Stone v Kramer

1. [1]

   The plaintiff, David Lindsay Stone, commenced these proceedings by filing a statement of claim on 28 August 2017 against the defendants, Hilary Lorraine Kramer and Jamie Ferrer. The defendants are the executors of the estate of the late Dame Leonie Judith Kramer, under a grant of probate made by this Court on 2 December 2016 of a will made by Dame Leonie on 11 November 2011. Dame Leonie died on 20 April 2016.

2. [2]

   As a practical matter, the defence of the claim has been conducted by Hilary Kramer on behalf of the two executors.

3. [3]

   Hilary Kramer is one of two daughters of Dame Leonie, the other being Jocelyn Anne Kramer.

4. [4]

   Dame Leonie's husband was Dr Harry Kramer, who died in 1988.

5. [5]

   As the parties did at the hearing, I will, with no disrespect intended, refer to the people involved in the events with which these proceedings are concerned by their first names, save that I will use the titles of Dr Harry and Dame Leonie.

6. [6]

   The proceedings concern the entitlement to a rural property at Upper Colo (the Colo Property or the Farm), which is about 100 acres in size.

7. [7]

   At the time of her death, Dame Leonie was the owner of the Colo Property. By her will, she left the Colo Property to Hilary.

8. [8]

   The essence of David's claim in these proceedings is that, in leaving the Colo Property to Hilary rather than to David, Dame Leonie acted unconscionably in conflict with representations that had been made to him by Dr Harry and Dame Leonie to the effect that the Colo Property would be left to David, in return for David continuing throughout Dame Leonie's lifetime to conduct share farming on the Colo Property under an oral share farming agreement. David claims that he continued with the share farming agreement, and undertook additional tasks on the Colo Property, in the expectation that Dame Leonie would bequeath that property to him, in circumstances where he did not, as he otherwise would have, follow a different occupation in which he would have enjoyed a better economic reward by way of higher or more commensurate income and savings and provision for his old age.

Pleadings

1. [9]

   In his statement of claim, David relied upon two representations that he claimed were made to him by Dr Harry, which he called the First and the Second Succession Plans, and a third representation said to have been made to him by Dame Leonie after the death of Dr Harry, called the Third Succession Plan. I prefer to refer to the Succession Plans as the first, second and third representations.

2. [10]

   The context in which these representations were claimed to have been made was a share farming agreement made between Dr Harry and David in 1975, which, according to David, continued throughout the balance of the lifetimes of Dr Harry and Dame Leonie, with a number of minor changes.

3. [11]

   The terms of the share farming agreement as alleged by David are set out in par 4 of the statement of claim:

4. [12]

   The defendants filed separate defences on 11 October 2017. Hilary filed an amended defence on 31 July 2019. In keeping with the approach referred to above, I will treat the amended defence as if it expressed the defence of each defendant.

5. [13]

   By her amended defence, Hilary admitted that, at the beginning of 1975, David commenced a share farming agreement with the joint owners of the Colo Property, who were Dr Harry and Dame Leonie.

6. [14]

   In par 4.2 of the amended defence, Hilary alleged that the terms of the share farming agreement were as follows:

7. [15]

   Hilary then added that she:

8. [16]

   Hilary did not admit the allegation made by David in par 5 of the statement of claim that he and Dr Harry adhered to the terms of the share farming agreement.

9. [17]

   In the statement of claim, David pleaded the representations that he alleges were made to him in the following terms:

10. [18]

    Hilary responded to David's allegations concerning the making of the representations by not admitting them and by, in substance, alleging that David did not adhere to the terms of the share farming agreement, or otherwise assist Dr Harry or Dame Leonie by virtue of the matters set out in pars 21 and 21A of the amended defence.

11. [19]

    Hilary specifically responded to the allegations made by David in respect of the first and second representations, being the subject of representations made to him by Dr Harry, by pleading that the Colo Property was owned jointly by Dr Harry and Dame Leonie while Dr Harry was alive, so that Dr Harry did not have any entitlement unilaterally to create any interest in the Colo Property, and that, upon Dr Harry's death, his interest in the Colo Property passed to Dame Leonie by survivorship.

12. [20]

    In pars 13 and 14 of the statement of claim, David alleged that, by her oral third representation, Dame Leonie encouraged and induced in David an expectation of inheriting the Colo Property on Dame Leonie's death, such that he was entitled to rely on the third representation being put into effect, and that the expectation induced by Dame Leonie in David arose reasonably from Dame Leonie's conduct.

13. [21]

    David pleaded the source of the alleged encouragement or inducement specifically in the particulars to par 13, where he alleged that Dame Leonie said to him:

14. [22]

    It should be noted that Dame Leonie did make a bequest of $200,000 to David in her will.

15. [23]

    David alleged in par 15 of the statement of claim that Dame Leonie knew of David's expectation or belief. The particulars of knowledge given are:

16. [24]

    David pleaded in par 16 that he altered his position in reliance on the expectation, and in pars 17 and 18 that he will suffer detriment from the altered position if the expectation is not fulfilled.

17. [25]

    David alleged in par 19 that the circumstances render it unconscionable for the defendants to not fulfil the expectation induced by the deceased. He pleaded in par 21 that Dame Leonie was estopped from making the 2011 will inconsistent with the third representation, and that the defendants, as executors, are bound by the representation of Dame Leonie.

18. [26]

    Finally, David pleaded in par 23 of the statement of claim:

19. [27]

    In her amended defence, Hilary did not admit the allegations made by David concerning the conduct of Dame Leonie, or that Dame Leonie knew that David had altered his position on the basis of any representations made by Dr Harry or Dame Leonie.

20. [28]

    In particular, Hilary said in par 18 of the amended defence that there was no change in David's conduct after the alleged representations were made to him, as he remained working on the Colo Property purportedly in accordance with the share farming agreement in the same way as he had done prior to the alleged representations.

21. [29]

    In her amended defence, Hilary pleaded the following specific defences to the whole of the statement of claim:

Legal principles governing David’s entitlement to the interest claimed

1. [30]

   The most appropriate way to classify David’s claim for a proprietary interest in the Farm is to describe it as being based upon an estoppel by encouragement.

2. [31]

   In the following consideration of the legal principles that govern David’s claim, I have avoided an expansive consideration of the authorities and attempted instead to distil those principles through the medium of relevant decisions of the New South Wales Court of Appeal. It is desirable to state the principles as clearly and simply as possible, which is an objective that tends to be obscured by an extensive examination of the reasoning in prior cases that have considered the application of the fundamental equitable principles in the multiplicity of circumstances to which they have been required to be applied.

3. [32]

   In Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466, Priestley JA (Hope and McHugh JJA agreeing) considered the decision of the High Court in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 (Waltons Stores), particularly the observations made by Brennan J at 429, and said at 472:

4. [33]

   In Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582, Priestley JA (Kirby P agreeing) at 610 said:

5. [34]

   After considering the authorities relevant to the case in the above extract, his Honour said at 612:

6. [35]

   It is of relevance to the present case that Priestley JA’s third proposition is that equitable estoppel operates upon representations or promises as to future conduct. It is not necessary that the representation be promissory in form. His Honour’s expanded fifth proposition may be satisfied if the representation by the defendant encourages the plaintiff to make an assumption that an interest will be granted to the plaintiff by the defendant, and the plaintiff relies upon the assumption in circumstances where departure from the assumption by the defendant would be unconscionable. Subjective knowledge by the defendant that the plaintiff is acting in reliance upon the assumption encouraged by the defendant may contribute to a departure from the assumption being unconscionable. However, the issue of whether the departure is unconscionable depends upon the particular circumstances of the case, so that if the nature of the representation and the circumstances in which it is made are calculated to induce reliance by the plaintiff, departure from the assumption may be unconscionable even if the defendant does not subjectively understand that the representation has motivated the plaintiff’s reliance.

7. [36]

   In Q (a pseudonym) v E Co (a pseudonym) [2020] NSWCA 220; (2020) 383 ALR 469 (Q v E Co), Meagher JA (with whom Leeming and Payne JJA agreed) said of the representation necessary to establish a proprietary estoppel by encouragement:

8. [37]

   The proposition, accepted by Meagher JA, that the meaning and effect of the representation must be determined objectively according to the impact that whatever is said may be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee is relevant to the present case.

9. [38]

   In Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 (Doueihi), Gleeson JA (Beazley P and Leeming JA agreeing) referred, at [153], to an argument put by the appellant in that case, based in part on the first proposition of Brennan J in Waltons Stores, to the effect that an assumption must be established that a particular legal relationship existed or would exist between the parties, and that in the latter case the party inducing the assumption would not be free to withdraw from the expected legal relationship. Gleeson JA, at [154]-[158], considered authorities that dealt with the issue of whether a failure by a party to perform an executory promise may be found to be unconscionable, and the requirement that “something more” than mere reliance on an executory promise is necessary to be sufficient, and said:

10. [39]

    In the course of elaborating the reasons to which he referred, his Honour said:

11. [40]

    The present is a case in which the parties did not contemplate that they would enter into any formal legal agreement, and David does not put his case on the basis of promissory estoppel. In the context of a consideration of whether there is a dichotomy between arms-length/commercial and domestic/family cases, Gleeson JA said:

12. [41]

    The evidence in the present case suggests that the relationship between David on the one hand and Dr Harry and Dame Leonie on the other was an informal halfway house between a commercial and a domestic one, and that even though there was an underlying commercial relationship in the form of the share farming agreement, the parties to that agreement substantially acted upon the basis of trust and the give and take that would commonly characterise a domestic relationship.

13. [42]

    In Simpson-Cook v Delaforce [2009] NSWSC 357, Bergin CJ in Eq said, in a passage approved by Ward J (as her Honour then was) in Dable v Peisley [2009] NSWSC 772 at [129]:

14. [43]

    In Delaforce v Simpson-Cook (2010) 78 NSWLR 483; [2010] NSWCA 84. Allsop P (Giles JA agreeing) gave the following explanation of the Court’s approach to fashioning relief when a proprietary estoppel has been established:

15. [44]

    Handley AJA added:

16. [45]

    These principles were recently considered and applied by Bathurst CJ in Trentelman v The Owners – Strata Plan No 76700 [2021] NSWCA 242. His Honour said:

The Share Farming Agreement

1. [46]

   The terms upon which David entered into the share farming agreement with Dr Harry, and then continued the agreement with Dame Leonie after Dr Harry’s death, provide an important part of the context in which the Court must decide whether it should accept David’s evidence concerning the representations that he alleges were made to him by Dr Harry and Dame Leonie. That is because the likelihood that Dr Harry and Dame Leonie would have thought it fit to leave David an interest in the Colo Property is linked to the apparent value of the share farming agreement to David, the distribution of the benefits of the agreement between the parties, and, as will be seen, the income that it was capable of generating for David.

2. [47]

   A claim by a plaintiff farm worker that a grazier for whom he worked had made an oral representation that the grazier would leave a major sheep station to the farm worker may well be improbable, but the position may be entirely different where the farm involved is small and commercially unviable, the farming operation is conducted as a close personal collaboration between the owner and farmer, and the assurance of the inheritance by the farm worker may be a supplement to what otherwise would be an inadequate income from working the farm.

3. [48]

   This issue is also significant to Hilary’s claims that David breached the share farming agreement by failing to minimise operating costs and maximise the gross proceeds of the agreement, and by failing to keep in good repair the house in which he lived on the Colo Property.

Evidence of the terms of the Share Farming Agreement

1. [49]

   David’s evidence was that he never entered into any formal written share farming agreement with Dr Harry and Dame Leonie. It was not put to him in cross-examination that this evidence was incorrect: see T 62.12.

2. [50]

   Although David said that the share farming agreement was oral, he did not give evidence of the conversations that gave rise to the agreement. Instead, in par 15 of his 24 August 2017 affidavit, he stated that the oral agreement contained the terms pleaded in par 4 of the statement of claim (see [11] above). Hilary was not privy to the conversations between David and her parents whereby the terms of the share farming agreement were agreed. Nonetheless, in her amended defence, she asserted that the share farming agreement had the terms pleaded in pars 4.2 and 4.3 (see [14] and [15] above).

3. [51]

   The terms of the share farming agreement were largely agreed on the pleadings, and most differences were not significant. The only significant differences asserted by the parties was that Hilary pleaded in par 4.2(a) that David was required to “maintain the Colo Property and the machinery, equipment and buildings on it”, and in par 4.2(b) that David was required to conduct the share farming operation “in a proper and workmanlike manner so as to minimise the operating costs and maximise the gross proceeds of the Share Farming Agreement, and keep the machinery, equipment and buildings in reasonable repair”.

4. [52]

   Hilary listed her understanding of the terms of the share farming agreement in her 14 August 2018 affidavit at par 16 in the following terms:

5. [53]

   This statement by Hilary of the terms of the share farming agreement is not significantly different from David’s statement as to his understanding of those terms.

6. [54]

   Hilary’s evidence does not support the inclusion in the share farming agreement of the additional terms pleaded in par 4.2(a) and (b) of the amended defence that I have set out above. Hilary said nothing about those terms in her evidence.

7. [55]

   Moreover, it was not directly put to David in cross-examination that the share farming agreement contained terms that were as onerous as those alleged by Hilary. Rather, David was asked whether he had negotiated with Dr Harry terms of the agreement that were more beneficial to him than the terms under the written agreement his father had worked under. David responded: “I don’t agree with that” (T 62.35).

8. [56]

   The following hand-written note made by Dr Harry in his first quarterly reconciliation for the period ended 30 September 1975 (Court Book 629) is relevant to the determination of the terms of the share farming agreement. The transcription may not be entirely accurate because the handwriting is not entirely legible:

9. [57]

   Not only is this note relevant to Dr Harry’s appreciation of the financial difficulties faced by David in conducting the share farming operation, but the final words perhaps cast light on the true extent of the work required of David in relation to the improvement of the Colo Property. The extent of the work that David was required to do in return for his quarterly bonus was in the nature of maintaining the fencing and painting buildings. That falls far short of a positive obligation to “maintain the Colo Property and the machinery, equipment and buildings on it”.

10. [58]

    Another note in Dr Harry’s handwriting concerning the March 1980 quarter recorded a change in the terms of the share farming agreement (Court Book 631):

11. [59]

    David acknowledged, however, in par 21 of his 24 October 2018 affidavit in reply, that it was his role to assess which crops were best grown to gain the best yield for the farm.

