E Co v Q

1. [1]

   HER HONOUR: On any view of the matter, underlying this dispute is a most unfortunate breakdown in the family relationship between a father (the first defendant) and his three sons (the third, fourth and fifth plaintiffs, to whom I will refer as “A”, “B” and “C”, respectively). The first and second plaintiffs (to which I will refer as “E Co” and “EM Co”, respectively) are companies in which the first defendant and his three sons each hold shares; the sons being the directors of both companies.

2. [2]

   The genesis of that breakdown (and the reason for my description of it as most unfortunate, though I accept that this hardly captures the depth of emotion involved – the sons describing this as a tragedy and the first defendant accepting that his actions had a “doubtless devastating” effect on the fabric of the family), was the disclosure in September 2009 by the twin daughters of B (to whom I will refer as “X” and “Y”), who were then about nine years old, of sexual abuse by the first defendant. B and his wife commendably took the disclosure seriously, as did B’s brothers, which led to a confrontation in October 2009 between father and sons in which the first defendant admitted to inappropriate conduct involving his two granddaughters (though he considered, and still considers, the sons’ reaction to this disclosure to be unreasonable; and maintained in the witness box that he is a loving and doting grandfather).

3. [3]

   Ultimately, the first defendant was charged with, and (having pleaded guilty to the relevant charges) convicted of, crimes relating to the sexual abuse of X and Y. In the course of the present proceedings, and with the benefit of a certificate under s 128 of the Evidence Act 1995 (NSW), the first defendant admitted to the sexual abuse also of A’s daughter (to whom I will refer as “Z”), in respect of which he has never been charged and which he had not previously expressly acknowledged. The abuse of all three children occurred when they were aged between five and ten years old. I raise this at the outset because it explains the extensive anonymisation of names and places in these reasons. I also note that there was considerable argument both before and during the course of the hearing as to the relevance to the issues here in dispute of evidence of the first defendant’s sexual offending (beyond certain admitted facts, including that he had pleaded guilty to the relevant charges and that he was imprisoned by way of punishment for the offences).

4. [4]

   The first defendant submits that the conduct of the proceedings by the plaintiffs indicates that the sons have been motivated in this litigation by feelings of ill-will towards him and that they are seeking to punish him for his sexual offending. This was denied when put to B in cross-examination (T 170.13) and C denied a similar proposition, namely that the motivation for the litigation was that his feelings concerning the offending made him think the transfer of land should happen (T 602). The sons, for their part, maintain that an important factual issue in the proceedings (referred to as the “minor fault-line” running through the proceedings) is the motivation for the first defendant’s conduct in, among other things, changing his will in 2013 to disinherit them. They maintain (but the first defendant denies – T 986) that the first defendant is seeking to punish them and to force an apology from them for his incarceration for the crimes to which he had pleaded guilty. I deal with those submissions in due course.

Prohibition on publication/disclosure

1. [5]

   Section 15A(1)(a) of the Children (Criminal Proceedings) Act 1987 (NSW) prohibits the publication or broadcast of the name of a person in a way that connects that person with criminal proceedings if the proceedings relate to the person and the person was a child when the offence was committed. Each of X and Y (but not Z) falls within the scope of sub-s (1)(a). The prohibition applies only to the publication or broadcast of the person’s name to the public or a section of the public by publication in a newspaper or periodical publication, by radio or television broadcast or other electronic broadcast, by the Internet, or by any other means of dissemination (sub-s (2)). The prohibition applies even after the proceedings concerned are disposed of and even if the person is no longer a child at the time of the publication or broadcast (sub-s (4)). For the purposes of s 15A, a reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person (subs (5)).

2. [6]

   Section 578A(2) of the Crimes Act 1900 (NSW) prohibits the publication of any matter which identifies the complainant in prescribed sexual offence proceedings or any matter which is likely to lead to the identification of the complainant. Publication includes (but is not exhaustively defined as) broadcast by radio or television and dissemination by any other electronic means such as the Internet (see sub-s (1)). Again, the prohibition applies even though the prescribed sexual offence proceedings have been finally disposed of (sub-s (3)). There are a number of exceptions (sub-s (4)), none of which is applicable in the present case. The offences of which the first defendant was convicted (offences under ss 61M and 66A of the Crimes Act) are prescribed sexual offences for the purpose of s 578A. Hence, the prohibition applies in relation to each of X and Y but again not Z.

3. [7]

   During the course of the hearing of these proceedings, I made orders pursuant to ss 7 and 8(1)(a)-(d) and (e) of the Court Suppression and Non-publication Orders Act 2010 (NSW) prohibiting the publication in Australia of the names of, or other material that would be likely to identify, each of X, Y and Z (such as the names of members of their families). I did so on the grounds set out in s 8(1)(a) of the said Act in relation to X and Y and on the grounds set out in s 8(1)(a) and (e) of the said Act in relation to Z. As to the orders made in relation to Z, I accepted the plaintiffs’ submission that any public interest in the publication of her identity is outweighed by the potential harm to her and her parents and would carry with it the potential prejudice to the administration of justice of the kind identified by Adamson J in “X” v Sydney Children’s Hospitals Specialty Network [2011] NSWSC 1272 at [8]. Prohibition of publication or disclosure of anything that might tend to identify Z is in any event necessary so that the identities of X and Y are protected from publication.

4. [8]

   I have raised this issue at the outset of these reasons not only to explain the extensive use of pseudonyms throughout this judgment (which extends to the names of the particular properties the subject of, or otherwise referred to in, these reasons, and the names of various companies and trusts to which reference is made in these reasons) but also to emphasise the need for care in any publication of parts of these reasons that might, despite my best endeavours, tend to reveal the identity of X, Y or Z. At the time of publication of these reasons I will provide to the parties and their legal representatives a schedule of the pseudonyms adopted. Publication of that schedule will be restricted.

Overview of the dispute

1. [9]

   By way of a broad overview of the dispute, the plaintiffs allege that, from shortly after the first defendant commenced (in about 1976) the establishment of what expanded over the years into a valuable cattle farming business over multiple rural properties, the first defendant allowed, encouraged or created the expectation in his three sons (A, B and C) that he would continue to purchase farms for his and their benefit; that he wanted his sons to work together with him on the farms in a family farming business for the benefit of them and the next generation; and that his sons would inherit his estate (including the farms and the cattle farming business) under his will (see [8] of the second further amended statement of claim filed in court on 4 September 2017).

2. [10]

   The plaintiffs allege that this expectation continued through to 2002 when the expectation came to encompass an “ownership structure” between the first defendant and his sons for the future management and conduct of the then proposed family business (which they say was to include both the family farming business and non-rural and non-agricultural businesses referred to in the proceedings as “off-farm investments”). The plaintiffs allege that the expectation was, first, that (with one exception – the property to which I will refer as “Property No 8”) the farms on which the family business was to be operated would be jointly owned by the first defendant and the sons (through the new family business structure) and the first defendant’s estate (which would presumably include the first defendant’s share in that business structure) would be left to the sons under the first defendant’s will (or, if any of the said properties were sold during the first defendant’s lifetime, the proceeds would be shared and/or spent wholly or partially on property and assets operated by the proposed family business) (see [66] of the second further amended statement of claim).

3. [11]

   The plaintiffs further allege that their expectation in relation to acquisition of joint ownership of the farms through the said family business structure was subsequently varied, such that the farms then owned by the first defendant (other than Property No 8), and any other farms purchased by the first defendant, would be “held” by the first defendant during the first defendant’s lifetime “for” his sons and for the use of the proposed family business and that, upon the first defendant’s death, the sons would inherit the said farms (with a similar expectation as before as to the proceeds of any sale of those farms during the first defendant’s lifetime) (see [74] of the second further amended statement of claim).

4. [12]

   The plaintiffs plead, further or in the alternative, that there was a binding agreement between the first defendant and his sons (the content of which was revised just as the pleaded expectation was revised) to similar effect as the expectations pleaded at [66] and [74] respectively (see [67]; [75] of the second further amended statement of claim).

5. [13]

   The sons say that, in reliance on the expectation allowed, encouraged or created by the first defendant (as it existed by around 25 September 2002), each made life-changing decisions – to work in the family business and not to pursue other career options then open to them (giving rise to the estoppel claims pleaded at [202]ff of the second further amended statement of claim). The plaintiffs further allege that E Co contributed time, money and effort in the improvement of the farms on which the farming business was conducted, in circumstances where it would be unconscionable for the first defendant now to retain the benefit of the improvements made to the farms (see [212]-[215] of the second further amended statement of claim). A separate proprietary estoppel claim is made by A in relation to the homestead in which he lives (which is on the property to which I will refer as “Property No 4”), by reference to expenditure made by him on renovations to the homestead and the expenditure of time, money and effort that he has contributed to the improvement of the property. In passing, I note that Property No 4 is the most extensive in acreage of all the properties; and the homestead does not appear to be on a separate title to that of the rest of that property.

6. [14]

   The plaintiffs’ complaint is that the first defendant has now disinherited his sons and has sought to take possession of the farms on which the family farming business has been operated (through E Co) since 2003. Although the plaintiffs’ claims are framed in a myriad of ways – including in contract, proprietary estoppel and trust – and encompass various claims for equitable relief, by the end of the hearing the principal focus of the plaintiffs’ claims, as I apprehend it, and the basis on which I have concluded they have established claims to relief, was the doctrine of proprietary estoppel.

7. [15]

   The first defendant denies the alleged agreements and denies having allowed, encouraged or created the alleged expectations. Indeed the first defendant maintains that there is scope to view this case as one in which (contrary to the plaintiffs’ case) it is he who has been taken advantage of – by his sons – in the sense that it is his expectation (namely, that the sons would work together on the farms) that is unfulfilled; whereas the sons have advanced their position to his clear detriment in that, on the plaintiffs’ case, he will be left with nothing. I interpose here to note that although there was some evidence of the first defendant’s financial position (in the form of tax returns and financial statements), there was no evidence adduced by the first defendant as to his asset position from which I could conclude that if the plaintiffs are successful in obtaining the relief they seek he will now be left with nothing.

8. [16]

   The chronology of events will need to be set out in some detail. However, by way of summary, for the purposes of this introductory overview of the dispute, I note the following.

9. [17]

   The first defendant, now aged 76, is one of a number of children of a man who established a very successful business from which he amassed considerable wealth. The first defendant’s father established a family trust (of which the first defendant was one of the beneficiaries) out of which his wealth was distributed amongst his children. It is not disputed that, over the years, the first defendant received substantial distributions from that family trust (to which I will refer, to avoid confusion between the various discretionary family trusts later established by the first defendant and each of his sons, as the “Sydney Family Trust” – since funds were distributed from that trust out of Sydney and the sons’ evidence, broadly accepted by the first defendant in cross-examination, is that reference was made by the first defendant over the years to him moving money out of Sydney).

10. [18]

    The first defendant admits that he used some of the income he received from the Sydney Family Trust over the years to purchase substantial rural land holdings in New South Wales on which he carried on the business of cattle farming. During their adult years, up until about 2010, the first defendant provided his sons with monthly payments out of the distributions received he from the Sydney Family Trust. (He was at pains to make clear in the witness box that these were moneys to which he, not the sons, was entitled out of the Sydney Family Trust.) There is no doubt that the first defendant has been very generous in terms of financial support for his sons, giving one or more of them expensive cars over the years, buying homes in Sydney for each of B and C, and making his assets available from time to time as security for various business ventures in which one or more of his sons were involved (though the sons characterise the last as part of the agreement or expectation engendered by their father that is the subject of this dispute).

11. [19]

    There is also no doubt that the first defendant wished (at least up until the present proceedings, and arguably even now when regard is had to his latest will) his sons to share equally in his largesse. I refer in this regard to references in the evidence to the “squaring up” of the ledger between the sons, by which the first defendant meant “evening” up the gifts he had made to the sons over the years (see [63] of the first defendant’s first affidavit sworn 2 November 2015), bearing in mind in particular that he had not bought A a house, unlike the position with respect to his other two sons; and I refer also to the first defendant’s insistence that A and C have an opportunity to share in one of the hotel ventures later entered into by B with the first defendant’s financial backing.

12. [20]

    The sons do not dispute the first defendant’s generosity to them over the years. Nevertheless, they say (when addressing the first defendant’s argument that they have suffered no financial detriment in reliance on the alleged representations) that there is no reason to think that the first defendant’s generosity would not have continued even had they not joined in the new family business in 2002/2003 – i.e., they say there is no reason to think that the first defendant would not still have assisted them to purchase their own land or businesses, the difference being that in that event such holdings or businesses would likely not have been vulnerable to the whims of the first defendant’s continued support (as, on the first defendant’s case, the plaintiffs say they now are).

13. [21]

    The three sons were raised on the first of the farming properties acquired by the first defendant in about 1978 (to which I will refer as “Property No 1”). The sons say that the first defendant impressed upon them from their earliest years the importance of family that had been inculcated into him by his own father. They say that their father wanted them all to obtain an education or a trade and then to return to work together as part of a family business for the benefit of all of them and their respective children. The sons also say that, in the period leading up to 2002, the first defendant gave them assurances from time to time that the farms would be left to them under his will. None of that appears seriously to be in dispute. That said, the various estoppel claims made in these proceedings are not based on any assurances, representations or conduct by the first defendant at a time earlier than September 2002. The relevance, as I understand it, on the plaintiffs’ case of the early family history (any such relevance being disputed by the first defendant), and of the expectations that the sons say were created in them by the first defendant prior to 2002 as to the family farming business being for the benefit of them and the succeeding generation, is that it sets the context in which the plaintiffs say what took place in 2002 should be understood (and as to what the first defendant’s conduct at that time reasonably conveyed to them).

14. [22]

    The eldest son, A, acquired skills as a mechanic and then returned to work with his father on Property No 1 in 1989. He has worked as a farmer (and has lived rent-free on various properties owned by his father) ever since. In particular, from 1993 A has lived with his family at the homestead on Property No 4, which property forms part of an aggregation of four farming properties (referred to and numbered consecutively in these reasons as “Property No 3” through to “Property No 6”) to which I will refer as the “3/6 Aggregation”. A regards the homestead on that property as his home and says that his father has encouraged him so to regard it. With his father’s encouragement and/or at his father’s direction, A has expended a substantial amount of money (the precise amount of which has not been quantified but accepted by the first defendant as being in the order of $327,000) on renovations to the homestead on Property No 4.

15. [23]

    The property on which for many years the first defendant lived is a property to which I will refer as “the Main Property”, which the first defendant acquired in 1999. A saw his father most days when they were each living on the respective properties (i.e., the Main Property and Property No 4).

16. [24]

    The second son, B, has a business degree as well as an undergraduate certificate in food industry management. Prior to July 2002, B worked in various roles for companies in the retail area. The youngest son, C, worked as a farm-hand and then in retail, mainly in the liquor area, until October 2002. He obtained a certificate in business from a business college during that time.

17. [25]

    In 2002, by which time the first defendant had substantially increased his land holdings both in the area in which the Main Property and Property No 4 are located and further afield, and each of the sons had received a substantial gift of money from one of their uncles, there were a number of meetings between the first defendant, one or more of his sons and the first defendant’s accountant (and, at one meeting, a legal adviser). What was said, let alone what, if anything, was agreed, in those meetings was much in dispute in the proceedings. The sons characterise the discussions as going to the form which the family business would thenceforth take, on the basis initially that the farms would be transferred by their father to a new entity for the purpose of a new family business structure and then that the farms would be held by their father and inherited by them on his death. In particular, the plaintiffs allege that, during these meetings, the three sons and their father entered into an agreement, or their father created in them the expectation, that the first defendant would grant to the sons an ownership interest in the farms if they worked with him to continue and expand the family business (the Family Business), which family business was also to encompass from time to time diversified “off-farm” investments. The first defendant has little recollection of any of these meetings but is adamant that he did not agree at these meetings or at any other time that he would “hand over” the farms to his sons or to any new entity. He says that the initial set up of the company (E Co) was to run the rural enterprise and “all this other stuff” came later when EM Co was incorporated and that his sons “dreamt [this] up” not he (see T 760). On his case, the 2002 discussions were no more than general discussions in which nothing relevantly was agreed and no expectation, as alleged, was created or encouraged by him.

18. [26]

    On 11 September 2002, documents were signed for the incorporation of E Co. The plaintiffs say (but the first defendant does not accept) that E Co was the proposed corporate trustee for the purposes of the operation of the Family Business. There is, however, contemporaneous evidence (in the form of a structure diagram prepared by the first defendant’s accountant and provided to the family members in one of the relevant meetings) that shows that as at September 2002 it was at least contemplated that the unit trust of which E Co was the trustee would be the owner of “assets” as part of the structure by which E Co was to be the owner of the then proposed family business (and the plaintiffs, in essence, say the relevant “assets” included the first defendant’s land).

19. [27]

    The two critical meetings (on the plaintiffs’ case) took place on 18 and 25 September 2002. At the first, on 18 September 2002, the plaintiffs say a trust was established which was to hold the farming assets, including the farms, of the Family Business. The plaintiffs say that the individual respective family trusts (also set up at this time) were to receive income from the trustee company, E Co. This is the core of the agreement pleaded in the second further amended statement of claim at [67] and will be referred to in these reasons as “the Family Business Agreement”.

20. [28]

    At the second, on 25 September 2002, the plaintiffs say that advice was received from the first defendant’s solicitor that the structure for the Family Business should be varied, for capital gains tax and “asset protection” reasons, and that it was agreed that (instead of the farms being transferred into a trust) the first defendant would “hold” the farms “for” his sons and would leave the farms to his sons under his will. This is the core of the revised agreement pleaded in the second further amended statement of claim at [75] and will be referred to in these reasons as “the Revised Family Business Agreement”.

21. [29]

    The plaintiffs say that thereafter (and indeed at least up to 2009 if not extending to 2013) the Family Business was conducted on the basis of the Revised Family Business Agreement. It is not disputed that, with effect from 1 July 2003, most of the first defendant’s livestock (apart from 200 head of cattle) was transferred to E Co and thereafter E Co conducted what had previously been the first defendant’s farming operations on the first defendant’s farms. An agreement for the lease by E Co of the farms, including Property No 8, commencing from 1 July 2003 and with no stated term, was minuted in March 2004 and was later varied in 2011 to exclude Property No 8 from the leased properties. I refer to this as the Agreement for Lease. Rent was struck for the lease arrangement at an amount that was apparently considered to be a commercial rent and the first defendant assumed responsibility for pasture development and other expenditure. At least in part this seems to have been to satisfy any tax issue that might later be raised as to it not being a commercial arrangement – see the first defendant’s evidence at T 831 where he seems to have accepted that satisfying the tax office was partially the reason for the lease terms as to responsibility for pasture development but added that this was not the main reason; that being, he said, that he did not want to be left with “run-down” properties.

22. [30]

    The plaintiffs have adduced evidence that each of the three sons had a role to play in the farming business: A as a full-time farmer and mechanic; B, who as noted above had a background in retail, as the businessman in charge of the accounts and also to assist with the farms and off-farm investments; and C, who again as noted above had a background in liquor shops, to look for off-farm investments, including hotels, and to assist as and when necessary on the farms. A continues to manage E Co’s business on the farms and to supervise its employees. B, who says that he worked full-time in E Co’s business between October 2002 and late 2010, has since then worked mainly in two hotel businesses in Sydney. C, likewise, now mainly works in Sydney but says that he worked in E Co’s business on the farms from time to time as needed and otherwise looked for off-farm investments. It is fair to say that the first defendant in general denigrates the contribution made by each son to the family business operated by E Co since 2003. In his affidavit evidence in these proceedings he attributed his decision to terminate the Agreement for Lease at least in part to dissatisfaction as to the management of the farms. However, no such reason was put forward at the time the notice of termination was issued, and the plaintiffs point to various matters to say this explanation is not credible.

23. [31]

    Following the family confrontation in October 2009, after the disclosure of sexual abuse by the first defendant, the plaintiffs say that it was decided that the family would continue the Family Business (albeit with personal contact between the first defendant and his sons being curtailed and any personal contact between the first defendant and X or Y being prevented).

24. [32]

    The first defendant was charged in 2011 on a number of counts relating to the sexual abuse of X and Y. He pleaded guilty to nine of those charges and was sentenced on 20 July 2012 to a term of imprisonment (eight years in aggregate with a minimum non-parole period of four years). On 13 July 2012, by which stage the first defendant’s bail had been revoked and he was in prison, the first defendant appointed his solicitor, the second defendant in the present proceedings, as his attorney under a general power of attorney. Leave to appeal against sentence was granted but the appeal was dismissed by the Court of Criminal Appeal on 12 June 2013. The first defendant was released from prison in 2016 after serving four years in gaol. I was informed that his parole conditions (which are in force until some time in 2020) currently restrict him from visiting the farms (a matter of relevance when considering the impact on the first defendant of any relief that might be granted in these proceedings by way of acceleration of the sons’ claims as to an interest in the properties).

25. [33]

    The sons say that, for the period from October 2009 up to June 2013, for all practical purposes it was business “as usual” in relation to the farming operations. However, in June 2013, at a time when an arrangement for refinancing in relation to the Sydney hotels was imminent, the sons learnt from the second defendant that the first defendant intended to sell the farms on which the Family Business was being conducted (and which were still leased to E Co).

26. [34]

    On 27 June 2013, a notice of termination of lease was served on E Co. On 22 August 2013, as his sons only later discovered, the first defendant made a new will, drafted by the second defendant, which in effect operates to disinherit his sons. In four earlier wills, the bulk of the first defendant’s estate was to be left to his sons. In the 22 August 2013 will, the residue of the first defendant’s estate will be held in a discretionary trust, the trustee company of which will be controlled by the first defendant’s sister. Although it was suggested for the first defendant that his sons have misconceived the effect of the 2013 will (because they may potentially receive a distribution out of that discretionary trust), the first defendant made clear in the course of cross-examination that as at 22 August 2013 his wish was that his sons should receive absolutely nothing out of the farms. Hence, it seems inherently unlikely that the first defendant’s sister, who will control the trustee company and who I understand was in Court supporting her brother during at least part of the hearing, will in the future act contrary to the first defendant’s expressed wishes. Be that as it may, there is a clear distinction between being named as a residuary beneficiary under a will and being an eligible beneficiary under a discretionary testamentary trust.

27. [35]

    The plaintiffs allege that, by so acting, the first defendant is in breach of the agreements he has made with his sons and the corporate vehicles established by them together to operate the Family Business and has resiled from the expectations that he induced in his sons (both by active encouragement and by silence and acquiescence over a substantial period of time). They allege that the first defendant has caused them loss and damage and has left them with the detriment flowing from their reliance upon the first defendant’s word (in essence that detriment being that, having built up the business of E Co, they have been left exposed to the foundation of that business now being removed and have lost the opportunity in the intervening period to establish themselves independently of the first defendant).

28. [36]

    The first defendant denies the existence of both the Family Business Agreement and the Revised Family Business Agreement, contending that the only agreement that was reached between the parties was the one recorded in the minute of meeting of 17 March 2004 for the lease by E Co of the relevant farms (which lease he says is terminable on one month’s notice or at most on reasonable notice). The first defendant describes that agreement as an agreement to permit his sons, through E Co, to conduct a valuable business on his land. The first defendant maintains that, while there was a change in about 2003 as to who operated a farming business upon the land (in that it was thereafter operated by E Co and not by him), there was not any change in the expectations of the sons.

29. [37]

    The first defendant maintains that there was no act or omission by him in 2002, or at any other time, that gave rise to the expectations or agreements alleged. The plaintiffs’ pleading is roundly criticised in this regard as failing to state clearly the alleged agreement(s) made or expectation(s) allegedly created or encouraged by him. The first defendant also contends that much of the affidavit material relied upon by the plaintiffs is characterised by “a marked lack of context and a lack of clear and reliable recollection”, it being described as “too often being assertion and submission rather than evidence”, noting that some of the conversations to which one or more of the sons depose occurred many years ago when they were children. The first defendant argues that the conduct of the parties, including the conduct of the farming business by E Co, since 2002/2003 can far more believably be seen as being on a continuum of conduct and lifestyle commencing from 1983, if not before, and ending no earlier than 21 October 2009 (and arguably not before the lodging of caveats over the farming properties by E Co in March 2014), rather than being pursuant to “some seismic shift in relations concluded emphatically at a meeting on 25 September 2002”.

30. [38]

    The first defendant submits that, in the circumstances that existed in 2002, the sons sought to branch out into their own business endeavours with their father’s assistance and that they intended to, and ultimately did, make investments with the support of the first defendant, by way of the first defendant providing certain guarantees secured by the first defendant’s land. His position, in essence, is that his sons were at no time any more than expectant heirs and that he is free to disinherit them and to do as he wishes with his properties. In large part, the first defendant’s response to the claims made against him is that “the plaintiffs seek to construct an unrealistic and unlikely revisionist view of the lives shared by him and his sons”.

31. [39]

    In that regard, the first defendant submits that the area of land in question in the present case (being some 28,000 acres) is significant, noting that some of the evidence shows that B at one time considered the value of the land to be up to $30 million (referring to a schedule – at CB Tab 748A – that was prepared around October 2009 after the confrontation between father and sons; see the email sent by B on 23 October 2009, just after the confrontation, to the first defendant’s accountant, Accountant No 2, at CB Tab 748). In effect, it is submitted that it is implausible that the first defendant would have agreed to give away such valuable assets for nothing or would have represented that he would do so.

32. [40]

    The first defendant points to three examples of conduct that he says is counter-indicative of the plaintiffs’ allegations: first, the payment of “rent” (described in his amended defence (amended defence to further amended statement of claim filed in court on 6 September 2017) as an “annual fee” under a “Management Agreement”) to the first defendant by E Co; second, the purchase of property by the first defendant in his sole name after 2002; and, third, the sale after 2002 of property owned by the first defendant and the first defendant dealing with the sale proceeds “as he saw fit”. The first defendant says that all the conduct after the September 2002 meetings is consistent with there being no such agreement (or expectation) as the plaintiffs now allege in relation to the farming land.

33. [41]

    The first defendant submits that even if it could be established (though he does not accept that such a finding should be made) that his sons reasonably held an expectation that his will would remain unchanged, in all the circumstances the sons have neither relied on any such expectation nor suffered any relevant detriment. It is submitted that “on the contrary they have had bestowed upon them many advantages which see them in sound financial positions” and they have had the benefit of the first defendant’s farms as financial backing for their business endeavours.

34. [42]

    Insofar as the plaintiffs allege that the land was to be used as asset backing for “off-farm investments”, the first defendant points out that the off-farm investments have to date benefited only the sons. The first defendant also submits (though the plaintiffs say such a submission is not open to him having regard to the fact that it was not put to the sons in cross-examination) that the plaintiffs’ own evidence shows that the sons never “collectively” intended to “work the farm(s)” on the basis that it would become their property (pointing in particular to evidence of each of B and C to the effect that neither intended to be a hands-on farmer on a day to day basis).

35. [43]

    The first defendant has cross-claimed in the proceedings, seeking: an order for E Co to vacate the land and claiming amounts allegedly owing under the Agreement for Lease entered into with E Co as well as the repayment of moneys advanced by the first defendant to E Co over the years; for A, B and C specifically to perform what I refer to as the “Westpac Deed”; and for payment by A, B and C of moneys due under another deed to which I refer as the “W Deed”. The plaintiffs accept liability for some of the amounts sought in the cross-claim (in particular, the amount due under the W Deed and an amount, though not the whole amount claimed, in relation to rent) but seek to set-off those amounts against any judgment obtained by them against the first defendant. I should add here that the first defendant (having regard to his evidence in cross-examination in which he accepted that he had agreed to grant rent relief during drought conditions from 2008 to 2011) no longer presses the claim for rental arrears prior to 2011.

36. [44]

    No relief is sought by the second plaintiff. Nor is any relief sought against the second defendant. In the joint defence filed for the defendants, the second defendant expressly does not plead to the allegations made in the plaintiffs’ statement of claim. Other than as acting as the first defendant’s solicitor on the record in the proceedings, and instructing Counsel throughout the hearing, the second defendant has taken no role in the proceedings. He gave no evidence in the proceedings – a matter that was the subject of comment by the plaintiffs in the context of a Ferrcom inference (that being a reference to Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389) that I was asked to draw on the issue as to the extent of the joint conferencing that occurred in 2015 in the course of the first defendant’s preparation for these proceedings between the first defendant’s accountant, Accountant No 2; his former accountant, Accountant No 1; and the second defendant (see [642]ff below).

Summary

1. [45]

   For the reasons I set out in due course, I am not persuaded that the claims in contract or based on an express trust (arising out of the alleged contract) have been made good. Nor am I persuaded that the oppression claim was made good. I do not consider it necessary to determine the various unconscionable conduct/undue influence claims in respect of the Revised Family Business Agreement having regard to my finding as to the contract claims. As to the unconscionable conduct/undue influence claims in respect of the Agreement for Lease and the Westpac Deed, the difficulty I have in relation to those claims is that since at least 2010 the plaintiffs have had the benefit of independent legal advice in relation to matters touching upon or relating to the family business venture (the Agreement for Lease being varied in 2011 and the Westpac Deed not being entered into until 2013). Another difficulty, in relation to the claims advanced in respect of the Westpac Deed, is that, despite the time pressure, the time frame put forward within which they were to arrange substitute security was seemingly of their suggestion.

2. [46]

   As to the common intention and joint endeavour constructive trust claims, I do not consider that the common intention constructive trust claim has been established but I do consider that the joint endeavour constructive trust claim has been made good. As to the former, I am not persuaded that there was, relevantly, a common intention of the kind pleaded because I accept the first defendant’s evidence (albeit only proffered some time after termination of the lease) that his intentions in relation to the family farming business (and in particular as to the sons inheriting the farms) were subject to the uncommunicated “success” condition. As to the latter, I accept that there was a joint endeavour between the family members and that it failed without attributable blame on the part of the plaintiffs, though I do not accept that it failed by reason of the “contumelious and criminal conduct” of the first defendant towards his granddaughters (as pleaded at [209]); rather, I consider that it has failed due to the first defendant’s decision in June 2013 (for whatever reason) unilaterally to terminate the basis on which the family farming business was to operate on his farms. In any event, while I consider that the joint endeavour constructive trust claim has force, any relief on that basis would effectively be subsumed in the relief to be granted on the jointly made proprietary estoppel claim.

3. [47]

   I have concluded that the sons’ jointly made primary proprietary estoppel claims (established separately in relation to each of them) in respect of the farms have been made good. Fundamental to my conclusion in this regard (as outlined in my findings as to the “holding/inheritance” expectation, below at [801]ff) is the acceptance by the first defendant in cross-examination of a succession of propositions put to him as to what he had agreed with his sons; what his intentions were; and, critically, as to his awareness of their expectations in relation to the family business and the farms in particular, as at the relevant time – namely from 25 September 2002.

4. [48]

   Those propositions include that: he had agreed with his sons that his grazing business would be transferred to the new company (E Co) (T 807); he had agreed with his sons that he would make the farms available as security for off-farm investments (T 807); he had agreed with his sons that he would move money out of Sydney into the farms to assist the new business (T 807); his intention was that his sons would obtain the benefit of the farming business conducted on the farms and would obtain the benefit from making off-farm investments, for which the farms would be used as security (T 808); and he knew that his three sons in going into the new business with him had made life-changing decisions on the basis that they would be involved in the farming business with him for the long term, meaning that they would be involved in the business in the farms with him until he died (T 808), qualified by the (uncommunicated) proposition that this was only if they made a success of the business. The first defendant accepts that he never told his sons that the new business structure to be entered into with them depended on whether they made a success of the farming business or was subject to any condition – because to do so would have defeated the whole purpose of the exercise (see T 801.23; T 987.8-987.10).

5. [49]

   Also fundamental to my factual findings is the first defendant’s acceptance, as to what was to happen to the farms, that as at 25 September 2002 it was his intention to leave his estate to his sons in equal shares (T 801.3), though he later clarified that by this he meant not the farms as such but the proceeds of sale of the farms to be divided up between them (which he appeared to accept was much the same thing) (T 802.21-802.23). The first defendant agreed that, between 25 September 2002 and when he was imprisoned on 6 July 2012, each of his sons in the course of his life had given up his time to work in the family business with the first defendant and his sons had done so “in the expectation that the farms would be there as on [his] passing” (T 809.45). He agreed that, as at 25 September 2002 his belief was that each of his three sons knew they were going to inherit from him (T 804.26) and that at no time before his imprisonment on 6 July 2012 had he ever informed his sons that they were ever at risk that he would take steps to remove the business from being conducted on the farms or that he would take steps to terminate the arrangement or that they were at risk that they would be disinherited by him (T 809.49). He accepted that he did not inform them of his view that the new family business structure was experimental and that if, in his mind, they did not make a success of it he could terminate the arrangement (T 810.11), knowing that they were giving up their time and effort and putting that into the family business (T 810.18).

6. [50]

   As set out below, I have found that each of the sons had the expectation, when entering into the new family business arrangement in the period after the meetings on 18 and 25 September 2002, that the first defendant would make his farms available to them during his lifetime for the use of the farming business that was to be transferred to the new business entity (E Co) (and in that sense that the first defendant would “hold” – or perhaps more accurately hold onto or retain ownership of – the farms for his sons during his lifetime to be used for the purposes of that family business); and that the farms would be left to them on his death. Further, I am satisfied that the first defendant knew (as he accepted in the witness box he did) that each of his sons was entering into the new family business arrangement in that expectation and that, in doing so, each of his sons was making a life-changing decision. The first defendant also accepted that he understood it was his sons’ expectation, at the time that E Co entered into the lease agreement, that E Co would be there, conducting business on the farms, until the first defendant passed away (see T 837.8), albeit qualified again by him saying “or until they fell over, whichever come first” (see T 837.8); and that he encouraged the expectation in his sons that E Co would be there (i.e., conducting the farming business on the farms) until he passed away (T 837.39).

7. [51]

   True it is that the sons have not been able to identify with precision words said by the first defendant that engendered such an expectation in them. That is not necessarily surprising given the time that has elapsed since the September 2002 meetings. Their recollection of the actual discussion that took place at the meetings in question is quite limited and their understanding (as at the time of these proceedings) of the outcome of the meetings appears largely to be based on what they have read in documents created at around that time (particularly B’s notes taken at or around the time of the meetings, which gives rise to concerns as to reconstruction and difficulties insofar as it involves the interpretation placed on the content of those notes). However, there are contemporaneous documents aside from B’s notes that reveal that, as at 2002, the family members were indeed engaged in discussions as to a family business structure going forward in which the sons, and their father, would work together in a family farming business. That structure at the very least involved the transfer of the first defendant’s farming business (and most of his livestock) to the new corporate entity (E Co) and the putting in place, in future of a lease arrangement (though the terms of such lease were not then agreed) for the use of his farms in the operation of E Co’s business.

8. [52]

   I have concluded that the first defendant created or encouraged the sons’ expectation by his conduct in adopting the business structure that was followed after the 25 September 2002 meeting and not communicating any success condition in relation to that joint endeavour. The sons’ expectation (that from 25 September 2002 the farming business and the farms would be operated by a new company in which they and their father would have shares – E Co – for their benefit and that of their families, as well as for the benefit of the first defendant, during the first defendant’s life and that on, on his death, the farms would be left to them) was one of which the first defendant accepts he was aware at the relevant time.

9. [53]

   In circumstances where each of the sons deposed to having such an understanding or expectation following the September meetings and I considered each to be a credible witness, and the first defendant admits that he was aware of that understanding or expectation on their part, I accept the plaintiffs’ submission that it is implausible that the first defendant did nothing to create or encourage such an expectation – and he certainly did nothing to disabuse his sons of that understanding or expectation (which gives rise to the alternative claim based on proprietary estoppel by acquiescence or standing by).

10. [54]

    In his oral evidence, the first defendant was adamant that his intention was not to offer his sons any inducement (in his words, any “carrot”) for them to make a success of the family farming business. However, while he qualified his evidence more than once to make clear that his intention that the sons inherit the farms was on the proviso that they make a success of the business venture, and I accept that that was his genuinely held belief at least as at the time of the hearing, there is no dispute that that proviso was never communicated to the sons. In my opinion this points strongly to the unconscionability of the first defendant now seeking to depart from the expectation under which the plaintiffs entered into the new family business venture.

11. [55]

    What I am not persuaded of, on the balance of probabilities, is that the engendered (or acquiesced-in) expectation as at around 25 September 2002 had two of the pleaded features – first, the exclusion of Property No 8 from the farms the subject of the expectation, and, second, what was to happen if any one or more of the farms was sold during the first defendant’s lifetime. Neither, however, is fatal to the plaintiffs’ claim.

12. [56]

    As to the first, there is nothing that points to a discussion in the September 2002 meetings as to Property No 8 being treated separately from the other properties. It was initially included as one of the leased properties. The sons’ understanding as to its exclusion from the properties to be left to them under their father’s will appears to be referrable to statements they recall their father making when the property was acquired (in about April 2002) as to it being his “retirement block” and later statements as to this property being left to the grandchildren. That the property was intended to be the first defendant’s “retirement block” is consistent with what in fact happened – at least in the sense that the first defendant moved to Property No 8 in about 2012 and it was excluded from the Agreement for Lease in 2011. At one point in cross-examination the first defendant appeared to agree that he had made it plain to his sons on the purchase of the property that it was to be his retirement block (see T 726/727). Moreover, the first defendant accepted in cross-examination that he understood from the sons’ perspective that Property No 8 was always regarded as his property – see T 991. As to the intention that the property be left to the grandchildren, the first defendant says he never said that (T 726) but it is consistent with various iterations of the first defendant’s will over the years since the acquisition of that property. However, I am not persuaded that those statements were made in the context of the discussions that took place in relation to the new business structure to be adopted following the September 2002 meetings. In any event, since the sons are not seeking any relief in relation to Property No 8, nothing turns on this. It certainly does not lead me to conclude that the sons did not otherwise each hold the expectation that I have found they did hold, and of which the first defendant was aware (see [50]; [52] above).

13. [57]

    As to the second, however, again there does not seem to be anything to point to a discussion having occurred during the September 2002 meetings as to what was to happen to the proceeds of sale if any one or more of the farms were to be sold during the first defendant’s lifetime. There was, I am satisfied, reference to capital gains tax during the September 2002 meetings and both Accountant No 1 and the first defendant accepted that it was likely that any discussion of capital gains tax would have related to land. Logically, there is a reasonable basis for concluding that the discussion related to a potential transfer of the first defendant’s land (since all the farming land was then owned, as remains the case, by the first defendant). However, there are indicators to the contrary (such as the reference in B’s notes to a corporate tax rate).

14. [58]

    I am unable to conclude on the balance of probabilities that there was an agreement (in principle or otherwise) at the first of the September 2002 meetings for the transfer of the first defendant’s land to the corporate entity there being discussed. Similarly, while it would seem implicit in the notion that the farms would be “held” for the sons during the first defendant’s lifetime for the operation of the farming business that any sale in that period would only be after consultation with the sons, that does not lead me to conclude on the balance of probabilities that the first defendant created or encouraged an expectation in his sons at the September 2002 meetings that the proceeds of any such sale would be shared equally between the four family members or reinvested in the family business. I am prepared to accept that that was the sons’ expectation as to how the family business venture was to operate but the first defendant’s evidence in cross-examination as to what he understood the sons’ intentions to be at the relevant time does not seem to go that far. However, again, nothing turns on this because, for the expectation of the first defendant “holding” the farms until death and then leaving them to the sons on his death to be made good, the proceeds of the sale in 2012 of the property to which I will refer as “Property No 12” (that being the only property other than Property No 8 that has in fact been sold) should in my opinion at least be accounted for by the first defendant as if shared between the four family members. (On one view it might be said that the whole of those proceeds should go to the sons in equal amounts, since that would have been the outcome had the property not been sold but left to them on the first defendant’s death – but that is not what is here sought by the plaintiffs and, if their interest in the farms is to be accelerated, a quarterly distribution of the proceeds seems to me to be fair.)

15. [59]

    I am satisfied that each of the sons acted in reliance on the said expectation in performing work for the purposes of the new family business structure (through E Co in particular) and in not choosing to take steps to further his own career or interests elsewhere. Posing the counterfactual as to what each of the sons would have done had he been told, as at September 2002, that he would be joining in a family business structure in circumstances where his father reserved the right, in effect, to “pull the rug out” from under E Co’s business operations by terminating the Agreement for Lease and evicting E Co from the farms at any time; and to disinherit him, I am satisfied that each of the sons would have chosen to pursue his own business (or in A’s case, farming or property) interests rather than join the new business venture on those terms.

16. [60]

    I am satisfied that the first defendant’s conduct, in creating and encouraging in his sons, and/or in not disabusing his sons of, the relevant expectation of which he admits he was aware, was a contributing cause that influenced the conduct of each of the sons in joining in the family business from late 2002 and (to the extent that this is a different and/or higher test for reliance) that, but for the expectation created or encouraged or acquiesced in – and not disabused – by the first defendant, each of the sons would have acted differently. Reliance is, in my view, well and truly established.

17. [61]

    I also accept that each of the sons has established detriment. True it is that each has been, to a greater or lesser degree, in a position to develop business interests of his own (the hotels in which each has an interest and for which the first defendant provided security, for example); but each has also unquestionably made life-changing decisions, such that I consider it would be unconscionable for the first defendant now to be permitted to act otherwise than in accordance with the expectation he created or encouraged in his sons (without ever disabusing them of that expectation).

18. [62]

    As to E Co, its proprietary estoppel claim is established by the matters to which I have already referred in the context of the jointly made claims by the sons (see [50]; [52] above) in terms of the capital improvements it made to the first defendant’s farms in the expectation that it would be able to continue its farming operations on those properties during the first defendant’s lifetime and until his death. However, any relief in that regard is in effect subsumed by the relief to be provided to the individual plaintiffs.

19. [63]

    As to the cross-claim by the first defendant for repayment of moneys advanced to E Co over the years or for payment for the cattle transferred to it at book value in 2013, the onus of proving that the moneys advanced were a loan (and if so, on what terms), or that the amount referable to the cattle is a debt presently owing, lies on the first defendant (see Gray v Gray [2004] NSWCA 408; (2004) BPR 22,755 at [16] per Young CJ in Eq, as his Honour then was, Sheller and Bryson JJA agreeing; and Schmierer v Taouk [2004] NSWSC 345; 207 ALR 301 at [59] per White J, as his Honour then was). The fact that the moneys advanced were recorded as a loan in the accounts of E Co is not determinative in this regard, particularly given that the practice of the first defendant’s accountant (Accountant No 2) appears to have been to record all moneys advanced by the first defendant (whether to the company or to his sons and whether or not the first defendant expected repayment) as being a loan (and Accountant No 2 did not give any evidence to explain how he came to record these amounts in the accounts). That was certainly not the first defendant’s intention in relation to moneys advanced to his sons and, from the evidence given by him in cross-examination, it was not his intention (subject to how the business performed) in relation to moneys advanced to E Co or shown in the accounts as payable by E Co for the cattle transferred to it in 2003.

20. [64]

    The first defendant’s evidence was that, in respect of the moneys provided to E Co, it depended on what the money was for as to whether it was his expectation that it would be repaid (T 822.50). He accepted that he had never asked for any interest (T 823) and he could not recall saying to his sons that the moneys provided to E Co were by way of a loan (T 823.19) (though he says it was “known” by reference to amounts being recorded “in the books” and he said – though it was not clear to me to what repayments he was there referring – that some had been paid back).

21. [65]

    Similarly, the first defendant did not recall whether the question of repayment for the transfer of the cattle to E Co “ever came up” with his sons (see T 834). The first defendant’s position at first was that his expectation as to repayment was that, if his sons failed, repayment would probably not be required, but if they made a success of the business, then repayment would be required (T 834.28). Nevertheless, he accepted that he had never told his sons that that was what he had in mind (T 834). Two days later, however, he gave evidence to the opposite effect (at T 1017-1018):

22. [66]

    I am not persuaded on the balance of probabilities that the advances to E Co were made by way of loan repayable in the first defendant’s lifetime; nor that there was an agreement that the amount shown in the relevant accounts for the transfer of the cattle would be paid by E Co during the first defendant’s lifetime. The first defendant accepted that he entered into these arrangements to provide for his sons, their future and their families’ future (see T 834.9) (albeit with the same uncommunicated qualification “providing they made a success of it”), as well as for himself (T 834.24). He admits that he encouraged and expected that E Co would be “there” until he passed away (T 837; see also to similar effect at T 867-869). He accepted that (as at the financial year 2006) he understood his sons’ expectation was that he was holding the farms for them and that they would inherit the farms under his will “if they made a success of this venture” (see T 874.48; see also T 928).

23. [67]

    I am satisfied that the expectation on the part of the sons (and through them E Co), encouraged and understood by the first defendant, was that the sums advanced to E Co by the first defendant for the purposes of the family business farming operations (and the transfer to E Co of the cattle at book value) would not be repayable during their father’s lifetime (and that those sums were not, as is in effect the first defendant’s case, repayable on demand (or at his whim)).

24. [68]

    My conclusion in this regard is fortified by the fact that the moneys advanced to E Co for the purposes of the farming operations were being advanced to a company in which the first defendant had a shareholding and which, it is open to infer, the first defendant anticipated would be run in a tax-effective manner (as his own farming operations had been) in order to generate tax losses. The first defendant’s own evidence in cross-examination was that whether they were to be repayable would depend on the same (uncommunicated) success condition to which the sons’ inheritance was to be subject. The first defendant accepted (T 916) that he did not expect a benefit from E Co or EM Co (see also T 915).

25. [69]

    Therefore, had the first defendant’s claim for the repayment of the advances and payment of the book value for the cattle transferred to E Co been considered in isolation, I would have been of the view that there was a strong basis for E Co to resist the claim for repayment based on the detriment to which it would now be put if the first defendant were permitted to resile from the expectation induced in his sons in that regard (at least in the absence of a reasonable time for repayment that would not be destructive of the company’s ongoing business operations).

26. [70]

    However, it does not seem to me that it would be unconscionable in all circumstances for the first defendant to depart from the expectation that E Co (and his sons) were to have the benefit (indefinitely or during his lifetime) of the advances made to E Co or the transfer of the cattle (and hence to require the repayment of the sums he has made available to the company over the years and recover the book value of the cattle) at least if a reasonable timeframe were allowed in that regard, so as not to prejudice the ongoing business operations of E Co. So, for example, if E Co were to have ceased the farming operations and were now to be wound up, I would not see it as unconscionable for the first defendant then to call for repayment of the moneys recorded as being owing to him in the company’s books (though the question of interest is another matter). More relevantly in the present situation, if there is now to be (as I think there must be) a clean break between the sons and the first defendant in relation to the operation of the family farming business, and the clean break encompasses the buy-out by the sons of the first defendant’s shares in the relevant family companies (E Co and EM Co), it would not in my view be unconscionable for the first defendant to require the repayment of those moneys (again assuming a reasonable repayment regime to permit this to occur without jeopardising E Co’s ongoing business or farming operations).

27. [71]

    As to the separate position of A, (put as an alternative claim to the claim made jointly with his brothers to a greater interest in the farms than Property No 4 alone), had it been necessary to determine, I would have concluded that there was a proprietary estoppel by encouragement arising in relation to the expenditure of funds by A on the renovations to Property No 4 in 2003 at the first defendant’s express encouragement (if not, indeed, direction). The quantum of that expenditure is not able to be precisely determined (estimates of the amount expended varied from about $300,000 through to about $500,000). It appears to be accepted that the expenditure was at least in the order of $327,000 (and at one stage it was apparently accepted by the first defendant to be in the order of $500,000 – if his will dated 22 August 2013 is any indication). The fact that A expected to be compensated for those renovations if the property was sold (“if it came to that”) is not in my opinion inconsistent with his primary expectation being that he would have the benefit of that expenditure by reason of the home being treated as his own during the first defendant’s lifetime – in circumstances where any sale during the first defendant’s lifetime would be expected to have occurred only after consultation with A (if not also with B and C).

28. [72]

    Nevertheless, it would in my view have been disproportionate to have granted relief on A’s separate proprietary estoppel claim by way of the transfer to A of title to Property No 4, in circumstances where the amount of expenditure by A (even accepting the figures put forward by A) is dwarfed by the value of the property as a whole; and where, in my view, the relevant representation or expectation related only to the homestead and not to the property as a whole.

29. [73]

    Had the matter been determined on this basis alone, while I would have considered awarding relief so as to compensate A for the loss of his ability to remain in the homestead (his “home”) for the indefinite future (since he no doubt considered that he would be able to remain in the home when he was encouraged to spend moneys on renovating the property), ultimately I would have concluded that (in circumstances where A himself appears to have understood that the arrangement was one pursuant to which the property might at some time be sold and that, if sold, he would then be compensated for the cost of the renovations in some fashion), the appropriate relief on this aspect of the claim would have been an order for compensation calculated by reference to the cost of the renovations, or the value to the first defendant of the improvements to the property carried out at A’s cost, whichever be the greater.

30. [74]

    In relation to the balance of the first defendant’s cross-claim, as already noted the claim for the rent is now agreed to be limited to the arrears for the period from 2014. Less an amount referable to the payment by E Co in respect of the insurance paid by it in respect of the properties over the relevant period (responsibility for which under the Agreement for Lease rested with the first defendant), liability for the arrears from 2014 is acknowledged by the plaintiffs. Liability on the part of the sons for the amounts payable under the W Deed for the transfer of the first defendant’s units in the W Unit Trust is conceded. Those amounts should be off-set against that portion of the proceeds of sale of Property No 12 for which I consider the first defendant should account in the context of the overall relief to be granted on the sons’ primary (and jointly made) proprietary estoppel claims.

31. [75]

    That brings me to the question of relief on those proprietary estoppel claims. The prima facie relief is to make good the relevant expectation. In broad terms, the relevant expectation I have found (see [50]; [52] above) was that the sons would be able to carry on the farming operations on the first defendant’s farms, through E Co, during the first defendant’s lifetime and would then inherit the farms on the first defendant’s death. That expectation could be made good by imposing an institutional constructive trust over the properties in favour of the sons (and requiring the first defendant to account to the sons for three-quarters of the proceeds of sale of Property No 12). However, I am firmly of the view that this is a case where a clean break is necessary even though that will involve an acceleration of the sons’ interests in the properties in question. That is because it is apparent that the familial relationship between father and sons has irreparably broken down. The suggestion during the course of the hearing for the matter to proceed to a further mediation (there having been, I was informed, two unsuccessful attempts at mediation) was politely discouraged (some might even say politely resisted) by Counsel. There was obvious emotion displayed in the courtroom by the sons while their father was cross-examined (which in my opinion dispels in large part the suggestion that this litigation was primarily motivated by ill-feeling towards their father) and, in the witness box, by the first defendant when giving evidence as to the uncommunicated success condition he had placed on his sons’ inheritance (which similarly suggests to me that he is more upset at the breakdown of the family relationship than motivated to force an apology from his sons for his incarceration).

32. [76]

    If a constructive trust were now to be imposed over the properties in favour of the sons and the first defendant were to be restrained from terminating the lease to E Co, as is an alternative way of making good the relevant expectation (and one which would not have the effect of accelerating the sons’ interest in the farms), the only practical benefit I can see to the first defendant (who would not on that hypothesis have possession of the properties) would be the ongoing receipt of rent. The reversionary interest in the properties would only be of practical use to the first defendant, as I see it, if his sons were to predecease him – which, given their respective ages, seems unlikely. In those circumstances I am not persuaded that acceleration of the sons’ interest in the land would be out of all proportion to the equity established by the sons, provided the first defendant is compensated for the loss of future rent.

33. [77]

    In my opinion it is appropriate to accelerate the sons’ expectation of an interest in the farms but to do so subject to the condition that the first defendant receive the net present value of the market rent for the properties for a period that correlates to his now remaining life expectancy. I do not accept the proposition that such rent should be calculated on a fixed basis at the current reduced rate of $100,000 (as put forward in the calculations prepared by the plaintiffs) because, if the assumption is that the family business arrangement is now to be brought to an end, then there is no reason to assume that the first defendant would not in those circumstances (had he retained ownership of the farms) have sought a market rent for the properties. As an aspect of the relief on the proprietary estoppel claims, orders should also be made requiring the plaintiffs to procure releases of any guarantees provided by the first defendant in support of the financing of the sons’ existing business ventures – or an indemnity in lieu, to be appropriately secured over the properties, in the event that such releases cannot be procured from the relevant financier(s).

34. [78]

    I have also considered in this context the first defendant’s existing shareholdings in E Co and EM Co. The intention of the first defendant was that, subject to the uncommunicated success condition, his sons (and by extension their families) would obtain the benefit of the farming business conducted on the farms during his lifetime (see T 808). It is less clear what expectation there was (or that the first defendant understood his sons to have) as to the ownership of his interest in the companies on his death. I am of the view that it is implicit in what was understood by the first defendant to be his sons’ expectations in entering into the new family business that they would have the benefit of that family business going forward after his death. On that basis an order that the first defendant’s shares in E Co and EM Co be acquired by the sons (at a price to be determined by an independent valuation of the shares) would similarly be appropriate.

35. [79]

    Moreover, to effect a clean break between the parties it seems to me that it would be necessary for the sons to buy out their father’s interest in E Co/EM Co. I have thus concluded that it would be appropriate, as a term of the relief to be granted under which the sons’ interest in the farms is to be accelerated, for the sons to acquire the first defendant’s shares in the companies at a value that represents the present worth of those shares (independently valued) calculated on the assumption that E Co is in a position to continue its farming operations on the properties but having regard to the requirement (to which I turn below) for E Co to pay to the first defendant the book value of the cattle transferred to it in 2003 and the advances made to it over the years (without interest). However, relief in those terms was not canvassed in oral submissions at the close of the hearing. In those circumstances I propose to seek further submissions on this aspect of the relief to be granted.

36. [80]

    As adverted to above, if there were to be an order requiring the acquisition of the first defendant’s shares in the relevant companies then it would in my opinion be appropriate for there to be an order that E Co repay to the first defendant the sums advanced to it over the years and the book value of the cattle (on suitable terms but without interest), which would presumably have an impact on the value of the first defendant’s shares in E Co. In any event, terms would have to be crafted for the payment of any sums to the first defendant by E Co for the transferred cattle and repayment of the advances on a basis that does not interfere with the reasonable operation of E Co’s ongoing farming business. If there were not to be a buy-out of the first defendant’s shares then I would be inclined to the view that no order should be made for the repayment of the advances made to E Co or for the transferred cattle unless and until one of the properties is sold (or to the first defendant’s estate on his death) but I will hear submissions on this.

37. [81]

    Finally, to the extent feasible, there should be a set-off of sums owing from one side to the other, including as to costs, in order to minimise the opportunity for ongoing disputes.

Chronology

1. [82]

   I turn now to set out the chronology of relevant events. The broad chronology has been summarised in the overview of the dispute set out earlier, but (unfortunately for readers of this judgment having regard to its length) it is necessary at this stage to add further detail.

2. [83]

   Much of the background facts (for example in relation to the various property acquisitions and other matters of family history) is agreed (or has not been contested) by the first defendant, as he accepts in his own outline of submissions dated 4 August 2017 (First Defendant’s Opening Submissions) (at [36]), though there is disagreement as to the relevance of a lot of that material. Appendix A to the plaintiffs’ written submissions dated 4 August 2017 (Plaintiffs’ Opening Submissions) sets out a list of matters said to have been admitted by the first defendant. There was no objection to that document being treated by me as an aide memoire, though I note that the first defendant contests its accuracy and completeness. So, for example, the first defendant does not agree that B spoke with him during 2002 “on behalf of” the other sons (see plaintiffs’ closing submissions dated 21 August 2017 (Plaintiffs’ Closing Submissions) at [661]; [33] of the amended defence); the first defendant says it is not complete to note (see Plaintiffs’ Closing Submissions at [676]) that Property No 4 was security for the Rabobank Australia loan (the circumstances of which loan will be set out in due course), without noting that that security was in support of a guarantee provided by the first defendant (a matter on which the first defendant relies on as being inconsistent with the plaintiffs’ case); and the first defendant says that the reference to his responses to the affidavit evidence of the sons is not complete.

3. [84]

   There remain various factual matters in contention (particularly as to the meetings that are critical for the purposes of the plaintiffs’ case that occurred on 18 and 25 September 2002). Findings as to those factual matters will be set out separately in due course. For the moment, what follows is the chronology of events as it emerges from the evidence. In this regard, I note that the plaintiffs’ evidence spanned events over some 40 years (the affidavit evidence generating several volumes of court books, which was the subject of complaint by the first defendant – both through his Counsel and in the witness box, see at T 1021 the reference to the “jungle”). I will generally refer to documents by reference to the numbers of the tabs in the court books behind which the relevant documents can be found.

4. [85]

   Given the period in question (even if one starts only at 2002), it is obvious that a fair bit of time has elapsed since the various conversations and meetings about which evidence has been given. Both Counsel accepted that this is a case where the caution observed by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 (at 318-319) as to the increase in the fallibility of human memory over time, particularly when litigation intervenes and “the processes of memory are overlaid, often subconsciously, by perceptions or self-interest”, is apposite. This means that the contemporaneous documents are of particular significance (and especially those of the non-family members – the accountants and solicitors). I have approached the factual findings on that basis.

5. [86]

   There was evidence adduced by the plaintiffs as to their father’s own family history, including the generation of wealth by the first defendant’s father for the first defendant and his siblings; the establishment by the first defendant’s father of the Sydney Family Trust for the benefit of the first defendant and his siblings; and the distribution of moneys to the first defendant out of that trust. An entire volume of the court books was comprised of a family history written by one of the first defendant’s siblings (CB Vol 17) (only a minute portion of which was admitted in evidence). As I have already noted, the plaintiffs rely on this family history as providing the context in which the discussions that took place in 2002 as to the new family business were and are to be understood. I do not propose here to summarise that family history. The relevance of much of it seems to me to be limited.

6. [87]

   Suffice it to note that, as at April 2002, the first defendant had access to funds in the sum of around $27.8 million from the Sydney Family Trust and that it is not disputed by the first defendant that over the years (from about 1989) he received distributions of money out of the Sydney Family Trust and used those funds (together with other funds available to him) towards the purchase of property, equipment and stock (second further amended statement of claim, [9]; amended defence to further amended statement of claim, [6]).

7. [88]

   Property No 1 was acquired by the first defendant in about 1978. He and his then wife and sons moved into a house on that property. Shortly thereafter, the first defendant commenced conducting a cattle farming business on the property.

8. [89]

   In 1983, the first defendant and his wife (the sons’ mother) separated. The first defendant remained living on Property No 1. The first defendant and his wife divorced in 1984 and in that year the first defendant made a will leaving the whole of his estate on trust for A, B and C in equal shares. After their parents’ separation, the sons lived mainly with their father (A from some time later in 1983; B from about 1984; and C from about 1987) until each left home either to study or work after leaving school. The first defendant in his written submissions dated 28 September 2017 (First Defendant’s Closing Submissions) (at [11]) says that it is wrong to think of the sons as having been brought up solely on working rural properties, pointing to the evidence that for a time (varying for each) each son lived with his mother (not on the farms); and that each of B and C left the properties and did not return to live in the area of the farms (C doing only “minimal” work on the farms thereafter and B only working on the farms on a part time basis after 2002 “and then almost entirely only in respect of ‘back room’ work”). Nevertheless, he does depose in his affidavit of 2 November 2015 (at [10]) that his sons were “largely raised” by him.

9. [90]

   In 1988, the first defendant sold Property No 1 and in 1989 he bought another property (to which I will refer as “Property No 2”) as well as a house in the nearby town (“House No 1”).

10. [91]

    A moved into the homestead on Property No 2 in about February 1989. After he married his first wife, she moved into the homestead on that property with him. A worked on the farm at Property No 2. The property was used for trading and then breeding cattle. Depending on the time of year, there were between 150 and 400 head of cattle on Property No 2.

11. [92]

    In about 1991, the first defendant sold House No 1 and purchased another house in the town (“House No 2”).

12. [93]

    In 1992, the first defendant sold Property No 2, with a 12 month settlement period. A continued to live in the homestead on Property No 2 pending completion of the sale.

13. [94]

    A’s recollection (set out at his affidavit sworn 2 April 2015 at [60]) is that when Property No 2 was sold he had a conversation with his father in which his father asked him “What do you want to do? Do we just keep a small block we can run on our ear or do we get bigger?” and he (A) responded “Why not? Why don’t we get bigger?”. A says he has a strong recollection of this because it was a big moment in his life. He says that that conversation, and his earlier decision to obtain a mechanic’s qualification, were the first two times the first defendant “had really asked me what I wanted to do with my life”, and they have stuck in his mind for that reason. A’s recollection is also that, from about 1992, the first defendant often said words to the effect: “Where are we going for the next 10 years?”, “if we do it right then we won’t have to do this again for 20 or 30 years”, “this will be your problem when I’m gone”, “it will be up to you blokes as to what you do”, and “this will last until [A’s son] has to replace it”. (The first defendant’s response to this last comment was, in effect, that it was an “off-hand joking” remark – see [29] of his affidavit of 2 November 2015 – but he does not deny making remarks of this kind - see T 994-995 - and he agreed that at the time of the conversation in which one of the “off-hand joking” remarks was made he knew A would have understood he was confirming A’s expectation that he would inherit the farms in due course and the fact that it was said to be in an offhand joking way did not change that at all.)

14. [95]

    In 1993, the first defendant purchased three more properties (“Property No 3”, “Property No 4”, to which I have earlier referred, and “Property No 5”). A and his family moved into the homestead on Property No 3 in about the year it was acquired. Then, following the acquisition the same year of Property No 4, they moved into the homestead on that property (where A still remains with his now wife and one or more children).

15. [96]

    In 1998, the first defendant purchased another property (“Property No 6”). Then in 1999 the first defendant purchased two further properties, also together referred to in the proceedings as an aggregation: the Main Property (to which I have referred earlier) and a property to which I will refer as “Property No 7”. The Main Property and Property No 7 were operated together as what I will refer to in these reasons as the “Main/7 Aggregation”. The Main/7 Aggregation was used as a breeding/fattening block to complement the 3/6 Aggregation.

16. [97]

    In around 2000, A and his wife separated. The first defendant purchased a house in the local town about 80km from Property No 8, to which house A’s wife moved. The first defendant’s recollection is that the house was purchased in her name (see his affidavit of 5 May 2017) at [28]). He later paid A’s former wife a sum of $260,000 on A’s behalf as part of their family law property settlement (see the first defendant’s affidavit of 5 May 2017 at [29]). Some documents relating to the family law proceedings (that had been subpoenaed from the solicitors acting for A’s ex-wife) were relied upon by the first defendant and used in cross-examination of A, broadly to demonstrate that A had not at that time asserted any beneficial interest in the farms and as to what A’s lawyers in the family law proceedings asserted had been done with the substantial gift received by A from his uncle in 2002 (to which I refer in due course). (There was debate during the course of the hearing as to whether use of the family law documents was permissible and as to whether leave was required for that purpose by reference to the so-called Harman principle – a reference to Harman v Secretary of State for the Home Department [1983] 1 AC 280. I do not here propose to add here to what I said at the time in that regard.)

17. [98]

    From about 1999 to about 2012, the homestead on the Main Property was the first defendant’s primary residence, though from 2003 the first defendant worked mainly on Property No 8 (see below).

18. [99]

    In about April 2002, the first defendant purchased Property No 8, which the sons understood was intended by the first defendant at the time to be his “retirement block”. Both A and B depose to conversations with the first defendant following the purchase of Property No 8 in which they say the first defendant said words to the effect that this was his retirement block and that when he was “gone” the property would be sold and the proceeds split between the grandchildren. Although the first defendant denied saying this and denied understanding that from the sons’ perspective it was always for the grandchildren when he died (T 991.44), it is consistent with the different manner in which the property was treated, both in 2011,when the E Co lease was varied, and in various of the first defendant’s wills after that time.

19. [100]

    As at 1 July 2002, therefore, the first defendant owned seven farming properties on which his cattle farming business was operated: the four properties comprising the 3/6 Aggregation, the two properties comprising the Main/7 Aggregation, and Property No 8.

20. [101]

    The first defendant admits that the various properties were purchased using funds to which he was solely legally and beneficially entitled (amended defence to further amended statement of claim, [2.6]; [3]), including funds that were distributed to him from the Sydney Family Trust; that he received distributions from that trust, including from about 1989; and that (as noted at [87] above) he used some of those distributions in the purchase of property, equipment and stock, together with funds that were otherwise available to him, including his income and savings. What is not agreed is that this is a matter of any relevance to the plaintiffs’ claims. The first defendant is adamant that he had no intention of “handing over” the land to his sons (see [31] of his first affidavit).

21. [102]

    B’s evidence is that, leading up to 2002 (in the period from about August 1996 onwards), he had discussions from time to time with the first defendant about issues as to estate or succession planning. He deposes to having discussed with his father articles published in the Business Review Weekly in August 1996 and November 1997 in that regard (B’s affidavit sworn 2 April 2015, [107]; [114]-[115]). He also deposes that, by 1996, the first defendant had said to him on more than one occasion that he was “moving his money out of Sydney” (B’s affidavit sworn 2 April 2015, [81]-[83]) (by which B understood his father to mean out of the Sydney Family Trust). The first defendant does not deny that words to that effect were said by him in about 1992 and 1996 but does not recall the conversation (see [70] of his first affidavit responding to [81] and [108] of B’s first affidavit) – see also his response to [83] of B’s affidavit where he agrees he said “I want to move my money out of Sydney” and agrees that he wanted to put it into farms.

22. [103]

    B says that, from about February 1998, he (B) was acting as a “personal assistant” for the first defendant in various respects, speaking on the first defendant’s behalf with Mr Ross Charge (the accountant in Sydney who dealt with matters in relation to the Sydney Family Trust) as well as dealing from time to time with the first defendant’s accountants in the local area (Accountant No 1 and Accountant No 2) and with the first defendant’s solicitor (Solicitor No 1) (B’s affidavit sworn 2 April 2015, [126]).

23. [104]

    Pausing here, Accountant No 1’s evidence (affidavit of Accountant No 1 affirmed 30 May 2017 at [2]) is that the local accounting firm (to which I will refer as the Local Accounting Firm) of which he was a “public accountant” from 1994-2012 was purchased in late 2000 by a national firm (to which I will refer as the National Accounting Firm) and that he was a principal in the business when it was owned by a national accounting firm (to which I will refer as the National Accounting Firm. He says that the former partners of the Local Accounting Firm repurchased the business from the National Accounting Firm in early 2003. (Nothing turns on the changes in ownership of the accounting business but I note this as it explains the references to both the Local Accounting Firm and the National Accounting Firm from time to time in the accounting documents. It also may explain why it is that Accountant No 2 at one stage appears to have contemplated seeking specialist tax advice from a partner of the National Accounting Firm in Melbourne – see [204] below.)

24. [105]

    The first defendant was Accountant No 1’s client at the Local Accounting Firm from about the mid-1990s to about 2003 (Accountant No 1’s affidavit at [5]). Accountant No 1 says that increasingly from 2002 his role focused on management of the Local Accounting Firm’s business and that the transition of his client base to others involved the first defendant’s accounting work moving to another accountant at the firm, Accountant No 2.

25. [106]

    B says that at the beginning of 2002 he had a series of conversations with his father about the future for the farms and “the boys”, the substance of which, according to B, was that the first defendant told him that: the first defendant intended to continue buying rural properties for the benefit of his children, and their children, in the same way that his own father had done; the first defendant wanted to generate wealth for his sons and enable each of his children to share that wealth, as his own father had done by establishing the Sydney Family Trust; the first defendant wanted the sons to share in the family wealth generated from the first defendant’s farming activities, and the use of the first defendant’s money from the Sydney Family Trust, by working together with the first defendant in respect of the farms; and that the first defendant wanted to move his money out of the Sydney Family Trust by investing his money in farms in and around the area for the benefit of himself and the boys (B’s affidavit sworn 2 April 2015, [153]-[154]). B also deposes to having read with his father an article in March 2002 discussing the return of a son or daughter to a family farm and to a conversation with the first defendant in around mid-2002 about the role that each of the sons could have in a family farming business (B’s affidavit sworn 2 April 2015, [167]-[171]).

26. [107]

    B’s evidence included notes made by him on a Research Report on aquaculture contained in an article he said his father gave him in April 2002, which he says they discussed in the context of possible diversification into that area. (B also says that in about August 2002 the first defendant showed him a videotape from the television show “Landline” on aquaculture entitled “Off-the-shelf system helps aquaculture grow” – see B’s affidavit sworn 2 April 2015, [180].)

27. [108]

    On 7 April 2002, each of the three sons received a gift of $1 million from one of their uncles. (The significance of this is that, with the receipt of this gift, each of the sons then had not insubstantial funds, at a relatively young age, with which each could then have chosen to acquire property or a business in his own name.) The first defendant at this time also had considerable funds available to him through the Sydney Family Trust (see T 719).

28. [109]

    B’s evidence is that, from May 2002 up to and including September 2002, there were a number of meetings with the first defendant’s accountant to discuss what he refers to as the first defendant’s “succession plan” (though as I understand it, B is not there referring to any particular succession plan but simply to the concept of “a” succession plan). B’s recollection of the substance of his discussions with the first defendant and his brothers in the period from July to August 2002 is that: the first defendant wanted to implement a succession plan for the transfer of his properties to the three sons; and that the first defendant would make his family money available to buy more farms, and establish off-farm investments so that each of the sons could be involved (B’s affidavit sworn 2 April 2015, [182]).

29. [110]

    In this regard, B says that in mid-2002 his father suggested that he organise a meeting with his accountants (B’s affidavit sworn 2 April 2015, [172]). Relevantly, there were in evidence various timesheets and invoices of the Local Accounting Firm which include narrations corroborating B’s evidence that meetings or discussion took place with the accountants during this period (though it cannot be discerned from those that it was B who was responsible for organising the meetings and I note that the invoices were sent to the first defendant not to B). I place weight on the time frame revealed by the relevant business records in that regard and the narrations as to the subject matter of the meetings/discussions, though of course the latter must necessarily be dependent on the accuracy of the characterisation by the person at the time entering that record on the system.

30. [111]

    The first defendant deposes (at [30] of his first affidavit) that he decided around 2002 “to hand over the management of the grazing business to [his] sons to see how well they would perform running an agricultural business”; and that he recalls speaking to Accountant No 1 saying words to the effect: “I am thinking of handing over the business to the boys to see how they will go”. Accountant No 1, at [7] of his affidavit, recalls being approached by the first defendant during the period in which he was transitioning his client based responsibilities to others and that the first defendant was “interested in discussing how his sons might become involved in his primary production business”. Thus, at whoever’s instance this was, and whether or not the discussions may be accurately characterised as discussions in relation to “a succession plan”, it is clear that there were discussions in the course of 2002, in which the first defendant participated, as to the involvement of the sons in a family business. The first defendant’s position appears to be that originally this was to be the grazing business and that it was his sons who would be involved in off-farm activities.

31. [112]

    There is in evidence a tax invoice dated 5 July 2002 issued by Local Accounting Firm and addressed to the first defendant for the period May 2002 to June 2002 (CB Tab 90). The narration in that invoice refers to a meeting with Accountant No 2 on 9 May “regarding the purchase of an additional property and the GST implications” and to “[d]iscussions concerning a new employee and rebates and grants that may be available”. (The only property purchased around that time was Property No 8 – see [99] above).

32. [113]

    The same tax invoice (CB Tab 90) includes a narration recording “[m]eeting with [Accountant No 1 ] on 4th June to review your [the first defendant’s] business, consider options for the future and potential business structures that could be adopted”. Accountant No 1 does not have an independent recollection of this meeting or what was discussed at this meeting (Accountant No 1’s affidavit affirmed 30 May 2017, [10]); nor does the first defendant (first defendant’s affidavit affirmed 2 November 2015, [73] in response to [173] of B’s affidavit).)

33. [114]

    The plaintiffs allege (see [62] of the second further amended statement of claim) that in about mid-2002, the first defendant instructed his business accountants at the time (Accountant No 1 and Accountant No 2) to commence work preparing business and ownership structures and arrangements to be implemented by the first defendant and his sons for the formation of the “Family Business Structure”. This is denied by the first defendant (see [32] to the amended defence to the further amended statement of claim) but is supported by the invoice referred to above. The plaintiffs place some weight on the fact that Accountant No 1 was “to review” potential business structures, in the context of the 18 September 2002 meeting at which they say Accountant No 1 put forward such a structure. (Accountant No 1, in cross-examination to which I will refer in due course, accepted that what was put by him at the 18 September 2002 meeting was one proposed structure, not a number of different structures.)

34. [115]

    B says that, from about June 2002, he began making more regular trips to stay with the first defendant at the Main Property. It is alleged (at [63] of the second further amended statement of claim) that from about July 2002 to September 2002, B made regular trips from Sydney to stay with the first defendant at the Main Property to discuss the first defendant’s intentions with respect to the Farming Business and the farms, and that he would pass on the first defendant’s intentions to his brothers. The first defendant admits that B visited him at the Main Property from time to time; says that during these visits the management of the first defendant’s Farming Business by the sons was discussed; does not know and cannot admit what B passed on to his brothers; and otherwise denies the allegations (see [33] of the first defendant’s defence).

35. [116]

    B also says that during that period (i.e., June to September 2002) he and his father discussed possible business structures and that the first defendant said to him words to the effect that he wanted the farms to be placed into the structure as asset backing and that he would make funds available for off-farm investments and would continue to “scout for additional agricultural properties to buy” (B’s affidavit sworn 2 April 2015, [175]-[176]).

36. [117]

    B says that it was following his discussions with the first defendant that he decided to leave his then employment in the retail industry (B’s affidavit sworn 2 April 2015, [177]). B resigned in about July 2002, with effect from 31 July 2002. Logically, if the resignation was precipitated by discussions with the first defendant, as B has deposed, the discussions to which B is there referring must have been before the resignation in July 2002 – meaning that, as a practical matter, on B’s own evidence the relevant discussions leading up to his resignation must have been in the period from May to July 2002 and could not have included anything said afterwards at the September 2002 meetings. It was suggested to B in cross-examination that B’s resignation from his then employment had more to do with B’s frustration at being an employee and wish to run his own business (see T 104.1-104.6). (The first defendant also suggested in cross-examination that B had resigned after being presented with an ultimatum so to do, but this was not put to B in cross-examination and there is no evidence of this.) To put B’s resignation in context, it followed roughly three months after B had been the recipient of the $1 million gift from his uncle (see above at [108] and this may help to explain B’s note (see [135] below) that this (2002) was a “year of change and opportunity”).

37. [118]

    B says that the possibility of A becoming divorced from his then wife was discussed at a meeting with Accountant No 1 between July – September 2002 (B’s affidavit sworn 2 April 2015, [193]). The first defendant recalls that wills were discussed and he has a “vague recollection” that there was a mention of A’s marriage but does not recall suggestion being made of “the assets to be put into a trust” (see [73] of his first affidavit). (This assumes some relevance in the context of later discussions in relation to the proposed business structure.)

38. [119]

    There was in evidence a Forysths’ tax invoice dated 16 August 2002 for the period July 2002 to August 2002 (Invoice 111332 – CB Volume 8, Tab 94) which records (without stating a date) a narration for a “[f]amily meeting attended by [the first defendant, A and B] and [Accountant No 1] to discuss the various options available and relevant issues regarding possible business structures that could be implemented”, for which a sum of $630 was charged (plus GST). This presumably followed on from the 4 June 2002 meeting at which (as per the invoice narration) Accountant No 1 was to consider options for future and potential business structures; and again supports the sons’ contention that what was discussed in September 2002 included a proposed business structure put forward by Accountant No 1.

39. [120]

    B says that there was a meeting with Accountant No 1, attended by the first defendant and the sons, on about 11 July 2002 (B’s affidavit sworn 2 April 2015, [184]). The Local Accounting Firm tax invoice referred to above supports the conclusion that there was such a meeting at around that time. Accountant No 2, in his affidavit of 24 May 2017 at [4], confirms that the electronic time records that he created record a meeting on 11 July 2002 between Accountant No 1 and each of the four family members.

40. [121]

    Accountant No 1, by reference to a copy of the invoice, deposes that to the best of his recollection the meeting “was simply a general discussion” (see his affidavit affirmed 30 May 2017 at [13]). He recalls the first defendant and B being present. He cannot recall if A and C were also present (see [12]). He deposes that, to the best of his recollection, no decisions were made as to whether the four family members would use a particular business structure. He says that “[t]he majority of ideas and questions came from [B] on an ‘ad hoc’ basis; and there was no particular structure to the questions, B was just asking general questions about different kinds of business structures (e.g. partnerships, trusts etc)” (see [13]). Accountant No 1, having considered B’s notes (at CB Tab 91 see [126]ff below) deposed that (assuming them to be notes of the meeting) they reaffirmed his recollection that it was “just another general discussion” (see Accountant No 1’s affidavit at [14]).

