that the preparation of Wayne's affidavit of 21 September 2005 was based upon his recollection of events which had taken place many years in the past unaided by contemporaneous notes, and that in cross-examination he accepted that the words of the conversations as set out in the affidavit were not those actually spoken at the time, and that he had engaged in a process of reconstruction as to when and by whom words were said at various times.
Principles
56 The issues left for determination are the extent of Wayne's beneficial interests in "Billabidgee" and "Warrawool" at the present time. The task for the Court is to ascertain whether the evidence of the conversations and events relied upon establish, or enable it to be inferred, that it was the common intention or representation that the extent of his interests should be as he claims them to be.
57 The circumstances in which a court of equity will intervene to declare the existence and extent of a beneficial interest in property were considered in Green v Green (1989) 17 NSWLR 343 in which, with reference to Grant v Edwards [1986] Ch 638, Gleeson, CJ said (pp 355, 356):
"Addressing the question of the quantification of the plaintiff's right, his Lordship pointed out that even after it has been established that the parties had a common intention that both should have a beneficial interest in the said property and that the claimant has acted to his or her detriment there will still remain a question as to the extent of the claimant's beneficial interest. Here again, if contributions have been made they may be of importance in the resolution of that question. Even in a case where a court can infer an actual intention to share ownership of real estate it is, of course, extremely rare that the parties will be people of such sophistication that they advert to or contemplate some particular form of legal title. Thus the court may have to resort to the application of such principles as that expressed in the maxim 'equality is equity': Gissing v Gissing (at 908) per Lord Diplock. The Vice-Chancellor said ([1986] Ch 638 at 657):
'Where, as in this case, the existence of some beneficial interest in the claimant has been shown, prima facie the interest of the claimant will be that which the parties intended: Gissing v Gissing [1971] AC 886, 908G. In Eves v Eves [1975] 1 WLR 1338, 1345G, Brightman LJ plainly felt that a common intention that there should be a joint interest pointed to the beneficial interests being equal. However, he felt able to find a lesser beneficial interest in that case without explaining the legal basis on which he did so. With diffidence, I suggest that the law of proprietary estoppel may again provide useful guidance. If proprietary estoppel is established, the court gives effect to it by giving effect to the common intention so far as may fairly be done between the parties. For that purpose, equity is displayed at its most flexible: see Crabb v Arun District Council [1976] Ch 179. ...'
There is another important aspect of the reasoning in Grant v Edwards that should be mentioned. Mustill LJ (at 651) observed that although a number of judgments in this area refer, for simplicity of expression, to intention or conduct "on acquisition" of the relevant property, in a given case the relevant events leading to the finding of an interest in the claimant may occur after acquisition, and beneficial interests may change in the course of the relationship between the parties. This observation was expressly approved by the Privy Council in Austin v Keele 290; (at 609; 587)."
58 Thus it is recognised that although evidence of an express agreement may be lacking, a common intention that the parties would share the beneficial ownership of the property may be inferred from words or conduct of a less explicit kind.
59 Gillett v Holt [2001] Ch 210 was a case concerned with the doctrine of proprietary estoppel which provides a basis for a court to grant relief to prevent unconscionable conduct. It held (pp 225, 233-4) that when ascertaining whether promises and assurances repeated over a period of many years as to future rights over property were sufficient to found a successful claim for equitable relief, it was necessary to stand back and look at the claim in the round.
60 Consistently, the approach to be taken by a court in cases such as the present was explained in Galaxidis v Galaxidis [2004] NSWCA 111. After reviewing relevant authorities Tobias, JA (with whom Giles, JA and Hodgson, JA agreed) said (paras 93-95):
"93 In my opinion, the effect of this Court's decision in [ Australian Crime Commission v Gray [2003] NSWCA 318] is that even if a representation is insufficiently precise to give rise to a contract (as in the present case), that fact does not necessarily disqualify the representation from founding a promissory estoppel. Much will depend upon the circumstances in which the representation is made and the context against which it is to be considered. In its context, the representation is sufficiently clear and unambiguous if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely. In these circumstances, it would be unconscionable for the representor to deny responsibility for the detriment that arises because of that reliance.