Share farming agreement with David’s father

1. [60]

   It is instructive to compare the terms of the written share farming agreement entered into between David’s father and Dr Harry and Dame Leonie with the manner in which the evidence shows that the share farming agreement operated.

2. [61]

   David’s father entered into a share farming agreement in 1965 with the predecessor in title to the Colo Property to Dr Harry and Dame Leonie.

3. [62]

   Hilary tendered a formal written share farming agreement between David’s father and Dr Harry and Dame Leonie made on 28 June 1970. The agreement was 13 pages long and dealt in detail with the obligations of the share farmer and the farm owners. It was a conventional share farming agreement, in which most of the income and expenditure was borne equally by the parties, and the share farmer was required to contribute significant resources.

4. [63]

   Clause A5a of the agreement states that: “The Farmer shall keep all buildings, fences and other improvements on the farm in as good repair order and condition as the same are in at the date hereof fair wear and tear and damage by fire only excepted”. Clause A5b states: “He will keep the property clean and tidy and attend to the eradication of such noxious weeds or vermin as may otherwise infest the farm”. There is no evidence that the oral share farming agreement with David included such a term, and there is nothing to suggest that Dr Harry or Dame Leonie ever complained to David of the fact that this alleged term was not adhered to or that they complained to David of the state of the Farm with respect to its order or condition generally. Clauses B2 and C1 obliged the Owners (that is Dr Harry and Dame Leonie) to provide a house rent-free for the Farmer. The agreement was more complex than the share farming agreement, as, for instance, clause A10 obliged the Owners to take out insurance for crops with the premiums payable equally by the Owners and the Farmer.

5. [64]

   It is clear from a comparison of the way the share farming agreement operated in practice with the terms of the formal written agreement to which David’s father was a party that the arrangement between David and Dr Harry and Dame Leonie was on quite different terms. For instance, the written share farming agreement required the parties to bear all costs of the farming operation equally, while the share farming agreement did not. Indeed, the hand-written accounts prepared by Dr Harry stated in relation to the expenses incurred when David’s father was the share farmer: “FARM EXPENSES (SHARED WITH HE STONE)”: see Court Book 2885. When David became the share farmer in 1975, Dr Harry wrote: “FARM EXPENSES (NOT SHARED)”: see Court Book 2889.

6. [65]

   David gave uncontradicted evidence that his father terminated his share farming agreement with Dr Harry and Dame Leonie because he was unable to make a sufficient living to support his wife and children, and his wife wanted to live a more suburban life.

Terms of the Share Farming Agreement

1. [66]

   The evidence does not establish that the share farming agreement contained a term that required David to maintain in good order the house in which he lived from his own resources. As will be seen, it is obvious from the evidence that at no time did David earn enough from the share farming agreement to maintain the house; which is a fact that must have been obvious to Dr Harry and Dame Leonie.

2. [67]

   I am also not satisfied that the share farming agreement contained a term that, in an absolute sense, required David to conduct the farming operation with a minimum of costs and a maximum of income that was possible in relation to the farming operations on the Colo Property. I find that the share farming agreement probably included an implied term that David would conduct the farming operation with reasonable care, and that he would use his best endeavours in the circumstances to minimise costs and maximise returns. However, the content of that obligation must be assessed having regard to the obvious fact that David did not have any independent financial resources to apply to the share farming operation, and, as will be seen, his earning capacity was meagre and wholly inadequate to fund any onerous obligation to maintain and improve the Colo Property.

3. [68]

   In fact, it is likely that all of the costs of maintaining and improving the Colo Property fell within the obligation of Dr Harry and Dame Leonie to pay all operating costs, and was within their discretion as to how much they wished to outlay for those purposes. The share farming agreement probably imposed upon David a residual obligation to apply his labour to the maintenance and improvement of the Colo Property to the extent that was consistent with his ability to conduct the share farming operation.

4. [69]

   However, the share farming agreement was not an arm’s length agreement, under which the owners made the land available to the farmer on the basis that the farmer would use his own resources to conduct the farming operation, and where the obligation to bear costs and the entitlement to share income would be split equally between the owner and the farmer.

Essential nature of the Share Farming Agreement

1. [70]

   The share farming agreement was a much less formal arrangement than the agreement with David’s father. Its primary objective, from the perspective of Dr Harry and Dame Leonie, was to enable them to have a farming property in reasonable proximity to their home in Vaucluse, which they could enjoy at their leisure and which presented as an operating farm. Dr Harry was an eminent doctor and Dame Leonie was a notable professor of Australian literature, who rose to a position of great distinction in society. They did not have the time to operate the Colo Property by themselves, and their aspiration to be able to enjoy an idyllic farming property depended upon their being able to secure the services of a farmer like David, who was prepared to work hard for very little income. The share farming agreement was more of a collaboration than a conventional share farming agreement.

2. [71]

   I infer that Dr Harry and Dame Leonie were content to enter into a more informal oral share farming agreement with David, on terms that were more favourable to the share farmer, because they realised that the Colo Property was not a viable economic proposition for the purpose of conducting a formal and conventional share farming operation. If Dr Harry and Dame Leonie wanted to have the lifestyle benefit of owning and being able to visit an operating farm in the Colo Valley, they had to find a farmer, such as David, who would be prepared to conduct a share farming operation on the Colo Property, on more favourable terms than had been given to David’s father, and within the significant restraints on the capacity of the Colo Property to earn income from farming operations.

3. [72]

   It is also necessary to bear in mind when considering Hilary’s claim that David did not conduct the share farming operation in a competent way that he had no training as a farmer. It is likely that he learned farming practices and techniques from his father while he was a schoolboy, by helping around the Colo Property outside school hours. Having completed his Higher School Certificate, David moved to Surry Hills in 1971 and worked for the NSW Mines Department in a clerical position. David successfully re-sat his HSC to improve his results, and in 1972, he enrolled in Agricultural Science at Sydney University. Whilst at university, where he attended full-time in the first year and part-time in the second year, David worked casually on home building and renovation work to support himself. David discontinued his studies in 1973. David probably learned something about farming in the brief period that he pursued the Agricultural Science course. By the time that David began to farm the Colo Property under the share farming agreement in 1975, David did not have a substantial amount of farming experience.

4. [73]

   Given the relatively small scale of the farming operations that were able to be carried out on the Colo Property, and the uncontradicted evidence that David’s father had abandoned share farming the property because of his inability to earn an adequate income, it is likely that Dr Harry and Dame Leonie would have understood that David did not have substantial farming experience or resources, and that he would have to ‘learn on the job’ with Dr Harry’s assistance. It is also likely that Dr Harry and Dame Leonie’s aspiration would have been to enjoy the benefit of owning a working farm in circumstances that minimised the annual losses that they otherwise would have incurred from the farming operation on the Colo Property.

Significance of David’s membership of the Rural Fire Brigade

1. [74]

   In final oral submissions, Hilary abandoned the allegation in par (b) to the particulars to par 21 of the amended defence that David’s performance of the share farming agreement was inadequate because he devoted too much time to the performance of his senior roles in the Rural Fire Service.

2. [75]

   It should be noted, in any case, that Dame Leonie recorded in a number of her quarterly reconciliations that the need for David to engage in Rural Fire Service duties had impeded his ability to perform the share farming agreement. However, there is no evidence that she complained of this fact, as opposed to having accepted it as effectively her contribution as the owner of the Colo Property to the cooperative efforts of local landowners to protect themselves and their neighbours from loss through bushfires. In her reconciliation for the March 2002 quarter, Dame Leonie wrote (see Court Book 633):

3. [76]

   Later, in her reconciliation for the March 2006 quarter, Dame Leonie wrote (see Court Book 635):

4. [77]

   The claim that David breached the share farming agreement as a result of the performance of his obligations as a member of the Rural Fire Brigade therefore introduced a nonissue into the proceedings.

5. [78]

   Consequently, it is not necessary to refer in detail to the evidence given by David to refute the assertion that his activities as a member of the Rural Fire Service diminished the quality of his performance of the share farming agreement. However, that evidence should not be ignored. David served his community as a member of the Rural Fire Service and its predecessor, the local bush fire brigade, from 1975, the year in which the share farming arrangement began. He rose from a member to a captain, and from 1 September 2003 to 5 July 2012, he was Deputy Group Captain at the Hawkesbury Fire Control Centre. David was awarded a number of Rural Fire Service long service awards and medals, and on 17 February 2011, he was awarded what his Member Report describes as “National Medal # Clasp 1”. The clasp signifies an additional 10 years of service above the 15 years required in order to be eligible to be nominated for the National Medal, which is awarded to members of eligible organisations whose members serve or protect the community at the risk of death, injury or trauma.

6. [79]

   Not only does this service by David do him considerable personal credit, but it is also relevant to the determination of the issues in these proceedings.

7. [80]

   First, I consider that it is legitimate to take into account David’s long service and achievements as a member of the Rural Fire Service in judging his credibility as a witness. David is unlikely to have risen to the rank of Deputy Group Captain without his peers in a largely voluntary organisation being satisfied of his character and reliability.

8. [81]

   Secondly, David’s evident competence which, according to David’s Member Report, involved him in planning, training, assessment and crew leader roles, assists the Court in being able to find that, if David had terminated the share farming agreement at about the time that he claims Dame Leonie made her representation to him, David had good prospects of obtaining reasonably remunerative, long-term alternative employment.

David’s evidence of representations and reliance

1. [82]

   I propose to set out David’s evidence in chief as well as excerpts from his cross-examination in some detail. The reason for including lengthy extracts from the cross-examination is that it is necessary for the purpose of explaining my judgment as to the credibility and reliability of the evidence given by David. That is a crucial matter in this case, because the circumstances are that David’s ability to establish his claim is substantially dependent on the willingness of the Court to accept him as both a truthful and reliable witness as to conversations that occurred as long as 40 years ago in private, and where in each case the persons who are alleged to have made the representations are now deceased.

First Representation

1. [83]

   In pars 19 and 20 of his 24 August 2017 affidavit, David gave the following evidence about the first representation:

2. [84]

   In relation to the first representation, David conceded that Dr Harry brought up the subject of his will without any introduction, and this surprised David (T 67.42). Dr Harry was a private sort of person (T 68.8). When it was put to David that he used the phrase “life interest” because that was something that he had heard from his lawyers, he said: “I think that’s correct” (T 69.1). David said that Dr Harry had not used the words “life interest”, but that he had explained that the Farm would be his to work for the rest of his life (T 69.41). Asked whether the statement made by Dr Harry “just came out of the blue, without any preliminary conversation about wills or the future” David replied (T 71.20): “That’s correct”.

3. [85]

   David was asked questions directed at obtaining a concession that, whatever Dr Harry had said to David, it was not an offer, in the sense of a promise made in exchange for some promise in return. In this and following extracts, I have abbreviated the transcript in order to focus on what I consider to be significant exchanges: (T 73.16 - 76.35)

Second Representation

1. [86]

   David gave the following evidence in his 24 August 2017 affidavit concerning the second representation:

2. [87]

   In the following paragraphs David gave evidence that, before the second representation, he had had doubts about the long-term viability of the share farming arrangement and whether he would remain on the Farm. Those doubts were dispelled when Dr Harry made the representation to him. David acknowledged that he had no other discussions about inheriting the Farm with Dr Harry other than on the two occasions mentioned. No witness was present at either of the discussions. David said that he considered Dr Harry to be a man of his word, and, if Dr Harry said that he would do something, then David expected he would do it. He had experienced that Dr Harry had adhered to the oral share farming agreement. David said that this was an incentive for him to stick to the share farming agreement, as the inheritance would compensate for the meagre income, he was deriving from the share farming agreement.

3. [88]

   David said in par 30:

4. [89]

   Further, David said in par 32: “I did not question or enquire further with Harry about reducing to writing the Second Succession Plan as I knew Harry and Leonie to be people of esteem, honour and integrity…”

5. [90]

   The following cross-examination occurred on the subject of the making of the second succession plan. Again, I have abbreviated the transcript: (T 78.22-T 86.23)

Third Representation

1. [91]

   David gave the following evidence concerning the third representation in his 24 August 2017 affidavit:

2. [92]

   In subsequent paragraphs David acknowledged that Dame Leonie did not advise him what amount of money she would be adding to his inheritance. David did not discuss the third representation or anything arising from her death or estate again with Dame Leonie. David said that the conversation confirmed to him that Dame Leonie was honouring the agreement that Dr Harry told David he had made with Dame Leonie. David then said:

3. [93]

   David was cross-examined in the following terms concerning his evidence of the third representation: (T 89.24-94.50)

Credibility of David as a witness

1. [94]

   In Withyman v NSW [2013] NSWCA 10 at [65] , Allsop P (with whom Meagher and Ward JJA agreed) made reference with apparent approval to the “helpful discussion of credibility” by Lord Pearce in Onassis and Calogeropoulos v Vergottis [1968] 2 Lloyd’s Rep 403 at p 431 as follows:

2. [95]

   I will record at the outset that I have no hesitation in accepting David’s evidence as being truthful and as reliable as the passage of time will permit. The findings that I make concerning David’s credibility as a witness are based upon notes that I made in the two days following the completion of the hearing.

3. [96]

   Hilary’s senior counsel said of David in final submissions, at T 333.10:

4. [97]

   I agree! Senior counsel made this submission in support of an argument in defence of Hilary’s claim, but I consider that the concession was well made. Though it appears that David was not academically inclined in his younger years, he appears to be a man of considerable intelligence.

5. [98]

   David was an attentive and focused witness, whose answers were stated with an immediacy that engendered confidence that David was speaking from clear memory. If David could not remember, he said so. David did not embellish his answers, and the promptness of his responses excluded any appearance of equivocation. His evidence was conceptually discriminating, he made concessions where appropriate, and he was unshaken on all significant points.

6. [99]

   The evidence given by David was, in my view, devoid of embellishment. It would have been easy for a plaintiff in David’s position to give evidence that improved his prospects of success, knowing that Dr Harry and Dame Leonie were not alive to contradict him. David’s case was that Dr Harry and Dame Leonie made three representations to him concerning his inheritance of the Colo Property. David considered those representations to be promises, even if only by implication. David considered that Dr Harry and Dame Leonie were distinguished people who would stand by their word. David volunteered in his evidence in chief that only three representations had been made, and that he had not discussed the issue further with Dr Harry or Dame Leonie. David conceded without hesitation that neither Dr Harry nor Dame Leonie had used the word “promise” or any expression with equivalent meaning. They had not made the representations in the context of explicit complaints by David that his income from share farming was unsustainable. They made the representations ‘out of the blue’. The representations were not made overtly in exchange for some return provided by David, or even an express agreement by him to continue the share farming operation. These concessions may diminish David’s prospects of succeeding on his claim. I am satisfied that David was intelligent enough to understand, and that he did understand, that the concessions that he readily made were not in his own interests. Yet he made them without hesitation. Although David’s recollection of the words used by Dr Harry and Dame Leonie in making the representations that David claimed were made must be fallible, given the length of time that has passed, I am satisfied that David’s evidence was given honestly and with a genuine recollection of David’s understanding of the meaning and effect of the words used and in which David had believed since the time that the representations were made.