41. [122]

    In his affidavit, B says that he made notes at this meeting on or about 11 July 2002 meeting and he refers to a copy of the notes at CB Tab 91, the original of which was admitted as Ex K (see [184] of B’s affidavit sworn 2 April 2015). B also refers to a meeting which he says was attended by the first defendant, A and B during the period from July to the end of September 2002 (B’s affidavit sworn 2 April 2015 at [189]). (Accountant No 1 says he does not know to what meeting B is there referring – see Accountant No 1’s affidavit at [15].) B refers in that regard to the copy of his notes at CB 118, the original of which was admitted as Ex L. B was cross-examined at some length about these (and his other notes).

42. [123]

    Before turning to these particular notes, I should note that it is apparent from the documents in evidence that B made various notes over the relevant period, some of which appear on their face to be notes of meetings (insofar as they are dated and appear to record the attendees at the meeting or information gleaned at the meeting which B would not otherwise necessarily have had) and some of which, having regard to their content, appear to be notes of things to do or of thoughts as to particular issues (such as the note by B as to why 50% of start-up companies “fold” within three years – see [134] below). B’s evidence was that it was generally his practice to date his notes but not always (T 92.1-92.9). At least some of the notes appear to have remained intact in the yellow foolscap notepad on which they were written; and on one, at least, the internal order of the notes can be seen from their content (I refer in this regard to the 10 December 2002 meeting note appearing underneath a ruled-off note from an earlier meeting (Ex N) (see [220]ff below)). Some of the notes were, however, loose. (It may be, and was suggested from the Bar table, that some may have inadvertently become loose over the course of the discovery and production of documents in these proceedings but nothing turns on this.)

43. [124]

    It is clear that each of the sons had refreshed his recollection of events from around this period, or what he recalled being told of the events in this period as the case may be, by reference to B’s notes. In that regard, there is a particular need for caution as to the reliability of the recollection of persons (i.e., A and C) who did not make the notes in the first place as to what happened or was understood by them to have happened in particular meetings, insofar as that recollection has been prompted by reference mainly, if not wholly, to someone else’s (B’s) notes. There is an obvious risk (unconscious or otherwise) of reconstruction of memory exacerbated by the difficulty of interpreting someone else’s notes. That said, at least from the perspective of the note-taker (here, usually B), reference to a contemporaneous note can permissibly refresh one’s memory of an earlier meeting or discussion. I accept that the same may be the case where reference is made to a note taken by someone else at the meeting (assuming at least some degree of independent recollection by the person who did not take the note of the meeting), though care needs to be taken in assessing such evidence. (Accountant No 1, for example, on whose evidence the first defendant places weight had refreshed his memory of events largely by reference to documents to which he was taken in the preparation of his affidavit and he accepted that his recollection had been prompted by a review of B’s notes.)

44. [125]

    In the present case, there was some difficulty (shared by the note-taker himself) in some instances in distinguishing between what were notes taken at a particular meeting and what were notes prepared before or after the meeting (recording either B’s thoughts going into a meeting or his understanding of what had happened at such a meeting or perhaps his plan going forward from such a meeting). Furthermore, to the extent to which a party’s evidence as to his recollection of the substance of the relevant discussions or understanding of the outcome of particular discussions depends on what construction or interpretation is to be placed on particular aspects of the notes or terms used in the notes (such as the meaning of the word “assets”) particular care needs to be taken. This difficulty is particularly apparent when there is a comparison between the notes at CB Tab 91 and at CB Tab 118.

45. [126]

    The notes at Tab 91 (which B said in his affidavit related to a meeting in about July 2002) comprise two pages. They are undated.

46. [127]

    At the top of the first page of these notes appears the name of Accountant No 1 as well as the first defendant’s first name and date of birth in the top right-hand corner. There then follow, over the course of the two pages, various asterisked items, as follows (omitting arrows) (text in italics added):

47. [128]

    B’s evidence is that at the July meeting there was discussion about a company to be owned and run by the first defendant, A, B and C equally through a central company which had the five business units listed under the first heading “SHELF”. The first defendant says he has no recollection about this meeting (see Schedule at [73] of his affidavit affirmed 2 November 2015, responding to [184]-[188] of B’s affidavit sworn 2 April 2017). Accountant No 1 appears to have some recollection of the meeting (see [12]-[14] of his affidavit). He deposes that the reference to “shelf” in the notes (assuming they are notes of the meeting) is “in all likelihood” a reference to him discussing the different generically created shelf entities that can be used to structure a business. (He also comments that his impression at the time was that B had only a rudimentary understanding of how company and trust entities worked (see [14].)

48. [129]

    The notes at CB Tab 118 comprise six pages. They are also undated.

49. [130]

    On the first page of those notes appears the following (the underlined words being in boxes in the original):

50. [131]

    At the bottom in the left hand margin is the number “3,000” in a box.

51. [132]

    Page 2 contains the following:

52. [133]

    Page 3, which finishes about a third of the way down the page contains the following:

53. [134]

    Page 4 of the notes comprises a series of ten enumerated items under an initial note as to half of all “start-ups” folding within three years:

54. [135]

    Pages five and six of the notes are clearly consecutive. Page five commences with a new set of (two) numbered items:

55. [136]

    Accountant No 1’s recollection, as set out in his affidavit, is that (although he does not know to which meeting B is here referring) all that was discussed around this time were the “pros” and “cons” of various business structures. In cross-examination he accepted that at this stage there was one particular structure being discussed. Accountant No 1 deposes that he does not recall using the term “asset parking” (and that he more likely would have said “asset holding”); has no reason to doubt he may have made reference to the use of a testamentary trust or a maintenance trust (though he did not recall giving the first defendant any advice as to the use of those); and that from time to time he would give B some “broad brush” comments (see his affidavit at [15]-[17]).

56. [137]

    Accountant No 1 deposes in his affidavit that he regarded the client of the Local Accounting Firm as the first defendant, not either B or C; and that he would not have provided B or C with any advice on using testamentary or maintenance trusts (see [16]). (Pausing there, insofar as none of the sons appears to have had any familiarity with the notion of a testamentary trust at that stage – and the misspelling of “testamentary” is not insignificant in this regard – it makes sense that this was a concept taken from a discussion with Accountant No 1. Whether or not Accountant No 1 was retained by the first defendant, it would be understandable for the sons to regard statements made by Accountant No 1 at the meeting as to the use of a testamentary trust as being in the nature of advice.)

57. [138]

    On 29 August 2002, a property to which I will refer as “Property No 9” was listed for auction. It was advertised as an “improved pasture beef cattle property which runs in conjunction with fish farming” (see Tab 96), and the property included infrastructure for an operational fish farm. The property was passed in at the auction.

58. [139]

    A’s recollection is that he attended the auction with the first defendant and that, as the last bidder, they entered into negotiations with the vendor after the auction and offered a further amount ($25,000) which was rejected, so they returned home; but that the selling agent rang later that day and asked if they were still interested in the property, after which the first defendant wrote a cheque for $92,500 and A took it to the agent (A’s affidavit sworn 2 April 2015 at [176]).

59. [140]

    It is also A’s evidence that he was interested in purchasing that property himself (A’s affidavit sworn 2 April 2015 at [175]). (I note that less than five months before this he had been the recipient of the $1 million gift from his uncle and his evidence was that he still had the money from his uncle at the time Property No 9 came up for sale - T 360.26-360.31.) A’s evidence is supported in this regard by the evidence of B to the effect that, at some point in time in 2002, A had discovered that the property was for sale and that A had said to him words to the effect “I’m interested in purchasing it, and leasing it back”. Nevertheless, B also says that A subsequently said to him words to the effect “I can’t get the finance to buy it myself” (see B’s affidavit sworn 2 April 2017 at [195]). (The first defendant says B’s evidence in this regard shows that the “twist” in A’s case – namely, as to the missed opportunity to buy Property No 9: see [150]; [1148] below – has no substance; and that this demonstrates the dangers of reconstruction by “informal notes and assisted recollection”.)

60. [141]

    A accepted in cross-examination that he did not tell the first defendant he was interested in purchasing Property No 9 until after the auction (T 377.18-377.32). He says that he had a discussion with the first defendant about providing the funds to purchase the property and the first defendant said to him “I’m probably better off buying it. You keep your money” (T 354.27-354.31).

61. [142]

    In his first affidavit, the first defendant deposed that prior to attending the auction he did not have any discussions with his sons about fish farming and he did not realise his sons would be interested in the property (see first defendant’s affidavit affirmed 2 November 2015 at [47]). He said he went to the auction “out of curiosity” and he bid for it because it was “going so cheaply”. He said for him it was “a cheap grazing property with a dam which stored a large quantity of water … handy for a drought”. He said he told his sons he was not remotely interested in a fish farm but if they wanted to operate it they could (see first defendant’s affidavit affirmed 2 November 2015, [47]). His position was that, so far as he was concerned, the fish farm was a business that belonged to his sons.

62. [143]

    The first defendant in cross-examination accepted that, at the auction, A said he was interested in purchasing the property but said that A did not say that he wanted to buy it “as such” (T 745.25-745.45). The first defendant disputed A’s version of what had occurred (he thought that the decision to buy the property was made in a discussion with the agent immediately after the auction) but said that either version could be correct and that he was not “100% sure” (T 746.5-746.6). The first defendant agreed that A expressed interest in purchasing the property and that A took the cheque to the agent’s office and A signed the contract. The first defendant said he thought that A used his own cheque for the purchase (T 748.4-748.12). (The real estate agent’s trust account receipt dated 29 August 2002 refers to A as the person from whom the deposit of $92,500 was received – see CB Tab 99.)

63. [144]

    There is no dispute that the initial contract for sale was signed by A and dated 29 August 2002. Ultimately, however, it was the first defendant who became the registered proprietor of Property No 9. B’s evidence (consistent with that of A) is that the first defendant said to him “No, you boys should not spend your money. I’ll spend mine and I will kick off the venture. I am bringing money out of Sydney” (B’s affidavit sworn 2 April 2017, [196]). B says this was in response to a discussion between the three sons and the first defendant in which he says he (B) had said words to the effect “[C] and I could contribute to the deposit, so that we buy it” (B’s affidavit sworn 2 April 2017, [196]). The first defendant denies saying the words there attributed to him (see [70]) of his affidavit, responding to [196] of B’s affidavit) though he accepts that in other conversations, in different contexts, he said words to the effect that he was bringing money out of Sydney.

64. [145]

    There is in evidence a letter dated 9 September 2002 from Solicitor No 1to the first defendant, on which the plaintiffs place no little weight, that refers to instructions from the first defendant to the effect that it had been proposed that a company acquire the property – see [152] below. The plaintiffs rely on this as support for their contention that there was a proposal at around this time for the farms to be transferred to the proposed new business structure of which they were to have joint ownership with their father. The first defendant denies having given any such instructions and says Solicitor No 1 must have been mistaken – see T 753.15.)

65. [146]

    The the Local Accounting Firm’s timesheets (see affidavit of Accountant No 2 affirmed 24 May 2017 at [4]; Exhibit H at Tab S11, page TB 330) record that on 30 August 2002 there was a meeting between the first defendant and B with Accountant No 1. The entry recorded: “Meeting with [the first defendant] and [B] regarding new family business entity structure, purchase [Property No 9] and [N] bottle shop [a bottle shop in Sydney]”. At around this time, C had prepared an Excel spreadsheet (see CB Tab 95) with a footer “28/08/2002” for the profit and loss statement of [N] Bottle Shop, the possible purchase of which the sons say they had discussed with the first defendant (which presumably explains the reference to [N] Bottle Shop in the Local Accounting Firm’s timesheets). The first defendant did not dispute that he and B went to see Accountant No 1 on 30 August 2002. Accountant No 1 did not refer to this meeting in his affidavit.

66. [147]

    According to his time records, on 2 September 2002 Accountant No 1 recorded 17 units of time (approximately 1 hour and 42 minutes) as follows:

67. [148]

    Accountant No 2 (see his affidavit affirmed 24 May 2017 at [4]) describes this as recording a meeting he had with Accountant No 1, and later that day a telephone call between Accountant No 1, the first defendant and B. On that same day the first defendant contacted his accountant in Sydney, Mr Charge, to draw down funds of $200,000. The first defendant accepted that it was quite possible that this was a reference to Property No 9 in some way (T 723), consistent with the notation in the relevant records in evidence.

68. [149]

    On about 3 September 2002, B met with Accountant No 2 to discuss the profitability of the [N] Bottle Shop (B’s affidavit sworn 2 April 2015 at [198]). B says he wrote the date “3/9/02” on a copy of the Excel Spreadsheet for the Profit and Loss 2002 for the [N] Bottle Shop that had been prepared by C (CB Tab 98) and made handwritten notes on the bottom half of the first page of the pages of notes on orange [National Accounting Firm] headed note paper (see CB Tab 97). B believes that the other handwriting on the first and the writing on the second page of the handwritten notes is that of Accountant No 2. The first defendant does not recall this meeting ([73] the affidavit of the first defendant affirmed 2 November 2015) and Accountant No 2 gave no evidence of it in his affidavit.

69. [150]

    As to this, the first defendant points out that there is no evidence that he attended this meeting. He says it supports the “entrepreneur” view, and the proposition that B and C did not act on any promise as alleged. The first defendant notes that the spreadsheet relating to the R Hotel (a different hotel from the N bottleshop being considered) acquisition (CB Tab 162) shows contributions by the sons, not the first defendant, indicating at least the proactivity of the sons. Also said to support the first defendant’s view as to the entrepreneurial intentions of the sons is: evidence that the money for “Netpro” netting on Property No 9 (that being large predation netting works) (see T 112.31-113.18) was from the uncle’s $1 million gift; and that the money for the R Hotel would also have been from the $1 million gift (see T 113.24). (The first defendant argues that this damages the “theory” about the “missed” Property No 9 opportunity since “at the very least” it shows that A had other options at the time besides Property No 9 “yet he chose to spend it on what might be termed consumables” – see First Defendant’s Closing Submissions at [88], referring to T 767.28, T 912.44. Insofar as A’s family lawyers in 2006 referred to the manner in which those funds were “converted or spent”, reference was also made to the cost of private school tuition over four year – perhaps a “consumable” but surely not cavalierly to be dismissed as “blowing” the money away.)

70. [151]

    The following Thursday, 5 September 2002, Accountant No 1 recorded six units of time (approximately 36 minutes) as follows: “Discussions with [the first defendant] & [B], follow up Cleardocs option”. Accountant No 2 confirms that the firm’s timesheets record a telephone call between Accountant No 1, the first defendant and B on that day. Cleardocs is an entity through which company incorporation documents can be readily obtained (as explained by Accountant No 1 – see T 1221). This may well be consistent with B’s understanding that at that stage it had been agreed that a company would be incorporated to purchase Property No 9 (but there was also at this time some consideration being given to the acquisition of the N Bottle Shop to which it might possibly relate). The first defendant had no recollection in cross-examination of any discussion in relation to Cleardocs. Accountant No 1 could not recall any specific reason for the creation of a company – see T 1235.

71. [152]

    On 9 September 2002, the first defendant’s solicitor, Solicitor No 1, sent a letter to the first defendant in respect of the purchase of Property No 9, stating:

72. [153]

    It is not clear when that “recent” meeting occurred but the letter is consistent with B’s recollection that it had been agreed that a company would be established to purchase Property No 9. (It is also consistent with A having been initially named as the purchaser on the contract.) The plaintiffs place weight on this letter as being objective evidence in support of their argument that there was discussion about the transfer of land from the first defendant to the new business structure being discussed around this time. (Pausing there, given the first defendant’s lack of recollection about any instructions given to Solicitor No 1 as to a corporate purchaser, but his adamance that he was not even “remotely interested” in a fish farm, and his evidence that he regarded the fish farm as a business of the sons, I would be inclined to the view that it is more likely that Solicitor No 1 had correctly understood his instructions in this regard than that he had misunderstood them or was on a frolic of his own. No evidence was adduced from Solicitor No 1.)

73. [154]

    On 11 September 2002, documents concerning the incorporation of E Co were executed. The documents included a date of “11 Sep 2002”, which B says was computer-generated (B’s affidavit sworn 2 April 2015, [200]). Each of the four family members (including the first defendant) appears to have signed the various documents on that day. In particular, each signed a “Consent to act as director of [E Co]” bearing the computer-generated date “11 Sep 2002” (see CB Tab 1016 and CB Tab 101, which is replicated at CB Tab 106) and the first defendant signed a “Consent to act as Public Officer” of the company (see CB Tab 103). As to the circumstances surrounding the signing of those documents, B recalls that he attended a meeting on about 11 September 2002 with the first defendant, A, C, Accountant No 1 and Accountant No 2 (B’s affidavit sworn 2 April 2015, [200]). There was no time record referred to by Accountant No 2 of any meeting on 11 September 2002 (see affidavit of Accountant No 2 affirmed 24 May 2017 at [4]).

74. [155]

    On 12 September 2002, E Co was registered with ASIC (see the certificate at CB Tab 107). Three ordinary shares were issued to the first defendant at $1 each, and one ordinary share at $1 each was issued to each of A, B and C. All four family members were directors.

75. [156]

    On 16 September 2002, a tax invoice was issued to the first defendant (Tax Invoice No 119916 at CB Tab 110) by the Local Accounting Firm in respect of the incorporation of E Co, preparation and issue of share certificates to shareholders, preparation of minutes of meetings relating to the incorporation and completion of relevant ASIC forms and lodgement with ASIC. On 17 September 2002, a further tax invoice was issued to the first defendant, in respect of the formation of a unit trust (which I will call the “E Unit Trust”) (Tax Invoice 120326, CB Tab 114), including the preparation and issue of unit certificates to unit holders and preparation of minutes of meetings relating to the formation of separate family trusts for each of the four family members.

76. [157]

    The first defendant’s evidence about this in his affidavit was: “I did not recall any discussion about trusts, though there may have been. I was not interested in a trust structure, nor was I intending to transfer any lands” (see [73] of the first defendant’s affidavit affirmed 2 November 2015, responding to [200]-[203] of B’s affidavit). However, the first defendant admits that on 12 September 2002 E Co was incorporated ([68] of the second further amended statement of claim; [1] of the amended defence) and on 7 March 2003 EM Co was incorporated ([84] of the second further amended statement of claim; [47] of the amended defence). He also admits that he was a director of E Co for the period from 12 September 2002 until 9 December 2002 ([68], [83] of the second further amended statement of claim; [1], [46] of the amended defence). The plaintiffs point to this inconsistency in their submissions as to the first defendant’s reliability.

77. [158]

    18 September 2002 is the first of the two critical (and disputed) meetings on the plaintiffs’ case. The plaintiffs allege (further or in the alternative to their pleading of an expectation – i.e., that the first defendant, by words and conduct including by silence had allowed, encouraged or created certain expectations in the sons – see [66] of the second further amended statement of claim) that between about January and 18 September 2002 they and their father entered into an agreement for the establishment of the “Proposed [xxx] Family Business Structure” (see [67] of the second further amended statement of claim). Although the period in which the pleaded agreement is said to have been entered into spans a broad period (from January to 18 September) this largely turns on what is alleged to have taken place at the 18 September meeting.

78. [159]

    There is no dispute that there was a meeting with Accountant No 1 on 18 September 2002 attended by the first defendant, A and B. C was not present at this meeting. Accountant No 1’s time records refer to attendance at a “meeting with [the first defendant], [B] and [A] regarding new coy. [company] structure, operation of same, will, legal considerations” (Exhibit H, CB 30, Tab S11, page TB-335). B’s affidavit says that Accountant No 2 was also present (B’s affidavit sworn 2 April 2015, [207]). Accountant No 2 did not recall attending the meeting and his timesheets contained no entry for attendance of a meeting on that date (Accountant No 2’s affidavit at [5]). It was accepted by B that his recollection that C was present was incorrect.

79. [160]

    In preparation for the meeting a document, on letterhead of the National Accounting Firm, was prepared, headed “The [xxx] Group Documents to Sign 18 September 2002”, those being described as documents “re establishment of the following entities”: E Co, E Unit Trust, and the four individual family trusts (CB Tab 115). All five trust deeds bore a typed date of 16 September 2002. It is not disputed that at the 18 September 2002 meeting the five trusts were established, though C did not sign the documentation for his individual family trust until later (C’s affidavit sworn 2 April 2017 at [108]). Accountant No 1, as settlor, signed each of the individual family trust deeds under which the relevant son (or the first defendant, in his case) was named as the trustee. The beneficiary of each individual trust was the named individual, and various classes of persons (including the spouse, parents and children of the named individual) were named as the eligible beneficiaries of the respective trusts. Accountant No 1 described his recollection of the purpose of the 18 September 2002 meeting as “predominantly administrative” (his affidavit at [22]); his recollection being assisted in this regard by the checklist of documents to be signed that had been prepared. (In cross-examination, Accountant No 1 resisted accepting the proposition that this conveyed an incorrect impression of the meeting – see T 1244-1245 – but did accept that his recollection of the meeting had been based only on the documents to which he was taken and that the timesheets he had been shown suggested that other matters were discussed.)

80. [161]

    In evidence, there was a document (bearing a “Cleardocs solution” footer) headed “Minutes of meeting of corporate trustee”, being minutes of a meeting of E Co on 18 September 2002 at 10am (CB Tab 116). The minutes noted the persons present as the first defendant and each of A, B and C (though, as already noted, C was not present at the meeting). The meeting was held at the offices of the Local Accounting Firm. The first defendant was noted as the chair of the meeting. The minutes (signed by the first defendant) recorded among other things that:

81. [162]

    B’s recollection of the discussion at the meeting was to the following effect: E Co would have four shareholders (the first defendant, A, B and C); the assets, including the farms, would be owned by the E Unit Trust; each of the first defendant, A, B and C would have an equal 25% ownership of the units in the E Unit Trust; each would have a family trust which would also own units in the E Unit Trust; there was a discussion as to capital gains tax; and the property company, E Co, would appear on all documentation, however, the assets would be held in the E Unit Trust. (Pausing here, the note does not refer in terms to the “assets” as including the farms and this is a point of contention which I address in due course.)

82. [163]

    In evidence were notes made by B in relation to this meeting (again written on a yellow foolscap notepad) (EX M; CB Tab 117). On the face of the notes they appear to be notes taken at the meeting; they commence with the date of the meeting (18 September) and the initials of each of the attendees (Accountant No 1, the first defendant, A and B). There is then set out (in diagrammatic form) the company (E Co), the shareholders of which were identified as the first defendant (as to 3), A, B and C (as to 1 each); that E Co was to be the trustee of the E Unit Trust, the units in which were identified as being owned as to 25% by each of the family trusts of the four family (the first defendant, A, B and C) members, and that it was to be a discretionary trust. To the left of the box representing the E Unit Trust was the word “ASSETS” with an arrow pointing to the E Unit Trust box. Underneath the box representing the E Unit Trust were lines down to “OPERATING COMPANIES”.

83. [164]

    The first page of the notes goes on to record:

84. [165]

    In the left hand margin of the first page of the notes was the word “WEDNESDAY”.

85. [166]

    On the second page appears the following:

86. [167]

    B’s recollection is that, at the meeting, Accountant No 1 explained the structure as follows (B’s affidavit sworn 2 April 2015 at [209]):

87. [168]

    B says that towards the end of the meeting Accountant No 1 recommended that the first defendant and the sons obtain legal advice on the trust structure which he had proposed and in respect of the various documents they had signed; and suggested two solicitors (whose names B had recorded on the notes) (B’s affidavit sworn 2 April 2015 at [209]).

88. [169]

    I interpose to note that the content of the first page of B’s notes of this meeting is consistent with the notes having been made at the meeting itself. In this regard the notation of the details of solicitors from whom advice could be sought strongly suggests that this was written at the time of the meeting itself (rather than pre-meeting notes). The second page of the notes, however, seems more likely to have been a list of “to do” items by B and could well have been made after the meeting (though presumably at around the time of the meeting).

89. [170]

    The first defendant’s evidence about this meeting was that “I do not recall discussion concerning trusts. I have a recollection of wills being discussed, but cannot recall whether that was this meeting. I did not want a trust for myself” (first defendant’s affidavit affirmed 2 November 2015 at [73] responding to each of [209], [211] and [212] of B’s affidavit without distinguishing between them). That last statement is, of course, inconsistent with the fact that an individual family trust was set up for the first defendant at the meeting and the fact that the first defendant signed the minutes of meeting resolving that E Co act as trustee of the E Unit Trust. The first defendant was taken in cross-examination to the inconsistency between his evidence as to not wanting a family trust set up for himself and what in fact happened – see T 780ff. He accepted that there was a “break away from the original plan” but said that was the way the accountants had developed it to make it work – see T 782. In cross-examination he said he did not recall being at the meeting “but they say I was there I was there” (T 791). He accepted that his memory of that meeting was a blank page (T 793; 794).

90. [171]

    The first defendant did not dispute there was discussion about assets at the meeting – his position was just that he could not recall any discussion (see T 792; 793); and could not recall being at the meeting (T 795).

91. [172]

    In cross-examination (T 929-932), the first defendant accepted that, in the years before 2002 he had taken advice from the Local Accounting Firm in relation to capital gains tax issues. He agreed that there was no capital gains tax payable on: cash, plant and equipment, livestock and personnel. He accepted that a discussion about capital gains tax at the 18 September meeting could not have been a discussion about the transfer of operating assets such as cash, livestock, plant and equipment, or personnel. He also agreed that, in September 2002, if it had been brought to his attention that the transfer of the properties from him to a trust could incur capital gains tax, he would have sought to pursue a different option if one was available: T 994.15. (As adverted to above, the first defendant argues that the reference to capital gains tax at this meeting could have been to the capital gains tax later payable if land was acquired and disposed of by a company and it is submitted this does not lead to a conclusion that the discussion was as to the transfer of the first defendant’s land as such.) (The first defendant maintained in cross-examination that the company (E Co) was set up to run the rural enterprise not to buy property – see T 753; see also T 730).

92. [173]

    In his affidavit, Accountant No 1 deposed that “[i]t is highly unlikely that I would give advice to transfer primary production land and other primary production assets into one entity” and that he could not recall ever giving such advice to the first defendant and his sons (see [24]). (He said there were a number of reasons for this, including “asset protection and costs associated with asset ownership transfers”).

93. [174]

    In cross-examination, Accountant No 1 accepted that that evidence was based on what he considered to be his common practice in 2002, insofar as he recollected that practice in 2017 (T 1265.38-1266.14); and he also accepted that this would be subject to there being a compelling reason or an instruction from the client to transfer assets. Accountant No 1 accepted that it could be the case that the client had made a decision that the new company would purchase Property No 9. He also accepted that, in the context of the new family business, where the sons were to become involved for the long term, this could be a compelling reason to give consideration to a transfer of the farms into the unit trust: T 1262. Accountant No 1 also accepted that asset protection was a reason why consideration might be given to purchasing assets through a trustee company. He accepted that A’s marital position (A having separated from his first wife in about 2000) was part of the context of these discussions, but said that it was not necessarily a compelling reason why the structure might be adopted.

94. [175]

    Accountant No 1 did not doubt that at the meeting on 18 September 2002 he discussed capital gains tax with the first defendant, A and B (T 1238). He agreed that at this meeting what was being proposed was that the assets would be held by the E Unit Trust. Accountant No 1 also agreed that the likelihood was that the only capital asset being discussed at the meeting was land. Accountant No 1 agreed that the likelihood was that there was a discussion about wills at the meeting on 18 September 2002.

95. [176]

    The plaintiffs allege that, following the meeting on 18 September, the structure of the business proposed by Accountant No 1 (to give effect to what they describe as “[the first defendant’s] succession plan”) was that: E Co would be the trustee of the E Unit Trust; E Co would have four shareholders: the first defendant, A, B and C; the assets, including the farms, would be owned by the E Unit Trust; each of the first defendant, A, B and C would have an equal, 25%, ownership of the E Unit Trust; each of the first defendant, A, B and C would have a family trust which would own units in the E Unit Trust; each of the first defendant, A, B and C would have a will; and the first defendant would leave his estate to his sons, A, B and C, in equal shares, other than the proceeds from the sale of Property No 8, which would go to his grandchildren.

96. [177]

    This (coupled with the earlier meetings in the period from July 2002 to 18 September 2002) is the basis for the plaintiffs’ allegation that, in the period between about July 2002 and 18 September 2002, Accountant No 1 and/or Accountant No 2 gave certain advice as to the elements of the Family Business Structure that should be established ([65] of the second further amended cross-claim).

97. [178]

    The first defendant denies the allegation at [65] of the second further amended statement of claim and says that, by an agreement between he and E Co (particularised by reference to a minute dated 1 July 2003, which is said to be in error in including reference to Property No 8 – and which is in any event in error in that it is clear that the minute was not made until March 2004 – see below), it was agreed that E Co would have the use of land and plant and equipment owned by the first defendant for the purpose of carrying on a business of primary production (see amended defence [34]). (The minute is referred to at [252ff] below.)

98. [179]

    Accountant No 1, in cross-examination, accepted that by the meeting of 18 September 2002 there was “one coherent structure” which had E Co acting as the trustee of a unit trust and four family discretionary trusts each holding a 25% interest in the unit trust. He agreed that by 18 September 2002, in terms of his advice to the first defendant and his sons, he had settled on one coherent logical structure for their new business; and that, having settled on one coherent, logical business entity structure as at 18 September 2002, there was scope that in the future “bits might be added to” the business structure (T 1254.37-1254.40). That, of course, begs the question as to whether that structure encompassed the transfer of the first defendant’s land to the trustee of the unit trust. Moreover, as the first defendant points out, acceptance by Accountant No 1 that there was a business structure provided to the family members at the meeting does not establish that it was agreed.

99. [180]

    The second of the critical (and disputed) meetings was on 25 September 2002. The 25 September 2002 meeting was attended by Accountant No 1, Solicitor No 2 (one of the solicitors whose name Accountant No 1 had given to the family members at the 18 September meeting), and each of the first defendant, A, B and C (B’s affidavit sworn 2 April 2015, [213]).

100. [181]

     The independent records of both Accountant No 1 and Solicitor No 2 confirm that a meeting took place on that day. Accountant No 1 recorded 32 units of time (approximately 3 hours and 12 minutes) in respect of a “family meeting regarding new structure involving [Solicitor No 2] - update [Accountant No 2] and instruct regarding livestock & plant & equip. rollover”. Accountant No 1’s recollection was that the meeting took place at Solicitor No 2’s office (see his affidavit at [28]). An invoice by [Solicitor No 2’s firm] to the National Accounting Firm dated 31 October 2002, states: “[m]eeting attendance on 25 September 2002 with [Accountant No 1] and Messrs [xxx] and [A], [B] and [C] (1.5 hours)” (see CB Tab 30).

101. [182]

     B made notes relating to this meeting on a yellow foolscap notepad (Exhibit N; CB Tab 121, the first page of which is replicated at CB Tab 119]. The notes at Tab 121 comprise three pages.

102. [183]

     At the meeting, Accountant No 1 distributed a diagram entitled “The [xxx] Group Existing Structure 25-Sep-02”’ (see CB Tab 120; B’s affidavit sworn 2 April 2015 at [214]). In the diagram, E Co is described as the “Trustee of Unit Trust”, and the “E Unit Trust” is described as “Owner of Assets”. Although the first defendant did not recall Accountant No 1 handing out the document, he accepted that Accountant No 1 could have done so (T 798). Accountant No 1 himself had no doubt that he handed out the Structure Diagram (bearing the date “25 Sep 02”), or a version of it, at the meeting on 25 September 2002 and he accepted that the structure discussed at the meeting was that set out in that document (T 1243.14-1243.15). The first defendant had no memory of the advice at that meeting because he had no memory of the discussion (T 800) but did accept that as at 25 September 2002 a “better way” had been suggested (see T 800.50-801).

103. [184]

     I interpose to note that there were in evidence four copies of structure diagrams of the kind referred to above (at [183]) one, undated, that was annexed to Accountant No 2’s affidavit; one dated 25 September 2002 (CB Tab 120), which is the one likely to have been handed out at the meeting on that day; one dated 17 March 2004 (CB Tab 235), and one dated 12 December 2005 (CB Tab 411). Accountant No 2’s evidence (see [9] of his affidavit) was that he had prepared these structure diagrams and (see [12]) was that his usual practice was to date diagrams of that type on or about the date of a meeting at which he was going to discuss them with clients. The undated structure diagram appears identical (other than the missing date) to the diagram bearing the 17 March 2004 date. It differs markedly from the diagram bearing the 25 September 2002 date (in that the latter shows, interposed between the family members and E Unit Trust, the entity E Co; E Co is described as “Trustee of Unit Trust” sons; and the description of E Unit Trust is described on the undated diagram as “Owner of Businesses”, whereas on the 25 September diagram as “Owner of Assets”; and, finally, the undated diagram (as to the 2004 and 2005 diagrams) include an entry for the first defendant as “Owner of Freehold Land” with an arrow pointing from E Co to him with the words “Lease Fee”).

104. [185]

     Accountant No 2 was unable to affirm one way or another whether the two documents (the undated structure diagram and the diagram bearing the 25 September date) were created on the same date (see [10] of his affidavit), the two being located in the same excel file.

105. [186]

     Relevantly, however, the undated diagram has notes at the foot of the diagram (identical with the notes on the March 2004 and December 2005 versions of the structure diagram), that I accept suggest that the undated document was created some time around 10 December 2002-January 2003, since the notes refer to the family members’ shareholdings in E Co, and those of their family trusts, that were effected by share transfers in about January 2003. In that regard Accountant No 2 points to an application dated 10 December 2002 by C for a transfer of one share from the first defendant to him, which is consistent with C holding two shares as indicated on the undated structure diagram; and that the actual share transfers resulting in the four family members each holding two shares in E Co and each holding one “D” class share in E Co are dated January 2003.

106. [187]

     As to when the undated group structure document that was annexed to his affidavit was prepared, the plaintiffs say that this is almost certainly a document produced for or after the meeting of 17 March 2004. Accountant No 2 could not affirm when the document was created (see his affidavit affirmed 24 May 2017 at [10]). In cross-examination, he appeared first to accept the document was produced shortly before the meeting (T 1187) but then he did not accept that it was likely that the document was prepared for the 17 March 2004 meeting; he thought there was a strong likelihood it may have been created “back when the whole restructure was happening” (T 1188.36). However, when it was put to him that Note 2 to the diagram refers to a class of shares that was only created on 9 January 2003 (see [224] above), Accountant No 2 agreed the document must date from between 9 January 2003 and 17 March 2004 (T 1189.40). Absent the restructure documents Accountant No 2 did not have any independent recollection about event in 2002 (T 1196).

107. [188]

     Thus I would conclude that the undated structure group diagram annexed to Accountant No 2’s affidavit was created after the 25 September 2002 structure diagram, and probably sometime in the period December 2002-January 2003. The significance of the difference between the 25 September 2002 structure diagram and the three later structure diagrams is in the interposition of the E Unit Trust on the former and the inclusion of the entry for a lease fee payable to the first defendant as owner of the freehold land on the latter. (For completeness I note that the only difference on the 12 December 2005 diagram is that the first defendant is shown in his personal capacity as the owner of one “D” class share in, and receiving a distribution from, E Co; whereas in the 2004 diagram the owner of that share is shown as the first defendant’s family trust).

108. [189]

     Returning to the 25 September 2002 meeting, B’s understanding of the 25 September 2002 structure diagram document (bearing in mind of course that he did not create it) is that the reference to “Assets” included the first defendant’s land (B’s affidavit sworn 2 April 2015, [220(d)]. The first defendant maintains that this was not a reference to land (pointing out that B’s notes at CB Tab 121 refer to “Cash, plant and equipment, livestock and personnel” – see [192] below). (Compare this with the structure diagram at CB Tab 235, which is dated 17 March 2004 and does include a reference to land albeit with the first defendant shown as the owner - see [248] below).

109. [190]

     The first page of B’s notes at CB Tab 121, after noting the date (“Wednesday 25”), time and attendees, sets out the following:

110. [191]

     (Pausing there, the reference to a handout from “AK” is consistent with at least this page of B’s notes being made at the meeting itself. The reference to “[r]eview of previous regards structure” I read as shorthand for something like review of previous meeting or discussion or perhaps proposal in relation to the proposed business structure. Of course, if the plaintiffs’ contentions are accepted this could also be a reference to a review of a previous agreement in relation to the proposed business structure.)

111. [192]

     On the second page of the notes there is a diagram:

112. [193]

     The plaintiffs allege that at the 25 September 2002 meeting, the substance of the advice from Accountant No 1 was that the farming assets (including the land) would be held by a trust and that the operating entities would lease or rent the assets to run the businesses to enable the trust to generate income from its assets; and the trust would then make distributions of the income to each of the unit holders, being the family trusts.

113. [194]

     At [216] of B’s affidavit sworn 2 April 2015, he deposes that Accountant No 1 gave advice to the effect that:

114. [195]

     Accountant No 1 in his affidavit could not recall saying those words and doubted he would have expressed himself exactly in that way (at [29]) but in cross examination did not deny that he may have said words to that effect at the 25 September 2002 meeting.

115. [196]

     The plaintiffs allege that the substance of the advice from Solicitor No 2 at the meeting was that there was no need to transfer the assets into a trust; that the same result would be achieved if the first defendant continued to hold the properties for the sons until his death when the properties would pass to the sons under the first defendant’s will and that way capital gains tax would not be paid on the transfer of the land; that a will was a common and reliable method used by many farming families to manage the passing on of existing assets to the children as part of a succession plan; and that it was a better strategy for the farming assets to be held by the first defendant, and kept separate from the assets held by the operating company.

116. [197]

     B deposes (at [217] of B’s affidavit sworn 2 April 2015) that Solicitor No 2 said words to the effect:

117. [198]

     In his affidavit in these proceedings, Accountant No 1 deposed that he did not recall Solicitor No 2 saying “word for word” the words attributed to him at [217] of B’s affidavit, other than that he recalled a reference to capital gains tax because he could recall that “we had previously discussed generally the issue of CGT” as he had referred to earlier in his affidavit (see [30] of his affidavit, referring back presumably to [25] of that affidavit). Accountant No 1 deposed that the reference to “asset” in the quote attributed to Solicitor No 2 was confusing to him in that it was not clear to which assets it referred. In cross-examination, Accountant No 1 did not dispute that Solicitor No 2 had said those words at the meeting. Accountant No 1 further agreed that it was fair to say that it was likely that Solicitor No 2 had said words to the effect attributed to him by B, and said that “[t]he banter of the comment” sounded like something Solicitor No 2 would say and “rang true” to him (T 1246.41-1246.48).

118. [199]

     At [218] of B’s affidavit sworn 2 April 2015, he deposes that Solicitor No 2 also gave advice to the effect that:

119. [200]

     Accountant No 1 did not comment in his affidavit as to the attribution of the above words to Solicitor No 2.

120. [201]

     The plaintiffs allege that, following the meeting on 25 September 2002, the structure of the business “to give effect to [the first defendant’s] succession plan” (Plaintiffs’ Opening Submissions at [341]) was that: E Co would be the operational company running the farming business, and would own the cattle; E Co would have four shareholders; the changeover date for E Co to take over and commence running the farming business from the first defendant would be 30 June 2003; the assets, including the farms, would be held by the first defendant on trust for the sons, and the farms would be transferred to the sons in equal shares under the first defendant’s will in the event of the first defendant’s death; and Property No 8 was the first defendant’s retirement block, and the first defendant would leave the proceeds of Property No 8 to his grandchildren.

121. [202]

     It is alleged that, at or shortly after the 25 September 2002 meeting, further expectations were allowed, encouraged or created by the first defendant in relation to the proposed family business ([74] of the second further amended statement of claim) or, further or in the alternative, the parties reached agreement to vary the Family Business Agreement so as to revise the structure (see [75] of the second further amended statement of claim).

122. [203]

     The first defendant’s evidence is that he does not recall this meeting and that, having sighted the chart (i.e., the 25/09 handout from Accountant No 1), he “would not have gone along with anything like this” (first defendant’s affidavit affirmed 2 November 2015 at [73] responding to [213]-[223] of B’s affidavit). The first defendant argues that the effect of Accountant No 1’s evidence is that the discussions at the September meetings were “general discussions” and that no final decisions were there made (those being the words used in Accountant No 1’s affidavit at [25]). Accountant No 1 did not recall having given Solicitor No 2 a “specific direction” on the matter and deposed that, so far as he was aware, none of the capital tax considerations referred to in his affidavit at [25] was attended to after the meeting (see [30] of Accountant No 1’s affidavit at [25]). I refer in due course to the submissions made by the first defendant as to what conclusions should be drawn as to the outcome of this meeting (see [493] below).

123. [204]

     Emphasis is placed by the plaintiffs on an unsigned document (at CB Tab 124) as to advice in relation to the tax implications of a particular scenario. The document in question is an unsigned letter dated 3 October 2002 addressed from Accountant No 2 to a Mr Simon Aitken, the principal of a tax consulting firm in Melbourne (associated with the National Accounting Firm). I will refer to this as the “unsigned Aitken letter”. Accountant No 2’s evidence is that the unsigned Aitken letter “was never sent as [he] was satisfied that [he] knew the answer to the questions in respect of which advice was sought” (see Accountant No 2’s affidavit affirmed 24 May 2017 at [6]). The plaintiffs note, however, that Accountant No 2 did not assert that the unsigned Aitken letter was based on incorrect instructions.

124. [205]

     The unsigned Aitken letter, as drafted, was to seek an opinion “as to the tax implications of the following scenario in respect of a client matter”, identifying the first defendant as the client. It included the following:

125. [206]

     By reference to the footer on the unsigned Aitken letter, which includes the description “Roll over relief letter to expert 26 Sept.doc”, and an email dated 26 September 2002 from an accountant in one of the offices of the National Accounting Firm to Accountant No 1, which was then forwarded to Accountant No 2 by Accountant No 1 on 3 October 2002 (see CB Tab 125), it appears that the unsigned Aitken letter was created on, or at the very least in existence as at, 26 September 2002 (the day after the 25 September meeting). Thus its existence, albeit that it was not ever finalised and sent, provides support for the proposition that business restructuring was a topic that was being discussed at that time. (See also, though at a later time, the tax invoice referred to at [244] below.)

126. [207]

     Of course, it may well be that the draft as at 3 October 2002 differed from that which was created or in existence on 26 September 2002, since there is no apparent reason for a draft letter created on 26 September to be post-dated to 3 October 2002. Further, it is open to infer that the letter was initially drafted by someone other than Accountant No 2 (since it was on-forwarded to Accountant No 2 by Accountant No 1, who had received it as a draft “which will need some work”), and that it was drafted on Accountant No 1’s (not Accountant No 2’s) instructions (see the email from Mr Asquith-Charlton to Accountant No 1 at CB Tab 125). Nevertheless the letter at least supports the proposition that there were discussions ongoing at the time in relation to which tax advice as to the implications of a roll-over were considered relevant by the accountants acting for the first defendant. It seems implausible that the accountants (Accountant No 1 and Accountant No 2) were on a “frolic of their own”, particularly since time was charged to the first defendant in relation to this and there is no suggestion that the charge was challenged or objected to by the first defendant.

127. [208]

     There was also a document bearing a similar footer description (“Rollover relief executive summary 26 Sept.doc”) prepared which was headed “[The first defendant] – BUSINESS RESTRUCTURING”, and sub-titled “RESEARCH – Executive Summary” (CB Tab 124). The executive summary document related to livestock and to plant and equipment. There was no reference in the summary to land.

128. [209]

     Both sides draw some support from the unsigned Aitken letter (though at best it represents the understanding of Accountant No 2 or the original draftsperson who forwarded it to Accountant No 2, or even perhaps Accountant No 1 since he appears to have commissioned the creation of the document) of the discussions with the family members to that point). The plaintiffs point to the reference in the unsigned Aitken letter to the first defendant’s “succession planning strategy”; the first defendant points to the fact that there is no reference to land in this draft letter (nor in B’s notes at CB Tab 121).

129. [210]

     Accountant No 2 deposed that he did not recall being involved with any consideration of any other tax issues relating to the transfer of any assets at this time (his affidavit at [7]). In particular, he did not recall carrying on any calculations for possible capital gains tax implications in respect) of the transfer of lands (see [7]).

130. [211]

     On 10 October 2002, settlement of the purchase of Property No 9 took place. The first defendant drew down from the Sydney Family Trust both for the balance of the deposit on 2 September 2002 (A having left a cheque by way of deposit to secure the purchase but in less than the required amount of the deposit) and for the balance of the purchase price on 3 October 2002. In cross-examination, the first defendant accepted that it was quite possible that sums he had drawn out of the Sydney Family Trust at around this time were referable to this acquisition (see T 723). (I interpose to note that insofar as A argues that he missed the opportunity to acquire Property No 9 in his own name, settlement did not take place until after the September 2002 meetings, so the fact that the auction preceded the discussions does not preclude the possibility that A could in fact have acquired the property himself.)

131. [212]

     On 1 November 2002, Solicitor No 1’s firm, sent a letter to the first defendant, noting that the certificates of title for the property had been registered in the first defendant’s name, and enclosing a settlement statement (CB Tab 131).

132. [213]

     The plaintiffs allege that, from about October 2002, E Co conducted the Family Business (details of which are pleaded in the second further amended statement of claim and the subject of lengthy affidavit evidence which I will not here summarise). Suffice it to note that the sons say that each played a different role in the operation of E Co and the conduct of the Family Business: A, as the person responsible for managing the day to day farming work of E Co and all aspects of the day to day operations of the farming business (including directing E Co’s staff in all aspects of their duties, and assigning staff particular tasks at the farm); B, as the person responsible for the book-keeping and accounting processes used in the administration of the farm business (which he maintained at the office on Property No 4) and for the management of the financial side of the farming operations, as well as to help out with the physical work; C, as the person responsible for research and establishment of off-farm investments and to help out with the farming business when needed.

133. [214]

     B’s evidence is that between about October 2002 through until August 2010 he travelled to the farming properties every two weeks or so, usually for four to five days at a time (and sometimes up to ten days) (B’s affidavit sworn 2 April 2015 at [1036]), working a minimum of 30 to 40 hours per week in the business of E Co (at [1038]). A’s evidence is that from about October 2002, he was the person responsible for managing the day to day farming work of E Co: A’s affidavit sworn 2 April 2015 at [205]. C’s evidence is that from the beginning of 2003, he visited the farms on a regular basis, generally every four to six weeks (primarily to Property No 4, the Main Property and Property No 9); he assisted B with some of his activities; occasionally sourced, purchased and delivered farming supplies to the farms; and attended the farms at the request of the first defendant, A or B to help with particular tasks, such as during the harvest season on Property No 9 (C’s affidavit sworn 2 April 2015 at [129]). He says that during 2003 and 2004 he also spent a substantial amount of time looking at bottle shops to purchase in Sydney (C’s affidavit sworn 2 April 2015 at [148]).

134. [215]

     A company, to which I will refer as “D Co”, was incorporated and registered with ASIC on 31 October 2002 (CB Tab 128). The application for registration by ASIC of D Co (CB Tab 126) was lodged by Accountant No 2. The registered office of the company was that of the National Accounting Firm. Its principal place of business was noted as Property No 4. A was the director and sole shareholder of the company. (D Co is a different entity from one which had earlier been set up by A in relation to the hire of machinery and labour.)

135. [216]

     B gave evidence (B’s affidavit sworn 2 April 2015 at [236]-[238]) that, at the time D Co was incorporated, both the first defendant and A owned a number of pieces of plant and machinery. The role that D Co was established to perform was that the plant, machinery, utes and vehicles owned by the first defendant and A were to be transferred to it with effect from 1 July 2003 and then D Co was to hire out those items to E Co or third parties.

136. [217]

     On 10 December 2002, the first defendant resigned as a director of E Co. The first defendant’s evidence in cross-examination was that he resigned because the “whole idea of this company set up is I did not want to be involved in the running of it, it was for the boys to run it not me” (see T 811.47) (it having been put to him that he had resigned as a director in order to provide asset protection so that there would be a separation between the first defendant as the legal owner of the farms and E Co as the operator of the grazing business on the farms).

137. [218]

     B’s evidence is that there was first a meeting attended by the first defendant, A, B, C and Accountant No 1, followed by a meeting of directors of E Co, at the Main Property, later that day. There is in evidence a tax invoice dated 19 December 2002 from the Local Accounting Firm, addressed to the first defendant, which includes as part of the narration “[m]eeting with [Accountant No 1] on 9th December to review the financial statements” (CB Tab 139), presumably in preparation for the 10 December 2002 meeting. (Accountant No 2 did not refer to any timesheets for that meeting – see [4] of his affidavit.)

138. [219]

     B’s notes of the 10 December 2002 directors’ meeting (which continue on, though ruled off from, his notes of the 25 September meeting) form part of Exhibit N (CB Tab 121).

139. [220]

     B’s notes record as follows:

140. [221]

     B’s evidence is that, at the meeting at the Local Accounting Firm, Accountant No 1 advised that the first defendant should not be a director in order to increase the separation of the assets from the trading company (B’s affidavit sworn 2 April 2015, [240]). Minutes of the meeting were signed by the first defendant, recording the resolution that he had resigned as a director to take effect from 9 December 2002. The first defendant’s evidence is that he has “a remote recollection of this meeting, though not of the words asserted in this paragraph”. He deposed that “My idea that I expressed was that the boys run the business. I didn’t want to be involved” (first defendant’s affidavit affirmed 2 November 2015 at [73], responding to [240]-[242] of B’s affidavit).

141. [222]

     Also on 10 December 2002, the first defendant, as director of E Co, signed a consent to act by E Co as trustee of the E Unit Trust “that is [sic] to be created by a deed dated 16 Sep 2002 between” the first defendant and each of the sons as trustee for their individual family trusts “as initial unit holders” and E Co as trustee (CB Tab 135). At CB Tab 132 there is a circulated resolution of directors of E Co, signed by each of the first defendant, A, B and C on 10 December 2002, noting among other things the appointment of each of the four family members as the first directors of the company. Also signed on 10 December 2002 were applications for shares in E Co by each of the four family members (at CB Tab 138 and, amongst other documents, at CB Tab 140).

142. [223]

     The first defendant says, as to the meeting on 10 December, that this plainly shows matters being discussed which would not have been discussed if the matters had been finalised at 25 September 2002 in the manner suggested by the plaintiffs.

143. [224]

     On 9 January 2003, further shares were issued by E Co. One ordinary share was allotted to each of A and B, and the directors approved the transfer of one ordinary share from the first defendant to C (see CB Tab 140). As a result, the first defendant’s ordinary shares decreased by one with the consequence that he then held two ordinary shares. In addition, one “ordinary D Class” share was allotted to each of A, B and C in their capacities as trustees of their respective family trusts (see CB Tab 142), and it appears (from CB Tab 141) that the first defendant was also issued with one ordinary D class share, in his capacity as trustee of the first defendant’s family trust.

144. [225]

     In his affidavit sworn 2 April 2015 (at [267]), B refers to a document entitled “Minutes of a meeting of directors”, on the letterhead of EM Co (see CB Tab 151). The minutes are dated 30 January 2003. (However, EM Co was not incorporated until 7 March 2003: see below at [227].) The document records the attendance of A, B and C at the meeting.

145. [226]

     At CB Tabs 166 and 167, respectively, are notes dated 30 April 2003 and 1 May 2003 by B. The first notes a meeting on 30 April 2003 at the Main Property at 8pm of the directors of E Co attended by the first defendant and the sons. On the agenda was progress at Property No 9 and off-farm activities (including a hotel to which I will refer as “R2 Hotel”) (see B’s affidavit sworn 2 April 2015 at [275]). The first defendant gave evidence that he did not recall this meeting (first defendant’s affidavit affirmed 2 November 2015 at [73], responding to [899 and [275] of B’s affidavit sworn 2 April 2015). The 1 May note, which B says he made in advance of a meeting of the directors of E Co to be held on 2 May 2003 (which was in fact held on that date: see [228] below), relates to Property No 9 and includes “called [Accountant No 2] to discuss meeting agenda for Friday meeting”.

146. [227]

     Meanwhile, on 7 March 2003, EM Co was incorporated (see CB Tab 151; minutes of meeting of EM Co, showing each of A, B and C present; CB Tab 154 – ASIC extract). Accountant No 2’s affidavit refers to time records confirming a meeting on that date between Accountant No 1, the first defendant, B and C (his affidavit at [4]). The plaintiffs say that EM Co was established as a vehicle through which the first defendant and the sons would make off-farm investments - see B’s affidavit sworn 2 April 2015 at [274] (which I read as evidence of an understanding of the reason for incorporation, though it is not clear from the paragraph whether it was B’s understanding or someone else’s). EM Co had a share capital of four D class shares at $1 each and eight ordinary shares at $1 each. Each of the first defendant, A, B and C owned one D class share each and two ordinary shares each. (The D class shares of A, B and C were not owned beneficially.)

147. [228]

     On 2 May 2003 there was a meeting attended by the first defendant, A, B, C, Accountant No 1 and Accountant No 2 at Property No 4. A tax invoice of 7 November 2003 (tax invoice 338298) from the Local Accounting Firm (CB Tab 212) includes a narration for “Our meeting 2 May 2003 on site at [Property No 4] regarding group structure, accounting and procedural setup, purchase of the [R2] Hotel, Sydney” (Accountant No 2’s affidavit does not refer to a time sheet entry for this meeting).

148. [229]

     B’s notes of this meeting (CB Tab 168) are part of Exhibit O, CB Tab 168. B’s notes record:

149. [230]

     Against each of the first four agenda items above there is a tick. The notes go on to record:

150. [231]

     The first defendant’s evidence is that “I don’t remember this meeting. I have a recollection of [Accountant No 2] being present at a meeting at [Property No 4] on one occasion” ([73] of the first defendant’s affidavit affirmed 2 November 2015, responding to [278]-[279] of B’s affidavit sworn 2 April 2015).

151. [232]

     The first defendant points out that the structure being discussed in relation to the R2 Hotel at this meeting is admitted by B to be one that has the first defendant as the “bank”, and not as a party to any capital growth (inconsistent it is said with the alleged Revised Family Business Agreement); and that the concept of a partnership acquiring the land (which B accepted was a live issue at that time) is also inconsistent with that structure. The first defendant also points in this regard to B’s acceptance (at T 169.45) that the common element of various “off farm activities” was the use of the first defendant as financier.

152. [233]

     I interpose to note here that the first defendant argues that the concept of him as banker “lies at the heart of this case” and that this is the perspective which “clarifies” the matter (First Defendant’s Closing Submissions at [94]). The first defendant submits, in effect, that the sons sought his assistance (in relation to the proposed R2 Hotel and then later in relation to the land development investment with the E and B Projects and the W Project investment – referring to B’s evidence at T 174.25 that this was another form of off-farm investment) as a banker. The first defendant says this “ad hoc approach to off farm investment” is consistent with his case; namely that “off-farm investment” was not the subject of any fixed agreement but simply a product of the relationship between father and sons (who it is said “had a favourable ear of their father towards investment assistance” (First Defendant’s Closing Submissions at [94])). It is submitted that for the sons to become involved in these possibilities was (other than in relation to the W Project) their own initiative, not something which the first defendant induced them to do. (The first defendant says that it is, consistent with this that, the sons did not give instructions to their solicitor, Mr Beattie, at any time over a ten-year period along the lines of what is now being suggested; rather, they gave instructions to the opposite effect, leading to the advice concerning the option agreement in 2010 to which I refer in due course.)

153. [234]

     House No 2 was sold on 26 June 2003 (CB Tab 187).

154. [235]

     With effect from 1 July 2003, all of the first defendant’s employees were transferred to employment with E Co, although there was an arrangement under which one of the employees in question (Farm Worker No 2), though employed by E Co, still continued physically to work for the first defendant on a full time basis on Property No 8 (in return for which the first defendant paid for the electricity at Property No 9) (see [14(e)] of B’s affidavit sworn 11 February 2016). The livestock then owned by the first defendant (other than 200 head of cattle) were transferred to E Co, at cost, by way of book entry (T 1017.33-1017.45). This was recorded as a loan from the first defendant to E Co.

155. [236]

     The plaintiffs say that there was never any suggestion by the first defendant, at the time that he transferred the ownership of the cattle to E Co, that he had loaned the sum of $758,427.12 to E Co or that E Co would ever be required to repay that sum to the first defendant in respect of the cattle. They further say that there was never any suggestion in discussions between the four of them that the sons (or for that matter E Co) were purchasing the first defendant’s business from him or that they would be liable to repay to the first defendant any money in respect of assets which he transferred to E Co. They say that the first defendant’s herd was not separately identified nor kept separate from E Co’s cattle and that no specific cattle were ever identified as comprising the first defendant’s herd. The first defendant, in cross-examination, said that the repayment of the amounts was subject to the “success” condition.

156. [237]

     The plaintiffs adduced evidence as to the work undertaken after 1 July 2003 by E Co to improve the farms (details of which are set out in the lengthy affidavits of A and B and largely are not contested by the first defendant). E Co’s employees performed all of the day to day work which was carried out on the farms. The plaintiffs point out that neither A nor B was cross-examined as to his evidence in respect of the work done by E Co.

157. [238]

     Also from 1 July 2003, there was an arrangement in place for the lease by E Co of Property No 4, the Main Property, Property No 8, Property No 9 and Property No 10. The agreement for lease was recorded in a document prepared by the accountants headed “Minutes of meeting of directors of [E Co] dated 1 July 2003” (see CB Tab 188). It is accepted that this document was back-dated, since it refers to a property (Property No 10) that was acquired in September 2003, after the purported date of the minuted meeting (see [241] below). The sons note that they did not obtain any independent legal or accounting advice with respect to the Agreement for Lease between E Co and the first defendant. This is relevant to their unconscionable conduct claim in relation to that lease arrangement.

158. [239]

     On 13 August 2003, there was a meeting attended by the first defendant, A, B and C at Property No 4. B’s notes in relation to the meeting are part of Exhibit O and are at CB Tab 197B (see B’s affidavit sworn 2 April 2015 at [296]). The first defendant did not recall this meeting ([73] of the first defendant’s affidavit sworn 2 April 2015, responding to [296] of B’s affidavit).

159. [240]

     B’s notes set out a list of various items, one of which was “Agri-lease” (page two of CB Tab 197B), there listing nine farming properties (including Property No 10, the purchase of which had not then been completed) against which figures were attributed with the words “5% lease”, and noting that Property No 8 was “to remain [first defendant]”. On page three, the notes also included figures for cattle sales and gross profits; wages; and a reference to Property No 9.

160. [241]

     In about October 2003, the first defendant completed the purchase of another property (to which I will refer as “Property No 10”). Once acquired, that property was also used by E Co. On the Local Accounting Firm file (see CB Tab 204; CB Vol 32 Tab 6A p 417M) there is a file note on the National Accounting Firm letterhead of 3 September 2003 headed “Re: New Property” noting:

161. [242]

     The copy coversheet of the contract for sale of Property No 10 supports at least that there was a suggestion that the property be acquired by E Co, as its name was typed in as the purchaser and then crossed out and replaced with that of the first defendant in handwriting (CB Tab 206).

162. [243]

     Accountant No 2’s review of his time recordings shows there was a meeting between he and B on 23 December 2003 ([4] of the affidavit of Accountant No 2), but it is not clear to what this meeting related.

163. [244]

     The proposition that what was contemplated at around this time was a “roll-over” or transfer of the farming operations from the first defendant to E Co (as part of a new family business structure) is corroborated by the tax invoice issued by the Local Accounting Firm (on a letterhead showing Accountant No 1’s office address) to the first defendant (addressed to him at Property No 8) and dated 7 December 2003. Part of the narration on this invoice reads: “[o]ur ongoing detailed research into the ‘rollover’ of the primary production activities to [E Co] including discussions and correspondence with tax specialists in Sydney and Melbourne” (CB Tab 213). The sum of $850 was charged in respect of that item. (This invoice is consistent with advice having been sought by those within the Local Accounting Firm from other tax specialist consultants on matters such as those referred to in the earlier unsigned Aitken letter, even though that letter was not apparently sent.) Significantly, however, the narration makes no reference to the transfer of land as part of the “rollover” of “primary production activities”.

164. [245]

     On 28 December 2003, the first defendant signed a letter, addressed “To Whom it May Concern”, confirming that A was employed as manager of the properties comprising the 3/6 Aggregation as well as Properties No 8, 9, 10 and the Main Property (CB Tab 223). (In cross-examination, the first defendant resisted the proposition that A was the manager of the farms, insisting that he (the first defendant) was the boss.)

165. [246]

     On 17 March 2004, B says there was a meeting at the Local Accounting Firm attended by the first defendant, A, B, C and Accountant No 2 (B’s affidavit sworn 2 April 2015 at [308]). (The first defendant did not recall this meeting – see [73] of the first defendant’s affidavit affirmed 2 November 2015, responding to [308], [314], [315] of B’s affidavit.) Accountant No 2’s records showed a meeting between him, Accountant No 1 and B on 3 February 2004 and his attendance at a meeting on 17 March 2004 (although he says this meeting was at Property No 4 whilst B says it was at the Local Accounting Firm) (affidavit of Accountant No 2 at [4]).

166. [247]

     B’s diary contains the following note on that day (clearly in anticipation of the meeting) (CB Tab 234):

167. [248]

     There was in the evidence another group structure document prepared as at 17 March 2004 (CB Tab 235). It is in similar form to the earlier group structure diagram handed out by Accountant No 1 at the 25 September 2002 meeting (see [160] above) but this one shows E Co as the “Owner of Businesses” and has an entry for the first defendant (as the “owner of Freehold Land”) on the right hand side, with an arrow indicating payment of “Lease Fee” from E Co to the first defendant.

168. [249]

     This structure document depicts the family members as shareholders, each owning two shares, of E Co; the sons as directors of E Co; and each of the individual family trusts as owning “1 special share each which only entitles them to dividends (creates the ability to split income with other family members)”. The plaintiffs say this is consistent with what happened after 9 March 2003.

169. [250]

     Also in evidence were copies of a Local Accounting Firm document headed “Requisition of Information” dated 17 March 2004 (CB Tab 236; 237). The information was itemised under four headings: D Co, E Co, the first defendant and A. As to E Co, the required information included “2.6 Discuss whether want to treat capital contributed as equity or loans” and “2.9 Discuss reporting requirements from MYOB (separation of trading activities by category eg fish farm v cattle trading)”. In relation to the first defendant, the information included “3.2 Discuss lease of freehold property to E Co”.

170. [251]

     It is accepted that the minutes of this 17 March 2004 meeting of E Co are those incorrectly dated 1 July 2003 (at CB Tab 188). This is evident from the reference in that minute to Property No 10 (which was only acquired in September 2003) and from the letter from Local Accounting Firm the following day (CB Tab 238).

171. [252]

     The minute at CB Tab 188 (of significance in that the first defendant maintains this is the only agreement that was reached in relation to the farming business operations as such) is headed a minute of a meeting of directors of E Co. By this stage, of course, the first defendant was no longer a director of the company, having resigned in December 2002. The minutes of meeting record the following:

172. [253]

     The minute also recorded a resolution by E Co to accept the terms of the lease agreement and that the minutes be signed in confirmation of the same.

173. [254]

     The first defendant’s evidence was that he did not recall this meeting (first defendant’s affidavit affirmed 2 November 2015 at [73], responding to [308], [314], [315] of B’s affidavit). However, the first defendant agrees (see First Defendant’s Closing Submissions) that the parties agreed in writing dated 1 July 2003 that the first defendant would lease the land owned by him to E Co, and plant and equipment, for $300,000 per year plus GST, referring to this minute of meeting (CB Tab 188). While the first defendant points out that the plaintiffs’ evidence is contradictory as to when this document was signed (referring to B’s 2015 affidavit at [278]-[279] and [314], where dates of 2 May 2003 and 17 March 2004 are asserted), there is no dispute that the parties executed this document. There is also a reference in the Local Accounting Firm’s records to a concern to be mindful not to have a situation where this resulted in a tax profit for the first defendant (see T 830).

174. [255]

     The lease agreement was noted in a letter apparently sent on or about 18 March 2004 from Accountant No 2 to the first defendant, copied to each of the sons, with which was enclosed a document entitled “The [xxx] Group – Action Plan 18 March 2004”. Accountant No 2’s evidence is that his records show he created a letter and action plan on that day (at CB Tab 238) (see affidavit of Accountant No 2 at [4]). The letter included the following:

175. [256]

     The action plan included reference to the preparation by Accountant No 2 of a draft standard lease agreement “for the property” between the first defendant and E Co “to be reviewed at our formal tax planning meeting May 2004”. (It does not appear that any “draft standard lease agreement” was ever prepared or reviewed by the parties.)

176. [257]

     The first defendant argues that there is real doubt as to whether the document at CB Tab 234 (see above at [247]) is a note of the meeting on 17 March 2004; in cross-examination, it was suggested to B that the notes were “obviously an agenda” (see T 160-161). The first defendant notes that B concedes that these are not entirely minutes of a meeting (T 161.03), but is unable to explain why there is a reference to a trust structure, some 18 months after that suggestion had, on the plaintiffs’ case, been rejected. (B says that these were “possibly different things” (T 161.28).) The defendant submits that B is here simply guessing, noting that he is unable to name what other project he is there referring to (see at T 161.45).

177. [258]

     On about 1 July 2005, the first defendant purchased another property (to which I will refer as “Property No 11”). It too was used by E Co to conduct the Family Business and the Agreement for Lease was amended to include it as one of the leased properties (second further amended statement of claim, [97]). Work was done by E Co on, amongst other things, enlarging existing and installing new dams on the property, constructing laneways and building and maintaining fencing on the property.

178. [259]

     At about the same time, the first defendant purchased another property (to which I refer as “Property No 12”), which was also used by E Co to conduct the Family Business and the Agreement for Lease was amended to include it as one of the leased properties (second further amended statement of claim, [100]; although that paragraph refers to Property No 11, it appears to be an error and I read it as referring to Property No 12).

179. [260]

     E Co paid the annual lease fee under the Agreement for Lease from 1 July 2003 up until 30 June 2007 (second further amended statement of claim at [115]).

180. [261]

     The plaintiffs allege (and the first defendant in the witness box did not ultimately dispute) that in about 2008, when there was a drought affecting the rural area, agreement was reached between the sons and the first defendant that E Co would not be liable for payments under the Agreement for Lease for the year 1 July 2007 to 30 June 2008 and would not be liable for payments for any period after 1 July 2008 unless and until the first defendant requested that E Co recommence making payments under the terms of the Agreement for Lease (second further amended statement of claim at [117]). (There is also an allegation in the alternative that the first defendant represented or made assurances or promises or encouraged, acquiesced in or created an expectation or assumption to that effect.)

181. [262]

     The plaintiffs argue that during the years of drought from about 2007 to 2010 any pasture development and improvement (matters for which the first defendant had responsibility under the Agreement for Lease) would have been futile (and the first defendant accepted this in cross-examination). They point to the first defendant’s financial statements (Exhibit AM) to show that in the period from 30 June 2008 to 30 June 2011 no payments were made by E Co for fodder or feed by the first defendant. They say this was the reason the first defendant gave E Co a rent-free period (see Plaintiffs’ Opening Submissions at [390].

182. [263]

     The plaintiffs admit that various sums of money were advanced by the first defendant to E Co over the period from July 2003 to July 2012 to fund E Co’s operations and to pay for improvements to the farm, items of equipment and the like (see [124] of the second further amended statement of claim), including for cattle purchases. They also admit that the sums were credited to an account in E Co’s books described as the first defendant’s loan account (see [125] of the second further amended statement of claim). However, they allege that the first defendant allowed, encouraged or created the expectation in the sons that, inter alia, the money advanced by the first defendant was not a loan and E Co was not under any obligation to repay it (see [126] of the second further amended statement of claim). The first defendant accepts that these moneys were “to assist the boys in the farms” (see T 849). I consider in due course his evidence as to the repayment of those advances.

183. [264]

     The plaintiffs say that, over the previous years, the first defendant had run the farms at a loss and that, between 2002 and 2009, E Co adopted the same approach, using the first defendant’s advances from the Sydney Family Trust to make capital improvements to the farms, to improve infrastructure on the farms and to improve the quality of the herd. They say that E Co accumulated trading losses, through expenditure on infrastructure and cattle, which could be offset against future profits. They note that, for the financial year ending 30 June 2009, E Co recorded carried forward tax losses from the 2004/2005 tax year to date totalling $1,244,787 (B’s affidavit sworn 2 April 2015 at [427]).

184. [265]

     The sons say that their understanding was that the arrangement with the first defendant with respect to moneys he provided to E Co for cattle purchases, and other expenses, was that the first defendant wanted to move his money out of Sydney to be used for wealth creation for the benefit of his family. B’s evidence is that, before the first defendant was gaoled, the first defendant never informed him that the moneys provided to E Co were required to be repaid. B says that his understanding was that the money was a loan but not repayable before the first defendant’s death (B’s affidavit sworn 2 April 2015 at [438]).

185. [266]

     The plaintiffs say that, had the first defendant ever indicated that the moneys he provided to E Co for purchasing cattle and other items were to be repayable before the first defendant’s death, it would have made the business of E Co non-commercial. They say that no repayments were ever requested by the first defendant (with or without interest) and no repayments were ever made by E Co to the first defendant, before the second defendant called for the loans to be repaid (see [527] below; and the cross-claim in these proceedings). They note that interest was not recorded in the company books as being payable on the loans.

186. [267]

     The plaintiffs allege that EM Co was the company through which “off-farm investments” were to be made by the first defendant and the three sons (see [130] of the further amended statement of claim). B and C give evidence of various off-farm investment opportunities that were considered and C, in particular, gave evidence of the steps he took to investigate potential investments.

187. [268]

     The plaintiffs identify a number of projects that they say were off-farm investments, the first two being: the “E” Project in Queensland (in which EM Co invested $225,000 in about November 2004), which was successful, and the “B” Project (in which it invested $561,000 in about October 2006), which was not. (See [131]-[141] of the second further amended statement of claim.)

188. [269]

     As to the E Project, which was a property development through a company to which I will refer as “R Co”, each of A, B and C advanced EM Co a sum of $75,000 to make the investment.

189. [270]

     As to the B Project, which was another property development through R Co or a related company (to which I will refer as R Co No 1), EM Co obtained a loan facility from Rabobank Australia Pty Limited (Rabobank) in the amount of $750,000, on condition of a personal guarantee provided by the first defendant and a first mortgage granted over Property No 4 as security. On 27 October 2006, E Co drew down on the loan account an amount of $561,000 and transferred it to “R Co No 1” to finance the B Project development. In about 2008, the B Project collapsed and in about 2008 or 2009 R Co No 1 went into liquidation. E Co repaid the Rabobank loan (second further amended statement of claim, [138]-[141]).

190. [271]

     The first defendant agrees that there was discussion about off farm investments (T 733/734), though he disagrees that B and C were not going to be full-time farmers. There is no evidence of any complaint about this prior to the commencement of the proceedings, however. The first defendant admits that, in or about October 2006, his three sons caused E Co to borrow money from Rabobank, which borrowing was secured over the property known as Property No 4; and that the loan facility was for $750,000 for the purpose of advancing the investment pursuits of A, B and C. (The first defendant referred to this at [19]; [37] of his affidavit affirmed 2 November 2015. He said (at [19]) that at the time he thought the loan was for housing construction in the mining industry.)

191. [272]

     The plaintiffs say that after the collapse of the B Project, EM Co did not recover any of the funds that it had advanced to R Co No 1. EM Co retained its shares in the company that had been established to pursue both that and the E Project and, since then, some eight to ten blocks of land have been developed. It is not clear whether any dividend has been recouped from the development of those blocks of land.

192. [273]

     Although steps were taken in 2007/2008 with a view to the investment by EM Co in two other property development projects in New South Wales, ultimately EM Co ultimately did not invest in either. The first defendant did, however, personally invest in one of those two projects (the “W Project”), which was for the development of an office building. The first defendant did so by purchasing units in the unit trust which held the land as an asset (the “W Unit Trust”). EM Co is a shareholder in the trustee company of the W Unit Trust (C’s affidavit sworn 2 April 2015, [189]). The first defendant paid for the acquisition of 50% of the units in the W Unit Trust and distributed the units in that unit trust equally to himself and each of his sons. (The first defendant attributes his involvement in this development to a discussion with someone else – to whom I will refer as “P” – see [36]; [43] of the first defendant’s affidavit affirmed 2 November 2015.)

193. [274]

     In the first defendant’s affidavit evidence he referred to a meeting with a real estate agent and Accountant No 2 on 20 August 2009 (see [58]). Accountant No 2 gave no evidence of any such meeting. The first defendant was there suggesting there had been some consideration as to the sale of all the properties shortly before 22 October 2009. In cross-examination, he was uncertain as to the date of this meeting but said it was long before the confrontation (in October 2009) – see T 1003. It was in this context that he said all the properties were for sale (or on market), from the time he bought them – see T 1003-1004.

194. [275]

     In September 2009 came the disclosure by X and Y to their parents of the sexual abuse by the first defendant. It is not necessary here to describe the abuse to which the first defendant ultimately pleaded guilty, save to note that if the agreed statement of facts tendered in the criminal proceedings is correct (as the first defendant agrees it is), then the first defendant’s evidence at the hearing before me (to the effect that he had pleaded guilty to some offences that he had not committed) cannot be accepted and, I would infer, reflects a lack of understanding on the first defendant’s part of the scope of conduct that falls within the relevant offences to which he pleaded guilty (see his comment at T 953.37 “You made a big thing of this so-called sexual thing. There’s sex and sex, as far as I’m concerned, and mine was an affection”). Nothing, however, turns on this.

195. [276]

     On 21 October 2009, the three sons confronted their father at the Main Property with those allegations (this is referred to in the pleading as the “Confrontation”). The sons each gave evidence describing the confrontation. In summary, their evidence (which is broadly the same) is that B accused the first defendant of the sexual assault of his daughters; the first defendant at first said nothing (which I note was accepted by the first defendant in cross-examination inconsistent with the submission for the first defendant in these proceedings that there was an immediate confession of guilt but, again, nothing turns on this); the first defendant then said words to the effect “[y]ou’re being unreasonable”; either B or C asked the first defendant “[w]hat about Z?” and the first defendant said “[w]ell you ask her”. The sons say, that during the course of the confrontation, the first defendant continued to say words to the effect “[Y]ou’re being unreasonable. The girls are fine; other people are telling them it wasn’t ok what I did”. The sons say that towards the end of the confrontation, the first defendant said words to the effect “[g]ive me some time to get some money together and I’ll fuck off out of your lives forever”. (The first defendant does not deny saying something to this effect but seeks to dismiss it as that he was saying all sorts of “silly statements at the time and this was one of them – T 959.45.)

196. [277]

     This evidence forms the basis for the plaintiffs’ allegation that, during the confrontation, the first defendant represented to them that he would leave them alone given some time to get some money together and that he would transfer the farms to the sons (second further amended statement of claim at [146] – these representations being referred to in the pleading as the “Leaving Representations”). They allege that, following the confrontation, the first defendant allowed, encouraged or created the expectation in them that: he was willing to transfer legal title to the farms to them but there would be substantial capital gains tax that would be payable if he did so; he was willing to sell the farms if a buyer could be found at the right price and the four would share the sale proceeds; the Family Business would continue to be conducted by the sons (with the minimum possible involvement by the first defendant) pursuant to the Revised Family Business Agreement as it had been prior to 22 October 2009; and the first defendant would otherwise hold the farms so that they would pass to his sons under his will (subject to “squaring up” any gifts made to each of them) apart from which Property No 8 would pass to his grandchildren.

197. [278]

     I interpose here to note that the first defendant points out that in the pleading no reliance is said to be placed on, nor any relief sought in relation to, the alleged “Leaving Representations”. I accept that, given that they post-date the discussions in September 2002 on which the plaintiffs rely for their various claims, any such representations could not have informed the sons’ decision to enter into the alleged Family Business Agreement or any arrangement to that effect; nor could they have influenced the conduct of the sons and E Co in relation to the operation of the family business in the period prior to 2009. As I understand it, however, the relevance of these alleged representations is said by the plaintiffs to be that it explains the sons’ decision to continue the family business notwithstanding the disclosure of sexual abuse (and confirms their continuing expectation as to inheritance of the farms). I would add that it also may explain the understanding of the sons going forward that Property No 8 was to be treated in a different category to the other farms (in effect as the grandchildren’s inheritance).

198. [279]

     The first defendant admits that in or about October 2009, the three sons met with him and accused him of matters in respect of which he was subsequently charged with criminal offences; and that he was subsequently convicted of such charges and sentenced to imprisonment.

199. [280]

     Following the confrontation on 21 October 2009, a meeting was arranged with Accountant No 2 for the following day (22 October 2009). The first defendant recalls this meeting but not how it came about or the words spoken at the meeting (first defendant’s affidavit affirmed 2 November 2015 at [73], responding to [949]-[962] of B’s affidavit).

200. [281]

     The sons’ evidence is that each of the first defendant, A, B and C attended the meeting on 22 October 2009 with Accountant No 2. The sons say that the reason for the meeting was to enable the four of them to understand the ramifications, in respect of the liability for capital gains tax, of selling the properties owned by the first defendant. They did not inform Accountant No 2 about the disclosure that had been made of sexual abuse by the first defendant.

201. [282]

     B says that at the meeting he provided a document to Accountant No 2 entitled “Increase in Property Value” (see CB Tab 748A-1). That document listed the various properties (treating Properties 9 and 10 together as a third aggregation) with their size in terms of hectares and acreage and estimated market values.

202. [283]

     B’s evidence is that, during the course of the meeting with Accountant No 2, two calculations were made as to the capital gains tax implications of a sale of the properties (depending on whether all were sold or only Property No 8 was sold).

203. [284]

     The sons say that, during the course of the meeting, after hearing the two alternative capital gains tax scenarios which Accountant No 2 had calculated during the meeting, the first defendant leant back in his chair and said “It would be easier if I was dead” (B’s affidavit sworn 2 April 2015 at [960]). (By this stage, Accountant No 2 was not aware of the sexual abuse allegations, so the context in which the first defendant’s remark would have been understood by him at the meeting is not clear.)

204. [285]

     Following the meeting, Accountant No 2 sent an email to B (CB Tab 748) attaching a file (see CB Tab 747A) containing estimates of capital gains tax: first, on the scenario of a sale of all properties (estimated at $4,271,208, with the 50% active asset discount estimated as $2,112,640); second scenario with a sale of only Property No 8 (estimated as $619,515, with the 50% active asset discount estimated as $306,427).

205. [286]

     B’s response was that:

206. [287]

     Accountant No 2 made no reference in his affidavit to the meeting on 22 October 2009. As adverted to above, the first defendant in his affidavit evidence appears to suggest that the meeting with Accountant No 2 related to an intention on his part (unconnected to the confrontation) to sell his properties. That seems to me to involve an unlikely coincidence of timing.

207. [288]

     The plaintiffs allege that, from about 22 October 2009 until about June 2013, the Family Business continued to be conducted by the first defendant and the three sons in much the same manner as it had been before (second further amended statement of claim, [148]). However, they say that thereafter the sons did not permit the first defendant access to his grandchildren. This does not appear to be disputed – indeed the first defendant’s complaint in the witness box (see T 973) was that the “biggest problem” was that he has not been able to see his grandchildren to apologise to them.

208. [289]

     Meanwhile, the criminal matter was reported to the police and a Joint Investigation Response Team (JIRT) became involved. As at February 2010, B and his wife decided that at that time their daughters should not be interviewed by police. (X and Y had attended regular counselling sessions with a child psychologist in the period following September 2009.)

209. [290]

     The sons’ evidence is that on 3 March 2010, the first defendant and they attended another meeting with Accountant No 2, in the course of which Accountant No 2 was asked to leave the meeting. Accountant No 2 gives no evidence of this meeting. In a statement to police dated 22 June 2011 (Annexure A to his affidavit sworn 2 April 2015) at [18] B says that during the course of the ensuing discussion between the first defendant and the sons, he said to his father “[w]e need to get this sorted, you’ve destroyed the bloody family”; that A got up and walked out; and that, when the first defendant went to leave, B grabbed the door and pushed it shut, saying “[y]ou should be in gaol, I don’t know why you’re not” and the first defendant said to words to the effect: “I’m prepared to go to gaol”.

210. [291]

     Following the second confrontation, on 4 March 2010 the sons sought advice from a solicitor in Sydney, Mr Beattie, who had previously acted for them in the drafting of their respective wills (and with whom one or more of the sons had had contact in other matters – see, for example, C’s evidence to the effect that if he had looked at other house properties he was interested in purchasing then “potentially” he would send Mr Beattie copies of the sales contracts “if it went that far” – T 452.46, though he had no recollection of how many and this evidence was very vague). B arranged the meeting with Mr Beattie. B’s diary entry of 4 March 2010 (see CB Tab 767) includes the following:

211. [292]

     B’s diary note of 7 March 2010 (CB Tab 768) records:

212. [293]

     It appears that, prior to the meeting, Mr Beattie perceived either that litigation was contemplated or that there might be a need for specialist advice from senior counsel experienced in the area of equity, since Mr Beattie had obtained advice as to appropriate counsel (see p 22 of the exhibit to Mr Beattie’s 8 August 2017 affidavit – an email to him from another practitioner on 5 March 2010 recommending the names of two senior counsel). There is nothing, however, to suggest that this was taken any further.

213. [294]

     The meeting with Mr Beattie was on 8 March 2010. B’s diary note of that date (CB Tab 769) simply notes “Prepare documents for DB” and lists a number of names – Mr Spillsbury “$” [a real estate agent], Solicitor No 1, Accountant No 2 and Mr Charge; and sets out contact and email details for Mr Beattie.

214. [295]

     The sons give evidence that, at the meeting, Mr Beattie gave advice to the effect that they had no rights in relation to the land because the first defendant was the owner.

215. [296]

     Two affidavits sworn by Mr Beattie, who has practised as a solicitor since 1964 mainly in the area of real property (conveyancing) along with some commercial law and probate, were read in the proceedings (in circumstances to which I will later refer – see [551]ff] below). Mr Beattie could not recall ever giving advice to any client about proprietary estoppel or similar causes of action and said that he did not conduct litigation on behalf of his clients (see first affidavit of David Beattie sworn 10 February 2016 at [2]).

216. [297]

     Exhibited to Mr Beattie’s later affidavit, sworn 8 August 2017, (see CB Vol 25 Tab 63) are copies of an option agreement prepared by him and forwarded to B under cover of a letter dated 29 March 2010 (page 3 of Ex DJB-1). The draft (never signed and, it would appear, not even forwarded to the first defendant for consideration – since its discovery was the focus of submissions as to the inference to be drawn from the fact that the plaintiffs did not make Mr Beattie available for cross-examination) recited that the first defendant was “proposing to transfer the properties to his sons, the Grantees by way of intergenerational transfers”. The draft operative provisions provided for the grant of separate options to take a transfer or transfers of the properties in one or separate parcels, such options to be exercisable at any time within 21 years and on one or more separate occasions. The properties were not listed in the schedule to the draft Deed (which was left blank). Mr Beattie’s handwritten notes in the exhibit to that affidavit make reference to “intergenerational sale” and to Property No 8 (misspelt) with the words “to be retained”.

217. [298]

     Nothing turns in my opinion on the fact that a draft option deed was prepared but not sent, beyond the fact that it is consistent with the understanding of the sons at that time being that (as was clearly the case) the legal title to the properties rested with the first defendant. I consider in due course the significance that the first defendant places on Mr Beattie’s affidavit evidence and the fact that he was not called to give evidence.

218. [299]

     The plaintiffs say that, in the period from around February to May 2010, there were discussions with real estate agents about marketing the properties for sale (see B’s diary note of 12 March 2010 in relation to a meeting with Frank Spilsbury, Elders State Manager, on Thursday of the next week – at CB Tab 773). There are also notes of B that indicate that consideration was being given (at least by him) to the transfer of real property from the first defendant to the sons (see at CB Tab 778, p 3167).

219. [300]

     A marketing submission was prepared (stated to be for the consideration of the first defendant, A and B) by Frank Spilsbury and Allister Rodgers of Elders in relation to the properties other than Property No 8 (see CB Tab 787) (and see also A’s diary note that indicates a meeting had been arranged with Mr Rogers on 5 May 2010 – CB Tab 788). The first defendant can recall receiving the proposal but not the meeting ([73] of the first defendant’s affidavit affirmed 2 November 2015, responding to [978] of B’s affidavit). The first defendant accepts he may have discussed the decision as to whether any of the properties were to be sold with his sons (see T 989 referring to Property No 11 and Property No 12).

220. [301]

     Pausing here, the first defendant’s affidavit evidence was that by 2008 he was “forming the opinion that the farming venture was not proceeding well and [he] was considering selling the properties” and that the then existing drought also increased his concerns (see at [56] of his first affidavit). In evidence were copies of agency agreements in relation to Property No 12 (dated May 2007) and also in relation to both Property No 12 and Property No 11 (dated March 2008) (see CB 27 Tabs 5 and 6). In cross-examination the first defendant accepted that his decision to sell Property No 11 and Property No 12 had nothing to do with an opinion that the farm venture was not proceedings well – T 996.)

221. [302]

     The first defendant’s evidence as to decisions made for marketing of his properties needs to be understood in the context that he said that he regarded all his properties as being “unofficially” (T 1004) “on the market the day I buy them” (T 1003.5) by which I understood him to mean, in effect, everything is for sale at the right price.

222. [303]

     In around June 2010, B had started investigating the purchase of a Sydney hotel to which I will refer as “the P Hotel”, with a now deceased friend of his (to whom I will refer as “B’s business partner”) (see structure diagram dated 15 June 2010 at CB Tab 792). They ultimately acquired a 50% interest each in the P Hotel through a structure involving a number of corporate entities and trusts. The settlement occurred on 23 August 2010. (This is described by the plaintiffs as an “off-farm investment” though, of the family members, only B was involved in the purchase and it was not effected through E Co or EM Co.)

223. [304]

     The structure of the ownership of the business of the P Hotel was that: an entity (to which I will refer as “P Co”) was set up as the trading company to conduct the business of the hotel, and another entity (to which I will refer as “PI Co”) was the purchaser of the freehold title of the land on which the P Hotel was situated, in its capacity as trustee for the “PI Unit Trust”, a property holding trust. The shareholders in PI Co were two companies – “PO Co”, controlled by B, as trustee for B’s family trust, and another company, controlled by B’s business partner, as trustee for the family trust of B’s business partner. Each of those companies owned a 50% interest of the units in the PI Unit Trust.

224. [305]

     National Australia Bank (NAB) provided the finance required for the purchase of the P Hotel; and B provided a mortgage over his home to support the borrowing (CB Tab 815).

225. [306]

     On or about 3 December 2010, Rabobank offered to the first defendant a loan facility for a $500,000 loan for the stated purpose of $250,000 for cattle purchases and $250,000 for working capital (CB Tab 826). This facility was secured by registered mortgage against Property No 4. It was for a 15 year term. The first defendant accepted the facility offer on 6 December 2010.

226. [307]

     On about 7 December 2010, EM Co applied to increase the limit of its own (separate) facility with Rabobank (of which the first defendant was a guarantor) from the existing $750,000 limit to $850,000. The purpose of the increase was stated to be “Off Farm Investments” (CB Tab 827). The application was signed by the first defendant and by C and B as directors of EM Co and E Co. The increase was approved (see CB Tab 828) with the stated loan purpose being to “Cross-collateralise this facility with new facility in [the first defendant’s] name”, with the facility to expire on 31 October 2021. The security to be provided for the Rabobank facility was the existing registered first mortgage over Property No 8, a personal guarantee from the first defendant, and a guarantee from E Co.

227. [308]

     In December 2010, Z told A that the first defendant had (in the past) sexually assaulted her. (It appears from A’s account of this conversation that Z may earlier, in 2009 following the disclosures by X and Y, have told him that the same thing had happened to her but that A had misunderstood what she had said at that time, but nothing turns on this.) A informed his brothers and, following a family meeting between the brothers and their wives (and discussion with A’s former wife), a complaint to the police was made on 14 December 2010.

228. [309]

     In May 2011, Accountant No 2 gave the first defendant advice (addressed, for whatever reason, to the first defendant at the address of Property No 4) as to the taxation treatment of the capital gain to be made from the (then proposed) future sale of Property No 8 (CB Tab 852).

229. [310]

     On 6 July 2011, the first defendant was arrested and charged with offences against X and Y. (No charges were laid in relation to Z, apparently as to concerns in relation to her being required to give evidence.) The first defendant declined to participate in an electronically recorded interview. He was granted conditional bail. At about this time an application was made (in relation to X and Y) for an Apprehended Violence Order against the first defendant. The provisional order was dated 8 July 2011 and a final order (with a duration of two years) was later made (see below at [326]).

230. [311]

     At around the same time, in around July 2011, B and his friend (the business partner involved in the P Hotel) commenced investigating a prospective purchase of a second hotel in Sydney (the “C Hotel”). Contracts for the sale of that hotel were exchanged on 20 July 2011. The purchaser was a company to which I will refer as “AH Co”, as trustee for a unit trust (“the CI Unit Trust”).

231. [312]

     Again, the structure for the business was through a series of companies and trusts (see CB Tab 893): a company to which I will refer as “C Co”, with a paid up share capital of two ordinary shares, was the trading entity for the hotel business conducted at C Hotel; each of B and his business partner owned a 50% shareholding interest in C Co (B through PO Co as trustee for B’s family trust and his friend through the trustee of his family trust). AH Co held the freehold as trustee for the CI Unit Trust. The units in the CI Unit Trust were held: as to 44 units by PO Co as trustee for B’s family trust; as to 44 units by the trustee of B’s friend’s family trust; and as to 6 Class B Units each by the trustees of A and C’s respective family trusts.

232. [313]

     Each of A and C came to own an interest in the C Hotel because the first defendant’s agreement to provide security for the purchase of the C Hotel was conditional upon A and C receiving an interest in the investment.

233. [314]

     The structure of the finance for the purchase of the C Hotel was in two parts: first, EM Co applied to Rabobank for an increase in EM Co’s facility with Rabobank by $1.75 million to $2.6 million and then on-lent the amount of the increase to the trustee of the CI Unit Trust (the first defendant providing a registered first mortgage over Property No 9 and a personal guarantee to secure the increased loan facility); second, the trustee of the CI Unit Trust borrowed money from NAB which, amongst a number of securities taken by NAB, was secured by registered first mortgage over the properties comprising the Main/7 Aggregation and the first defendant’s personal guarantee (see CB Tabs 894/898). The stated purpose of the $2.6 million Rabobank facility to E Co was “$1,750,000 Off Farm Investment for the purpose of on lending funds to [AH Co] to assist with the purchase of the [C Hotel]” (see CB Tab 898).

234. [315]

     On 21 September 2011, the settlement of the purchase of the C Hotel took place (see CB Tab 901). NAB provided two facilities, one in the amount of $12.9 million and one in the amount of $1.5 million (see CB Tab 895).

235. [316]

     The first defendant (at [37] of his first affidavit deposes that the increase in the Rabobank loan to $2.6 million in 2011 was for two reasons – one for EM Co to purchase a part interest in the C Hotel (for $1.45 million) and the second to purchase hay for E Co. This is not consistent with the bank facility documents (and the first defendant was taken to various financial statements as to the years in which expenditure for hay was or was not recorded). In any event, it does not appear to be disputed that the first defendant gave a personal guarantee in respect of EM Co’s borrowing from NAB and the facility was secured over one or more of the first defendant’s farming properties.

236. [317]

     I interpose here to note that in 2016 (two years after the death of B’s business partner in relation to both of the P and C Hotels), B negotiated a purchase of the 50% or so interest that was then held by the widow of his late business partner’s wife in both hotel businesses. As to the P Hotel, it is still an asset of the PI Unit Trust, the other half interest in that trust having been acquired by B’s wife. On 19 September 2016, St George Bank offered a facility with respect to the P Hotel which was signed by each of A, B and C and B’s wife on or about 10 November 2016. The C Hotel is still owned by the CI Unit Trust, but each of A and C has increased his interest in the trust by taking half each of the 44 units that B’s business partner had originally held. On 19 September 2016, St George offered a facility with respect to the C Hotel which was signed by B and C on or about 10 November 2016.

237. [318]

     During November 2011, it appears that the first defendant met with Accountant No 2 on 9 and 17 November 2011 (see the Local Accounting Firm file notes at CB Tabs 912; 914).

238. [319]

     The first file note (CB Tab 912) includes reference to:

239. [320]

     The second file note (CB Tab 914) includes:

240. [321]

     This led to the proposal by the first defendant for the operation of the cattle grazing activities on Property No 8 be separate from the operation of the cattle grazing activities conducted by E Co on the other farms: namely that Property No 8 should be excluded from the farms on which E Co conducted its farming business; that E Co should commence paying a new lease fee in respect of E Co’s occupation of the other farms held in the first defendant’s name; that the lease fee should be $100,000 per annum, and was to include rates and insurance; and that in addition E Co was to pay the following expenses: electricity; repairs & maintenance; and motor vehicle registrations. The proposal was that the lease fee would be payable in two $50,000 payments per year with the first payment of $50,000 to occur on 1 January 2012. Farm Worker No 2 would cease to be employed by E Co but instead would be employed by the first defendant, and would thereafter work for the first defendant at Property No 8.

241. [322]

     B’s evidence is that the first defendant spoke to him and proposed a variation of the lease to the above effect (see B’s affidavit sworn 2 April 2015 at [1082]). He was not cross-examined on that evidence. Neither the first defendant nor Accountant No 2 gave evidence in chief as to the variation of lease in November 2011. In cross-examination, the first defendant accepted that: in late 2011, there was a renegotiation of the lease between him and E Co and a new lease fee of $100,000 per annum was struck; part of the agreement was that he would be responsible for paying rates and insurance; he did not pay insurance for the farms for the financial years ending 30 June 2014, 30 June 2015 or 30 June 2016; and that for each of the financial years ending 30 June 2014, 2015 and 2016, E Co paid the insurance for the farms.

242. [323]

     Meanwhile, on 15 December 2011, the first defendant made a new will (CB Tab 922). His earlier will made on 25 July 1984 had left the whole of his estate on trust for his children absolutely as would survive him and attain the age of 21.

243. [324]

     Under the 15 December 2011 will, which was prepared by Solicitor No 1, the whole of his estate was left to his executors (the only named executor was Solicitor No 1) on trust (cll 3.1-3.3). His executors were directed to sell and convert into cash Property No 8 and his stock, plant and equipment usually located at Property No 8 (with the exception of a Toyota Troupe car if he owned such a vehicle at the time of his death) and to use the net proceeds of sale to pay funeral, testamentary and estate expenses (including any taxes payable in respect of the sale of Property No 8 but excluding any taxes payable for the sale of any other assets owned by him, which were to be paid from the residue of his estate) and then to give the sum of $500,000 to a named beneficiary (not involved in these proceedings); the sum of $100,000 and his Toyota Troupe to Farm Worker No 2; and to divide the balance of the net proceeds of Property No 8 between such of his grandchildren as survived him and attained the age of 21 years. As to the residue of his estate, the first defendant directed that it be left equally to his three sons (and if any should predecease him leaving children that share should go to those children in equal shares on attaining the age of 21 years).

244. [325]

     Clause 3.3 of that will further provided that:

245. [326]

     On 24 November 2011, the provisional AVO in relation to X and Y was made final for a period of 2 years (CB Tab 915).

246. [327]

     At some stage in 2011, C acquired an interest in a property management business. None of the other family members has an interest in that business and it has not been suggested that this is an “off-farm” investment of the kind that the plaintiffs say was part of the agreement reached with or expectation induced by their father. The first defendant points to this (and the manner in which other so-called “off-farm” investments were structured – such as the hotels) as being inconsistent with the plaintiffs’ case.

247. [328]

     By letter dated 18 December 2011 (CB Tab 921), Solicitor No 1 forwarded to B a deed (already signed by the first defendant and dated 15 December 2011). Solicitor No 1, in his letter, referred to having seen B recently “in town” and to Solicitor No 1’s instructions from the first defendant (“as you [B] may recall”) to prepare a deed between each of the first defendant, A, B, C, EM Co and B’s business partner, to cover the event of the first defendant’s guarantee being called on and the first defendant dying before B and his business partner could repay any moneys that the first defendant may have lost as a result of the guarantee being called on, with the intent that in the event that the first defendant died before that event the moneys would be repaid to the first defendant’s estate.

248. [329]

     The Deed recited, among other things, that EM Co “is a company used by [the first defendant] and his sons for various commercial activities” (recital C); that [the first defendant] is the registered proprietor of the Land” (recital D), the word “Land” being defined as “the rural properties owned by [the first defendant] and which he provided security for under the Guarantee”; and that “[the first defendant] seeks to ensure that the guarantee which he gave to the Bank is adequately protected by requiring that [B] and [B’s business partner] meet certain obligations as set out in this deed” (recital F).

249. [330]

     The Deed set out a number of obligations (“Borrowers’ Obligations) (cl 3). The term “Borrowers” was defined as meaning EM Co, B and B’s business partner. The obligations included (cl 3.1.1) an obligation on B and his business partner to provide reports on a quarterly basis to the first defendant on the financial performance of the hotels “and any other relevant matters that the Borrowers consider in their reasonable opinions should be provided to [the first defendant]” and (cl 3.1.4) to maintain appropriate life insurance on their lives “to ensure that borrowings under the Loan Documents are able to be repaid” if either B or his business partner died prior to the loan the subject of the loan documents being paid out.

250. [331]

     Clause 4 related to the first defendant’s will. Relevantly, it set out a procedure that was to apply if the Bank (Rabobank) exercised its rights under the guarantee and the land was sold. In that event, A, B and C acknowledged and agreed that should the first defendant die before changing his will and should such will leave “part or all of his estate to be divided equally between his three sons”, then there was to be, in effect, an adjustment such that the amount paid to the Bank and interest that could have been earned thereon were to be added together, then divided by three and that B was to pay to each of A and C an amount equal to one third of that total amount “given that [A] and [C] would have been entitled to one third each of the Total Amount” (cl 4.2.5). The Deed further contained an acknowledgement by B that the process under that clause “is to ensure that if the Bank does exercise its rights under the Guarantee, [A] and [C] are kept in the same position that they would have been [sic] under [the first defendant]’s will” (cl 4.3).

251. [332]

     At least as at this stage, therefore, it is clear that the first defendant was not seeking to disinherit his sons; rather, he was concerned to ensure that as between the three of them they were treated equally.

252. [333]

     On 8 March 2012, the first defendant made a further will (CB Vol 27 Tab 10) in which he again left a legacy of $100,000 and vehicle to Farm Worker No 2; directed that the net proceeds of sale of Property No 8 be divided equally between grandchildren; and left the residue of his estate to his sons in equal shares (subject to the repayment by them of any outstanding loans, and to the reimbursement of A for the renovations at Property No 4).

253. [334]

     On 15 March 2012, the first defendant pleaded guilty in the District Court of New South Wales to nine counts relating to the sexual assaults against X and Y (see CB Tab 926).

254. [335]

     On 11 May 2012, the first defendant entered into a loan agreement with a company (“T Co”), (all of the shares in which were owned by the trustee of the Sydney Family Trust), agreeing to lend the company the sum of $3 million for two years. The sons claim the loan was made to assist one of the first defendant’s brothers, the director of T Co, out of financial difficulties (see CB Tab 937). That appears to have been the case – certainly it was the basis on which B was cross examined.

255. [336]

     On 30 May 2012, the first defendant made another will (CB Vol 27 Tab 11), to the same effect as the March will but with the addition of the devise of a life estate in another house in the town (House No 3) “that I own or will own” to a named beneficiary not connected with this litigation. The distribution of the residue of the first defendant’s estate to the sons was again subject to each of his sons paying back to the estate any moneys that the first defendant may have lent to them and which had not been repaid by them as at the date of death and to A being reimbursed from the residue of his estate the sum of $300,000 for renovations undertaken and paid for by him on Property No 4.

256. [337]

     On 6 July 2012, the indictment in the first defendant’s case (CB Tab 950) was presented to the District Court. Pleas of guilty were entered on the 9 counts together with 4 charges on a Form 1. The first defendant’s bail was revoked that day and he went to gaol that day. (In cross-examination the first defendant agreed that he had not expected to go to gaol that day and had hoped not to go to gaol at all, though it appears he did expect some form of custodial sentence – see T 961.)

257. [338]

     By deed entitled “General Power of Attorney” executed on 13 July 2012, the first defendant appointed the second defendant to be his attorney having the powers conferred on an attorney Part 2 of the Powers of Attorney Act 2003 (NSW) (CB Tab 953).

258. [339]

     On 20 July 2012, the first defendant was sentenced to a term of imprisonment, for an aggregate period of eight years, comprising a minimum non-parole period of four years, to expire on 5 July 2020 (CB Tab 955). The first defendant regards the sentencing hearing as having been a disaster, in part because the matter was allocated to a different judge than had been expected (see T 964).

259. [340]

     Notwithstanding the first defendant’s imprisonment it seems to have been contemplated that the family farming business would continue as it had been. By email of 7 August 2012, the second defendant (by the first defendant’s attorney) confirmed to B that “[t]he corporation grazing company of your brothers yourself and your father should continue as before” (CB Tab 959; 961). (Although the first defendant in his amended defence denies this - see the allegations at [167], denied at [107] of the amended defence to the further amended statement of claim; and [168], largely denied at [108] of the amended defence to the further amended statement of claim; in cross-examination he accepted that the words “business as usual” were said – see T 959.)

260. [341]

     On 13 August 2012 the second defendant caused a notice of intention to apply for leave to appeal against sentence to be filed on behalf of the first defendant with the Court of Criminal Appeal of New South Wales (CB Tab 962; notice of appeal – CB Tab 985 filed 16 January 2013).

261. [342]

     On 14 September 2012 (see CB 968 p 4171), the sale of Property No 12 was settled. A purchaser had been secured for the property with the knowledge of at least B (see CB Tab 956) (as at 20 July 2012) and the sons accept that they were aware of the proposal to sell that property. B says (and in cross-examination the first defendant accepted) that consideration was given within the family to marketing both that property and Property No 11 for sale in early 2008, with a view to purchasing an irrigation farm to “drought proof” the other farms. B says that, without the acquisition of another property lying between Properties 11 and 12 and the Main/7 Aggregation, the former two properties were isolated from the latter. There appear to have been ongoing conversations with the first defendant in relation to a sale of Property No 12 in August 2012 (see CB Tab 959). There is no complaint by the sons as to the sale of this property as such – rather, their complaint is in effect that the proceeds of sale (around $800,000) have not been utilised for the purposes of the family business operations and have been treated as being to the personal account of their father. (There was some suggestion in submissions that House No 3 was purchased out of the proceeds of sale of Property No 12. This would be consistent with the description of that property in the May 2012 will as property “I own or will own”.)

262. [343]

     The position of the sons is that they were not concerned by the first defendant’s proposal to sell either of Property No 8 or Property No 12: as to the former, because it had always been treated separately from the other farms, and they say had always been described by the first defendant as “his retirement block”, with the intention that the proceeds from any sale from that property would in due course be distributed to the grandchildren; as to the latter, because a potential sale of Properties No 11 and 12 had been in contemplation for a period of time because those properties were not a “good fit” with the other properties owned by the first defendant. The sons say that they had no reason to believe that the first defendant would not treat them fairly with respect to the sale of the two properties and that they believed that the proceeds from any sale of Property No 11 would be reinvested into the other farms operated by E Co. (They also say they did not believe that their father was going to disinherit them.)

263. [344]

     At some stage around mid 2013 an issue arose as to non-payment of the insurance payable in respect of the farms (liability for which, under the Agreement for Lease, was to be borne by the first defendant). In May 2013, C emailed the second defendant and suggested that the farm insurance be “moved across to us and we then just deduct the amount from the lease payment” (CB Tab 999). The second defendant responded “[w]ill be in touch in due course”.

264. [345]

     I interpose to note that the first defendant was cross-examined as to a statement made in his first affidavit (that I had provisionally rejected) to the effect that his criminal conviction made him uninsurable (see T 1008). No basis for any such belief (other than an inconclusive statement attributed by Accountant No 2 to the second defendant appearing in an email dated 20 December 2013 from Accountant No 2 to the second defendant – namely, “I know you flagged that there could be an issue with insurance renewal given [the first defendant’s] circumstances – see Ex AU p 36) was apparent. A call for documents to be produced evidencing insurance having been declined was met with a nil return (see T 1009) and no evidence was given by the second defendant to explain the reference to an issue as to insurance renewal having been “flagged”. The significance of this is only to the extent that it was raised initially (together with the first defendant’s concern that he might die in prison and his asserted concern with the management and maintenance of the properties) for the first defendant’s intention to see his grazing properties after his appeal was rejected by the Court of Criminal Appeal (see [59]-[60] of the first defendant’s first affidavit).

265. [346]

     On 12 June 2013, the Court of Criminal Appeal dismissed the first defendant’s application for leave to appeal against sentence. The significance of this, from the sons’ perspective, is that they believe that it was this event (with the then knowledge by the first defendant that his sentence would not be reduced) that led to the first defendant’s decision to sell the farming properties and disinherit them. The first defendant denies that this was what led to his decision to sell the properties (he did not, in his affidavit or oral evidence, give any reason for his decision to disinherit his sons) and points to the fact that he had already been in gaol for about a year by the time he took the steps now challenged by his sons. However, insofar as he gave an explanation for the former decision in his affidavit (by reference to matters such as him no longer being insurable) (see first defendant’s affidavit affirmed 2 November 2015 at [59]-[60]), the sons argue that there is no evidence (or logic) to such an explanation. I address this issue (the so-called “minor fault line” in the proceedings) in due course (see [418] below).

266. [347]

     By June 2013, B had been in discussions with St George for some time about refinancing the facilities with NAB to St George in respect of the two hotels (the P Hotel and the C Hotel). (The current structure of the loan facilities as at 6 June 2013 is set out at CB Tab 1000). Those discussions continued during the period from May 2012 to 17 June 2013 and, between 14 and 17 June 2013, there was an exchange of emails between the second defendant and C about the proposed refinancing of the loan to B in respect of the hotels. It was in that context that the second defendant communicated to C the first defendant’s intention to sell all his assets including the farms.

267. [348]

     On 14 June 2013, the second defendant informed C in an email (CB Tab 1004) that his instructions were that the Main Property would not be available as collateral security for any hotel refinancing purposes. C’s response that same day was that when he had met with the first defendant “we agreed it would be cleaner if there was no debt” but that at no stage did the first defendant convey to him that there was any problem with the refinancing. The second defendant’s response (see CB Tab 1005) was blunt in its tone; communicating that once the liability to NAB was paid no further encumbrance on the Main Property was to occur. C’s response to that is to be found at CB Tab 1009. Discussion then took place as to possible arrangements for a temporary refinancing of the loan.

268. [349]

     On 23 June 2013, C visited the first defendant in gaol. His evidence is that two of the first defendant’s brothers were also there. C says that the first defendant said words to the effect “I want to sell everything. I can’t have any assets in my name”.

269. [350]

     On 25 June 2013, the second defendant sent an email to C (CB Tab 1012), stating that:

270. [351]

     C’s response to this (CB Tab 1102) was that “what we need is time”, indicating in relation to the tenancy notice that the first defendant had mentioned “trying to line up some of this to coordinate with some of the cattle sales periods, so that we can offload cattle during the big sales, the biggest for us is the weaner sale in the autumn”.

271. [352]

     Two days later, on 27 June 2013, the second defendant sent a letter to the directors of E Co, addressed to the company’s registered office (the Local Accounting Firm), enclosing by way of service a Notice of Termination of Lease (CB Tab 1013). (The plaintiffs place some weight on the fact that the notice of termination was sent on B’s birthday; the first defendant, questioned about this in cross-examination, said he did not recall when B’s birthday was T 983.1 – without knowing the first defendant’s usual memory of such occasions it is impossible to attach any significance to this. I note that the first defendant, somewhat surprisingly, also said he did not even know his birthday – see T 983.1 – though he deposed to it in his first affidavit.)

272. [353]

     The Notice of Termination of Lease stated:

273. [354]

     Following a visit by B and C to their father at the gaol on 7 July 2013, the sons understood that the first defendant was prepared to continue to make the Main Property available to finalise the refinance of the hotels from NAB to St George. (In their pleading the plaintiffs allege that the first defendant represented on 7 July 2013 that he would consent to the Main/7 Aggregation being used as security for refinance of facility for hotels: second further amended statement of claim at [176].)

274. [355]

     By email of 8 July 2013 (CB Tab 1027), C (who by this stage was the agreed contact point with the second defendant) informed the second defendant of the visit he and B had had with the first defendant the previous day, at which he said it was agreed that, among other things, the Main Property would be available to finalise the refinance of the hotels on the following basis:

275. [356]

     The email also made reference to the disposal of the first defendant’s units in the W Unit Trust and to “contacting and arranging meetings with Agents” (the latter, in context, being a reference to meetings with real estate agents).

276. [357]

     There were further communications between the second defendant and C on 22 July 2013 (CB Tab 1029) in the course of which the second defendant referred to loan accounts of E Co “that need resolution”, and expressing his uncertainty as to whether the first defendant would require payment of these. Reference was also made to a deed regarding arrangements “as to the condition of the collateral security being made available for 6 months” (CB Tab 1029, p 4438).

277. [358]

     By letter dated 2 August 2013, Westpac approved finance to repay the NAB advances secured by the Main/7 Aggregation properties (CB Tab 1034; 1036). The finance term was three years, to expire in August 2016. The facility limit was $2 million. The security was to be a $2 million “limited guarantee and indemnity” by the first defendant, supported by a mortgage by the first defendant over the Main/7 Aggregation properties and a $2 million “limited guarantee and indemnity” by A, B and C.

278. [359]

     On 20 August 2013, C provided to the second defendant the Westpac Bank security/guarantee documents in respect of the Main/7 Aggregation properties to support the refinance of the loan facilities from NAB to St George/Westpac (see exchange of email communications at CB Tab 1039).

279. [360]

     B’s evidence is that he had sought to arrange to meet the second defendant on 22 August 2013 at 12.30pm to collect from him the signed Westpac Bank security/guarantee documents but that, during the course of that morning, he became aware that the first defendant wanted each of the sons to sign a deed under which they personally guaranteed payment to the first defendant of the secured amounts (see CB Tab 1040 referred to below).

280. [361]

     C was, of course, already aware that the first defendant wanted some such deed but it may be that what was not appreciated at that stage was that the deed was required to be signed before the security/guarantee documents would be provided by the first defendant. This would be consistent with the tenor of the second defendant’s email of 22 August 2013 at 11.26am (CB Tab 1040), in which he informed C that he was just leaving the gaol and that there was a “hitch” with the bank documents and that the first defendant wanted the three to sign “a Deed acknowledging the agreed arrangement and guaranteeing payment to him before handing docs over”, and referred to a meeting that had been planned with B at 12.30 pm to hand over the documents.

281. [362]

     The second defendant, in a further email, insisted upon a deed “and by guarantee, not undertaking”, commenting that the sons’ lawyer would know the difference (CB Tab 1041).

282. [363]

     In any event, B’s evidence was that he understood that the settlement for the refinance of the hotels, as between the incoming mortgagee St George/Westpac, and the outgoing mortgagee, NAB, was scheduled to occur on 28 August 2013; and he considered that there was a risk that the refinancing would not proceed unless the first defendant provided the Main Property as security for the refinance.

283. [364]

     Meanwhile, on 21 August 2013 (CB Tab 1040 p 4514), C had conveyed to the second defendant an offer to purchase the first defendant’s shares in E Co for $200,000 plus GST (in two instalments - $100,000 by the end of calendar year 2013 and the balance after the “wiener” [sic] sales of 2014 (said to be typically around April); as well as proposing a structure for the buy-out of the first defendant’s units in the W Unit Trust.

284. [365]

     The issues raised in connection with the then imminent refinance of the NAB loan for the hotels apparently led to the sons again seeking legal advice about their legal position from Mr Beattie. They attended a meeting with him in his office in Sydney on 22 August 2013. Their evidence was that they spoke with Mr Beattie about two matters: the first defendant’s stated intention to sell the farms (including the Notice of Termination of Lease); and the refinance for the hotels, including the deed which was required by the second defendant before the first defendant would sign the loan/security documents for the Westpac/St George loan facility (to which I will refer as the “Westpac Deed”).

285. [366]

     The sons gave evidence that, during the course of the meeting, Mr Beattie gave advice to them to the effect that: the first defendant was the legal owner of the land; E Co had leased the land from the first defendant for many years; as the owner of the land, the first defendant was allowed to sell the land; as the owner of the land, the first defendant was allowed to terminate the lease as long as he gives proper notice; there was nothing they could do to stop the first defendant terminating the lease and selling the land; and if they wanted the refinance of the hotels to go through they would need to give the first defendant the deed that he wanted.

286. [367]

     Mr Beattie deposed (in his first affidavit sworn 10 February 2016) as to the 22 August 2013 meeting, confirming that his advice was sought in respect of two matters: first, the preparation of the Westpac Deed and, second, as to the sale of certain of the farms. I set out in due course the evidence Mr Beattie gave on those issues (see [498]ff below). In substance, his recollection of the advice that he gave to the sons at the meeting on 22 August 2013 is consistent with their recollection of that advice, namely that: as the first defendant was the registered proprietor of each of the properties, he could sell the properties if he wished; there appeared to be a valid lease between E Co and the first defendant, on the basis that the lease had been in place for several years and E Co had been making payments to the first defendant under the terms of the lease; as lessee of the farming properties, E Co could not simply be required to leave the properties, but rather the first defendant as lessor was required to give E Co reasonable notice of the termination of the lease; and that the sons could not stop the first defendant selling the properties, and nor could E Co.

287. [368]

     Exhibited to Mr Beattie’s second affidavit (of 8 August 2017) (at pp 14-16) is a draft letter dated 3 September 2013 that Mr Beattie had prepared, addressed to the second defendant, raising a number of issues in relation to the rural properties (referring to Property No 8, Property No 11 and an aggregation of properties comprising the Main Property and Properties No 3, 5, 6, 7, 9, 10 and 12). The draft stated that the completion date for the sale of the latter aggregation should not be before 31 May 2014 and that if the company (E Co) was forced to remove its cattle by the end of the year it would incur losses in the order of $1 million.

288. [369]

     The draft letter also raised his clients’ wish to retain the “Property No 4 Aggregation” (a term not defined in the letter) and suggested that the first defendant transfer these properties to the three sons in equal proportions (by inter-generational transfer) “with the appropriate adjustments being made between them to reflect the varying gifts they have received from [the first defendant] over the years”. The letter referred to the sum of approximately $300,000 owed to A for work carried out on the Property No 4 Aggregation.

289. [370]

     One thing to note from this draft is that the reference to adjustments in relation to gifts received over the years is in the context of making adjustment as between the three sons, which is consistent with the way in which the first defendant is said to have spoken of “squaring up the ledger” (and his own evidence of “evening up” of the gifts made to the sons) and with what he did in relation to the Westpac Deed in seeking to make provision for an adjustment to reflect the benefit B might obtain vis a vis his brothers if the Bank called upon the first defendant’s guarantee in respect of the hotel facilities and he died before making a change to his will to reflect that (see below).

290. [371]

     Mr Beattie prepared the Westpac Deed, which the sons executed on 23 August 2013 following receipt of the above advice from Mr Beattie.

291. [372]

     The Westpac Deed (CB Tab 1042) provided that, in consideration of the first defendant granting a first mortgage in favour of Westpac over the Main Property, the guarantors (each of A, B and C) jointly and severally indemnified the first defendant from any liability under the mortgage and agreed that, in the event that the first defendant sold the property “or in any event at the expiration of six (6) months from the date hereof” the guarantors would provide substituted security to the bank to enable the mortgage to be discharged (upon completion of the sale or at the expiration of the six month period); and would ensure in those events that the guarantee given by the first defendant was forthwith released and discharged.

292. [373]

     The refinancing was then completed on 28 August 2013 (B’s affidavit sworn 2 April 2015 at [1145]).

293. [374]

     Meanwhile, and unbeknownst to the sons at the time, on 22 August 2013, the first defendant made a further will, under which the first defendant left the bulk of his estate on trust for a discretionary trust of which a company (to which I will refer as Trustee Co) is the trustee. The first defendant’s sister is the director of Trustee Co. This will included two specific bequests. The first was that the first defendant left a house and land in the town near the various properties, together with the sum of $100,000, to Farm Worker No 2, subject to the right and entitlement of another named person to reside in that house at no cost to her so long as she wished. The second was to leave A the sum of $500,000 on condition that the first defendant had not after the date of the will made a gift of that sum to A.

294. [375]

     Clause 4 of the will contained the following declaration:

295. [376]

     In his second affidavit, the first defendant deposed that he had attempted to give a testamentary direction in relation to the distribution of his estate but had done so ineffectively; and that his intention was to give a direction to the trustee that the assets of the trust should ultimately be distributed among his grandchildren but also that provision should also be made for financial assistance for his siblings “if required” (see [27] of his affidavit affirmed 5 May 2017).

296. [377]

     As at 30 August 2013, there was still discussion between C and the second defendant as to matters in relation to the planned marketing process for the sale of the properties (see CB Tab 1048) and it is clear that C contemplated that the sale would include at least the Main/7 Aggregation properties, Property No 8 and Property No 4 (or perhaps the whole of the 3/6 Aggregation) (see CB Tab 1048 pp 4529-4530); the concern expressed by C at that stage being that some of the agents’ valuations looked a little “light on”. The second defendant informed C that “… although your father is anxious to sell I don’t think he intends to sacrifice the properties for some ridiculous price. In other words it is not a fire-sale”.

297. [378]

     On 1 September 2013, A visited the first defendant in gaol in an attempt to persuade the first defendant not to sell the properties. A made a note of his meeting with the first defendant (CB Tab 1049), in which he recorded, among other things, that, at the meeting they had discussed the property sale; that the “tax position” of the first defendant’s brother (whose company had been the recipient of the $3 million loan referred to earlier) with the ATO was $4 million; that A had asked for any postponement of the sale of Property No 4 (the property on which A and his family lived) or all the properties; that the first defendant wanted everything out of his name “ASAP” (as to which A’s note records “Why?”); that the proceeds from the sale would be “to kids trust” (meaning the grandchildren); and that everything would be OK.

298. [379]

     As at 9 September 2013 (CB Tab 1059), the second defendant’s response to C was that the auction for Property No 8 was set for late October; for the other properties in early December and that settlement on those other properties would not be expected until late February “to allow a reasonable time for cattle dispersal”. As to the E Co shares, the second defendant said that the first defendant “did make mention once that there was a loan account arising from the purchase of the units in [the W Unit Trust]”.

299. [380]

     Pausing here, in terms of the chronology, there was in evidence a copy of email communications between Accountant No 2 and the second defendant on 9 September 2013 (CB Tab 1058) in which Accountant No 2 conveyed to the second defendant a call from C “saying that we need to restructure the share holding of [E Co] to allow for a transfer of [the first defendant’s] shares to the boys”; that Accountant No 2 had indicated (to C) that he would need consent from the second defendant and that Accountant No 2’s thoughts were that the second defendant (as the first defendant’s representative) would be “more interested in the +$2 million that the company owes [the first defendant] by way of loan”, to which C’s response had been that the share and loan issues were two different points and they wanted to resolve the share issue first. I refer to this here because (though Accountant No 2 may well have informed C that he would be conveying that communication to the second defendant or may have been asked by C to do so), it points to the very real potential by this stage for a conflict to arise between Accountant No 2’s professional obligations to the respective clients of his accounting firm (the first defendant on the one hand and E Co and the sons on the other). As will be seen in due course, Accountant No 2 was seemingly oblivious at this stage to the potential for conflict where the interests of his clients might be seen to diverge. The plaintiffs have pointed, in particular, to Accountant No 2’s breach of an instruction given by the sons in relation to E Co’s accounts (see [662]ff below), as indicating that Accountant No 2 preferred the first defendant’s interests over theirs, and as a matter going to his credit.

300. [381]

     The other thing to observe is that, as at 20 October 2013, C was obviously contemplating the possibility that there would be “no farming operations” going forward (see CB Tab 1072, p 4574).

301. [382]

     On 25 October 2013, Property No 8 was offered for sale by auction (CB Tab 1060). Settlement of the sale of that property for $5 million took place on 22 November 2013.

302. [383]

     On 10 December 2013 (CB Tab 1088), C provided the second defendant with calculations as to the payment for the first defendant’s units in the W Unit Trust (the total, including beneficiary account of $25,868, being $406,268); and indicated that he was contemplating completion on 31 December 2013 (or as soon as possible) with the suggestion that the balance be paid after the weaner sales (it being said that the sales were business as usual).

303. [384]

     The remaining properties were advertised for auction in one line on 6 December 2013. No sale in one line eventuated (see CB Tab 1093).

304. [385]

     By 15 December 2013, the second defendant had accepted an offer of $900,000 for Property No 10 (CB Tab 1090), subject to the purchaser’s satisfaction with access (see also CB Tab 1091; 1092). He informed C that the prior notice to vacate would be extended by a further three months.

305. [386]

     On 16 December 2013 (CB Tab 1093), C emailed the second defendant informing him that C had raised with the first defendant the option of “intergenerational transfer” and C said that he would “put some thoughts down about how possible structures could suit what [the first defendant] is trying to achieve with divesting his assets and trust held funds for the grandchildren”. (Of course at this stage C would not have been aware that the first defendant’s intention – that the first defendant deposes had “firmed” after the Court of Criminal Appeal had dismissed his sentence appeal – was that his sons should receive absolutely nothing out of the farms out of the farms (T 986.36). Hence any proposal for intergenerational transfer by this stage might be thought to have been doomed to failure, though the sons would not then have been aware of this.)

306. [387]

     On 17 December 2013, as had been foreshadowed with C, the second defendant sent to the registered office of E Co, a Notice of Extension of Lease Termination, extending the date for the farms to be vacated to 31 March 2014 (B’s affidavit sworn 2 April 2015 at [1151]).

307. [388]

     Then, in an email on 20 December 2013, the second defendant commented to C that the first defendant “seems to want to slow the property sales down for the time being” (CB Tab 1095). No explanation for this change of heart (if it was a change of heart) on the first defendant’s part was proffered. By 5 February 2014, however, the second defendant was advising C that the first defendant “still wishes to continue with the sales of the real estate” (CB Tab 1105).

308. [389]

     On 7 February 2014, the second defendant emailed C, saying that there seemed to be a bit of confusion about the 3/6 Aggregation (which aggregation included Property No 4 where A and his family still live) and that it was not “off the market” though the first defendant was open to consider propositions regarding that property, particularly from A (CB Tab 1108).

309. [390]

     Steps were taken in late December 2013 in relation to the transfer of the first defendant’s units in the W Unit Trust (see the communications as to the signing of transfer forms at CB Tabs 1098; 1099; 1011), in the context of which, in January 2014, the second defendant said he had decided that some form of documentation was needed “in view of delayed payment” (CB Tab 1102). The second defendant drafted a deed for that purpose (CB Tab 1102; 1103).

310. [391]

     On 16 February 2014, B visited the first defendant in gaol. On 18 February 2014, the first defendant, A, B, C and certain other parties entered into a deed (to which I will refer as the “W Deed”) in relation to the sale of the first defendant’s units in W Unit Trust (CB Tab 1113).

311. [392]

     The W Deed recited that the debtors (A and two corporate entities, each acting as trustee for one of the sons’ individual family trusts) had purchased the W Units and had agreed to pay for them by instalments; and that the guarantors (A, B and C) had agreed jointly and severally to guarantee the performance of the provisions of the deed. The operative provisions of the Deed made provision for the payment of the said sums by the debtors, the guarantee and indemnity, and contained various representations and warranties.

312. [393]

     Under the W Deed, the first payment of $62,500 each was due from the Debtors on 31 January 2014 and the second (variously of $52,083.49 or $52,082.49) was due on 30 April 2014.

313. [394]

     On 21 February 2014 (CB Tab 1114), C emailed the second defendant with a comment as to intergenerational transfer for the first defendant to consider – namely, that the current asset base “plus our half share of [W]” gave the family an asset base to build upon and that “[i]f he decides to cash everything up, imagine how long if even possible to regenerate that asset base back to where it stands now?”. Again, it is clear that at this stage C did not appreciate that his father’s intention had firmed (or was firming) to the point where his father wanted his sons to obtain not one cent of the proceeds of sale of the farms.

314. [395]

     By March 2014, it is clear that the sons were becoming concerned as to their position. On 25 March 2014, the sons first sought legal advice from Mr Michael Fitzgerald, the solicitor acting for them in the current proceedings. B then sent an email on behalf of himself and C to Accountant No 2 on 25 March 2014 (CB Tabs 1129,1130) directing him to send a copy of his complete files for E Co and D Co to Mr Fitzgerald and authorising Accountant No 2 to speak candidly with him. Whether precipitated by this or the timing was simply coincidental, by email on 26 March 2014, Accountant No 2 raised with the second defendant that the $50,000 lease fee was in arrears (CB Tab 1131); and the second defendant then raised this and other matters with C, requesting that C and his brothers put down on paper what they thought were the money adjustments to be made among them (see CB Tab 1132; and C’s response at CB Tab 1133).

315. [396]

     As to the request by B for a complete copy of the companies’ files, Accountant No 2’s response, by email dated 31 March 2014 almost a week later (though referring to an earlier telephone conversation on 25 March 2014 with B and C) was to attach the 2012 financial statements for both companies and to advise that work for the 2013 financial year had just been commenced and should be completed within a couple of weeks. Accountant No 2 confirmed that the files were “now completely electronic and are mainly workpaper and financial statement related”. He noted that he had been asked “to review our files for meeting notes on succession planning”, which he said he was currently doing (CB Tab 1140). (Accountant No 2’s ultimate response on this issue – by email of 7 May 2014 - CB Vol 32 Tab 6, p 417; [408]ff was the subject of some contention as to its admissibility – see below at [403]ff.)

316. [397]

     On both 22 and 30 March 2014, B visited the first defendant in gaol. On 30 March 2014, B sent a lengthy email to C setting out B’s understanding of the first defendant’s position at that time (CB Tab 1138). There was at that stage a potential purchaser for Property No 9. B’s email was forwarded to the second defendant on 31 March 2014 (CB Tab 1141). No response is in evidence. As at March 2014, B and C were in contact with a real estate agent regarding the sale of Property No 11 (see CB Tab 987-989).

317. [398]

     On 31 March 2014, B and C met with Mr Fitzgerald. Caveats were lodged by E Co over the title to Property No 9 later the same day, and caveats lodged on the titles of the other properties shortly thereafter (see CB Tab 1142). The interest claimed under the caveats was “[i]nterest as tenant of the land and an interest in fixtures, tenant’s improvements and crops on and within the land” by virtue of the fact that “[t]he Caveator has been, and is, a tenant and occupier of the land and has carried out agricultural activities since 2002 and has a right to possession of the land”. (Evidence was given in the proceedings by the solicitor who drafted the caveat, Mr Andrew Eager.)

318. [399]

     On 1 April 2014, Accountant No 2 sent an email to B and C enclosing a Notice of Extension of Lease Termination dated 29 March 2014 by the second defendant, extending the date for E Co to vacate the properties to 30 June 2014 (CB Tab 1143).

319. [400]

     On 14 April 2014, the second defendant sent a letter to Mr Fitzgerald, advising that, on a “no admissions” basis, the properties had been withdrawn from sale and that no action would be taken to file a lapsing notice in respect of the caveats, in view of a foreshadowed “promissory estoppel” claim (CB Tab 1145).

320. [401]

     At around this time (a call from Mr Fitzgerald being postulated by Accountant No 2 as the catalyst for this), there was some discussion between Accountant No 1 and Accountant No 2 as to their recollection of events in 2002. I refer to this in more detail below (see [641]).

321. [402]

     By email dated 7 May 2014 (CB Vol 32 CB Tab 6 (p 417), Accountant No 2 communicated to B that:

322. [403]

     In context, both “our” and “we” are clearly references to the Local Accounting Firm. However, it was made clear by the first defendant (when I was dealing with the plaintiffs’ objection to tender of this email) that it was relied upon only as relating to the recollection of Accountant No 2 and that Accountant No 2 did not there purport to speak to the corporate knowledge of the Local Accounting Firm. I rejected the first sentence italicised above (commencing “Our advice”) as it was not clear on the face of the email to what advice in 2002 Accountant No 2 there was referring (and Accountant No 2’s affidavit evidence did not set out the recollection of any advice given in 2002). I admitted the balance limited to evidence of Accountant No 2’s recollection of any conversation with the first defendant at which he was present or to which he was a party. (Senior Counsel for the first defendant had relied for its admission on what was said in Thornton v State of NSW [2015] NSWDC 251 and to McDougall J’s decision in Osborne Metal Industries v Bullock (No 1) [2011] NSWSC 636.) Thus it was read only as a statement of Accountant No 2’s personal recollection of events.

323. [404]

     Accountant No 2’s email to B was sent at 4.23pm that day. At 4.22pm (i.e., sent first) a separate email in precisely the same terms and ostensibly attaching the same documents was sent to the second defendant (see CB Vol 32, Tab 6A (page 417A)). This is relied upon as support for the plaintiffs’ contention that Accountant No 2 preferred their father’s instructions over theirs (see [658] below). There was nothing on the face of the email to B to indicate that the emailed information had also been sent to the second defendant.

324. [405]

     On 4 July 2014, these proceedings were commenced by summons filed in the Equity Division of this Court. On 18 July 2014, a statement of claim was filed in the proceedings. There were a number of subsequent iterations of the statement of claim (the final pleading being the second further amended statement of claim, additional particulars to some of the allegations therein being provided during the course of the hearing). The first defendant filed a cross-claim in the proceedings on 18 August 2014.

The pleadings

1. [406]

   Various causes of action are pleaded in the second further amended statement of claim (at [187]-[235]), in summary those being:

   1. (1)

      for breach of contract (the contract being the Family Business Agreement pleaded at [67] as amended by the Revised Family Business Agreement pleaded at [75]; see pleadings of breach of the contract at [187]-[189]) and associated equitable claims based on undue influence and unconscionable conduct in respect of the Revised Family Business Agreement (see [190]-[201]);

   2. (2)

      in the alternative, relief in respect of various alleged trusts and estoppel claims (see [201A]-[216]): an alleged express trust (arising out of the execution by the first defendant of the E Unit Trust Deed and the Revised Family Business Agreement) (see [201A])); a common intention constructive trust (see [202]-[204], [206]-[208], [210] and [212]-[216]); proprietary estoppels (both on the basis of estoppel by encouragement and by acquiescence) claimed by the sons jointly (see [202]-[204], [206]-[208], [210] and [212]-[216]), as well as by E Co (alternatively to the sons’ claim and/or see [202], [204], [207], [208] and [212]-[216]), and a separate proprietary estoppel claimed by A in relation to the homestead on Property No 4 (see [202], [207], [208], [210], [211], [215], [216]); and a joint endeavour constructive trust (see [202]-[216]);

   3. (3)

      for relief from oppression pursuant to ss 232 and 233 of the Corporations Act 2001 (Cth) (see [217]-[221]); and

   4. (4)

      for relief in respect of a number of specific matters (see [224]-[235]), relating broadly to: the Agreement for Lease; the first defendant’s claim for repayment of advances made by him to E Co; the validity of the Westpac Deed; as well as an entitlement to set off amounts owing by the sons under the W Deed.

2. [407]

   There was considerable overlap in the pleading of the respective trust and estoppel claims and, as I will explain shortly, much criticism by the first defendant as to the “oxymoronic” nature of the pleading – criticism that the plaintiffs maintain is based on a fundamental misapprehension of the pleaded case.

3. [408]

   The principal relief sought in relation to the alleged breaches of contract is an order that the first defendant specifically perform the Revised Family Business Agreement (see [189]). In the alternative, the plaintiffs seek remedies in equity setting aside the Revised Family Business Agreement in favour of the earlier Family Business Agreement on the basis of undue influence and unconscionability (as pleaded at [190]-[201]). In either case, a declaration is sought that the first defendant holds particular assets (namely, the farms and specified farming equipment and machinery) on trust for the sons or alternatively for E Co ([222]) and consequential remedies (at [223]).

4. [409]

   It is convenient at this stage to set out the principal relief sought in respect of the trust and estoppel claims, which is that contained in [222]-[223] of the second further amended statement of claim (some of which overlaps with the relief sought on the contract/express trust claims). Those paragraphs (adopting the pseudonyms used throughout these reasons and without identification of the specified farming equipment and machinery) are as follows:

5. [410]

   As to the Agreement for Lease, the plaintiffs contend that, on its proper construction, the first defendant does not have a contractual right to terminate or alternatively the first defendant has not identified or satisfied the conditions precedent to the exercise of such right, including that it only be exercisable in good faith and for a proper purpose (there referring to NSW Rifle Association Inc v Commonwealth [2012] NSWSC 818; 293 ALR 158). The plaintiffs submit that the first defendant is purporting to exercise such a power for an ulterior purpose and in bad faith (namely, to punish his sons for their reaction to his sexual abuse of B’s children – hence one of the bases for the asserted relevance of evidence as to the first defendant’s criminal conduct).

6. [411]

   It is contended further that the first defendant is estopped from terminating, or has waived his right to terminate, the Agreement for Lease on a similar basis to that on which the claims for proprietary estoppel are founded; and, further in the alternative, that the plaintiffs are entitled to relief from forfeiture. On the question of relief from forfeiture, the plaintiffs rely on both equitable fraud and surprise as circumstances making it unconscionable for the first defendant to exercise any right of termination (invoking the jurisdiction recognised in Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57). To the extent that the Agreement for Lease is an ineffective contract between the parties, E Co claims reasonable remuneration on a quantum meruit for the work done by it in making improvements to the farms leased by E Co and/or compensation in the nature of restitution for those improvements to the extent that the value of the farms has been enhanced. Alternatively, if (which is denied) the Agreement for Lease is effective as a lease of the farms then upon termination of the lease they again seek reasonable remuneration/compensation in the nature of restitution in respect of the improvements to the farms. There is also a claim for compensation in respect of the improvements under the Agricultural Tenancies Act 1990 (NSW).

7. [412]

   The declaratory and other relief sought in relation to the Agreement for Lease is contained at [224]-[228] of the pleading (again using pseudonyms):

8. [413]

   As to the relief sought in respect of the remaining matters (the claim for repayment of the amounts claimed by the first defendant to be owing by way of the advances made by the first defendant to E Co; relief against enforcement of the Westpac Deed by the first defendant; and a set-off arising in relation to the amounts claimed in respect of the first defendant’s units in the W Unit Trust), this is set out in the pleading from [229]):

9. [414]

   As already noted, the first defendant denies the alleged agreements and the alleged express trust. In relation to the alleged Family Business Agreement and the Revised Family Business Agreement, the first defendant invoked the Statute of Frauds (amended defence to further amended statement of claim at [40A]), to which the plaintiffs respond by pointing to documents which they say constitute a memorandum or note in writing of those agreements, and also by pointing to certain acts which they characterise as having been done in part performance of the Family Business Agreement and the Revised Family Business Agreement (including the execution of the discretionary family trust deeds in September 2002, the settlement of those trusts, and the resolutions of the directors of E Co in relation to the E Unit Trust, also in September 2002). The first defendant, in his amended defence, characterises the alleged Agreement for Lease as a “Management Agreement” (see amended defence at [34]) (although ultimately the first defendant did not appear to contend that E Co’s occupation of the farms in question was only as a licensee); and argues that this is the only agreement that was entered into by the parties in relation to the farms.

10. [415]

    The first defendant has filed an amended cross-claim seeking: a declaration that any entitlement of E Co to the use and/or occupation of the first defendant’s properties has been validly terminated; an order that E Co vacate the properties within 28 days; judgment against E Co in the sum of $3,663,253 (being $1.54 million claimed for the unpaid “annual fee” in the years 2008 to 2011 and 2015 to 2016 under the “arrangement” (there defined as the Management Agreement) for the non-exclusive use by E Co of the first defendant’s lands for the purpose of conducting a primary production business; and $2,123,253 in repayment of amounts advanced to E Co – as alleged at [158.4] and [158.5] of the defence to the further amended statement of claim (which was later replaced by the amended defence)); judgment against A, B and C for the amount of $156,249.57 (being the payments claimed under the W Deed); and an order that A, B and C do all things necessary specifically to perform the Westpac Deed within 28 days (i.e., to provide security to Westpac in substitution of the security provided by the first defendant over the Main Property).

11. [416]

    The plaintiffs in their defence to cross-claim deny that E Co was obliged to pay an occupation fee of the Agreement for Lease, deny that E Co is liable to repay the Alleged Loans, and say that the first defendant is not entitled to enforce the Westpac Deed and say, in the alternative, that the first defendant is estopped from asserting any rights he does have (defence to the amended cross-claim, [6(b)(ii)]). The plaintiffs accept that they are liable to make the repayments due under the W Deed, but plead that that liability should be set off against the first defendant’s liability to them (see [15(c)] of the defence to cross-claim; [235] of the second further amended statement of claim).

The Issues in Dispute

1. [417]

   The plaintiffs have identified the factual disputes between the parties as being largely confined to the following questions (Plaintiffs’ Closing Submissions at [17]:

2. [418]

   The plaintiffs maintain that the most significant factual issue in dispute is whether the first defendant ever suggested that he would transfer his properties to the E Unit Trust (which they describe as the “major fault line” in the evidence). They identify the “minor fault line” (the resolution of which they argue has significance for determination of the “major fault line”) as being the motivation for the first defendant seeking to evict E Co from the farms and to disinherit the sons. The plaintiffs submit that it follows that, if the first defendant cannot be believed in respect of the “minor fault line”, then he cannot be believed on the “major fault line”. (I do not accept that conclusion necessarily follows but in any event it does not arise because I am not satisfied as to the premise.)

3. [419]

   As to the so-called minor fault line, the plaintiffs submit that none of the three matters that, in combination, were put forward by the first defendant in his first affidavit (at [59]-[60]) as motivating him to seek to evict E Co from the farms (namely, that he might die in prison and just wanted to divest himself of all his assets; that he thought the properties were not insurable in his name; and that he was concerned with the management of the farms by his sons) can be accepted as a substantial motive for so doing. As to the first, they argue that the first defendant had no need of cash while he was incarcerated. As to the second, they point to the lack of evidence to support a conclusion that the first defendant was uninsurable because of his crimes. As to the third, they say that the first defendant never raised “poor management” of the farms as a reason for the termination of the lease and had commenced steps for the sale of one or more of the properties at a time when his will still left the residue of his estate to the sons (it being argued that if successful management of the farms was a condition of the inheritance this suggests that at that stage the first defendant had no such concerns). The plaintiffs submit that the true motive of the first defendant in terminating the lease and in disinheriting them was a combination of revenge, punishment and control (suggesting that the first defendant was seeking to force an apology from them).

4. [420]

   The first defendant denies any such motivation. He submits that there is significant evidence that he did not intend to punish the sons, referring to: the extensive assistance he provided after October 2009 (including the continuation of the lease agreement, the continued conduct of the farming business, the purchase of the W Unit Trust investment, the security given for the hotels, the short-term continuance of the $2,000 gifted to each son on a monthly basis, which ended in 2010 – it is said due to matters beyond the first defendant’s control, though the basis for that was not explained); and the evidence that when the first defendant went to prison, the approach was “business as usual” (see the first defendant’s acceptance of this at T 959).

5. [421]

   As to the legal relevance of the first defendant’s motive for acting as he did, the plaintiffs say this is largely limited to issues of unconscionability (for all the equitable claims), good faith (in respect of the alleged breach by the first defendant of the Agreement for Lease) and attributable blame (in respect of the claim based on a joint endeavour constructive trust), but they argue that it is also highly relevant to the issue of the first defendant’s credit and the reliance that can be placed on his evidence when it is not against interest. They submit (Plaintiffs’ Closing Submissions, [109]) that:

6. [422]

   With respect to the “major fault line”, the plaintiffs argue that the only real issue is as to whether the first defendant agreed (which he has adamantly denied) to transfer the farms into the E Unit Trust.

7. [423]

   The plaintiffs argue that the first defendant (though denying that there was an enforceable agreement before 17 March 2004), appears to have accepted that at the meetings of 18 and 25 September 2002 he agreed (or by his conduct, including his silence, induced the expectation in his sons) that he would go into business with them through a joint vehicle and that this new family business would operate the farming business. This submission is broadly based on the concessions the plaintiffs say were made by the first defendant in cross-examination (to some of which I have referred in my summary of the proceedings earlier but to which I will refer in more detail in due course).

8. [424]

   The plaintiffs say that the first defendant’s concessions in cross-examination support their case that the new family business was also to incorporate off-farm investments and, further, support their case that, in respect of the farms, the first defendant had agreed, after the advice given by Solicitor No 2 on 25 September 2002, that he would hold them farms for his sons for the new family business during his lifetime and that they would pass to his sons in equal shares on his death under his will. In this regard the plaintiffs submit that the first defendant’s denials are not credible and that the evidence is more than sufficient to establish, on the balance of probabilities, that he agreed to transfer his farms into a joint family vehicle, at least from the time that Accountant No 1 followed up “Cleardocs” on 5 September 2002 to the time that Solicitor No 2 gave his advice at the meeting of 25 September 2002.

9. [425]

   The factual issues identified by the first defendant in his outline of submissions (First Defendant’s Opening Submissions at [40]) are:

10. [426]

    The first defendant then identifies the further issue:

11. [427]

    The first defendant’s case is that there was simply an agreement to permit the sons, through E Co, to conduct a valuable business on his land; that the sons’ expectations are no more than as expectant heirs; and that the plaintiffs have not established reliance on any expectations of the kind alleged by the plaintiffs or any conduct on his part – rather, that the sons acted in accordance with their “own agenda”, that being to advance themselves as investors, with the support of his assets. He also maintains that the plaintiffs have not suffered detriment, in that none is in financial difficulty.

12. [428]

    The plaintiffs’ response to the first defendant’s position in relation to both reliance and detriment is that it fails to take into account that the sons’ conduct of their affairs in the period from October 2002 to June 2013 was on the basis of long term reward, not short term profits and income. They argue that if the first defendant is permitted to resile from the expectation he has created or encouraged, the business of E Co will be destroyed and the withdrawal of the farms as security for the hotels will make that investment “precarious at best and unfeasible at worst”. (Certainly the E Co annual accounts for the year ended 30 June 2016 – see CB Vol 31 Tab 13 – do not reveal substantial assets from which the company could now establish its business operation elsewhere, particularly if the company is required at the same time to repay the moneys advanced by the first defendant and pay for the cattle transferred to it.)

13. [429]

    The plaintiffs submit that the question of detrimental reliance can be determined by posing a counterfactual based upon the plaintiffs knowing the true state of affairs as asserted by the defendants (referring to the judgment of the plurality of the High Court in Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 9 at [77] and by the Court of Appeal in Priestley v Priestley [2017] NSWCA 155 at [124] in this regard). They submit that, if the first defendant had told the sons on 25 September 2002 that he was willing to go into business together with them but that he reserved the right to: evict them and the business from the farms at any time; deny the use of the farms as security at any time; disinherit them by changing his will at any time and naming others as his beneficiaries; and sell the farms at any time, keeping the sale proceeds; then it is clear that the sons would not have acted as they did. It is submitted that each of B and C would have returned to paid employment until such time as he could purchase his own business (perhaps with the assistance of the first defendant), and that A would have sought his own “block” to live on and farm (perhaps Property No 9 where he was the first-named purchaser) and/or expanded his machinery business (through D Co).

14. [430]

    The plaintiffs argue that this conclusion is particularly so if the counterfactual is expanded to encompass the first defendant telling the sons that the relationship between them might be destroyed at any time by discovery of his sexual offending against his three granddaughters. The plaintiffs argue that, in circumstances where the sons were armed (as at April 2002) with the ability to seek their own fortunes, the idea that they would invest so many years of their life on a venture contingent on the first defendant’s whims “strains credulity”. They submit that the fact that the “proper” counterfactual was not put to the sons was because the first defendant knew the answer that would be received – one which would accord not only with human nature but also with an understanding of the position that the parties found themselves in the period April to October of 2002 when, they say, the decision to join the new family business was made.

15. [431]

    Pausing here, during the course of the hearing the plaintiffs sought further to amend their pleading in order to supplement the particulars of detriment at [210] of the pleading (see the debate on 23 and 24 August 2017 in that regard). Broadly speaking, the additional particulars related to the loss of an opportunity by A to purchase a property which would provide a home and also be the basis for a grazing or farming business of his own and, specifically, to purchase Property No 9 (in effect to reflect the evidence that had emerged in A’s cross-examination in relation to his wish to purchase Property No 9 at the time of the auction). The additional particulars also related to the giving up by B and C of their then employment (in July 2002 and October 2002 respectively). The articulation of the further particulars was on the basis that they were to be the subject of final submissions and so as not to take the first defendant by surprise when final submissions were made. Objection was taken to the amendment. After some debate, the objection was largely on the basis of a perceived inconsistency between some of the proposed additional particulars and the pleading. My view was that, as one is not required to plead to particulars, the provision of amended particulars (whether in the pleading or by communicating them outside the pleading) was not objectionable and, after further amendment of the proposed additional particulars I gave leave for the filing of the amended pleading with those amended particulars. Relevant for present purposes was the reference to A having an interest in purchasing Property No 9. I have already adverted to the first defendant’s submission as to the “twist” in the case in this regard. He also points to the affidavit evidence to the effect that A had said he could not obtain finance (though this may be explicable by reference to A’s belief that the property would sell for a larger price at auction). All I note at this stage is that the evidence of B, to the effect that it was suggested that he and C could contribute to the deposit for the purchase of Property No 9, indicates to me that a not unrealistic prospect as to what the sons would have done had the posited counterfactual been put to them in September 2002, would have been for the three to join in some farming or business enterprise such as that which was at least fleetingly proposed in relation to Property No 9.

16. [432]

    At this point, for completeness, I address the criticisms made by the first defendant as to the plaintiffs’ pleaded case. I do so because of the need for precision as to what the pleaded case encompasses (particularly the ambit of the proprietary estoppel claims).

17. [433]

    To my observation, much (though by no means all) of the criticism or complaint by the first defendant as to the plaintiffs’ pleading seems to have been the perception that the plaintiffs were pleading both that there was an agreement by the first defendant to transfer the properties to them (or to a unit trust) during the first defendant’s lifetime (or that they had acquired an immediate beneficial interest in the properties as from the events in September 2002) and at the same time (rather than in the alternative) that the properties were to be left to them by will. The first defendant says that the pleading alleges that two things occurred when those two things cannot coexist (namely, a transfer of land and a “non-transfer” of land). It is said, pejoratively (though I hasten to note that neither side was alone in the evocative use of disparaging descriptors), that this oxymoronic element of the pleading is characteristic of the entire presentation of the plaintiffs’ case (a feature of which is said to be the difficulty in isolating with any precision just what the first defendant is alleged to have done to create the expectations or to make the representations alleged).

18. [434]

    In this regard, the first defendant points to the allegation of a present beneficial interest in the farms (referring to [66], [67], [74] and [75] of the second further amended statement of claim): whether as to an expectation of or agreement for a transfer of the farms (referring to [66(d)] and [67(b)]); as to a holding of the farms on trust for the sons (referring to [74(d)] and [75(a)]; or as to a declaration of trust (referring to the particulars of [74] at (2)(D) and (F) and (3)(B) (contained at pp 21 and 23 of the particulars provided by the plaintiffs on 8 November 2016 (see CB Tab 2) and at [107] of the Plaintiffs’ Opening Submissions); and to the allegation at [73] that advice was given against the transfer of the farms resulting in a decision not to transfer the farms ([75(a)]) but that the farms would be held by the first defendant for the sons on trust, so as to provide capital gains tax benefits and “asset protection”, including “protection” from a claim that may be brought by any spouse in the event of a marriage breakdown.

19. [435]

    The first defendant points to the inconsistency between an agreement or expectation that the properties would be “held” for the sons (if that be understood as encompassing the notion of a holding on trust such that the plaintiffs thereby acquired an immediate beneficial interest in the properties) and other propositions that form part of the plaintiffs’ case, such as the proposition that the alleged revision on 25 September 2002 of the terms of the alleged agreement reached on 18 September 2002 was for the purpose of “asset protection” or the proposition that the relevant expectation or agreement was that the properties would be left to the sons under the first defendant’s will.

20. [436]

    As to the former, I understand the first defendant’s proposition to be that a beneficial interest in property would not be immune from a spousal claim in family law proceedings; as to the latter, the first defendant makes the (surely uncontroversial) point that if the sons already had (as at September 2002) a beneficial interest in the properties then the first defendant would not be free to deal with them under his will as if they were his to bequeathe.

21. [437]

    As to the “asset protection” point, the first defendant says that in order to provide protection of the type sought no beneficial interest could exist (referring to s 104-55 of the Income Tax Assessment Act 1997 (Cth) and Ascot Investments Pty Limited v Harper (1981) 148 CLR 337; [1981] HCA 1, approved in Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56). The first defendant argues that the plaintiffs’ case on this aspect of the matter amounts to saying that the legal structure of ownership of assets can be held out to the world for tax or other purposes as one thing, but in truth be something quite different (there referring to Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 where Young J, as his Honour then was, said at 694-695 that if a person elects to erect a particular structure which has meaningful legal consequences that person must take the consequences of such erection “for better, for worse, for richer or poorer, in commercial sickness or commercial health”).

22. [438]

    The plaintiffs take issue with the first defendant’s submission made by reference to s 104-55 of the Income Tax Assessment Act and Ascot Investments Pty Limited v Harper (as approved in Kennon v Spry) but, as I read the respective submissions I rather think they are at cross-purposes. As I understand it, the first defendant’s argument is that it would not make sense to change a proposed business structure (from one involving a transfer of land to one involving land held on trust for the sons) for reasons related to capital gains tax or asset protection because those issues would arise either way (i.e., whether there was a transfer of legal ownership or the creation of a beneficial interest in the land) (in support of the argument that such advice was not given). I do not understand the first defendant to be submitting, based on the income tax legislation or cases referred to above, that “no beneficial interest can exist” in the sense that it would be impossible for a beneficial interest (such as that arising under a remedial constructive trust) to exist. Hence, it is not necessary to elaborate on the reasons that the plaintiffs say the submission that “no beneficial interest can exist” has no substance.

23. [439]

    As to the second point, this was the subject of cross-examination of the sons as to matters going to their subjective understanding over the relevant period that the first defendant was the owner of the farms and that they had no interest in the land, including as to the fact that they had not asserted or disclosed, in particular contexts, a beneficial interest in the farms (see, for example, the passages to which the first defendant points as contradicting the plaintiffs’ claim as to an agreement or expectation of an interest in the lands arising as at 2002 – A at T 344.36-344.48; B at T 119.44-119.50, T 178.01-178.08, T 256.04 and T150.36-150.50; and C at T 401.26-401.38 and T 450.32-451.03).

24. [440]

    A third “major point” identified by the first defendant in his submissions in relation to the pleaded case is not as to a perceived inconsistency in the pleaded claim as much as an identification of inconsistency between the pleaded claim in respect of the “off-farm” investments and what later transpired in relation to those investments.

25. [441]

    Not surprisingly, the plaintiffs cavil with the characterisation of their pleaded case as oxymoronic. The plaintiffs submit that the first defendant has mischaracterised their case as being one at the heart of which is “the expectation of ownership by transfer, the establishment of a unit trust”. The plaintiffs disavow that it is any part of their case that, after the meeting of 25 September 2002, they expected that the farms would be transferred into a unit trust; and say that none of their causes of action is founded on this proposition, including their claims in contract and for an express trust.

26. [442]

    As to the submission that the pleading alleges both that there was a transfer of farming land and that there was not; or, in other words, that two things occurred that cannot co-exist – namely a transfer of land and a “non-transfer” of land (see [4]; [19] of the First Defendant’s Closing Submissions; [23] of the First Defendant’s Opening Submissions), the plaintiffs submit that there is no substance to this criticism.

27. [443]

    To explain this, it is necessary to consider what is in fact pleaded in the second further amended statement of claim at [65]-[67] (which paragraphs relate to the 18 September 2002 meeting) and at [73]-[75] (which paragraphs relate to the 25 September 2002 meeting), following on from the allegations as to the 18 September 2002 meeting. The critical allegations for the proprietary estoppel claim are at [66] and [74]; the corresponding contract claims being expressed to be further or in the alternative to those allegations.

28. [444]

    At [66], which follows the allegation at [65] as to the giving of certain advice by Accountant No 1 and/or Accountant No 2 in the period between about July 2002 and about 18 September 2002, it is alleged that (adopting the pseudonyms used throughout these reasons):

29. [445]

    The extensive additional particulars subsequently provided in relation to [66(d)] were as follows:

30. [446]

    The first defendant emphasises that the pleaded expectation is said to have been partially founded on express statements by him to be inferred from B’s belief that he and the sons had agreed that there would be a new company and a new trust equally owned by them and which would own all the assets of the Family Business including the farms (see additional particulars to [66(d)] of the second further amended statement of claim and B’s affidavit at [212(a)-(e)]) and argues that something more is needed to make out a case of estoppel than “untenable assertions” of a person’s belief “founding, by implication, an express statement and … reconstructed events based on notes that are not notes of what the author says they are notes of” (First Defendant’s Closing Submissions at [27]).