7. [100]

   When asked whether his recollection was fairly hazy about the conversations he had with Dr Harry, David said (T 69.50): “They’re not hazy. If I don’t clearly recall now something you’re questioning me about, I will say so”. I am satisfied that David did his best to adhere to that undertaking.

Supporting evidence of David’s witnesses

1. [101]

   David’s brother, Phillip Gordon Stone, and David’s sister, Joy Ilena Stone, gave evidence relevant to the issue of whether Dr Harry made representations to David concerning his inheritance of the Farm. Phillip said:

2. [102]

   Joy said:

3. [103]

   Phillip and Joy were not required for cross-examination. Hilary submitted at T 324.42 that this evidence provided no corroboration that Dr Harry made any representation as claimed by David, because the evidence concerned statements they say were made to them before the late 1980s when David said that the second representation was made to him. They were statements made at a time when, according to David, the only thing which he had been told by Dr Harry was that he would be able to live on the property for as long as he liked. That was inconsistent with the witnesses having been told that Dr Harry was leaving the Colo Property to David.

4. [104]

   I do not accept that this unchallenged evidence provides no corroboration for the evidence given by David as to what he was told by Dr Harry. The witnesses are much more likely to have remembered being told that David would inherit the Colo Property than they were likely to remember precisely when the event occurred or where they were at that time. Given the time at which the events occurred, it is unsurprising that the witnesses’ recollections are imperfect. That is a factor that reduces the weight of the evidence. However, the evidence remains significant, because of the important and unusual subject of what the witnesses were told. There is no reason for the Court to reject the evidence completely.

5. [105]

   David’s former de facto wife, Maureen Anne Edwards, also gave evidence that tends to corroborate David’s evidence concerning the representations that he claims were made to him by Dr Harry and Dame Leonie. After she explained in her affidavit why she had become very worried about her and David’s financial future because of the inadequacy of the income earned by David from farming, Maureen said:

6. [106]

   Maureen was also not required for cross-examination. She did not give specific evidence as to when this conversation occurred. She said that she lived on the Farm with David for about seven years from 1989.

7. [107]

   David’s present partner, Julie Anne McBride, gave evidence in response to evidence given by Hilary in pars 46 and 53 of her affidavit, to the effect that the first time Hilary heard anything about any agreement between her parents and David about David inheriting the Farm was from Julie on 7 August 2014. Julie said that the conversation happened on 4 August 2014 and not 7 August 2014. I will set out the relevant parts of Julie’s version of the conversation referred to by Hilary:

8. [108]

   Julie gave evidence in cross-examination that she had made a note of her conversation with Hilary on the day it occurred. She said that she had thrown out the note after she had transcribed the conversation into a hand-written document that she provided to David’s solicitors.

9. [109]

   Exhibit P2 is a hand-written document prepared by Julie on 30 August 2018 onto which, according to Julie, she had transcribed the contents of the contemporaneous note of her conversation with Hilary on 4 August 2014.

10. [110]

    Julie also gave evidence, at T 171.28, that she had made a note in her calendar that David told her on 4 February 2014 that he had learnt from Hilary that he would not inherit the Farm.

11. [111]

    The evidence given by David’s witnesses did not directly corroborate his evidence concerning the making of any of the representations allegedly made by Dr Harry and Dame Leonie. However, taken as a whole, it is evidence that supports an inference that David genuinely believed that the collective effect of the representations was that the Colo Property would be left to him in Dame Leonie’s will. The fact that Maureen was not called for cross-examination reinforces the strength of the inference that can be made on the basis of her evidence. It supports the view that I had formed, regardless, of David’s evidence that he genuinely believed that Dr Harry and Dame Leonie had made the representations to him that he alleges were made, and that the effect of those representations was ultimately that the Farm would be left to him in Dame Leonie’s will.

Hilary’s evidence

1. [112]

   David said in his 24 August 2017 affidavit at par 23 that, in about 1987 or 1988, about a month after he had the conversation with Dr Harry about the second representation, he had a conversation with Hilary at the Colo Property in the main shed, during which Hilary said:

2. [113]

   Hilary denied, at par 50 of her 14 August 2018 affidavit, that she made this statement to David.

3. [114]

   However, Hilary volunteered the following evidence in cross-examination, at T 208.4:

4. [115]

   The context in which this unexpected disclosure occurred was in cross-examination, commencing at T 202.28, about evidence given by Hilary commencing at par 80 of her affidavit concerning the circumstances in which Dame Leonie had executed a power of attorney in favour of Hilary at the office of Dame Leonie’s solicitors. The evidence included the following:

5. [116]

   Hilary said at par 86 that, when Dame Leonie raised the question about Maureen, she thought that what Dame Leonie was going to do with the Farm “was in the balance”. Hilary said that Dame Leonie’s decision “appeared to me to hang on that answer”, being the statement of the solicitor that, if the Farm was left to David, Maureen might be able to make a claim on it. Hilary also gave evidence, at par 88, of having called Jocelyn to seek advice on whether she should tell David that Hilary was to inherit the Farm. According to Hilary, the conversation was as follows:

6. [117]

   Hilary gave evidence in cross-examination, at T 204.11, that, before the meeting at the solicitors’ office, Dame Leonie had asked her whether, if she were to leave the Farm to David, Maureen could make a claim on it. Hilary said to Dame Leonie that she should ask her lawyers. The following exchange then took place at T 204.29:

7. [118]

   Hilary accepted at T 207.10 that the advice given by the solicitors about the possibility that Maureen could make a claim “maybe altered her thinking”.

8. [119]

   Hilary gave evidence at T 207.38 that she thought that David might inherit the Farm because Hilary went up to the Farm very infrequently and Jocelyn was in a nunnery and “David has been living there for 40 years. It would be natural that he may think that”.

9. [120]

   Hilary gave evidence to the effect that she and Jocelyn had spoken over the years about the possibility that the Farm may be left to David. Hilary said that she was told by Jocelyn that Jocelyn thought that the Farm should be left to David. Hilary said that Jocelyn told her that Jocelyn had raised with their parents the subject of the Farm being left to David.

10. [121]

    A major feature of Hilary’s defence was her attempt to create an aura of deep improbability as to the likelihood that two eminent professional people in the position of Dr Harry and Dame Leonie would represent to a young share farmer in the position of David that they would leave the Farm to him by will. Considered as a general proposition, it is indeed improbable that farm owners would promise to leave their farm to an outsider with whom they have a share farming agreement. However, the truth of the proposition must depend upon all of the circumstances of the particular case.

11. [122]

    The evidence given by Hilary dispels the notion that there is anything fundamentally improbable about Dr Harry and Dame Leonie telling David that they would leave the Farm to David in the will of the last one of them to die.

12. [123]

    First, I do not accept that the statement that Hilary admitted in cross-examination she made to David about the effect of Dr Harry’s will was a spontaneous aberration that had no basis in Hilary’s knowledge of the intentions of her parents.

13. [124]

    The evidence does not permit any finding as to whether the disclosure made by Hilary to David had any connection with the conversation the subject of par 23 of David’s affidavit to which reference is made above.

14. [125]

    The content of Hilary’s disclosure is strange, because it was to the effect that Dr Harry had left the Farm to David in his will, when that was contrary to the terms of the will and Dr Harry’s agreement with Dame Leonie to leave the Farm to her. Hilary provided no basis for her understanding that the Farm had been left to David. Nonetheless, Hilary appeared by her evidence to be resolute that she had made a statement to David after Dr Harry’s death that he had inherited the Farm.

15. [126]

    I do not accept Hilary’s explanation of the circumstances that she suggests caused her to invent the idea that David would inherit the Farm. The thought process involved is simply too irrational. In my view, the only probable source of any belief entertained by Hilary that David would inherit the Farm is statements made by her parents, whether directly to her or in conversations between them that were overheard by Hilary.

16. [127]

    Hilary’s recollection that, at the meeting at Hunt and Hunt, Dame Leonie initiated a conversation about her will by asking for advice about the consequences of Dame Leonie leaving the Farm to David suggests at least that that possibility was a real one in Dame Leonie’s mind.

17. [128]

    The conversation that Hilary had with Jocelyn about her feeling uncomfortable about knowing that the Farm would be left to her “in case Dave thinks he’s getting the Farm” also suggests that Hilary must have had some basis in her experience for thinking that there was a real possibility that David would expect to inherit the Farm.

Jocelyn’s evidence

1. [129]

   Jocelyn gave evidence in her 14 August 2018 affidavit of a conversation that took place between her parents and herself about one month after Dr Harry had unsuccessful surgery for cancer. The conversation included:

2. [130]

   After discussing the pros and cons, Dr Harry then said: “On balance, it seems most practical to let the Farm pass to Mum. Whatever she decides to do about the Farm later on is her decision.”

3. [131]

   This evidence is of significance to the argument put by Hilary, at T 323.44, that David’s claim that he was told by Dr Harry that Dr Harry would leave the Farm to David assumed that Dr Harry did not know that he and Dame Leonie owned the Farm as joint tenants, and that Dr Harry did not know the significance of a joint tenancy. Hilary submitted that the representations alleged by David would be inconsistent with the actual legal effect of the ownership that he had, whereby the Farm would pass to Dame Leonie by survivorship. Notwithstanding that argument, Hilary acknowledged, at T 324.19, that Jocelyn had given the evidence of her conversation with her parents that is set out above. The terms of that conversation establish that, notwithstanding that the Farm was in joint ownership, Dr Harry considered the issue of the title to the Farm after his death as if it was within his power to bequeath the Farm to David. There was no evidence that Dame Leonie challenged that position, as she did not say that the Farm would pass to her by survivorship. Rather, the evidence is that Dame Leonie relied upon her stated preference for keeping ownership of the Farm. The terms of the conversation would suggest that, notwithstanding the joint tenancy, Dr Harry and Dame Leonie treated the Farm as if it was the property of Dr Harry.

4. [132]

   In any event, a representation or assumption as to a legal position or state of affairs which later proves to be mistaken or incorrect will not preclude or impede an equitable estoppel: Waltons Stores at 415–416; Foran v Wight (1989) 168 CLR 385 at 433-435; Commonwealth v Verwayen (1990) 170 CLR 394 at 413 and 445. The Court cannot draw an inference of inconsistency from this aspect of David’s evidence.

5. [133]

   The fact that Jocelyn specifically asked Dr Harry whether he would leave the Farm to David strongly suggests that, within the Kramer family, events had occurred over the life of the share farming agreement that caused the possibility to be to the front of Jocelyn’s mind, when she was talking to her father about his testamentary intentions, that he might have intended to leave the Farm to David.

6. [134]

   Jocelyn gave evidence at par 47 of her affidavit about a conversation that she had with Dame Leonie in about June 2006, which was in the following terms:

7. [135]

   While, if the conversation occurred in these terms, it was inconsistent with Dame Leonie believing or remembering that she had made a binding representation to David shortly after Dr Harry’s death that she would leave the Farm to him in her will, it is consistent with Jocelyn having an understanding that there was a real probability that Dame Leonie would leave the Farm to David.

Context in which the representations were allegedly made

1. [136]

   According to Hilary’s evidence, her parents bought the Farm in 1969.

2. [137]

   I infer that Dr Harry became aware, when David’s father terminated the formal share farming agreement that he had with Dr Harry and Dame Leonie, that he did so because he considered that he could not make a sufficient living from the share farming agreement to properly provide for himself and his family.

3. [138]

   As Hilary described it in her evidence, Dr Harry was a pathologist, teacher, medical administrator and researcher. He was the founding director of the Institute for Clinical Pathology and Medical Research in Lidcombe. Dr Harry was also involved in the development of the Institute’s operations at Westmead Hospital.

4. [139]

   At par 24 of her 14 August 2018 affidavit, Hilary described Dr Harry’s interest in farming in the following terms:

5. [140]

   Hilary gave evidence that Dame Leonie was a Professor of Australian Literature at the University of Sydney. Dame Leonie also held many other august positions for which she was renowned. The evidence was not clear about the positions held by Dame Leonie in the period up to shortly after Dr Harry’s death.

6. [141]

   David’s evidence, in par 11 of his 24 August 2017 affidavit, was that, at around the time when his father decided to leave the Farm, Dr Harry approached David to ask him if he would take over the share farming arrangement and David agreed.

7. [142]

   Jocelyn’s evidence, based upon conversations that she said she heard her parents having, was that David had asked Dr Harry to let him return to the Farm, but Dr Harry was reluctant to agree, because David would be socially isolated at the Farm and life as a farmer may be too limiting: 14 August 2018 affidavit pars 17 to 19 and 22. Jocelyn claimed that David “pressed” Dr Harry to let him return to the Farm.

8. [143]

   Hilary also claimed, at par 54(f) of her 14 August 2018 affidavit, that Dame Leonie “was not reliant on Dave”. She asserted that, if David left the Farm, Dame Leonie had resources at her disposal to seek help to find a replacement share farmer. Hilary said that Dame Leonie: “had sufficient means to ensure the Farm continued to operate with the assistance of an alternative share farmer”.

9. [144]

   Hilary did not provide any objective basis for this claim. I accept that Dame Leonie had the resources that allowed her comfortably to maintain the operation of the Farm notwithstanding that it was a loss-making venture. However, I am not willing to accept that Dame Leonie could readily have found an alternative farmer ready to enter into a share farming agreement in respect of the Farm, given the consistent difficulties that were experienced in making the Farm a viable commercial enterprise. David’s father was not able to conduct a conventional share farming operation successfully. If Dr Harry and Dame Leonie had been able to enter into a conventional share farming agreement with some farmer other than David, who had the interest and the resources necessary to conduct a successful conventional share farming operation on the Farm, it is not improbable that they would have entered into such an arrangement instead of the share farming agreement with David.