31. [447]

    What is alleged at [66] of the second further amended statement of claim, relevantly for present purposes, is that the expectation included that “an ownership structure” would be put in place whereby each of the first defendant (who, of course, already owned the farming business and the farms in his own right) and his sons “would acquire joint ownership” of the Farming Business, the farms presently owned by the first defendant other than Property No 8, and any farms purchased by the first defendant in the future. The particulars identify this “ownership structure” as a new company and a new trust to be owned equally by the four family members (see additional particulars to [66(d)]).

32. [448]

    The alleged agreement (pleaded further or in the alternative to [66]) at [67] of the second further amended statement of claim is an agreement whereby, among other things, during the first defendant’s lifetime each of he and the three sons “would have joint ownership” of the Proposed Family Business including the Farming Business, the farms presently owned by the first defendant (except Property No 8), and any farms purchased by the first defendant in the future (see [67(b)]); and whereby as soon as practicable the first defendant would transfer the assets of the Farming Business and the farms “to the Proposed [xxx] Family Business Structure” for the purposes of giving effect, inter alia, to the agreement pleaded at [66(b)] (see [67(c)]).

33. [449]

    Thus, the plaintiffs have alleged an expectation and, further or in the alternative, an agreement as at 18 September 2002 in broadly similar terms, under which, among other things, the farms were to be transferred into a new structure owned equally by the four family members. (The expectation/agreement at that stage also included provision for the sons to inherit the first defendant’s estate; and provision that if the farms were sold during the first defendant’s lifetime that the proceeds would be shared and/or spent wholly or particularly on property and assets operated by the Proposed Family Business which would come to be owned by the sons, but that is not relevant when addressing the first defendant’s “oxymoronic” pleading complaint.)

34. [450]

    What is then pleaded is a revision to the expectation or agreement alleged at [66]-[67] respectively.

35. [451]

    At [73], it is alleged that on 25 September 2002 the first defendant and the three sons attended a meeting arranged by Accountant No 1 with Solicitor No 2 for the purpose of Solicitor No 2 providing advice with respect to the Family Business Structure (that the plaintiffs say had been agreed at the 18 September 2002 meeting), including advice in respect of any capital gains tax payable on the transfer of the Farming Business Assets (including the farms) to the E Unit Trust, and asset protection, having regard to the separation of A from his then wife. (There is no dispute that a meeting took place on 25 September 2002.)

36. [452]

    At [74] the revised expectation (on which the principal or jointly made proprietary estoppel claim is now based) is pleaded:

37. [453]

    In the pleading just set out, the allegation is, in effect, that the earlier expectation was varied (or a new expectation created) such that, relevantly, during the first defendant’s lifetime, while each of the first defendant and the three sons would have joint ownership of the Proposed Family Business, the farms presently owned by the first defendant (except for Property No 8) would be “held” by the first defendant “for his sons and for the use of the Proposed [xxx] Family Business” (as opposed to the expectation being one under which the farms would be transferred to the new proposed business structure – i.e., to the new company or trust in which all four family members would have an equal ownership interest).

38. [454]

    The plaintiffs say that the pleading at [74] is directed to the claim to a proprietary estoppel (both under the Dillwyn v Llewelyn (1862) 4 De G F & J 517; 45 ER 1285 estoppel by encouragement line of authority and the Ramsden v Dyson (1866) LR 1 HL 129 estoppel by acquiescence line of authority). They contrast this with the alternative allegation at [75], which is directed to their claim in contract (the Revised Family Business Agreement), not proprietary estoppel.

39. [455]

    At [75], the allegation (further or in the alternative to [74]) is of an agreement varying the agreement pleaded at [67], the alleged variation including that the farms that were to be transferred into the Proposed Family Business Structure (under the alleged 18 September 2002 agreement) would now be retained by the first defendant “but held by him during his lifetime for [the sons] on trust and be used for the purpose of the Proposed [xxx] Family Business”; and that any future farms acquired by the first defendant would also be held by him during his lifetime for the sons on trust and be used for the purposes of the Proposed Family Business.

40. [456]

    The particulars to [75] (at sub-paragraph (6)) state that “[i]n respect of the ownership of the farms, the parties’ express agreement was that [the first defendant] would hold the legal ownership of the farms “for” [the sons] and for the use of the [xxx] Family Business”, the legal effect of which agreement was said to be that the first defendant was “to hold the farms as express, or alternatively constructive, trustee for [the sons]” and “to permit the plaintiffs to use the farms for the purposes of the Proposed Family Business” (see CB Tab 2 p 30).

41. [457]

    The plaintiffs maintain (and I agree) that there is on the pleading at [73]-[75] a clear distinction between the proprietary estoppel claim (under which the allegation was that the farms – and any new farms – were to be “held” by the first defendant “for” his sons and “for” the use of the proposed family business) and the contract claim (under which the allegation, relevantly, was that the first defendant held the farms during his lifetime for the sons “on trust”, to be used for the purpose of the proposed family business).

42. [458]

    The plaintiffs describe the proprietary estoppel claim as one whereby “the plaintiffs would acquire [my emphasis] an interest in the farms, in the sense that [the first defendant], during his lifetime, would not transfer his farms without the consent of his sons and would make them available for use by the grazing business and for the off-farm investments, and on his death, the farms would transfer to the [first defendant]’s sons under the [first defendant]’s will” (plaintiffs’ written submissions in reply dated 2 October 2017 (Plaintiffs’ Reply Submissions), [16]), referring to this as a proprietary estoppel claim analogous to a testamentary contract, of the type upheld in Flinn v Flinn [1999] 3 VR 712; [1999] VSCA 109, Gillett v Holt [2001] Ch 210, Thorner v Major [2009] 1 WLR 776, Walton v Walton (Court of Appeal of England and Wales, unreported, 14 April 1994), and Priestley v Priestley. They do not, as I understand it, maintain that prior to the first defendant’s death the plaintiffs acquired any beneficial interest in the farms.

43. [459]

    Understood in that fashion, while I accept that the claims in contract (and express trust) and the proprietary estoppel claims (all arising from the outcome of the 25 September meeting, though the latter are not based solely on that meeting) cannot stand together – insofar as the former allege a present beneficial interest and the latter allege a beneficial interest in the future (by way of inheritance under the first defendant’s will) – I consider them able to be properly pleaded as alternative claims.

44. [460]

    The confusion in this regard may derive from the expression of the claim at [75] (and, for that matter, the claim at [67]) of the second further amended statement of claim as being “further” and in the alternative to the claim at [74] (and [66]). It may also derive from what is meant by the notion that the properties would be “held” by the first defendant “for” the sons and for the use of the Proposed Family Business (see [74(c)] and [75(b)]). However, any confusion of the latter kind is in my view dispelled by the coupling of “for his sons” with “and for the use of the Proposed [xxx] Family Business” at [74(c)]. This is not language readily conformable to an allegation of the sons having a present beneficial interest in the farms (to use as they might see fit); it is indicative of an expectation that the first defendant would retain his interest in the farms and make them available for the benefit if his sons in the use of the then proposed family business. That is not inconsistent with the sons having a present expectation of a future interest in the farms (which the plaintiffs say is based on an assurance that is more than merely a statement of the first defendant’s then present intention and hence this is more than a case where all the sons have is the expectation of an expectant heir under a will that the testator is at liberty to change at his or her whim).

45. [461]

    For those reasons, I see the contract/express trust claims as alternative claims to the proprietary estoppel claims and reject the proposition that the pleaded case is oxymoronic in that regard. Insofar as there remains any confusion as to what is meant by the pleaded expectation as to the “holding” of the properties by the first defendant during his lifetime (for the purposes of the proprietary estoppel claim) I note that in their submissions the plaintiffs have made clear that this is not an allegation of a presently existing trust. (See Plaintiffs’ Reply Submissions at [23]). The plaintiffs say that their claims for a “common interest” (by which I understand the submission to mean common intention) constructive trust and based on proprietary estoppel are founded, in part, upon an expectation of an interest, not an existing interest (which they accept would render the cause of action otiose) (Plaintiffs’ Reply Submissions at [23]).

46. [462]

    Finally, insofar as the first defendant argued in closing submissions that there had been a shift in emphasis in the plaintiffs’ case in the course of the trial (from being a case “focused on the claim that the land was somehow transferred to them in 2002” to being a case more focused on the elements of the claim that the first defendant would “hold” the lands until his death, whereupon they would be gifted to the sons by his will (First Defendant’s Closing Submissions at [18])) – and pointed to the contradictory nature of the two cases, the plaintiffs argue that there has been no such shift. The plaintiffs point both to the pleading of proprietary estoppel considered above and the submissions made prior to and in opening in relation to that case, in which the estoppel case was squarely raised. A complaint in closing submissions by the first defendant that a case in acquiescence had not been pleaded was not pressed, and the allegation of a “shift” in the plaintiffs’ focus in the case seemed to be abandoned in oral argument.

47. [463]

    I would simply add that, although the alternative claims by the plaintiffs based on contract/express trust were not abandoned, it was my impression by the close of submissions that the primary focus of the plaintiffs’ case was their proprietary estoppel case (founded on the detrimental reliance by the sons, and E Co, on the expectation that the first defendant in essence conceded in the witness box that he understood his sons held at the time they went into the family business in 2002/2003, that rendering it unconscionable for the first defendant now to depart from the expectation). Ultimately, for the reasons set out below, I find that that claim has been made good and the plaintiffs are entitled to relief to make good their expectations.

48. [464]

    I have referred to the criticism made of the pleading because it highlights what in some respects seemed to me to be a case of the respective parties’ cases best being described as ships passing in the night. The cross-examination of the sons as to the non-existence of a belief on their part that they had a present beneficial interest in the farms (or as to the farms belonging to the first defendant) and, in essence, as to their understanding that a beneficiary under a will can only inherit whatever is comprised in the deceased’s estate at the time of death is not to the point in relation to what I consider to be the claim which has ultimate merit – namely the proprietary estoppel claim. That claim is founded on an expectation not that the sons had an immediate beneficial interest in the farms but, in effect, that they would be in a position during the first defendant’s lifetime to carry on, through E Co, the family farming business operations on the first defendant’s farms (which were to be held for that purpose) and that they would in due course inherit the farms (including any later acquired farm) or (which, however, I have rejected) whatever farms or other assets in which the sale proceeds of any farms sold during the first defendant’s lifetime might be re-invested as part of the ongoing family business.

49. [465]

    The sons are not lawyers. They consulted a lawyer (Mr Beattie) at various times about various matters. Mr Beattie advised them (and this is not challenged) that they had no interest in their father’s land. Whether or not that advice was correct (and, as with most if not all such advices, it must necessarily be dependent on the scope and accuracy of the instructions sought by, and given to, the legal adviser in question as to the relevant facts), is not to the point. Unsurprisingly, the sons did not, before or after the advice from Mr Beattie (until the present proceedings), assert an interest as the beneficiaries of a constructive trust. It seems inherently unlikely that, as non-lawyers, the sons would have had an understanding as to the notion of a constructive trust (impugned as a “vague dust-heap” by Professor Edward Sykes in his 1941 article – see E Sykes, “The Doctrine of Constructive Trusts” (1941) 15 Australian Law Journal 171, 175; as noted in P Young, C Croft, ML Smith, On Equity (2009, Thomson Reuters) at [6.670]); let alone as to the whys and wherefores of the debate that has raged in academic and judicial circles as to the merits or legitimacy of the so-called remedial constructive trust, as opposed to the institutional constructive trust (see Snell’s Equity (32nd edition, 2010), [26-015]; for comment by the English appellate courts upon the difference between the institutional constructive trust and the remedial constructive trust, see, in the context of mistaken payments, Westdeutsche Bank v Islington LBC [1996] AC 669 at 714-715; and, in the context of profit derived from fraud, Halifax Building Society v Thomas [1996] Ch 217 at 228-229).

50. [466]

    What is of relevance, at least to the proprietary estoppel claim, is not so much that the sons did not assert, prior to their meeting with Mr Beattie, a present beneficial interest in the land and did not assert, after their meeting with Mr Beattie that or any argument based on a constructive trust in respect of the land; rather it is the sons’ recollection (such as it is) of what occurred at the relevant meetings and their state of mind or expectation as to any assurances conveyed or communicated by their father’s words, conduct or silence at or following those meetings.

51. [467]

    There were extensive objections by the first defendant to the affidavit evidence of the plaintiffs (occupying some 40 pages of submissions by the respective parties in formulating and addressing those objections and a full day in advance of the hearing for rulings thereon).

52. [468]

    By way of broad summary, four recurring points of dispute were identified in relation to the evidentiary objections: objections (mainly based on relevance) as to evidence of the first defendant’s own family history;, objections (on the basis that these were inadmissible assertions or conclusions) as to those parts of the sons’ affidavits asserting that various parts of the first defendant’s affidavits were untrue; objections as to the evidence of conversations (not on the basis of form but on the basis that they were inadmissible conclusions); and evidence as to the witness’ stated understanding or belief where the asserted basis for the understanding or belief was not set out (and where the asserted understanding or belief was relied upon to infer that some other thing occurred or was said).

53. [469]

    A number of the objections based on relevance (particularly in the first of the four recurring areas of dispute) were not pressed (though the relevance of the evidence was not conceded and the first defendant expressly reserved any question of costs in relation thereto). However, one topic where relevance was “particularly pressed” was as to what the first defendant maintained was an “excess of evidence” concerning his criminal offences (i.e., evidence going beyond: the admitted facts as to the first defendant’s offending; the sons’ evidence of the October 2009 confrontation – which was uncontested; and the fact of the first defendant’s conviction and imprisonment).

54. [470]

    I admitted, subject to relevance and over objection, Exhibit AN (which consists of a bundle of documents obtained from Corrective Services NSW relating to the first defendant) and parts of B’s first affidavit relating to the first defendant’s criminal conduct. The plaintiffs maintained that this evidence was directly relevant to the following parts of their pleaded case: the allegation that the first defendant unconscientiously used the Revised Family Business Agreement to his advantage (see [197(a)] of the second further amended statement of claim); the breakdown of the joint endeavour (see [209(a)] of the second further amended statement of claim); and the alleged breach of the implied term of good faith in the Agreement for Lease (see [224(e)(ii)(A)] of the second further amended statement of claim). The first defendant argued that on each of those matters no more evidence was required than the fact of the offences admitted on the pleadings and the uncontested affidavit evidence of the 21 October 2009 confrontation.

55. [471]

    The first defendant pointed out in that regard that the sons learnt of the offences in 2009 and that the “Leaving Representations” allegedly made at the confrontation on 21 October 2009 (as pleaded at [146] of the second further amended statement of claim) are not relied on for any relief (see from [222]). It is submitted that, insofar as the pleading (at [209]) has sought to make the offences relevant by asserting that the “Joint Endeavour” failed by reason of the first defendant’s criminal conduct, this takes the matter no further in light of the earlier allegation at [207] that he had resiled from the alleged “Common Intention”. The first defendant maintains (and I accept) that the “resiling event” (for the purposes of the claimed breakdown of the joint endeavour) would not be the criminal offending (which became known in 2009 and after which the arrangement as to the family business continued) but the decision to sell the properties which occurred in June 2013 (First Defendant’s Closing Submissions at [313]).

56. [472]

    As to the argument based on a breach of an implied term of good faith, the first defendant maintains that s 14 of the Agricultural Tenancies Act permits notice to be given without a reason. It is submitted that there is no term of the Agreement for Lease (CB Tab 188) that negates the parties’ respective entitlements under that legislation. It is submitted that the first defendant was acting in accordance with his statutory entitlement when the notice of termination was served and that this is not a case requiring an examination of the law of the implied term of good faith into commercial contracts; rather, it is said, it is sufficient that the first defendant’s conduct was in accordance with his statutory rights.

57. [473]

    Insofar as the plaintiffs argue (at [217] and [218] of the Plaintiffs’ Closing Submissions) that the criminal conduct is relevant to an assessment of the evidence of the first defendant in respect of the events of 2002, the first defendant submits that the plaintiffs’ reliance on s 55(2)(a) of the Evidence Act is misplaced. It is submitted that the exception to s 102 of the Evidence Act in respect of cross examination as to credibility (see s 103) does not apply because the evidence in question could not substantially affect the credibility of the first defendant. It is submitted for the first defendant that there is nothing about his life that shows him to be dishonest, or given to untruthfulness. Reliance is placed on the concessions the first defendant made in the witness box and the “immediate confession” he made in the confrontation as being testament to this. (The immediacy of the confession may be a matter of degree. The sons’ evidence, which the first defendant accepted, is that at first the first defendant did not respond when the allegations were put to him during the October 2009 confrontation.) The first defendant contends that the suggestion that a sex offender cannot be believed in respect of matters of commerce cannot be maintained.

58. [474]

    In closing submissions the first defendant reiterated his complaint as to the admission of the evidence as to his criminal conduct and submitted that the evidence added nothing other than to give the plaintiffs an opportunity to disparage him and to “seek to taint his evidence by aspects of his life which are no way relevant” (First Defendant’s Closing Submissions at [316]). For the first defendant the submission went further (at [319]), namely that “the bringing of the case, in such an excessively presented way, and where the evidence to support the case seems to have not even occurred to the plaintiffs to have any significance prior to 2014”, suggests that the plaintiffs were motivated in bringing this litigation by ill-feeling towards the first defendant as a result of his offending.

59. [475]

    On that issue, I was (and remain) persuaded that evidence of the first defendant’s sexual offending (beyond the mere fact that he pleaded guilty, was convicted, imprisoned and unsuccessfully appealed against sentence) had potential relevance to at least some of the claims brought by the plaintiffs. I accepted the submissions put by Senior Counsel for the plaintiffs in that regard. As to the cross-examination of the first defendant as to his sexual offending against Z I also accepted that it had potential relevance in relation to the temporal aspect of the offending, coinciding as it did with the discussions as to the new family business. While I do not accept (as I explain when dealing with the credibility of the first defendant) that the fact or nature of the first defendant’s offending goes to his credibility as a witness in relation to the meetings that took place in 2002, I do accept that the evidence to which objection was taken is of relevance insofar as it explains what might otherwise have been considered to be conduct of the sons after 2009 that was inconsistent with the alleged agreement/expectation. This is highlighted by the submission made at one stage for the first defendant to the effect that the conduct of the off-farm investments provided a “handbrake” on reliance on the alleged or assumed state of affairs “because [the sons have] gone off and conducted themselves in a different way entirely” – see T 699.35.-699.39 – so, too, might a submission potentially have been made as to the conduct of the family operations after 2009 (when the participation of B and C in relation to the farming business appears to have been reduced) and the plaintiffs point to the evidence of the sexual offending to counter any such suggestion.

60. [476]

    As to the first defendant’s suggestion that there was an “excess of evidence” and that this evidence was motivated by a desire to disparage him (from which it should be concluded that the motivation of the litigation was to “punish” him), I do not accept that the cross-examination of the first defendant in relation to his criminal conduct was in any way badgering or belittling; indeed I consider that it was done with solemnity and as much sensitivity as could be expected having regard to the unfortunate subject matter. It was disparaging of the first defendant only in the sense that the first defendant was being asked to accept that his conduct had been and would be regarded by society as unacceptable (and, indeed, the first defendant did accept that - agreeing that had another grandfather done what he did to his granddaughters he would have regarded it as unacceptable and would have expected it to be punished – “depending on the severity” of the actions – see T 952-953).

61. [477]

    Any visible discomfort I observed on the part of the first defendant in the course of cross-examination related not to the questioning about his sexual offending but followed questions about his evidence that the new family business structure in 2002 was an experimental venture and the secret condition he attached in his own mind in that regard (namely, that the sons would inherit the farms only if they made a success of the venture – which he accepted was not conveyed to them at the time) – see T 800-801 (at which point I considered a short adjournment was warranted). To my observation, the first defendant seemed more agitated at it being intimated that he was a liar (see T 1030) than at the questions as to the offences for which he had been convicted (or, for that matter, as to those additional offences admitted by him in the witness box), about which he maintained his view that he had been accused of, and had pleaded guilty to, offences that he did not commit; that “sexual interfering” was others’ word for it, not his; that there had been a gross overreaction on the part of his sons; that what he did was minor and caused his granddaughters no harm; that they had been more traumatised by their parents’ reaction to it than by his conduct; and that in time they might come to apologise to him for the fact that he went to gaol.

62. [478]

    The cross-examination as to the first defendant’s offences was taken in closed Court (with only the sons, and the parties’ legal representatives and Court officers involved in the case, present in Court) and I have made orders prohibiting the publication in Australia of the names of X, Y and Z or any material likely to identify them (which necessarily also serves to anonymise the first defendant himself). This was not a jury trial. Any judicial officer hearing evidence of such offences must, in accordance with his or her judicial oath, consider that evidence with objectivity and impartiality. The first defendant did not suggest that I would do otherwise if the evidence were to be admitted. Cases such as these are not, and certainly should not be, determined by idiosyncratic notions of fairness; nor by any sympathy that might be felt for one or more of the parties or (where it would most obviously be reposed in cases of child sexual offences) for the victims of the admitted crimes. This is, as I said at the outset, an unfortunate case of a breakdown in a family relationship obviously caused by criminal conduct within the family and in that regard I have sympathy for all the family members. Sadly, such cases are by no means uncommon in the criminal jurisdiction of this Court. But that does not mean that justice is here to be (or will be) dispensed under the proverbial palm tree.

63. [479]

    I will turn in due course to the submissions made as to the first defendant’s credibility as a witness (see [635] below). Suffice it at this stage (as noted above) to say that I do not accept that the first defendant’s credibility as a witness in this case was “tainted” by evidence of his previous crimes. (That said, nor do I accept the first defendant’s submission that his credibility is in some way bolstered by his admissions as to the crimes for which he was convicted or the like crimes against Z.)

64. [480]

    As to the second recurring evidentiary dispute - the objections raised in relation to assertions by the sons in their affidavits that parts of the first defendant’s affidavit evidence were untrue - those were not ultimately pressed on the basis that all that was intended by that evidence was to assert a denial in respect of those matters.

65. [481]

    As to the third recurring evidentiary dispute - objections to the conclusory nature in which various of the conversations or discussions at the meetings were recounted - the first defendant argued that the material to which objection was taken was not of the substance or effect of what was said but instead it was the witness’ conclusion as to the effect of this conversation and hence not admissible (referring to the third form of evidence of conversations referred to by Besanko J in Hamilton-Smith v George [2006] FCA 1551 at [79]). Examples illustrative of this kind of objection were given of the following paragraphs in the 2 April 2015 affidavits of each of the sons: A at [157], [158], [189] and [199]; B at [207]; [212]; [220] and [221]; C at [96]; [101] and [103].

66. [482]

    The plaintiffs argued that all of the objections on this ground either fell within the second ground identified by Besanko J in Hamilton-Smith, and were admissible as evidence of fact, or within the third ground and admissible by reference to s 78 of the Evidence Act as a statement of opinion (pointing, among other authorities, to what was said by Finkelstein J, with whom Jacobsen and Besanko JJ agreed in La Trobe Capital & Mortgage Corp Ltd v Hay Property Consultants Pty Ltd (2011) 190 FCR 299 at [43]-[46]; [2011] FCAFC 4, White J, as his Honour then was, in Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 at [16]-[17]; and Besanko J in ACCC v Yazaki Corporation (No 2) [2015] FCA 1304 at [59]; 332 ALR 396).

67. [483]

    Some of the paragraphs to which objection was taken I admitted (subject to relevance and weight) as the witness’ understanding of what was discussed; in some instances giving leave to clarify the basis of a witness’ asserted understanding. I do not propose to set out those rulings (which appear on the transcript). Nor do I propose to revisit them at length in what is already (and inevitably to become longer) a lengthy judgment.

68. [484]

    I do not draw an inference (as it was suggested by the first defendant that I was being asked to do) from the fact that one or other of the sons had a particular understanding that a topic was discussed at a meeting, that something that they believe was said or that occurred at the meeting in fact happened. I accept that there is a need for caution where there is a risk of evidence being no more than a reconstruction (here, from B’s notes) as to what was said or done some 15 years ago, particularly when the parties’ evidence of the discussions is so closely tied to the content of the notes and is couched largely in terms of the witness’ understanding or belief of the outcome of the discussions.

69. [485]

    Nevertheless, there are some independent contemporaneous documents which shed light on what was being discussed all those years ago: in particular, the timesheets and invoices of the professional advisers; communications from those advisers, such as the letter from Solicitor No 1 at the time of the acquisition of Property No 9 (which points to the first defendant having given consideration to its acquisition by a corporate vehicle); the unsigned Aitken letter (which points to the accounting advisers – most likely Accountant No 1, he having been at the meetings – having understood from the relevant meetings and discussions) that what was being considered was in the nature of succession planning on the part of the first defendant). There are also contemporaneous documents pointing to the consideration being given as to the potential structures for the new family business venture, such as the the Local Accounting Firm’s file note of 3 September 2003 (which refers to the sons having given consideration to making a particular acquisition through a partnership) and the various group structure diagrams in evidence. The assessment of the witness’ affidavit evidence is to be made having regard to all of the evidence. Ultimately, from my point of view the most critical evidence of the existence of an expectation along the lines pleaded by the plaintiffs was the first defendant’s own evidence in the witness box of his awareness of the expectation held by his sons when they entered into the new family business structure.

70. [486]

    As to the fourth category of objection (going to statements of the witness’ understanding or belief), in general where objection was taken on this basis I read those parts of the affidavits as evidence of the particular witness’ state of mind or belief (subject to relevance and/or subject to weight). Again, in various instances I indicated that I would give leave for evidence to be adduced in chief to clarify certain matters. In the end, the question was one as to the weight to be given to the evidence.

Evidence at trial

1. [487]

   In the plaintiffs’ case, as adverted to earlier, voluminous affidavit evidence was filed by the sons each of whom was cross-examined over the space of seven days, the bulk of the cross-examination being directed at B (over around two and half days). The plaintiffs also filed affidavit evidence from Mr Beattie, the status of that evidence being a matter of some contention due to the fact that he was not ultimately made available for cross-examination, and from the solicitor who had drafted the caveats lodged on the titles to the properties shortly before commencement of the proceedings (Mr Andrew Eager) who was briefly cross-examined on his affidavits. They also filed an affidavit from a former employee of the first defendant (Farm Worker No 1), largely to show his career trajectory after he left the first defendant’s employment but also to respond to suggestions of poor management of the farms by A.

2. [488]

   The first defendant gave evidence himself (and was cross-examined over about three days) and called evidence from his two accounting advisers at the relevant times (Accountant No 1 and Accountant No 2) as well as from his former employee (and a beneficiary under his current and earlier wills), Farm Worker No 2. The second defendant as already noted, did not give any evidence in the proceedings.

3. [489]

   Both sides submitted that adverse Jones v Dunkel (a reference to (1959) 101 CLR 298; [1959] HCA 8) or Ferrcom inferences should be drawn in relation to witnesses not called or made available for cross-examination by the other or with whom particular topics of evidence were not explored (in particular, the first defendant points to the fact that the plaintiffs did not call evidence from Solicitor No 2 and did not make Mr Beattie available for cross-examination; the plaintiffs point to the fact that the second defendant did not give evidence at all and that certain matters were not dealt with in the evidence of Accountant No 2). The plaintiffs also contend that, having regard to various propositions not put to one or more of the sons, certain submissions are not open to be made by the first defendant (such as the submission made as to “recent invention” in respect of the claims now brought).

4. [490]

   I propose here to do no more than summarise the ambit of the affidavit evidence from the relevant witnesses with reference to some matters admitted in cross-examination and to various of the submissions made about that evidence.

5. [491]

   The affidavit evidence of the sons (in particular their lengthy 2015 affidavits as supplemented by later affidavits responding to matters raised in the first defendant’s affidavit evidence) recounts matters as to the family history, conversations and events prior to 2002 and then, largely by reference to the notes made by B at or about the time of the various meetings, their understanding or belief as to what (in substance or in general terms) was discussed at the critical meetings of 18 and 25 September 2002, what they believed or understood was the outcome of those meetings, and what they then did (in relation to E Co or otherwise) pursuant to what they allege was the agreement reached in those meetings and/or in reliance on the expectation they say they had as a result of those meetings.

6. [492]

   The plaintiffs submit that the sons’ evidence is clear about certain central details – including that, at the meeting of 18 September 2002, and into the meeting of 25 September 2002, there was one single, logical, coherent proposal presented by Accountant No 1 being considered by the four family members and that that proposal involved: the transfer of all of the first defendant’s commercial assets (including the farms) into the E Unit Trust; that E Co would run the farming business; and that the farms would also be available as security for off-farm investments. They maintain that their evidence is also clear as to that single proposal having been set aside during the meeting of 25 September 2002 due to concerns about capital gains tax and asset protection but that while the proposal changed so that the first defendant would continue to own the farms and transfer of title would not occur until the first defendant’s death, no other aspect of the proposal had changed (i.e., the farms would still be available for the family business in both its farming and off-farm manifestations during the first defendant’s lifetime). The sons say that the purpose of the new family business was not just so that they could work together with their father in one business, but that it was also a plan for the first defendant to implement a succession plan through intergenerational transfer of his wealth to his sons for the benefit of them and their families.

7. [493]

   There was much criticism by the first defendant of the adequacy of the sons’ affidavit evidence (and of the proposition that express statements can be inferred from the existence of a belief on the part of one or more of the sons that something had been agreed; see the particulars to [66(d)] as to the 18 September 2002 expectation, at CB Tab 2 p 15 point (3)). The first defendant emphasises that in the sons’ evidence as to the September 2002 meetings (see A at [154]-[158]; [197]-[200]; B at [173]-[176], [207]-[221]; C at [86]-[96]; [101-[105]) either no or very few words are there attributed to the first defendant. The first defendant submits that B’s notes cannot be taken to be an accurate record and that they are open to interpretation (in particular, referring to the word “assets” in B’s notes in relation to the 18 and 25 September 2002 meetings). The first defendant argues that, insofar as the sons give evidence of an understanding by reference to a summary of B’s notes, this is not probative of what occurred.

8. [494]

   The plaintiffs submit that, even though they cannot point to specific statements made by the first defendant during the September meetings, the conduct of the first defendant in: allowing his advisers to present proposals to him and his sons; proceeding to sign documents such as those for the incorporation of E Co and to allow E Co take over the business on 1 July 2003; and providing the farms as security for other investments, without making an objection to the course being pursued; amounted to an adoption by the first defendant of the statements made by Accountant No 1 and Solicitor No 2 (and later by Accountant No 2) and constituted ample demonstration of the encouragement of the pleaded expectations.

9. [495]

   The plaintiffs accept that there were errors in some of the affidavit evidence, including, for example, B’s evidence that Accountant No 2 was present at the 18 September 2002 meeting and his assumption that the unsigned Aitken letter had in fact been sent, but they say these do not affect the general reliability of the evidence.

10. [496]

    The plaintiffs place emphasis on two documents that they identify as being the most significant contemporaneous documents: the letter dated 9 September 2002 from Solicitor No 1 (which evidences that the first defendant had an intention at one stage for Property No 9 to be bought in the name of a company) (see [152] above) and the unsigned Aitken letter (which refers to succession planning) (see [204] above). It is noted that Accountant No 2 (who gave evidence about the latter) did not explain what was in his mind when he used the expression “succession planning” and that the drawing of a Ferrcom inference against the first defendant in respect of this letter is compelling because of Accountant No 2’s evidence that his affidavits were drawn with the assistance of the second defendant and the defendants’ counsel, who knew the issues in the case. (As noted earlier, the plaintiffs also point out that the second defendant has not given evidence to explain the circumstances in which the evidence of Accountants No’s 1 and 2 was obtained which might contradict the natural inferences to be drawn regarding joint conferencing, incomplete presentation of contemporaneous documents to the witnesses “whose recollection outside those documents is essentially nil” and the topics upon which they would give evidence in chief in support of the first defendant’s case.)

11. [497]

    The sons were cross-examined on various matters going to their reliance on B’s notes and as to their understanding or belief as to the position in relation to ownership of the farms, their alleged reliance on the pleaded expectations, to the “off-farm investments”, and their current financial position. I turn in due course to the criticisms made of their evidence. Broadly speaking, however, the first defendant’s position is that the son’s evidence is unreliable and amounts to no more than a reconstruction of events.

12. [498]

    Mr Beattie’s affidavit evidence may be summarised as follows. It was not challenged by the first defendant (though the first defendant maintains an adverse Jones v Dunkel inference should be drawn against the plaintiffs from the fact that he was not made available for cross-examination).

13. [499]

    As to the first of his two affidavits, Mr Beattie there gave evidence of the advice he gave in the 22 August 2013 meeting as to two matters, the preparation of the Westpac Deed and the sale of certain of the farms.

14. [500]

    As to the preparation of the Westpac Deed, Mr Beattie believes that his instructions were provided by C and B. His recollection of those instructions is that: B was in a partnership which owned two hotels; that B had negotiated the refinance of the loan facilities which had funded the purchase of one or other of the hotels, from NAB to St George; that two farming properties were to be part of the security provided to St George; that the first defendant was the registered proprietor of the two farming properties; that the first defendant’s attorney, the second defendant, had requested that the sons enter into the Westpac Deed with the first defendant to govern the terms on which the first defendant would allow the two farming properties to be made available to St George as security for the loan funds. Mr Beattie’s recollection is that the preparation of the Westpac Deed was urgent.

15. [501]

    Mr Beattie deposes that he did not make any particular enquiries of B and C as to the circumstances surrounding the matter; in particular, he did not make any enquiries of either B or C as to the circumstances surrounding the ownership of the two farming properties being made available to St George as security for the loan funds other than to confirm that the first defendant was the registered proprietor of each property.

16. [502]

    As to the sale of certain of the farms, Mr Beattie gives evidence as to the instructions he was given in respect of the proposed sale of certain farming properties. Those included that the first defendant was the registered proprietor of the properties comprising the Main/7 Aggregation and the 3/6 Aggregation and Properties 8, 9, 10 and 11; that A and his family continued to live in the homestead at Property No 4; that E Co leased the farming properties from the first defendant for the conduct of a cattle grazing business on the farmland and had been making regular payments to the first defendant under the terms of the lease. Mr Beattie notes that he was never provided with a copy of the lease. Mr Beattie’s recollection is that he was given instructions that the sons had been informed that the first defendant intended to sell the farming properties and that a notice to quit had been served on E Co, which was due to expire on 31 December 2013.

17. [503]

    Mr Beattie’s evidence is that he did not ask for, and was not given, any instructions by the sons as to the circumstances surrounding the incorporation of E Co or the formation of any business between the sons and their father. His evidence is that he did not ask for, and was not given, any instructions about any legal or accounting advice that was given to the sons and their father as to the structure of a family business between them, and issues such as asset protection and capital gains tax.

18. [504]

    Mr Beattie says he further advised that it would be necessary to give consideration to what plant and equipment should be included in the sale of each property as an inclusion; and whether such plant and equipment was owned by the first defendant, E Co or some other entity; and there would have to be a clearance sale of any assets not included in the sale of the properties. He says he also advised that if B wanted the re-financing of the hotels to proceed, then it would be necessary for the sons to enter into a Deed with the first defendant in the terms required by the second defendant.

19. [505]

    Mr Beattie’s evidence is that he further advised that, given the position of the sons and E Co in respect of the farming properties, the prospects of a beneficial resolution of the dispute would most likely come from entering into a negotiation with the first and second defendants to reach a commercial resolution to the dispute, in particular with the aims of: securing the retention of the 3/6 Aggregation for A’s family to live on and to continue the cattle breeding business if they wished to do so; managing the sale of the various farming properties to ensure that the cattle herd could be appropriately accommodated on the farming properties until the end of May 2014; working with the first and second defendants, and the real estate agents, to ensure that the highest sale price was obtained for each property; and negotiating with the first and second defendants for the transfer of the first defendant’s shares in E Co to the sons so that they could continue to conduct the company with the first defendant’s involvement if they so wished.

20. [506]

    Mr Beattie’s evidence is that he did not provide any advice to the sons as to any equitable rights or claims that they may have had against the first defendant; nor did he advise the sons as to any equitable rights or claims that E Co may have had against the first defendant. Mr Beattie did not think, on the basis of the instructions with which he had been provided, any such advice was relevant to the sons.

21. [507]

    There was no reference in Mr Beattie’s first affidavit to the preparation by him of a draft option agreement in relation to the first defendant’s farms nor as to the wills he had earlier drafted the sons.

22. [508]

    As to his second affidavit, Mr Beattie there deposed that the sons came to him in early 2010 seeking advice about obtaining a transfer of farms to them from the first defendant. Mr Beattie recalls that they told him that: the first defendant had committed sexual assault against B’s daughters; the first defendant had agreed to leave and to transfer his property to them, apart from Property No 8 which was to be sold so that he would have money to live off; and that the first defendant had told them that they would be inheriting the properties and that his will recorded this (see his second affidavit at [10]).

23. [509]

    Mr Beattie recalls advising the sons that: an intergenerational transfer of rural property from parents to children did not attract stamp duty; there could be a capital gains tax obstacle to a simple transfer of land; and that, if the first defendant agreed to transfer the land in an option agreement, capital gains tax would not be incurred until such time as the option was exercised.

24. [510]

    Mr Beattie’s evidence is that he was aware that there was in existence a lease of the farms from the first defendant to the plaintiffs but he was not aware of any improvements carried out on the farms by the plaintiffs. Mr Beattie’s evidence (his second affidavit at [11]) is that he did not consider, or give advice about, any estoppels or constructive trust. Other than the above, Mr Beattie deposed that he has little or no independent recollection of the matters pertaining to this file, including conversations, outside of his file notes and documents.

25. [511]

    Mr Beattie’s files, as produced on subpoena, are in evidence in the plaintiffs’ case (Exhibit AK) and parts were included in the first defendant’s tender bundle (CB Vol 2 Tab 3). The significance attributed by the first defendant to the files of Mr Beattie is that he says it is clear from those files that no instructions were given to Mr Beattie by any of the sons of the nature now being asserted to support the plaintiffs’ case (by which I understand the first defendant to be referring to the allegation of a beneficial interest held by the sons in the properties prior to their father’s dealings) and that there were numerous opportunities for such instructions to be given over a 10 year period if the position was as the plaintiffs now maintain it to be.

26. [512]

    The plaintiffs say that Mr Beattie’s evidence as to the instructions he received, and the advice he gave (both in March 2010 and August 2013) is wholly consistent with the evidence given by each of the sons on that issue. The plaintiffs note that each of the sons was cross-examined on the basis that Mr Beattie had given him advice to the effect described by Mr Beattie in March 2010 and again in August 2013.

27. [513]

    The first defendant submits that Mr Beattie’s first, 10 February 2016, affidavit was “obviously less than fulsome” as to Mr Beattie’s knowledge of the sons’ affairs; and says that the second, 8 August 2017, affidavit similarly omits a range of matters on which Mr Beattie advised the plaintiffs, and thus is silent also on what instructions he may have received in connection with those matters.

28. [514]

    The first defendant points out that the first affidavit of Mr Beattie made no reference to the lengthy period of time for which Mr Beattie had acted for the plaintiffs. It is said that an objective reader of the first affidavit would be none the wiser than to think that the sons had walked into Mr Beattie’s office for the first time in 2013. As to the second affidavit the first defendant notes that the range of matters on which Mr Beattie advised the sons over the ten years in question touched on and expressly related to their entitlement to any interest in the land. The first defendant emphasises that, for a period of some ten years, the plaintiffs gave no instructions of the character of what is now alleged in the second further amended statement of claim (again, as I understand it, here referring largely if not wholly to the ownership/trust claims) and submits that it should be concluded that those matters alleged never happened.

29. [515]

    I deal shortly with the question whether any adverse inference should be drawn from the fact that Mr Beattie was not made available for cross-examination.

30. [516]

    As already adverted to, Mr Eager’s evidence was limited to annexing copies of the title searches and his account of the instructions given in relation to the lodging of the caveats over the properties. He was cross-examined briefly. Nothing turns on his evidence in chief or in cross-examination.

31. [517]

    The remaining affidavit evidence in the plaintiffs’ case comprised an affidavit from a former farm employee (Farm Worker No 1) whose evidence was relied upon in substance to show what A’s financial position might have been had he chosen to pursue his own course in 2002, rather than entering into the business of E Co, and to respond to criticisms of the management of the farms.

32. [518]

    As to the former, I admitted his affidavit over the first defendant’s objection but subject to relevance. Farm Worker No 1 was not required for cross-examination. His evidence was in my opinion of little assistance. As to the evidence of his career, to test it by way of a no doubt inapt analogy, one need only point to the situation of two solicitors joining the same law firm, or two barristers joining the same set of chambers, at the same stage in their respective legal careers. The success or otherwise, in terms of his or her career path, of one of the two (be he or she a solicitor or barrister) over the years is hardly a reliable pointer to what the success of the other might have been had he or she continued in that same career path rather than, say, joining a family company or family law firm. As to the management of the farms, the complaints made by the first defendant were general and were largely not put to the sons in cross-examination. This was not relied upon as a reason for termination of the Agreement for Lease at the time the notice was given and for the first defendant it is maintained that no reason was necessary. Thus I do not propose to say anything further about Farm Worker No 1’s evidence.

33. [519]

    The first defendant swore two affidavits in the proceedings. He corrected various matters in the sons’ affidavits and set out in tabular form in his first affidavit his response to various of the conversations of which his sons had given evidence (at [70]) and his recollection of the various meetings to which one or more of his sons had referred (see [73]). For the most part he did not recall the discussions at the various meetings he attended and in a number of instances did not recall attending the meetings themselves. He was nevertheless firm in his evidence that his intention was not at any time to “hand over” the farms to his sons. Some of his affidavit evidence (such as the reason for the rent relief afforded to E Co from 2008; and that the money spent by A on renovations to Property No 4 would be treated as a loan to him), he conceded in cross-examination was incorrect.

34. [520]

    The plaintiffs emphasise that various of the matters the subject of the plaintiffs’ evidence in chief were the subject of at least partial admissions in the first defendant’s affidavits in chief or not challenged by him in his affidavits; including as to statements by him from time to time as to the moving of his money out of Sydney; the making of occasional statements in an off-hand or joking manner when his children were younger in respect of his estate; that it was always his intention, up to 2002, to leave his property to be sold and equally divided between his sons; and that, once the handover of the business to E Co occurred, he spent his time at Property No 8, apart from residing at the Main Property.

35. [521]

    The plaintiffs also rely upon concessions that they say were made by the first defendant during his cross-examination as to various matters. These concessions (omitting the concessions they identify as having been made by the first defendant as to his sexual offending) were identified by the plaintiffs in respect of particular subject matters as follows.

36. [522]

    As to the position before 2002, the plaintiffs say that the first defendant accepted that: at all times from 1984 to 30 May 2012, it was his intention to leave his estate (including his farms) to his sons in equal shares, apart from some specific bequests; the rationale for incurring expenditure which exceeded his income from the primary production business was to offset the loss against the income from the Sydney Family Trust; he treated Property No 4 as A’s home; he never suggested to A at any time that there was a risk of A being evicted from his home; his evidence (at [64] of his affidavit affirmed 2 November 2015) in relation to the 2003 renovation of Property No 4 was incorrect where he said that he “would then regard the money so spent as a loan to [the first defendant] repayable on [the first defendant’s] death or on the sale of [Property No 4] if that occurred prior to [his] death”; and that before E Co took over, A did the day-to-day work of managing the farms.

37. [523]

    As to the various meetings, the plaintiffs note that the first defendant agreed in cross-examination: that he was now unable to offer anything further in respect of the meetings that he said in his affidavit he could not recall; that, from about June 2002, he wanted to accommodate his sons with their different skills in a business together; that from about June 2002, he started having discussions with his accountant, Accountant No 1, about a business structure to accommodate each of his sons; and that from at least July 2002, he knew that C had an interest in purchasing a bottle shop and, if C had asked for help regarding the purchase of a bottle shop, he would have given it (saying that C did not ask for that help). They point to the first defendant’s acceptance that: from about late 2002 to August 2003, he was offering to provide finance for the purchase of a hotel; A had expressed interest in purchasing Property No 9 for himself; and that, in 2002, he was “looking to expand” and had in excess of $14 million available to do so and he was looking for his sons to be set up in a business structure to provide for their future and for their families. They also point to the following matters which the first defendant accepted in cross-examination: that, during the discussions in 2002, he knew that each of his sons understood, first, that his intention was that they would inherit his estate in equal shares and, second, that his (the first defendant’s) intention was that the family business would make “off-farm” investments; that he signed a number of documents setting up E Co, E Unit Trust and his personal family trust; and that, from 25 September 2002, he had agreed with his sons that the grazing business would be transferred to E Co, that he would make the farms available as security for off-farm investments, and that he would move money out of Sydney into the farms to assist the new business.

38. [524]

    In particular, in respect of the meeting of 25 September 2002, the plaintiffs point to the first defendant’s acceptance that: his intention was to hold the farms for his sons for their future, and to leave the farms to his sons in his will; that at that time the first defendant’s belief was that each of his three sons knew they were going to inherit from him; that Solicitor No 2 attended the meeting to give legal advice to the first defendant and his sons; that Solicitor No 2 “could” have given legal advice at the meeting to the effect that, rather than using the E Unit Trust Structure, the first defendant should hold the farms for his sons and leave them to his sons under his will; and that if Solicitor No 2 had given advice to that effect, that advice would have been wholly consistent with the first defendant’s intention for his sons going forward and the first defendant would have agreed with the advice at the time. The plaintiffs note that the first defendant accepted that he does not suggest that he did not act in accordance with Solicitor No 2’s advice; and that he does not suggest that his sons did not act in accordance with Solicitor No 2’s advice. They point to his acceptance of the proposition that he had agreed with his sons: to transfer his grazing business to E Co; that he would make the farms available as security for off-farm investments; and that he would move money out of Sydney into the farms to assist the new business. (I interpose to note that the first defendant’s evidence did not go so far as to amount to an acceptance that he did in fact act in accordance with Solicitor No 2’s advice; nor did the first defendant ever move away in cross-examination from his affidavit evidence to the effect that he did not at any time intend to hand over the farms to his sons.)

39. [525]

    The plaintiffs note that the first defendant accepted that, from 25 September 2002: he did move money out of Sydney to put into the business and did put money into the farms by causing capital improvements to be made; he knew as at 25 September 2002 that his sons, in going into the new business with him, had made life changing decisions; his intention was that as time went on he would retire to Property No 8; his intention was that as time went on his sons would have the benefit of the farming business conducted on the farms and would obtain the benefit of making off-farm investments for which the farms would be used as security; and he knew that the life changing decisions made by his sons were made on the basis that they would be involved in the farming business with the first defendant for the long term (which he knew his sons understood to mean until he passed away).

40. [526]

    The plaintiffs further note that the first defendant accepted that he did not ever say to his sons or to anyone else that the business was “experimental” or subject to a reservation that he would only continue to support the business if he thought his sons were making a success of the business; in the period from 25 September 2002 until he was imprisoned on 6 July 2012, the first defendant did not ever tell his sons that they were not making a success of the business or that they were ever at risk of him preventing the business from being conducted on the farms; that in the relevant period between 25 September 2002 and 6 July 2012, he knew that his sons had given up their time to work in the family business in the expectation that the farms would be theirs on his death; that, as at 25 September 2002, he did not have any need for money himself; that he moved money out of Sydney by making capital improvements on the farms and by providing money to E Co for the farms; that, in advancing money to E Co, he was seeking to assist the new family business and that that was part of what had been agreed back in 2002; that between October 2006 and the early part of 2009, he was supportive of his sons looking for off-farm investments; that he was prepared to support his sons by making the farms available by way of security for such investments; that he did not expect anything in return from the off-farm investments; that he did not expect any benefit in return from the “W” investment; that he did not expect, as at September 2011, to obtain any benefit from making the farms available to support the purchase of the C Hotel; that he did not expect any benefit from E Co; and that he did not expect any benefit from EM Co.

41. [527]

    As to the first defendant’s claims in debt, the plaintiffs point to the first defendant’s acceptance that: he never expected anything from his sons in return for the gifts that he gave them; a number of the amounts recorded as loans in his financial statements were in fact gifts, or could not be explained by him; non-repayable gifts made by him to his sons were recorded as loans at call in his financial statements but he never intended that these gifts would ever be repaid; his financial statements were incorrect in describing gifts as loans at call; gifts provided to his sons were recorded as loans in his financial statements in order to keep track of how moneys had been disbursed during each financial year; a person looking at his financial statements could not rely on any matter recorded within them, in the financial years 30 June 2002 to 30 June 2014 inclusive, on the fact of a description attached to an item as a loan at call; as at 1 July 2003, he knew that his sons were proceeding with the new family business in the expectation that the farms, and the cattle grazing business, would all come to the plaintiffs once he passed away; as at 1 July 2003, he knew that his sons’ understanding at the time of the transfer of the cattle at book value to E Co was that they would not have to pay any moneys in respect of that transfer before his death; nowhere in his affidavits did he give evidence to suggest that there was a conversation with his son that moneys recorded as loans in his financial statements were to be repaid; he never said to any of his sons that the moneys he provided to E Co were loans; in respect of moneys provided to E Co, he never asked for the payment of interest; prior to the commencement of the proceedings, he had never made a demand for payment of any moneys from E Co; and in the period from December 2011 to the commencement of the proceedings, he had never made any complaint to B, orally or in writing, that he had not complied with the deed providing finance for the hotels.

42. [528]

    As to the Agreement for Lease, and the work on the farms by his sons and by E Co throughs it employees and contractors, the plaintiffs note that the first defendant accepted that: the intention was that the lease fee should not exceed the expenditure incurred on pasture development and capital improvement; at the time he entered into the lease agreement, it was not intended that he would benefit from the agreement in terms of monetary compensation; when improvements were made to the farms paid for by him, this was part of the plan to move money out of Sydney for the long-term benefit of his sons and their families; the lease agreement did not have an end date; there was no term in the lease about termination; he did not ever discuss termination of the lease with his sons; this was because the arrangement was that his sons would be running the cattle grazing business on the farms until he passed away (subject to his uncommunicated success condition); he encouraged the expectation in his sons that E Co would run the farming business until he passed away; he never gave the sons any indication that they would not obtain through E Co the benefit of the works they were carrying out at the farms; and that, two years in, E Co’s employees were undertaking all of the tasks previously undertaken by him and his employees for the primary production business, except for tasks done through contractors.

43. [529]

    As to the work on the farms, the plaintiffs note that the first defendant accepted that: after 1 July 2003, E Co employees would carry out building, repairs and maintenance of dams, laneways, stockyards, sheds, roads, tracks, cattle grids, fences, and also taking care of blackberries and weeds; in March 2003, A built the loading dock for the cattle yards at the Main Property; A was involved in the earthworks and cutting gravel; A also carried out work for the construction of the large machinery sheds at the Main Property and did other works at that property and Property No 4 using his dozer and other heavy equipment; extensive works at Property No 9 were undertaken to the fish farm; E Co had committed large amounts of time and money from 1 July 2003 to develop the fish farm, including by implementing a program to commercialise the 20 grow out ponds and installing some 45,000 m2 of bird predation netting; and providing labour and machinery to supply and direct cattle fencing; A undertook a range of earthworks at Property No 9; A’s heavy machinery was used to widen channels, undertake pond work, dig pits, grade the road, and do contouring pond work; that the contour water delivery system had to be extensively redesigned to use less water and that this was to control carp infestations in the excess water required to fill the ponds; that the purging shed at Property No 9 was enlarged to enable a more sophisticated biological purging system to be installed; from 2005, E Co improved the power supply to the farm and the first defendant funded parts of it; E Co improved water delivery to the ponds, constructed a new cool room and fish health testing laboratory, and installed a shed system in part to enable the counting and quarantining of fingerlings; A was involved in carrying out earthworks for the laying of a new concrete slab for the shed; in about August 2007, E Co purchased six 9000 L aquaculture tanks for Property No 9 and in 2008, E Co constructed an additional water supply channel on the property; during the period from the purchase of Property No 9 through until 30 June 2009, his sons and E Co employees carried out major works to the fish farm; E Co employees carried out all of the repairs and maintenance on the farms; he understood that improvements made to cottages, or homesteads, sheds (and extensions to sheds), fencing and dams were capital items that would depreciate over time; he encouraged his sons through E Co to undertake works at the farms; a tenant on a farm would not be required to: repair and maintain dams, assist in the installation of a new shed, build repair or maintain roads, install new stockyards, undertake earthworks, such as putting a slab in for the shed, or install new dams; and that, during the period from about October 2002 to 30 June 2009, he stood by and allowed E Co to undertake improvements to the various properties.

44. [530]

    The plaintiffs note that the first defendant also accepted that: following advice from Accountant No 2, in 2008 he extended a rent-free period to E Co by reason of the drought, which he had agreed with his sons, and that the statement that “[t]he fee was not paid and/or reduced because the personal plaintiff claimed that [E Co] could not afford to pay it” (in [57] of his affidavit affirmed 2 November 2015) was wrong; he did not demand payment of rent for the financial years ending 30 June 2008, 30 June 2009, 30 June 2010 and 30 June 2011; there was no basis for the claim for rent against E Co for the financial years ending 30 June 2008 to 30 June 2011 (inclusive); in late 2011, there was a renegotiation of the lease with E Co and a new lease fee of $100,000 per annum was struck; part of the agreement was that he would be responsible for paying rates and insurance; he did not pay insurance for the farms for the financial years ending 30 June 2014, 30 June 2015 or 30 June 2016; and that, for each of the financial years ending 30 June 2014, 2015 and 2016, E Co paid the insurance for the farms.

45. [531]

    As to the attempted sale of Properties No 11 and 12, the plaintiffs note that the first defendant accepted that: he could have had discussions with his sons about the marketing agreements he had entered into with a real estate agent (Mr Spilsbury) in 2007 and 2008 and was looking to buy an irrigation property; for reasons of access, and also having regard to the drought, he and his sons thought that those properties should be sold; he had had discussions with his sons, and they all agreed that the properties would be sold; and that, other than those properties, there were no other properties that were being marketed for sale in 2007 and 2008. It is noted that the first defendant accepted that his reasons for seeking to sell the properties had nothing to do with his holding an opinion that the farming venture was not proceeding well; and that everyone was “on the same page” that the sale of the properties was for the common purpose of the family company. I interpose to note that the first defendant did, however, make clear in re-examination that he treated all his properties as “unofficially” on the market as at the time he bought them – i.e., they were all for sale at the right price.

46. [532]

    As to the period following the first defendant’s incarceration, the plaintiffs point to the first defendant’s acceptance of the propositions that: if the farms were not made available to provide security for the refinance of the hotels, that this could put the ownership and operation of the hotels at risk; he knew this at the time he took steps following 12 June 2013 to require B and his brothers to enter into the Westpac Deed (whereby they would arrange a refinance for the Main/7 Aggregation properties within six months) and he regarded this as their problem; as at 22 August 2013, what he was seeking to do was to ensure that his sons would get absolutely nothing out of the farms; nowhere in his affidavits did he provide an explanation as to why he had disinherited his sons; prior to the decision of the Court of Criminal Appeal on 12 June 2013, he had not “firmed” in his intention to sell his grazing properties and it was only after the Court’s decision on 12 June 2013 that he made a decision to sell the properties; and that he had never expressed to his sons that he had been concerned with the way the properties were being managed and maintained.

47. [533]

    As I have said more than once in these reasons, the evidence that in my opinion was critical in the case was the first defendant’s acceptance (having regard to his answers to a whole series of questions, framed in various ways, as to his intentions and his awareness of his son’s expectations) that he was aware that his sons had what I consider to be the critical understanding or expectation, namely that their father would make his farms available (i.e., “hold” the farms) during his lifetime for the conduct of the family grazing business to be thenceforth operated by the sons through E Co; that he would make money available (out of Sydney i.e., out of the funds available to him from the Sydney Family Trust) to assist the company and transfer most of his cattle to the company at book value without requiring repayment or payment during his lifetime; and that the properties would be “there” and pass to his sons on his death.

48. [534]

    In that sense, the expectation was thus that the properties would be retained or “held onto” for the purposes of the business during his lifetime. I accept the plaintiffs’ submission that it is implausible that the first defendant would have had this knowledge or awareness without having in some fashion either encouraged or created that understanding or expectation. He certainly acquiesced in that understanding or expectation, in that he allowed the sons to join in the family business having that expectation, without communicating to them the secret condition to which he maintains it was subject.

49. [535]

    The affidavit evidence was adduced by the first defendant from each of Accountant No 1 and Accountant No 2 is largely limited Accountant No 1’s case to what he believes in accordance with his then general practice it is likely he would have advised. In Accountant No 2’s case its largely limited to his review of time sheets or other records to their recollection (if any) of particular meetings.

50. [536]

    Insofar as those witnesses were called but not questioned on particular topics in issue in the proceedings (more relevant in this case to Accountant No 2 than Accountant No 1 – see below) the plaintiffs invoke Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 for the proposition that where a party called, but did not question, a witness in relation to an issue the Court will be less likely to draw inferences favourable to the party from the other evidence in relation to that issue.

51. [537]

    Accountant No 1 is a former principal of accounting firm the Local Accounting Firm (and for a short time, the National Accounting Firm). From the mid-1990s to 2003, he provided accounting services to the first defendant. He resigned from the Local Accounting Firm with effect from 30 June 2012 (T 1202) and has since operated his own consulting practice (Intuit Advisory), providing business advisory services (T 1202). His evidence was that he has not been in contact with the first defendant since he left the Local Accounting Firm.

52. [538]

    In April 2014, Accountant No 1 first became aware that there might be litigation between the first defendant and his sons (T 1202). At about that time, as I will explain in more detail later, Accountant No 1 met and/or had conversations with Accountant No 2 in which it appears they discussed their recollection of events relating to the initial set-up of the new business structure. Later, in 2015, apparently in the course of preparation by the second defendant of evidence in response to the plaintiffs’ affidavits, Accountant No 1 was called into a joint conference with the second defendant and Accountant No 2.

53. [539]

    When it came to preparation in 2017 of Accountant No 1’s affidavit in these proceedings, Accountant No 1 was shown certain documents by the first defendant’s legal representatives. Those documents did not include his timesheets (T 1206); nor did Accountant No 1 have a complete copy of the sons’ affidavits. He was shown particular paragraphs in B’s affidavit and asked to respond thereto (T 1207). In cross-examination he described the process by which his affidavit was drafted, in essence as one in which he was interviewed by the first defendant’s legal representatives (over the course of some eight or nine hours – T 1264); he was asked questions and provided answers; the draft affidavit was then typed up by one of the barristers; he then reviewed it and said what changes he wanted made (see T 1207). Not surprisingly, therefore, the structure of the affidavit (and the issues there addressed) was dependent on the input of the legal representatives and its completeness (in terms of addressing the matters of which it might be expected Accountant No 1 could shed light upon) dependent on what questions Accountant No 1 was asked and what documents he was shown. As the plaintiffs emphasise, he was not shown all relevant documents for the purpose of that exercise (in particular, the Local Accounting Firm’s timesheets).

54. [540]

    Accountant No 1 recalled that there had been meetings in September 2002 but he did not have a clear recollection of who attended each of those meetings or what was discussed. Asked in cross-examination about the various meetings, Accountant No 1 did not doubt that he had discussed capital gains tax with the first defendant, A and B at the 18 September meeting (T 1238). He accepted that no capital gains tax issue would arise in relation to cash as an asset, trading livestock, plant and equipment, or personnel (T 1239). He accepted that a reference to capital gains tax (in B’s notes) may have related to land but could not say “absolutely” how it did (T 1240). By default, he accepted that there must have been a structure that assets were to be held by a unit trust (T 1240). He agreed the likelihood was that the only capital asset being discussed was land (T 1240). Accountant No 1 also agreed the likelihood was that there was a discussion about issues in relation to wills (T 1241). He did not doubt that he had handed out, at the meeting on 25 September 2002, the 25/9 structure diagram or a version of it (T 1243).

55. [541]

    Accountant No 1 agreed that his affidavit conveyed the impression that all that happened on 18 September 2002 was that documents were signed and he accepted, by reference to the timesheets he was shown in the witness box that the timesheets indicated that other matters were discussed at that meeting (T 1245).

56. [542]

    Accountant No 1 accepted that by 18 September 2002 there was a “skeleton” structure (T 1252), not a myriad of different structures then being considered (T 1252/1253). He said that the structure that was “there” at 18 September 2002 was a “starting point” (T 1255) to which bits and pieces might later be added.

57. [543]

    Accountant No 1 was firm in his evidence that it was highly unlikely that he would advise a client to transfer assets unless there was compelling reason to do so (see T 1261) and says he was not aware of one. His explanation for this was that it was common, in a prime production structure, not to hold the land and the operating assets in the same entity (T 1265).

58. [544]

    In cross-examination, Accountant No 1 accepted that the statement in his affidavit (at [25]) (that was not read by the first defendant following objection by the plaintiffs and so to this extent was read back in in cross-examination) to the effect that what happened after the September meetings was not consistent with any final decision having been made could equally be expressed as being that what happened was inconclusive as to whether or not any final decision had been made (see T 1249/1250), which as I understood his evidence casts a somewhat different and less definitive emphasis. Accountant No 1 did not recall any work being taken following the meeting but accepted that it could be the case that there was no need for it – he accepted that an experienced accountant could, for example, be in a position to make a “back of the envelope” calculation of capital gains tax (which, as I understand the plaintiffs’ argument, might explain there being no steps taken following the meeting to do so) (see T 1249/1251).

59. [545]

    It is submitted by the plaintiffs that Accountant No 1’s evidence rises no higher than his opinions based on his usual practice at the time with the benefit of hindsight. I agree. That said, it may be inferred from Accountant No 1’s evidence as to usual practice that where something was done or agreed that departed in a significant way from his usual practice then it might be more likely that he would have a recollection of this.

60. [546]

    Accountant No 2 is a principal of the accounting firm the Local Accounting Firm. He has provided accounting services to the first defendant since 2002 and provided accounting services to E Co from its incorporation to 2014.

61. [547]

    Accountant No 2 gave evidence as to the Local Accounting Firm’ timesheets by reference to which he deposed to the various meetings attended by one or more of the family members during the relevant period (see his affidavit affirmed 24 May 2017).

62. [548]

    The plaintiffs point to various matters about which he did not give any affidavit evidence: as to the reference to “succession planning” in the unsigned Aitken letter; as to the meaning of various parts of the structure diagrams; as to the meeting of 17 March 2004 where the Agreement for Lease was signed (including about whether termination was ever discussed as a possibility); as to the meeting of 22 October 2009 (the day after the October 2009 confrontation); as to the meeting of 3 March 2010 (at which, after he had left the room, the second confrontation occurred); as to any matters concerning the allegedly outstanding rent owing under the Agreement for Lease or alleged loans at call (the plaintiffs’ evidence being to the effect that this part of the accounts was done by the Local Accounting Firm without consulting them); and as to any matter about the operations of E Co or EM Co or the first defendant’s accounts (in relation to any issue as to whether the company accounts revealed poor management or the nature of the payments made by the first defendant to E Co). The plaintiffs submit that a Jones v Dunkel inference of the Ferrcom kind should be drawn against the first defendant in relation to all of those matters about which Accountant No 2 could have given (but did not give) evidence.

63. [549]

    Finally, there was an affidavit in the first defendant’s case from another former farm employee (Farm Worker No 2), whose evidence largely went to criticism of the management of the farms or A’s farm management skills.

64. [550]

    I consider that Farm Worker No 2’s evidence was of little assistance. The question as to the management of the farms while under the control of E Co or the sons is of no relevance to the issues in the case in circumstances where the first defendant in cross-examination accepted that his decision to sell the properties was not made as a result of any poor management issue. Even if the first defendant’s concerns as to poor management by his sons or E Co of the farms or the farming business was a factor in the first defendant’s decision to terminate the Agreement for Lease (and to disinherit the sons), this does not address the unconscionability of departing from the pleaded expectation in circumstances where the “secret” condition to that effect was not communicated to the sons at the time they made the decision to participate in the family business (or at any time afterwards until these proceedings).

65. [551]

    Before turning to the credit of those witnesses who were cross-examined, I deal with the not uncomplicated position in relation to the affidavit evidence of Mr Beattie.

66. [552]

    The plaintiffs formally read both of his affidavits in their case (the 8 August 2017 affidavit being sworn in substitution for a 5 July 2017 affidavit that, he deposed, had not correctly exhibited the documents referred to in it). There was no objection to the first of the affidavits. The only objection to the second of the affidavits was that it was not strictly an affidavit in reply. I did not reject the 8 August 2017 affidavit on that basis.

67. [553]

    The complication arose when the plaintiffs made the decision not to call Mr Beattie for cross-examination but sought to tender his affidavits (not for the truth of their contents but for the limited purpose of evidencing the matters to which he had deposed in those affidavits) (see T 649ff). The first defendant objected to the tender (on the basis that the affidavits had already been read and, unless withdrawn, were in evidence for all purposes) and indicated that he would be relying upon the affidavits in his case.

68. [554]

    That gave rise to debate as to whether the plaintiffs required leave to “use” Mr Beattie’s affidavits for the limited purpose for which they had indicated (see r 35.2(3) of the Uniform Civil Procedure Rules 2005 (NSW)). In the course of discussion on this issue the prospect that the first defendant might choose to call Mr Beattie if he wished to rely on Mr Beattie’s evidence was raised (see the discussion in that regard in Varma v Varma [2010] NSWSC 786) and there was debate as to the potential inconsistency raised between the proposition that an affidavit, once read, remains in evidence unless withdrawn by leave or with the consent of the other party, and the proposition that, unless the Court otherwise orders, the affidavit may not be used even if not formally withdrawn because of the provisions of r 35 – see in that regard the decisions to which I was taken in the course of argument Fermiscan v James [2009] NSWSC 474 per McDougall J and Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 12) [2012] NSWSC 1363 per Ball J); as well as debate as to whether the prohibition on use without leave applied both to the party who had read the affidavit (but not made the witness available for cross-examination – here the plaintiffs) and the party in effect being deprived of the opportunity to test the evidence in cross-examination (here, the first defendant).

69. [555]

    The position of the first defendant was that he did not take exception to Mr Beattie not being made available for cross-examination (indeed he did not seek to impugn Mr Beattie’s affidavit evidence). He did not ask that Mr Beattie’s affidavits not to be treated as part of the plaintiffs’ case, stating that no-one was saying that the affidavits could not be relied upon by the plaintiffs (see T 649.26).

70. [556]

    That left open the issue as to which of the respective parties (if any) was seeking or would need leave to rely on or “use” the affidavits of Mr Beattie pursuant to UCPR 35.2(3) which provides that in circumstances where a witness is not called to give evidence “the affidavit may not be used unless the deponent is dead or unless the court orders otherwise”. The plaintiffs maintained in closing submissions that, for the first defendant to rely upon Mr Beattie’s affidavits (as it was indicated he wished to do – in essence to point to the omissions therefrom as to earlier occasions on which advice had been sought from Mr Beattie by the sons - see T 650.43-651.11) the first defendant required leave (since the rule which prohibits the affidavits being used unless the court otherwise orders is not restricted in terms to use “by the party who served the affidavit(s)”). In that regard, the plaintiffs indicated that they would consent to the grant of leave for the first defendant to use the affidavits of Mr Beattie. The upshot of the debate on this issue was that leave was sought by neither side.

71. [557]

    Given that the affidavits were formally read in the plaintiffs’ case; both parties have made submissions in relation to the contents of the affidavits; neither side raised objection to the other side making submissions in relation to that evidence (though of course the submissions made by the respective parties are not accepted by the other); and the content of his affidavit is not challenged (nor was it sought to be challenged by the first defendant in the sense of seeking to impact that evidence) the debate as to this procedural issue is in my opinion an arid one and it is appropriate simply that I order pursuant to UCPR 35.2(3) that to the extent necessary all parties may use the affidavits of Mr Beattie in the proceedings for the purposes of making submissions notwithstanding that he was not made available by the plaintiffs for cross-examination (and was not subpoenaed to give evidence by the defendants).

72. [558]

    Turning then to what inferences if any should be drawn in respect of the fact that plaintiffs chose not to make Mr Beattie available for cross-examination, the first defendant submits that it should be inferred that nothing Mr Beattie could say would have assisted the plaintiffs’ case. The first defendant says any such adverse inference is not mitigated by the fact that he could himself have called Mr Beattie.

73. [559]

    In particular, the first defendant argues that it should be concluded that no instructions were ever given to Mr Beattie as to what is now being asserted in the plaintiffs’ case. It is clear that this submission is addressing the case based on beneficial title to the property being presently held by the plaintiffs. So, for example, the first defendant points to the sons’ instructions in 2013, where the plaintiffs made no mention of any interest in lands that on B’s estimate had a value in the range $31.7 million to $44.6 million (as at October 2009). The first defendant says this supports the view that the case for the plaintiffs is a “recent invention” and “brought for whatever reason so as to make a claim that the plaintiffs by their previous conduct show they have no basis to make”. Whether or not, as the plaintiffs contend, such a submission is open to be made by the first defendant, I do not accept the submission. The sons made clear in their evidence why it was that they had not previously asserted a claim based on a beneficial interest in the farms and it is clear from Mr Beattie’s affidavit evidence, which is not challenged by the first defendant, that he gave no advice that they had any such claim. Moreover, the plaintiffs’ claim to a present beneficial interest is based on their express trust claim which I do not believe has been made good.

74. [560]

    The plaintiffs argue that the rule in Jones v Dunkel is inapplicable: first, because they had no obligation to call Mr Beattie to explain or contradict anything (referring to Cubillo v Commonwealth (2000) 103 FCR 1 at 118 [355]; [2000] FCA 1084 where O’Loughlin J made reference to the joint judgment of Gleeson CJ and McHugh J in Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121; [2000] HCA 18); second, because there was nothing they were required to explain or contradict in respect of their position that the first defendant would hold the farms for them and leave the farms to them under his will, having regard to the concessions made by the first defendant (that at all relevant times from 2002 up to and including 30 May 2012, he knew that his sons understood that he would hold the farms for them and he intended to leave the farms to his sons under his will); third, because Mr Beattie’s evidence in relation to instructions received from the sons and advice given by Mr Beattie in March 2010 and November 2013 was merely “cumulative” (see Hammond v Hammond [2010] NSWSC 331 at [73] per Biscoe AJ), having regard to the course of the cross-examination of each of the sons; and, fourth, because they say Mr Beattie was not a witness in their “camp”, there being “no property in a witness” and noting that the service of the sons’ affidavits (and Mr Beattie’s served, but ultimately unread, affidavit of early July 2017) made it clear that privilege had been waived by the plaintiffs in relation to Mr Beattie’s retainers with the plaintiffs.

75. [561]

    Thus the plaintiffs argue that, in circumstances where the plaintiffs were cross-examined in such a way as to suggest that the evidence of Mr Beattie was not challenged by the defendants, the plaintiffs were not then obliged to provide the defendants in effect with an opportunity to adduce evidence from Mr Beattie in support of the defendants’ case, in circumstances where the defendants would, in substance, then be permitted to cross-examine their own witness.

76. [562]

    As to the first defendant’s submission that the absence of instructions to Mr Beattie over the years supports the view that the case for the plaintiffs is a recent invention, the plaintiffs submit that this submission cannot be put, since it was not put to any of the sons that his evidence was a recent invention and was fabricated (that being an allegation of dishonesty that had to be put to the sons if there was to be a submission made in that regard) (see The Nominal Defendant v Clements (1960) 104 CLR 476 at 479-480; [1960] HCA 39 per Dixon CJ). I have addressed this above.

77. [563]

    The plaintiffs argue that the first defendant did not establish that work undertaken by Mr Beattie in 2005 in respect of drafting wills for each of the sons and making a simple amendment to their discretionary family trusts (to remove the individual son as trustee and replace him with a corporate trustee) or in 2010 in respect of the drafting of the option deed, required any instructions to be given by the plaintiffs to the effect that the farms were held by the first defendant for the sons and to pass to the sons on his death under his will. They say that the cross-examination of each of the sons does not permit the conclusion to be drawn that Mr Beattie ever requested sufficient information, in the nature of instructions from each of the sons, from which one could infer that instructions of the said kind ought to have been provided by each of the sons to Mr Beattie.

78. [564]

    For the plaintiffs, it is emphasised that none is a lawyer. It is submitted that the first defendant’s submission implicitly makes the unsound assumption that each of the sons could articulate the nature of the future interest in the farms to be acquired by them based on their father’s conduct, such that the failure to give such instructions to Mr Beattie is a material omission. Further, it is submitted that the alleged contradiction between the plaintiffs’ case and the evidence about what instructions were given to Mr Beattie is based on the fundamental mischaracterisation, or misunderstanding, of the plaintiffs’ case by the first defendant (namely that the sons, after 25 September 2002, had a subjective understanding that they had an interest in the farms as opposed to an expectation that they would have such an interest). The plaintiffs say, moreover, that the fact that they took no steps to protect their position in the period 2010-2014 is consistent with the first defendant having told them it would be “business as usual” and with their understanding (based on what they now say was erroneous advice from Mr Beattie that they had no rights or interest in the land).

79. [565]

    The plaintiffs emphasise that it was not suggested to any of the sons that he did not hold the belief, following the meetings in September 2002, that the first defendant would hold the farms for them during his lifetime and that the farms would pass to them in equal shares on his death under his will. Further, the plaintiffs argue that on the proprietary estoppel case the lack of a subjective belief as to a present beneficial interest takes the matter no further.

80. [566]

    After consideration, I have concluded that no adverse inference should be drawn from the fact that the plaintiffs chose not to make Mr Beattie available for cross-examination. While it is no doubt fair to treat Mr Beattie as someone who was in the plaintiffs’ camp, so to speak – he having been the sons’ solicitor at the relevant times and being someone that it might be expected would be called by them if there were anything for him to explain or contradict, it is also relevant that the plaintiffs have clearly waived legal professional privilege in their solicitor/client communications with Mr Beattie in relation to matters relevant to the present proceedings (having regard to the contents of the affidavits served by them in these proceedings) and, as the plaintiffs have noted, there is no “property” in a witness as such. It was open to the first defendant to have sought to confer with (and, if he wished, to subpoena) Mr Beattie to give evidence in their case (though leave would have been necessary in those circumstances had the first defendant sought to cross-examine Mr Beattie).

81. [567]

    More significantly, the first defendant does not seek to challenge Mr Beattie’s affidavits. The contents of Mr Beattie’s files have been made available to the first defendant, from which Mr Beattie’s record of any instructions given by the sons (and the lack of instructions as to a present beneficial interest in the farms) can be discerned and, as has been the case, the subject of submissions the force of which is not diminished by the fact that Mr Beattie was not cross-examined. There is force in those circumstances in the plaintiffs’ submission that there was nothing for Mr Beattie to explain or contradict and that the plaintiffs were not required to call Mr Beattie simply in order to give the first defendant an opportunity to seek to adduce evidence on other matters in support of his case.

82. [568]

    True it is that Mr Beattie might have been able to shed light on the particular questions he had asked the sons when they sought legal advice from him (so as to illuminate the nature of the instructions they had given), although in light of Mr Beattie’s evidence as to his recollection of events that seems unlikely. In particular, of potential relevance would be what instructions were given to him at the time the sons made their earlier wills. However, even then, a belief that they would or might in the future inherit the farms would arguably not have been of such relevance as to have warranted Mr Beattie seeking or being given instructions on such an issue.

83. [569]

    Given that there was no challenge to his evidence sought to be made as to the advice Mr Beattie had given the sons, on which point Mr Beattie and the sons gave consistent evidence, and the sons were not cross-examined to suggest that they did not hold the belief following the meetings in September 2002 that the farms would be held by their father for them and would pass to them under their father’s will, any submission as to this being a recent invention on their part is problematic. And it is well understood that the drawing of an adverse Jones v Dunkel inference cannot be relied upon to supply gaps in the evidence or to draw positive inferences damaging to the case of the party against who it is drawn (as opposed to making it easier to draw inferences that would otherwise be available on the admissible evidence). Therefore, although I was initially troubled by the fact that Mr Beattie was not made available by the plaintiffs for cross-examination I have concluded that no adverse inference should be drawn against the plaintiffs in that regard.

84. [570]

    This is a convenient point at which to refer to another “missing” witness – Solicitor No 2. No affidavit evidence was served by either side from Solicitor No 2 and, although there was reference in oral submissions to his name having appeared on a list of witnesses for the plaintiffs (and that it had been indicated that he would be attending to give evidence under compulsion of a subpoena), no evidence as to his position as a potential witness or as to his ability or inability to give evidence.

85. [571]

    Insofar as the first defendant suggested that an adverse inference could be drawn against the plaintiffs from the fact that Solicitor No 2 was not called to give evidence in the proceedings, the plaintiffs argue that Solicitor No 2 cannot be said to be a witness in their “camp”, he being the first defendant’s solicitor and hence not someone who would be expected to be called by them.

86. [572]

    Solicitor No 2’s invoice in respect of the 25 September 2002 meeting was addressed to the National Accounting Firm. Hence, strictly speaking, it appears that Solicitor No 2 was there retained by the National Accounting Firm (as agent presumably for its client, the first defendant). From the description on the invoice, that Solicitor No 2 understood he was giving the advice in relation to the family members as a group (see the reference in the narration to the invoice to the “[XXX] Group”). In circumstances where any evidence given by Solicitor No 2 at the meeting of 25 September 2002 was given, as a practical matter, to all the attendees irrespective of who was in fact his client, and given that both the first defendant and Accountant No 1 seemed to accept that it was possible that Solicitor No 2 could have given the advice attributed to him, I am inclined to the view that no adverse inference should be drawn against either side from the fact that no evidence was adduced from Solicitor No 2.

Findings as to credit

1. [573]

   Unsurprisingly, given the suspicions harboured by both sides as to the motives of the other in the prosecution or defence, as the case may be, of these proceedings, each side made submissions adverse to the reliability or credit of the other’s witnesses.

2. [574]

   The first defendant characterises the sons’ evidence, broadly, as dogmatic, intransigent, affected by their “inherent self-interest” and grossly unreliable. Numerous submissions were made as to the unreliability of their evidence. The first defendant submits that the evidence of all three of the plaintiffs’ witnesses to these meetings in 2002 is at best vague and uncertain, and that it does not rise to the level of persuasion necessary to make out their various cases.

3. [575]

   Taking the evidence of each of the sons in turn, the first defendant submits that, on the issue central to B’s case (which is said by the first defendant to be what did B understands his position to be in relation to the land and did he understand that he had an interest in the land), his evidence is grossly unreliable. I have already adverted to some of the criticisms made of B’s evidence in relation to his notes. The first defendant also submits that the “studied resistance” of B to offer a view of Mr Beattie’s file note (at CB Vol 32 p 50) when invited to do so in cross-examination, damages B’s evidence.

4. [576]

   The first defendant says that B’s evidence in respect of his understanding of his position in respect of the land is trite (a reference to T 242.48-243.9). The first defendant points to B’s admission that he received advice that he had no interest in the land and the fact that he gave instructions to Mr Beattie to draw a deed that creates a caveatable interest, and yet B insisted on “qualifying his concession to not having any legal title”.

5. [577]

   The first defendant submits that B’s oral evidence as to the 2 May 2003 meeting (from T 162) adds weight to the view that B’s evidence is unreliable and is a “total reconstruction”. In particular, the first defendant points to the answer given at T 163.44 (which he says is based on the idea that what was being referred to in May 2003 were “operational assets” and not land); whilst the note at CB Tab 121 of the 25 September meeting clearly refers on the second page to what may be described as operational assets. The first defendant accuses B of being dogmatic in his evidence on this issue; submitting that (at T 165-166) B is “so welded” onto his “mantra” of “operating entity” and the use of EM Co in “off farm activity”, that B is “simply unable to read the very clear words at [CB Tab] 168 written by him” and that, at T 166.20, B agrees, having just been taken through his own words, that he had told the Court the exact opposite of what he in fact wrote.

6. [578]

   The first defendant also places weight on the answer given at T 168.01 as representative of B’s evidence and supportive of the proposition that the plaintiffs’ case is built not on factual recollection but on “result orientated reconstruction”. The first defendant says it is undeniable that the structure there being discussed for the possible purchase of the R2 Hotel is a partnership of the sons, yet B, having said he did not know, speculates from the reference to the initials appearing in the note that this would have been a reference to EM Co “which would have been incorporated for this purpose”. The first defendant argues that the reconstruction given by B as to the reference in his note to the said initials is “totally at odds with the undeniable words of the note”. The first defendant criticises this evidence as vague, uncertain, and unreliable; and points out that this view of the evidence and the timing of EM Co’s incorporation had never been proffered before.

7. [579]

   The first defendant points to the following errors in B’s evidence: deposing in his affidavit that Accountant No 2 was at the 18 September meeting, when he was not; swearing that the first defendant had guaranteed the loan for the P Hotel in 2011 (see T 249.39); and, in relation to that part of the meeting of March 2004 in relation to how loans were dealt with, swearing that it was a reference to the first defendant’s loans, when it is said that it is clear on the evidence it was not (referring to CB Tabs 236 (item 2.6) and 238; and T 252.20).

8. [580]

   The first defendant submits that B has a predisposition of viewing matters to his father’s disadvantage (referring by way of example to his evidence at T 253.45 in relation to the $3 million loan to the trustee of the Sydney Family Trust).

9. [581]

   As to A, the first defendant argues that, for the same reasons that the evidence of B concerning the meetings of the second half of 2002 is flawed, so too must be the evidence of both A and C since their evidence is founded on B’s notes. So, for example, the first defendant says their evidence is based on an acceptance that the notes at CB Tab 118 are notes of a meeting of 30 August or notes made at a time after the meeting (if it was a meeting) referred to in the note at CB Tab 91, which the defendant argues is not the case. Insofar as other parts of the notes are treated by A and C as being notes of a meeting, it is said that some were, at best, some agenda or other writing of B.

10. [582]

    In particular, the first defendant says that though A deposes (at [156] of his 2 April 2015 affidavit) that he attended “many” meetings, in cross-examination this meant more than two (T 327.18) and that A does not recall which of the meetings said to be the subject of the notes at CB Tabs 91 and 118 came first (T 326.50). The first defendant notes that A: has a vague recollection of some of the things that happened (T 327.40); has relied partly on his own recollection, but “for the nitty gritty part of the notes” has relied on B’s notes (T 328.04); and considered 2002 as being a year of opportunity to develop some business interests (T 329.43).

11. [583]

    At T 331 when A is asked about [157] and [158] of his 2 April 2015 affidavit which were admitted, subject to objection, the first defendant says that the effect of A’s oral evidence is that: he does not know at which meeting these things were said and he does not know who said what.

12. [584]

    Similarly, the first defendant says that [159] is A’s assertion of an understanding of something based on “discussions” without asserting what those discussions were. The first defendant submits that an understanding of this type is of no weight in proving the fact in issue, namely, what were the discussions. The first defendant emphasises that in respect of those discussions, A does not know who said what words (T 335.22), nor does he say what the words were, either directly or indirectly.

13. [585]

    As to C’s position, again, the first defendant points to the unreliability of evidence based on B’s notes. C says that he had regard to all of B’s notes in setting out his “belief” at [96] of his affidavit sworn 2 April 2015 (see T 407.04-407.47). The first defendant says that there is an additional element of unreliability in relying on notes before and after the meetings in question to set out a “belief” as to what happened at a meeting in the period July to September 2002.

14. [586]

    The first defendant points to [96] of C’s affidavit sworn 2 April 2015, where C sets out the elements of the business arrangement that he believed in 2002 he was proposing to enter into with the first defendant and his brothers in the months leading up to the incorporation of E Co, the core of which arrangement was to be that the first defendant’s existing farming operations, including his landholdings, would be transferred into a holding company which would serve as the trustee of a unit trust, of which the four family members would be the unit holders. That paragraph places the foundation for his belief about the proposed business structure on various conversations with his father and brothers in early to mid-2002 and his “review of the handwritten notes”.

15. [587]

    The first defendant notes that C does not identify how many conversations there were, when each took place, who the participants were, or what was discussed; and emphasises that C does not suggest that, as part of these conversations, the first defendant agreed to transfer his lands into a unit trust - rather, C asserts that an unidentified number of conversations took place, as a result of which he formed the belief that, among other things, the first defendant was proposing to transfer his properties into a unit trust. The first defendant says that in circumstances where he denies ever having agreed to transfer his lands, to a unit trust or any other entity, no weight should therefore be attributed to C’s assertion.

16. [588]

    As to C’s “review of the handwritten notes”, read in the context of the preceding paragraphs, it is submitted that C is referring to B’s undated handwritten notes at CB Tab 91. The first defendant notes that at [94] of his affidavit, C states that prior to the incorporation of E Co, he recalls attending a meeting with the first defendant, his brothers and Accountant No 1; at [95], C refers to the notes at Tab 91 and states that he believes the notes are of the meeting he attended because there are two matters referred to in the notes that he recalls being discussed at the meeting.

17. [589]

    The first defendant says that, cross-examined on the contents of [96], C initially could not say with certainty what notes he had reviewed to form his belief (see T 406.40-407.18); then said that that he “imagine”[d] that he had reference to “all” of B’s handwritten notes in preparing [96] (see T 407.45-47); confirming that he had regard to B’s notes appearing at CB Tabs 79, 79A, 117, 118, 121, 167 and 168. The first defendant points out that these notes include B’s personal notes not taken during a meeting, B’s notes of meetings C did not attend, and notes of meetings which postdate September 2002; and that later in his evidence C said that the notes referred to in [96] of his affidavit were only the notes at CB Tab 91. The first defendant submits that this demonstrates that C had no real idea what notes, if any, he relied upon to depose to the matters set out in [96]; but that C may have had regard to B’s personal notes not taken during a meeting, B’s notes of meetings C did not attend, and notes of meetings which postdate September 2002, in forming his “belief” that the family was considering a business structure in which the first defendant’s lands were transferred into a unit trust. Thus it is said that C’s belief in this regard is unreliable.

18. [590]

    The first defendant submits that, regardless of whether C’s review of handwritten notes in [96] was of “all” B’s notes, or limited to those at CB Tab 91, he conceded that none of them made any reference to the transfer of land (or the first defendant’s land) (see T 433.21-35). In relation to the notes at CB Tab 91, although C referred to the fact that there was a reference to “assets”, he conceded that it would be “almost impossible” to have a conversation about setting up a business structure in the terms deposed to by C (including off-farm investments) and not use the word “assets”.

19. [591]

    The first defendant submits that, considered as a whole, C’s evidence regarding his review of B’s notes does not withstand scrutiny and that he simply does not know what he relied upon to assert the belief he says that held 13 years prior. It is pointed out that he does not say that reviewing the notes allows him to recall the events of the meeting he says he attended; and he does not say, for example, that having reviewed the notes at CB Tab 91 he remembers a conversation during the meeting in which it was suggested that the first defendant’s lands be transferred into a unit trust and the first defendant either agreed to that proposal or else said nothing to dissuade the other meeting participants from believing that he did. The first defendant says that C’s evidence is in effect that, having reviewed one or more sets of notes that he did not make (and none of which refers to the transfer of the first defendant’s land), he believes there was a proposal in mid-2002 for the first defendant’s lands to be transferred into a unit trust. It is submitted that if C’s evidence is taken at face value, there is no basis for him having the belief to which he deposes.

20. [592]

    The sons, although accepting that they made what they characterise as some “relatively minor” errors about parts of their evidence, submit that their evidence was truthful and ought to be given significant weight. They point to “the consistency of their evidence, albeit expressed according to their differing recollections and different life experience and perspectives and to their frank acknowledgement of the limits of their recollection”. It is submitted that if they were being untruthful or heavily motivated by a desire for punishment or greed then one would have expected to see many more statements in their affidavits of things that the first defendant had said in direct speech.

21. [593]

    The plaintiffs further rely upon the second aspect of the rule in Browne v Dunn (1893) 6 R 67 in relation to the question of credit, noting that it was not suggested to any of the sons that he had fabricated any parts of his evidence and pointing to various propositions that were not put to the sons in relation to their respective affidavit evidence (as summarised in detail in their written submissions but which I will not here repeat other than to note that they include that: their evidence in respect of what was said at various meetings was untruthful; B’s notes of these meetings falsely or inaccurately recorded things that were discussed; implementing a succession plan was not one of the purposes of the new family business; or their evidence about their understanding of the result of the discussions at the time was incorrect).

22. [594]

    The plaintiffs refer in this context to the statements of principle set out by McColl JA in Samm Property Holdings Pty Ltd v Shaye Properties Pty Ltd [2017] NSWCA 132 at [136]-[140]; 345 ALR 633 (and to the following authorities: Bulstrode v Trimble [1970] VR 840; Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation (Cth) [1983] 1 NSWLR 1; Ellis v Wallsend District Hospital (1989) 17 NSWLR 553; and Curwen v Vanbreck Pty Ltd (2009) 26 VR 335; [2009] VSCA 284) for the proposition that even where the pleadings, affidavits or pre-trial preparation have already made clear that particular assertions or evidence will be challenged, there may still be a requirement for matters to be put to a witness if they are to form the basis for adverse submissions in due course and that failure to cross-examine on particular points may be “a very good reason for accepting that witness’s evidence, particularly if it is uncontradicted by other evidence” and “can affect the weight of the evidence called against the witness”.

23. [595]

    In particular, the plaintiffs contend that the forensic approach taken in the cross-examination of the three sons (not to challenge the understanding each had as to the effect of the meetings which occurred between 11 July 2002 and including 25 September 2002, other than to suggest that there was not a concluded agreement reached and that there was no discussion of the first defendant transferring his farms during his lifetime, and not to put to any of the sons that he entered into the new business, forsaking other employment and investment opportunities, knowing that: E Co could be denied the use of the land on six months’ notice or that the first defendant reserved the right: to sell the properties at any time, without providing alternative land to run the business; to disinherit his sons at any time; to treat monetary contributions by him as loans and to call on those loans at any time; and to call in any properties offered as security for off-farm investments), in circumstances where the state of mind of each of the three sons is a fundamental aspect of a claim made in proprietary estoppel, going directly to reliance, assumes greater significance given the first defendant’s repeated concessions that he knew his sons entered the business believing that he would hold the farms for them during his lifetime which would then pass to his sons on his death under his will in equal shares, and so that his sons would reap the long term benefit of their skill and labour for themselves and their families.

24. [596]

    I make no adverse credit findings against any of the sons. My observation of each in the witness box was that he was endeavouring to answer questions truthfully. There were certainly aspects of each the sons’ evidence which were unreliable or on which limited weight could be given. In particular, the cross-examination of each in relation to B’s notes suggests to me that each was placing his own particular interpretation on the notes and to the extent that the memory of each of the sons was based on those notes care must be taken in assessing that evidence. That is particularly the case in relation to the meeting of 18 September 2002 which C did not attend. That said, there were consistencies in their recollection of events (particularly that advice given by Solicitor No 2 at the 25 September 2002 meeting had caused a change in the proposed structure of the new family venture that rang true) and each in his own way gave credible evidence of the expectation that what was being entered into was a new family business and that they would ultimately inherit the farms.

25. [597]

    As to B, where there were what were characterised as inconsistencies in his evidence as to the acceptance of particular propositions (such as the distinction between legal title and having an interest in the properties) with the pleaded case, this relates to the case based on contract/express trust. Insofar as B emphasised the notion of “legal title”, I considered this to be a product of his apparent, and understandable, concern (as a non-lawyer) not to be conceding legal issues. It was clear, for example, that he had no real concept of the distinction between legal and equitable title (see T 246). Insofar as the evidence referred to above was characterised as dogmatic it was no different from the insistence by the first defendant upon the secret “success” condition he says was placed on the new business venture. B’s dry comment, when pressed on the question of ownership of the land (“technically it still isn’t” – see T 119), made clear his acceptance of the proposition that his father owns the farms in question.

26. [598]

    I accept that B’s evidence as to the financial management issues raised by EM Co was, in effect, to disclaim knowledge of a large number of matters on the basis that they were C’s responsibility; and that he did not appear to have a clear view of the accounting/financial structures or arrangements in place involving the financing of the hotel loans and the like. However, this is not a case about B’s financial or book-keeping skills. Nor does the fact that he (and his brothers) may have been content to enter into loan arrangements between the companies controlled by the sons without formal loan documents and may have arranged company loans between related entities (such as the loans to which B was taken in cross-examination from E Co to the trustee of his family trust) establish anything in relation to what was agreed or discussed at the September 2002 meetings. This is not an oppression suit on the part of the first defendant. The first defendant points to the off-farm activities as being inconsistent with any agreement of the kind alleged having been reached at the September 2002 meetings. That may well be. However, it says nothing about B’s credit.

27. [599]

    By the time he was cross-examined about arrangements in relation to his own financial affairs – including as to the reference in a loan application document in 2010 to him having a quarter-share in the properties; and certain of the loans disclosed in the accounts (such as at T 268) – it seemed to me that B was to some extent “shutting down” or becoming defensive; and unwilling to speculate. I see his refusal to speculate on Mr Beattie’s file note (notwithstanding that this was something put to him as “blindingly obvious”) as an example of this (see T 203). It is not surprising that having been challenged in cross-examination for some time as to the interpretation he had placed on words in his own notes B would not be prepared to engage as to what another person had meant by that person’s notes. However, when required to answer questions as to his wife’s financial position (following a query of me as to whether he was required to do so), B did so without hesitation. Insofar as B was taken to a loan application in June 2010 in which he had represented that he had a one quarter interest in the land (and sought to explain that as a one-quarter interest in E Co – see T 246; derived by working backwards – from the land to the company – see T 248), B acknowledged that the statement was false and inconsistent with what he was saying in the witness box (T 248). While that may not reflect well on him in his dealings with the bank, it does not lead me to conclude that his evidence in the witness box was untruthful.

28. [600]

    I accept that B, having re-read his contemporaneous notes (at least some of which were clearly not taken at the meetings themselves), appears now to some extent to be recalling events in 2002 with the benefit of hindsight or placing an interpretation on those notes consistent with his present views as to what was intended; and there is a risk that he is doing so with at least a subconscious focus on the construction of those documents that accords with his case. That issue came to the fore with the cross-examination as to the content of the diagrams contained in the notes and in some parts of that cross-examination his evidence had more of the flavour of a submission than an actual recollection.

29. [601]

    As to the criticism made by the first defendant in effect that B had engaged in prevarication at points in his cross-examination, I have reviewed both the transcript and my notes taken during the course of his cross-examination. My observation at the time (see T 115-118) was not that B was prevaricating but that there was a genuine confusion at some of the questions and he was wanting to be sure that he understood what he was being asked (see for example the apparent confusion at T 104.11-39; at T 116 as to the question about what the first defendant wanted in relation to the farming business; at T 128.6; at T 176; and the question at T 177 – “is that a technical point?”). My perception was that B did not always listen carefully to the question put to him and that sometimes he and the cross-examiner were at cross-purposes (see for example at T 137-138).

30. [602]

    B’s response to various propositions seemed unrehearsed and genuine (such as his question of the cross-examiner at T 140 as to whether he was saying that B had re-created the diagram).

31. [603]

    In all, I considered B to be endeavouring to give a truthful account of his recollection of events; and, relevantly, his expectation mirrored that which his father understood he had at the relevant times.

32. [604]

    As to A and C, I make similar observations. They also both appeared to me to be attempting to answer honestly the questions put to them as to their recollection of events and meetings of quite some time ago.

33. [605]

    A’s evidence was given in a laconic (“why would I bid against my father?” – see T 353) and matter of fact fashion. He made appropriate concessions when various propositions were put to him in cross-examination (such as his acceptance that it was possible that the discussion as to the tax advice was that it was just a discussion about the conduct of the business going forward – “Yeah maybe” at T 337). Similarly, he made concessions in relation to his understanding that he would be reimbursed for the amounts expended on Property No 4 (T 347) but, significantly, he added “if it came to that”. His explanation as to his understanding as to what was to happen in respect of the money that he had spent on the homestead if the properties were sold (that it would come back to him “before it went and wherever we were going next” and that “basically” it would be a clean sheet) makes clear in my opinion his belief that the continued occupation of Property No 4 was on the basis that he accepted that it would be up to the first defendant “where we were going next” but that in one way or another his contribution to the capital improvement of the property was to be recognised and this or any replacement property was to be his and his family’s home indefinitely. He also said that his father always discussed whatever move he was going to make “with us” and he had never thought about the question as to any restriction on his father dealing with the property (T 343). That makes sense in the context of an understanding that Property No 4 was to be his home and that, if sold by his father, there would be a next move to a property which likewise would be his home. His comment, when told that he was going to be reimbursed for the renovations (“Well you say I am”) was said with an air of scepticism, not unfounded in all the circumstances.

34. [606]

    A did not purport to have any detailed recollection of the discussions in 2002 but his explanation as to the tax advice that he was given rang true (see T 316) as did his evidence that “at the end of the day the farms and everything were going to be owned if you like by us” (T 333). His understanding as to the basis on which he went into the new business venture accorded with that of his father. As to his evidence as to his interest in purchasing Property No 9, although that emerged only in cross-examination (almost as an aside) it had the ring of truth and it was corroborated by the evidence of both his father and B. His evidence as to his detriment also rang true (see at T 363 – “well only that I could’ve owned my own farm”). What was clear from A’s evidence was that he regarded E Co as simply the farming entity but that “the farming business was us” – T 332; and I accept that to be his motivation for entering into the family business structure.

35. [607]

    As to C, though there was a hint of confrontation with the cross-examiner, I formed the impression that this was because C was being careful to ensure that he properly understood the propositions he was being asked to accept, not that he was being a difficult witness as such; and on occasion that he was suspicious of being asked to concede the specifics of the mathematics (see T 422). He was clear that his motivation was to be involved in a family business (T 416); emphasising that it was always “we”; and that it was considered to be a family business and family property (T 359). That evidence came across as his genuine belief. He was motivated to be involved in business with his family (T 417).

36. [608]

    C’s explanation that his father had essentially “become” the trust sounded to me like a genuine description of his lay understanding of events (see T 450). I accept his evidence that when he left the 25 September 2002 meeting there was an understanding of “how we were moving forward” and that he perceived that Solicitor No 2’s advice had led to a change in the proposed arrangements (T 445).

37. [609]

    I see no reason to disbelieve the evidence by any of the sons going to the expectations that he had (and which his father accepts he had) when entering into the new business structure, nor to disbelieve any of their evidence as to reliance.

38. [610]

    As far as the first defendant’s evidence is concerned, the plaintiffs submit that his evidence (except where he made concessions against his interest in the proceedings) was unreliable and untruthful.

39. [611]

    The plaintiffs’ submission as to the unreliability of his evidence is based in essence on: the first defendant’s admitted lack of recollection of many of the meetings with his sons in the period from 11 July 2002 up to and including 17 March 2004 (see his affidavit of 2 November 2015 at [73]); his acceptance in cross-examination that where he had said in his affidavit that he did not recall a meeting that meant that he was now unable to offer anything further in respect of that meeting; what emerged in cross-examination by reference to contemporaneous documents in relation to those meetings; inconsistencies between his affidavit evidence and contemporaneous business records; omissions from his affidavits; and the lack of any positive explanation in his affidavit evidence for what occurred or was discussed at the meetings.

40. [612]

    As to the inconsistencies between the first defendant’s affidavit evidence and the contemporaneous business records, the plaintiffs point to three examples: first, the inconsistency between, on the one hand, the first defendant’s evidence that he did not want to be involved in the rural business being put in place in the new business structure between July and September 2002, wanted there to be three shareholders and that only his sons would be shareholders, and did not want to be a shareholder, a director, an office holder or involved in the management of the business in any way, or to have any involvement at all, and, on the other hand, the fact that he signed various documents on 11 September 2002 for the incorporation of E Co which clearly made provision for his involvement as a shareholder, and initially director, of the company, and then on 18 September 2002 signed the “Minutes of Meeting of Corporate Trustee”; second, the inconsistency between his evidence that he did not want a trust set up in his name and the evidence in relation to the establishment of the E Unit Trust and the issue on 9 January 2003 of an ordinary class D share in that unit trust to his individual family trust; and, third, the inconsistency between his initial evidence (that he was not involved in the setting up of EM Co but that eventually he became aware of it and that he did not know how he became involved in it) and the fact that on 7 March 2003 he attended a meeting with Accountant No 2, B and C to incorporate EM Co.

41. [613]

    I accept that there were the inconsistencies identified above but I take from that simply that the first defendant’s memory of events over that period in relation to the corporate/trust structures involved in the setting up of the family business that was to operate the farming business from July 2003 is unreliable. The first defendant made no attempt to suggest otherwise. Indeed he made a number of references to his inability to remember things (see for example at T 780; T 794; including the surprising statement that he could not even remember his own birthday – T 982; that dates meant nothing to him – T 750; T 771; and that even last week was a lifetime to him – see T 746) and on at least one occasion during his cross-examination – which took place over the space of just over 3 and a half days – he said his mind had gone blank and he appeared to have difficulty in focussing on the question (see T 807)). Based on his age, and the length of time that has elapsed since the events in question, none of that is surprising. There was some reference to a medical condition that might have affected his memory (in the Corrective Services notes and in the Court of Criminal Appeal judgment – which I admitted subject to relevance). However, there was no evidence from any doctor or specialist on that topic and I note that objection was raised by the plaintiff to any reliance on a medical condition where no such medical evidence had been adduced. I raise the issue here not because I am placing weight on it but simply for completeness. My observation of the first defendant in the witness box was that, apart from instances where he was physically discomforted by cramps (see T 847) or where he said his mind had gone blank (see T 897), the first defendant was able to understand and respond to the questions put to him; and, having regard to some of his comments – such as the reference to not getting in the “gutter” (T 987), was certainly capable of expressing his views as to the matter. Whatever the cause, his memory, was demonstrated by reference to contemporary documents to be quite unreliable.

42. [614]

    As to the question of omissions from the first defendant’s affidavits, this submission is based on the first defendant’s intimation in cross-examination that there was more he could have said in relation to the case and his acceptance of the proposition that there was important information relevant to his case which should be before the Court but which he had made a deliberate decision to leave out of his affidavits and the further proposition that he had conveyed a misleading impression of the evidence because he had not included everything in his affidavits that he thought important. In that regard, I gained the impression, from the rather cryptic manner in which the first defendant said in the witness box that there was more he could have said (see, for example, the exchange at T 987.46-988.26), that he regarded what was left unsaid as information that would not be to the credit of other people or would cause embarrassment to others (see T 988). As already noted, he said, with no little asperity, at one stage that he refused to get “into the gutter” (T 987). His refusal to elaborate on that matter in re-examination reinforced my view in this regard. I draw nothing adverse to the first defendant’s credit from this.

43. [615]

    Finally, as to the contention that the first defendant’s evidence was untruthful in respect of a number of matters, the plaintiffs point to the first defendant’s evidence on a number of matters.

44. [616]

    First, that by 2008 he was forming the opinion that the farming venture was not proceeding well and was considering selling the properties (first defendant’s affidavit affirmed 2 November 2015 at [56]) and that from about 2008 his decision to sell the farms was partially motivated by what he considered to be his sons’ poor management of the farming business (first defendant’s affidavit affirmed 5 May 2017 at [21]).

45. [617]

    Second, that it was his idea “to form a company with three equal shareholders being my sons so that they could run the business themselves and have the benefits themselves” and that he told Accountant No 1 “I just want a simple structure where they are equal. I did not wish to be involved in the business”.

46. [618]

    Third, that he had never “made use” of the discretionary trust set up for him. Fourth, that, prior to attending the auction for Property No 9, he did not have any discussions with his sons about fish farming. Fifth, that he placed Properties No 11 and 12 on the market in 2008 without any objection from his sons and felt “no obligation to them so far as requiring their consent to place them on the market” and did not seek any such consent. Sixth, that the lease fee was not paid and/or was reduced because his sons could not afford to pay for it and that, while the drought may have partly accounted for the non-payment of the fee from 2007-2011, in his opinion the major factor was poor management. Seventh, that his criminal conviction had resulted in him becoming uninsurable so that he could not effect insurance on the properties in his own name. Eighth, that, despite not receiving lease payments in 2007 to 2011, he nevertheless spent money in these years on hay which he made available to E Co for drought feed.

47. [619]

    Ninth, that in the years after 2003 it became increasingly clear to him that his sons were really not interested in running the farming business as he had done and that “their hearts were not in it”. Tenth, that another matter of concern was that the farming enterprise conducted by E Co “made continual losses (apart from the year 2009) and was propped-up in those years of loss by loans from [him]”.

48. [620]

    Finally, the plaintiffs point to the first defendant’s conduct during the period from July 2002 (in concealing from his sons both the sexual abuse of his granddaughters and the “success” condition in relation to the new family farming business).

49. [621]

    As to those matters, the plaintiffs point to the following as evidence of untruthfulness.

50. [622]

    As to the first, they say that, as at 2008, the first defendant had made no decision to sell all the farming properties (despite there being meetings with real estate agents, which involved his sons) and had not formed any opinion as at 2008 that there had been “poor management” of the family farming business by his three sons (pointing in this regard to the fact that as late as 30 May 2012 he had made a will in which the bulk of his estate, including the farms, was left to the sons, his acknowledged intention from 2002 up until at least then being that the sons would inherit the bulk of his estate). They point out that the only properties which the first defendant had made a decision to sell as at 2008 were Properties No 11 and 12 and that that decision had been made, in conjunction with his three sons, because of the drought, because the properties were not a good fit with the 3/6 and Main/7 Aggregations, and because of a desire to purchase a good hay/irrigation block for the family business being conducted by E Co. They also note that the first defendant had never expressed the opinion to anyone before the commencement of these proceedings that there had been “poor management’ of the farms by E Co or his three sons.

51. [623]

    As to the second, the plaintiffs note that Accountant No 1 did not give evidence that that was what he was told by the first defendant and say that it is inconsistent with the following: that the first defendant consented to become a shareholder and director of E Co on 11 September 2002; that E Co had four shareholders from its inception and that the first defendant held three shares whilst his sons each held one; and that the first defendant participated in the management of the family farming business by his attendance at meetings held on 18 September 2002, 25 September 2002, 10 December 2002, 30 April 2003, 2 May 2003, 13 August 2003 and 17 March 2004.

52. [624]

    As to the third, the plaintiffs note that on or about 9 January 2003, the first defendant consented to the holding by his individual discretionary trust of one “D” class share in E Co.

53. [625]

    As to the fourth, the plaintiffs say that, whether or not B’s evidence that he was shown an article about fish farming by his father in about April/May 2002 is correct, B’s contemporaneous notes of the discussion with Accountant No 1 on 11 July 2002 (at which the first defendant was present) make reference to a particular trout farm in the context of what must have been a discussion about fish farming (and the first defendant agreed that he showed B the videotape of a Landline program concerning aquaculture (“Off-the-shelf system helps aquaculture grow”) on or after 18 August 2002).

54. [626]

    As to the fifth, the plaintiffs say that this evidence was contradicted by the evidence of all the sons, who were not challenged on this issue in cross-examination; and point to the evidence of the first defendant in cross-examination as to the making of the decision to sell those properties and the reasons for it, to which reference has already been made.

55. [627]

    As to the sixth, the plaintiffs point to the acceptance by the first defendant in cross-examination that he had extended a rent free period to E Co in respect of the financial years ending 30 June 2008 to 30 June 2011 and say that the extension of the rent free period had nothing to do with poor management.

56. [628]

    As to the seventh, the plaintiffs point out that there is no evidence that the first defendant was refused, or declined, insurance as a result of his criminal conviction and say that insurance policies were issued in the first defendant’s name after his conviction.

57. [629]

    As to the eighth, the plaintiffs note that there was no reference in the first defendant’s financial statements for the financial years ending 30 June 2008-2011 to the purchase of any hay in that period (referring to the nil entries for “Fodder and feed” under Livestock Husbandry in the accounts).

58. [630]

    As to the ninth, the plaintiffs point to the evidence that over the relevant period during each working week the first defendant would regularly visit the homestead on Property No 4 and have a coffee with A; that B would visit the farming properties for somewhere between four to ten days each time, twice monthly, and would stay with the first defendant at the Main Property; and that there is no evidence that before the commencement of these proceedings the first defendant had ever suggested to any of the sons that they “were really not that interested in running the farming business” or that “their hearts were not in it”. The plaintiffs also point to the fact that although the first defendant asserts a lack of willingness and competence on the part of the sons to run the farming business, there was limited cross-examination of B as to A’s ability as a farmer (and none of A on this issue). They say that the criticisms made of A by the first defendant in his oral evidence related to the fact that A had other interests (such as horse-riding and airplane flying) not to any serious mismanagement by A of a kind that would justify termination of the lease. And they argue that the first defendant knew that neither B or C was intended to spend any significant time as full-time farmers.

59. [631]

    As to the tenth, the plaintiffs accept that E Co, before the financial year ending 30 June 2009, made tax losses but they point to E Co’s expenditure on improvements made to the farms, and on improving the genetic quality of the herds, which exceeded its revenue for that period and say that this approach was entirely consistent with the practice followed by the first defendant in conducting his own grazing business in the period during the financial years ending 30 June 1991 to 30 June 2002 (namely, to incur expenditure which would exceed revenue to generate a loss for tax purposes). They also say that this approach was consistent with the first defendant’s knowledge of his sons’ understanding that he would move money out of Sydney to put into the farms for the new family business and the fact that the first defendant did so by spending money on capital improvements for the farms and advancing money to E Co.

60. [632]

    The above matters, which are relied upon by the plaintiffs as demonstrating untruthfulness on the first defendant’s part, in my opinion simply confirm the unreliability of the first defendant’s recollection of events relating to the establishment of E Co and the family business that was embarked upon towards the end of 2002/mid 2003. The evidence of the first defendant on many if not all of those matters was clearly proven to be incorrect. However, I am not persuaded that the evidence was dishonest.

61. [633]

    Finally, as to the concealment by the first defendant both of his sexual offending and of the secret “success” condition placed by him on the sons’ inheritance of the farms, the plaintiffs submit that fundamentally this reflects dishonesty on the first defendant’s part; namely that he was “living a lie” (that last “living a lie” proposition being accepted by the first defendant accepted in relation to the sexual offences but not the success condition – see T 987; T 982). This is the most contentious of the submissions made by the plaintiffs as to the first defendant’s credit. The plaintiffs couple this with the evidence of the first defendant’s criminal conduct, which they say demonstrates that the first defendant “has engaged in a process of justification and blame-shifting”. They say that the first defendant’s lack of remorse and insight into the consequences of his offending, and “his sense of grievance fuelling a desire for an apology”, are matters that are directly relevant to assessing his evidence about why he sought to evict and disinherit the plaintiffs, which in turn is relevant to assessing his evidence about the events from 2002 onwards. Further, the plaintiffs argue that the first defendant’s crimes and their context have additional contextual relevance to understanding the behaviour of the parties (that of all three of the sons from the time the crimes were discovered in September 2009; that of A after Z disclosed in December 2010 the sexual abuse committed on her; and that of the first defendant, over the whole period from before 2002 to the present, but especially in 2013 and 2014 when the plaintiffs say that he “truly committed to punish his sons”).

62. [634]

    The first defendant submits that, in assessing his own evidence it is important “to distance the impression gained of him from his unvarnished and confronting evidence as to his criminal offences”. It is submitted that that evidence is in fact of no relevance to this case within the meaning of “relevance” as provided for by s 55 of the Evidence Act and that, in accordance with rulings made in the course of the trial (including before trial), that evidence should be rejected in its entirety. At the same time, however, the first defendant relies on his evidence in the witness box when questioned about the offending as giving his evidence credibility in general. It is submitted that:

63. [635]

    The first defendant both in his evidence in cross-examination (and, it would appear, while in prison – having regard to the matters recorded in Exhibit AN, much of which the first defendant himself confirmed in the course of his cross-examination) has sought to minimise (and, if not in those precise terms, in effect to justify or explain) his conduct towards his granddaughters – among other things by insisting that it was minor; by intimating that, though others said it was “sexual interference”, he did not regard it as such; that there was a gross overreaction to the disclosures; that the granddaughters were not harmed by his actions; and that he had pleaded guilty to offences of which he was not guilty to spare them trauma (but that the real trauma had been occasioned by the reaction of their parents to the disclosure).

64. [636]

    I accept that the first defendant’s evidence in this regard may be seen as an attempt at justification or explanation of his actions regarded rightly by society in general (as reflected in the criminal sanctions for such conduct) as abhorrent. I also accept (which hardly seems surprising for someone engaging in conduct of this kind – since offences of this kind are not usually openly broadcast to the world, presumably for the reason that steps would then be taken to prevent their recurrence) that the first defendant concealed his offending from his sons, abused the trust placed in him as his grandchildren’s grandfather, and did not disclose to his sons that he had placed his granddaughters in a position of harm.

65. [637]

    However, I do not see that this leads to the conclusion that the first defendant’s evidence in relation to the critical matters in issue in the proceedings was untruthful. Misguided (or perhaps self-deluded) as the first defendant clearly is if he considers that the facts to which he agreed on sentencing, and which he accepted in the witness box were correct, did not render him liable to the offences for which he was charged and to which he pleaded guilty, and accepting that in relation to the offending itself he can fairly be described to have been “living a lie”, that does not in my opinion make it more likely that he has been dishonest in giving evidence before me as to the family business structure entered into from late 2002. Even though, as at 2002, he must already have been committing sexual offences against Z (given his evidence in cross-examination – that being the temporal relevance attached to that evidence by the plaintiffs), I do not conclude therefrom that his evidence as to the meetings in 2002 was untruthful. This makes it unnecessary to enter into the debate between the parties raised in their submissions as to issues such as the applicability of the tendency or coincidence rules to evidence relating to the credibility of a witness.

66. [638]

    As to the concealment from his sons of the “success” condition (to which the first defendant deposed in his affidavit of 2 November 2015 and which he insisted in the witness box was a condition he had attached to their inheritance of the farms), again I do not consider that this makes the first defendant a dishonest witness as such (whatever his sons might think as to the deceptive nature of his conduct in that regard). Nor, however, do I accept the submission of the first defendant that this “success” condition is “strong evidence” in support of his case. Indeed, the secrecy of the “success” condition supports the conclusion that it is now unconscionable for the first defendant to resile from expectations encouraged in his sons (and on which they acted) on the basis of any perception that they failed to make a success of the business in their father’s eyes.

67. [639]

    The first defendant, other than his challenge of the cross-examiner to call him a liar and his obvious indignation at this, was generally quiet and subdued in the witness box. He seemed to me to be resigned to the prospect of being cross-examined on issues as to his offending. His asides as to the “jungle” of paperwork (see T 999; T 1001) and obvious feeling of grievance at what he referred to as the “shifting” of money here and there or “siphoning” off of funds (see T 998; T 999) (a reference to the evidence as to loan arrangements between E Co and other entities associated with the sons) seemed to me to ring true; as did his observation of surprise at a minute suggesting that he had taken the “chair” at a meeting of E Co with the meeting’s approval (see T 785.34); and his comment that the reduction of rent from $300,000 to $100,000 was “a hell of a change” – T 846).

68. [640]

    In summary, I considered the first defendant to have been a truthful witness albeit one whose memory as to the detail of meetings and events back in 2002 was very unreliable. His propensity to blame others for the predicament in which he found himself once his criminal conduct came to light does not persuade me that his present stance in the litigation is an attempt to justify taking the action he has now taken in respect of his sons.

69. [641]

    Before turning to each of the accountants separately, I address the plaintiffs’ submit that the evidence of both accountants must be considered in the light of their evidence of joint conferencing. The plaintiffs referred in this regard to Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731; [2005] NSWCA 110 where a teleconference with witnesses “discussing amongst themselves the evidence that they would give” was found to be improper (see at [30] per Sheller JA, McColl JA and Windeyer J agreeing). The plaintiffs note that the concern as to this kind of discussion amongst witnesses is that it involves or may involve a process of reconstruction. (In the Perisher Blue case, Sheller JA considered that what had happened was of sufficient seriousness prima facie for the papers to be sent to the Legal Services Commissioner – see [35]. There was no such suggestion made here.)

70. [642]

    Relevantly, Accountant No 2 accepted that he had met with Accountant No 1 on 17 April 2015 “to review internal set up documents” (as recorded in the Local Accounting Firm’s invoice dated 31 May 2015 to which he was taken in cross-examination – see T 1160) (see Accountant No 2’s timesheet entry for 17 April – Ex AV). Accountant No 2 thought Accountant No 1 had contacted the Local Accounting Firm about the meeting because he (Accountant No 1) had been contacted by the second defendant (T 1164). He agreed that they were getting together to consider the events which had occurred back at the time of incorporation of E Co (T 1164). Initially uncertain as to where the meeting took place, he thought it would have been at the offices of the Local Accounting Firm (T 1164). He accepted that at that stage he had the affidavits of the three sons. When it was put to Accountant No 2 that he and Accountant No 1 were trying to assist each other’s memory of what had happened, Accountant No 2 said “exactly”. Accountant No 2 said that the focus (of the discussion with Accountant No 1) was on the original set-up documents. However, Accountant No 2’s timesheet entries also make reference to the reviewing of affidavits at around that time – on 27 April 2015 time is recorded (from 10.36am to 10.54am) by Accountant No 2 for a phone call with Accountant No 1; and then there is a recording of 20 units (around 40 minutes) “review affidavits of boys”.

71. [643]

    There was a subsequent meeting noted in the Local Accounting Firm’s invoice as occurring on 28 April 2015 with Accountant No 2, Accountant No 1 and the second defendant. Accountant No 2 recorded 15 units “re affidavits” (Ex AV; T 1179) in relation to this meeting (approximately one and a half hours). He thought the meeting was at the office of the Local Accounting Firm (which accords with Accountant No 1’s recollection, to which I will shortly turn) and when asked about this in cross-examination his initial thought was that it would have been talking about the initial set-up (T 1165). Later, when shown the timesheet entry for the 28 April 2015 meeting with the second defendant and Accountant No 1 “re affidavits”, he said he “would imagine” they were discussing the affidavits he had previously reviewed (T 1179). Accountant No 2 did not recall discussing the sons’ affidavits in any detail with Accountant No 1.

72. [644]

    There were two further meetings noted in the Local Accounting Firm’s invoices with Accountant No 1 – on 18 May 2015 and 25 May 2015. Accountant No 2 accepted that the reference to “special work” in the invoices related to this litigation (T 1166) and that there was no other reason for him to meet with Accountant No 1 at this time. As to the 18 May 2015 meeting, this was recorded as “meeting 15 mins” with the second defendant “re [B’s] file notes” (see T 1180).

73. [645]

    The Local Accounting Firm’s 30 June 2015 invoice records a meeting on 18 June 2015 with the second defendant, a third accountant (the managing partner of the Local Accounting Firm) and Accountant No 1. Accountant No 2 was not sure if he was at that meeting (though he accepted that “our” in the Local Accounting Firm’s invoices – here, for example, “our meeting” – was normally a reference to him – see T 1166). No file note was produced by the second defendant in respect of the 28 April meeting in answer to a call made by the plaintiffs (see T 1200). Accountant No 2 explained that Accountant No 1 was involved in a “risk management role” for the firm (the Local Accounting Firm) (T 1167). There is certainly no suggestion that the third accountant was involved in any of the discussions or meetings in 2002. There may well, by 2015, have been a concern within the Local Accounting Firm as to potential exposure of the firm arising out of the events the subject of this litigation – or perhaps the concern was (somewhat belatedly at least on the part of Accountant No 2) as to issues of conflicts/confidentiality as between the by now warring family members and associated companies. In any event, Local Accounting Firm’s timesheets record 10 units of the third accountant’s time on 18 June 2015 referring to the second defendant and a phone call with Accountant No 1 (see T 1174).

74. [646]

    There was reference in the 30 June invoice to a subsequent meeting (again described as “our” meeting) with the third accountant, Accountant No 1 and Solicitor No 1 on 19 June 2015. Accountant No 2 does not recall being at that meeting either. (Perhaps this is an instance – seen elsewhere in his evidence, such as at T 1164 – of the use of the royal “we”.) There is also reference in the invoice to phone calls with Accountant No 1 and the first defendant on 16 June 2015 (half an hour of time there being recorded) but Accountant No 2 did not recall any three way telephone call (see T 1181). Accountant No 2 said that Solicitor No 1 was acting as a legal adviser to the Local Accounting Firm at that time (June 2015) in respect of the litigation. He thought that Solicitor No 1 was advising in relation to information requests that the Local Accounting Firm was “getting at the time” (see T 1183). There was also an entry for 26 June 2015 (time from 10.42am to 11am) “[second defendant] re mediation” (see T 1181).

75. [647]

    In cross-examination, Accountant No 1 was taken to an email (Ex AU p 46) sent by him to Accountant No 2 on 8 April 2014, in which he refers to a telephone call from the second defendant that day “regarding legal action being considered by [the first defendant’s] sons” and says that the second defendant “was interested in what my recollection might be regarding [the first defendant]’s position in respect of land ownership around the time the farm operating entity was established”. In the witness box, Accountant No 1 said he recalled discussions with the second defendant around April/May 2014 (T 1267). He says he had received a phone call from Mr Fitzgerald (the plaintiffs’ solicitor) back in April 2014 that “most likely” was the catalyst for all discussions around that time (although the 8 April 2014 email suggests the catalyst for Accountant No 1’s involvement may instead have been a call from the second defendant). Accountant No 1 said in cross-examination that he was in contact with Accountant No 2 and the Local Accounting Firm asking for “direction” on what was expected of him “in regards to the matter” (see T 1268). By this stage, of course, he was no longer a principal of the firm and he may well have sought guidance as to the firm’s position in responding to queries by one or other of the parties involved in the dispute. Certainly, his 8 April 2014 email records that he felt it “more appropriate to work back through Forysths” and that “[s]ubject to the legal advice the Local Accounting Firm has, or is getting, [he was] prepared to assist [the Local Accounting Firm] [the Local Accounting Firm] as best [he could]”.

76. [648]

    Accountant No 1 recalled having a couple of meetings with Accountant No 2 to review the start up documents (T 1269). When it was put to him that they “went through the documents together having a discussion about those documents trying to assist each other’s recollection about what happened”, his immediate response was “We had quite a brief meeting for that purpose” (see T 1269).

77. [649]

    At T 1268, Accountant No 1 gave evidence that he went into the Local Accounting Firm one day to drop something or pick something up and that Accountant No 2 and the second defendant were in one of the interview rooms and they called him in “for a quick discussion”. He thought this was in 2015. He said that the meeting was “by chance” and says that he was asked whether he was prepared to give an affidavit. Asked about that meeting (which presumably was the 28 April 2015 meeting since he later confirmed that he was referring to the one meeting – see T 1272), Accountant No 1 agreed with the proposition that what he would have done was to exchange thoughts with Accountant No 2 about matters in the affidavits “with a view to trying to assist each other’s recollection – his response to this being a confident “Certainly” (see T 1270). He agreed that he had the benefit of such a discussion. He did not recall it being long or involved. He believed that the second defendant was there (see T 1271). However, he denied meeting “to discuss our evidence” (T 1271) and said that “our recollections are consistent” (T 1271). As I understand it, the meeting referred to in this and the preceding paragraph is the same meeting.

78. [650]

    In this context it is relevant to note that the second defendant gave no evidence as to the meeting at which both Accountant No 1 and Accountant No 2 recall there was at least some discussion (with a view to trying to assist each other’s recollection) of the matter (and seemingly with reference to matters to which one or more of the sons had deposed in their affidavits served in early April 2015 in the matter). In circumstances where the second defendant was in Court for most of the hearing, and one might have expected he could have shed light on this issue, I would be inclined to draw a Ferrcom inference from the fact that he gave no evidence as to the extent of the joint conferencing that nothing he could have said would have assisted the first defendant in that regard but in the end it does not change my conclusions as to the credibility or reliability of the evidence of Accountant No 1 or Accountant No 2.

79. [651]

    The first defendant says that the plaintiffs’ criticism of the evidence of both Accountant No 2 and Accountant No 1 as to reconstruction has no force. First, he points to Accountant No 1’s evidence that the meeting with Accountant No 2 and the second defendant was “quite brief” (T 1269) and happened “by chance” when he was called into a meeting they two were having. Second, it is argued that the affidavit evidence of Accountant No 1 and Accountant No 2 addresses different matters, and it is noted that Accountant No 2 was not present at the meetings that occupy the bulk of Accountant No 1’s affidavit. Third, it is said that, given Accountant No 1’s clear identification in his affidavit of any matter which is outside his knowledge or recollection, and his general reliability as a witness, it is highly unlikely that his evidence is based upon something Accountant No 2 told him during a brief conversation that took place around three years before he affirmed his affidavit. The first defendant also argues that the email dated 7 May 2014 (CB Vol 32 Tab 6 p 417) (see [402] above)) is a clearer statement on this subject at an earlier time than what was later sworn to by Accountant No 2 in his affidavit and that it supports the first defendant’s case.

80. [652]

    At the outset, it must be emphasised that it is not proper practice for there to be joint conferencing between witnesses or potential witnesses (as explained in the Perisher decision). In that regard, the lack of commonality in the areas covered by the respective affidavits is not to the point. The concern that arises from joint conferencing between Accountant No 1 and Accountant No 2 in April 2015 (and, earlier in April 2014 when they were discussing between themselves – though not at this time, it would seem, with the second defendant) is that conclusions drawn from the materials to which one or both was taken in the course of preparation of his or their evidence may have been influenced by the recollection of the other or the interpretation placed on the materials by the other. This is particularly acute when so much of the recollection of these witnesses was based on references to contemporaneous documents (or in Accountant No 1’s case his recollection of what was his common practice at the time).

81. [653]

    As to Accountant No 1’s evidence that the meeting occurred by chance, again that is not to the point. The fact that he recalls it being quite brief (if his recollection is correct in that regard – bearing in mind that Accountant No 2’s time sheets recorded 15 units for the joint conference but that Accountant No 1 was not present for the whole of the conference – and that it followed a 20 minute telephone conversation with Accountant No 1 the day before) would ameliorate to some extent the concern but would not remove it altogether. Moreover, the person who might have been able to clear up any question as to the extent of the joint conferencing (the second defendant) did not give evidence in the proceedings.

82. [654]

    As to the submission that Accountant No 1 was careful to point to the limits of his recollection, I accept that he did so – and I accept that he presented as a credible witness – but what is left unclear is what influence (unwitting let it be accepted it would have been) the one would have had on the other in terms of their memory by the time each came to swear his affidavit of events back in 2002.

83. [655]

    The first defendant’s argument that the 7 May 2014 email from Accountant No 2 is a clearer statement made at an earlier time than the statements in the respective affidavits, suffers from the difficulty that Accountant No 2 was not at the relevant meetings and that his own evidence made clear that the statements made in this email were based on “a quick sweep through to try and put together” documents that he thought were relevant (see T 1196) (arguably, based on the discussions he had had with Accountant No 1 the preceding month).

84. [656]

    I consider that the joint conference, however brief it may have been, was improper and care should be taken in assessing the evidence given by each of Accountant No 1 and Accountant No 2 as a result. That said, it is clear that Accountant No 1’s recollection of the September 2002 meetings is based on his review of the contemporaneous invoices and his recollection as at 2017 of what was his usual practice a decade or so earlier. Even without the joint conference it is apparent that it involves an element of reconstruction (as, indeed, does the evidence of the sons). It does not otherwise undermine Accountant No 1’s credibility. Similarly, Accountant No 2’s affidavit evidence was largely limited to his reference to timesheets and the like; and hence the same comment can be made, but I would add to that my conclusion that little weight can be placed on Accountant No 2’s recollection of events as set out in the 7 May 2014 email – both because he was not at the relevant meetings and because it must be concluded that there was scope for his recollection to be influenced by his discussions with Accountant No 1 as to the latter’s recollection of events.

85. [657]

    Turning then to matters raised in respect of the two accountants in isolation, I note as follows.

86. [658]

    The plaintiffs argue that Accountant No 2’s evidence is also to be assessed having regard to the evidence that suggests that, from April/May 2014, he was preferring the first defendant’s interests to the interests of E Co (or the sons). In this regard, they refer to the fact that, Accountant No 2 had acted contrary to express instructions (from B) when Accountant No 2 provided copies of company documents to the first defendant in May 2014. It must be remembered that the first defendant, from as early as December 2002, was not a director of the company although he remained a shareholder. By email dated 31 October 2012 (Ex AU p 4A), in an email dealing with various matters, informed Accountant No 2 that “[E Co’ accounts will not be shared outside of the directors of the company. … We will not be providing any information to others so the group report will need to change so that [the second defendant] receives the [Property No 8] numbers but is not entitled to any company information”. This was reiterated in a further email of 8 November 2012 (Ex AU p 5) from B to Accountant No 2: “”Also, as stated previously the accounts and finances of [E Co] are not to be shared with [the second defendant] or anyone not a director of this entity”; B going on to state that he would keep the first defendant informed of what is happening when he visited him.

87. [659]

    The second defendant by at least 15 April 2014 had contacted Accountant No 2 apparently asking him to collate records in relation to E Co (see email of 15 April 2014 at Ex AU p47). This was at a time when Accountant No 2 had been authorised to send a complete copy of the E Co files to the plaintiffs’ solicitor and had not yet done so. On 7 May 2014, he forwarded by email sent at 11.50am to the second defendant all the financial statements for E Co since incorporation and noted particular loan balances in relation thereto (see Ex AU p 58). Two minutes later he forwarded that same information to B and the plaintiffs’ solicitor (Ex AU p56). Accountant No 2 agreed in cross-examination (at T 1193) that at the time he sent financial information to the second defendant about E Co (on 7 May 2014) he was not authorised to do so and (at T 1195) that he never informed E Co or the sons that he was providing information to their father. Accountant No 2’s explanation was, in effect, that he did not distinguish between the family members but this does not satisfactorily explain why, having been given an express instruction not to disclose information and having been informed by Accountant No 1 – if he was not otherwise by then aware of this, of potential legal action by the sons, he did so. On the same day, Accountant No 2 sent the “mirror” emails relating to his review of the files (see [402] above) to both B and to the second defendant. From the documents in Exhibit AU, it is clear that Accountant No 2 continued to provide information to the second defendant as to E Co through to at least August 2014 (see Ex AU p 69). It seems that it was not until September 2014 that Accountant No 2 seems to have considered that he might be in a position where there was a conflict of interest – by letter dated 1 September 2014 (Ex AU p 72), he resigned as the accountant for E Co and D Co “effective immediately” on the stated basis that “[g]iven the current legal proceedings, I need to ensure that I am not in a position where I have a conflict of interest”. By then, as will be apparent from the above, it is clear that he already was in that position.

88. [660]

    The fact that Accountant No 2 chose to send his 7 May 2014 emails first to the second defendant – albeit by only a minute or so – might not of itself display any preferring of the first defendant’s interests over those of the sons, but the fact that in each case there were two separate emails meant that (whether or not that was intentional) as a practical matter Accountant No 2 was not drawing the sons’ attention to the fact that information was being sent at the same time to the first defendant’s solicitor. It is difficult not to draw the inference that Accountant No 2 was preferring the first defendant’s interests over the interests of the companies, and by extension, the sons. So, too, does the fact that once Accountant No 2 became aware of the possibility of a conflict of interest in acting for both the first defendant and the sons he did not cease his retainer for all but chose to continue to act for the first defendant (though he explained this in the witness box by reference to the fact that the first defendant was in gaol at the time and needed his assistance).

89. [661]

    The first defendant submits that the above is of no direct relevance to the matters canvassed in Accountant No 2’s affidavit. While I would accept that that is the case, given that Accountant No 2’s affidavit largely focusses on the time sheets disclosing the various meetings and he was not at the relevant meetings, the above sequence of events certainly indicates some partiality towards the first defendant’s position. The best that might be said for Accountant No 2 in that regard is that he failed to pay due regard to his obligations of confidentiality to clients. The first defendant, nevertheless, submits that Accountant No 2 made frank concessions that were adverse to his own interests without hesitation and that, by reason of this, Accountant No 2 was a reliable witness and his evidence should be accepted.

90. [662]

    As to this, there is no doubt that Accountant No 2 acted contrary to an express direction not to release information of E Co to the first defendant. He did not recall the instruction not to release the information (T 1126) but he did not dispute receipt of the email with that instruction. In so doing, it seems unarguable that he was in breach of his duty of confidentiality owed to his client, E Co. Accountant No 2, by the time of his cross-examination, was acutely aware of this (he made reference to having been “burnt” once in this regard and he was at pains to ensure that in complying with a call made during the course of his cross-examination for the production of Local Accounting Firm’ time sheets for a particular period he did not breach any duty of confidentiality owed to other clients) and he conceded (at T 1161) that it could be said that he was “prepared to prefer [the first defendant’s] interests”.

91. [663]

    That said, as already noted, I place little weight on the statement in Accountant No 2’s email of 7 May 2014 referred to at [402] above to the effect that, to his knowledge, “we” have never had a conversation with the first defendant about the transfer of the rural land to his sons – given that Accountant No 2 was not at the September meetings; he did not give an explanation for the reference to succession planning in the unsigned Aitken letter (that he presumably reviewed even if he did not draft it, since he said he decided it was not necessary to seek the advice the subject of the letter); and his recollection generally seems to have been based solely on the contents of the timesheets and invoices to which he had regard.

92. [664]

    Therefore, while criticism can validly be made of his conduct in relation to the forwarding of company information to the second defendant contrary to the express instructions of B, I am not persuaded that it had a discernible impact on his credibility as a witness, particularly where he was not present at most of the relevant meetings in 2002 and there is no need to make any adverse credit finding about Accountant No 2.

93. [665]

    As to Accountant No 1, the plaintiffs submit (and I accept) that his affidavit evidence is almost entirely limited to opinion evidence about what (in accordance with what he says was his usual practice at the time) he would have done. He accepted in cross-examination that he had no recollection of the content of meetings, as opposed to the fact that they occurred. His affidavit evidence relied on the documents to which he was taken by the first defendant’s legal representatives (which the plaintiffs note did not include Accountant No 1’s own timesheets or the affidavits of either A or C, or the entirety of B’s 2 April 2015 affidavit).

94. [666]

    The plaintiffs further submit (and Accountant No 1 adamantly denied) that Accountant No 1’s evidence was that of someone who desired to protect his own professional reputation. In particular, it is submitted that Accountant No 1’s statement in his affidavit to the effect that he could not give firm advice to both the first defendant and to his sons arose from a concern that Accountant No 1 perceived, when he came to prepare his affidavit in 2017, that he had placed himself in a position of conflict once Solicitor No 2 had given the advice that he did at the 25 September 2002 meeting. I do not accept that submission. Accountant No 1’s affidavit evidence is appropriately qualified for someone who admits that he does not have a recollection of what was discussed at the relevant meetings. He struck me as a careful and considered witness; and genuinely affronted by the suggestion that there had been any improper communication with the first defendant’s legal representatives before he came to be cross-examined (see T 1269).

95. [667]

    The plaintiffs point to the risk of “happy hindsight” where a professional gives evidence based on his or her usual practice rather than on actual recollection (referring to Goody v Baring [1956] 1 WLR 448 at 452 per Dankwerts J; Mathiesen v Clintons (A Firm) [2013] EWHC 3056 at [8] per Asplin J) and note that Accountant No 1 conceded that, where a client was seeking advice from him, the client would generally be more likely to remember that advice than he, by reason of the fact that he has to advise many clients in a week, over a year. That may be accepted as a general principle. However, in the present case, the critical issue is a matter that Accountant No 1 says would not have accorded with his general practice and for that reason there is a basis for thinking that a departure from usual practice might well stick in a practitioner’s mind.

96. [668]

    Insofar as the first defendant places weight on Accountant No 1’s evidence of the meetings that took place on 18 September 2002 and 25 September 2002 (on the basis that he was the only impartial witness to the meetings that lie at the heart of the factual dispute), while I accept that Accountant No 1’s evidence was honestly given and appropriately qualified, the fact remains that Accountant No 1 had only limited recollection of the matters that were discussed and conceded that he or others in his presence may have said things attributed to them by B in his first affidavit, even though he had no recollection of it. Therefore, I do not consider that Accountant No 1’s limited recollection is entitled to more weight than the (also limited, in the sense of precise detail) recollection of the sons.

97. [669]

    As to his credibility as a witness, however, I accept the first defendant’s submission that Accountant No 1 was a credible witness. From my observation of Accountant No 1 in the witness box, he was focussed on answering correctly the questions put to him (see, for example, at T 1210 where he did not accept that the first defendant was a client of his from 1993 but readily accepted that the first defendant could have been a client of the firm from about that time. Accountant No 1 fairly conceded various propositions put to him as to the meeting of 25 September 2002, namely as to the limits on his recollection; that it was based on what was his usual practice at the time; and that his usual practice would be subject to compelling reasons to the contrary (such as if his client had given him instructions to follow a different course).

98. [670]

    Accountant No 1’s statement in his affidavit that the 25 September meeting was just another in a series of general discussions I read as no more than his impression (in hindsight) of that and earlier meetings and I consider its weight to be limited having regard to his limited recollection of what was in fact discussed at the meetings. He accepted in cross-examination that the lack of steps taken after the meeting was inconclusive as to whether a final decision had been made at the meeting. He also accepted that there was no reason to doubt the accuracy of the timesheets (T 1221). Accountant No 1 also accepted that B’s notes had inspired recollections of the matters that were discussed (T 1214).

99. [671]

    It is clear from the contemporaneous the Local Accounting Firm’s records that Accountant No 1 had been asked to review potential options for a new business structure; and he readily accepted in cross-examination that: there was only one coherent, logical proposal put to the meeting of 18 September 2002; that that proposal was put, with the structure diagram, at the commencement of the meeting of 25 September 2002; and that, having sought advice on 25 September 2002 as to the one structure proposed and discussed at the meeting of 18 September 2002, no further meeting was then scheduled for further advice or further discussion.

100. [672]

     Accountant No 1 accepted that B’s evidence of what was said by Solicitor No 2 at that meeting (see [216] of B’s affidavit) sounded just like Solicitor No 2 to him. Though in that regard I understood his evidence to be, as the first defendant argues, to the attribution to Solicitor No 2 of the “rack up fees” comment rather than to the balance of the advice there attributed to Solicitor No 2, he did accept that it was likely that Solicitor No 2 had said something along the lines of that attributed to him. He was not prepared to accept, having been taken through the contemporaneous documents (at T 1261.16-1261.24) including the timesheet entries, that (although he could not recall it), it was likely that he did give advice to the first defendant and his sons that the first defendant’s assets including his farms would be transferred to the E Unit Trust. I accept that this was his genuine view (based, no doubt, on his evidence to which I have earlier referred as to why ownership of the land and assets would ordinarily be kept separate in a primary production business).

101. [673]

     Accepting that Accountant No 1’s recollection was largely based on his usual practice, I considered Accountant No 1’s evidence to be objective and balanced. What is significant in my opinion is that if the transfer of land to a single entity would not have accorded with Accountant No 1’s usual practice (and I accept his evidence as to that usual practice) then it might be expected that he would have remembered an occasion where advice was given or instructions were taken contrary to that practice (for whatever compelling or other reason there might have been).

102. [674]

     As to the complaint made of reconstruction, it seems to me that there is an inescapable conclusion that there is a significant degree of reconstruction on the part of all the witnesses, none of whom has a clear recollection of what was said at the relevant meetings. I do not accept that the evidence of Accountant No 1’s usual practice is “motivated by hindsight and concern for his own reputation”, as the plaintiffs submit. I regarded Accountant No 1 as a careful and credible witness.

103. [675]

     I have referred above to Farm Worker No 2’s evidence as to the farming skills or work ethic of the sons and, in particular, of A. The plaintiffs argue that his evidence (which they characterise as being opinion evidence largely of an evaluative kind) is vulnerable to being influenced, even if only unconsciously, by partiality toward the first defendant. They point to the fact that Farm Worker No 2 is a close friend of the first defendant; that he stayed with the first defendant in Sydney the night before he was cross-examined; and that he has been given a number of gifts by the first defendant (including a ute worth $80,000 and, after he had ceased to be the first defendant’s employee, the sum of $20,000 transferred into Farm Worker No 2’s bank account). They also argue that there was animosity on Farm Worker No 2’s part towards the sons (though that was denied by Farm Worker No 2).

104. [676]

     As to Farm Worker No 2’s evidence, the first defendant points out that the plaintiffs do not dispute Farm Worker No 2’s evidence as to the superior condition of the properties and the grazing herd prior to September 2002: noting that A concedes that prior to E Co taking over the grazing operation the first defendant’s land had good fences, road and sheds and was regularly maintained; and that A’s evidence is that during the 1990s, the first defendant had implemented a commercial genetic program which looked for good bulls and cows to build a quality herd; by the late 1990s the first defendant’s grazing business “had essentially become a breeding operation”; and that by 2002, the first defendant’s grazing business was well known in the industry and had won numerous awards at cattle sales. (The first defendant says this evidence is significant because, among other things, it contradicts B’s evidence to the effect that the commercial breeding herd was only built, and the genetic quality was only improved, after E Co took over the grazing operation.)

105. [677]

     The first defendant submits that criticism by B of Farm Worker No 2’s evidence based on B’s observations of Farm Worker No 2’s working habits are of little value given B’s admissions that he was only infrequently present at the farms and that when he was there he was working in the office and not “picking up sticks”; and the first defendant points to the animosity of the sons towards Farm Worker No 2. The first defendant submits that Farm Worker No 2 was tested on only one matter in relation to the farms – namely, the issue of rotational grazing and says that Farm Worker No 2’s evidence that he commenced rotational grazing after calving to encourage fertility and to keep calving ordered was not challenged (as opposed to a challenge based on whether this was common practice, which Farm Worker No 2 conceded). It is submitted that Farm Worker No 2’s concessions revealed him to be a reliable witness who was prepared to make concessions as appropriate.

106. [678]

     Insofar as the plaintiffs submitted that assessment of Farm Worker No 2’s evidence is “hampered” because none of the allegations made by him as to A’s work ethic or competence was put to the plaintiffs in cross-examination, the first defendant says that this is not correct (reference being made to the transcript at T 303.14-304.02).

107. [679]

     As to Farm Worker No 2’s motivation in giving evidence, the first defendant submits that Farm Worker No 2’s denial that he had any ulterior motive in giving evidence (and that his motivation was simply that the first defendant was his friend) should be accepted.

108. [680]

     It seems apparent, though Farm Worker No 2 denied that he “did not get on” with the sons, that there was some dislike at least as between he and A and perhaps also B. The first defendant suggested that there was some dislike on the part of B towards Farm Worker No 2 and B seemed to confirm this, agreeing that he considered Farm Worker No 2 insolent and (T 303.45) saying that if he had the opportunity to employ Farm Worker No 2 he would not do so. As to A, while Farm Worker No 2 said that he had no feeling for A “either way” (T 1061), he was quick to denigrate A in the witness box – when accepting that he had done very little work with A, Farm Worker No 2 was quick to add “[t]hat’s because he didn’t work” (T 1063) and to say that he was not sure what A did.

109. [681]

     The plaintiffs also point to evidence to suggest that Farm Worker No 2 was regarded by others (including the second defendant) as a difficult person (see the evidence of Accountant No 2 at T 1131.12 and the email exchange of 13 June 2013 between Accountant No 2 and the second defendant at Exhibit AU, p 19, in which the second defendant suggested that Farm Worker No 2 was “born angry, suspicious and resentful”). I treat that, however, with more than a grain of salt. Irascibility or downright aggression of a kind that Farm Worker No 2 may well have displayed to others, he was not guilty of such behaviour in the witness box.

110. [682]

     More relevantly, Farm Worker No 2 appeared reluctant in the witness box to concede matters such as the receipt of gifts from the first defendant (the most recent of which, a $20,000 transfer, had been received by him only earlier that year and one would have expected it to remain in his mind) or as to the circumstances relating to his use of the first defendant’s credit card for transactions while the first defendant was in gaol. That said, the second of those matters does not, however, go to any particular issue in the proceedings and there was little other than the evidence of Accountant No 2’s complaint to the second defendant seeking instructions as to what to do in this regard.

111. [683]

     Farm Worker No 2 accepted that he is the first defendant’s friend and, whether or not he was aware (he says he was not) prior to the day he was cross-examined that he had been made a beneficiary under the first defendant’s will, the first defendant’s generosity to Farm Worker No 2 in the past gives the latter an obvious interest in supporting the first defendant’s case as against the sons for whom it does not appear Farm Worker No 2 holds any great affection.

112. [684]

     In the end, it is not necessary to make any finding as to credit because the evidence of Farm Worker No 2 so far as it went to discrediting A as a farmer and a worker (and, to a lesser extent, to discrediting B and C in that regard) goes nowhere, in my opinion, since the so-called “success” condition was never made known to the sons and even if the motivation for the first defendant in terminating E Co’s lease were to have been referable to a perception by the first defendant as to poor management of the farms by his sons, Farm Worker No 2’s view on that matter is irrelevant. Furthermore, insofar as Farm Worker No 2 conceded in cross-examination that he had had very little opportunity to observe A’s work on the properties (both before and after Farm Worker No 2 moved to work on Property No 8 in 2003), his evidence as to A’s work ethic or competence would not have much weight in any event).

Factual findings – the minor and major fault lines and as to the factual issues posed by the plaintiffs

1. [685]

   I address first the so-called “minor fault line” in the proceedings, namely the contention of the plaintiffs that the first defendant, by causing the termination notice to be issued and by taking steps to disinherit his sons, is seeking to punish his sons and/or coerce them into an apology. I have already noted the relevance attached by the plaintiffs to this in the determination of the legal issues in dispute.

2. [686]

   On the question of the motivation of the first defendant to disinherit his sons, the plaintiffs submit that a Ferrcom inference arises from the fact that the first defendant gave no account in his affidavit evidence of his reason for disinheriting his sons (as opposed to his reason for terminating E Co’s lease – which I have referred to above and which was the subject of the first defendant’s affidavit evidence at [59] and [60]). The plaintiffs point to the evidence given by the first defendant: as to his belief that the sons overreacted to the disclosure of the sexual abuse; that he pleaded guilty to more offences than he believed he had committed in order to avoid trauma to his granddaughters; that he received a harsher sentence than he should have done; that after his sentence appeal was dismissed he was not happy about the prospect of more than three years in gaol before being able to get parole because he did not think he would last that long; that one day his granddaughters would come to apologise to him for the fact that he went to gaol; and that (when interviewed in April and May 2016) he had told a Corrective Services officer that he apportioned blame to the victims’ mother and that he had maintained that the victims and their parents would eventually apologise to him. They argue that the reasons given for terminating the lease (assuming those also influenced the decision to disinherit his sons) are not credible.

3. [687]

   Among other things, the plaintiffs argue that the execution by the first defendant of his 30 May 2012 will means that, even if the first defendant did place a secret “success” condition on his sons’ inheritance of the farms, at least as at that date he must have believed they were doing a “sufficiently good job” to remain in the will. They maintain that if the first defendant had been truly concerned with how his sons were managing the farms, then there would have been a request for the accounts of E Co well before the second defendant made such a request of Accountant No 2 in March 2014, and before the notice of lease termination was issued on 27 June 2013; and that if he had been concerned about the size of the debt that was accumulating, then he would not have first acted years after the loan account had ceased rising. As to the performance of any of the off-farm investments, it is said that the first defendant could have asked for documents, as it is conceded he was entitled to do, or made “even the simplest of inquiries”.

4. [688]

   The plaintiffs contend that the reason that the first defendant’s intention to sell only became “firm” after the dismissal of his sentence appeal was that it was then that he became “truly embittered”, when he knew he would be spending a minimum of three more years in gaol, and that he might die there. Thus it is submitted that the first defendant is acting out of the motives of punishment, control and revenge.

5. [689]

   Leaving aside the first defendant’s (untenable, in my opinion) submission that the change made to his will has not been properly understood by the plaintiffs and that, subject to the decisions of the trustee of the discretionary trust to be established under his will (a company controlled by his sister), provision has been made for his sons (which flies in the face of reality, particularly in light of the first defendant’s admission in the witness box that as at 22 August 2013 he wanted his sons to receive absolutely nothing from the farms – see T 986.34-986.36), I am not persuaded on the balance of probabilities that the motivation for the first defendant to disinherit his sons was to punish them or to force an apology from them.

6. [690]

   It is understandable that the sons would have that view, particularly given the coincidence of timing between the dismissal of the first defendant’s sentence appeal and the steps taken by the first defendant to terminate E Co’s lease and change his will. However, there might well have been a range of factors operating on the first defendant’s mind at the time he came to reflect on the exercise of his testamentary bounty (including, though I do not purport to make any finding on this, possible influence from other members of his family with whom it may be that the first defendant has had more contact during the period after disclosure of the sexual offending, or during and after his incarceration, than his sons).

7. [691]

   It certainly seems clear to me that there has been a breakdown in the relationship between the first defendant and his sons (for quite understandable reasons) and the disinheritance may be no more than the product of that breakdown notwithstanding that the change to the will did not come about until some time after both the confrontation and the first defendant’s incarceration.

8. [692]

   Thus I would answer question (b) of the questions posed by the plaintiffs (see [417] above) in the negative. (Of course, that does not necessarily lead to the conclusion that the first defendant in the circumstances of this case was free to revoke his will at any time – as the first defendant contends – and thus, implicitly, free to disinherit his sons.)

9. [693]

   That said, I do not consider that my finding on this “minor fault line” issue is (or would have been had the finding been otherwise) determinative of the ultimate issues in the proceedings. In other words, whether or not the first defendant is now acting vindictively to punish his sons for the fact of his incarceration, does not lead me to conclude that the first defendant is fabricating his denial of the alleged agreement or expectation as to the transfer of the lands that the plaintiffs contend was reached or engendered as a result of the September 2002 meetings. I accept the potential relevance of such a finding (had it been made) on the issue as to whether termination of the Agreement for Lease would have been in breach of an implied term of good faith but in light of other conclusions I have reached that issue does not arise.

10. [694]

    As to the so-called “major fault line”, that issue (determinative in my opinion only insofar as it relates to the claims based on contract/express trust) depends on a number of factual findings. This issue goes to the underlying purpose of the business structure adopted at or following the meetings in September 2002. The plaintiffs identify the factual dispute between the parties in this regard by reference to [31] of the first defendant’s affidavit affirmed 2 November 2015 in which he deposes that: he had no intention of handing over the land to his sons; he never said to his sons or anybody else that he would do so; he had the idea for a company with three equal shareholders being his sons so that they could run the business themselves and have the benefits themselves; and he considered the arrangement to be experimental. In argument, the issue was premised on whether or not the purpose of the business structure was the transfer of the farms into a trust.

11. [695]

    On the issue as to what transpired at the relevant meetings in 2002 (and particularly the meetings on 18 and 25 September 2002), which is relevant both to the contract/trust claims and the proprietary estoppel/constructive trust claims, it is convenient to address first the submissions made by the first defendant as to the construction or interpretation to be placed on the various notes made by B.

12. [696]

    First, as to the notes at CB Tab 91 (attributed by B in his affidavit to the 11 July 2002 meeting) and the notes at CB Tab 118 (attributed by B to a meeting between July- September 2002), when cross-examined B was at first unable to say which, of the meeting referred to in the notes at CB Tab 91 and the meeting referred to in the notes at CB Tab 118, occurred first (from T 102.34). He said that he did not believe the note at CB Tab 91 was the first meeting (T 102.50). The first defendant says that (based on B’s evidence at T 102.50) the better view is that B says that the note at CB Tab 118 (to the extent that CB Tab 118 is accepted as being a note of a meeting) relates to a meeting that occurred before the CB Tab 91 meeting (First Defendant’s Closing Submissions, [53]).

13. [697]

    The first defendant points out that both sets of notes are undated, which is not B’s usual procedure with meeting notes (see T 92.01-92.09). The note at CB Tab 91 records the attendees in a different manner to B’s other notes (in that Accountant No 1’s full name is used rather than initials, and the first defendant’s name is recorded under his date of birth); the note at CB Tab 118 records no attendees.

14. [698]

    The note at CB Tab 91 is said to differ markedly from the corporate diagrams of the then “existing group structure” created by Accountant No 2 (see CB Tabs 120 and 235) (First Defendant’s Closing Submissions at [55]). In particular, the first defendant notes that Accountant No 2’s diagram (apparently a reference to the diagram at CB Tab 120, dated 25 September 2002) does not show the different “divisions”, but rather shows how the different family trusts receive distributions from the unit trust. B’s diagram does not show the latter but instead shows divisions coming off the “shelf” company (a feature it shares with the note at CB Tab 118 –the divisions there coming under the heading “holding company”).

15. [699]

    Pausing here, one indication that the note at CB Tab 91 was taken at a meeting (rather than, say, being a note of B’s thoughts in advance of a meeting) is the reference to, and details in respect of, the Mid-lands Trout Farm on page two (something obviously gleaned from Accountant No 1 – as the farm was owned by a client of the Local Accounting Firm).

16. [700]

    The first defendant argues that it is significant that the note at CB Tab 91 notes a query as to whether to buy assets outright, pointing out that the note at CB Tab 117, which is dated 18 September 2002 - see [163] above, includes reference to capital gains tax. Insofar as the plaintiffs argue that the reference to capital gains tax must be a reference to the first defendant’s land, the first defendant says that the reference in the note at CB Tab 117 to a corporate rate of tax for capital gains tax would be relevant if, as appears at CB Tab 91, there was a discussion as to the new entity being a company and buying assets outright. (That proposition was put to B at T 136.03-138.17 and the first defendant submits that B was less than forthright in his response.) It is submitted that what should be accepted from this evidence is that the idea, as at 18 September 2002, was to establish a structure and buy assets, with a question arising as to whether the directors would lend money to the “shelf” to buy the assets or buy the assets directly themselves. (The first defendant submits that it is also clear that B’s understanding of business structures is fairly basic, (referring to his cross-examination at T 120.45).