10. [145]

    David was not truly challenged in cross-examination about his evidence of the circumstances in which he entered into the share farming agreement: see T 59.33

11. [146]

    David accepted in cross-examination at T 60.37 that he was aware, when he started share farming, that his father had left because of an inability to earn enough money for him to support his family with. However, David denied that he entered into the share farming agreement knowing that there would only be a relatively modest income. David explained, at T 60.46, that he had an expectation that he could achieve a better outcome than what his parents had achieved, by doing things differently to the way his father had done things. David then explained the different farming techniques that he thought might generate greater income from farming the Colo Property.

12. [147]

    It appears from the evidence that David’s hope that he could improve the farming operation and generate a satisfactory income was not realised.

13. [148]

    The evidence that is available concerning the income that David received over the period that he farmed the Colo Property under the share farming agreement is capable of shining a light on the true nature of the agreement, as it must have been understood by David on the one hand and Dr Harry and Dame Leonie on the other hand. As will be seen, the attack that Hilary has made on David’s competence as a farmer has largely been supported by the evidence of her expert agronomist, who has assumed that the farming operations were undertaken by a farmer with competent but not exceptional managerial skills, but who also had the resources to carry on the operation efficiently. The evidence of the income that David received will illustrate the reality of David’s capacity to devote resources to the share farming operation. In this regard, Dr Harry and Dame Leonie must have been well aware that David started off with nothing.

14. [149]

    It will also be useful to consider the significance of the evidence concerning the ‘bonuses’ that David received over the period of the share farming operation. As noted above, Hilary pleaded in par (d) of the particulars to par 22 of her amended defence that the payment of the bonuses to David was one of the reasons why it was not unconscionable for Dame Leonie to have resiled from her representation to David (assuming it had been made). This claim treats the payments of bonuses as if they were genuine bonuses, over and above a proper level of remuneration for the work done by David. The validity of that claim may be assessed having regard to the available evidence concerning the income received by David.

15. [150]

    The evidence of the level of income enjoyed by David at the time the representations that David claims were made to him by Dr Harry and Dame Leonie may also have a bearing on the likelihood that those representations were made in fact, and that David continued to farm the Colo Property in the expectation that the representations would be honoured. The more obvious that it may have been to David on the one hand, and Dr Harry and Dame Leonie on the other, that the income that David was capable of earning under the share farming agreement was insufficient as a living wage, the more likely it is that Dr Harry and Dame Leonie would have made the representations claimed. Hilary submitted that there was “an inherent implausibility about the first succession plan having occurred” (T 324.11). Hilary submitted that “neither Harry nor Leonie intended or knew that the plaintiff was only staying on the property because of the statements that have been made to him” (T 329.44). There is force in these submissions, but that force may be an illusion dependent on an unexpressed assumption that the return that David was seen to be enjoying from conducting the share farming operation on the Colo Property was sufficient to make it improbable that owners in the position of Dr Harry and Dame Leonie would volunteer such an unusual additional consideration for David’s continuing to farm the property. There is a danger that David’s evidence concerning the making of the representations may be rejected because of the adoption of a false assumption as to the likelihood that such representations would have been made.

16. [151]

    The following table contains an analysis of the records that were in evidence (so far as they were legible) of the income received by David from the commencement of the share farming agreement.

17. [152]

    Notes:

    1. (1)

       The headings in this table are:

    2. (2)

       Hilary gave evidence in par 17 of her 14 August 2018 affidavit that the documents exhibited at tabs 4 to 7 were handwritten farm account books prepared by Dr Harry and Dame Leonie, and that tabs 9 to 14 were handwritten share farming account summaries prepared by Dr Harry and Dame Leonie. The documents relevant to some years were not included, and apparently are missing.

    3. (3)

       The information in the table is primarily taken from the documents at tabs 5 to 7, which are in the form of meticulously prepared accounts. Those documents cover the period up to the end of the 2002 financial year, with 2000 and 2001 missing. I have been able to augment the table using the documents at tabs 9 to 14 (although taken from the instructions to Hilary’s expert agronomist). In these cases, the Court Book references are indicated with an asterisk. The available records did not permit a continuation of the table after 2007 (although there were some records for the later period when Hilary was Dame Leonie’s attorney).

    4. (4)

       The first line for each quarter in the table sets out David’s share of the income after deduction of his share of the fuel cost. The second line sets out the amount of the bonus payable to David at the time. The records for each quarter include calculations that involve refunding money to David for expenses paid by him and charging David for income received that had not been banked by him at the time into the Kramer bank account. I have ignored these refunds and charges as they do not reflect David’s income. This approach is confirmed by the record at Court Book 2904, which separately lists David’s income each quarter for the financial years 1976 to 1978 in a way that agrees with the figures that I have included in the table.

    5. (5)

       David’s income for the third and fourth quarters of the 1978 financial year had to be taken from the document at Court Book 2904.

18. [153]

    Hilary tendered evidence of the revenue earned from the share farming operation for the years in which records were available. The amounts of revenue received were also converted into equivalent 2019 figures using an inflation calculator based upon CPI increases published by the Reserve Bank of Australia. The inflation calculator was tendered into evidence. That being the case, I have used the inflation calculator to calculate and set out in the following table the annual income received by David taken from the table above and the amount of that income rendered into 2020 dollars.

19. [154]

    The figures in this table therefore demonstrate that, over the period covered, David’s average annual income from the farming operation expressed in 2020 dollars was about $30,000. In the period up to 1988, the year of Dr Harry’s death, the average was slightly more, being about $31,200. Both figures are less than one third of the average weekly total male earnings as at November 2020 of $97,905.60 (Source: Australian Bureau of Statistics [1] ). I have used this statistic only to give more accuracy to the inference that I would have drawn in any event that the income that David earned from the share farming operation was a mere fraction of what he could have earned if he had terminated the share farming agreement shortly after Dr Harry’s death and pursued some alternative employment that returned an average level of income.

20. [155]

    The records kept by Dr Harry that are still available frequently record that David was indebted to Dr Harry at the end of a quarter, and it was necessary for Dr Harry to carry over that debt until David’s income permitted it to be paid. It appears that, in many cases, the debt arose because David was not able to pay to Dr Harry and Dame Leonie their share of the proceeds of sale of produce because of his own needs. The earliest available record, for the September quarter in 1975, records an advance of $600 to David and a net debt at the end of the quarter of $300.59. At the end of the March quarter in 1984, David owed $428.89 which was deducted from his income. A debt of $156.04 owing at the end of the December quarter in 1985 was repaid at the end of the March quarter in 1986. The record for the June quarter in 1986 referred to a loan of $500 and a debt of $717.76. David owed $244.07 at the end of the September quarter in 1986, $1,103.15 at the end of the December quarter in 1986, $843.36 at the end of the March quarter in 1987, and $769.80 at the end of the June quarter in 1987. The debt at the end of the September quarter in 1987 was $2,307.56, at the end of the December quarter in 1987 it was $2,532.83 and at the end of the March quarter in 1988 it was $2,940. Dr Harry made a note: “David will bank $2,940 next week and discharge debt”.

21. [156]

    This analysis of the income received by David in the period of 1976 to 2003 permits the following inferences to be drawn:

    1. (1)

       Broadly, the average income received by David was in the order of one third of the average annual total male income calculated on the basis of 2020 equivalent dollars.

    2. (2)

       David’s income was irregular on an annual basis, and highly irregular from quarter to quarter.

    3. (3)

       David was dependent on the bonuses that he received, which were required to be increased over the period.

    4. (4)

       As a consequence of the irregularity of David’s income, it was frequently necessary for him to be given loans to tide him over until he enjoyed a more remunerative quarter.

22. [157]

    The results of this analysis do not provide additional direct proof of Dr Harry and Dame Leonie having made the representations to David, or that David would have terminated the share farming agreement if he had not received those assurances, but it does establish an objective reality that makes it substantially more probable that the assurances were made and that David would have pursued alternative employment if they had not been made.

Findings as to existence of interest claimed

1. [158]

   I will start by making a number of specific observations concerning the way that David has pleaded reliance on the three representations.

2. [159]

   First, on David's own pleading, the second representation superseded the first representation. Dr Harry informed David of the change and David acquiesced in the change.

3. [160]

   Secondly, there are conceptual difficulties with the manner in which par 10 of the statement of claim is pleaded: (see [17] above). As executor of the estate of Dr Harry, Dame Leonie was not required to adhere to the share farming agreement. That agreement was terminable at the will of either party, probably on reasonable notice having regard to the state of the crops that had been planted at the particular time. Dame Leonie was not obliged to continue the share farming agreement in her capacity as Dr Harry's executor.

4. [161]

   She was not obliged to implement the first representation because, as I have noted, it was superseded. The second representation was a representation made by Dr Harry as to an agreement that he had made with Dame Leonie. Dr Harry's estate could not be liable to David if Dame Leonie did not implement any agreement she made with Dr Harry.

5. [162]

   In reality, the first and the second representations only formed the background against which David was conveyed the alleged third representation by Dame Leonie. Dame Leonie could only be bound by such assurances as she may have made to David, and her conscience could only be burdened with the need to act in accordance with her assurances.

6. [163]

   The allegation in par 10 of the statement of claim that Dame Leonie was obliged to adhere to the share farming agreement illustrates a problem for David's case that must be addressed; being that while David claims that Dame Leonie said to him that she would leave the Farm to him in her will, both parties to the share farming agreement were nevertheless entitled to terminate it at will on reasonable notice. That circumstance raises the issue of what the legal position would have been if either David or Dame Leonie had decided to terminate the share farming agreement during Dame Leonie's lifetime. On David's part, he may have lost interest or decided that his income was unjustifiably insufficient and terminated the share farming agreement. Dame Leonie may have taken the same course or decided simply to sell the Farm with vacant possession.

7. [164]

   These possibilities would have given rise to legal problems, but they are not the legal problems that must be addressed in this case. It may be that from David's perspective, if he terminated the share farming agreement or even predeceased Dame Leonie, then Dame Leonie would simply have been free to devise the Farm as she wished, because it would have ceased to be unconscionable for her not to leave the Farm to David's estate. It may be that if Dame Leonie had terminated the share farming agreement or sold the Farm during her lifetime that Equity would have imposed upon her some appropriate obligation to compensate David.

8. [165]

   In my view, the fact that the share farming agreement had an uncertain duration is not inconsistent with David being entitled to claim the relief that he claims in this case. Equity should determine his entitlement on the basis of what happened, not what could have happened. In so far as it was implied in the third representation that David would only be entitled to expect to inherit the Farm if he continued to perform the share farming agreement during Dame Leonie's lifetime, that is what he has done.

9. [166]

   It is now necessary to address the issue of the credibility of David's evidence concerning the making of the three representations. David's case substantially relies upon the Court accepting that David gave reliable evidence about the making and the meaning of the third representation, which David claims was conveyed to him by Dame Leonie in a single conversation made about 30 years before the date of his first affidavit in these proceedings. David accepted that the statement had never been repeated, that there was no written record of it, and that there is no evidence that Dame Leonie ever informed any other person that she had made the statement to David.

10. [167]

    I have already indicated above that I have found David to be an exceptionally credible witness. If it had been sufficient for the Court to be satisfied on the balance of probabilities that Dame Leonie made the statement to David with the meaning that he claims it had on the basis of David's testimonial evidence, and by assessment of the credibility of that evidence following David's cross examination, I would have accepted David's case that the third representation was made in the way that he claimed. That is, in so far as it may have been proper for the Court to act solely on its belief as to the reliability of David's evidence, I would have accepted his case.

11. [168]

    That would, of course, have been an extreme position to take, as there is an inherent fallibility in all testimonial evidence, particularly evidence such as that given by David, which is self-interested and requires a relatively accurate recollection of an event that occurred some 30 years ago.

12. [169]

    It is reasonable in this case to qualify the acknowledgement of the danger in accepting testimonial evidence that is not directly corroborated by recognising that some events are much more likely to be retained in memory than others. A statement made by Dame Leonie that she had agreed with Dr Harry that the Farm would pass to David upon Dame Leonie's death is a statement of life-altering significance and one that is inherently capable of being long remembered. However, that said, it must be accepted that there would be scope for misinterpretation of nuance in the meaning of the words actually used by Dame Leonie.

13. [170]

    It is therefore necessary to have regard to the observations made in the authorities concerning the approach that the Court should adopt in deciding whether to accept testimonial evidence that is not directly corroborated of statements made long before the evidence is given, where the witness would be a beneficiary of the Court's acceptance of the evidence. I acknowledge my debt to Black J in In the matter of Hillsea Pty Ltd [2019] NSWSC 1152 (Hillsea) for having collected the relevant authorities together at [16] to [22].

14. [171]

    Understandably, Hilary’s submissions focused on the often-quoted observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319 that:

15. [172]

    Black J, at [17] added the following extract from the decision of the High Court in Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 at [15], which approved an observation at first instance in that case that:

16. [173]

    Further, at [18] his Honour noted that in Fox v Percy (2003) 214 CLR 118 at 129; [2003] HCA 22, Gleeson CJ, Gummow and Kirby JJ observed that:

17. [174]

    While these observations demonstrate the forensic difficulty faced by a plaintiff who is required to rely upon evidence that is not directly corroborated of statements made a long time in the past, they do not suggest that there is any strict aversion of the Court to acting on evidence of this nature. The Court must be keenly aware of the inherent fallibility of such evidence. The Court must place its primary emphasis on the objective factual surrounding material and the inherent probabilities. In order to be accepted, it may be necessary that the witness display an exceptional level of credibility. As such, the principles governing the credibility of witnesses remain applicable especially in this context.

18. [175]

    It is also necessary to bear in mind the degree of satisfaction that is required before the Court can rely upon evidence of spoken words to establish a cause of action. In John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]– [96], Hammerschlag J said that:

19. [176]

    See also to similar effect Warner v Hung; Bellpac Pty Ltd (recs and mgrs apptd) (in liq), Re [2011] FCA 1123; (2011) 297 ALR 56 at [48] per Emmett J.

20. [177]

    It is also necessary for the Court to make proper allowance for the fact that neither Dr Harry nor Dame Leonie are available to give evidence in contradiction of the evidence given by David.