17. [701]

    The first defendant submits that the note at CB Tab 91 also demonstrates an intention that “the entrepreneurs” were to be B and C (not the first defendant, B and C; and not A), pointing to the question mark for the third contributor (the first page of the note at CB Tab 91, at CB 202) (see T 105-106). The first defendant further points out that the note at CB Tab 91 records nothing said by him (which was put to B in cross-examination: T 108.9).

18. [702]

    The first defendant argues that it is clear from CB Tab 91 that there is no reference to any land owned by him, nor any suggestion that it be transferred. (The first defendant also submits that B’s evidence is significantly discredited by his evidence at T 122: namely that, having earlier agreed that the “boxes” under “shelf” represent divisions of the company, be it a further company or a business, he then maintained, when it was put to him that there was no reference to the first defendant’s land or its transfer, that the word “agri” represented not only land, but the first defendant’s land.)

19. [703]

    The first defendant thus submits that, in respect of the note at CB Tab 91, it should be found that: it was created by B; it is not dated, contrary to B’s usual note taking practice; it identifies only B and C as involved with a possible bottle shop; and it envisages “boxes”, being either companies or businesses of the shelf company, “buying assets outright”. The first defendant: says that there is no reference to any land of the first defendant being transferred, and that the reference to “buying assets” is expressly contradictory to such a notion; notes that there is no reference to any statement or other conduct of the first defendant encouraging the business structure the subject of the note (and that the note goes much further than noting a possible structure in that it lays out an entrepreneurial map for the aspirations of B and, it is submitted, C); notes that there is no mention of any inducement to conduct the possible business on the basis of any land being transferred; and says that the note shows an intention on the part of B to develop business interests free of any belief or understanding that in pursuing his own preferred career path the first defendant would transfer or hold on trust any land for him.

20. [704]

    As to the note at CB Tab 118, the first defendant maintains that this is significant because it establishes that B’s intent to change his career for his own purposes was unconnected to any alleged inducement from the first defendant (referring also to B’s evidence at T 104.5; T 284.31). (In this regard, the first defendant points to his own evidence in the witness box to the effect that he did not want to provide a “carrot” to his sons; see T 912.33-912.41 – i.e., as I understood his evidence, that he wanted them to go into business together and see if they could make a success of it without holding out an inducement for them to do so.)

21. [705]

    The first defendant points out that, consistent with the lack of any reference to transfer of land in B’s notes, neither of the group structure diagrams at CB Tabs 120 and 235 has any reference to transfer of land (though I interpose here that the diagram at CB Tab 235 (see also annexure A to Accountant No 2’s affidavit dated 24 May 2017) does include a reference to the first defendant as “owner of Freehold Land”, with reference to a lease fee payable by E Co, which is described as “Owner of Business” - see above at [248]).

22. [706]

    The first defendant submits that it is obvious that the notes at CB Tab 118 are not, in their entirety, notes of a meeting. B appeared to accept this (see T 96.39) and I would agree. Page 4, for example (commencing “Half of all start-ups fold within three years…”), seems more likely to be a note setting out B’s thoughts than a note recording statements made at a meeting with Accountant No 1 and others. Similarly, note 2 on page 5 (about which each of the sons was cross-examined – i.e., that 2002 was “a year of change and opportunity”) seems aspirational or motivational rather than something likely to have been said in a meeting with an accountant (although perhaps, unstereotypically, some accountants may have a motivational bent). Whether or not that is a correct reading of the notes, it illustrates the difficulty in treating them as a reliable record or summary of the discussion that took place at the meeting(s); as opposed to as a reliable record (which I accept that they are) of the matters that were being considered by B at the time and that may well have been raised in some form for discussion at the relevant meeting(s).

23. [707]

    Further in relation to the note at CB 118, the first defendant notes that B’s evidence was that the meeting was some time “during the period July to the end of September 2002” (see [189] of B’s 2015 affidavit). The first defendant argues that the evidence points to this meeting being earlier than July, not later, given the notes of B’s intentions at the concluding pages (in particular, the reference to 2002 as a year of opportunity and change).

24. [708]

    Insofar as there was a suggestion in the cross-examination of the first defendant that there was a connection between the date of the purchase of Property No 9 on 29 August 2002 (see [138] above) and a time sheet record of a meeting at the Local Accounting Firm the following day, with the note at CB Tab 118, the first defendant submits that the meeting the subject of CB Tab 118 (to the extent that it is found to be of a meeting) has no connection to anything to do with Property No 9 and says that CB Tab 118 is not a note of a meeting on 30 August (see First Defendant’s Closing Submissions at [61]). (The first defendant says that what the undated note at CB Tab 91 represents is similarly in doubt.)

25. [709]

    Finally, as to the notes at CB Tab 118, the first defendant says that: the description is of discussions not of any conduct (or omission) of the first defendant that could be said to be the basis for any reliance by the sons; the diagrams are similar to the diagram of CB Tab 91, showing a holding company with “subsidiary” entities (it being submitted that the notes of diagrams are B’s thoughts, not any alleged accounting advice); the last line of the second page at CB Tab 118 (CB page 408) states “where to from here” in a theme consistent with the language on the fourth page (at CB page 411) (“year of change and opportunity”), which the first defendant says B conceded was not a meeting note. The first defendant submits that the note at CB 118 cannot be concluded to be a meeting note at all. He points out that the diagrams on B’s note are significantly different to those created by the Local Accounting Firm; that there is no mention of land or of any transfer of land; and that there is no mention of any inducement to conduct the possible business on the basis of any land being transferred; and he submits that the notes show an intention on the part of B to develop business interests, free of any belief or understanding that in pursuing his own preferred career path the first defendant would transfer or hold on trust any land for him.

26. [710]

    The first defendant notes that in evidence at T 103.36, B said that his plans for the future were happening at (or before) July 2002. The defendant points to B’s admission (at T 104.05) that his intention was to head out and be entrepreneurial. It is submitted that “[f]ar from being induced by any act or omission of [the first defendant], [B] was encouraged to take this course by his own ambition, and the circumstances in which he found himself, which included not only the gift of $1 million, but also a significant yearly income received by his wife” (First Defendant’s Closing Submissions, [53]). The first defendant also notes that (at T 284.31) B agreed that he was encouraged to become an investor due to the steady income of his wife, which she had received ever since he had known her, and which at times was as much as $120,000 - $150,000 per year (T 284.17-284.27).

27. [711]

    I have concluded, by reference to the content of the respective notes, that it is likely that they were made at or around the same time (given the similarity in the diagrams on the notes). I cannot determine which is likely to have been made first. I consider that the document at CB Tab 91 is likely to have been made at a meeting because of the reference to a specific trout farm owned by one of the clients of the Local Accounting Firm, but it could equally have been a note made of a telephone conversation with Accountant No 1 (noting Accountant No 1’s evidence that B would call him from time to time with queries – see his affidavit at [17]). I consider that pages 4-6 of the notes at CB Tab 118 are most likely not to be notes of a meeting at all. I think there are pointers both ways in relation to pages 1-3 of the notes but on balance would be inclined to the view that this is either a meeting note or a note of a telephone conversation (by reference to the explanation of the various items set out therein).

28. [712]

    What is, however, clear from these two sets of notes is that there is no reference to any discussion as to the transfer of land from the first defendant either to the sons or to any new business structure for the purposes of the family business in these notes.

29. [713]

    As to the 18 September meeting, B’s affidavit evidence (at [207] of his affidavit sworn 2 April 2015) is that “My recollection of the meeting is that the substance of the discussion was to the following effect (in respect of which I have made a handwritten note)”. The first defendant submits that such evidence is inadequate to found a submission that there was any representation, agreement, or encouragement of the type alleged. The first defendant submits that any proposition that the evidence is the independent recollection of B as assisted by the note should be rejected, and that B’s evidence at [207] is a bare recitation of the notes themselves, which recitation, the defendant says, is plainly inaccurate.

30. [714]

    In particular, the defendant notes that [207(c)] of B’s 2 April 2015 affidavit, read with the chapeau to that paragraph, states B’s recollection that “the assets including the farms, would be owned by the [E Unit Trust]”. The defendant makes the point that the notes at CB Tab 117 do not include the words “including the farms”; rather they show “assets” with an arrow then pointing to the unit trust. It is submitted that, read with the earlier CB Tab 91 note, there is good reason to think this is a reference to assets to be bought by the trust. The first defendant submits that B’s evidence on this point (at T 136) is unsatisfactory, characterising it as vacillating between “accepting and veering away from” paragraph [207] of his affidavit as being a summary of the note as opposed to being his recollection of having seen the note; and argues that B’s evidence as to the meaning of “assets” in this note should be rejected.

31. [715]

    The first defendant points in support of this submission to B’s evidence (at T 136-7) as to capital gains tax: namely, that the only tax rate being referred to was the individual rate (thus supporting a view that the discussion was as to transferring land owned by an individual, namely the first defendant). The first defendant emphasises that there is no reference in the note to any transfer of any land. He says that B’s evidence that he was not aware of the 30% company tax rate (and was not aware of that even at the date of his cross-examination) was “plainly disingenuous” (First Defendant’s Closing Submissions, [69]).

32. [716]

    As to the note at CB Tab 117, the first defendant says that, despite being dated and recording the attendees, it suffers from uncertainty. He submits that, objectively, the second page of the note is a meeting schedule, or agenda, and not a note of a meeting as such. The first defendant points out that, when initially asked about the second page of the note (at T 139.05), B was unable to say when it was created but when reminded that it formed part of CB Tab 117 he said “This belongs to this does it? Okay, then it belongs here” (T 139.22). The first defendant submits that B’s evidence (at T 139), is clearly not his recollection, but a reconstruction. He says that B then admitted that the second page of CB Tab 117 is an agenda for the 18 September meeting created by him and with no reference to any transfer of land by the first defendant. The first defendant argues that, to the extent that it can be accepted that this second page of CB Tab 117 is able to be so described, it supports the idea that the reference to assets on the first page is not a reference to land, because land was not on the agenda.

33. [717]

    The first defendant says that another oddity as to B’s diagrams is that he says in his affidavit that he copied Accountant No 1’s diagram but the only evidence of a diagram presented by Accountant No 1 at a meeting is the document at CB Tab 120 (which I note is dated 25 September 2002 and therefore more likely to have been handed out at the meeting on that date), which is different to B’s diagram in that it does not show the “divisions”. The first defendant says that it is unclear when and for what purpose the second page of CB Tab 117 was created.

34. [718]

    The first defendant notes that B admits there is no reference to land on the document (T 127.48-127.49) but sought to argue that “assets” means land. The first defendant submits that B’s evidence on this issue discredits his evidence: in that, first, B agrees there are other assets of the first defendant’s besides land, but then asserts there are no other assets but land at that time (T 129.13); that B then argues there was talk of transfer of the land due to the note of a capital gains tax calculation but “retreats” from this and states the calculation was to explain how capital gains tax works (T 129.47). The first defendant argues that the latter characterisation is the more likely: on the basis that, in the event that the structure was a company, the 30% tax rate would apply to any capital gains tax liability, as opposed to the 24.75% rate on an individual, should the assets be held in a way incurring individual liability. The first defendant argues that further support for his view is the arbitrary figures that are used (of $1 million and a gain of $500,000) which in no way relate to the value of the first defendant’s landholdings at that time.

35. [719]

    The first defendant argues that, based on the agenda, the purpose of this meeting was clearly to focus more on progressing the fish farm as much as anything else (see T 141.37-142.16) and submits that it is indicative of the unsatisfactory nature of B’s evidence that “even matters as obvious as this” were dealt with in a guarded fashion.

36. [720]

    The first defendant also points out that the final note on page 2 is written with a different pen. It is accepted that a pen may have run out (as B speculated at T 142.22) but the first defendant postulates that another explanation would be that it may have been written later. The first defendant submits that the content of the final note suggests a continuation of the personal planning of B that was seen in CB Tab 118. The first defendant places emphasis on this as showing that the notes are not just notes of meetings; and that B is “progressing his own interests, and hopes for the future” (First Defendant’s Closing Submissions at [74]).

37. [721]

    The first defendant argues that the notes show that well before 18/25 September (possibly as early as April and certainly by July), B had marked out and commenced his new career (something the first defendant says was admitted by B at T 142.43). The first defendant says that, consistent with this view, the notes at CB Tab 117, as with the earlier notes, contain nothing akin to an inducement by the first defendant for the sons to be part of the business (noting the first defendant’s own evidence as to the reason for the lack of any inducement at T 912.40). It says that what the note sets out is a “discussion” of a business structure that ultimately did not happen.

38. [722]

    I consider that the first page of the notes at CB Tab 117 is clearly a note made of the meeting held on 18 September 2002. It is dated; the attendees are noted; and it includes references to the solicitors to whom Accountant No 1 referred at the meeting. I consider (by reference to its contents) the second page more likely than not to be a note made by B whether before or after the meeting – the first part seems to be a list of things to be done or to which he was to attend (or perhaps, as the plaintiffs concede is a possibility, may be an agenda of some kind); the last point (in the different pen) a motivational entry, whether made at the same time as the first or not.

39. [723]

    The first defendant submits that it is at this point that the “reconstructed” case of the plaintiffs “comes into full bloom”, there now being no suggestion that he will transfer his land to either a trust or a company (due to capital gains tax and asset protection considerations) but that there will be a transfer by way of declaration of express trust.

40. [724]

    The first defendant says in this regard that: there is no declaration of trust in writing; a declaration of trust fails both to achieve the capital gains tax benefit and to give asset protection; there is no reference in the note at CB Tab 119 to any decision not to transfer the land as it is alleged had previously been planned nor to any decision to transfer the land so that it will be held on trust by the first defendant. The first defendant further submits that it is inconsistent with many later events such as discussions (not involving him) of owning Property No 10 in partnership (see CB Tab 204).

41. [725]

    The first defendant also notes that a feature of [212] of B’s 2015 affidavit (comparable to [207]), is the addition of words that do not appear on the note (see at [207(c)]) to add to “assets” the words “including the farms”. The first defendant here points to [212(g)], where it is asserted that the first defendant would leave his estate equally to the sons except for Property No 8. The first defendant submits that this was not said at any of the meetings under scrutiny, relying on the following in support for that submission. First, that such an assertion is not supported by B’s notes (in this regard the first defendant says that the reference to testamentary trusts could be explained in a number of ways, including as a possibility that it might be solely referrable to the sons’ wills). Second, that the first defendant’s wills at that time had, since 1984, provided that his estate be equally divided between his sons and hence it is submitted that it was not a matter requiring discussion. (Nor, it is said, is there any evidence that it was a matter relied on for the sons to be part of E Co). Third, the reference to Property No 8 being dealt with separately occurs nine years after the property was purchased. Fourth, it is said to be inconsistent with [207], namely that in [207] B swears to what he says is his recollection yet he does not “recall” what (at [212(g)]) he says was part of the substance of what he understood of the meeting.

42. [726]

    The first defendant argues that this shows that [207] of B’s affidavit is “simply a repetitive setting out of what is in the note itself” (with the addition of the reference to land) and [212] “on the limited basis it is read, is [B]’s understanding of we know not what”.

43. [727]

    The first defendant argues that the plaintiffs unjustifiably assume a connection between the references in the earlier notes to “CGT” (at CB Tab 117) and to the words appearing in the note at CB Tab 121 to “assets held/owned by trust”. The first defendant says that there is no connection expressed in the notes of those two matters and submits that the notes suggest they are not connected, because the “CGT note” has the reference to individual and company tax rates, which the defendant says shows that something different is being referred to than a transfer from a known entity. The first defendant maintains that the more likely discussion as to capital gains tax was that it was about capital gains tax consequences for whatever structure was decided upon, when it bought assets, and was unrelated to the first defendant’s land.

44. [728]

    The first defendant submits that Accountant No 1’s evidence concerning [217] was that it was the “banter of the comment” (about accountants always suggesting this to rack up fees) was the sort of thing that Solicitor No 2 would say and does not support an argument that the words set out at [217] were spoken, and therefore that discussion of “transfer” took place. The first defendant says that this was not an agreement by Accountant No 1 in cross-examination to any part of the paragraph concerning capital gains tax or the transfer of land. The first defendant argues that Accountant No 1’s evidence was a comment as to the conduct of accountants increasing fees; the express words of “transfer” were not put. The first defendant notes that later, when a proposition was put to Accountant No 1 that he provided advice concerning the transfer of land, he rejected it.

45. [729]

    The first defendant argues that the quote at [217] of B’s affidavit is notable because it is open to be interpreted more sensibly as suggesting that the first defendant should continue to own the land as he has always done, and leave it to the sons in his will. It is submitted that the net effect of the plaintiffs’ own evidence is that nothing changed in 2002.

46. [730]

    The first defendant submits that no reliance can be placed on B’s evidence concerning the note at CB Tab 119. The first defendant says that B’s affidavit omits the word “asset” next to the first defendant’s name, and “it minimises to the point almost to exclusion” the contents of the second page (which did not form part of CB Tab 119). The first defendant submits that the only transfer of assets that was discussed at the meeting was of the assets on this second page. The first defendant submits that the notes taken together support this view, as does the objective evidence of Accountants No’s 1 and 2. (Reliance is placed on the lack of explanation for the non-attendance at the trial of Solicitor No 2, who it is said was listed as a witness for the plaintiffs. I have referred to this above at [200].)

47. [731]

    The first defendant submits that a feature of the note of the 25 September meeting is that it makes no reference to a plan being discarded, and some other plan being adopted. The first defendant says that the evidence shows that Accountant No 1 had organised documentation for a business structure, enabling it to use a company and a unit trust and family trusts. He points out that it is not in dispute that the trusts were not used. The first defendant says that there is nothing in the notes that suggests any great divergence from what had been previously discussed; nor to suggest any conclusions were reached.

48. [732]

    The first defendant says that Accountant No 1’s agreement in cross examination that a structure had been identified does not assist the plaintiffs because the question of what structure is to be used, and when any such decision was made, does not determine the question of transfer. The first defendant says that whether a trust structure was used involving the E Unit Trust and a range of family companies, or whether E Co was used as a trading entity, does not resolve the question of whether there was ever any meeting of minds between the first defendant and each of his sons, taken individually, (or even any raising of the issue), as to if, and if so how, and on what terms, there would be a transfer of the first defendant’s land. The first defendant argues that the fact that there is so little evidence, if any, as to these matters supports the view that the concept of some transfer of the first defendant’s land was simply never discussed.

49. [733]

    The first defendant says that there is objective evidence of transfer of other assets, such as plant and equipment (see the notes at CB Tab 121) and notes that this was the subject of the unsigned Aitken letter. The first defendant says that B’s oral evidence (at T 156) adopts a very dogmatic stance when asked about the notes of the 25 September 2002 meeting (pointing to his insistence that the words “[the first defendant] holds the assets” are there in his note, and that Solicitor No 2 said this). The first defendant emphasises that those words are not in B’s note, nor is there any reference to what farming families do. The first defendant argues that this evidence damages the plaintiffs’ case, describing it as one of a number of examples where B insisted that something was the case when he had in front of him a document that showed it was not so (and arguing that evidence of the quality of that at T 156.09 is unpersuasive).

50. [734]

    As to the assertion (at T 156.21) that the words “[the first defendant] asset” are a reference to the land, the first defendant disputes this but says it shows there is no dispute that the land is his (i.e., an asset of the first defendant). The first defendant says that where the parties differ is whether that asset is held by the first defendant for some other entity or purpose.

51. [735]

    The first defendant notes that there is no reference in any of the notes to the first defendant “holding” any asset for any other entity or purpose, whether it be on trust or otherwise, and there is no reference in any of the notes to any transfer by the first defendant of any of his farmland. He says that, as recorded in the note at CB Tab 119, the only assets being transferred were those assets listed on the second page of CB Tab 121.

52. [736]

    The first defendant argues that there is express reference in B’s own notes to the first defendant transferring non land assets to the business entity (arguing that it is still not stated as at 25 September whether “[E]” is a trust or a company), and no reference to any transfer of land. It is submitted that a recurring theme of the plaintiffs’ evidence is that the most important matters are left unstated, and matters consistent with the defendant’s case are clearly recorded (one example of this being at T 157.35-40).

53. [737]

    The first defendant contends that, as at 25 September, the position was that: there is no evidence in writing expressly referring to discussions concerning the transfer of the first defendant’s land; there is no evidence in writing expressing a view that the first defendant at any time had agreed to the transfer of his land; the express intent of the plaintiffs was not to transfer the land; the alleged purpose of the plaintiffs’ change of planning to avoid capital gains tax and provide asset protection from A’s then wife would have been completely defeated by the first defendant holding the land on trust.

54. [738]

    As to the submission that B’s notes of the meeting of 18 September 2002 make no reference to land, the plaintiffs argue that until the advice of Solicitor No 2 on 25 September 2002 (the giving of which they say was in substance not disputed) there was no need for B at the time to distinguish land from the other assets to be transferred into E Co (and that it was as a consequence of Solicitor No 2’s advice that the notes of the meeting of 25 September 2002 mention a lease for the first time).

55. [739]

    Given that the “major fault line” is premised on there being a discussion as to the transfer of the farms into the E Unit Trust, I cannot accept the submission by the plaintiffs that, even absent a finding that there was an express discussion of the inter vivos transfer of the farms into the E Unit Trust, they have satisfied their burden of proof on that issue. However, I accept the submission that, whether or not the inter vivos transfer of the lands was discussed, is not determinative of the proprietary estoppel claims.

56. [740]

    Of the particular factual questions posed by the plaintiffs in relation to the purpose of the new business structure discussed by the parties (see [417] above) I would thus answer: (a)(i) in the negative; as to (a)(ii), that nothing turns on whether the purpose of establishing the new business structure was one described as succession planning or not – since its effect was clearly so designed; and as to (a)(iii), that as at 25 September 2002, the first defendant and his sons had reached substantial agreement as to the business structure that they would adopt going forward (but that this did not amount to a binding and enforceable agreement).

57. [741]

    The first defendant argues that the plaintiffs’ case hinges on establishing that an agreement or representation was made on 25 September 2002. He says that, if that was so, there should therefore have been no further discussion as to the business structure after this date, in terms of the form it should take; yet the plaintiffs’ evidence shows that the structure was subject to different possibilities, and only finally confirmed, as late as March 2004, 18 months later.

58. [742]

    The first defendant argues that the conduct of the sons after September 2002 makes clear that there was no agreement (or understanding or expectation on their part) for the transfer inter vivos of the land to them or the creation of a beneficial interest in the land at that time.

59. [743]

    They point in this regard to the interaction of the sons with Mr Beattie and the steps they took after the notice of termination was issued.

60. [744]

    As to other “difficulties” in B’s evidence, the first defendant first goes to the position of Mr Beattie, who first acted for B in 1996 (see T 194.33). The first defendant notes that nothing about any interest in the first defendant’s land was mentioned by B to Mr Beattie on the various occasions on which his advice was sought: neither in 2005/6 in respect of B’s individual family trust deed nor in 2006 in respect of his will (see invoice of Mr Beattie dated 28 April 2005 at CB Vol 32 p37; T 198.5-198.19); and not when B provided Mr Beattie with the 2004 diagram (at CB Tab 235) showing the first defendant as the owner of the land (T 199.25). The first defendant submits that it is unlikely in the extreme that, if the position was as B and his brothers allege, B would hand this diagram to his solicitor, clearly showing the first defendant as the landowner, and seeking advice as to his rights in relation to the land, and would not indicate that the land was being “held” by that landowner for his benefit. The first defendant submits that the conclusion to be drawn, from the fact that none of the sons told Mr Beattie this, is that none of the sons held any such expectation.

61. [745]

    The first defendant notes that B agreed in cross-examination that he never told Mr Beattie about any interest that he, B, had in the land, by trust or otherwise. The first defendant argues that the reference in Mr Beattie’s notes of his instructions (see CB Vol 32 p 50 and B’s evidence at T 202-3) to a unit trust cannot be a reference to his land being in a trust. The first defendant says this conclusion is supported by the value of “$1,000,000” in Mr Beattie’s note, which on the evidence is not a reference to the land (noting that B agreed at T 199.35-45, that value is a value that could be attributed to the business).

62. [746]

    In relation to the option deed drafted by Mr Beattie (see CB Vol 32 pp 265 and 267 and T203-4) the first defendant emphasises that there is no reference to any interest in the land in the instructions that were given. The first defendant says that the option deed was only drafted because the accepted position was that B had no interest in the land – and hence B’s evidence to the effect that he thought he had some interest in the period from 2002 – 2009 should be rejected.

63. [747]

    As to the advice sought from Mr Beattie in 2013, after receiving the notice to vacate, the first defendant points to B’s acceptance of the proposition that he gave Mr Beattie as much information as he possibly could as to the occupation of the land by E Co (T 207.27). The instructions are recorded in the handwritten notes at CB Vol 32 pp 192-3. The first defendant submits that the email at CB Vol 32 p 194 from B on 29 August 2013 is telling, in that B there is telling Mr Beattie what the first defendant does not own. The first defendant argues that B otherwise accepts the first defendant’s ownership without restriction of the land (because he says nothing about it, other than to make arrangements to vacate).

64. [748]

    In relation to the reference to the Westpac Deed (at CB Vol 32 pp 197-198) the first defendant notes that there are also no instructions of the type on which the plaintiffs’ case is now based (see T 214.31). Similarly, the first defendant points to the evidence as to the “squaring of the ledger” (at T 299.01-21).

65. [749]

    The first defendant argues that B accepted he needed to act on the notice to vacate, hence the instructions leading to the draft letter of 3 September 2013; see T 301.17. The first defendant argues that the suggestion that the Agreement to Lease documented in the minutes dated 1 July 2003 is “somehow endless” because it has no end date is not, it is said, supported by the conduct of the plaintiffs (and not supported by the law). The first defendant argues that even if there was no understanding of the plaintiffs as to termination, the provisions of the Agricultural Tenancies Act still apply.

66. [750]

    The first defendant relies on the following matters as demonstrating the lack of any interest in the land by the plaintiffs as alleged (which were put to B in cross-examination commencing at T 175.30): the lease to E Co, emphasising that the minutes at CB Tab 188 record that the first defendant has offered E Co the opportunity to lease land owned by him; the lack of any document suggesting a trust arrangement (see T 176.39); that all the land was paid for by the first defendant, who can do what he likes with money from the Family Trust (see T 177.18); the sons’ need for the first defendant’s consent to use farms as security, indicating that the first defendant had the sole ability to determine whether security was given; that B was told in 2010 that he had no legal interest of any kind in the land; that B never put forward his position as beneficiary of a trust worth at least $10 million to any potential financier (see T 181.24; 181.41); that the first defendant bought Property No 12 without needing B’s permission (T 182.26); that the first defendant sold Property No 12 without needing B’s permission (T 182.35); that the first defendant spent the proceeds of sale of Property No 12 without telling B (and the defendant notes that in B’s affidavit B suggests that the first defendant should spend these proceeds on assisting his brother); that B’s understanding was that he had no entitlement to the said proceeds (T 183.04), and this is contrary to the claim; that at a time when joint ownership was the allegedly proposed or discussed structure, the first defendant bought land in his name (both Property No 8 and Property No 9) (T 183.44); that in the meeting with Accountant No 2 in 22 October 2009, B did not tell Accountant No 2 that the first defendant held the property on trust (T 184.46); and that the first defendant bought Property No 11 in his name after 2002 (see T 185.45-186.01).

67. [751]

    The first defendant points to other matters that he says B accepted as inconsistent with B’s claim and consistent with the first defendant’s position: the consolidated asset schedule completed for Rabobank in 2011 (see CB Vol 32 p 322 and T 234-236 where the first defendant says B was evasive in answering obvious questions); that as at 30 March 2014 B accepted that the first defendant was fully entitled to sell the properties (T 254.41; T 255.49-256.02; T 256.22) at which time B understood he was a major beneficiary of the first defendant’s will, along with his brothers (T 254.46 and T 256.16); that in his email of 30 March 2014 (at CB Tab 1138), B said he had deep concerns that the first defendant could not “be trusted” with his grandchildren’s inheritance; and that he explained this in cross-examination by saying that he had presumed that he would be “stepped over” in the first defendant’s will in favour of the grandchildren (see T 256.29) (the defendant points to this evidence to show that B’s expectation was that of expectant heir and nothing more); B’s acceptance that the second defendant, having the first defendant’s power of attorney, was the only person who has authority to deal with the properties (see T 276.41); that as at 31 March 2014, when the caveats were lodged relying on the 1 July 2003 minute, B is unable to say that he gave any instructions as to any agreement of the type now alleged (see T 282.01); that (at T 282.14) B states he has no recollection of any conversations where he said to anybody that his father said he would transfer the land to him; and the draft letter of Mr Beattie, drafted on instructions and dated 3 September 2013 (CB Vol 32 at p 229).

68. [752]

    The first defendant also relies on the concessions that are made by the sons to argue that their understanding or expectation was not as has been alleged in the second further amended statement of claim (pointing to [74(b)] of the second further amended statement of claim alleging an agreement for there to be joint ownership of all the first defendant’s farms present and future; and [75] alleging not that there would be a transfer, but that the first defendant would now hold the farms for the sons’ benefit, particularised as being a transfer of the equitable interest). It is submitted that the “key paragraphs” of the affidavits of A, B and C do not make this out for two main reasons: because they are inadmissible, or alternatively of no weight; and because, as conceded by the witnesses, even if admissible the paragraphs do not contain any act done, or words spoken by the first defendant that could be said to give rise to the alleged representation, assumption or expectation. The first defendant argues that C made concessions to the opposite effect of the allegations found in the pleading: at T 400.17-20 (that he thought or understood that his interest in the lands owned by his father up to September 2002 was that he would be a beneficiary of his estate equally with his brothers); at T 401.26-38 (that it was only from late 2002 that he thought that he had any interest in his father’s real estate – having been taken to [6(c)] of an affidavit in which he deposed that from late 2002 he understood that the properties were to be held by the first defendant “for us jointly”)’ and at T 450.32-451.3 (that his interest in the first defendant’s land did not change after the meeting held on 25 September 2002).

69. [753]

    The first defendant points to the evidence at T 332.01, where it was put to A that at no time was it suggested that there should be a transfer of property by the first defendant, A did not assert that a transfer was to occur, but said: “He didn’t transfer the properties at the second meeting, it wasn’t a viable proposition. I do recall that”. A accepted that the consequence of this was that the ownership of the land was the same after September 2002 as before (T 332.09). A’s evidence was that before 2002, the properties were entirely belonging to the first defendant (T 332.12). At T 341.15, A agreed that if an intergenerational transfer was being considered then the outright owner of the land must have been considered to be the first defendant.

70. [754]

    The first defendant notes that in respect of the 18 September meeting, and the notes concerning capital gains tax, A allowed for the possibility that the capital gains tax reference was not a reference to a transfer of land from the first defendant, but was talking about the conduct of the business going forward (T 337.09).

71. [755]

    As to the allegation that the agreement (or expectation) included an agreement (or expectation) as to off farm activity, the first defendant points to: the differences in the group structure diagrams (CB Tabs 120 and 235) and B’s notes (the former, unlike B’s notes, making no reference to “boxes” or operations below the unit trust or corporate vehicle proposed for the family structure); to the fact that B agreed that the projects were “ad hoc”; and that for the most part there has been “no adherence” to the alleged Revised Family Business Agreement in respect of “off farm” activity. The first defendant argues that the off farm activity was engaged in to the (significant) benefit of the sons, not for his benefit.

72. [756]

    I interpose here to note that the plaintiffs submit that the difference between the diagram in B’s notes and the structure diagrams presented on September 2002 and March 2004 can be explained by the different stages of development of the joint family business: an early exploration of concepts in July 2002, the expression of those concepts in one single, coherent, logical structure by 18 September 2002, and the modification of that structure to take into account the change flowing from the advice of Solicitor No 2 on 25 September 2002, the subsequent change in the share structure and directorships of E Co as advised by Accountant No 2 and the formulation of the terms of the Agreement for Lease.

73. [757]

    As to off-farm activity, the first defendant notes that: he was not asked to contribute to the first “off farm investment”, to which the sons each contributed $75,000; that he, not the sons, provided the security for the B Project; that he gifted the sons their interest in the W investment; that he has no interest in either the P or the C Hotels (and is at risk while his security remains on foot); that he was not invited to be a partner in any venture concerning the R Hotel (an investment that did not proceed); and that there is now in place a structure whereby moneys are borrowed in the names of both E Co and EM Co, some of which funds have been on-lent to the trustee of B’s individual family trust (without a loan agreement and without interest) and hence there is no benefit in either of these loans to the borrowers (i.e., E Co – see T 218.27 – or EM Co; see T 215ff; T 542ff) or to the first defendant (see T 225.35).

74. [758]

    The first defendant argues that B’s evidence (for example at T 216.15 and T 219.31) to the effect that he did not know about particular matters relating to EM Co is inconsistent with B’s claim to be the “back room person” for the overall business.

75. [759]

    The first defendant says that evidence as to the off farm investments: demonstrates that there was no agreement, or representation or expectation as alleged; demonstrates the unreliability of the plaintiffs’ evidence not just in relation to those investments but in any respect; and is consistent with what was the pattern of the sons’ lives before 2002 and supportive of the view that nothing changed in 2002, other than to establish a vehicle to allow for the conduct of a farming business in which the sons were all involved. Thus it is submitted by the first defendant that the evidence as to off farm activity supports his case.

76. [760]

    The first defendant points to the discrepancy between the pleaded case that off farm investments were to be jointly owned by him and his sons (see [67(d)] of the second further amended statement of claim) and the corresponding pleading as to the revised agreement or expectation, using EM Co as the vehicle for that purpose, and the fact that, apart from his interest as a shareholder in EM Co, the first defendant has no interest in any off farm investment involving the sons and the investments have been made on an ad-hoc basis in almost all cases without using EM Co as the investment vehicle. This is relied upon both as establishing that the non-existence of the alleged agreement and for the proposition that the sons never held (and did not rely on) the alleged expectation.

77. [761]

    The first defendant also points to conflicting evidence of the sons as to who was responsible or had the control of matters in relation to the off-farm investments (see B’s affidavit that “the off-farm investments were pursued primarily by [C] and me”; and the following evidence of the sons in cross-examination – A, at T 387.09-387.23; B, at T 114.13-114.16; T 172.32-172.45; T 216.11-216.16; T 215.33-215.36; 219.29-219.32 and 224.22-224.31). The first defendant submits in particular that B’s affidavit evidence relating to EM Co and the off-farm investments is unreliable having regard to B’s oral evidence in which he conceded he had no knowledge of matters such as the way EM Co operates; and argues that this demonstrates more generally that B is an unreliable witness; that EM Co was not central to any alleged off-farm investments strategy; that there was no off-farm investments strategy; and that there was no agreement or revised agreement as alleged.

78. [762]

    The first defendant relies on the discussions as to the potential acquisition of the R Hotel as demonstrating that the plaintiffs were acting contrary to the alleged 2002 agreements less than nine months after it is alleged they were made (referring to B’s evidence as to the 2 May 2003 meeting including his notes in which a partnership is proposed with the sons purchasing the outright land and business and renting or leasing to EM Co the operations, which is said to be inconsistent with the alleged Revised Family Business Agreement and with the alleged expectation, and his evidence in cross-examination in relation to the plans for the ownership of the R Hotel – see T 167.47-170.10 (which the first defendant maintains was evasive, unconvincing and unreliable and demonstrated a “dogged insistence” and refusal to concede on matters that he perceived might not assist his claim). The first defendant also points to C’s evidence in this regard at T 495.11-29; T 496.05-19; T 498.31-499.01). Again, the first defendant submit that C’s refusal to acknowledge the effect of B’s note established him as an unreasonable and unreliable witness who, like B, was unprepared to make concessions that he perceived may harm his case.

79. [763]

    The first defendant similarly refers to the steps taken in relation to the E Project, W Unit Trust and the hotel investments as not being in accordance with the pleaded expectation or the Revised Family Business Agreement; pointing to circumstances such as the different arrangements for the funding of these various investments.

80. [764]

    As to the E Project, C’s evidence was that the first defendant did not contribute any money towards the investment but had been asked to do so (see T 427.42-428.32). The first defendant relies on this as evidence that his conduct was “clearly at odds” with the plaintiffs’ allegation that he had agreed on 25 September 2002 that he would be equally involved in all off-farm investments or alternatively had created an expectation in his sons that this was the case.

81. [765]

    As to the investment in the W Unit Trust, this was initially funded by the first defendant alone (who C conceded had lost money on the investment) and it was not held by EM Co. The defendant notes that, when questioned about the W Unit Trust investment, B conceded that off-farm investments were made on “ad-hoc” basis (see T 173.29-174.30), accepting that “there was no plan to these off farm investments, it was just they were taken up when and if the opportunity arose” (T 174.27-174.29).

82. [766]

    Some emphasis was placed on the evidence relating to the investments in the P and C Hotels. B appeared in cross-examination to concede that his affidavit was incorrect in stating that the first defendant had “subsequently guaranteed” his loan for the P Hotel (see T 249.25-249.46) (another matter to which the first defendant points as demonstrating the unreliability of his affidavit evidence). The first defendant notes the concession by C that the effect of the arrangements for these hotels was that the first defendant would not obtain any benefit from these “off farm” investments (see T 506.43-507.25). He points out that he obtained no benefit from providing the security in relation to the C Hotel purchase or for the additional finance obtained by EM Co from Rabobank (see C’s concession that EM Co derived no benefit from its loan of those funds to the purchaser – T 518.25-518.46; and B’s concession that the first defendant derived no benefit from the loan by EM Co to C Co as trustee of the CI Unit Trust of $1.3 million – at T225.12-225.36; T226.09-226.17).

83. [767]

    The first defendant points to the deed he required his sons, B’s business partner and EM Co to execute in relation to their investments in the P and C Hotels and argues that this is contrary to the intention of the alleged agreement (or expectation) insofar as the alleged agreement/expectation provided for the farms to be provided as asset backing without qualification. He notes that C conceded that he executed the deed, both in his own capacity and as a director of EM Co, and that B accepts the terms of the deed, despite not having signed it (see T 265.24).

84. [768]

    As to the 2013 refinance by St George and Westpac in relation to the hotels, the first defendant notes that E Co on-lent the borrowed money to the CI Unit Trust as part of the refinance, without charging interest or obtaining any other benefit (as conceded by B at T 218.12-28, where B accepted that E Co took the risk on the loan and recovered only the interest payable by it to Westpac on the loan) and points to the concession by C that the first defendant obtained no benefit from this transaction, although his farms were put at risk, the only persons benefitting being the sons (see T 510.01-07).

85. [769]

    The first defendant argues that, by using E Co in this transaction, the plaintiffs merged the grazing business and off-farm investments (inconsistent with what they allege they had sought to avoid by incorporating EM Co); and emphasises that the loan was not even formalised with a written loan agreement (see C’s concession at T 510.13-511.06). The first defendant submits that the evidence reveals that C, who controlled EM Co “and, by extension, the off-farm investments” had not even turned his mind to these matters. It is submitted that, far from being an organised investment program with set parameters based upon the terms of the Revised Family Business Agreement or the alleged expectation, these arrangements were made without any consideration given to the growth of “family wealth” or asset protection; rather, they were made on an “ad hoc” basis in whatever manner would benefit B, and to a lesser extent A and C, without regard to the first defendant’s position.

86. [770]

    The first defendant also points to the Westpac Deed as being consistent with his previous conduct – being the implementation of his own measures to protect his position – and argues that it militates against the alleged Revised Family Business Agreement or the alleged expectation in relation to off-farm investments.

87. [771]

    The first defendant argues that the use of borrowed funds for non-investment purposes (in particular the loan of $300,000 in 2008 from EM Co to P Co for the purchase of shares in a technology company) and the intermingling of the funds of E M Co and E Co (being loans from time to time from E Co to EM Co) as inconsistent with the pleaded purpose of EM Co (as “the company in the Revised [xxx] Family Business Structure through which off-farm investments were to be made by” the first defendant and his sons). As to the P Co loan, the first defendant points to the cross-examination of B (at T 223.24-224.47) and the cross-examination of C (at T 542.31-543.28). As to the loans from E Co to EM Co, the first defendant submits that the fact that a loan obtained by P Co of $150,143 from the CI Unit Trust is not recorded in the financial statements for B’s individual family trust suggests a lack of distinction being drawn between investment funds and funds belonging to B and refers to the evidence in cross-examination of C (at T 543.43-T 544.40) in which he disclaimed knowledge of those matters as being unpersuasive.

88. [772]

    As to the intermingling of funds between E Co and EM Co, contradicting the plaintiffs’ case that off-farm investments were to be kept separate from the grazing business, the first defendant refers to E Co’s financial statements which record loans to EM Co (from $60,000 in 2009 to $611,920 in 2016) and to the evidence of B in that regard (at T 215.01-216.16; T 226.37-227.03).

89. [773]

    Given that there is no suggestion that in June to September 2002 (or any other time) the first defendant was considering “potential business structures” that could be adopted for his business with other (non-family) persons or entities, the overwhelming probability is that, at least as at 4 June 2002, the first defendant was meeting with Accountant No 1 to review options that related to the involvement of the sons in the said future and potential business structures (consistent with Accountant No 1’s recollection that the first defendant was “interested in discussing how his sons might become involved in the primary production business”: see above at [111]). It was not suggested by the first defendant that the narrations recorded on the Local Accounting Firm’s invoice were incorrect or inaccurate in any way. Whether such a meeting be characterised as “succession planning” or not, it does support the plaintiffs’ contention that at that time the first defendant was considering how to structure his farming business going forward.

90. [774]

    There is no doubt in my mind that there was discussion between the first defendant and his sons (and with the first defendant’s accounting and legal advisers) in the period from at least 11 July 2002 to 25 September 2002 as to a proposed new business structure in which the sons were to be involved in the first defendant’s primary production activities/business. That is clear from the independent contemporaneous documents – in particular, the Local Accounting Firm invoices/timesheets that include narrations to that effect; the preparation by Accountant No 2 of the various group structure diagrams; and the obvious understanding of whoever was responsible for the drafting of the unsigned Aitken letter that some form of roll-over of assets into a new family business structure was being contemplated by the first defendant. Whether the characterisation by Accountant No 1 that these were just general discussions is correct or not, the fact is that there were discussions of that kind (and they were held in the context of the sons’ then expectation, well understood by the father that they would after his death inherit, if not the farms themselves, then the proceeds of the conversion of his estate by the sale of the farms).

91. [775]

    It is clear in my opinion that what was contemplated leading up to and in the meeting of 18 September 2002 was that the new family business would be one in which the first defendant and his sons would work together; and that at the meeting of 18 September 2002 there was discussion of a proposed structure that involved both a unit trust (the trustee of which would own the assets of the farming business) and a company (which would own the business or businesses – both farming and non-farming – in which the family (through the new business structure) proposed to engage). That much is clear from the group structure diagram dated 25 September 2002 (CB Tab 120; see above at [183]-[184]), which was prepared by Accountant No 2 for, I would infer, the purposes of the meeting that had been arranged on 25 September 2002 with Solicitor No 2. At a time when Accountant No 1 says, in effect, that he was transitioning his client base to Accountant No 2, the obvious inference is that Accountant No 1 conveyed to Accountant No 2 what had been discussed at the 18 September 2002 meeting in order to enable the latter to prepare the group structure diagram. There is no other sensible construction to be placed on the coincidence in timing between the meeting on 18 September 2002 and the group structure diagram on 25 September 2002.

92. [776]

    The characterisation by the sons of the discussions leading up to and at the 18 September 2002 as being part of a “succession plan” is not inapt. I have no doubt that B considered the discussions to be part of the establishment of a succession plan for his father’s farming business and assets – which may well in his mind have included ownership (as opposed to use) of the farms – given that it is clear that during the course of 2002 his focus was on some form of planning for the future (hence his interest in articles published around that time on issues of succession/estate planning in the agricultural context). That is not surprising given his dissatisfaction with his then employment and the fact that the gift from his uncle gave him (and his brothers) an opportunity for investment in business opportunities. At the same time, the first defendant himself accepts that it was his intention at the time (subject to the uncommunicated “success condition”) that the sons would inherit the farms and the family farming business (and that he did not expect a benefit from the new family business and intended to put his money out of Sydney into the business for the benefit of his sons and their families). Whether this was called a “succession plan” or not, that is clearly the effect of what was being discussed (as was the understanding of the first defendant’s accountants at the time – as evidenced by the unsigned Aitken letter (see above at [204]-[207])).

93. [777]

    Where there is room for doubt is as to whether the proposed business structure as at 18 September 2002 and going into the meeting on 25 September 2003 was to involve the transfer of the farms by the first defendant (into a unit trust or otherwise). I consider that, on the balance of probabilities, there was a discussion at that 18 September 2002 meeting as to the capital gains tax implications of a transfer of the farms (existing or after – acquired), since otherwise the reference to capital gains tax in B’s notes (CB Tab 117) would make no sense (the first defendant and Accountant No 1 both accepting that a discussion as to the transfer of plant and equipment, livestock or personnel would not give rise to capital gains tax); and, since Accountant No 1’s advice was that the family members should consult a solicitor, I would conclude, on the balance of probabilities, that what was contemplated in the discussion on 18 September 2002 was a specific proposal for the new family business structure, rather than simply a general discussion as to capital gains tax divorced from the circumstances of the then farming operations (that were conducted by the first defendant on his own farms).

94. [778]

    I have no doubt that each of the sons present at the discussion on 18 September 2002 (namely A and B) left that meeting with the understanding (the substance or general thrust of which is deposed to in their respective affidavits), that what was being considered would be a family business structure under which they would jointly work together to operate the farming business (in which they would have a joint interest) and that they would be able to do so using the first defendant’s farms, which would be available for use by the family business; and that this was conveyed to C before or during the discussion at the 25 September 2002 meeting. I also accept that A and B, going into the 18 September 2002 meeting, (and separately, C, at that time) had the expectation (to their father’s knowledge) that the farms would be left to them under his will and in that context I accept that A and B understood the discussion at the meeting to encompass their joint ownership of the farms as part of the new business structure. (That would explain the lack of any reference to a lease fee in the group structure diagram prepared after that meeting.) However, as I explain below, I do not accept that there was a binding agreement reached at that meeting for there to be a transfer of the farms into the proposed new business structure.

95. [779]

    As to the issue of “off-farm” activities or off-farm investments, I accept that it was contemplated (and discussed) at the 18 (and, for that matter, 25) September 2002 meeting(s) that the proposed new business structure would be one that included participation or involvement of the first defendant and his sons (through the proposed new corporate entity) in off-farm investments. (What I am not persuaded of, on the balance of probabilities is that there was a concluded agreement at that stage as to the form those investments were to take or how they were to be structured.)

96. [780]

    In summary, therefore, while I consider it more likely than not that there was discussion at the meeting of 18 September 2002 as to the capital gains tax implications of a transfer of the farms and as to the interposition of a unit trust to hold the assets of the proposed new family business arrangements which were to be used in the operation of the family farming and/or non-farming businesses through the corporate entity earlier set up on 11 September 2002, I am not persuaded on the balance of probabilities that at the meeting there was a concluded agreement (or even an agreement in principle) as to the transfer of ownership of the first defendant’s then (and any future acquired) farms to the proposed new business entity (be that a unit trust or otherwise) in which he and the sons would have an equal interest.

97. [781]

    In essence, the plaintiffs’ case on this issue rests on the significance of the reference to capital gains tax in the notes made by B at or around the time of the 18 September 2002 meeting and the subsequent reference by Solicitor No 1 in his letter of 9 September 2002, in relation to the acquisition of Property No 9, to the earlier proposal that the purchase be in the name of a company (as well as the fact that the draftsperson of the unsigned Aitken letter understood the discussions to be by way of succession planning).

98. [782]

    The plaintiffs argue that the first defendant’s explanation of the capital gains tax discussion on 18 and 25 September rests on acceptance of one of two inconsistent propositions: first, that the discussion concerned “operating assets” such as plant and machinery, stock, employees and cash; or, alternatively, that it was a discussion in the abstract unconnected to any specific proposal.

99. [783]

    As to the first, the plaintiffs say that none of those “assets” could result in a capital gain on disposal in the context of a farming business (that being accepted both by the first defendant and Accountant No 1); therefore if a specific transaction was being discussed, then the only asset class which could reasonably fit that description is land. I accept that proposition.

100. [784]

     As to the second, the plaintiffs note that the first defendant places reliance on the fact that B’s notes record both the company tax rate of 30% and the concessional income tax rate for an individual. However, the plaintiffs say that the suggestion that the discussion of capital gains tax was therefore hypothetical and not connected to the transfer of assets to E Co cannot withstand analysis (pointing to Accountant No 1’s concession that the discussion of capital gains tax was likely in respect of land and the fact that Solicitor No 2 gave advice, according to the unchallenged evidence of B, expressly on the question of capital gains tax). The plaintiffs argue that the fact that Solicitor No 2’s advice was sought and obtained (in the meeting on 25 September meeting) on this question is the decisive factor against an argument that there was only a general discussion of capital gains tax unconnected to any specific proposal at the 18 September 2002 meeting. First, they maintain that if, on 18 September 2002, there was only one coherent, logical proposal presented to the first defendant and his sons (as Accountant No 1 accepted) and capital gains tax was discussed at that meeting (as I accept it was), then the advice given by Accountant No 1 that specialist legal advice should be obtained on that topic from a solicitor renders far-fetched the suggestion that capital gains tax was being discussed “in a vacuum”. Second, they argue that the fact that legal advice was being sought means that the issue of capital gains tax was still being discussed at the conceptual level (but still in relation to a specific proposed transaction) and was not at the implementation stage which would require valuations and the like. The plaintiffs submit that, in the light of all the evidence, the reference to the corporate tax rate is much more easily explicable as a reference to the tax payable on a subsequent transfer of one or more of the farms by E Co.

101. [785]

     I accept (as noted above) that reference to capital gains tax at the meeting of 18 September 2002 makes sense (in the context of the discussions as to the proposed new business structure) only if it relates to land (and I note that both Accountant No 1 and the first defendant conceded as much); and that the referral of Accountant No 1 to Solicitor No 2 for advice suggests that this was on some specific issue and not a mere general or hypothetical discussion. However, that does not give me a sufficient level of comfort to be able to conclude on the balance of probabilities that the discussion at the 18 September 2002 meeting involved agreement to a proposed structure that involved the transfer of all the first defendant’s then properties. Thus, while I accept that the capital gains tax implications of a transfer of land were discussed, I consider that if there had been an agreement, even in principle, at the meeting for such a transfer to take place Accountant No 1 would have recalled it (since I accept his evidence, hindsight though it was, that this was not what as a matter of ordinary practice he would recommend and hence I consider it likely that it would have stood out in his memory had it occurred).

102. [786]

     As to the weight placed in this context by the plaintiffs on the 9 September 2002 letter from Solicitor No 1 (as giving rise to the inference that the first defendant had instructed his solicitor to draw up a contract so that the proposed new joint family business company vehicle would be the purchaser), I accept that this indicates that the first defendant had at some stage contemplated the acquisition of that property via a corporate vehicle (which would equally be consistent with his awareness that the sons or at least some of the sons had expressed an interest in acquiring the property and operating the fish farm on it as with an agreement that all future properties were to be acquired in the name of a corporate or trustee entity for the purpose of the business structure). I do not accept that this leads to the inference that the discussions that took place later (on 18 September 2002) were to the effect that all the properties (other than Property No 8) were to be transferred to the proposed new unit trust. (I also note that the exclusion of Property No 8 from this proposed business structure is not supported by anything in B’s notes of the relevant meetings and is more likely based on the sons’ understanding (from before those meetings) that the first defendant intended it to be his retirement property - and hence their assumption that it would not form part of the business structure as such.)

103. [787]

     I accept that the sons’ understanding at the time may well have been that what was being proposed was the transfer of the whole of the business operations (including both the farming assets and the land) into a new business structure (and I do not disbelieve their evidence to that effect), and I accept that the recommendation from Accountant No 1 for them to obtain advice from a solicitor points to the contemplation that a formal business structure was to be put in place (as indeed happened), but I am not persuaded on the balance of probabilities that the proposal put forward by Accountant No 1 at the 18 September 2002 meeting was one that had, as its central element, the transfer of the existing farms into a proposed unit trust. Accepting the difficulties of recollection based on usual practice and hindsight, I think it more likely that if Accountant No 1 had on this occasion put forward a proposal inconsistent with what I accept was his usual practice at the time then he would have recalled having done so. A departure from usual practice in any particular case (for whatever compelling reason might then have caused that departure – and the plaintiffs submit that one obvious compelling reason would be that instructions had been received that the proposed new business structure had two objectives: a joint family business and succession planning/intergenerational transfer) seems likely to be one that would have been recalled simply because of the fact that it was a departure.

104. [788]

     What is clear, in my opinion, is that at the meeting on 18 September 2002 there was discussion as to the transfer of the operational assets of the first defendant’s farming business, the livestock, plant and machinery, on the basis that a new business structure would be established under which the sons would participate in and share ownership of the farming activities; and there was some discussion as to the capital gains tax implications of the transfer of farming properties by a company or by an individual. However, the group structure diagram dated 25 September 2002 does not make clear that what was envisaged at that stage was that there would be a unit trust interposed between the company owning not only the operational “assets” of the farming business but also the farms (with the family members holding an interest in that company).

105. [789]

     As to the meeting on 25 September 2002, at which it is more likely than not that the structure diagram of that date was handed out, the absence of any evidence from Solicitor No 2 as to his recollection of what was discussed has already been noted. Relevantly, however, Accountant No 1 accepted that advice of the kind attributed to Solicitor No 2 could have been given at that meeting (as did the first defendant); and that advice as to capital gains tax and asset protection would, in the circumstances of the family’s affairs at that stage be more likely to have been made in the context of considering how either the existing land, or land to be acquired in the future, should be dealt with for the purposes of the business structure. That said, I accept that what does not make sense is the proposition that a trust arrangement was proposed (and agreed) in lieu of an outright transfer of the land if the reason for this was the so-called “asset protection” purposes; nor is it consistent with an understanding or intention (whether qualified by the uncommunicated “success condition” or not) that the sons would in due course inherit the farms.

106. [790]

     I find that what was discussed at the 25 September 2002 meeting (and agreed in principle) was an arrangement under which the new corporate entity (E Co) would carry out the farming operations (for the purposes of which the first defendant’s employees would be transferred to employment by E Co and most of the first defendant’s livestock would be transferred to E Co); that under the arrangement, each of the sons would have a role in (and an interest in the shareholding of) the company, as would the first defendant; and that under the arrangement the family business structure would involve potential off-farm investments.

107. [791]

     The first defendant maintains that there was no concession by him as to any transfer of the land or as to him “holding” the land for his sons. I accept the former but not the latter proposition.

108. [792]

     The first defendant submits that what he admitted in respect of the questions put to him that he would “hold” the farms for his sons and leave them to his sons by his will is limited to the following exchange (at T 800-801):

109. [793]

     For the first defendant it is emphasised that in the above passage there is no explanation of what is meant, or what the witness understands, by the expression “hold the farms for your sons”. It is noted that there is no proposition put that what was intended to be conveyed by the question was some declaration of trust to create a present beneficial interest in the land, or that the first defendant was a constructive trustee in waiting, nor was any form of words used that might explain such propositions to the first defendant. (Of course, the plaintiffs disavow that this is their case at all on proprietary estoppel – see the pleading debate to which I have already referred.)

110. [794]

     It is submitted that, absent any clarification, this expression, to a non-lawyer, could well mean no more than that he or she had intended to leave something by will. While I accept that “holding” the farms to be left under his will is consistent with an expectation of inheritance, I do not accept that in the context of the whole series of propositions put to the first defendant, it could have been understood by the first defendant as limited in that way. The questions based on the first defendant’s knowledge that his sons were entering into the new family arrangements and making life-changing decisions to do so supply the relevant context in which the first defendant’s answers above must be understood.

111. [795]

     The first defendant also notes that the above exchange was questioning as to the pre-2002 intention, which on the evidence was still the intention after 2002 so far as the sons and the first defendant were concerned. It is submitted that the evidence at the second last answer extracted above is entirely consistent with the first defendant’s case, noting that there is nothing about this evidence that suggests the first defendant loses his ability to deal with the land as he sees fit. (Pausing there, the propositions put to the first defendant as to the use of the land until his death, make clear in my view that the first defendant was accepting that the land was to be held for the purpose of the family business operation until that time – therefore clearly impacting on his ability unilaterally to deal with the land; and the adamance of the first defendant’s affidavit evidence was as to the proposition that he ever had the intention of “handing over” his land, not that he denied having the intention that his land would be held and used for the purpose of the family business operations – subject only to the uncommunicated success condition.)

112. [796]

     As to the exchange at T 803-804:

113. [797]

     As to the exchange at T 804:

114. [798]

     As to the exchange at T 874 (which the first defendant says was still with no explanation of what is meant by “holding the farms”):

115. [799]

     The first defendant then emphasises the responses given at T 912-913:

116. [800]

     The first defendant argues that this is strong evidence favouring his case. I beg to differ. I accept that it does not support the case put by the plaintiffs based on a contract or express trust; or any case based on a representation that if the sons worked with him on the farms the first defendant would transfer the farms to them during his lifetime (so as to amount to the creation of a beneficial interest in the properties at that time). However, what is abundantly clear from the above exchanges is that the first defendant well understood that the sons’ expectation, while they (including through E Co) were working in the family business (including making capital improvements to the properties owned by their father), was that the first defendant would make his farms available to them during his lifetime for the use of the farming business, and that that the sons would inherit the farms on his death; and that the sons were not aware of the condition he had in his own mind placed (but not communicated to them) on that scenario (i.e., that E Co would be there on the farms, followed by the inheritance) eventuating.

117. [801]

     It is one thing to say, as the first defendant does, that the idea of the first defendant inter vivos gifting away without reservation his entire net worth (or at least that tied up in the farms) is a proposition to which the Court would not accede without strong evidence that it was indeed agreed or represented. But the first defendant’s own evidence is that he knew his sons were acting in reliance on the expectation that he would “hold” the farms for them (and for the benefit of the new family business to be operated through E Co) (and that E Co would be “there” carrying on business on the farms until the first defendant died when they would inherit the farms); and, while he cavilled with the proposition at one point, he ultimately appeared to accept that they had made life-changing decisions in so doing.

118. [802]

     I do not accept that there is any real doubt, for a lay person, as to what is meant by “holding” property in this context. For property to be available to be inherited by one’s children it is axiomatic that it must form part of one’s estate (i.e., must still be owned at the date of death). That, indeed, was the thrust of the cross-examination of each of the sons to the effect that he understood he would inherit his father’s estate in equal shares with his brothers “whatever that may be at the time of his death”. The concept of “holding” property in that sense does not require an understanding as to the legal intricacies of the concept of constructive trust. Nor does it defy logic to postulate a father having the intention to hold (and encouraging his sons in the expectation that he would hold) onto his farms and leave them to his sons on his death (which is what, subject to the imposition of the “success” condition, is what the first defendant accepted was his intention and what he knew was the sons’ expectation).

119. [803]

     Insofar as it is submitted that what was not put to the first defendant was that he knew that his sons only came to join in the conduct of the farming business in reliance on their expectation of the farms being transferred to them; and that it was not put to him that the two concepts (of the sons working in the farming business and that they had the expectation of inheritance) were connected, I consider that this is implicit (if not indeed explicit) in what the first defendant said in the passages extracted above: he agreed that he wanted his sons to “work the farms”, that he knew they had given up their time and effort having made a life changing decision “to come into business with [him] on the farms” and that he knew, from October 2002 (when they did come into the business with him) that they had the expectation in so doing that he would hold the farms and they would inherit the farms when he died.

120. [804]

     It was not necessary that the sons’ “only” reason for so doing was the expectation from which the first defendant now seeks to resile (as made clear by the facts in Sidhu v Van Dyke, a decision which I consider in some detail later). What is required is that the expectation be a “contributing cause” (and that is one that the plurality said can be inferred as a matter of fact on the balance of probabilities having regard, among other things, to the experience of human nature). In any event, it seems to me to be a distinction without substance because even if it can be said that the first defendant did not induce his sons to come into the family business by promising them explicitly that they would inherit the farms, his evidence makes clear that he knew that in working for the family business over that at least eight or ten year period they were doing so in that expectation and he did nothing to disabuse them of that expectation.

121. [805]

     The first defendant says that what he is saying in the above passage(s) is consistent with his own case: namely, that he wanted his sons to work together; that he intended to leave them his property; but that he did not connect the two, because the whole point from the first defendant’s perspective was to see if they could become involved without a “carrot” (in this case, more than $20 million worth of land). The difficulty I see with that is that the first defendant may not have connected the two in his own mind (due to the uncommunicated success condition) but he was aware that this was the plaintiffs’ expectation and he stood by and allowed them to continue to work in the family business and, through their own efforts and those of E Co’s employees, make capital improvements to his properties in that very expectation. The plaintiffs emphasise that it was not suggested to any of the sons that he went into the family business knowing and accepting the risk that he could contribute time, effort and money in establishing and working in the family business (through E Co) and that his father could, whenever he chose, terminate the lease in respect of the farms, demand repayment of all amounts advanced to E Co over the years, and disinherit him.

122. [806]

     The plaintiffs argue that if the transfer of land of the unit trust was discussed, then the change engineered by Solicitor No 2’s advice was relatively modest (i.e., though the first defendant would continue to own the farms, the uses to which they would be put and their ultimate destination would not be affected at all; the first defendant would hold the farms for his sons during his lifetime but the farms would pass to his sons in equal shares on the first defendant’s death) but that even if transfer of the farms to the E Unit Trust was not discussed, (and I find that if discussed in that detail it was nevertheless not agreed) they rely on the first defendant’s concession that, from 25 September 2002, he had agreed with his sons that the grazing business would be transferred to E Co, that he would make the farms available as security for off-farm investments, and that he would move money out of Sydney into the farms to assist the new business, in circumstances where the first defendant knew that his sons understood that the first defendant would hold the farms for his sons during his lifetime until the farms passed to his sons in equal shares on the first defendant’s death. I accept the latter proposition.

123. [807]

     The plaintiffs submit, and I accept, that in the context where the first defendant’s evidence was that he kept his “success” condition secret and that he knew that his sons were making life-changing decisions expecting to inherit the farms, it must follow that the first defendant encouraged the plaintiffs’ expectation in those terms even if an inter vivos transfer was not discussed.

124. [808]

     The remaining factual questions posed by the plaintiffs ((a)((iv) and (c) at [417] above) go to the expectations held by the sons and the question as to their reliance on any such expectations. I would answer those broadly in the affirmative. I have concluded that the expectation held by each of the sons (engendered as a result of the discussions held in September 2002 and the conduct of their father in participating in the new business structure following those discussions), on which each relied to his detriment was that the sons would be involved, with their father, in the management and operation of the family farming business on their father’s farms; that their father would make his farms available to them during his lifetime for the use of the farming business that was to be transferred to the new business entity (E Co) (and in that sense that the first defendant would “hold” – or retain ownership of – the farms for his sons during his lifetime); and that the farms would be left to them on his death.

125. [809]

     I find that, as and from the time the meeting of 25 September 2002, the first defendant knew that his sons were making life-changing decisions to join in the new family business in reliance on a belief or understanding or expectation that the purpose of the new family business was to generate wealth for all of them (including the first defendant) and their families and that the first defendant would make his farms available for the purposes of that new family business (and in that sense “hold” – or probably more accurately hold onto or retain ownership of – the farms for his sons during his lifetime to be used for the purposes of that family business) and that the farms would pass to his sons under the first defendant’s will on the first defendant’s death.

126. [810]

     As already indicated above, I place considerable weight in this regard on the numerous admissions made by the first defendant in the course of his cross-examination as to his intentions and his understanding of the expectations his sons had at the time they entered into the family business with him. The plaintiffs have emphasised in that regard the following exchange (at T 807-808) (but I rely on the whole series of propositions accepted by the first defendant to which I have referred in these reasons in addition to the following):

127. [811]

     For completeness, I add at this point, in relation to the alternative claim by A in relation to Property No 4, that the first defendant accepted in cross-examination that he had treated Property No 4 as A’s home; accepted that he had encouraged A to spend money on the renovations of the homestead on that property; and accepted that he had never suggested to A at any time that there was a risk of A being evicted from his home. I make findings to that effect. The fact that A expected to be compensated for those renovations if the property was sold (“if it came to that”) is not in my opinion inconsistent with his primary expectation being that he would have the benefit of that expenditure by reason of the home being treated as his own during the first defendant’s lifetime.

128. [812]

     In summary, on the various proprietary estoppel claims, I find that each of the sons, relying on the expectation induced by the first defendant that he would make the farms available for the new family business and that they would inherit the farms on his death, worked in the new family business in varying capacities from October 2002 onwards at least up until 2010 (after which I accept that C’s role in the new family business was much reduced and B’s role was also limited). I find that the expectation in question was a contributing cause in each of the sons’ respective decisions not to pursue other career options and, instead, to join in the new family business. Further, I am satisfied that, but for the expectation engendered by their father, each of the sons would have taken a different course. Those decisions were life-changing and amounted in my opinion to detrimental reliance sufficient to make it unconscionable for the first defendant now to resile from the basis on which the sons made those decisions. My reasons for those conclusions are set out in more detail in the section of these reasons dealing with the proprietary estoppel claims from [900] below.

Determination

1. [813]

   I deal first with those claims that I consider can be relatively quickly disposed of, namely, the claims in contract (including the unconscionable conduct claims in relation thereto) or express trust, and the common intention or joint endeavour constructive trust and oppressive conduct claims, before turning to the proprietary estoppel claims.

2. [814]

   The alleged contract (to which I have referred as the Revised Family Business Agreement) is one that is pleaded (at [75] of the second further amended statement of claim) as having been agreed between the first defendant and his sons at or shortly after the 25 September 2002 meeting being an agreement varying the alleged agreement pleaded (at [67]; to which I have referred as the Family Business Agreement) between the four during the period between about January and September 2002 for the establishment of the proposed Family Business Structure.

3. [815]

   It is alleged (at [67]), in substance, that the Family Business Agreement provided that the first defendant would transfer the farms (other than Property No 8) (and any farms purchased by the first defendant in the future) and the Family Business to an entity (a trust and a company) which would be owned and controlled by the sons jointly. I set out [67] of the pleading in full:

4. [816]

   As revised, allegedly as a consequence of Solicitor No 2’s advice that transferring the ownership of the farms would result in a very significant capital gains tax liability, the alleged agreement was that the first defendant would retain ownership of the farms but would hold them during his lifetime for his sons on trust and the farms would be used for the purpose of the Proposed Family Business. The plaintiffs say that the farms were to be used by the new business entity (E Co) for the purpose of its operations, both farming and (as asset backing and a source of income) for diversified “off-farm” investments. Paragraph 75 of the second further amended statement of claim pleads:

5. [817]

   The alleged Family Business Agreement involved the transfer of the relevant assets (principally the farms) to a corporate trustee to be jointly owned by the first defendant and his sons. By contrast, the alleged Revised Family Business Agreement was to the effect that, during the first defendant’s lifetime, each of the first defendant and his sons would have joint ownership of the proposed Family Business (which would include the Farming Business – see [67(b)] read with [66](c)), but the farms presently owned by the first defendant (except for Property No 8) and any farms purchased by the first defendant in the future would be held by the first defendant for his sons on trust “and be used for the purpose of the Proposed [xxx] Family Business”.

6. [818]

   Insofar as it is alleged that the variations to the Proposed Family Business Structure would not otherwise alter, detract from or impair the Family Business Agreement ([75(c)]), it follows that the Revised Family Business Agreement (or perhaps more precisely the Family Business Agreement as revised) still included the provision as to what was to happen in relation to the first defendant’s estate on his death (see [67(e)] of the second further amended statement of claim) and as to what was to happen if the farms were sold during the first defendant’s lifetime (see [67(f)]).

7. [819]

   Thus the plaintiffs argue that (irrespective of the subjective intention of the parties) the effect of the revised agreement was that legal title to the farms would be retained by the first defendant but impressed by a trust in favour of his sons. Reference is made to the statement by Handley JA in Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at [31]; [2010] NSWCA 84 (Handley AJA, Allsop P (as his Honour then was) and Giles JA agreeing) that:

8. [820]

   Unlike the arrangement under the alleged Family Business Agreement (where the farms (other than Property No 8) were to be transferred to an entity (the so-called Proposed Family Business structure) of which the first defendant and sons were to have joint ownership), the alleged Revised Family Business Agreement, as pleaded, provided for the first defendant to retain the farms but that they would be held by him during his lifetime on trust for his sons (thus strictly speaking the first defendant would retain no beneficial interest in the relevant farms under the agreement as pleaded). The plaintiffs submit that, although the revised agreement works a change in the structure of the new venture agreed between the parties, it does not in substance alter the fact that the “new” family business was to be owned by them equally and that the property which formed the foundation (or “backing”) of the business was to be held “on behalf of all of them, with legal title passing on [the first defendant’s] death (or earlier if the properties were sold)” (my emphasis). As I understand it, this submission can be reconciled with the pleading on the basis that the farms to be held “on trust” for the sons were to be used for the purpose of the Proposed Family Business in which the first defendant was to have an equal interest. It is in that sense that I understand the plaintiffs’ submission that, under the Revised Family Business Agreement the farms were to be held on behalf of the first defendant as well as his sons.

9. [821]

   In closing submissions, the plaintiffs describe the cause of action in contract as follows (Plaintiffs’ Closing Submissions at [18]):

10. [822]

    That can be read consistently with the pleading (which speaks of the farms being held “on trust” “for” the sons) if what was there contemplated was, in effect, a purpose trust.

11. [823]

    It is alleged (see [188] of the second further amended statement of claim) that the first defendant breached the Revised Family Business Agreement by: selling Property No 12 in about September 2012 without accounting to the sons for their share of the proceeds of sale; selling Property No 8 in about November 2013 without accounting to the sons, as trustees for their children, for their children’s share of the proceeds of sale; commencing from shortly after 12 June 2013 to take steps to sell the Farming Business Assets, without the consent of the sons; commencing from shortly after 12 June 2013 to take steps to terminate the Agreement for Lease; and, on about 22 August 2013, executing a will which left the residue of his estate on trust for a discretionary trust of which F Co is the trustee.

12. [824]

    Reference is made by the plaintiffs to the summary of the principles relating to the formation of oral contracts set out by Sackar J in King v Adams [2016] NSWSC 1798 at [65]-[69], including that the existence and terms of an oral contract are to be ascertained as a question of fact and that consideration of surrounding circumstances and post-contractual conduct is permissible when the existence or terms of an oral contract are in issue. They note that his Honour there referred to what was said by Spigelman CJ in County Securities Pty Limited v Challenger Group Holdings Pty Limited [2008] NSWCA 193 at [7]; and to what was said by Heydon JA, as his Honour then was, in Brambles Holdings Limited v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61.

13. [825]

    As to the alleged Family Business Agreement concluded as at 18 September 2002, the plaintiffs submit that the requirements for an enforceable contract are met. First, they argue that: agreement was reached at the meeting on 18 September 2002 on the terms of the structure proposal presented by Accountant No 1 to the meeting; the fact that the E Co documents had been executed by the parties on 11 September, and then, during the meeting, the trust documents were executed, is a powerful indicator of finality; and the fact that legal advice from Solicitor No 2 was envisioned should be understood (by analogy with the first category of Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72) on the basis that the provision of that legal advice was either anticipated to lead to a new contract, or alternatively, was a condition subsequent to the agreement concluded at the 18 September 2002 meeting. Second, the plaintiffs argue that there are mutual promises sufficient to establish consideration between the parties (the first defendant’s transfer of assets into a joint family business being in consideration for the receipt of an ownership interest in the business and the gain of the benefit of the labour of his sons). Third, as to the intent to create contractual relations, it is submitted that, although this occurred in a family context, the subject matter of the agreement is property and business; and it is further submitted that the number of meetings, consultation with professionals and execution of documents all demonstrate that the parties perceived themselves to be embarking on a serious venture with important consequences for their lives.

14. [826]

    As to the revised agreement alleged to have been entered into on 25 September 2002, the plaintiffs submit that the elements of a concluded, binding and enforceable contract are here “even more powerful”, emphasising that there was no further meeting scheduled to seek advice or to consider options after the 25 September 2002 meeting and that the plaintiffs moved immediately to commence giving it effect. The transfer of the farming business on 1 July 2003 is, in the plaintiffs’ submission, particularly powerful evidence that the parties had a concluded bargain and were proceeding to take steps to carry it into effect.

15. [827]

    The plaintiffs accept that the parties’ actions, in so far as they related to off-farm investments, “did not often comply” with the terms of the agreements as pleaded. They submit that, on one view, the parties were in breach of the term to that effect (which they say was designed to ensure equality of ownership) but say that if so the first defendant waived his rights in that respect. Alternatively, they argue that the term regarding off-farm investments that was incorporated into the final revised agreement did not require that investments be owned equally, but did require that the farms be available as security.

16. [828]

    The plaintiffs argue that their causes of action in contract do not require that the parties subjectively appreciated that their agreement created a trust over the farms. The plaintiffs’ contention is that the parties’ agreement that the first defendant would hold the farms “for” himself and for the plaintiffs, including E Co and EM Co, while he lived has the legal effect that a trust is created over the properties.

17. [829]

    Insofar as the first defendant relies on Morgan v 45 Flers Avenue Pty Ltd for the proposition that, if affairs are structured to achieve a particular tax purpose, that purpose cannot be disavowed in another context, the plaintiffs note that the weight to be given to the achievement of some tax objective has been said to be only one factor to take into account when construing a contract which arises in that context (referring to Yaroomba Beach Development Company Pty Ltd v Coeur De Lion Investments Pty Ltd (1989) 18 NSWLR 398). It is submitted that in the present case, it was an inherent and necessary part of their bargain that the farms be held available for the purposes and use of the joint family business above and beyond the way a truly arms-length commercial arrangement would be structured (reference being made to Nguyen v Phan (No 2) [2015] VSC 634 at [237] in this context).

18. [830]

    In response to the pleading by the first defendant (at [40A] of the amended defence) of lack of writing and the first defendant’s reliance upon s 54A of the Conveyancing Act against the plaintiffs’ claims in contract, the plaintiffs in their reply have pleaded that: the documents set out at [2] of the reply (being: the E Unit Trust deed; the four individual family trust deeds; the notes made by B at the meeting of 18 September 2002; the notes made by B at the meeting of 25 September 2002; the Agreement for Lease recorded on 17 March 2004; and the minutes of the directors’ meetings of E Co on 18 September 2002, 10 December 2002, and 17 March 2004 (incorrectly dated 1 July 2003) constitute a sufficient “memorandum in writing” of one or both agreements such that s 54A does not apply; the first defendant’s reliance on s 54A is, by reason of the unconscionable conduct of the first defendant, to use the statute as a means of fraud in the equitable sense; the statute provides no bar to the enforcement of those parts of the agreements not relating to the transfer of an interest in land; and the acts set out at [6] and [7] of the reply are sufficient acts of part performance of the agreements that equity will enforce the contracts.

19. [831]

    As to the allegation of an express trust (see [201A] of the second further amended statement of claim), the plaintiffs argue that the Revised Family Business Agreement, in the context of the documents signed by the parties at the time, manifested an intention on the part of the first defendant to hold the farms and other farming business assets on trust for his sons. The plaintiffs argue that although the parties agreed, at the meeting of 25 September 2002, that the farms would not be conveyed to E Co, that does not negate the fact that they agreed that the farms (and other business assets) would be held for the benefit of the new family business.

20. [832]

    The plaintiffs maintain that, in order to find an express trust was created, it is not necessary for the plaintiffs to prove that the parties specifically and formally turned their minds to the fact that a trust was being created. They say that no special or technical language needs to be used and that it is sufficient if the intention to create a trust may be ascertained from what the parties actually agreed or said. They note that it has been recognised that the precision that might be expected in arms-length commercial transactions is not to be expected in private family dealings.

21. [833]

    The plaintiffs submit that in the present case, the first defendant’s conduct in agreeing to make the farms available, together with the execution and stamping of the E Unit Trust Deed, manifests a sufficient intention to create a trust. In the further alternative, the plaintiffs submit that the first defendant owes the plaintiffs a fiduciary duty in respect of the farms arising from the fact that the new family business is in the nature of a joint venture (citing United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49). The nature of the obligations imposed on the first defendant in relation to the farms would, it is said, at a minimum prevent him from withholding the farms, or denying the plaintiffs their use, for purposes alien to the joint venture (such purposes including, it is submitted, punishment of the sons and the sale of the properties without accounting to the plaintiffs such that any obligation to pass the first defendant’s estate on to his sons under his will is rendered nugatory in this way).

22. [834]

    As to the undue influence and unconscionable conduct claims in relation to the Revised Family Business Agreement, in essence what is alleged is that: there is a presumption of undue influence, or alternatively there is actual undue influence, in relation to the entry by the sons into the Revised Family Business Agreement ([193] of the second further amended statement of claim); the sons were in a position of special disadvantage vis a vis the first defendant ([196]); the first defendant used the Revised Family Business Agreement to his advantage to the detriment of his sons ([197]); it is unconscionable, against good conscience or an equitable fraud for the first defendant now to assert he is the beneficial owner of the family business assets (including the farms) and to exercise a right to the farms ([198]); and, if the first defendant does retain beneficial ownership to the farms then the agreement is voidable “against” (presumably meaning “by”) the plaintiffs and is, by the pleading, rescinded and set aside ([199]); as a result of which the plaintiffs now seek an order for specific performance of the original Family Business Agreement ([200]).

23. [835]

    The presumption of undue influence is predicated on the relationship of parent and child between the first defendant and his sons. As to the alleged exercise of actual undue influence, the plaintiffs argue that this is established by showing that the relationship is one which involved ascendancy and influence on the part of the dominant party (here, the first defendant) or dependence, reliance, trust and confidence on the part of the weaker party (here, the sons). The plaintiffs argue that the exercise of influence in the present case was made more pronounced by the fact that the professional advisers did not provide advice to the sons concerning the risk to them in the event of the first defendant resiling from his promises. In particular, the plaintiffs point to the sons’ evidence that they were not informed that, from their perspective, the disadvantage to them in the first defendant retaining title to the farms was that he could deal with the property as he saw fit if he changed his mind, and that the only way to stop him would be to bring proceedings of the present kind. The plaintiffs say that this risk was one never brought home to them at the time the sons entered the new family business.

24. [836]

    The plaintiffs’ claim for relief based on the allegation of unconscionable conduct invokes the well-known statement of principle by Mason J (as his Honour then was) in The Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; [1983] HCA 14. They argue that the sons were in a position of “special disadvantage” (citing Blomley v Ryan (1956) 99 CLR 362 per Fullagar J at 405; [1946] HCA 81) such that they could not make a proper judgment as to their own interests (in substance that being the relationship of dominance that their father had established over them, as well as their inexperience and ignorance of legal matters); that the first defendant had actual or constructive knowledge of their disadvantage (as to which it is said there is no question); and that the first defendant took unfair advantage of his superior bargaining power or position.

25. [837]

    As to the alleged unconscientious advantage said to have been taken of the plaintiffs’ special disadvantage, the plaintiffs appear to argue not so much that the first defendant took unfair advantage of them in the circumstances in which the sons entered into the Revised Family Business Agreement without advice as to what could be the consequences if the first defendant later resiled from his promises under the agreement but, rather, by reference to the first defendant in fact resiling from the promises that formed part of the understanding to the Revised David Family Business Agreement “by seeking to sell the farms, both evict and disinherit the plaintiffs and otherwise do them harm by reason of their disgust at his crimes and his imprisonment”. The sons argue that, by that time, their special disadvantage had “enlarged” to include their complete financial reliance and dependence on the farms and the Family Business.

26. [838]

    Even if the discussion on 18 September 2002 did include the proposal for the transfer of the first defendant’s land to E Co, as trustee of the E Co Unit Trust, (which is possible but which I cannot find on the balance of probabilities is the case) and even if (which I do not accept) there was an agreement reached in principle that this should happen, I am not persuaded on the balance of probabilities that the intention of the family members (which is to be objectively ascertained) as at the 18 September 2002 meeting was that they should immediately be bound by such an agreement. The fact that they were being referred to a solicitor for legal advice points against the conclusion that any agreement in principle was intended at that stage to be legally binding, as does the lack of any documentation of such an agreement at that stage. Subsequent conduct in the present case does not assist in establishing that there was a binding agreement as at that stage.

27. [839]

    I am therefore unable to find that any agreement was concluded at the 18 September 2002 meeting in relation to the transfer of the ownership of the farms from the first defendant to the new entity to be incorporated for the purpose of the proposed new business structure (E Co). Nor am I persuaded that the discussions on that date sufficiently manifested an intention on the first defendant’s part to hold those properties on trust for the sons so as to give rise to any express trust of the properties in their favour.

28. [840]

    As to the 25 September 2002 meeting, I accept that the basic structure of the new family business arrangement was there discussed and that the family members were going forward from that meeting on the basis of the understanding that had been reached at that meeting as to the structure of their new family business venture (namely, that the first defendant’s farms were to be made available for the use of the new family business venture and that the structure of that venture would be that a unit trust would hold the “assets” and the new family company would operate the businesses). However, there were aspects of the arrangement that had not then been discussed, let alone agreed (for example, the terms of the ultimate lease of the farming lands for the purpose of operation of the new business structure had not by then been agreed). And there is, at the very least, uncertainty as to what the parties contemplated were the “assets” comprised in that proposed structure. While no further meetings or discussions were planned at that stage in relation to the business structure that was there being discussed (and which was subsequently brought into operation), it is difficult to conclude that the parties had at that meeting reached agreement with sufficient certainty on all the essential terms of the proposed new structure or intended immediately to be contractually bound to the arrangements there discussed. There was nothing documented (by contrast, the parties did document the later Agreement for Lease) and neither the legal adviser nor the accounting adviser present at that meeting appears to have advised the parties to document or make any formal note of any such agreement.

29. [841]

    I accept that later discussion as to other ways of structuring the new business venture, for example as to the potential acquisition of property in a partnership between the three sons (as evidenced by the Local Accounting Firm’ internal file note in October 2003 (see [241] above)) does not necessarily mean that there was not already a concluded agreement or that there was not an agreement of the kind falling within the first category of case considered in Masters v Cameron. However, in the present case I am not persuaded to the requisite degree of satisfaction that there was a concluded agreement as at either 18 or 25 September (or that the parties objectively intended to be legally bound by any agreement in principle that may there have been reached as to the proposed structure for the new business venture).

30. [842]

    I do not, however, accept the first defendant’s contention that there was no agreement at all between the parties until the one minuted in the March 2004 minute of meeting. What was discussed, and I think agreed in principle without any binding contractual arrangement at the 25 September 2002 meeting, was the basic business structure to be adopted, which the parties then (albeit without having entered into any binding contractual arrangement) proceeded to take steps to implement.

31. [843]

    I have concluded that the claims for breach of the alleged Revised Family Business Agreement must fail; and the premise on which an express trust is argued must also fail. It is therefore not necessary to consider the issues relating to the statute of frauds defence pleaded by the first defendant. Nor is it necessary to consider the claims of undue influence/unconscionability in relation to the revision of the alleged 18 September 2002 agreement. Suffice it to note, however, in relation to the latter that, on the evidence of the sons, it is difficult to accept that the first defendant was the person dominating the discussions as to the proposed new business structure. It seems more likely to me that this was something that B desired to pursue (by way of succession planning) and that it suited the first defendant’s objectives (in order to have his sons working together in a family farming business) to participate in the arrangement.

32. [844]

    While I accept that the sons had no independent legal or accounting advice as to the arrangements discussed at the 25 September 2002 meeting (and on Accountant No 1’s own evidence he considered that B was not well-versed in company/trust matters), the relief sought on this basis is predicated on there being an initial binding agreement reached on 18 September 2002 which was then revised (in circumstances that were unconscionable). I do not accept that the premise has been made out.

33. [845]

    Accordingly, I find that the plaintiffs have not established their claims in contract/express trust or otherwise based on the existence of a binding Family Business Agreement as revised as at 25 September 2002; nor is there a basis on which to hold that the first defendant should perform the obligations under the terms of the agreement allegedly reached on 18 September 2002.

34. [846]

    The plaintiffs allege that a common intention or joint endeavour constructive trust arose out of the circumstances pleaded at [202]-[216] of the second further amended statement of claim, being, in summary, that: the first defendant, A, B, C, E Co and EM Co shared “the Expectation” and “the Common Intention” (as therein defined); the Family Business was established as a joint endeavour (the Joint Endeavour); each of A, B and C acted in reliance upon the Expectation and the Common Intention; the first defendant resiled from the Common Intention and/or the Expectation, and used the Revised Family Business Agreement to his advantage; the Joint Endeavour failed; and each of A, B and C will suffer detriment if the first defendant is permitted to resile from the Common Intention and/or the Expectation, and/or withdraw from the Joint Endeavour. The plaintiffs plead that good conscience requires the first defendant to adhere to the Common Intention, the Joint Endeavour and the Expectations. A similar pleading is advanced in respect of A and E Co in relation to the improvements to Property No 4 and the improvements carried out by E Co respectively.

35. [847]

    As to the claimed common intention constructive trust, the plaintiffs here invoke the cause of action described by White J (as his Honour then was) in Shepherd v Doolan [2005] NSWSC 42 at [31]as follows:

36. [848]

    The plaintiffs note that it is not necessary for a common intention constructive trust that the common intention be that the parties have a specific share of the property; it being sufficient that they intend that the claimant should have a beneficial interest or “some form of proprietary interest”. The plaintiffs further note that, on the question of detriment, White J noted in Shepherd at [40] that in Green v Green (1989) 17 NSWLR 343 at 357; 13 Fam LR 336 Gleeson CJ, with whom Priestley JA agreed, approved a less stringent test (taken from the judgment of Sir Nicolas Browne-Wilkinson VC in Grant v Edwards [1986] Ch 638) that:

37. [849]

    The plaintiffs also note that although the relevant common intention is often the intention at the time the property the subject of the trust was acquired, a common intention constructive trust may arise after the acquisition of the property if the evidence establishes that the relevant common intention was formed at some later time; and that the nature of the common intention may also change from time to time but that change will not be established merely from proof of proportionate changes in the contributions made by the parties.

38. [850]

    On this issue, the difficulty I have is that I am not persuaded that there was, relevantly, a common intention of the kind pleaded because I accept the first defendant’s evidence (albeit only proffered some time after termination of the lease) that his intentions in relation to the family farming business (and in particular as to the sons inheriting the farms) were subject to the uncommunicated “success” condition. I am therefore unable to conclude that the common intention was that the sons have an immediate beneficial interest in the properties. I consider, instead, that the evidence establishes that the expectation of all the parties was that the first defendant would make the properties available for use in the new family farming business during his life and that the sons would acquire an interest in the properties only on the first defendant’s death (and even then, as far as the first defendant was concerned, only if they had satisfied the uncommunicated secret “success” condition).

39. [851]

    The claim based on a common intention constructive trust is not therefore made good.

40. [852]

    As to the claim based on a “joint endeavour” constructive trust, this is a case of the kind described in Shepherd v Doolan at [32]-[33] as follows:

41. [853]

    The plaintiffs note that in Sivritas v Sivritas [2008] VSC 374 at [132], Kyrou J set out the considerations a Court examines in weighing the scope of such a trust:

42. [854]

    In the present case, the plaintiffs submit that the following statement of principle from Nolan v Nolan [2015] QCA 199 at [61] is directly apposite to the present case:

43. [855]

    In Muschinski v Dodds, (1985) 160 CLR 583; [1985] HCA 78, Deane J said, in an oft-cited passage (at p 618):

44. [856]

    Insofar as there is the requirement in this context that the failure of the relationship or joint endeavour be “without attributable blame”, the plaintiffs note that this expression has received little judicial explication (pointing to what was said by Parker J in Dean v Aylward [2017] NSWSC 972 at [48], referring to Bryson J in Bennett v Horgan (Supreme Court (NSW), 3 June 1994, unrep), and to the discussion of this issue in Australian Building and Technical Solutions Pty Ltd v Boumelhem [2009] NSWSC 460 at [99] and in Austin v Hornby [2011] NSWSC 1059 at [172]). The plaintiffs argue that, here, it is difficult to envisage a case where the existence of fault is more clearly established (referring to the sexual offending of the first defendant).

45. [857]

    I do not consider it necessary here to explore the concept of attributable blame. That concept arises for consideration where it may be said that the breakdown is due to some wrongful conduct of the party seeking the imposition of a constructive trust; and it falls for consideration as part of the question whether it is unconscionable for the other (“innocent”) party in those circumstances to retain the benefits of the joint endeavour. Here, on any view of the matter, the familial relationship between father and sons broke down as a result of the criminal conduct of the father; not of any wrongful conduct by the sons. Moreover, I accept the submission implicitly made for the first defendant that there is a difference between the failure of the joint venture and the failure of the familial relationship. The former broke down when the first defendant resiled from the joint venture by issuing the notice of termination of lease in June 2013 some years after the disclosure of his criminal conduct.

46. [858]

    In any event, in light of the conclusion I have reached on the proprietary estoppel claims it is not necessary to consider the imposition of a constructive trust in order to take into account the contributions made by E Co and the sons to the first defendant’s farms in the course of the joint endeavour. Suffice it simply to say that, had I not found for the plaintiffs on their proprietary estoppel claims, I would have considered that this was a case where the contributions made by the plaintiffs (or, more precisely by E Co and also by each of the sons separately over the years) to the capital improvement of the first defendant’s farms was part of a joint endeavour under which it was contemplated that E Co and the sons should obtain the benefit of those capital improvements; and hence they should be accounted for by way of the imposition of either a charge over the farms to secure the repayment of an amount reflecting the value of the contributions over the years or a constructive trust over the farms retained by the first defendant to reflect the benefit to the first defendant of the work carried out on his farms over the period from 1 July 2003.

47. [859]

    The plaintiffs note that in Sivritas v Sivritas, Kyrou J said at [132]-[133]:

48. [860]

    The plaintiffs say that while the financial contributions of the sons into the joint venture have been modest, the financial contributions of E Co and the labour of all the sons (including that of E Co’s employees and contractors) has not. Noting that the joint endeavour is over 16 years old, and that the blame for the breakdown in the relationship is attributable to the first defendant, the plaintiffs submit that the appropriate principle to be applied is that “equity is equality” and that the relief to be awarded if their joint endeavour constructive trust is established would be the imposition of a constructive trust such that the plaintiffs jointly, and their father, together hold the farms in equal 50% shares as tenants-in-common. I would be inclined to agree. The alternative claim (for the contributions to be determined by reference to the financial statements of E Co and the first defendant over the period with an adjustment in favour of the plaintiffs to take into account the significant non-financial contributions of the parties) seems likely to involve considerable further time expense and would be inconsistent with the expectation on which the parties went into the joint endeavour (namely that the sons would inherit the properties).

49. [861]

    Nor do I consider it necessary to consider the possible existence of a fiduciary duty arising out of the alleged joint endeavour – a point taken by the plaintiffs by reference to the judgment of the plurality of the High Court in United Dominions at pp 10-11. This point was advanced by the plaintiffs in their closing written submissions (though not pleaded as such in the second further amended statement of claim as far as I could see). The need for such a claim to be pleaded in a proper and detailed manner is particularly compelling where it has been recognised that, notwithstanding the labels that may be put on the parties’ relationship, the determination of a fiduciary relationship depends on “an examination of the detail of what [the parties] have agreed and done” (John Alexander’s Clubs Pty Limited v White City Tennis Club Limited (2010) 241 CLR 1; [2010] HCA 19 at [44], approving a statement to that effect in the judgment below); a point made by Black J, speaking extra-judicially in a recent seminar (“Modern indicia of fiduciary relationships in a commercial setting and the interaction of equity and contract”) (15 November 2017, Supreme Court Corporate and Commercial Law Conference).

50. [862]

    Section 232 of the Corporations Act 2001 (Cth) relevantly provides that:

51. [863]

    In their pleading on this point (see [217]-[221] of the second further amended statement of claim) the plaintiffs rely on both (d) and (e). They note that the potential reach of s 232 is very broad, referring to Re Spargos Mining NL (1990) 3 WAR 166 at 189; 3 ACSR 1 where Murray J, after referring to the decision of the High Court in Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68, stated that:

52. [864]

    The particulars to [219] of the second further amended statement of claim are as follows:

53. [865]

    The plaintiffs submit that the first defendant’s actions will bring about, and are designed to bring about, the destruction of E Co’s business, and to do so without any reasonable commercial justification. That being so, they say that the first defendant’s conduct falls within both ss 232(1)(d) and (e). They note that once oppression is established, s 233 vests in the court very wide powers to grant relief in respect of oppressive conduct, here to be exercised broadly in accordance with equitable principles.

54. [866]

    The difficulty I have with this claim is that the first defendant is a minority shareholder of E Co, not a director and not in control of the affairs of the company. In Re Polyresins Pty Ltd (1998) 16 ACLC 1,674, Chesterman J in the Supreme Court of Queensland said (at 1,677):

55. [867]

    In Watson v James [1999] NSWSC 600, Bergin J (as her Honour then was) considered Chesterman J’s analysis to be compelling, but refused to apply it as a firm rule excluding majority shareholders from accessing the remedy, saying (at [72]):

56. [868]

    That dicta was referred to with approval by Brereton J in Re Richardson & Wrench Holdings Pty Ltd [2013] NSWSC 1990; 97 ACSR 351. His Honour there would have held that the conduct of directors representing a minority beneficial interest was “oppressive to, unfairly prejudicial to or unfairly discriminatory against the majority” (at [41]). Those directors had effected an amendment to the articles of association which denied the majority the ability to carry an ordinary resolution. (It was, however, unnecessary to decide the oppression point, as Brereton J held the amendment invalid.)

57. [869]

    I consider it improbable (and I am not satisfied on the present case) that the conduct of the affairs of E Co was oppressive, unfairly prejudicial to, or unfairly discriminatory against the individual plaintiffs, when it was they who together had control of E Co.

58. [870]

    In any event, there is a separate difficulty with the plaintiffs’ submissions. What is being argued is that a minority shareholder, the first defendant, who owns property leased to E Co, is engaging in oppressive conduct, or conduct contrary to the interests of the members as a whole, in acting to terminate the lease in question.

59. [871]

    Although the phrase “conduct of the company’s affairs” in s 232(a) is a wide one (see the definition of “affairs” in s 53 of the Corporations Act), I doubt that it would include the conduct of the first defendant pleaded at [197(f)], [200] and [230(h)] of the second further amended statement of claim in the exercise of his own rights, as he perceives them to be (that is: the taking of steps to sell the farms; the taking of steps to terminate the Agreement for Lease; the taking of steps to evict A from Property No 4; the selling of Property No 12 without accounting for the proceeds; and, through his agent, obliging A, B and C to enter into the Westpac Deed).

60. [872]

    It is true that the antecedent relationships and conduct of shareholders in a corporation may be relevant to an oppression suit. However, this must come together with conduct of the company’s affairs for the purposes of s 232. In Crossman v Taylor (No 3) [2011] FCA 734, Besanko J said (at [290]):

61. [873]

    I consider that observation to be applicable here. I do not accept that an understanding, on its own, that the first defendant would not act in a particular way, makes that conduct, relevantly, conduct of the company’s affairs. The plaintiffs have not pleaded (at [217]-[221] of the second further amended statement of claim) conduct of the company’s affairs.

62. [874]

    In Raymond v Cook (1997) 29 ACSR 252, the Queensland Court of Appeal described the equivalent of ss 232 and 233 as follows (at 263):

63. [875]

    Given that the present case does not concern a complaint as to the internal management of E Co, however, a more relevant authority is Weatherall v Satellite Receiving Systems (Australia) Pty Ltd [1999] FCA 218. There, the applicant alleged oppression by the respondent company, Satellite Receiving Systems, and its members and directors. The foundation for the suit was an alleged breach of several contracts, namely, “the share agreement”, “the UST deed” and “the MOU” ([9]), to which the applicant and two other shareholders (Mr Mullane and Mr Wang) were parties. Satellite Receiving Systems was not a party to any of those agreements. Whitlam J said at [13] (citations omitted):

64. [876]

    In my view, that statement applies to the termination of the lease by the first defendant. I consider that it is not sufficient for the plaintiffs’ s 232 claim here made that the first defendant’s conduct in terminating the lease may have been, in fact, contrary to the interests of the members as a whole.

65. [877]

    Therefore, I do not accept that the termination of the lease amounts to oppressive conduct within the purview of the section notwithstanding that it may lead to the destruction of E Co’s business.

66. [878]

    The claims for further relief in relation to contracts other than the alleged Family Business Agreements can be shortly disposed of, having regard to the conclusions I have reached on the main proprietary estoppel claims. For completeness, I note the following in relation to those claims for relief.

67. [879]

    There is a series of claims for declaratory and consequential relief in relation to the Agreement for Lease.

68. [880]

    I do not accept the proposition that, because there is no provision in the Agreement for Lease providing for its termination, no right is conferred on the first defendant to terminate it. The rent payable under the Agreement for Lease was an annual rent. At common law, where rent is paid on a periodic basis, there is said to be a periodic tenancy terminable with notice for a period referable to the term of the periodic tenancy. Under the Conveyancing Act (1919) NSW, a tenancy from year to year is terminable on one month’s written notice. Under the Agricultural Tenancies Act, a tenancy from year to year is terminable on six months’ notice (s 14(4) of the Act). The fact that there is no express term in the Agreement for Lease entitling the first defendant to terminate the Agreement for Lease (and evict E Co from the farms), and that there was apparently no discussion preceding the Agreement for Lease as to such a possibility) does not alter that position. Hence I am not persuaded that the relief sought under [224(a)-(c)] would have been appropriate.

69. [881]

    As to the declaration sought at [224(d)], what is there contended is that there can be no implied term entitling the first defendant to terminate the Agreement for Lease and to evict E Co from the farms because it was never intended or contemplated that the Agreement for Lease would give rise to any of the usual incidents of lessor and lessee as between the first defendant and E Co or that the first defendant would be entitled to terminate the lease and evict E Co from the farms. I see no basis for such a finding given that the minute recording the terms of the Agreement for Lease itself expressly addresses matters essential to a lessor/lessee relationship (such as the parties, the leased property, and the rent payable); further, the submission is inconsistent with the insistence by the plaintiffs that this is a lease arrangement and not a mere licence. As to the contention encompassed by the declaration sought at [224(d)(iii)] of the second further amended statement of claim – that, in the event that the parties had contemplated the matter, they would have decided not to include any term entitling the first defendant to terminate the Agreement for Lease and to evict E Co from the farms, this seems to proceed on the assumption that any such implied term would be required to satisfy the business efficacy test for the implication of a term, which is not the basis on which I consider a right to terminate would arise (albeit on proper or reasonable notice) under the lease arrangement.

70. [882]

    As to the declaration sought that the relevant parties’ intention was that E Co would remain in occupation of the farms until the first defendant’s death at which time the farms would pass to A, B and C under the first defendant’s will, and that the first defendant would not do anything to interfere with E Co’s occupation of the farms before his death ([224(d)(iv)] of the relief sought), this seems to me to add nothing to the proprietary estoppel claim (which I consider below). Similarly, the claim for a declaration that it was never intended or contemplated by the relevant parties that E Co would make improvements to the farms in circumstances where the first defendant would retain the benefit of the improvements to the farms to the exclusion of A, B C and E Co ([224(d)(v)], seems to me to add nothing to the proprietary estoppel claims.

71. [883]

    I accept that there may well have been implied into the Agreement for Lease an implied term to the effect contended for at [224(e)], namely that it might only be exercised in good faith, reasonably having regard to the interests of both parties, and not for a purpose ulterior or extraneous to the purpose of the contract (see NSW Rifle Association). However, I do not accept that the decision of the first defendant to terminate the Agreement for Lease and to evict E Co from the farms is one that has been established to be, as alleged, “for the ulterior and extraneous purpose of punishing A, B and C for the first defendant's imprisonment and their disgust at his crimes against their children”, and I consider that the time allowed (including the extensions of time to permit cattle sales and the like) demonstrates that it was exercised reasonably having regard to the rights of E Co.

72. [884]

    As to the claim that the first defendant is estopped from terminating the Agreement for Lease, while I accept that the expectation of E Co (through the sons) was that the lease would remain on foot (and the farms would be available for use in the farming operations) while the first defendant was alive, and that the parties have acted in reliance on that representation, I am not persuaded that it would necessarily be unconscionable, if there were to be a cessation of the joint family farming business, for the lease to be terminated on reasonable notice. Thus, for the reasons set out in considering the sons’ jointly made proprietary estoppel claim, if their expectation as to inheritance of the properties were not to be accelerated then it would be appropriate to give some relief as to the termination of the Agreement for Lease and eviction of E Co from the farms but not indefinitely.

73. [885]

    As to the relief sought based on the presumption of undue influence and unconscionable conduct, I am inclined to the view that, whatever may have been the case at the time of entry into the Agreement for Lease, the plaintiffs have (and had at the time the lease terms were re-negotiated in 2011) had the benefit of independent legal advice as to E Co’s rights in relation to the lease (from Mr Beattie) and I would not have granted the relief sought at [224(g)] on that basis.

74. [886]

    As to the claim for relief against forfeiture (apart from noting that a condition of any such grant of relief would have to be the making good of the arrears under the lease), a relevant consideration would be whether it would be open to the first defendant (as, but for the proprietary estoppel claims, it would have been in my opinion) on reasonable notice to terminate the lease. If so, I would have fashioned any relief against forfeiture only to operate for a reasonable period to enable E Co to establish its business and relocate its cattle elsewhere.

75. [887]

    As to the relief claimed in respect of amounts owing under the Agreement for Lease, I deal with that when I come to the cross-claim. However, as noted above, the first defendant has abandoned his claim to rent for the period prior to 30 June 2011.

76. [888]

    As for the relief claimed at [226]-[227] of the second further amended statement of claim, I do not find that the Agreement for Lease is an ineffective contract between the parties. I accept that if terminated (had there not been the relief proposed under the proprietary estoppel claims) it would have been appropriate for E Co to be paid either reasonable remuneration on a quantum meruit basis for the work done by E Co in making capital improvements to the farms leased by E Co or (but not both) compensation in the nature of restitution to E Co for making improvements to the farms leased by E Co, to the extent that the value of the farms has been enhanced. This does not, however, arise in circumstances where I propose to make orders for the transfer of the farms to the plaintiffs and they will be in a position to allow E Co to remain on the farms as lessee and to gain the benefit of its capital improvements.

77. [889]

    As to the alternative claim for compensation under the Agricultural Tenancies Act, the first defendant argues that the improvements made to the farms on which the farming business was conducted do not readily fall within the compass of ss 6, 7, 8 or 9 of the Act.

78. [890]

    Section 6 of the Agricultural Tenancies Act relevantly provides:

79. [891]

    Section 7 of the Agricultural Tenancies Act relevantly provides:

80. [892]

    Sections 8 and 9 relate to improvements carried out by the owner of the farm and so are not presently relevant.

81. [893]

    “Improvement” for the purpose of the above sections is defined as follows (s 4(1)):

82. [894]

    The amount of compensation payable for tenant improvements is to be calculated by reference to the value of the improvement to an incoming tenant (s 15). In addition, “fair compensation” has a meaning affected by s 17.

83. [895]

    Section 20 of the Agricultural Tenancies Act permits an owner or tenant to apply to the New South Wales Civil and Administrative Tribunal for the determination of a dispute in relation to a right or obligation conferred by the Act. No such application appears to have been made in the present case. Therefore, cl 5(3) of Schedule 4 to the Civil and Administrative Act 2013 (NSW) does not prohibit me from hearing or determining the issue the plaintiffs raise; and in that regard I apply what was said by White J (as his Honour then was) in Steak Plains Olive Farm Pty Ltd v Australian Executor Trustees Limited [2015] NSWSC 289 at [93].

84. [896]

    The plaintiffs did not direct evidence to the value of the improvements, as required by s 15. I In those circumstances, whether or not the improvements were of a nature falling within the Act, a claim for compensation under the Agricultural Tenancies Act could not be made out at this stage (had it been otherwise, this could have been a suitable matter for referral to a referee under the UCPR). In any event, having regard to the conclusions I have reached on the proprietary estoppel claim it is not necessary to make any concluded finding as to this aspect of the matter.

85. [897]

    As to the relief sought in respect of the amounts claimed by the first defendant to be owing by way of the advances made by the first defendant to E Co, this is dealt with when I come to the cross-claim.

86. [898]

    The claims for relief in relation to the Westpac Deed again are dealt with in relation to the cross-claim. For present purposes I conclude as follows. I do not consider that it is void and of no effect; nor do I consider that it ought be set aside or that the first defendant should be restrained from enforcing it. Were they necessary to determine, I would reject the claims of unconscionable conduct and undue influence in relation to the plaintiffs’ entry into the deed (second further amended statement of claim at [230]-[231]), on the basis that the plaintiffs had the benefit of independent legal advice (in 2013); and, further, that although there was time pressure in relation to the execution of the Westpac Deed, the time frame put forward within which substitute security was to be arranged was seemingly of the plaintiffs’ suggestion. I do not consider the Westpac Deed to be an unjust contract for the purposes of the Contracts Review Act 1980 (NSW).

87. [899]

    I deal with this issue when I come to consider the final relief to be granted in these proceedings.

88. [900]

    Finally, I turn to the basis on which I consider the plaintiffs’ claims have been made out.

89. [901]

    At the outset, in considering the proprietary estoppel claims, I note that the following legal issues arise (my conclusions as to those matters, in summary, being noted in parentheses below):

    1. (1)

       The requisite certainty for a representation or promise in proprietary estoppel, as distinct from the certainty requirements for estoppel by representation or promissory estoppel (as to this, my view is that the weight of appellate opinion is that there are less stringent certainty requirements for proprietary estoppel);

    2. (2)

       The significance of the fact that the plaintiffs’ assumption related to the first defendant’s testamentary intentions (as to this, my view is that proprietary estoppel cases concerning testamentary assurances are relevant: first, to the question of reliance (viz., whether the plaintiffs’ reliance is reasonable, given the inherent revocability of wills) and second, on the remedy point (given that relief might involve “acceleration” of the expectation and disproportionate relief));

    3. (3)

       The status of Macfarlan JA’s analysis in Priestley v Priestley as to the knowledge requirement on the part of a defendant in an acquiescence case (see the submissions in the present case at T 1298-1299) (as to this, my conclusion on a review of the authorities is that in an acquiescence case, the sons must establish the first defendant’s knowledge of their “mistake” (or, arguably, their “misprediction”));

    4. (4)

       The relevance of the first defendant’s evidence as to his state of mind and uncommunicated plans (i.e., the secret “success” condition) (as to this, I consider that this is relevant insofar as it establishes the first defendant’s knowledge of their mistaken assumption, a necessary element of estoppel by acquiescence);

    5. (5)

       The legal significance of certain counterfactual reasoning as utilised in Sidhu v Van Dyke and Priestley v Priestley (I consider that such counterfactuals go both to reliance; and to certain evidentiary inferences that may be drawn in relation thereto);

    6. (6)

       The test for reliance laid down in Sidhu v Van Dyke, the ratio of that decision having been subject to some controversy: on the one hand, it is said that a plaintiff must show that he or she “would have acted differently” but for the assumption (explicitly supported by Gageler J in Sidhu; Darke J in Stone v Stone [2014] NSWSC 1655; the Court of Appeal in Miller Heiman Pty Ltd v Sales Principles Pty Ltd [2017] NSWCA 106; White J, at first instance, and Macfarlan JA, on appeal, in Priestley v Priestley); on the other hand, it is said that one simply asks if the promise or representation was “a contributing cause” or “influenced” the plaintiff’s action (Edelman J’s reading of Sidhu v Van Dyke in Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [2015] FCA 825 at [770]-[779]; Emmett AJA in Priestley v Priestley; K Handley, “Recent Cases” (2017) 91 Australian Law Journal 812) (as to this, I consider that as a matter of authority the Sidhu v Van Dyke “contributing cause” is the correct test, but that the better reading of this test is that propounded by Gageler J (Sidhu v Van Dyke), White J (Priestley v Priestley), and Macfarlan JA (Miller Heiman; Priestley v Priestley); in any event I do not think that the competing formulations, in the great majority of cases and certainly not the present, are likely to affect the outcome – here I consider that the plaintiffs would succeed on either formulation);

    7. (7)

       he principles as to relief generally – specifically as to the question of proportionality, and as to “acceleration” of testamentary expectations (as to which I consider acceleration is warranted subject to appropriate conditions in the present case).

90. [902]

    The plaintiffs advance three different proprietary estoppel cases: first, the joint claim of the three sons (although it is of course necessary to consider the position of each of the sons individually); second, A’s separate claim in relation to Property No 4, or more precisely the homestead on Property No 4; and third, the claim of E Co. As emphasised by the first defendant, each case must be examined separately.

91. [903]

    Broadly speaking, five issues arise in relation to each of these claims:

    1. (1)

       Assurance – namely, whether there were sufficiently clear representations or promises by the first defendant (being relevant to a claim premised on estoppel by encouragement but irrelevant to a claim premised on estoppel by acquiescence);

    2. (2)

       Assumption, inducement and knowledge – namely, whether the plaintiffs had an “induced” assumption or expectation (relevant to both forms of estoppel);

    3. (3)

       Reliance – namely, whether, on the balance of probabilities, each plaintiff has acted in reliance upon his or its assumption (relevant to both forms of estoppel);

    4. (4)

       Detriment – namely, whether each plaintiff has suffered or will suffer detriment if there is departure from the induced assumption upon which each plaintiff acted (which is to say, whether detriment will follow if the first defendant is permitted to act inconsistently with any expectation he encouraged, or otherwise to deny the truth of any assumption in which he has acquiesced);

    5. (5)

       Relief – namely, the appropriate form of relief.

92. [904]

    I make the following general remarks on the nature of proprietary estoppel before turning to the five issues in respect of each claim.

93. [905]

    Australian law recognises a number of distinct doctrines to which the appellation “estoppel” is applied. In equity, a distinction continues to be drawn between “proprietary estoppel” and “promissory estoppel” (see Ashton v Pratt (2015) 88 NSWLR 281; [2015] NSWCA 12 at [138]; Thorner v Major at [61]).

94. [906]

    The present case is only concerned with proprietary estoppel. In that context, the authorities further distinguish, and the parties also distinguished, between proprietary estoppel by encouragement and proprietary estoppel by acquiescence or standing by. This further distinction, not always observed and at times criticised, remains part of Australian law (see Milling v Hardie [2014] NSWCA 163 at [50]-[52]; Sidhu v Van Dyke at [2]; [77]; Priestley v Priestley at [7]-[8]; JD Heydon, MJ Leeming, PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis) (MGL) at [17-100])).

95. [907]

    Although the doctrines emerging from these lines of authority are, to some extent, distinct, in either case the estoppel operates as the source of an enforceable equitable obligation (Ashton v Pratt at [138]; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 416; [1988] HCA 7) and the relevant action or inaction on the part of the defendant may give rise to “an equity” (Crabb v Arun District Council [1976] Ch 179 at 187).

96. [908]

    The notion of “equitable estoppel” is not a unitary concept; behind it lie discrete equitable doctrines. However, one well-known formulation of the elements common to these doctrines is that of Brennan J, as his Honour then was, in Waltons Stores v Maher at 428-429:

97. [909]

    His Honour’s elements are not to be applied in every case in a “mechanical fashion” (Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105 at [166]; and see DHJPM Pty Ltd v Blackthorn Resources Ltd (2011) 83 NSWLR 728; [2011] NSWCA 348 at [47]); they are, however, a “useful check” – “if the facts of the case did not measure up to those tests, it would be necessary to think thoroughly about why not” (Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 at 615-616 (Priestley JA); referred to approvingly in Doueihi (at [166]).

98. [910]

    The first line of authority, concerning estoppel by encouragement, is often said to descend from Dillwyn v Llewelyn. However, it may be that it is the subsequent interpretation of the dissenting judgment of Lord Kingsdown in Ramsden v Dyson, particularly at 170-171, which has been the more influential (see Austotel at 606-612; Feltham et al, Spencer Bower: Reliance-Based Estoppel (5th ed, 2017, Bloomsbury) at [12.6]-[12.19]; Waaka v Francois [2017] NSWSC 744 at [100]-[101]).

99. [911]

    An estoppel by encouragement may arise “when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged by the property owner, has changed his or her position to [his or her] detriment” (Delaforce v Simpson-Cook at [21] (Handley AJA)).

100. [912]

     In Carter v Brine [2015] SASC 204, Blue J set out, by reference to authority, the following summary of the elements of estoppel by encouragement (at [326]):

101. [913]

     This summary is a useful practical guide, though three observations may be made. First, as to the use of the term “representation”: Handley AJA has pointed to the desirability of distinguishing between “a representation (of an existing or past fact)” and “a voluntary promise about the speaker’s future conduct” (Equititrust Ltd v Franks [2009] NSWCA 128 at [73]; my emphasis; cf Spencer Bower: Reliance-Based Estoppel at [1.8] fn 38). Second, as to the sixth element: “unconscionability” does not exist at large and it is not a “triable issue” as such (see MGL at [17-040] and the authorities cited therein; K Handley, Estoppel by Conduct and Election (2nd ed, 2016) at [1-027]-[1-032]). Third, as with Brennan J’s formulation in Waltons Stores v Maher, it would be inappropriate to apply the formulation in any mechanical fashion, or to treat the elements as subdivided into “watertight compartments” (Gillett v Holt at 225).

102. [914]

     Estoppel by encouragement vindicates a plaintiff’s expectations when a defendant seeks unconscionably to resile from an expectation that he or she has created (Sidhu v Van Dyke at [77]). Importantly, this act of encouragement – the representation or promise – need not be express. (This is one reason why these two forms of estoppel may be difficult to distinguish on the facts of a particular case.)

103. [915]

     At least as regards proprietary estoppel by encouragement, it is not necessary in every case for a plaintiff to show that he or she assumed that a “particular legal relationship” existed or would exist (see Doueihi at [153]-[170]; see also E K Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172 at [231]-[267]).

104. [916]

     The second line of authority is often traced (see for example New South Wales Trotting Club Ltd v Glebe Municipal Council (1937) 37 SR (NSW) 288 at 308 (Jordan CJ)) to Ramsden v Dyson, particularly the judgment of Lord Cranworth LC at 140-141:

105. [917]

     This doctrine has come to be described as estoppel by acquiescence (as to the various legal meanings of the term “acquiescence”, see Rodger v De Gelder (2011) 80 NSWLR 594; [2011] NSWCA 97 at [81]-[83]). Some uncertainty has attended the precise character of the doctrine (see the discussion in R Goff and G Jones, The Law of Restitution (2nd ed, 1978, Sweet & Maxwell) at 106-110) though its characterisation as a form of proprietary estoppel would now appear to be settled in England (Fisher v Brooker [2009] 1 WLR 1764; [2009] UKHL 41 at [62]; Thorner v Major at [55]) and in Australia (Hamilton v Geraghty (1901) 1 SR (NSW) Eq 81 at 87; 89; Priestley v Priestley at [8]).

106. [918]

     The classic formulation of the elements to establish an estoppel by acquiescence is that set out at first instance by Fry J (as his Lordship then was) in Willmott v Barber (1880) 15 Ch D 96, a case of pure acquiescence, at 105-106:

107. [919]

     This passage has been cited approvingly or applied in Australian courts (see, for example, Moffat v Sheppard; Alexander v Sheppard (1909) 9 CLR 265 at 281 (O’Connor J); 286-287 (Isaacs J); [1909] HCA 22; Svenson v Payne (1945) 71 CLR 531 at 542-543 (Latham CJ, Rich and Williams JJ); [1945] HCA 43; Donaldson v Freeson (1933) 33 SR (NSW) 460 at 468-469 (Davidson J, with whom James and Halse Rogers JJ agreed); Brand v Chris Building Co Pty Ltd [1957] VR 625 at 628 (Hudson J); Dewhirst v Edwards [1983] 1 NSWLR 34 at 49-50 (Powell J); Waltons Stores v Maher at 428 (Brennan J); Portland Downs Pastoral Company Pty Ltd v Great Northern Developments Pty Ltd [2012] QCA 18 at [52] (Chesterman JA, with whom White JA and Margaret Wilson AJA agreed)), though it has been observed that successful reliance upon an estoppel by standing by has been “rare” (Handley, Estoppel by Conduct and Election at [11-008]).

108. [920]

     Some relaxation of the Willmott v Barber elements has been observed in the cases (Croft and Smith, On Equity (2009, Lawbook Co) at [12.10]; Ben McFarlane, The Law of Proprietary Estoppel (2014, Oxford University Press) at [2.08]-[2.44]). In an oft-cited decision, Oliver J in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1981] 2 WLR 576 acknowledged (at 589) that Fry J’s probanda may well be necessary in a case of “pure passivity” – as where a defendant never made any representation or promise, but merely stood by in silence after becoming aware of the plaintiff’s unilateral mistake as to his or her rights – but expressed doubt that they were applicable to every case of estoppel by acquiescence (see 588-590; 593; a view referred to approvingly in Cameron v Murdoch [1983] WAR 321 at 351; and see Cobbe v Yeoman’s Row Management Ltd [2008] 1 WLR 1752; [2008] UKHL 55 at [63]). More recently, Fry J’s probanda have been characterised as “highly convenient and authoritative” but “not necessarily determinative” (Blue Haven Enterprises Ltd v Tully [2006] UKPC 17 at [23]; and see Lester v Woodgate [2010] EWCA Civ 199 at [33]-[39]).

109. [921]

     This relaxation is perhaps reflected in the modern tendency to emphasise the commonalities between estoppel by encouragement and estoppel by acquiescence. In Carter v Brine, Blue J set out a formulation of the elements necessary to establish an estoppel by acquiescence (at [327]):

110. [922]

     In respect of this formulation I would repeat the earlier observations in relation to his Honour’s statement of the elements of estoppel by encouragement, but add (in respect of Blue J’s first element) some remarks in relation to a further matter; namely, the relevance of an assumption as to future rights.

111. [923]

     It has been suggested that estoppel by acquiescence is confined to assumptions concerning presently existing rights (see The Law of Proprietary Estoppel at [2.14]-[2.25]; Spencer Bower: Reliance-Based Estoppel at [12.18]-[12.19]). Support for this view is typically found in the traditional formulations of the doctrine: in Ramsden v Dyson, Lord Cranworth LC spoke of a person supposing a property “to be his own” (at 140; and see 142); in Willmott v Barber, Fry J referred to one’s mistake “as to his legal rights” (at 105); in New South Wales Trotting Club Jordan CJ also spoke of improvements to land “in the mistaken assumption that it is his own” (at 308). If so restricted, this would distinguish estoppel by acquiescence from estoppel by encouragement and promissory estoppel, both of which may operate in relation to assumptions concerning the future (such as an expectation of acquiring rights in respect of certain land or an expectation that certain contractual rights will not be exercised).

112. [924]

     The issue has importance in the present case to the extent that the sons’ assumption is (as I consider it to be), in substance, that they would in the future have rights in respect of the properties (as distinct from an assumption that they were in some sense presently entitled to the properties, or that the first defendant had presently bound himself by a promise to leave the properties by will).

113. [925]

     The Plaintiffs’ Reply Submissions emphasise that the relevant assumption, at least in the context of the estoppel claim advanced by the three sons jointly, relates to the future (see at [23](a)-[23](b) of the Plaintiffs’ Reply Submissions). To the extent that the claim is framed as an estoppel by acquiescence and the relevant assumption is as to the future acquisition of rights in respect of the first defendant’s properties, it is therefore necessary to consider the issue.

114. [926]

     A similar difficulty arose in Priestley v Priestley. At first instance, it was argued for the defendant that the plaintiff’s claim was, in substance, one of estoppel by acquiescence, the consequence being that there was an additional requirement that the plaintiff hold (to the knowledge of the defendant) a mistaken belief as to his legal rights. The trial judge White J (as his Honour then was) considered that “the same basal principles” applied in this regard, irrespective of the precise categorisation of the proprietary estoppel (see Priestley v Priestley [2016] NSWSC 1096 at [109]). His Honour saw “little utility” in distinguishing between the two forms on the facts of that case (see [110]). His Honour considered that the distinction between the doctrines was “not so clear that different principles should apply” and, significantly, that the matter had to be viewed in light of Doueihi (at [110]). His Honour considered that it was not an essential requirement that there be an assumption of a particular legal relationship (relevantly, an assumption that there was an irrevocable promise to leave property by will) (see [116]), concluding (at [117]) that it was:

115. [927]

     In other words, in Priestley it was not fatal to a claim (arguably one of estoppel by acquiescence) that the plaintiff’s assumption did not relate to a present legal right (namely, a binding agreement precluding revocation of the will). This conclusion was based, at least in part, on one reading of Doueihi.

116. [928]

     On appeal in Priestley v Priestley, Emmett AJA (with whom McColl JA agreed) observed that there was no challenge to the primary judge’s characterisation of the estoppel, and was content to approach the matter “by reference to the basal principles” as White J had done (though his Honour did note that the submissions had the “flavour” of an estoppel by encouragement) (at [132]-[133]).

117. [929]

     In contrast, Macfarlan JA, who delivered a separate judgment, expressly characterised the case as one of estoppel by acquiescence (at [14]). His Honour denied that Doueihi cast any doubt on the requirement that a defendant know of the plaintiff’s mistaken belief as to his rights (at [10]-[12]). His Honour’s express conclusion (at [14]) that Duncan’s mistake was “a present mistake of fact” and “not simply a mere misprediction of future events” (my emphasis) may cast some doubt on the views expressed at first instance. His Honour did however expressly endorse (at [14]) the following passage from White J’s judgment at [169] (being remarks made in the context of the common law restitutionary claim):

118. [930]

     It may be that Macfarlan JA was there intending only to deny the proposition that Doueihi entailed an abrogation of the requirement, in a case of pure acquiescence, that the defendant have knowledge of the plaintiff’s belief (as distinct from denying that estoppel by acquiescence can arise where the assumption relates to future legal entitlements). (I refer later to authority for the proposition that knowledge of the plaintiff’s belief is required in such a case.) This reading is supported by the fact that his Honour’s judgment seems to countenance the possibility that an estoppel by acquiescence can be raised even where the belief is in fact an expectation as to future rights at [13]:

119. [931]

     In relation to the claim advanced by the three sons jointly, it may be unnecessary to express any concluded view on this point. It appears that the sons, insofar as they do invoke estoppel by acquiescence, do not themselves characterise at least their primary claim as one of pure acquiescence.

120. [932]

     Although their submissions, rightly, acknowledge the distinct lines of authority, the sons point to a course of conduct on behalf of the first defendant before and after the 2002 meetings which expressly or impliedly created or sustained the assumption held by each of the sons. They expressly state that their case “does not depend on words attributed to the first defendant” (though they point to a number of examples), instead relying on Evans v Evans [2011] NSWCA 92 for the proposition that the relevant assurances need not depend on the words of a single conversation but can arise from conduct over a period of time (Plaintiffs’ Reply Submissions at [124]). In other words, the sons’ claim is, in substance, one of estoppel by encouragement.

121. [933]

     In those circumstances, if the sons succeed on their estoppel by encouragement claim, it is not necessary further to consider whether an estoppel by acquiescence can arise in a case where the plaintiff’s assumption relates to future legal rights.

122. [934]

     That said, although the primary claim of the three sons is expressly put as one of estoppel by encouragement (premised on the encouragement at the meetings in 2002 and the first defendant’s previous conduct), it was nonetheless submitted that the sons “rely on an acquiescence aspect to that claim based on the conduct which occurs thereafter” (see T 7.30-8.31; my emphasis; Plaintiffs’ Reply Submissions at [30]).

123. [935]

     In my opinion, this does not alter the position: if the alleged acts of encouragement as up to the 2002 meetings are established on the balance of probabilities, it is not necessary for the sons to invoke a separate doctrine (namely, estoppel by acquiescence) so as to impugn any subsequent silence or inaction on the part of the first defendant in respect of the sons’ expectation. That subsequent conduct would, in the context of the first defendant’s earlier conduct, form part of the continuing encouragement for the purposes of an estoppel by encouragement.

124. [936]

     However, the plaintiffs also expressly advance a claim based on estoppel by acquiescence (see [236]-[240] of the Plaintiffs’ Reply Submissions), one grounded on the pleaded expectation, which they say ought to succeed even if they fail on their proprietary estoppel by encouragement argument (see [239] in particular; see also plaintiffs’ response to oral submissions of defendants on 10 October 2017 at [25]-[29]). In opening, it was submitted that each of the three claims (that is, that of the three sons; of A in relation to Property No 4; and of E Co) was “put both on an estoppel by encouragement … and also an estoppel by acquiescence” (T 8.28).

125. [937]

     Accordingly, if it is necessary to express a view on this point, I would make the following observations.

126. [938]

     First, it would appear that the existence of the postulated limitation on estoppel by acquiescence is something that has more often been assumed than decided (cf Scottish Newcastle plc v Lancashire Mortgage Corporation Ltd [2007] EWCA Civ 684 at [44]-[47]). Moreover, many formulations of principle refer generally to “proprietary estoppel” in stating that equity may intervene in respect of a belief that a person has or will have an interest in land, without any suggestion that the acquiescence doctrine could not be relied upon if the belief related to the future acquisition of rights in respect of real property.

127. [939]

     One example is Silovi Pty Ltd v Barbaro (1988) 13 NSWLR 466, where Priestley JA, summarising the effect of the judgments in Waltons Stores v Maher, observed (at 472) that “equitable estoppel” (under which label estoppel by acquiescence was expressly included) operates upon representations or promises as to future conduct, including promises about legal relations (see also, Austotel at 610). Others include Vukic v Grbin [2006] NSWSC 41 at [27]-[28], Scottish Newcastle plc v Lancashire Mortgage Corporation Ltd at [44]-[47], Thorner v Major at [29], [55]; Priestley v Priestley at [13]; and McNab v Graham [2017] VSCA 352 at [97]-[98]. Formulations such as these need not be read as endorsing some unified theory of proprietary estoppel (or of “equitable estoppel generally”); rather, they acknowledge some convergence of principle.

128. [940]

     Second, the significance, practically speaking, of estoppel by acquiescence is that its existence confirms that there is scope for equity to grant relief, notwithstanding the absence of a representation or promise, in a case where one party seeks to act inconsistently with a belief (concerning real property) adopted by another on which that other has reasonably relied to his or her detriment to the knowledge of the other party. After setting out elements common to the relevant lines of authority (at [17-095]), the authors of MGL emphasise as the point of distinction not the temporal content of a plaintiff’s assumption but rather the absence of a representation or promise (at [17-100]). They describe the acquiescence doctrine (at [17-065]) as binding an owner who induces another “to expect that an interest in the property will be conferred” (my emphasis).

129. [941]

     A core case of estoppel by acquiescence may well be one of unilateral mistake as to present legal entitlement (as seen in Lord Cranworth LC’s remarks in Ramsden v Dyson at 140-141) but there is force to the view that equity’s reach, in an appropriate case, is not necessarily so confined. Although estoppel by representation is confined to representations of present fact or law (Jorden v Money (1854) 5 HLC 185; Waltons Stores v Maher at 398; Sidhu at [58]), neither promissory estoppel nor proprietary estoppel by encouragement is so confined. If the sole reason for this temporal limitation upon estoppel by acquiescence is the absence of a representation or promise, as a matter of principle, I would express respectful agreement with the dictum of Oliver J in Taylors Fashions (at 590) that:

130. [942]

     Third, whatever the position in England, it may be that, as a consequence of decisions such as Waltons Stores v Maher, and notwithstanding the absence of a unitary concept of “proprietary estoppel” (still less of a unified doctrine of “equitable estoppel”), Australian law has moved beyond a strict demarcation between these two forms of proprietary estoppel, at least insofar as the content of a plaintiff’s belief is concerned. (That is not to suggest, however, that estoppel by acquiescence lacks the orthodox knowledge requirement affirmed in Priestley v Priestley at [13] – see further, below.)

131. [943]

     Notwithstanding the foregoing, it must be acknowledged that there are strong criticisms to be made of any departure from the postulated limitation upon estoppel by acquiescence (see McFarlane’s Law of Proprietary Estoppel at [2.18]-[2.25]). Moreover, it should be emphasised that I did not have the benefit of argument on this point. The plaintiffs (see Plaintiffs’ Closing Submissions at [18](c)(iv); [403]) and the first defendant (see First Defendant’s Opening Submissions at [31]-[32] referring to “assumption or expectation”; T 1369.8ff) each appeared to conduct their or his case on the assumption that estoppel by acquiescence (if it were open on the pleadings, which was ultimately conceded by the first defendant) is not so confined.

132. [944]

     In circumstances where I am satisfied that the primary claim of each of the three sons is most appropriately characterised as an estoppel by encouragement and (as will be seen) I am satisfied that such an estoppel arises in the present case, I did not consider it necessary to invite further submissions on this issue after judgment had been reserved and it is unnecessary to say anything further on the point.

133. [945]

     In relation to A’s claim in respect of Property No 4, it is submitted that, in essence, from 1993, A assumed he was living in, and working on, his own home (to the knowledge of the first defendant) (Plaintiffs’ Reply Submissions at [236]). If so, that is a present mistake of fact. Accordingly, the issue as to the scope of estoppel by acquiescence does not arise and A’s separate (alternative) proprietary estoppel claim can be framed by reference to either form of estoppel.

134. [946]

     In relation to E Co’s separate proprietary estoppel claim, to the extent that it is based on the conduct relied upon for the sons’ jointly made estoppel claim, then the comments set out above in relation to that claim would equally apply. To the extent that it is based on an assumption or expectation that, in carrying out capital improvements or the like to the properties of the first defendant, it would continue to have the benefit of the use of the farms indefinitely until the first defendant’s death, i.e., that there was no right of termination of the Agreement for Lease then that might be characterised as a present mistake of fact or, perhaps more accurately as a mistake of law. If the former, then, as with A’s separate alternative proprietary estoppel claim, it could be framed by reference to either form of estoppel.

135. [947]

     With those observations, I turn to the five issues identified above.

136. [948]

     Both parties adverted to the need for some degree of certainty in respect of the alleged representations or promises. Before turning to that requirement in the context of a proprietary estoppel, it is useful briefly to consider the question of certainty in relation to other forms of estoppel.

137. [949]

     In relation to estoppel by representation, it is necessary that the language upon which it be founded be “precise and unambiguous”, though this “does not necessarily mean that the language must be such that it cannot possibly be open to different constructions”; rather, “it must be such as will be reasonably understood in a particular sense by the person to whom it was addressed” (Low v Bouverie [1891] 3 Ch 82 at 106 (Bowen LJ); see similarly at 113 (Kay LJ)).

138. [950]

     This requirement that the language be “clear” and “unequivocal” applies in a case of promissory estoppel (see Legione v Hateley (1983) 152 CLR 406 at 435-436; [1983] HCA 11). In Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd (2016) 333 ALR 384; [2015] HCA 26, the statement of principle in Low v Bouverie was expressly endorsed (at [35]) by the plurality. The plurality declined to consider the respondents’ assumption that a “less stringent view is taken for the test for certainty of the representation” in proprietary estoppel (see [36]). Keane J considered that promissory estoppel required a high degree of certainty (in fact, one sufficient to ground an effective contractual variation; see [143]; [147]) and was clearly of the view that proprietary estoppel involved a lesser standard of certainty than promissory estoppel (see [148]-[149]). Nettle J was of the view that “the notion that there is or should be some a priori distinction between the degree of objective certainty required to found a promissory estoppel compared to a proprietary estoppel runs counter to principle” (at [217]). His Honour later remarked that “it would not follow that because it has been found in the context of one relationship that a designated level of certainty was required, the same degree of certainty would be necessary in the context of a different relationship or in different circumstances” (at [217]).

139. [951]

     The plaintiffs submitted, correctly in my opinion, that cases of proprietary estoppel by encouragement have been approached differently from cases of promissory estoppel (see T 1281). (I put to one side cases of estoppel by acquiescence in this regard. As the plaintiffs submit, it is unnecessary to identify any express representation or promise in order to establish such an estoppel (and hence no question of certainty can, in that context, be said to arise); rather, what is material is the standing by while the work is undertaken in respect of the land to the knowledge of the defendant (T 1280).) (That said, I note that in Thorner v Major, Lord Walker observed (at [55]) that if all cases of proprietary estoppel are to be analysed in terms of assurance, reliance and detriment, then “the landowner’s conduct in standing by in silence serves as the element of assurance”.)

140. [952]

     Drawing a conclusion as to the adequacy of the alleged representation or promise requires “careful identification of the nature of the assumption by the plaintiff” (Doueihi at [186]). The alleged representation or promise is to be assessed by reference to the circumstances of each case (Doueihi at [186], citing Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 445; [1990] HCA 39; see also, Thorner v Major at [56]).

141. [953]

     In Flinn v Flinn, Counsel submitted that a “representation” in the context of proprietary estoppel had to be “unambiguous”, “clear” or “unequivocal”. Brooking JA (with whom Charles and Batt JJA agreed) reviewed the law in this area (see [80]-[93]), noting academic opinion to the effect that proprietary estoppel may give rise to an equity notwithstanding that there was “difficulty in quantifying in legal concepts the interest held out by the donor” (see [81]) and characterising the authorities as exhibiting a “liberal approach” (at [94]). His Honour concluded, relevantly, as follows (at [80]; [95]):

142. [954]

     The relevant passages from Flinn v Flinn have been cited approvingly on numerous occasions (see, for example, Delaforce at [55]; Evans v Evans at [121]; DHJPM at [54]; Crown Melbourne at [215]; cf [159]). The analysis also accords with that of Campbell JA (with whom Giles JA and Sackville AJA agreed) in Evans v Evans at [116], where it was accepted, in effect, that the precise content of the assumption and expected arrangements flowing from the relevant representation or promise need not always be susceptible to precise legal analysis:

143. [955]

     Accordingly, it can be said that a claim premised on proprietary estoppel by encouragement does not fail merely on the ground that the relevant interest has not been “expressly indicated” (Plimmer v The Mayor, Councillors and Citizens of the City of Wellington (1884) LR 9 App Cas 699 at 713), and a proprietary estoppel “may be established where the conduct of the party estopped did not define the expectation” (Delaforce at [55] (Handley JA, with whom Giles JA and Allsop P agreed)) and “notwithstanding that the expectation contains elements that would not be sufficiently certain to amount to a valid contract or is formed on the basis of vague assurances” (DHJPM at [54] (Meagher JA, with whom Macfarlan JA agreed); cf Crown Melbourne at [35]; [143]; [147]; [211]; [212], in relation to promissory estoppel).

144. [956]

     It has been said that the representation or promise is sufficiently clear “if it is reasonable for the representee to have interpreted the representation in a particular way being a meaning which it is clearly capable of bearing and upon which it is reasonable for the representee to rely” (Galaxidis v Galaxidis [2004] NSWCA 111 at [93] (Tobias JA)). Reference is also often made to the following passage from the judgment of Hodgson JA in Sullivan v Sullivan [2006] NSWCA 312 at [85] (cited with apparent approval in Evans v Evans at [124], Doueihi at [187] and in Crown Melbourne at [147]-[148]):

145. [957]

     A distinction has sometimes been drawn between arms-length/commercial cases and domestic/family cases when assessing adequacy of an assurance or the reasonableness of an expectation or assumption (see, for example, DHJPM at [104]-[105]). In Cobbe v Yeoman’s Row Management Ltd Lord Walker made the following observation (at [68]):

146. [958]

     Insofar as the present case does not fall neatly into the proposed distinction, it perhaps illustrates the wisdom in the observation that the distinction is neither “universal or infinite” and the warning that care should be used in the use of such “shorthand labels” (Doueihi at [178] (Gleeson JA)). Moreover, however accurate Lord Walker’s generalisation may be, it is to the particular plaintiff and his or her circumstances that regard must be had.

147. [959]

     Both parties made reference in their written submissions to the sort of representations or promises which have been successfully relied upon in the cases, including: In re Basham, decd [1986] 1 WLR 1498 at 1503 (“You’ll lose nothing for this, doing all these jobs”); Gillett v Holt at 227 (“all this will be yours”); Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 (in which there had been oral promises by parents to their son that they would subdivide their property and transfer a parcel to him); Sullivan v Sullivan at [58] (“This is your Christmas present. [We] will look for a home of your/our choice for you to live in as long as you like”); Delaforce at [18] (in which there had been a notation in Family Court consent orders that the husband “will retain the wife as a beneficiary in his will”); Thorner v Major at [26] (in which there were oblique remarks between men between whom “clear and unequivocal statements played little or no part”); and Sidhu (in which there was an oral promise to subdivide property and transfer a parcel, supported in subsequent years by signed notes, e-mails and further oral promises) (see further, First Defendant’s Closing Submissions at [32]; Plaintiffs’ Opening Submissions at [66]; see also the review in Flinn v Flinn at [82]-[93]).

148. [960]

     This approach is a useful exercise insofar as it illustrates the practical application of general principle, but it should not detract from the fundamental task of examining the alleged conduct in the case at hand in its own context. That said, equity has not, at least in the context of proprietary estoppel, required a party to satisfy the more stringent requirements set by the common law of contract, this being consistent with the fact that it is not the “unperformed promise” per se which attracts equity’s concern (Giumelli v Giumelli at 121).

149. [961]

     As adverted to above, and of particular importance to the present case, the expectation reasonably derived from another’s words and actions “need not depend on the words of a single conversation, but could arise from conduct over a period of time” (Evans v Evans at [107] (Campbell JA, with whom Giles JA and Sackville AJA agreed).

150. [962]

     Finally, also of relevance to the present case, I note that a claim does not fail simply because the representations or promises are conditional. As was said by Campbell JA (with whom Allsop P, as his Honour then was, and Sackville AJA agreed) in Waddell v Waddell [2012] NSWCA 214 at [53]:

151. [963]

     In that context, the recognition by each of the sons in the present case that farming properties might be bought or sold over the years (and hence that what they expected to inherit in terms of the actual property portfolio held by the first defendant at his death would or might differ according to the changes in the property holdings over the years) is not fatal to the claim since the representation (or expectation) relevantly may be seen as relating to whatever the farming properties were at the time of the first defendant’s death.

152. [964]

     I turn now to consider whether the first defendant’s alleged representations or promises were sufficiently clear in relation to each plaintiff.

153. [965]

     At the outset I note that the plaintiffs emphasised more than once that their case did not rest on words attributed to the first defendant. Nevertheless they point to the evidence of various assurances given to the sons over the years that they would inherit the farms (such as the first defendant: saying to A, that certain fencing “should last for 20 years, and then they’ll be [A’s son’s] problem”; saying to A in respect of Property No 8 “This block is for [A’s son]”; saying to A “This will be your problem when I am gone”, “It will be up to you blokes as to what you do” “This will last until [A’s son] has to replace”; “This can be [A’s son’s] house down the line”, and “Well you can do what you like when I am gone”; saying to Farm Worker No 1, “that will be [A’s son’s] problem”, or “that will be the grandchildren’s problem” or words to that effect; and saying to B “[Property No 8] is for my retirement. The [other] properties are for you blokes. When I’m gone, [Property No 8] can be sold and the proceeds split between the grandchildren”). They also point to the statements that they say were made at the meetings of 18 and 25 September 2002 by Accountant No 1 and on 25 September 2002 by Solicitor No 2 in the presence of the first defendant and one or more of the sons. Although after the decisions made in 2002, they also point to the first defendant’s statement at the confrontation on 21 October 2009 to the effect “You blokes can have the [properties other than Property No 8], and I will fuck off”.

154. [966]

     The plaintiffs argue that the words used by the first defendant, and by his accountant and solicitor in the presence of the first defendant and his sons, as well as the conduct of the first defendant, must be assessed against the evidence that the state of mind of the first defendant and his sons in September 2002 was that: each of the sons understood that they would inherit the farms in equal shares; the first defendant knew that each of the sons understood that he would inherit the farms with his brothers in equal shares; and the first defendant intended (subject to the uncommunicated “success condition”) that he would hold the farms for his sons until his death when the farms would pass to his sons under his will.

155. [967]

     The conduct to which they refer includes the first defendant’s participation at the meetings with the Local Accounting Firm on 11 July 2002, 30 August 2002, 2 September 2002, 5 September 2002, 11 September 2002, 18 September 2002 and 25 September 2002; the first defendant’s attendance at the auction for Property No 9, and his subsequent conversations with A, and then B; the first defendant instructing the Local Accounting Firm to follow up “Cleardocs” on 5 September 2002 (including the instructions to purchase the documentation to incorporate E Co and establish the E Unit Trust, and each of the family discretionary trusts for each of the first defendant and his sons); incorporating E Co and establishing each of the individual family trusts; and then “acting in accordance with” the advice of Solicitor No 2 at the 25 September 2002 meeting.

156. [968]

     It is submitted that the first defendant’s conduct after 25 September 2002 continued to encourage his sons that the first defendant would hold the farms for them during his lifetime and that the farms would pass to them on his death, including: the first defendant’s attendance at the meetings of E Co on 10 December 2002, his participation in the issuing of shares in E Co on 9 January 2003, his participation in the incorporation of E Co on 7 March 2003, and his attendance at the meetings on 30 April 2003, 2 May 2003, 13 August 2003 and 17 March 2004. Also relied upon is the first defendant’s conduct from October 2002 and continuing thereafter, in standing by knowing that his sons, and E Co, were carrying out extensive works to Property No 9, and to the other farms, which were of a capital nature. It is submitted that those improvements were not the subject of the Agreement for Lease; and were improvements of a type which the first defendant agreed he would not expect a tenant to undertake. The plaintiffs argue that the improvements made to Property No 9, and the other farms, by his sons, and E Co, were made on the premise that E Co would obtain the benefit of those improvements consistent with the first defendant’s intention that E Co would conduct the new family farming business on the farms until his death, at which point the farms would pass to his sons under his will. It is also said that the first defendant encouraged the sons’ expectation by making the farms available as security for off-farm investments (although I note that the plaintiffs also submit, in a different context, that it could be expected that the first defendant would have done so even had they not gone into the family business venture with him).

157. [969]

     It is submitted that even after the confrontation on 21 October 2009, the first defendant continued to encourage the expectation held by each of his sons that the first defendant would hold the farms for them, and that the farms would pass to them on his death. This followed from the first defendant in making the farms available as security for the C Hotel, and from his will dated 15 December 2011 (which was disclosed to his sons, as part of his sons giving consideration to signing the “Square Up” deed dated 15 December 2011), which made clear that the first defendant continued to ensure that his estate, including the farms, was being held for his sons until his death, at which point in time the farms would pass to the sons under his will.

158. [970]

     The plaintiffs emphasise that the first defendant engaged in the conduct described above, throughout the period from 25 September 2002 until 30 May 2012, with the intention that he would hold the farms for his sons during his lifetime, and that his sons would inherit the farms on his death; and engaged in the conduct described above before the confrontation on 21 October 2009, knowing that each of his sons expected that he would hold the farms for them during his lifetime, and that the farms would pass to them in equal shares on his death (without disclosing to his sons that he was sexually abusing his granddaughters, and without disclosing to his sons the “success condition” – which the sons dispute as a fabrication – that the boys would only inherit if he considered that they had made a success of the new family farming business).

159. [971]

     The plaintiffs accept that they cannot, given the effluxion of time, give direct evidence of words used by the first defendant during the meetings of 2002 but submit that the absence of evidence of direct speech attributed to the first defendant at the September 2002 meetings does not matter, pointing among other things to the first defendant’s concessions.

160. [972]

     It is submitted, adapting the words of Lord Rodger of Earlsferry in Thorner v Major, that “[w]hat matters, however, is that what [the first defendant] said should have been clear enough for [his sons], whom he was addressing and who had years of experience in interpreting what he said and did, to form a reasonable view that [the first defendant] was giving [them] an assurance that [they were] to inherit the farm and that [they] could rely on it”. Reliance is also placed on the statement of Lord Neuberger, extracted and approved by Kaye J in Harrison v Harrison [2011] VSC 459 at [383] that “[a]t least normally, it is sufficient for the person invoking the estoppel to establish that he reasonably understood the statement or action to be an assurance on which he could rely”.

161. [973]

     The plaintiffs accept that evidence of an understanding (in and of itself, absent evidence of the context in which that understanding was formed) cannot establish conduct (including omissions) which may have encouraged that understanding, but they submit that the evidence given by the sons is not of that kind, noting that the plaintiffs specifically attribute their understandings to the meetings of 2002, and in particular, the meetings of 18 and 25 September 2002.

162. [974]

     The plaintiffs attach weight to the fact that the statements made by Accountant No 1 and Solicitor No 2 at the meetings, in the first defendant’s presence (and with his express concurrence or at least without contradiction from him at the meetings). They argue that the execution of documents relating to E Co on 11 September 2002, and in respect of the various trusts on 18 September 2002, assumes real import because by 18 September 2002 the proposed structure had been reduced to “one specific, coherent, logical proposal” and the first defendant was executing documents in accordance with that proposal. The plaintiffs say there is no evidence that the first defendant ever raised an objection to what was proposed by either Accountant No 1 or Solicitor No 2. It is submitted that it was therefore reasonable for the plaintiffs to assume that what was being put to the meetings was adopted by the first defendant, or put with his agreement.

163. [975]

     The plaintiffs accept that the evidence of the earlier conduct and representations by the first defendant, and the understandings and expectations induced in the plaintiffs thereby, is not, on its own, sufficient to establish the conduct relied on in 2002 (in respect of each of the sons with regard to the new family business) and from 1993 (in respect of A with regard to the homestead) on Property No 4; but they submit that it is relevant to assessing the likelihood of the “competing hypotheses” of the parties, which must be evaluated in their entire context.

164. [976]

     The plaintiffs also place some significance to the name chosen for the company to be the “hub” of the new joint enterprise (on which I do not here elaborate given the need for anonymisation but which I include in the restricted schedule of pseudonyms). The plaintiffs submit that this weighs into the calculus of whether the first defendant was willing to put his assets into an entity for the benefit of all his family. Most significantly, the plaintiffs submit, the continued importance of family (as stressed by the first defendant to his sons), is a matter to be weighed in judging whether his conduct amounted to encouragement of the expectation that the plaintiffs would inherit his farms (as opposed merely to hoping that they might receive whatever he decided to give them in his last will).

165. [977]

     As to the first defendant’s assertion that his desire to move his “money out of Sydney” and out of the Sydney Family Trust (common ground in these proceedings) is of no relevance to these proceedings, the plaintiffs submit that the significance in this is that the first defendant received approximately $13 million at the same time that his sons received $1 million each and hence was armed with a very significant increase in his wealth at the same time as the plaintiffs, and at a time that he was seeking to disentangle his affairs from his siblings. They submit this is directly relevant to the likelihood of him agreeing either to transfer his properties into a trust structure, or to affirm that his sons would inherit the farms on his death but in the meantime to use his wealth, including his farms, to set them up in a business which would provide for them and their families into the future. The plaintiffs place significance on the first defendant’s concessions that he had agreed with his sons, as and from 25 September 2002, that: “the grazing business would be transferred to [E Co]”; he would “make the farms available as security for off farm investments”; and he would “move money out of Sydney into the farms to assist the new business”.

166. [978]

     The plaintiffs thus submit that the first defendant, by his conduct including omissions, encouraged the plaintiffs to believe that he was willing to transfer the farms to them, and that in the alternative he would hold them for his sons and their joint business or businesses, and that they would pass to his sons on his death through his will.

167. [979]

     As adverted to earlier, the first defendant submits that the plaintiffs need to establish some representation or expectation made or created by him based on some clear matter, “not some vague notion of what may or may not have been said at a meeting and without necessarily knowing who in fact said it”. The plaintiffs emphasise that the authorities establish that specific express words need not be proven; they need to demonstrate conduct and that conduct can in part be established by silence, “for instance, by conduct which indicates that the representations of [Accountant No 1 and Solicitor No 2] were adopted by the first defendant by his participating in meetings at which they made those representations, by failing to object to what was said and by taking active steps in consequence and in accord with those representations such as signing documents”.

168. [980]

     The first defendant argues that the pleaded expectation (at [202] of the second further amended statement of claim), though pleaded in the alternative to the express trust and agreement claims, also relies on the pleading of an express trust. I have dealt with this already. (The first defendant also argues (which the plaintiffs dispute) that there is an inconsistency in the Plaintiffs’ Closing Submissions (at [403]) insofar as it is said there is no beneficial interest until the moment the first defendant allegedly resiles from the assumed position, whereupon, having expected to take the properties upon his death, the plaintiffs obtain an even greater entitlement than they expected and obtain an immediate and present beneficial interest in the land. It is submitted the contradictory nature of the pleading is borne of “the need to reconstruct history”. In response to this, the plaintiffs cite Giumelli v Giumelli and the distinction between institutional and remedial constructive trusts. It is not necessary here to reagitate those issues.)

169. [981]

     While I am not persuaded to the requisite degree of certainty that the first defendant encouraged the plaintiffs to believe that he was willing in September 2002 to transfer the farms inter vivos to the proposed trustee of the unit trust then contemplated in the new family business structure, I am so satisfied that – by his acquiescence in the discussions for the proposed business structure and implementation of that structure, in the context of his admitted knowledge of the sons’ expectation that they would inherit the farms (and hence have the benefit of the capital improvements effected by them and the business to be established and operated by them together with their father) – the first defendant encouraged each of his sons (and through them E Co) to believe that he would hold onto the farms during his lifetime and make them available for the purposes of the new family farming business and, on his death, would leave the properties to his sons under his will.

170. [982]

     The first defendant’s encouragement or creation of such an expectation is evidenced not simply by the steps that the first defendant took in the implementation of the new family business structure but by his concessions in the witness box as to his awareness that the sons had those expectations and the fact that he was content to let them continue as they did with the family business holding those expectations (without enlightening them as to the uncommunicated “success” condition).

171. [983]

     As to the position of A in relation to the homestead on Property No 4, the first defendant accepts that he encouraged A to pay for the renovations in question. Although the first defendant in his affidavit also deposed that the money expended by A was a loan to him, that was not pressed in the pleadings or submissions. The plaintiffs also point to the fact that the first defendant was aware of A’s belief that he was living in his own home and carrying out renovations to that home.

172. [984]

     The first defendant points to A’s acceptance of the proposition that he was to receive recompense from his father (see T 347.36, where A said that if the property was sold the money he had spent would come back to him; and see T 348.04).

173. [985]

     I find that there was a clear expectation encouraged in A that the homestead on Property No 4 was his home and that if he spent his money on the renovations in question, he would have the benefit of that expenditure. He was encouraged to believe that he would be permitted to remain in the property indefinitely. The fact that A expected that his father would square up the ledger and even up the gifts as between he and his brothers does not gainsay that he expected in some fashion that the expenditure on Property No 4 would be to his benefit.

174. [986]

     The position of E Co is established through that of the sons. The evidence supports the conclusion that the first defendant encouraged an expectation that it would be permitted to carry on the farming business on his lands; that it would not be required to pay for the cattle transferred to it at book value, and that moneys advanced to it would not be required to be repaid prior to his death.

175. [987]

     In order to rely upon either form of proprietary estoppel, it must be established that the plaintiffs held an assumption that he or it had (or, at least in the context of estoppel by encouragement, would have) an interest in the relevant properties (Carter v Brine at [327]; Doueihi at [131]; [154]; [159]-[168]). In respect of this assumption, there must have been encouragement or acquiescence (which may compendiously be termed “inducement”) on the part of the first defendant.

176. [988]

     In estoppel by encouragement, the relevant assumption is “induced” by the relevant representation or promise, be it express or implied from conduct. The requisite clarity of the alleged assurances has been considered above. Whether the relevant assumption was in fact “induced” by the first defendant’s assurances and therefore induced the plaintiffs’ change of position will be considered below in the context of reliance.

177. [989]

     In estoppel by acquiescence, the relevant assumption is not “induced” in the same sense. It is the defendant’s knowledge of the assumption, and his or her inaction while possessing this knowledge, which supplies that element; “[t]he act of standing by without correcting the plaintiff’s mistaken belief is itself an act of encouragement” (Priestley v Priestley at first instance at [109]). As Brennan J said in Waltons Stores v Maher at 429:

178. [990]

     In Willmott v Barber, Fry J stated (at 105) that “the defendant, the possessor of the legal right, must know of the plaintiff’s mistaken belief of his rights” and that “[i]f he does not, there is nothing which calls upon him to assert his own rights.” In Priestley v Priestley, Macfarlan JA emphasised the necessity of establishing this element in a case of estoppel by acquiescence (at [13]):

179. [991]

     Senior Counsel for the plaintiffs respectfully expressed some doubt concerning the distinction drawn by Macfarlan JA and whether it was borne out by the authorities (see T 1298-1299). However, insofar as a case is put on the basis of pure acquiescence, it is settled law that the first defendant will not have acted unconscientiously unless he knew that the relevant plaintiff was mistaken in a belief about his (or its) rights to the property, and the first defendant stood by in silence (see Svenson v Payne at 541-543; Bismark Range (Lucknow) Gold Exploration NL v Wentworth (Lucknow) Goldfields NL (1935) 35 SR (NSW) 400 at 408-409; Waltons Stores v Maher at 428; Australian Olympic Committee Inc v The Big Fights Inc [1999] FCA 1042 at [349]-[358]; 46 IPR 53; Eade v Vogiazopoulos (No 2) [1999] 3 VR 889 at [65]; Portland Downs v Great Northern at [52]-[57]; Priestley v Priestley at [13]; cf Taylors Fashions at 569-570).