21. [178]

    In Dable v Peisley [2009] NSWSC 772, Ward J (as her Honour then was) said:

22. [179]

    As her Honour noted, in Vukic v Luca Grbin; Estate of Zvonko Grbin [2006] NSWSC 41, Brereton J (as his Honour then was) said:

23. [180]

    In Hillsea, Black J also accepted the need for the Court to subject the evidence to careful scrutiny in these circumstances, saying:

24. [181]

    In Gautam v Health Care Complaints Commission [2021] NSWCA 85 at [25], Leeming JA, referring to the judgment of Ipp JA in Goodrich Aerospace Pty Limited v Arsic [2006] NSWCA 187, said:

25. [182]

    Notwithstanding the self-evident validity of these reservations about the wisdom of a court accepting the oral evidence of an interested witness that is not directly corroborated of statements allegedly made by a now-deceased person long in the past, the courts may from time to time have to decide cases of considerable importance to individual plaintiffs, where the plaintiff's claimed rights are based upon statements made to them in private, in circumstances where the context is one of trust between the participants, and where they have no intention to seek legal advice, to involve strangers in the transaction, or to enter into formal legal agreements. It is only necessary to recall the dichotomy between arms-length/commercial cases and domestic/family cases discussed by Gleeson JA in Doueihi, at [178], and the possibility that the parties may have different expectations as to entry into a formal written agreement from those usually held in a strictly commercial case or a domestic/family case.

26. [183]

    While it is clear that the amplification of the forensic uncertainties that may attend the enforcement of non-commercial arrangements based on oral agreements in informal circumstances, where it is expected that the agreements will be honoured on the basis of trust, requires that the Court exercises exceptional care in acting on the evidence of a plaintiff that is not directly corroborated concerning oral assurances, that is a circumstance that only makes the Court's duty more onerous. The issue is always whether the plaintiff has established the claim on the balance of probabilities, having regard to all of the evidence, as well as the gravity of the matters alleged and the other considerations required to be taken into account under s 140(2) of the Evidence Act 1995 (NSW). There is no rule that the Court should not act on the uncorroborated evidence of an interested party as to the terms of historical conversations. There is scope for great injustice to be done if the Court adopts an excessively inflexible resistance to accepting oral evidence of conversations in that manner.

27. [184]

    In Nguyen v Cosmopolitan Homes [2008] NSWCA 246, McDougall J (with whom McColl and Bell JJA agreed) summarised the relevant principles with respect to the finding of facts on the balance of probabilities as follows:

28. [185]

    The only course available to the Court is to give an in-depth consideration to the circumstances surrounding the making of the alleged representations and the subsequent behaviour of the parties to the conversation, as well as to give exhaustive scrutiny to the available objective evidence. It is to the evidence that I will now turn.

29. [186]

    Hilary submitted that it was inherently improbable that people in the position of Dr Harry and Dame Leonie would give the assurances to David that he claimed they had made to him.

30. [187]

    That submission has superficial force, but the evidence in this case demonstrates special circumstances that do not warrant the Court’s rejection of David’s evidence.

31. [188]

    This is not a case where a farmhand claims after the death of a grazier that the grazier has casually promised to leave a large sheep station to the farmhand.

32. [189]

    I will first consider the significance of the evidence concerning the nature of the Farm and the financial aspects of the farming operation under the share farming agreement, in so far as that evidence has a bearing on the likelihood that Dr Harry and Dame Leonie made the representations to David.

33. [190]

    There was no evidence concerning the value of the Farm at the time when any of the representations were alleged to have been made and there is no current valuation. As the Farm is about 100 acres in size and has two houses on it, it is likely to have a reasonably significant value. However, the evidence does not support a conclusion that, at the time the alleged representations were made to David, the value of the Farm was so great as to make it inherently improbable that the representations were made.

34. [191]

    The evidence also does not support a finding that, at the time the representations were allegedly made to David, either Dr Harry or Dame Leonie had reason to think that their daughters had any desire to own the Farm, or to carry the losses involved in conducting farming operations on the Farm, or that their interest would extend further than the ability to make occasional visits to the Farm for recreational purposes.

35. [192]

    Hilary’s own evidence was that she was hardly ever at the farm (T 209.13). Jocelyn gave the following evidence at par 31 of her affidavit:

36. [193]

    Further, Jocelyn gave evidence that she had joined the Carmelites and in doing so, had undertaken a vow of poverty. Jocelyn gave the following further evidence in her affidavit in relation to a conversation she had with her mother about her inheritance:

37. [194]

    As I have explained above, the Farm was a loss-making enterprise over the whole of the period covered by the evidence. As will be seen, even the evidence of Hilary's expert agronomist was that, if the Farm had been worked under the terms of the share farming agreement, assuming competent but not exceptional managerial skills, Dame Leonie would still have made significant annual losses, and David would only have enjoyed a relatively modest income.

38. [195]

    The evidence does not support a conclusion that, at the time that the representations were allegedly made to David, or at any time thereafter, the Farm was a viable property for the purpose of conducting farming operations.

39. [196]

    As I have explained above, David's income under the share farming agreement was highly irregular from quarter to quarter, and only a modest fraction of the average annual male income. It was regularly subject to the common agricultural risks of drought and flooding. From David's perspective, farming under the share farming agreement could not be maintained without David's income being supplemented by 'bonuses' that were required to be increased over the years. It was also found necessary to reduce the share of the fuel bill that was required to be paid by David. Furthermore, there is evidence that it was necessary for Dr Harry and Dame Leonie to make loans to David at various times throughout the years to enable him to carry on until the income from a better quarter enabled him to repay the loans.

40. [197]

    These matters must have been obvious to Dr Harry and Dame Leonie from the time when David's father terminated the written share farming agreement because of his inability to make a sufficient living to support his family and provide for his future.

41. [198]

    The conclusion that should be drawn from these facts is that, while Dr Harry was alive, he was prepared to maintain the Farm as an operating farming business, because of a personal interest in farming that he had the financial resources to pursue, notwithstanding that it would consistently lead to operating losses that Dr Harry would be able to claim as income tax expenses (see par 5 of Jocelyn’s affidavit).

42. [199]

    If Dr Harry and Dame Leonie were to continue to have the interest and lifestyle benefit of an operating farming business on the Farm, without the property going to rack and ruin, it was necessary for them, following David's father's departure, to find someone like David, who was prepared to put in all of the hours and hard work necessary to operate the farming business on a subsidised basis, and who was prepared to accept the meagre income and prospects offered by the share farming agreement. Absent such an arrangement, the ownership of the Farm was likely to be more of a burden than a benefit.

43. [200]

    There was no evidence that the Farm has ever been the sort of property that would be attractive to the owners if allowed entirely to return to nature.

44. [201]

    The financial and occupational burdens that the share farming agreement imposed on David must have been obvious to Dr Harry and Dame Leonie. They would have been aware from the quarterly reconciliations how meagre and irregular the income earned by David from the share farming operation was. That was so notwithstanding the subsidy that they provided to David. Dr Harry and Dame Leonie must have been acutely aware that they were required to make loans to David to carry him over from quarter to quarter. They must have understood that there was no prospect that the operation of the Farm would ever lead to David enjoying an income commensurate with his efforts or provide a surplus that would enable him to make provision for his old age.

45. [202]

    If Dr Harry and Dame Leonie were indeed decent and benevolent people, they could well have formed the view that it would have been ungenerous of them to take long-term advantage of the share farming agreement, while ignoring the long-term disadvantages that the farming operation would impose upon David.

46. [203]

    These considerations do not directly corroborate David’s evidence about the making of the representations, but they significantly reduce the degree of improbability that the alleged assurances were made to David.

47. [204]

    I have already considered above the evidence given by Hilary and Jocelyn about discussions within the Kramer family concerning the possibility that the Farm would be left to David. Far from such a bequest being an entirely unnatural and improbable event, it seems that it was in the foreground of discussions. When it came to Jocelyn asking her father before his death as to what he proposed to do with the Farm, the evidence was that her first question was whether Dr Harry would leave it to David because he was living and working there. Jocelyn’s evidence was not that Dr Harry rejected the suggestion, but that, after discussion with his family, he decided to leave the Farm to Dame Leonie, because she expressed a wish to have it. Jocelyn’s evidence of the conversation, whereby Dr Harry said that he would leave it to Dame Leonie to decide what to do with the Farm does not sit consistently with David’s evidence concerning the third representation. However, it is possible that Dame Leonie decided, at least in the period early after Dr Harry’s death, that she would honour his wishes and tell David that she would leave the Farm to him in her will. Jocelyn’s evidence that Dame Leonie, in mid-2006, was considering leaving the Farm to the University of Sydney suggests that it was Dame Leonie’s belief that her daughters did not want or need the Farm. Dame Leonie’s stated reason for not leaving the Farm to David was the possibility that Maureen would be entitled to make a claim against it. It seems that Dame Leonie was implacably opposed to that possibility.

48. [205]

    In the context of providing reasons for why she presumed the Farm would be gifted to David, Jocelyn said at par 56 of her affidavit:

49. [206]

    Jocelyn affirmed again at par 69: “My mother was very clear that she did not want the Farm to be sold.”

50. [207]

    Hilary’s evidence that, at the meeting with the solicitors concerning the execution of a power of attorney by Dame Leonie, Dame Leonie initiated a question of the solicitors as to whether, if she left the Farm to David, Maureen would be able to make a claim on it, strongly suggests that the possibility was present in Dame Leonie’s mind, and that she was dissuaded from taking that course because the solicitors gave an affirmative answer to the question.

51. [208]

    This expectation may have been indefinite, and Hilary and Jocelyn have claimed that they did not form this expectation as a result of anything said to them by their parents. However, even if the circumstances that led Hilary and Jocelyn to form this expectation can no longer be identified, it suggests that there must have been some element of the relationship between David and Dr Harry and Dame Leonie that caused their daughters to form this understanding.

52. [209]

    This is not evidence that directly corroborates David’s evidence concerning the making of the representations, but it substantially diminishes the reservation that the Court would otherwise have about the likelihood that Dr Harry and Dame Leonie gave the assurances to David.

53. [210]

    Hilary's defence also focused on the fact that David was relying upon three conversations that he claimed to have had with Dr Harry and Dame Leonie, and that there was no evidence that either person had ever informed any other person that they had made statements to David substantially in the form that David said they had made them.

54. [211]

    David claimed that Dr Harry made the first representation to him in the early 1980s. At that time, it is likely that Dr Harry had the same expectation as most middle-aged men that he would live to a reasonable old age. I consider that the absence of any evidence of Dr Harry bringing any person other than David into his confidence about his testamentary intentions concerning the Farm is a relatively neutral factor. The Court cannot know whether or not Dr Harry discussed the subject with Dame Leonie. In light of the evidence of Hilary and Jocelyn discussed above, it would not be expected that he would have discussed the subject with his children, particularly if his daughters had shown no particular interest in operating the Farm. Further, Hilary and Jocelyn each gave evidence to the effect that on the rare occasion their parents thought fit to discuss their testamentary intentions with them, they only provided them with such information as that which related to them and nothing more.

55. [212]

    As far as the second representation is concerned, that is a subject that was raised by Dr Harry in circumstances where he understood that his premature death was relatively imminent. It is not unnatural that, in about 1988, only five or so years after the first representation was made to David, that Dr Harry may have thought that an adjustment to the plan was justified because of his unexpected, impending death. The first representation would have been made to David in the expectation that he would have to perform the share farming agreement for a period of decades in order to enjoy the promised inheritance. Dr Harry's premature death changed the parties’ expectations, and that was implicitly accepted by David, when he was informed of the second representation.

56. [213]

    If Dame Leonie in fact made the third representation to David, it is not surprising that she did not talk about the issue to anyone else, including her daughters, until it came to the time when Dame Leonie had to make the arrangements that were necessary to deal with the frailties of age. Hilary's evidence was also that Dame Leonie "was guarded in what she shared about money and financial plans". The sense that I got about Dame Leonie from her daughters' evidence was that she was a private and reserved person. Consequently, I do not think that the Court should place any positive significance on the absence of evidence that Dame Leonie informed any other person of what David claims she said to him about the third representation.

57. [214]

    It may well be, as Hilary and Jocelyn claimed, that it would generally have been out of character for Dame Leonie to confide in David her intentions about the third representation. However, the time at which these events occurred was exceptional, in that Dame Leonie had recently experienced the loss of her husband through his premature death with cancer. If in fact Dame Leonie had reached an agreement with Dr Harry that the Farm should be left to David if he continued to perform the share farming agreement during Dame Leonie's lifetime, it is not particularly exceptional that Dame Leonie may have made the third representation to David shortly after Dr Harry's death and out of respect for his wishes. It is also possible that, in the ensuing years when Dame Leonie continued to pursue the activities that led her to exceptional eminence in society, the significance of any statement that she made to David may have diminished in her own recollection.

58. [215]

    Moreover, Hilary and Jocelyn gave evidence that Dr Harry had also broached the subject of his will with them once only and, at least with respect to Jocelyn, without being prompted. Hilary said at par 50 of her 14 August 2018 affidavit:

59. [216]

    In response to pars 19 and 20 of David’s 24 August 2017 affidavit, at which he detailed the first representation, Jocelyn said at par 65 of her affidavit:

60. [217]

    In response to par 33 of David’s affidavit, at which he detailed the third representation, Jocelyn said of Dame Leonie at par 67 of her affidavit:

61. [218]

    This evidence is of significance because it diminishes the strength of Hilary’s claim that it was improbable that Dr Harry and Dame Leonie would have raised the issue of their wills with David once only and without any prompt.

62. [219]

    I have already discussed above the evidence given by David's witnesses of how they learned of a proposal that David would inherit the Farm. That evidence has assisted me to accept that David himself believed at times before Dame Leonie's death that he was entitled to the benefit of the third representation.

63. [220]

    The evidence also was that David never discussed the issue again with Dame Leonie after she had informed him of the third representation.

64. [221]

    In my judgment, this evidence is explicable on the basis of the impression I formed of David in the witness box that he is relatively laconic. Moreover, there was such a great social imbalance between Dame Leonie and David that it is not surprising that David was inhibited in discussing Dame Leonie's testamentary intentions with her. This being the case where Dame Leonie’s own daughters were inhibited in the same regard. I formed the judgment that David is the sort of person who is a man of his word and expects other people to act honourably in the same way. Once a bargain is made, it is made and does not need to be revisited.

65. [222]

    While it would have been easier for the Court to accept David's evidence that Dame Leonie conveyed the third representation to him if there was independent evidence that Dame Leonie had informed other people of that occurrence, the absence of that evidence is not, in the circumstances, a significant factor that tells against the Court accepting David's evidence.

66. [223]

    Hilary put a number of further arguments as to why the Court should not accept David's evidence that the three representations were made to him by Dr Harry and Dame Leonie.

67. [224]

    First, Hilary submitted that, on David's case, the statements were completely impromptu, and they were not made in the context of David complaining that the rewards that he had received from the share farming agreement and living on the Farm were insufficient. David accepted that he had not made any complaints to Dr Harry or Dame Leonie.

68. [225]

    Although David agreed in cross-examination that the representations were made impromptu, I take him to mean that they were not made in direct response to a request made by him. Although David accepted that he had not complained to Dr Harry or Dame Leonie about his financial circumstances, his response was guarded, and he referred to the quarterly reconciliations that took place. As I have explained above, it must have been obvious to Dr Harry, and later to Dame Leonie, when they considered the quarterly financial results, that David’s income was irregular and meagre, and that he could not be expected to continue with the farming operation without the ‘bonus’ being increased. In addition, it was apparently necessary for Dr Harry and Dame Leonie to make short-term loans to David. I am satisfied that David was not the type of person to complain about circumstances into which he had voluntarily entered. However, his financially grim position would have been obvious to intelligent and sophisticated people like Dr Harry and Dame Leonie. Consequently, I do not consider that it is of any moment that the representations were not made in response to specific complaints by David.

69. [226]

    There is a likelihood that the circumstances themselves may have motivated Dr Harry and Dame Leonie to give those assurances. This is so in a context where Dr Harry, and later Dame Leonie and David shared a warm relationship over many years, where Dr Harry and Dame Leonie were aware of the financial struggles David faced, where Dr Harry and Dame Leonie would have been aware that David’s father had terminated the written share farming agreement because he could not support his family with the level of income it generated, where Dr Harry and Dame Leonie were likely aware of David’s love of the Farm and farming in general, where Jocelyn gave evidence that her mother did not want the Farm to be sold, subdivided or developed, and where Dr Harry and Dame Leonie observed their daughters had little to no interest in the Farm (with Dame Leonie having considered gifting the Farm to the University of Sydney rather than her daughters but deciding against it on the probability that the university would sell the Farm).

70. [227]

    Secondly, there was no express promissory element in any of the statements allegedly made by Dr Harry and Dame Leonie, and the statements were not expressed to be conditional on David doing or not doing anything.

71. [228]

    As I have explained (above at [32]-[35]), it is not necessary that an encouragement be formally expressed in terms of a promise before it may form the basis of a proprietary estoppel. A bare statement that the maker will do a specified act in the future may be sufficient. Whether the maker will be held to performing the act will depend upon whether the circumstances justify an expectation in the listener that the intention to do the act is serious and the statement may reasonably be relied upon by the reasonable listener. Where the act is the conferral of a benefit on the listener, it will be easier to treat the statement as being an assurance. It will also be easier to do so where the making of the statement is likely to induce conduct by the listener from which the maker will benefit. In short, a statement that is not overtly promissory in form may be sufficient to create a reasonable expectation. As Mr Handley was recorded by Meagher JA in Q v E Co to have said (above at [36]), a representation or promise “may be implied wholly or partly from conduct or inferred from silence or inaction”. Further, whether a representation or promise has been made, and if so what its meaning is, must be judged “objectively according to the impact that whatever is said [or done] may be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee”.

72. [229]

    I also consider that it does not matter in this case that the statements were not expressed to be conditional on David doing or not doing anything. In Waddell v Waddell [2012] NSWCA 214, Campbell JA (with whom Allsop P and Sackville AJA agreed) held at [54]:

73. [230]

    Thirdly, there was no evidence that either Dr Harry or Dame Leonie knew that David was only staying on the Farm and continuing to implement the share farming agreement because of any of the representations.

74. [231]

    For an equitable estoppel to arise, the representor must know that the representee has placed reliance on the representation. In many cases, that requirement has been satisfied by the representor having actual knowledge of the reliance by the representee. However, there is High Court authority to the effect that constructive knowledge is sufficient. In Commonwealth v Verwayen, Deane J said at 445:

75. [232]

    This issue was discussed by Macaulay J in Leading Synthetics Pty Ltd v Adroit Insurance Group Pty Ltd [2011] VSC 467:

76. [233]

    The second aspect of this submission speaks to whether Dr Harry and Dame Leonie knew that the only reason David stayed on the Farm was because of the alleged representations. With respect, that is not the appropriate test. In Priestley v Priestley [2017] NSWCA 155, Emmett AJA (with whom McColl JA agreed) said:

77. [234]

    I do not accept that an estoppel by encouragement can only arise where the representor has actual knowledge that the only reason why the representee engages in the conduct that will lead to detriment being suffered if the representation is not realised is the expectation that the representation will be made good. It will be sufficient if the making of the representation is a real or significant reason for the response of the representee. Furthermore, subjective knowledge on the part of the representor is not essential, provided that a reasonable person in the position of the representor would understand that it was probable that the representee was engaging in the conduct in the expectation that the representation would be realised. In any case, as a matter of fact, the income earned by David from the farming operation was consistently so irregular and meagre compared to the amount of arduous work that was required that, if it is accepted that Dame Leonie made the third representation to David, she ought reasonably to have assumed that part of his motivation for continuing was the expectation that he would inherit the Farm. That Hilary and Jocelyn had at various times assumed David would be left the Farm lends weight to this inference.

78. [235]

    In any event, with respect to the suggestion that David did not raise the issue of the representations again with either Dr Harry or Dame Leonie, it is to be noted that there is authority for the proposition that an equitable estoppel will not be defeated because the representee had the means of knowing the truth. In Nigel Watts Fashion Agencies Pty Ltd v GIO General Ltd [1994] NSWCA 365, Handley JA said at 19:

79. [236]

    Fourthly, Hilary submitted that the terms in which the representations were explained by David were inconsistent because, on the one hand he claimed that, after he inherited the Farm he would be able to do what he wanted with it, including to sell it, but an additional element of the plan was that Hilary and Jocelyn were to be free during their lifetimes to visit the Farm and use the Kramer house whenever they wanted to.

80. [237]

    Further to my discussion above (at [36]-[41]), in DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348, Meagher JA said:

81. [238]

    In Moore v Aubusson [2020] NSWSC 1466, Ward CJ in Eq said at [399]:

82. [239]

    The strength of Hilary’s submission depends upon the assumption that is made concerning the understanding of the maker of the representation as to the true level of commitment of Hilary and Jocelyn to a right to enjoy occasional visits to the Farm. As David explained his understanding of the first representation, Dr Harry only required an assurance by David that David would allow Dame Leonie and his daughters to visit the Farm during the period of time in which he owned it. David evidently assumed that the same requirement was made of him by Dame Leonie when she made the third representation known to him. The suggested inconsistency only arises if the representations are understood as having the intent that David was entitled at the one time to treat the Farm as his own and to sell it, but also to make it available to Hilary and Jocelyn at will during their lifetimes. The fact that Dame Leonie expressed the initial intent to leave the Farm to the University of Sydney) suggests that Dame Leonie did not have a strong belief that her daughters wanted to have access to the Farm.

83. [240]

    A further submission put by Hilary was that it was inherently improbable that Dame Leonie had made the third representation to David because, if she had done so, it would be necessary for the Court to find that she had acted dishonestly when she decided to leave the Farm to Hilary and not to David.

84. [241]

    I do not accept the premise of this submission. A finding that a deceased person has acted unconscionably in failing to implement an assurance that a particular bequest will be made to a person to whom the assurance was made does not require a finding of dishonesty. Whether or not the failure to make that bequest is unconscionable is an objective question based upon all of the circumstances, which ultimately lead to the question of whether, having regard to how the assurance was made, the consequences of reliance on the assurance and the detriment that will be suffered as a result of the bequest not being made, that failure is to be considered by equity as unconscionable. That may occur where the deceased did not understand the assurance to have the effect as it was reasonably understood by the representee, in that person’s position and with his or her known characteristics. The representor may have wrongly thought that the representee had not acted on the faith of the representation. The representor may have forgotten that the representation was made or what its terms were. The probability of the latter is likely in the light of Dame Leonie’s diagnosis of dementia. In cases such as this, there may be unconscionability without dishonesty.

85. [242]

    The available evidence does not justify the Court in making any finding concerning Dame Leonie’s subjective honesty, and it is not necessary to do so. On the one hand, Hilary’s evidence of the meeting with Dame Leonie’s solicitors, in which Dame Leonie sought advice as to whether, if she left the Farm to David, it would be susceptible to a claim by Maureen, and Dame Leonie’s response to affirmative advice that she absolutely did not want to risk the Farm going to Maureen is consistent with Dame Leonie having recalled the third representation but having decided that she would not accept any risk that the Farm would end up in Maureen’s hands. The evidence does not really explain the level of antipathy that Dame Leonie apparently felt against Maureen. On the other hand, Jocelyn gave evidence that, in about June 2006, Dame Leonie simply stated to her that she was not going to leave the farm to David, and that she initially contemplated leaving it to the University of Sydney. That evidence is consistent with Dame Leonie either not having a present recollection of having made the third representation to David, or of having decided not to implement it even though she was aware of it. It is significant that the conversation occurred about 18 years after the third representation was allegedly conveyed to David. An assurance that was a life changing event to David may well have been a much less significant event in Dame Leonie’s mind, given it was made in the highly emotional circumstances of Dr Harry’s recent death.

86. [243]

    Senior counsel for Hilary ended his submissions by giving a summary of the defendant’s case in respect of liability. He said at T 338.49: “[E]ven if the statements were made as asserted by Mr Stone, the first thing is that what was said only encouraged in him a hope and not an expectation that he would receive the farm when Leonie had passed away, and if that be the case, no estoppel can arise …[S]econdly, even if the [representations] were made and they did encourage him to have an expectation rather than just a mere hope, neither Leonie nor Harry intended or knew that he had that expectation and that he was staying on the property only because of what they had said to him, and in those circumstances, an estoppel cannot operate either. That is the gravamen of the defendant’s case here”.

87. [244]

    As I have accepted that David believed he had been given an assurance that he would inherit the Farm because of the third representation, and that he told Maureen and other members of his family of that belief, acceptance of the first part of this submission would require a finding that the collective effect of the representations allegedly made by Dr Harry and Dame Leonie were only reasonably capable of conveying to a person in David’s position that it was possible that the Farm would be left to him when Dame Leonie died. That in my view is an inherently improbable proposition. It is more rational to decide that the assurances were made as asserted by David, or that they were not made at all. For either Dr Harry or Dame Leonie to have informed David that there was a mere possibility that he would inherit the Farm, if he continued the share farming operation for their lives would have been cruel, and I consider that it would have been out of character for both of them.

88. [245]

    In response to the second aspect of this final submission, I have already explained above why I do not accept that estoppel by encouragement can only arise if the assurance is the only reason why the representee acted on the faith of the assurance, with the consequences that lead to the resiling from the assurance being unconscionable. Furthermore, it is not necessary for the representor to have any intention or subjective appreciation that the representee is acting on the faith of the assurance, if the representee is aware of circumstances that make it objectively reasonably apparent that the representee is so acting.

89. [246]

    In considering the submissions made on behalf of Hilary I have substantially relied upon the succinct and comprehensive summation made by her counsel in final oral submissions. No submission was made based upon any earlier draft or executed wills of Dame Leonie that predated her final 2011 will. I am aware that the evidence contains a number of such documents: see Exhibit HLK-2 to Hilary's affidavit of 26 July 2019 Tabs 17 to 21. There are incomplete and unexecuted draft wills apparently prepared in 1996 and 1999. There are wills executed by Dame Leonie on 13 December 2000, 2 June 2003 and 18 December 2006. Each of these documents only contemplates or provides for David to receive a legacy under the relevant draft or will. The amount of the legacy increased over the three wills that were executed. From the time of the incomplete draft will apparently prepared in 1999, the Colo Property was to be bequeathed to Hilary and Jocelyn, or later Hilary alone. The incomplete draft will apparently prepared in 1996 did not mention the Colo Property.

90. [247]

    I have considered these documents even though they were not specifically relied upon by Hilary in her final submissions. They tend to show that Dame Leonie may not have had in mind from as early as 1996 that she had given any assurance to David that she would leave the Colo Property to him in her will (although I would not place much weight on draft documents). This is evidence that weighs against a finding that Dame Leonie made the third representation to David less than 10 years earlier. However, I do not consider the evidence to be conclusive against David's case. That case depends upon the finding that should be made concerning the conversation that David claims occurred between himself and Dame Leonie relatively shortly after Dr Harry's death.

91. [248]

    I consider that the significance of these documents is weakened when weighed against the evidence given by both Hilary and Jocelyn discussed above. Hilary’s evidence was that at a meeting with her solicitors, Dame Leonie queried whether Maureen would be able to make a claim on the Farm if she left it to David, and that upon learning of the possibility, decided against it. Jocelyn gave evidence that in June 2006, months before the executed will of 18 December 2006, Dame Leonie contemplated leaving the Colo Property to the University of Sydney, and when asked why she was not leaving the property to David, responded by recounting her meeting with the solicitors and said that she would leave David a monetary amount “instead” (see [134]).

92. [249]

    I have taken this evidence into account in conjunction with all of the other evidence that I have discussed above, and I am positively satisfied that, on the balance of probabilities, the third representation was made to David by Dame Leonie.

93. [250]

    I am satisfied that David acted on the faith of that assurance to his detriment by continuing the farming operation on the Colo Property for about 23 years thereafter in the belief that he would inherit that property under Dame Leonie’s will.

94. [251]

    I am also satisfied that there is a sufficient probability, that in the absence of a belief that he would inherit the Colo Property, David would have decided that the farming operation was too hard going and would have terminated the share farming agreement and successfully pursued a more remunerative occupation. Dame Leonie ought to have known that part of David’s motivation for continuing was the expectation that he would inherit the Colo Property. In those circumstances, it was unconscionable for Dame Leonie not to have left the Farm to David in her will.

95. [252]

    Consequently, David is entitled to appropriate equitable relief to relieve him of the effect of Dame Leonie’s unconscionable conduct. I will consider the terms of that relief below.

Defences raised by Hilary

1. [253]

   It is now necessary to deal with the grounds raised by Hilary in the amended defence as to why David’s conduct has disentitled him to the equitable relief that he would otherwise have received.

David’s obligation to account to Dame Leonie

1. [254]

   The most serious claim made by Hilary was that David deceived Dame Leonie on a significant number of occasions from 2007.

2. [255]

   As noted above, Hilary alleged in par 21A and 21B of the amended defence that David lacks clean hands and that Equity should refuse the relief sought by him because he acted dishonestly and failed to account to Dame Leonie for all produce grown on the Farm. Hilary also alleged that David had taken advantage of Dame Leonie when her mental faculties were declining by knowingly failing to pay his proper share of the fuel costs of the farming operation.

3. [256]

   The first of these claims was based on the uncontroversial fact that the evidence showed that, in 16 of the 36 quarters, beginning in the 2007 financial year, David had purchased quantities of seeds and seedlings but the proceeds of sale for which David accounted to Dame Leonie for those quarters was nil. The detail of these circumstances will be set out below in a table in the course of discussing the evidence of Hilary’s expert agronomist, Mr Ivey, in relation to her alternative claim that the absence of returns from the growing of crops in these quarters demonstrated that David had conducted the farming operation incompetently and without due diligence. Hilary’s case was that the absence of returns meant that either David had dishonestly failed to bring the proceeds of sale to account, or that the crops had failed because his farming practices were incompetent.

4. [257]

   David responded to the evidence that was tendered against him comprehensively and in detail, primarily in two affidavits made on 18 October 2019.

5. [258]

   It is not surprising that David was driven to prepare comprehensive and detailed evidence to defend himself against the claims of dishonesty levelled by Hilary. A very substantial proportion of the forensic effort in these proceedings has been directed at prosecuting and defending Hilary's claim that David performed his obligations under the share farming agreement dishonestly. The need to deal with the mass of evidence on these issues has substantially prolonged the preparation of this judgment.

6. [259]

   In response to Hilary's affidavit dealing with her dishonesty and incompetence claim, David said in par 5, concerning Hilary's assertion that he "was under-declaring sales to dishonestly reduce his liability to my mother":

7. [260]

   David responded to Hilary's claim that a total of 4,000 lettuce seedlings were purchased in the September 2010 quarter, but there were no sales of lettuce recorded in the account book, by accepting the truth of the assertion but denying that he had under-declared sales to dishonestly reduce his liability to Dame Leonie. David explained how he, as a matter of “prudent farm management practice”, planted a limited test crop in order to see whether a new type of produce could be grown economically on the Farm, and that was the case for the particular quantity of lettuce that David had grown on this occasion. David explained why the crop failed and decided that lettuce could not be grown commercially on the Farm.

8. [261]

   David also gave a detailed explanation in par 6.5 of his response to Hilary's affidavit as to why, in the years of 2007 to 2014, he frequently lost a substantial proportion of the cabbage and cauliflower crops growing on the Farm due to the substantial increase in the incidence of wild radish. David explained that wild radish had not been a serious problem up until about 2007, but thereafter he experienced great difficulty in preventing wild radish from ruining the crops that they infested.

9. [262]

   As will be seen, it is possible that David's farming methodology was not optimal in respect of his attempts to defeat the frequent infestation of cabbage and cauliflower crops with wild radish. However, I accept that David conscientiously tried to deal with the problem with the resources available to him over the later years that the share farming agreement was in effect.

10. [263]

    If in fact David had decided to defraud Dame Leonie by selling produce and not bringing the sale price to account, it is most unlikely that a table of the proceeds of sale would have the profile in Mr Ivey’s table 10, which shows significant sales in some quarters and absolutely none in others. Any but the most maladroit thief would steal an undetectable portion of the proceeds of sale of the crops each year, rather than to fully account for some years’ crops, but for others sell a whole year’s crops and keep all of the proceeds.

11. [264]

    At T 124.21, David specifically denied that there were occasions when he went to the markets and sold stock without accounting for the proceeds in his quarterly reconciliations. There was no positive evidence at all that David had ever defrauded Dame Leonie. The very fact that Hilary put the alternative case that the crops may have failed because of David’s incompetence had the forensic effect of undermining her dishonesty case. That was because David accepted that the crops had failed. The parties’ expert agronomists did not give evidence to support David’s claim that the crops had failed, but their consideration of the issue gave the Court no reason to think that David’s evidence was false. I unreservedly accept David’s denial and reject Hilary's claim that David acted dishonestly in his dealings with Dame Leonie in accounting for the proceeds of sale of the crops.

12. [265]

    Hilary made a claim in par 4.6 of her 26 July 2019 affidavit that, from at least 2007, fuel expenses which under the share farming agreement were to be paid equally by Dame Leonie and David were on occasions not accounted for by David in his quarterly reconciliations.

13. [266]

    Hilary said in par 9 that, between about 2010 and 2014, when she dealt with David on Dame Leonie’s behalf as her attorney, during the quarterly reconciliations: “Dave would open his account book to the relevant page to allow me to see the figures he had recorded for income, expenses, his quarterly bonus, fuel for that quarter, and for the Quarterly Reconciliation”.

14. [267]

    Hilary said in par 18 that a review of the expenses for fuel recorded by David in his account book against fuel invoices showed that fuel expenses had been omitted from the account book for nine consecutive quarters between July 2007 and September 2009 inclusive. In par 19, Hilary asserted that “the total amount of fuel expenses omitted from Dave’s account books during this period is approximately $19,751.57, of which $9,875.79 should have been paid by Dave as his half share of the fuel expenses”.

15. [268]

    David explained in par 6 of his 18 October 2019 affidavit in response to Hilary’s affidavit that he did not include fuel expenses in the farm account book as part of the quarterly reconciliation. Accounts for diesel fuel for the Farm were sent by the supplier directly to the home address of Dr Harry, Dame Leonie or Hilary, as was appropriate at the time. David annexed sample accounts to prove this claim. The Kramers paid the amounts of the invoices directly to the supplier. At the time of each quarterly reconciliation, David was told the fuel cost paid for by the Kramers, and that amount was then entered into the reconciliation. David said that, if no entry for fuel appeared in the farm books, that would be because no corresponding tax invoices were presented by the Kramers at that particular quarterly reconciliation.

16. [269]

    In cross-examination, David was taken to a number of documents in the Court Book that showed payments by Dame Leonie for fuel that were not recorded in the relevant quarterly reconciliations with Dame Leonie for 12 quarters after January 2008. David accepted that he had not paid his share of the fuel bills.

17. [270]

    David accepted that Dame Leonie’s dementia was starting to show from 2008, in her driving ability and her capacity to do sums.

18. [271]

    David also accepted that the man who delivered fuel would sometimes leave a docket at the Farm showing the cost of the fuel that had been delivered but said that this did not always happen.

19. [272]

    The following cross-examination occurred at T 116.14:

20. [273]

    David acknowledged that he knew that Dame Leonie was receiving and paying the fuel bills and that he had an obligation to pay her one half of those amounts.

21. [274]

    The cross-examination continued at T 117.32:

22. [275]

    David’s explanation for how the errors had been made in the quarterly reconciliations was that the long-term practice of the Kramers had been to present evidence of payments made by them at the time of the reconciliations and David had simply acted upon the information that was provided to him by Dame Leonie.

23. [276]

    Remembering that Dame Leonie was considered to have testamentary capacity as late as 11 November 2011, I do not accept the insinuation made by Hilary that David must have been aware that Dame Leonie’s advancing dementia was responsible for her failures to claim a share of the fuel bills that she had paid, and that David had dishonestly taken advantage of Dame Leonie’s disability. The most likely explanation for these events is that Dame Leonie retained a commanding presence and that David simply followed the time-honoured process that had always been adopted in striking the quarterly reconciliations, and that he was not sufficiently alert to the deterioration in Dame Leonie’s capabilities to take adequate care to scrutinise the claims made by Dame Leonie.

24. [277]

    The deficiency of $9,875.79 in David’s contribution to fuel costs spread over three years is an average of $823 per quarter. While that amount is not inconsequential, given the meagre returns from the share farming operation, I do not consider it to be so great as to justify a finding that David was motivated by any intention to dishonestly take advantage of Dame Leonie.

David’s obligation to farm in a proper and workmanlike manner

1. [278]

   Hilary pleaded in par 22 of her amended defence that, even if the representations asserted by David were made, it was not unconscionable for Dame Leonie to resile from them. One of the particulars for that claim, by reason of Hilary's repetition of the particulars to par 21, was that David had not conducted the farming operation under the share farming agreement in a proper and workmanlike manner.

2. [279]

   Hilary did not, in her submissions, provide any conceptual framework to support her claim that an alleged breach by David of a common law contractual duty to conduct the farming operation competently should excuse Dame Leonie from being found to have acted unconscionably in departing from a representation to David that she would leave the Farm to him in her will.

3. [280]

   Dame Leonie made her will on 11 November 2011, which was some time after she was diagnosed with dementia in 2010. It has been accepted that Dame Leonie had testamentary capacity when she made her will. Even allowing for earlier reduced cognitive capacity on Dame Leonie's part, there is no evidence that Dame Leonie, at any time from 2007, formed the opinion that David was not conscientiously performing his duties under the share farming agreement, or that any breach by him of his contractual obligation towards her justified Dame Leonie in declining to leave the Farm to David in her will.

4. [281]

   It is therefore difficult to see why, in principle, any breach by David of any common law contractual obligation that he owed to Dame Leonie could be a valid exculpation for conduct on the part of Dame Leonie that Equity would consider to be unconscionable.

5. [282]

   Furthermore, Hilary has not demonstrated that Dame Leonie suffered a loss as a result of David’s alleged incompetence that was of a magnitude that would justify the Court in declining to make an order that had the effect that David would inherit the Farm.

Mr Ivey’s opinion

1. [283]

   Hilary relied on an expert report dated 14 August 2019 by an agronomist, Richard Ivey. Mr Ivey was instructed to provide an opinion about the income that could have been generated on the Farm by a competent share farmer working under the terms of the share farming agreement, assuming competent but not exceptional managerial skills.

2. [284]

   Mr Ivey's report was based on the profit and loss statements of Dame Leonie for 2009 to 2014 and the income tax returns of David for 2010 to 2016. Mr Ivey separated these years into two periods, being before and after a significant irrigation redevelopment that was completed in late September-early October 2011, following which there was evidence of increased scale and intensity of vegetable and fruit production on the irrigated area of the Farm. Mr Ivey prepared his report on the basis that Dame Leonie and David were to share the income and the cost of fuel in accordance with the terms of the share farming agreement.

3. [285]

   Mr Ivey provided his opinion based upon the evidence of the seedlings and seeds purchased for the purposes of the share farming agreement for the financial years of 2008 to 2015. Mr Ivey concluded that, assuming competent but not exceptional managerial skills, if all of the seedlings had been planted, the total estimated potential gross income from the sale of produce that could be expected to be grown from those seedlings was $374,948 excluding GST. That estimate of potential gross income made no allowance for selling costs, industry levies, packaging, freight and production costs.

4. [286]

   Mr Ivey's average year budget before the irrigation redevelopment assessed that the Farm was capable of generating a total income of $65,101 with total operating expenses of $55,585, giving an operating return of $9,515. After allowing for a depreciation of $6,000, the operating profit was $3,515. The equivalent average year budget after the irrigation redevelopment generated a total income of $82,526 with total operating expenses of $69,445, giving an operating return of $13,080. After allowing for a depreciation of $8,500, the operating profit was $4,580.

5. [287]

   On this basis, applying the terms of the share farming agreement, the net annual return of Dame Leonie for the two periods would be losses of $26,335 and $30,882 respectively. The net annual return to David would be $35,850 and $43,963.

6. [288]

   Mr Ivey calculated that Dame Leonie incurred substantial losses over those periods, and that in the financial years of 2009 to 2014, Dame Leonie made losses of $21,206, $17,728, $22,468, $32,568, $33,683 and $52,571.

7. [289]

   On my calculations, the total actual loss incurred by Dame Leonie over the six-year period was $180,224. Mr Ivey calculated that the loss should have been $173,697, a difference of only $6,527.

8. [290]

   In comparison to the estimated potential gross vegetable and fruit income in the financial years of 2008 to 2015 of $374,948, Mr Ivey calculated that the actual sales data for fruit and vegetables (excluding oranges and potatoes) was $132,753.

9. [291]

   The clearest exposition of the factual basis of Hilary’s claim, based upon the expert opinion of Mr Ivey and the difference between the number of seedlings and seeds purchased and the proceeds of crops sold (fruit and vegetables excluding oranges and potatoes), is found in Tables 9 and 10 of Mr Ivey’s 14 August 2019 report. I have combined those tables to create the following table (which lacks elegance because Table 9 was prepared on a financial year basis and Table 10 on a calendar year basis):

10. [292]

    Mr Ivey concluded that there was little or no apparent, explainable relationship between potential sales (based on seedling and seed purchases) and actual sales. Mr Ivey expressed the opinion that, in the ordinary course, assuming competent but not exceptional managerial skills, a notable correlation between the farm enterprise expenses and produce sales would be expected.

11. [293]

    At pars 114 and 120 of his report, Mr Ivey offered a number of explanations for the lack of an apparent relationship between potential and actual sales, and between costs and sales, some of which involved inadequacy in the data provided to Mr Ivey. However, one of the explanations was: "crop husbandry and managerial inputs may not have been of a sufficient standard to produce the expected relationships between costs and actual sales."

David’s evidence in response

1. [294]

   The most significant feature of David's 18 October 2019 affidavit in response to Mr Ivey's report is the impression that it creates in the reader of the enormous workload undertaken by David, largely without assistance, over the period that the share farming agreement was in effect. In response to the passing growing seasons, David was required to work hard and long, often in a way that must have been exceedingly demanding and frustrating, because of the inefficiencies of the farming process and the limited equipment that was available.

2. [295]

   The best example of this is the evidence given by David in par 21 of his affidavit concerning the steps that were necessary to irrigate the growing crops on the Farm before the irrigation system was improved in about 2011.

3. [296]

   David also gave evidence concerning the frequency and seriousness of the flooding of the Colo River (evidence that was supported by the affidavit of Wendy Elizabeth Ward affirmed 17 October 2019 concerning rainfall and flooding records).

4. [297]

   David responded to Mr Ivey's list of produce grown on the Farm by explaining that certain types of produce had not been grown or had only been grown in very limited quantities.

5. [298]

   In par 25 of his affidavit, David responded to Schedule 4 of Mr Ivey's report, in which Mr Ivey estimated the potential gross income from vegetable and fruit production, by explaining the process by which David sold the Farm's produce at the Grower's Market, and the reasons why David understood that the price that he received was about 30% less than the wholesale price.

Mr Stephens’ opinion

1. [299]

   David responded to Mr Ivey's report by serving a report dated 4 November 2019 by an expert agronomist, Mr Michael Richard Stephens.

2. [300]

   In essence, Mr Stephens expressed the following opinion. The operation of the Farm under the share farming agreement has been an ‘undercapitalised business, limited by insufficient labour, poor soils, inadequate machinery, a poor irrigation system and layout and has been subject to the vagaries of the market’. Mr Stephens said that the business is too small to enjoy the economies of scale and too big to allow time for the farmer to produce meaningful off-farm income. Although the new system of irrigation was an improvement, it was still not fully automatically controlled, and was required to be operated manually by driving a tractor to the pumps on the river. The adequacy of the water flow in the Colo River did not ensure that the correct amount of water could be supplied to crops at the correct time. Mr Stephens opined that the performance of the farming business was inhibited by a lack on David's part of detailed agronomic knowledge backed by independent agronomic advice.

3. [301]

   Mr Stephens set out, in par 16 of his report, the inputs and outputs from vegetable farming, the absence of which may lead to lower yields. Mr Stephens explained, in par 18 of his report, how the size of the Farm placed it in a "no man's land", where it was not small enough to be farmed by a single family that could earn off-farm income, and not large enough to be farmed with full economic efficiency.

4. [302]

   Mr Stephens explained, in par 20.1, that the soil on the Farm appeared to be low in organic matter and tight, and, in par 20.4, that parts of the terrain of the paddocks on the Farm are undulating and unsuitable for the purpose of irrigated vegetable production.

5. [303]

   Mr Stephens said, in par 20.5, that the combination of machinery and labour necessary to ensure efficient and timely production has been absent from the Farm.

6. [304]

   Mr Stephens concluded, in par 27 of his report, that Mr Ivey's method of calculating gross income made insufficient allowance for the factors that Mr Stephens had listed in his report that made the farming operation on the Farm inefficient. Mr Stephens added:

7. [305]

   In pars 29 to 34 of his report, Mr Stephens responded to Mr Ivey's opinion that, in the period of 2008 to 2015, the gross vegetable and fruit income from the Farm should have been $374,948. Mr Stephens first concluded that the effect of the presence of wild radish would have reduced the cabbage and cauliflower return by 35%, from $221,395 to an amount of $143,906. That adjustment would reduce Mr Ivey's estimate of achievable gross income to $298,000, which should then be reduced by a further 30% to allow for the difference between the wholesale price and the price received by the grower. Mr Stephens concluded that the estimated achievable gross income should be $208,600, rather than the $374,948 estimated by Mr Ivey.

8. [306]

   This figure for achievable gross income estimated by Mr Stephens is still substantially higher than the amount of $132,753 achieved by David over the period.

Joint expert report

1. [307]

   Mr Ivey and Mr Stephens conducted an expert witness conclave and produced a joint expert report that was filed on 27 April 2020. Both experts were cross-examined concurrently, although their evidence was given remotely.

2. [308]

   With some exceptions, the expert witnesses maintained the opinions that they had stated in their reports.

3. [309]

   My assessment of the expert witnesses is that Mr Ivey based his opinion more on theoretically achievable results in accordance with published statistical data, while Mr Stephens took that data into account, but in addition was more influenced by what he considered to be the day-to-day reality of David's experience as a share farmer on the Farm over the relevant period.

4. [310]

   While both experts calculated their budgets on the basis that the share farmer had competent but not exceptional managerial skills, Mr Stephens gave more weight to the fact that a share farmer in David's position would need technical advice and the resources to achieve the budgets, which David did not always have.

5. [311]

   While Mr Ivey based his opinion as to the achievable income on published data, Mr Stephens also considered evidence that small local producers had to pay commissions in the order of 30% to the agents who sold their produce wholesale.

6. [312]

   Mr Stephens considered that it was significant that Mr Ivey had not interviewed David, although he had inspected the Farm.

7. [313]

   The expert witnesses disagreed as to whether, there being sufficient irrigation water in the Colo River, the correct amount of water could be supplied to crops at the correct time.

8. [314]

   I consider that a significant difference between the opinions expressed by the two expert witnesses arose out of the assumptions that they made in determining their theoretical budgets concerning what David was required to supply under the share farming agreement.

9. [315]

   In particular, Mr Ivey assumed that a competent share farmer would apply the share farmer's own skills and knowledge to the management of the farm business or engage other professionals where the share farmer's own capacity, skills and knowledge were not sufficient. According to Mr Ivey, it is the share farmer's role to identify and arrange to secure the resources required for the operation of the farm business, including plant and equipment, irrigation infrastructure, crop inputs and labour. It was Mr Ivey's opinion that matters such as crop inputs and labour would be under the direct control of a competent share farmer. Mr Stephens' response was, in effect, that these assumptions did not reflect the reality of the operation of the share farming agreement. The farming operation was ‘undercapitalised and limited by insufficient labour, poor soils, inadequate machinery, a poor irrigation system and layout, and was subject to the vagaries of the market’. David lacked expert agronomic knowledge and did not have available independent agronomic advice.

10. [316]

    In this respect, the following points of disagreement were recorded in the joint expert report:

11. [317]

    Mr Ivey was of the view that there are no inherent relationships between the size of vegetable production businesses and the timing of operations and quality of produce. The critical determinants are the skills, capability and application of the management team. To the contrary, Mr Stephens' opinion was that the Farm is too small to enjoy economies of scale and too big to allow time to produce meaningful off-farm income. There is an inherent relationship between the size of vegetable production businesses and the timing of operations and quality of produce. Mr Stephens said that many small vegetable farms rely on an abundance of family labour which was not available in this case.

12. [318]

    Mr Stephens acknowledged that, with the benefit of hindsight, it would have been better for David to avoid planting the cabbage and cauliflower crops that he did plant, because of the wild radish infestations, but the fact is that they were planted and the presence of wild radish reduced the yield.

13. [319]

    Another assumption of significance made by Mr Ivey was that a competent share farmer would be responsible for arranging soil testing if required, and had direct control over the nutrient management for crops on the Farm, the operation of the irrigation system, the weeds, the marketing and packaging of produce, and the method and timing of harvests. Mr Ivey also assumed that produce would be sold on the open market with prices received reflecting prevailing market prices.

14. [320]

    To the contrary, Mr Stephens was of the view that it is unreasonable to hold David accountable for the soil type, and that, in determining the responsibility of the share farmer, it is necessary to take into account that a share farming agreement is shaped over time by the accepted practice and actions of the parties to the agreement.

15. [321]

    I have not attempted to summarise all of the issues in the joint expert report in respect of which the experts have expressed agreement or disagreement. In considering the significance of the differences between the expert opinions expressed by the two witnesses, it is necessary to have regard to the reason why the expert evidence has been tendered and the use to which that evidence can properly be put in determining the issues raised by the case.

16. [322]

    This is not a case where Hilary has claimed an amount of damages for breach by David of a common law contractual obligation to conduct the share farming operation competently and to achieve a reasonable economic return for the landowner. Rather, the issue is whether the performance by David of his obligations to Dame Leonie was so deficient that her conduct in resiling from her representation to him should not be considered to be unconscionable.

17. [323]

    That being the case, I consider that the approach adopted by Mr Stephens is the most apposite and is to be preferred over the approach adopted by Mr Ivey. The issue is not the theoretical optimal return that David could have achieved from conducting the share farming operation proficiently, but rather whether, given the unique arrangement between David and Dr Harry, and then Dame Leonie, and having regard to the reality of the farming operation, David's conduct of the share farming operation was deficient. I find that Hilary has not established that David's conduct of the share farming agreement disentitles him from whatever equitable relief he may otherwise have been given.

18. [324]

    I should also record that I preferred the evidence of Mr Stephens generally to that given by Mr Ivey. I mean no disrespect to Mr Ivey whose reports were competently prepared. However, I consider that the assumptions made by Mr Ivey concerning the share farmer's resources, in relation to being able to pay for external expert advice, to conduct soil testing, and to control the level of machinery and other farming inputs, were assumptions that are simply not consistent with the circumstances of the share farming agreement in this case, and the relative resources of David and the Kramers. Mr Ivey assumed that David had resources that may generally be expected to be available to a competent share farmer, which David clearly did not have, and could not have afforded, given his meagre income from the share farming operation. The Kramers were well aware of the reality, and did not in fact expect David to apply to the farming operation the various resources that were assumed by Mr Ivey in his report.

19. [325]

    The reality is that the Kramers always recognised that the Farm was incapable of generating a reasonable income for David, which is reflected in the portion of his income that was paid in the form of bonuses. The Kramers must also have recognised that the operation of the share farming agreement would most likely generate continuing losses for them.

David’s entitlement to rent-free accommodation

1. [326]

   One of the factors relied upon by Hilary to establish that it was not unconscionable for Dame Leonie to resile from the representation asserted by David was that David and his family had rent-free accommodation on the Farm for almost 40 years: see amended defence par 22(c).

2. [327]

   It is true that David was entitled to occupy the second cottage on the Farm rent-free as an incident of the share farming agreement. However, the value of that benefit to David should be measured against the standard of accommodation that it provided David and his family.

3. [328]

   The best evidence of the real circumstances experienced by the occupants of the cottage is in the following unchallenged evidence given by David’s former de facto partner, Maureen, in her affidavit of 23 October 2018:

4. [329]

   Plainly, David’s rent-free accommodation must have had a value to him. However, Hilary made no attempt to lead evidence to establish the effective value of that benefit. Given the extremely meagre income that David earned from the share farming agreement, I am not satisfied that his entitlement to enjoy the rent-free accommodation was sufficiently valuable to be of any significance in determining whether it was unconscionable for Dame Leonie to fail to leave the Farm to David in her will.

David’s obligation to maintain his house

1. [330]

   Hilary’s claim in particular (c) to par 21 of the amended defence that David did not comply with the share farming agreement because he failed to maintain the house in which he lived is not made out, given that I have found that the share farming agreement did not contain a term requiring David to maintain the house.

Entitlement of David to half the proceeds of sale of produce and a bonus

1. [331]

   Even though it is true that the share farming agreement contained terms entitling David to half the proceeds of sale of the crops and the bonus, as alleged by Hilary in par 22 particulars (b) and (d), those receipts only constituted the meagre income enjoyed by David. This entitlement could not in Equity deprive David of his right to the equitable relief that he claims.

Loans made to David

1. [332]

   Although there is evidence of loans being made by the Kramers to David from time to time, Hilary has not established the case raised by par 22 particular (f) of the amended defence that David over the course of time has been forgiven loans to a value that had the effect that it was not unconscionable for Dame Leonie not to leave the Farm to him in her will. Such evidence as there is, suggest that generally loans that were noted in the farm accounts were required to be repaid by David out of his later shares in the proceeds of sale of the crops. While it may be that some relatively small loans that were made to him were forgiven, the aggregate amount of the loans has not been shown to justify the Court in denying David the equitable relief that he seeks.

David’s desire only to live on the Farm

1. [333]

   David freely acknowledged in his evidence his love of farming and living a rural life. However, once it has been established on the balance of probabilities that David, for financial reasons, would have terminated the share farming agreement and sought alternative employment, if he had not believed that he would inherit the Farm, the fact that he is the type of person who acknowledges a preference for an outdoor working life is of little relevance to his entitlement to relief. There is no way that the Court can place a value on this factor, and it would have to be weighed against a myriad of other considerations, such as the extreme hard work that was required in order to conduct the farming operation single-handedly, and the requirement that he live in the inadequate accommodation that he had for decades.

Bequest of $200,000 to David

1. [334]

   In particular (g) to par 22 of the amended defence, Hilary relied upon the fact that Dame Leonie had made a gift of $200,000 to David in her will as a reason for why it was not unconscionable for her not to leave the Farm to David.

2. [335]

   David’s evidence was that, when Dame Leonie made the third representation to him, she told him that, as well as leaving the Farm to him “there will also be a sum of money”. The amount of the gift was not mentioned. David did not say in evidence that he expected a gift in any particular amount, or that the expectation was a factor in causing him to continue throughout the life of Dame Leonie to conduct the share farming operation, rather than to have found alternative employment.

3. [336]

   There was some evidence from Jocelyn that, in circumstances where Dame Leonie had said that she did not intend to leave the Farm to David, she proposed to make a gift to David in her will of $75,000, and Jocelyn urged her to increase that amount. Dame Leonie ultimately did increase the gift to $200,000.

4. [337]

   Accordingly, not only did David not propound the case that he had an expectation to receive any particular bequest in Dame Leonie’s will, but there are grounds for the Court to believe that the bequest that he in fact received under the will was at least substantially more than he would have been given by Dame Leonie if she had acted under a belief that conscience required her to leave the Farm to David.

Appropriate relief

1. [338]

   As I have recorded above when considering the applicable legal principles, the Court is no longer required to approach the issue of relief on the basis that a party who establishes a right to property by estoppel by encouragement is only entitled to the “minimum equity”. In principle, I consider that this is a proper case for requiring Dame Leonie’s estate to make good the third representation.

2. [339]

   Hilary submitted that the Court should consider providing alternative relief to David, but Hilary has done nothing to show what alternative relief may be equitable, or to assist the Court in formulating any appropriate orders or to determine a proper value for the relief that she says should be awarded in lieu of an order that the Farm be transferred to David.

3. [340]

   I am satisfied, however, that it would not be equitable to Dame Leonie’s estate for the Court to order that the Farm be transferred to David in circumstances where he was entitled to keep the $200,000 bequest as well.

4. [341]

   I appreciate that, if David is required to return $200,000 to Hilary as executor of Dame Leonie’s estate, that may have a practical effect on David’s ability to keep the Farm.

5. [342]

   However, it may be that the quantum of David’s entitlement to costs as a result of his success in these proceedings will be for an amount that may be set off against the obligation to repay the $200,000 in a way that will extinguish that obligation.

6. [343]

   The parties should consider these reasons and confer as to appropriate short minutes of order to give effect to them and provide the draft short minutes of order to my Associate.

Costs

1. [344]

   David is entitled to an order that Hilary pay his costs of the proceedings. I will hear David if he claims an entitlement to an order that the costs be payable other than on the ordinary basis.

2. [345]

   I record that, if I had found against David on his claim for an order that the Farm be transferred to him on the basis that he was entitled to assert an estoppel by encouragement against Dame Leonie’s estate, I would have nonetheless ordered Hilary to pay David’s costs of all of the defences raised by her as to why David should be denied the remedy that he sought. I consider that all of these grounds, particularly the dishonesty and the incompetence claims, were completely separate from David’s claim to enforce the estoppel by encouragement against Dame Leonie’s estate.