180. [992]

     As to the content of the relevant assumption or expectation, it is convenient at this stage to observe that the plaintiffs’ pleaded assumption or expectation relates in part to the first defendant’s testamentary intentions.

181. [993]

     The plaintiffs submit that the expectation allowed, created or encouraged by the first defendant, as pleaded, was that the first defendant would “hold the farms” for his sons during the first defendant’s lifetime, and that the farms would pass to the sons on the first defendant’s death. It is said that the plaintiffs would then acquire an interest in the farms, in the sense that the first defendant, during his lifetime, would not transfer his farms without the consent of his sons and would make them available for use by the grazing business and for the off-farm investments, and on the first defendant’s death, the farms would be transferred to the sons under the first defendant’s will (Plaintiffs’ Reply Submissions at [16]).

182. [994]

     So framed, their claim is said to be one of proprietary estoppel analogous to a testamentary contract, of the type upheld in Gillett v Holt, Flinn v Flinn, Walton v Walton, Thorner v Major, and Priestley v Priestley (see Plaintiffs’ Reply Submissions at [17]). (I interpose to emphasise that there is a distinction between a testamentary contract and a proprietary estoppel. In each of those cases, the claim upheld was of the latter kind: in Gillett v Holt the contract claim was abandoned at trial ([224]; [231]); in Flinn v Flinn the promises were too uncertain to establish a binding agreement at law (at [65]-[66]); in Walton v Walton Counsel for the plaintiff had always accepted that the promises could not in law amount to a contract; in Thorner v Major the claim was solely advanced as one of proprietary estoppel; and in Priestley v Priestley the claim in contract failed at first instance and on appeal ([114]-[122]).)

183. [995]

     The plaintiffs refer (Plaintiffs’ Reply Submissions at [18]) to the following remarks of Brooking JA in Flinn v Flinn (at [75]):

184. [996]

     It is then submitted by the plaintiffs that the plaintiffs were not cross-examined at all on whether each of them understood that the first defendant could revoke his will at any time; nor on whether there could be a change of circumstances, at any time before the first defendant’s death, which could mean that the first defendant could change his will, or sell off all his assets, without making any provision for his sons (Plaintiffs’ Reply Submissions at [19]). (The first defendant contests the factual premise for this submission, pointing to A’s agreement in cross-examination that he expected to inherit whatever the estate might be (T 344.36-344.48); B’s agreement that he had no ownership interest in the land as at the middle of 2002 (T 119.44-119.50) or in the period 2010 to 2014 (178.01-178.08); and C’s agreement that prior to late 2002 he had no interest in the first defendant’s land (T 401.26-401.38) and that after 2002 the land was owned in the same way (T 450.32-451.03).)

185. [997]

     As was observed (at [36]) in Delaforce, testamentary promises are not always revocable:

186. [998]

     It follows that, in the context of a case premised on estoppel by encouragement, the factual question in this regard is whether the first defendant’s conduct amounted to more than a mere statement of present (revocable) intention to provide for the three sons in his will and was instead “tantamount to a promise”.

187. [999]

     A similar analysis may apply in the context of estoppel by acquiescence, as Priestley v Priestley demonstrates. If one party labours under a present mistake of fact that he or she is presently named as a beneficiary in a will, and suffers detriment in reliance upon that assumption (for example, through expenditure on the property which he or she expected would be inherited in due course), the circumstances may be such as to give rise a duty on the part of the testator to disabuse the party of the mistake, the consequence being that the party may be entitled, in equity, to relief (see Priestley v Priestley at [14]; [124]-[126]; [150]; [153]; [157]; [159]). (Of course, one obvious difference between Priestley v Priestley and the present case is the fact that there the person against whom the estoppel was successfully raised was not alive at the time of the proceedings.)

188. [1000]

     I turn now to consider whether each of the plaintiffs possessed a relevant assumption and, in the context of the acquiescence case, whether this was known to the first defendant. As noted above, the content of the assumption does not need to be precise; hence, as a matter of law, an assumption/representation/promise that the first defendant would “hold the farms” “for” the sons to be used for the purposes of the family farming business is sufficient.

189. [1001]

     As regards the certainty of the assumption held by each of the sons, the plaintiffs submit that the word “hold” is not sufficiently ambiguous, when understood from a lay person’s perspective, so as to negate the first defendant’s repeated concessions. It is said that “to hold” means “not to part with” (plaintiffs’ response to oral submissions of defendants on 10 October 2017 at [31]).

190. [1002]

     As has already been noted, complaint was made by the first defendant about the generality of the sons’ affidavit evidence. In this regard, the plaintiffs say that: giving evidence using the formula “using words to the effect” amounts to evidence of the substance of what was said (not to be equated with an understanding); the fact that some of the plaintiffs’ evidence is a statement of the witness’ then understanding does not deprive it of weight on the question of what conduct may have induced that understanding when the witness also gives evidence of the circumstances in which that understanding was formed; and the fact that some of that evidence is expressed as a conclusion deprives the evidence of weight.

191. [1003]

     Reliance is placed on the statement in Connex Group Australia Pty Ltd v Butt by White J (as his Honour then was) (at [16]-[17]) that:

192. [1004]

     The plaintiffs point out that his Honour there accepted that a person’s opinion about a matter or event may be of value even if the person has no recollection, or an incomplete recollection, of the primary facts perceived and that (at [25]-[27]):

193. [1005]

     The plaintiffs also refer to what was said by Besanko J in ACCC v Yazaki Corp (No 2), at [53]-[59].

194. [1006]

     In particular (and in addition to the references given to the sons’ evidence throughout the plaintiffs’ submissions) the plaintiffs point to the following evidence as establishing the relevant assumption or expectation held by each of the sons.

195. [1007]

     As to B, the plaintiffs point to B’s evidence in his first affidavit at [174]-[176] (the last two not being subject to any evidentiary rulings) to the effect that: during the period from about June 2002 he and the first defendant “discussed possible business structures to give effect to the [corrected in his 28 July 2017 affidavit to “a”] succession plan” and that the substance of his discussions with the first defendant from about June 2002 to September 2002 was that there needed to be a clear structure so that the business could be managed on a going concern basis; and the first defendant said words to the effect that “I want the [xxx] farms to be placed into the structure as the asset backing”; to his evidence as to discussions that included A and C in that period as to the four of them (i.e., including the first defendant) making “off-farm investments” and that the substance of what the first defendant said to him about this issue was words to the effect of: “I will make funds available for off farm investments and will continue to scout for additional agricultural properties to buy”.

196. [1008]

     In B’s affidavit of 10 August 2017, clarifying [182] of his first affidavit B said:

197. [1009]

     The plaintiffs note that neither [174] nor [182] of B’s first affidavit, nor the clarifying evidence given in later affidavits, was the subject of cross-examination and that the only question put to B on the issue whether or not there was a succession plan, concerned his evidence in respect of the meeting of 25 September 2002. Nor was [176] the subject of cross-examination. It is submitted that although [175] was the subject of cross-examination, B was not shaken in his evidence.

198. [1010]

     As to A, his evidence included his recollection that before E Co was formed, he recalled attending many meetings at which advice was given about how to structure the business and how to go about intergenerational transfer of the first defendant’s land “to us and how we should go about that” ([157]). Clarifying that in a later affidavit, he said:

199. [1011]

     The plaintiffs note that [157] of A’s first affidavit was the subject of cross-examination, and though it was suggested that the words “succession plan” did not appear in B’s notes, it was never put to A that a succession plan was not discussed during the meetings of 2002; nor was it ever put to him that the discussions did not include off-farm investments.

200. [1012]

     As to C’s evidence it is noted that he deposed that:

201. [1013]

     It is noted that C was not cross-examined on this evidence.

202. [1014]

     The plaintiffs accept that the first defendant wanted all his sons to join in the family business, but they say that the evidence that is overwhelming from the constant discussions of off-farm investments in 2002 and 2003, and the references in B’s notes to other businesses, that the first defendant apprehended that B and C were not returning to become graziers. It was not put to C that there was no discussion of the new family business being involved in off-farm investments, or that the discussion with the first defendant proceeded along the lines that the only roles being discussed for B and C concerned the farming business.

203. [1015]

     As to the meeting of 18 September 2002, the plaintiffs note that B was not challenged on his evidence that Accountant No 1 said words to the following effect, “A corporate trustee would hold the farm assets and conduct the business activities and each of you [A,B, the first defendant and me] would be the unit holders in the trust as well as being directors and shareholders in the corporate trustee”; nor was he cross-examined to the effect that the understandings he formed as a consequence of this meeting were not in fact held by him.

204. [1016]

     The plaintiffs note that B was not cross-examined about the following evidence given in a later affidavit referring to [207] of his first affidavit:

205. [1017]

     They note that A also gave evidence in a later affidavit that:

206. [1018]

     It is noted that A rejected the suggestion that the issue of capital gains tax was raised in a general way and not specifically in relation to the transfer of land.

207. [1019]

     As to the meeting of 25 September 2002, the plaintiffs note that some of B’s evidence of this meeting was limited to his understanding and one sentence, relating to the purpose of the meeting, was rejected with leave. They point to the evidence in his later affidavit, exercising that leave, referring to [221] of his first affidavit, that:

208. [1020]

     The plaintiffs note there was no cross-examination to the effect that what B had recorded in his first affidavit had been said by Accountant No 1 and Solicitor No 2 had said was, in substance, wrong, nor was there any cross-examination of B’s understanding as a consequence of that meeting, which included the following evidence, which was not the subject of a ruling on evidence, to the effect that as a result of that meeting B understood that the substance of Solicitor No 2’s advice was that:

209. [1021]

     A’s evidence in his first affidavit, was with leave clarified in a later affidavit, where he gave the following evidence referring to [199] of his first affidavit:

210. [1022]

     C’s evidence in his first affidavit, in respect of which there is no ruling on evidence, as to what was said by Accountant No 1 and Solicitor No 2 is consistent with B’s account, albeit that he cannot recall words to the effect of those actually used. As with B, it was not suggested to B that his evidence in this respect was wrong. In a later affidavit, he gives evidence that he understood going into the meeting of 25 September 2002 that the structure presented at the start of the meeting by Accountant No 1, was the one agreed on 18 September 2002.

211. [1023]

     As to the plaintiffs’ understanding of their rights in the period from the confrontation, the plaintiffs say their conduct in this time must be viewed through the lens of the advice given by Mr Beattie, in the aftermath of the discovery of the first defendant’s crimes. It is submitted that once it is understood that no claim made by the plaintiffs required or is founded on the plaintiffs at any time having a subjective belief of an existing ownership interest in the farms, the significance of this evidence diminishes further and that this disposes of the “so-called” concessions made by the plaintiffs contrary to their pleading, the alleged significance of the emails after 27 June 2013 and the “so-called” failure to call evidence from Solicitor No 2 and Mr Beattie. It is submitted that, apart from the evidence of Solicitor No 2, all of these submissions depend on the first defendant’s repeated erroneous assertion that their case depends, in whole or in part, about a subjective understanding on the part of the plaintiffs that they held a present interest in land.

212. [1024]

     What the plaintiffs say is significant is that at the confrontation the first defendant said that it would be “business as usual” and the first defendant essentially kept to his word until 27 June 2013 (though in retrospect it is submitted that he started to separate himself from his sons as early as December 2010 when the monthly payments to them ceased) and that the post September 2002 conduct on the part of the sons includes the commencement of operations of E Co, work on the properties (all the sons work on the fish farm, A on the farms, B in the back office and B and C in respect of off-farm investments), as well as the extensive series of works by E Co from 1 July 2003 including work of a capital nature designed for the long term improvement of the land (which the plaintiffs say they expected to inherit).

213. [1025]

     The plaintiffs say that the activity relating to the improvements on the farms, the building of the fish farm on Property No 9, the improvement of the herd and the nature of the investment opportunities being pursued, all pointed to a long term investment by the plaintiffs, not short term gain and that this was affirmed by the behaviour of the first defendant, who, as he promised, would take money out of the Sydney Family Trust and put it into the joint family business, to build wealth for him and his sons and their families, just as his father had done for him.

214. [1026]

     It was submitted by the first defendant that B always understood that the only interest that he had in the land was that of an expectant heir (just as is the express position of his brothers) and that B only differs from his brothers in that he does not admit the obvious. The first defendant argues that B accepts the “expectant heir” position expressly in the periods up to 2002 and from 2010, when told by Mr Beattie he has no interest in the land. The first defendant says that for Mr Beattie to come to that conclusion is due to Mr Beattie acting in reliance on what B told him, which did not include anything to the effect of what is now alleged. Thus it is said that B was unaware of any relevant facts that differentiated his position from before 2002 to the period 2002-2010.

215. [1027]

     The first defendant argues that even if it is accepted that B held the expectation that he now says he does, it remains for him to establish that it was as a result of something attributable to the first defendant and that B could not do so – in that he could put forward no basis for holding this belief in the period 2002-2010. The first defendant says that B simply holding the belief does not make out any part of his claim.

216. [1028]

     As to A’s evidence generally, the first defendant places weight on his concession that his expectation from 1995 to the present is that he and his brothers will inherit his father’s estate; and argues that the events of 2002 made no difference to this expectation. The defendant notes that A agreed (at T 343.04) that it would not be inconsistent with A’s view for the first defendant to buy and sell properties prior to his death. It is submitted that A’s concession that his expectation was to be a beneficiary of his father’s estate equally with his brothers (see T 343.25), defeats A’s broader claim for an interest in the farm lands. The defendant says that this conclusion is further supported by further concessions made by A at T 354.40ff.

217. [1029]

     The first defendant notes that the above evidence is consistent with A’s affirmed financial statement (exhibited at CB Tab 21 of volume 31) dated 9 November 2006. The first defendant notes that there is no disclosure in that document to any interest in the farm land of the first defendant as is now contended for (referring to the evidence at T 372.25-.40 in this regard).

218. [1030]

     The first defendant notes that these concessions are also consistent with the instructions given by A to Mr Beattie, about which A was cross-examined at T 318, and again at T 380. The first defendant notes that at T 381-382, A agrees with the draft letter of 3 September 2013 as being in accordance with his instructions (see p 229 of volume 32). Reliance is placed on the evidence at T 384.19. The first defendant notes that these instructions include the assertion that the reimbursement amount re Property No 4 is $300,000.

219. [1031]

     I find, based on the evidence referred to above, that each of the sons held the expectation that their father would hold onto the farms during his lifetime, make the farms available during his lifetime for the conduct of the farming business by E Co and his sons, and would leave the farms to his sons under his will. (Insofar as I have not excluded Property No 8 from that finding it is because I am not satisfied that there was consideration given to this at the time of the September 2002 meetings but nothing turns on this as no relief is sought by the plaintiffs in relation to Property No 8.)

220. [1032]

     The first defendant points out that, when asked what his motivation was in taking part in the discussions, A said that it was to form a family company (T 330.04), not to acquire any interest in land (see also T 330.44-T331.05 as to A’s motivation for becoming involved in E Co). The first defendant argues that there is no motivation, or inducement, or reliance, or assumption, or expectation, or agreement, involving the transfer of the first defendant’s land so far as A is concerned.

221. [1033]

     I disagree. Having regard to the evidence referred to above by A, and noting the first defendant’s concessions as to the manner in which he treated A’s occupation of the homestead on Property No 4, I find that A held the expectation (when paying for the renovations carried out on the property and carrying out the capital improvements with the time and labour expended by him on the property) that he and his family would be able to live on the property during his father’s lifetime and that he would, equally with his brothers, inherit the property. I also find that it was A’s expectation that his father would “square up the ledger” as between he and his brothers in effect so that each would have the same financial benefit in relation to their respective homes.

222. [1034]

     As to E Co, its expectation, relevantly, was that held by the sons – that it could operate its business on the farms during the first defendant’s lifetime and that the expenditure in time and effort by its employees in capital improvement on the farms would not be rendered of little or no value by the first defendant terminating the Agreement for Lease and evicting it from the farms.

223. [1035]

     It is necessary for each of the plaintiffs separately to show that it or he has acted in reliance upon the relevant assumption. There is no presumption of reliance; reliance is a fact to be found (Sidhu v Van Dyke at [58]). Various formulations of the relevant test can be discerned in the English cases (see generally, McFarlane, The Law of Proprietary Estoppel, Ch 3). That is true of the Australian cases, to which I shall come shortly.

224. [1036]

     In terms of proof, what is required is satisfaction from the whole of the evidence of the fact of reliance by each of the plaintiffs, on the balance of probabilities. In that regard, Counsel for the plaintiffs drew attention to Nguyen v Cosmopolitan Homes [2008] NSWCA 246, where McDougall J (with whom McColl JA and Bell JA, as her Honour then was, agreed) set out the following summary concerning the civil standard of proof (at [55]):

225. [1037]

     Reliance in the context of estoppel by encouragement was considered by the High Court in Sidhu v Van Dyke. It is clear that it is not necessary that the relevant assumption be the “sole inducement operating on the mind of the party setting up the estoppel” (Sidhu v Van Dyke at [71] (my emphasis)). The threshold is lower: it need only be a “contributing cause” (at [71]-[73] (French CJ, Kiefel, Bell and Keane JJ); [90] (Gageler J) (my emphasis)). Although Sidhu v Van Dyke was an estoppel by encouragement case, the approach would seem to apply equally to an acquiescence case (see Priestley v Priestley), where it is necessary that a plaintiff act “on the faith of” the mistaken belief (Willmott v Barber at 105)).

226. [1038]

     However, there is some uncertainty as to whether it is necessary for a plaintiff to prove that he or she would have acted differently (and, if so, precisely what that entails; for example, whether it in truth entails a higher standard), had the representations or promises not been made or the assumption not held. I turn now to consider that question.

227. [1039]

     Sidhu v Van Dyke is the leading Australian authority on reliance. As the academic and judicial interpretation of the reasoning in the case has not been uniform (see A Silink, “Causation in Equitable Estoppel” (2016) 43 Australian Bar Review 320; cf K Handley, “Recent Cases” (2017) 91 Australian Law Journal 812) it is necessary to consider the decision in some detail.

228. [1040]

     The plurality formulated their approach to the question of reliance, in the context of the facts of that case, as follows (at [66]):

229. [1041]

     Having reviewed the evidence, the plurality rejected the appellant’s submission that the respondent had not discharged the onus of proving “that she would not have ‘remained on the property and … done what she had done in any event’” (at [67] (my emphasis)). The plurality considered that there was a “compelling” case of reliance (at [67]) and that it should be found that the respondent had in fact been induced to rely on the appellant’s assurances (at [78]) and had therefore discharged her onus, setting out four reasons why this was so.

230. [1042]

     First, after setting out part of the respondent’s evidence-in-chief, the plurality said that (at [69]):

231. [1043]

     It is clear from this passage that the plurality considered that the assurances had a “significant effect” upon the respondent’s decision-making process and that it was indeed more likely than not that the respondent would have acted differently, had the promises not been made. This conclusion was reached through an acknowledgment that the witness was found to be a “truthful witness” (at [68]) and (as observed in MGL at [17-129]) through “the drawing of inferences on the basis of the probabilities of human behaviour” – hence the references (at [69]) to the promises being “objectively likely to have had a significant effect” upon the decision-making processes of someone in the respondent’s position.

232. [1044]

     Second, the plurality rejected any suggestion that there was a need to demonstrate that a representation or promise was the “sole inducement” operating on the mind of a plaintiff. Their Honours referred approvingly (at [73]) to the remarks of Neuberger LJ in Steria Ltd v Hutchison [2007] ICR 445 at 465; [2006] EWCA Civ 1551 to the effect that it suffices to show that a representation grounding an estoppel by representation was “a significant factor” which the plaintiff “took into account”, noting that this conformed to the approach taken in Newbon v City Mutual Life Assurance Society Ltd (1935) 52 CLR 723 at 735; [1935] HCA 33, another case of estoppel by representation. Accordingly, the plurality held (at [71]) that the factual finding at first instance that the appellant’s promises “played a part” in the respondent’s action “warranted the conclusion” that she had “discharged the onus she bore” (my emphasis).

233. [1045]

     Third, the plurality inferred from the evidence that the appellant’s representations and promises were in fact “material” to the respondent’s course of action (see [74]).

234. [1046]

     Pausing there, two observations can be made. First, these latter two portions of the plurality’s judgment should not be divorced from their context – they follow immediately from what appears to be a conclusion that it was more likely than not that the respondent would have acted differently, had the promises not been made (i.e., that she would have “sought to maximise her own income for the benefit of herself and her infant son by seeking the most gainful form of employment”; at [69]). Second, the plurality’s reference (at [71]) to the onus borne by the respondent is plausibly read as a reference to the appellant’s description of that onus (at [67]); namely, to prove that she “would not have ‘remained on the property and … done what she had done in any event” (my emphasis). Accordingly, although the plurality were clearly rejecting a “sole inducement” test and endorsing a “contributing cause” test, the passages do not necessarily dispose of the question whether it was nonetheless necessary for the respondent, in establishing the fact of reliance, to show that the promises made a difference to her action or inaction.

235. [1047]

     Fourth, the plurality rejected the submission that the cross-examination of the respondent showed that the promises were “not a real inducement” (see [75]). The plurality noted the finding that the appellant and respondent’s contributions to their relationship were “broadly matched”, but then said the following (at [76]):

236. [1048]

     Again, the substance of the formulation is on the reasoning process of the respondent and its impact upon her course of action or inaction; whether, “had she not been given the assurances”, she would have acted or abstained from acting (my emphasis). The plurality then reviewed the cross-examination at first instance of the respondent (see [76]), rejecting the submission that the promises were not a real inducement.

237. [1049]

     After posing a counterfactual (to which I shall return later), the plurality concluded that, on all the evidence, it should be found that the respondent’s conduct had been relevantly “induced” by the promises (at [78]).

238. [1050]

     In a separate judgment, Gageler J agreed with the plurality’s reasons, but added further observations concerning “the second of the four reasons for concluding that the respondent discharged her onus of proof” (at [89]). Gageler J explicitly agreed (at [90]) that it was not necessary to establish that the relevant belief was the “sole or predominant cause” of the subsequent course of action or inaction; rather, it sufficed to show that the relevant belief was a “contributing cause” (see also, [73] per the plurality). His Honour continued, however (at [91]):

239. [1051]

     His Honour then went on to formulate the question as follows (at [93]):

240. [1052]

     As White J (as his Honour then was) observed at first instance in Priestley v Priestley at [121], in substance this formulates the question in the same manner as the plurality in asking:

241. [1053]

     The issue was recently considered by the Court of Appeal in Miller Heiman, a case of estoppel by convention. Macfarlan JA posed the following question (at [45]):

242. [1054]

     His Honour noted that Gageler J in Sidhu v Van Dyke had answered the question in the affirmative, and considered that the plurality had “taken the same view, although less explicitly” (at [47]-[48]). I pause here to note that the plurality in Sidhu v Van Dyke (at [71]) held that a finding that promises “played a part” in the respondent’s actions “warranted the conclusion” that the onus as to reliance was discharged, drawing that factual finding from the whole of the evidence and, as noted above, the emphasis placed upon it must be read in the full context of the plurality’s judgment. Macfarlan JA in Meiller Heiman has pointed out (at [47]-[48]) that:

243. [1055]

     Accordingly, in Miller Heiman, Macfarlan JA (with whom McColl JA and Sackville AJA agreed) held (at [49]) that “it is necessary for a person claiming the benefit of a conventional estoppel to demonstrate that he or she would have acted differently but for the agreed assumption” (my emphasis) (cf Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 6) [770]-[779]). Although the question posed by his Honour at [45] referred to “equitable estoppel”, in terms his Honour confined his conclusion to estoppel by convention. However, the decisive authority for his Honour’s conclusion appears to have been the estoppel by encouragement case of Sidhu. It would follow that the analysis in Miller Heiman would apply, mutatis mutandis, in a case of proprietary estoppel by encouragement (and, it would seem, proprietary estoppel by acquiescence; see Priestley v Priestley at [14]; [16]).

244. [1056]

     On this view, it is necessary for each of the plaintiffs to establish, on the balance of probabilities, that the relevant assumption was a “contributing cause” (Sidhu v Van Dyke at [71]-[73]; [90]) to this or its course of action or inaction in the sense that he or it would have acted differently but for that (actively or passively encouraged) assumption (Sidhu v Van Dyke at [91] (Gageler J); Stone v Stone at [46] (Darke J)).

245. [1057]

     Support for this view is found in the detailed analysis of Sidhu v Van Dyke in the first instance judgment of White J in Priestley v Priestley at [119]-[137], as well as the judgment of Macfarlan JA on appeal at [16] (Macfarlan JA there relying on his earlier judgment in Miller Heiman, with which McColl JA and Sackville AJA agreed).

246. [1058]

     However, in Priestley v Priestley Emmett AJA (with whom McColl JA agreed) said the following (at [138]):

247. [1059]

     Bearing in mind that “all judicial statements of principle must be read and understood having regard to the factual context to which they were directed” (New Galaxy Investments Pty Ltd v Thomson [2017] NSWCA 153 at [280] per Basten JA), I would make the following three observations.

248. [1060]

     First, no reference was made in Priestley v Priestley to Miller Heiman, where a contrary view appears to have been taken (see [45]-[49]). Although Miller Heiman was a case of conventional estoppel, the reasoning drew upon the encouragement cases.

249. [1061]

     Second, although authority was not specifically cited for the rejection of the primary judge’s analysis, it is clear that reliance was placed on the passage drawn from Sidhu v Van Dyke at [71]-[73], in which the plurality endorsed certain English authorities which reject a “sole inducement” test (see the final two sentences of [71]), those English authorities (and other Australian authorities) instead adopting a less stringent test (namely, a “contributing cause” test). It may be that the “would have acted differently” formulation was rejected only insofar as it was premised on a “sole inducement” understanding of causation (see, for example, at [136]; [137]) (though White J himself had also rejected the “sole inducement” test at [118]). In any event, the language employed was that used in the formulations endorsed by the plurality in Sidhu.

250. [1062]

     It is also worth noting that Emmett AJA in Priestley v Priestley at [138] nonetheless incorporated similar language to that of White J, albeit in the alternative:

251. [1063]

     In contrast, the thrust of White J’s analysis at first instance (and that of Macfarlan JA on appeal) appears to be that the “would have acted differently” requirement is not an alternative to the “contributing cause” approach affirmed in Sidhu but is rather an aspect of that very approach. That would certainly seem to follow from Gageler J’s analysis at [91]. For these reasons, and the next point to be mentioned, I am hesitant to conclude, on the basis of Priestley v Priestley, that it is erroneous as a matter of principle to require a plaintiff to demonstrate that the plaintiff would have acted differently in order to establish reliance. On the contrary, that requirement would seem to follow from Sidhu and Miller Heiman.

252. [1064]

     Third, and in any event, the remarks are not part of the ratio of Priestley v Priestley. The relevant ground of appeal was as follows (at [100]):

253. [1065]

     All three of their Honours were of the view that the plaintiff/appellant (Duncan) would indeed have acted differently from 2004 onwards (partly overturning the factual finding of the primary judge on this point, who only considered that to be the case as from 1 July 2008) (see [100]; [145]-[150] (Emmett AJA, with whom McColl JA agreed); [16] (Macfarlan JA)). Hence the apparent rejection of the primary judge’s consideration of the authorities was not determinative of this ground of appeal. Emmett AJA concluded as follows (at [150]):

254. [1066]

     Put another way, it was contrary to the evidence to conclude that Duncan would not have acted differently (which is to say, presumably, that it was open to find – and should have been found – that Duncan would have acted differently, but for his assumption). Three reasons were advanced for this conclusion (see [147]-[149]). Two of those are presently relevant.

255. [1067]

     The first reason was expressed as follows (at [147]):

256. [1068]

     In terms, the proposition here is that it is unnecessary to demonstrate precisely or categorically that the plaintiff would have acted differently. That proposition is, with respect, not only consistent with the approach taken in Sidhu (particularly the emphasis on the need for an inference to be drawn from the whole of the evidence; see [64]; [66]; [67]; [69]; [76]; [95])) but is required by it, given the rejection of a “sole inducement” test.

257. [1069]

     I do not read Emmett AJA’s remarks as an affirmation of the converse of the view taken by the primary judge (i.e., as a suggestion that reliance can be established even where one would have acted in an identical manner). Nor was there any intimation that his Honour intended to cast doubt upon the analysis in Miller Heiman (though I accept that was a case of conventional estoppel). The proposition is simply that a plaintiff need not establish precisely or categorically what the plaintiff would have done, but for the relevant assumption.

258. [1070]

     Emmett AJA’s reference to [95] of Gageler J’s judgment in Sidhu v Van Dyke is also significant, in that Gageler J had (at [90]-[91]) explicitly approached the matter by reference to whether the party seeking the benefit of the estoppel would have acted differently before saying (at [95]) the following:

259. [1071]

     The second reason for Emmett AJA’s conclusion that Duncan would have acted differently as from October 2004 was that it was not put to Duncan in cross-examination that he would not have acted differently from 2004 if he had known that his assumption was false (see [148] of Emmett AJA’s reasons). An aspect of this was the failure to cross-examine Duncan on the significance of any filial duty to Gordon (Duncan’s father, the testator) (at [148]):

260. [1072]

     This reason for upholding the ground of appeal was therefore not premised on a rejection of the view taken at first instance that it was necessary for Duncan to establish that he would have acted differently, absent his assumption (if anything, it assumes its correctness).

261. [1073]

     What emerges from these authorities is that each of the plaintiffs must establish the fact of reliance on the balance of probabilities and the test is that laid down in Sidhu v Van Dyke: it suffices if the first defendant’s encouragement or acquiescence was a “contributing cause” (as distinct from the “sole inducement” or a predominant cause). The plaintiffs need not prove “precisely” or “categorically” how they would have acted differently (Court of Appeal, Priestley v Priestley at [147]).

262. [1074]

     However, in view of the foregoing, it is arguable that the dictum in Priestley v Priestley does not require any departure from the approach explicitly taken by Gageler J in Sidhu v Van Dyke at [91] and, it would seem, implicitly taken by the plurality (see for example, at [69] and [76]; and see the analysis of White J at first instance in Priestley v Priestley).

263. [1075]

     The proposition that a plaintiff must establish that the assumption “influenced” his or her course of action or inaction in a “significant” or “material” way in the sense that he or she would have acted differently had the (induced) assumption not been held reflects the basal purpose of the estoppels in pais. Although the questions of reliance and detriment are distinct, they are interwoven, and it is clear that “[t]here can be no real detriment if the party asserting the estoppel would have been in the same position in any event” (Sidhu v Van Dyke at [92] (Gageler J); Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674; [1937] HCA 58).

264. [1076]

     However, as will be seen below, if the correct test is the “would have acted differently” formulation, and that does indeed involve a higher test (which may be doubted; it may be but an elucidation of the approach taken by the plurality in Sidhu v Van Dyke), I consider it to be satisfied on the facts of this case. That is, I am satisfied, on the whole of the evidence, that each of the plaintiffs would have acted differently had he or it not held the relevant assumption (Sidhu v Van Dyke at [91]). In those circumstances, it is not necessary to express a concluded view on the precise test for reliance having regard to the authorities considered above.

265. [1077]

     Before turning to the evidence of reliance, it is convenient to consider certain of the plaintiffs’ submissions relating to counterfactual reasoning. The thrust of these submissions was directed at the conclusions to be drawn about the plaintiffs’ reliance from two matters: first, the absence of certain counterfactuals being put to the three sons (T 1300.1-2; T 1303.17-20; T 1304.26-38); and second, those which were in fact put to the sons (T 1302.9-10; T 1303.17-20).

266. [1078]

     The background to these submissions can be found in the counterfactual reasoning in both Sidhu v Van Dyke and Priestley v Priestley. In Sidhu v Van Dyke, the plurality reasoned as follows (at [77]):

267. [1079]

     In Priestley v Priestley, Emmett AJA reasoned along similar lines (at [124]):

268. [1080]

     This mode of reasoning echoes the approach taken by Hoffmann LJ in Walton v Walton at 12:

269. [1081]

     Whatever the status of such a test in England (cf McFarlane, The Law of Proprietary Estoppel at [3.114]-[3.132]), in Australia this mode of reasoning is perhaps more appropriately characterised as one tool to be employed as part of the holistic approach to the question of reliance, as framed by the principles laid down in Sidhu v Van Dyke.

270. [1082]

     For the plaintiffs it was submitted that the key counter-factual (which was not put to any of the sons) was as to the position had the first defendant had told each of the sons on 25 September 2002 (as he admitted he did not) that he was willing to go into business together with his sons, but that he reserved the right to: (a) evict them and the business from the farms at any time; (b) deny the use of the farms as security at any time; (c) disinherit them by changing his will at any time and naming others as his beneficiaries; and (d) sell the farms at any time, keeping the proceeds (see plaintiffs’ oral submissions: T 1300.1-1304). The plaintiffs submit that it is “clear as could be” that B and C would have returned to paid employment until such time as they could purchase their own business (perhaps with the assistance of the first defendant) and that A would have sought his own property to live on and to farm and/or expanded his machinery business (Plaintiffs’ Closing Submissions at [30]). In short, it is submitted that each of the sons would have acted differently, but for the (induced) assumption or expectation.

271. [1083]

     As to reliance, the first defendant emphasises that reliance needs to be determined three times, in respect of each son. As adverted to earlier, the first defendant submits that, far from the sons acting in reliance on any alleged conduct of the first defendant, “the sons acted in accordance with their own agenda” – that being “to advance themselves as investors” with the support of the first defendant’s assets. In particular, the first defendant maintains that the conduct of the plaintiffs of the farming business was not done in reliance on any representation as alleged; rather, that the factors motivating both B and C were that they wanted to establish a standalone business; they did not want to be employees; and they saw 2002 as their year of opportunity.

272. [1084]

     The first defendant points to C’s evidence (at [86] of his 2015 affidavit) to the effect that B was thinking of leaving his then employment in early to mid-2002. The first defendant points out that B finished working at his previous employment before any decisions were made in the September meetings and therefore leaving that employment cannot have been based on any such decision.

273. [1085]

     The first defendant submits that it is significant that, by taking part in E Co, the plaintiffs acquired between them 75% of a business of significant value without immediate cost. The first defendant argues that, logically, no inducement is necessary to be handed the plant and equipment, stock, for no immediately payable cost, and the use of land on very favourable terms, and be given an opportunity to have 100% of the managerial control of the business. The first defendant points to the obvious profit motive, in addition to the receipt of a wage by each of the sons, as well as that, on the plaintiffs’ case, they were to be supported in their off farm activities by the first defendant.

274. [1086]

     The first defendant notes that, at T 160.21, B agreed that the establishment of the E Co farming business under what the defendant refers to as the management agreement was “a very favourable commercial deal from the point of view of [E Co]”. The first defendant argues that the case contended for by the plaintiffs amounts to saying that, if the first defendant provides them with significant benefits, then they will only accept those benefits if yet more benefits are to be provided to them. The first defendant maintains that the far more likely position is that there was never any discussion as to any entitlement of the sons to the land at the time E Co was created, and thus no reliance on it. The first defendant says the conduct of the plaintiffs is for more likely to be due to their own ambitions and desires.

275. [1087]

     Pausing here, the plaintiffs say that the first defendant’s failure to grapple with the counterfactual hypothesis extends to the submissions that B and C especially were motivated to be “entrepreneurial” in the aftermath of the gift from their uncle in April 2002. The plaintiffs do not deny this. Rather, they say that the first defendant’s submissions on this point ignore the fact that they could have been entrepreneurial in more than one way. They say that this is particularly so, because on the first defendant’s case, the first defendant’s willingness to assist them by providing his properties as security had nothing to do with the joint enterprise. They say that, armed with $1 million and the assistance of their father, B and C could have purchased a hotel or liquor store or other business in 2003 and be in a position now where they had had the intervening period to build up that business with their skill and labour, and where that business would not be subject to being pulled out from under them on the first defendant’s whim. In A’s case, they say that he could have had his own property to provide him both with a home and a place to work on his own account; and could have spent the years since 2002 improving his property and his own herd, and reaping the benefits, rather than in the present case, where, if his father is successful, all the work done in respect of the farms and the herd will be for nought. The plaintiffs note that in A’s case his time on the farms stretches back to 1989 and based on his home on Property No 4 from 1993. The plaintiffs argue that in all that time A thought he was working on properties that he would one day own with his brothers, and in 2002 that was reaffirmed during the discussions and meetings to set up the new joint family business which was also to serve as a means of intergeneration transfer.

276. [1088]

     As to the argument set out at [1086] above, the plaintiffs say that this is “merely a manifestation of the defendants’ broader argument on detriment that the plaintiffs have not suffered any detriment because they have, on the defendants’ case, done relatively well from their entry into the joint business structure”. The plaintiffs submit that this argument is flawed in that it: ignores the fact that if the first defendant is successful, E Co will likely be insolvent; ignores the fact that by entering into the E Co structure, the plaintiffs forsook other opportunities to look after their own interests so they would not be tied to the first defendant’s whims; and ignores the test posed by the authorities (see [1078]-[1081] above).

277. [1089]

     Returning to the position of the first defendant on reliance, he submits that to the extent that the plaintiffs suggest that the work done on the properties constitutes reliance, this should be rejected. The first defendant points out that A and B (with one qualification by B) agreed that work was done in the ordinary course of the farming business (see B at T 274-275 and A at T 345.04). He maintains that that work was not done in reliance of any alleged representation; it was done in furtherance of the sons’ “entrepreneurial intentions”.

278. [1090]

     As to A, the first defendant says that A gives no evidence of substance of other farming opportunities; rather that if he had not contributed to E Co, he would have performed similar tasks elsewhere. The first defendant says that A simply did what A was going to do anyway, except that he did it in far more favourable circumstances. The first defendant says that, by 2002, A had been working in the first defendant’s grazing business for 13 years, since 1989. The first defendant says that the plaintiffs have adduced no evidence to suggest that, had the alleged expectation not been created, A would not have continued as before. Given the evidence that there was no change in A’s understanding of his interest in the land after 2002 as before 2002, it is said that it cannot logically be said that he relied on something that occurred at the relevant meeting.

279. [1091]

     The first defendant submits that A wanted to, and did, pursue a career as a farmer; that A returned to the farm because he wanted to, and stayed on the first defendant’s properties because he wanted to; that there was no inducement on the part of the first defendant for this to happen (T 320.45 and T 321.30). The first defendant points out that, assisted by him, A now has a modest interest in the C Hotel, which the evidence shows has a value presently of some $14 million, which, according to B, is a business that is doing well (T 220.22-26) and that A has also benefited from the W investment by some $420,000. Further, the first defendant notes that A has been given significant gifts by his father, including a payment made by the first defendant of $260,000 to A’s ex wife as a property settlement.

280. [1092]

     The defendant notes that the establishment of E Co was, on A’s evidence, to create a vehicle so that the four family members could together conduct the farming business (T 386.36). It is submitted that in this and in all other significant respects, A’s evidence is consistent with the defendant’s case. It is submitted that at T 387 A’s evidence is consistent with the first defendant’s “ad hoc” investment view. Thus it is submitted that A’s evidence should be accepted as supporting the position argued for by the first defendant, and failing that, it is in all significant respects contradictory to the plaintiffs’ case.

281. [1093]

     As to B, the first defendant says that B participated in the family business because his goal was to be an entrepreneur in his own right and from 2002 he was given the means to achieve that goal when he received the gift of $1 million from his uncle in April 2002. The first defendant points to B’s evidence at T 100.19-5 in this regard and to B’s handwritten note including the statement that: “One must determine where life is to go from 2002. A year of change and opportunity which must provide a financial and well-being benefit by year end”. The first defendant says that in July 2002, B ceased his then “frustrating and unrewarding” employment, with the intention was to become an entrepreneur (referring to the cross-examination at T 104.01-09) and says that B conceded that the reason that he became involved with the Family Business was because he wanted to be an entrepreneur (see T 142.39-43):

282. [1094]

     The first defendant points to the evidence that, during his involvement with the Family Business, B was entrepreneurial, investigating and pursuing a range of different business and investments including fish farms, bottle shops and pubs in Sydney and elsewhere, various property developments and a chicken farm. It is noted that B conceded that, following the events of September 2002, he had achieved his objectives of being an entrepreneur (at T 311.01-03). The first defendant argues that B’s denial of the proposition that he did not rely upon the pleaded expectation in following his chosen career, cannot be maintained having regard to the above.

283. [1095]

     The first defendant submits that there is no evidence from B that in becoming involved with E Co he was acting in reliance on any inducement of the first defendant that by doing so he would become entitled to some present or future interest in the land. Rather, the first defendant argues that B was motivated by the prospect of becoming a standalone businessman (T 100.32).

284. [1096]

     As to C, the first defendant notes that, by 2002, C had been working a retail job in a bottle shop for a number of years; and conceded in cross-examination that he was dissatisfied with this job (see T 415.07-10) and that, by the middle of 2002, his measured ambition was to cease being employee and become an employer (see T 414.25-35). The first defendant submits that involvement with the Family Business presented C with the opportunity to achieve that ambition (referring to the exchange at T 416.27-417.03 in this regard). Pausing there, in that exchange C was clear that his motivation was to become involved in a “family business”:

285. [1097]

     The first defendant says that the fact that C’s understanding that he had no interest in the farming land over that of an expectant heir is clear from his interactions with Mr Beattie; noting that in none of his interactions with Mr Beattie from 2006 onwards did C give instructions that he had an interest in the farming lands. It is said that C’s understanding was, in effect, confirmed by Mr Beattie who advised in 2010, and again in 2013, that C and his brothers had no title, legal or otherwise, to the farming lands.

286. [1098]

     The first defendant also relies on the communications between the parties during the period between the service of the Notice of Termination of Lease on 27 June 2013 and the commencement of these proceedings as being entirely consistent with the first defendant’s case.

287. [1099]

     The first defendant argues that the fact that the emails canvass the anticipated vacation of the farms by the plaintiffs and the sale of the farms by the first defendant belies the suggestion of the plaintiffs’ “understanding” that, absent a termination date on the minute of 1 July 2003, it was a lease without an end date, or that there was some lack of entitlement on the first defendant’s part to seek to end the lease and regain the use of his land for his own purposes. The first defendant notes that the emails canvass: the “squaring up of the ledger”, and the reimbursement of A in respect of the 2003 renovations; matters involving the W Unit Trust; matters concerning E Co; a proposal for the purchase of the first defendant’s shares in E Co; the insurance issue and the non- payment of the lease fee; and the sale of the first defendant’s farm equipment (all in a manner said to be consistent with the first defendant’s case).

288. [1100]

     The plaintiffs point to A’s evidence that he purchased plant and equipment for use both on Property No 4 and other farms owned by his father from moneys (totalling about $290,000) which he received following the death of one of his aunts in 1994; that he contributed his time and effort, including the use of his plant and equipment, to the renovations carried out to the homestead on Property No 4 in 1997, 1999 and 2003; and (which is not disputed) paid for the 2003 renovations with a gift he had received from one of his uncles in 2002 (in the sum of $1 million). There is a dispute as to how much A paid for those renovations (A says about $400,000 - $450,000) and as to whether the moneys paid by A for those renovations were to be treated as a loan repayable by his father (as pleaded by the first defendant) or otherwise were to be reimbursed by his father (said by the first defendant to be conceded but, the plaintiffs say, treated in his will “as an example of his munifence”). In any event, there does not appear to be a dispute that the first defendant encouraged A to pay for the 2003 renovations. (The first defendant had paid for the earlier renovations in 1997 and 1999.)

289. [1101]

     A says that he used another $150,000 of his uncle’s money to buy machinery ($70,000 to $80,000 for an F250 truck and $70,000 to $80,000 on a skid steer and front end loader), equipment used to perform the 2003 renovations.

290. [1102]

     In his affidavit evidence, A has described the work he performed, either himself or through the supervision of others, at each of the properties comprising the 3/6 and Main/7 Aggregations (in respect of building and repairing cottages, building sheds, replacing and repairing fencing, building and clearing out dams, building roads, laneways, tracks, grids and gates, spraying blackberries and other weeds, pasture improvement and other work). His evidence is that, following the purchase of a property by the first defendant, the usual practice was that most of the work done to the property would be done immediately after the property was bought, and thereafter it was mostly maintenance; that the first improvement that was done was fencing/stock proofing, followed by expenditure on the houses and building of sheds, then the building or repair of the cattle yards, and then the making of a stock route. His evidence is that he and his father would usually meet on a day to day basis to talk about the work to be done, would agree to the works to be undertaken, and then the first defendant would leave it to A to organise and implement the works.

291. [1103]

     A estimated that in general he would spend approximately half his time undertaking tasks relating to improving the land and half relating to animal husbandry or herd improvement. He gave detailed evidence as to the work done by him on the properties prior to June 2002, including as to work on the dams, laneways, access tracks and roads, fencing, and cottages, sheds and yards. I do not propose to summarise that evidence. Suffice it to note that, although the first defendant expressed criticism of A’s abilities or work practices as a farmer, he did not dispute that A had carried out work on the respective properties of the kind A described.

292. [1104]

     A says his plant and equipment continued to be used extensively for work carried out to the farms after the formation of D Co in late 2002. The nature of the work carried out to the farms using that plant and equipment included capital improvements, such as building and enlarging dams, which added to the value of the farms.

293. [1105]

     As to A’s claim in respect of the homestead on Property No 4, the first defendant says that there is no evidence to support it. The first defendant notes that the main claim is that A would own the Property No 4 homestead (referring to [43] of the second further amended statement of claim and the relief sought at [18]). (The first defendant says it is almost certain that the homestead is not on a separate title.) The alternative relief sought (see [19]-[22]) is in effect that monetary compensation be paid to A. The first defendant accepts that this should occur and says he made provision for this to occur by his will executed before the commencement of the litigation. (I interpose to note that given the frequency with which the first defendant appears to have changed his will in more recent years, provision of this kind might well turn out to be illusory and cannot be regarded as the same as the payment of compensation as here sought by A.)

294. [1106]

     Where the first defendant takes issue in this regard is as to the amount of compensation. The first defendant says that there is no evidence of the costs involved of a primary nature; that it is in the range of $300,000 (pointing out that he has allowed as much as $500,000 in his will but stating that this bequest “is not any concession that it is the amount properly payable on the basis sought by [A]”).

295. [1107]

     The first defendant criticises A’s evidence on this issue as varying “as it suits him”. The first defendant notes that in the draft letter of Mr Beattie of September 2013 there is an assertion of $300,000 (see p 229 of CB Vol 32), which the defendant says is in line with the evidence at T 349-351; noting that the reference at T 349.35 to CB Tab 7 is to a document now found at CB Tab 20 of volume 32, where a calculation agreed to by A showed no more than $327,000 could have been spent on renovations. At [233] of A’s 2015 affidavit, the amount is stated as being $450,000. The first defendant says that, given the other benefits related to the house that A has received (payment of outgoings, and no payment of rent since 1993 to 2017, and two other renovations paid for by the first defendant) the compensation claim should not include interest. Further, the first defendant says that the amount is only payable upon the sale of Property No 4. It is submitted that the amount should be assessed at no more than the sum of $327,000.

296. [1108]

     A was cross-examined as to matters such as the statements made in the context of his family law proceedings (including statements made in a letter sent in 2006 from his solicitors in those proceedings to his ex-wife’s solicitors. I do not propose to set out in detail that cross-examination (or the debate as to what use was able to be made of that material). Suffice it to note that at least $327,000 appears to have been conceded by way of expenditure on the renovations.

297. [1109]

     B says that from October 2002 until the end of 2010 all of his working hours were directed at the Family farming business - whether providing back end support to the farming business, including the fish farm on Property No 9, or (with C) investigating investments in pubs, hotels and liquor stores.

298. [1110]

     It is submitted that the time C spent working in the business of E Co, and pursuing off-farm investments for EM Co, and otherwise for the benefit of the first defendant and his brothers.

299. [1111]

     The plaintiffs point to the lack of submissions by the first defendant in respect of reliance and detriment by E Co as distinct from that of the sons. In relation to E Co, the plaintiffs point to the following.

300. [1112]

     They say that, following October 2002 there was a push to develop the infrastructure at the properties to cater for increased cattle numbers; that this strategy was implemented by significant works being undertaken on the properties: substantial building works for dams; the building of numerous sheds on the property; extensive weed control being undertaken; building and improving stockyards; and significant fencing to maintain and improve the existing cattle mustering laneways and to construct new cattle mustering laneways at Property No 10, Property No 8 and Property No 11. The objective was to manage the farms, through the improvements to infrastructure which were carried out, such that E Co could maximise the number of cattle run on the properties which could be worked with a minimum number of men. This was to improve the long term operational efficiency of the farms. This strategy required a large number of employees to carry out the substantial works to the farms, and significant capital expenditure in the short term.

301. [1113]

     After 1 July 2003 work performed at the farms fell into three categories. The first category was the work undertaken by E Co, by its employees, on the properties. The second category was where E Co paid a third party to supply materials, or provide services, in respect of works carried out on the properties. In respect of this second category where services were provided by a third party, and those services were paid for by E Co, then either the third party would provide the services without the assistance of E Co’s employees, or alternatively the third party in providing the services would be assisted by E Co’s employees.

302. [1114]

     The third category was where the first defendant paid a third party to supply materials, or provide services, for works carried out to the properties. In respect of this third category where services were provided by a third party, and those services were paid for by the first defendant, then either the third party would provide the services without the assistance of E Co’s employees, or alternatively the third party in providing the services would be assisted by E Co’s employees. The advantage to the first defendant in paying for materials was that the first defendant would then be able to claim a tax deduction in respect of the depreciation of the materials he purchased.

303. [1115]

     The day to day work carried out by E Co’s employees on the farms included: building, repairs and maintenance of dams; building, repairs and maintenance of laneways; building, repairs and maintenance of stock yards; building, repairs and maintenance of sheds; building, repairs and maintenance of roads, tracks, other access ways, grids, and gates, within the properties; building, repairs and maintenance of fences; and spraying blackberries and other weeds.

304. [1116]

     For the financial year ending 30 June 2004 E Co employed ten people, including Farm Worker No 2. There was an arrangement between E Co and the first defendant whereby E Co employed Farm Worker No 2, in return for which the first defendant paid for the electricity at Property No 8. Farm Worker No 2, however, carried out work for the first defendant at Property No 8 on a full-time basis. Farm Worker No 2 continued to work at Property No 8 was sold in late 2013.

305. [1117]

     For the financial year ending 30 June 2005 E Co had 12 employees, for the financial year ending 30 June 2006 E Co had 13 employees, for the financial year ending 30 June 2007 E Co had 13 employees, for the financial year ending 30 June 2008 E Co had 15 employees, for the financial year ending 30 June 2009 E Co had 13 employees, and for the financial year ending 30 June 2010 E Co had 16 employees.

306. [1118]

     By 30 June 2010, however, the operational efficiencies which E Co had sought to achieve through the substantial works carried out to the farms in the earlier years were starting to be realised. For the financial year ending 30 June 2011 E Co had 11 employees, of which three were casual employees.

307. [1119]

     After 1 July 2003 E Co’s employees carried out the work to build, repair and maintain, fences at each of the properties E Co’s employees constructed cattle mustering laneways at Properties No 8, 10 and 11, which required substantial new fencing to be constructed on each of those three properties.

308. [1120]

     E Co’s employees carried out the dam cleaning, repairs and maintenance, to dams at each of the farms. E Co’s employees carried out repairs and maintenance to the stockyards at each of the farms. E Co’s employees carried out repairs and maintenance to the roads, tracks, access ways, gates and grids, at each of the farms. The road and related works carried out by E Co’s employees included: regular re-forming of the roads after heavy rain; grading of the roads; re-building and maintaining the approaches to the cattle grids; putting in cattle grids; repairing cattle grids; installing gates; and repairing gates.

309. [1121]

     In about March 2003 A built the loading dock for the cattle yards at the Main Property, which involved mostly earthworks and carting gravel.

310. [1122]

     In about May 2003, A carried out work for the construction of the large machinery sheds located at the Main Property. The large machinery shed measures 60ft by 50ft. A did the earthworks for that shed, and used his D6 dozer, levelling the site and carting gravel. In doing that work A and other employees used the D6 dozer, the Hitachi 20 tonne excavator and A’s Leader Dump Truck for the job.

311. [1123]

     In 2004 or 2005 A assembled the portable round yard at Property No 8. In 2008 A levelled the pad for the house water tanks which were installed at Property No 8 using the Case 850 dozer.

312. [1124]

     In addition, E Co made payments from time to time in respect of electrical work carried out on the properties, including to the cottages/house.

313. [1125]

     After 1 July 2003 A’s plant and equipment was used by E Co’s employees as and when required for work carried out on the farms: the International 370 truck and cattle float was used by E Co to move cattle between properties and small loads to the Inverell saleyards; the D6 Bulldozer was used for: extensive dam building and enlarging; dam cleaning; when fitted with a tree pusher and/or stick rake, and used for land clearing and fence line clearing; site preparation for sheds and buildings, including the renovations to the Main Property house and sheds; paddock scrub clearing; major earth works; extensive pond reforming and maintenance at Property No 9; major earth work for the large dam at Property No 9; water channel reforming at Property No 9; forming and maintaining fire access trails and push fire breaks during bush fires. The D6 Bulldozer was often driven by contract labour, such as Shane Booth; the Hitachi 20 tonne Excavator was used for: when fitted with a mud bucket, for dam cleaning and enlarging; site preparation for sheds and buildings; trenching, including the renovations at the Main Property house and sheds; moving and/or lifting large items, including placing large rocks at the Main Property house gate; major earth work surrounding the pond drainage channels at Property No 9. The Hitachi 20 tonne Excavator was often driven by contract labour, including Richard Doyle and Grahame Smith; the Case 850 Bulldozer was used for: dam cleaning; fence line clearing; paddock scrub clearing (A manufactured a tree pushing extension arm); and site preparation for sheds and buildings; the Galion Grader was used: to form and maintain all access roads including the approximate 10 kilometres of road from the front gate at Property No 4 to the Medlow house; to reform the water delivery channels at Property No 9; and to form and maintain fire trails and fire breaks during bush fires; the Mack 61 Prime Mover was used to haul the water cart and side low loader; the 13,000 Litre Water Cart was used: to provide water during road building and maintenance; to provide on paddock water refilling for the extensive spraying of weeds; to cart stock water during extensive dry periods; and to cart water to refill domestic house water supply tanks during extensive dry periods; and the Side Load Low Loader was used to move machinery around the properties to job sites.

314. [1126]

     After D Co was incorporated on 31 October 2002, D Co purchased plant and equipment which was used by E Co for worked carried out on the farms, which included: the purchase of the Thomas 245 Skid Loader by D Co for $20,273 on 15 October 2002; the Backhoe attachment plus two buckets purchased by D Co for $11,016 on about 22 October 2002; and the Digga Trencher purchased by D Cofor $3,363 on about 30 October 2003.

315. [1127]

     I find that each of the three sons relied on the expectation engendered in them by their father (which was known to him and of which he did not disabuse any of them). A did so in continuing to work on the farms and, importantly, in not looking to purchase a property elsewhere on which he could have built up a farming (or other business) which was not subject to his father’s control (in the sense that he would not have had the risk of the farm being sold and making the business effectively inoperable); B by concentrating his endeavours on the family business up until the time of his involvement in the P Hotel and thereafter in working both in the family business and in his own interests; C in making his time available to assist in the family business and to look for investment opportunities to pursue as part of the family business or with his brothers and with the potential involvement of his father.

316. [1128]

     The reliance relied upon by A for his separate claim in relation to the homestead on Property No 4 is evident. At his father’s request he paid for the 2003 renovations out of the moneys made available to him by his uncle and which he could have invested elsewhere. The fact that he expected to be repaid those moneys in some fashion (out of the sale proceeds of Property No 4 or otherwise) is not inconsistent with his belief that he was being asked to contribute to (and did contribute – not only in relation to the renovations but also in relation to the time, labour and provision of equipment and machinery) to the capital improvement of what he regarded, and his father treated, as his home.

317. [1129]

     Again the reliance by E Co on the expectation held by the sons that it would be in a position to build up a cattle farming business on the first defendant’s properties and reap the benefits of that business without the risk of eviction or the like, is evident (as set out in the plaintiffs’ submissions summarised above).

318. [1130]

     The concept of detriment is common to both forms of proprietary estoppel (Thorner v Major at [29]; Fisher v Brooker at [63]; Waltons Stores v Maher at 428-429; MGL at [17-095]). The weight of authority confirms that detriment is a necessary element of a proprietary estoppel. It is one’s detrimental reliance which makes an estoppel enforceable (Sullivan v Sullivan at [18]).

319. [1131]

     In a case of estoppel by encouragement, the relevant detriment is not the loss flowing from mere non-fulfilment of a representation or promise (Verwayen at 429 (Brennan J)); nor in a case of estoppel by acquiescence is it the mere existence of an unfulfilled assumption as to one’s present (or, perhaps, future) entitlement to an interest in property. Were the case otherwise, as Neuberger LJ pointed out (at [125]) in Steria Ltd v Hutchison:

320. [1132]

     That said, equity will have regard to the actual detriment that has been suffered, as well as to that which it is anticipated will be suffered if equity were to stay its hand and permit a defendant to act inconsistently with a plaintiff’s assumption. As Mason CJ observed (at 415) in Verwayen:

321. [1133]

     Equity’s concern for prospective detriment flows from the basal purpose of the doctrine, evident in the elucidation of estoppel in pais found in the remarks of Dixon J in Grundt at 674-675 (a statement of principle that has been applied in the context of estoppel by encouragement; Sidhu at [80]-[81]):

322. [1134]

     Shortly put, in a case of estoppel by encouragement, each plaintiff must establish that he or it has suffered (or will suffer) detriment if the first defendant is permitted to resile from his representations or promises. In a case of estoppel by acquiescence, each plaintiff must establish that he or it has suffered (or will suffer) detriment if the first defendant is permitted to assert his adverse title; that is, to act inconsistently with the assumption in which he has acquiesced.

323. [1135]

     There is no presumption of detriment; that detriment has been suffered (or will be suffered) must be established on the balance of probabilities. However, the concept of detriment in the context of proprietary estoppel is neither narrow nor technical (Donis v Donis (2007) 19 VR 577; [2007] VSCA 89 at [20]). The question of detriment is assessed as at the time a party seeks to depart from the assumption or expectation (DHJPM at [72]).

324. [1136]

     In the present case, the essence of the sons’ submissions is that they have suffered detriment of a kind and extent that involves “life-changing decisions with irreversible consequences of a profoundly personal nature” (Donis v Donis at [34]; cited approvingly in Sidhu at [84]) (Plaintiffs’ Closing Submissions at [36]).

325. [1137]

     As to detriment it is said that the plaintiffs have not suffered detriment:

326. [1138]

     The first defendant submits that there is a twofold consequence to the conclusion that there has been no detriment: one is that a fatal flaw to the plaintiffs making out this cause of action; the second is that, even if the earlier elements of the cause of action were made out, the present position of the plaintiffs, and how they achieved those positions, shows that it is not unconscionable for him to seek to sell the properties, or otherwise deal with them as he sees fit, as he has done in the past.

327. [1139]

     The first defendant maintains that it is illogical to say that, by taking part in a beneficial arrangement on the basis of some extraneous matter, some detriment thereby arises. The first defendant says that, on the plaintiffs’ case, they were provided with a business worth in the order of $3 million in plant stock and equipment, and an opportunity to engage in other business activities; they received regular funding totalling more than $1 million which is not repayable; and they have interests in a business worth well in excess of $1 million (dependent on stock levels) and are in financial positions better than they were in 2002.

328. [1140]

     The first defendant points out that: B expects the hotels to increase in value (see T2 63.09) and that the evidence is that the value of the P Hotel (now owned wholly by interests controlled by B and his wife) has increased from its 2010 purchase price of $5.8 million to a 2016 valuation of $8.4 million (see T 263.20-27); each of the sons received $533,000 on the sale of the W units (from an investment of $62,000), so have benefited by $471,000 each (to be reduced by the final payment due under the W Deed (CB Tab 1113) of $52,000); each of C and A has an interest in the C Hotel (due, at least in part, to the intervention of the first defendant – see, T 267.15 and the first defendant’s affidavit at [37]; and B has been in a position to engage in other investment (see at T 269.01) and to make a loan to his family trust of some $614,000 (see T 271.20).

329. [1141]

     The first defendant argues that the statements of financial position of the sons (albeit said to be unreliable) show no detriment. The first defendant challenges the reliability of the documents pointing to the unexplained variations between the document provided at the end of last year by their solicitor and the reports provided by their affidavits in early 2017.

330. [1142]

     As to B, the first defendant criticises the vagueness of the accountant’s description (and the evidence of B is that he does not know what information the accountant had - see T 289). The first defendant notes the value given by B of his home as $3.6 million in 2016, when in 2010 he had given a value of $5 million (exhibit AH) and he agreed his house value had increased in the interim. The first defendant notes that B’s net asset position currently is between $7,965 million and $8.45 million (T 292.50) and in 2002 it was less than $3.6 million (T 293.47). Hence it is submitted that B’s net asset position since being involved with E Co has increased by approximately $4.5 million (or, excluding the house, by approximately $2 million) plus the significant interest in two businesses of hotels that he did not previously have, the benefit from the W investment (said not to have been included in his statement of position), and an interest in R Co via EM Co, all of which are said to have potential for capital growth. The first defendant says the statement of position is unclear as to the value attributable to the shares held in E Co. The first defendant notes that B agreed that the benefits to B (and to his brothers increasing interests in the hotels) (see T 298.47) were due to the financial assistance of the first defendant.

331. [1143]

     The first defendant refers to the passages in the transcript at T 309.31 showing the benefits to the sons of being involved with E Co; see also T 310.19-34. The defendant notes that at T 311.19-21, B agreed that as a result of reliance on any conduct of the first defendant which suggested that the first defendant would hold land on trust for B, B had achieved a “positive and advantageous outcome”.

332. [1144]

     As to A, it is said that his position improved after 2002, from what, on his own evidence, was “a pretty good lifestyle” before 2002 (see T 353.09). This is said to be significant, as showing that before E Co the working conditions for A (at a time when he accepts he had no interest in the land but for an expectation he may be a beneficiary in his father’s will), were good. It is submitted that his position has improved thereafter, as he now is a director of E Co in running the business, sets his own wage, and has a profit motive; and has accrued additional investment interests.

333. [1145]

     It is submitted that A’s evidence shows that he has been in no way detrimentally affected by participating in E Co: A admitting at T 357.29 that his skills have improved with machinery and that he could “rebirth” the “Stock and Transport” business he conducted prior to 2002 and which became D Co. The first defendant notes that a truck in the use of D Co was a truck entirely paid for by him (T 358.25-39). The first defendant points out that A considers he is well qualified to resume this business (T 359.37; and T 365.45 and T 366.10-20).

334. [1146]

     As to the alleged detriment of A set out in his 2015 affidavit (at [330]), by reference to the possibility of an alternative career in earthmoving, mechanical repair, and transport, the defendant notes that (at T 361.47) A said that is “basically what I do anyway”. It is submitted that the effect of the evidence at T 363.40-44 is that the only detriment A claims is not having a house of his own. The first defendant submits that A is without a house because he chose not to buy a house and that:

335. [1147]

     The first defendant says that the answer to the argument that A relied on having the homestead at Property No 4 to live in is simply that he will receive reimbursement which there is no reason to think would not be sufficient to buy his own home (as A says he would have done at par (e) on p 23 of his affidavit of 11 February 2016). It is submitted that there is no reason to think the admitted reimbursement from the first defendant in respect of the Property No 4 renovations will not be sufficient for that purpose.

336. [1148]

     As to the opportunity to purchase Property No 9, the first defendant submits that this establishes no detriment to A because: the plaintiffs’ case is that they were looking for investment opportunities (and hence the defendant says that the fact that A may have “missed out” on Property No 9 does not mean he is unable otherwise to invest his money); it was A’s choice to spend the money as he did (and it is suggested from the correspondence CB Vol 31 at CB Tab 20 that these spending decisions may have been influenced by his then wife); the plaintiffs’ evidence is that A did not have the finance to buy Property No 9 (see B’s 2015 affidavit at [195]); A has had the benefit of the money; but for his father, $260,000 of that money would have been paid to his ex-wife; A did in fact use some, but chose not to use all, his money for investments (he put $42,000 towards Netpro and $75,000 towards R Co); and, even if A “missed out” on Property No 9, he can still spend the money on a property, and how he spends it is his decision. (That, however, does not take into account that decisions as to other expenditure might have been made differently had the relevant counterfactual been put to A at the time that he had the $1 million in funds from his uncle.)

337. [1149]

     The first defendant notes that there is no reference to the lost opportunity in relation to Property No 9 in A’s 11 February 2016 affidavit (see p23 paragraphs (e) and (f)) where the issue of detriment is being addressed. The first defendant submits that the conduct of A fits within the concerns that he expressed in cross examination that his sons may “blow it”.

338. [1150]

     The first defendant further says that the statements of financial position in evidence produced by the sons (though he criticises them as unreliable) are nevertheless relevant on the question of detriment (see CB Vol 31 CB Tab 11).

339. [1151]

     As to A, the first defendant notes that (at T 370) A is unable to indicate the source of information of his accountant. It is noted that in 2002 A had a million dollars, all of which he spent (including $327,000 on the homestead on Property No 9) and that he now has a net position of about $1.125 million (plus the $327,000 it is conceded should be reimbursed), so approximately $1.5 million. It is submitted that A has also had the benefit of his expenditure of $673,000, “which is either still with him in depreciated form, or consumed”; the benefit of realising the W investment, which was sold in 2017 and so not part of the December 2016 statement of position; net assets of “conservatively” $2 million, and no personal debt. It is submitted that, on the plaintiffs’ case, A has also had through E Co the benefit of over $3 million jointly with his brothers in non-refundable financing and rent relief from the first defendant. The first defendant argues that A is in a far better position than (who they say is, however, an irrelevant comparable person) Farm Worker No 1.

340. [1152]

     As to C, it is similarly submitted that he is unable to establish detriment. The first defendant argues that C’s position is not credible: noting that C maintains he spent years in search of a bottle shop to buy but no such purchase was made; and arguing that C has spent his time managing his own investments ever since he received his $1 million in 2002, not working on the farm in the manner for which he acknowledged his father had hoped. (On that last issue, the first defendant points to the statement contained in C’s 5 July 2017 affidavit (at [10(e)]) that: “I had never wanted to be a farm or station hand. Nor did I ever say that I would. The agreement we had reached in September 2002 was that I would work with off farm investments, though I would lend a hand when needed”; and to similar evidence by both C and B in the witness box (see, for example, B’s evidence at T 124 that it was not his intention to be on the ground walking around the paddocks every day; or “picking up sticks”); as demonstrating that the first defendant’s wishes were not fulfilled.) It is submitted that such efforts as C made in connection with the fish farm are reflected in the fact that E Co did not consider it appropriate to pay him.

341. [1153]

     The first defendant says that C’s financial position has improved: he has benefited from E Co, W Project, and now the hotels, and at the same time has pursued his own separate interests. The defendant says that C: was not at the 18 September 2002 meeting; “did not relevantly work on the farm”; had invested his $1 million before September 2002; spends his time managing his own investments; has his own business interests involving extensive rental properties; and conducts his own affairs from an office in Sydney. It is submitted that everything about C’s conduct is consistent with the first defendant’s case: namely, there was no representation of the type alleged; there was no agreement or representation as to off-farm investments; there has been no reliance; and there is no detriment.

342. [1154]

     The detriment said to have been suffered by A in reliance on the expectation said to have been encouraged by his father is put on the basis that if he had understood at any time that he would not come to own the farms or the homestead on Property No 4, then he would have sought employment elsewhere.

343. [1155]

     A says that if he was not to inherit the farms with his brothers, then he would not have spent his time and effort using his plant and equipment to undertake such works himself, or permitting employees of the first defendant, or third party contractors, to use that plant and equipment to improve the farms.

344. [1156]

     A says that if he had understood, before he spent the money he had received from his uncle on the renovations to the homestead on Property No 4 and on more machinery, that the homestead would not be his home or that he would not come to own the farms with his brothers, then he would not have spent the money on renovations to the homestead. Instead, he says that he would have spent the $1 million he had inherited from his uncle on buying his family and himself a house; and otherwise would have sought advice about how to invest the money for his family’s future, and would have taken steps to invest the money. (In this context, the plaintiff points to A’s evidence that he had expressed the wish to buy Property No 9 in his own name.)

345. [1157]

     It is noted that as at 1994 A was a qualified mechanic and had worked with the first defendant on the farms since about 1989. It is submitted that he had skills to obtain employment as a qualified mechanic, or could have used the skills he had from working on the farm to work as a farmhand, or obtain some other more profitable form of employment. By 2002, A was a qualified mechanic, had experience as a farm manager; had a heavy vehicle licence; had extensive experience in operating heavy plant and equipment (including driving large articulated trucks; operating bulldozers; operating graders; operating excavators; and operating bobcats). It is said that A’s experience meant that he was well suited to finding employment with trucking companies; earthmoving companies; and mines (and mining operations).

346. [1158]

     Evidence was adduced (over objection) and admitted subject to relevance and weight as to the position of Farm Worker No 1 who had worked with A from 1993 for a number of years with similar skills, who had left the first defendant’s employment to work first for an earthmoving company and then for a mining company. It is submitted that A could have followed a similar career path. (I have already indicated that I place no weight on the example of Farm Worker No 1). A says that if he had known that the first defendant was going to sell the farms, and “cut him” and his brothers out of his will, then A would have sought employment elsewhere.

347. [1159]

     A’s taxable income during the period from 30 June 1999 to 30 June 2013 varied from $24,373 (its lowest, in the 1994/1995 financial year) to $55,676 (its highest, in the 2003/2004 financial year) but was generally in the order of about $47,000 to $48,000 per year over the period.

348. [1160]

     B’s taxable income during the period from 30 June 1999 to 30 June 2013 varied more widely from $15,505 (its lowest, in the financial year 30/06/2004) to $113,434 (its highest, in 30/06/2002; that year including a termination payout from this then employer).

349. [1161]

     B says that if he had thought that all that work would be nothing because the first defendant could “throw the boys off the farms and disinherit them in the process”, he would “never have gone down that path”; instead, on leaving his then employment in 2002 he would have found another paying job in either the retail or wholesale food and liquor industry, by using the money he had inherited from his uncle in April 2002. It is submitted that B was earning more in his paid employment in the retail sector on his own account before 2002 than he ever earned working for E Co, and that he would never have made the decision to pursue only employment with E Co if he did not think it would benefit his family.

350. [1162]

     C’s taxable income from 2002 to 2013 varied from $8,425 (its lowest, in the financial year ended 30/06/2008) to $70,751 (its highest, for the year ended 30/06/2003). Generally it appears to have been around $30,000 to $40,000 over the period.

351. [1163]

     The plaintiffs say that, as at 2002, C had several years’ experience in the retail liquor industry and was actively searching for a bottle shop business to buy and run himself; and he had also been interested in real estate and property developing for several years. C says that his decision to join in the family business meant that he was not able to pursue his own opportunities for his own sole benefit. It is submitted that C will have wasted the time and effort he expended on behalf of E Co, and in pursuing off-farm investments through EM Co, and otherwise for the benefit of the first defendant and his brothers, if the first defendant is now permitted to disinherit his sons.

352. [1164]

     No specific submissions as to E Co’s detriment (as distinct from that of the sons) were advanced. However, in the course of argument the separate detriment that can be identified is that, if the first defendant is now permitted to resile from the expectation engendered in the sons that they would have the use of the land, through E Co for the balance of his lifetime and it would be “there” when he died, and hence to evict E Co from the farms and require repayment of the loans advanced and the book value of the transferred cattle, E Co will be left in the position where the business it has built up will not be feasible and it will lose the benefit of the capital improvements made by it to the first defendant’s land.

353. [1165]

     In the course of oral (and written) submissions, the first defendant made reference (as noted above) to the not insubstantial financial benefits that have accrued to the sons as a consequence of their involvement in the family business, the suggestion being that there was therefore no detrimental reliance (see T 1406.39-42).

354. [1166]

     In this regard, it is important to bear in mind that equity’s intervention is not premised on the outcome of some accounting of the benefits obtained and the detriment sustained by each party. The existence of an equity of the kind asserted by the plaintiffs does not turn on an analysis of comparative financial position (nor, as was rightly submitted, on abstract, idiosyncratic notions of fairness: see T 1450.42-1451.46).

355. [1167]

     It can also be observed that we are far from the law of contract. Equity’s concern is not the “unperformed promise” but rather the conduct of each plaintiff in acting upon the (induced) assumption or expectation (Giumelli v Giumelli at 121). This detrimental reliance “need not constitute, in any sense, a consideration moving to the party bound” (Sullivan v Sullivan at [20]; Delaforce at [56]); nor will relief be measured by “weighing detriment too minutely in order that it be converted into some equivalent of cash or kind, as if one were measuring the consideration for a commercial bargain” (Delaforce at [3]) – in short, “proprietary estoppel is not a case of quid pro quo” (McNab v Graham at [114(3)], Tate JA there citing with approval the analysis of Nettle JA, as his Honour then was, in Donis v Donis at [56]).

356. [1168]

     I find that each of the sons did make life-changing decisions, and did not pursue other avenues that were available to him, in reliance on the expectation engendered in him that his father would make available the farms for use in the family farming business during his lifetime and then would leave the farms to his sons. I am satisfied that this amounted to detrimental reliance and that if the counter-factual postulated by the plaintiffs were to have been put then the answer of each of the sons would have been that he would not have joined in the family business structure (or at the very least would have done so in a fashion that would have protected his interests against the kind of events that transpired in 2013). I make this finding notwithstanding that each of the sons has been, to a greater or lesser degree, in a position to develop business interests of his own.

357. [1169]

     Applying the tests articulated in Sidhu v Van Dyke, I find that the expectations induced in each son by the first defendant was a contributing cause to the son’s decision to join in the family business and forsake other business opportunities; that but for the expectation engendered in him he would not have done so; and that as a matter of common sense and the likelihood as a “a matter of the probabilities of human behaviour” it can comfortably be concluded that there was detrimental reliance on that expectation in the sense explained in Sidhu v Van Dyke (and in Donis v Donis).

358. [1170]

     The plaintiffs submit, and I accept, that A’s detriment goes beyond the expenditure of money on the renovations to the homestead at Property A (and the time and labour committed to earlier renovations). It is the loss of an opportunity to purchase a property which could serve as both home and farming enterprise or to set up an independent machinery, stock or transport business, or to pursue his skills in the mining industry.

359. [1171]

     I find that, considered separately from the jointly made proprietary estoppel claim, A relied to his detriment on the expectation that he and his family would be able to live on Property No 4 during the first defendant’s lifetime (and that if the property were to be sold during that time he would be able to live on another property acquired for the use of the family farming business) and would have the benefit of the capital improvements made to the property with his contribution of time effort and money by jointly inheriting the property (and being recompensed for the cost of the renovations), with a squaring up of the ledger to reflect the differences in financial support given to B and C in the purchase of their respective houses.

360. [1172]

     The detriment to E Co of reliance on the expectation that it would be in a position to remain in occupation of the farms and there to carry on the farming business operated by it in the time from late 2002/mid 2003 is again obvious. If the first defendant’s termination of the lease is effective then E Co is left without properties on which to conduct its farming business and, if required to repay the amount of the advances claimed and the book value of the cattle transferred to it, is unlikely to be in a financial position to carry on the business developed by it over the past fifteen or so years.

361. [1173]

     The next question concerns the relief appropriate to satisfy the equity established by each of the plaintiffs. I deal first with particular questions of principle that arise in relation to the measure of relief to be granted.

362. [1174]

     As a preliminary matter, it can be noted that there is some support in the cases for the view that, while an estoppel by encouragement may give rise to an equity in a plaintiff to have an expectation enforced (Sidhu v Van Dyke at [82]), an estoppel by acquiescence is generally concerned with preventing a defendant from profiting from a plaintiff’s mistake (see, for example, the discussion in the fourth edition of MGL at [17-090]; [17-110]-[17-115]).

363. [1175]

     There is academic opinion to the effect that such a distinction is, at most, “no more than a prima facie guide to appropriate relief” (see JD Heydon and MJ Leeming, Cases and Materials on Equity and Trusts (8th ed, 2011, LexisNexis) at [18.10]) and much can be said for the view that seeking “a single ‘right’ approach” to the question of remedy “inevitably runs the risk of over-simplification, in part owing to the very different factual situations which may generate a proprietary estoppel” (Spencer Bower at [12.182]).

364. [1176]

     In the present case neither party in terms adverted to the remedial distinction. For its part, the plaintiffs invoked the analysis of authorities in MGL (see [17-105]-[17-110]), emphasised what has been referred to as the “prima facie entitlement” of a party raising a proprietary estoppel (referring, inter alia, to Verwayen, Giumelli v Giumelli, Donis v Donis, Delaforce and Sidhu v Van Dyke) and drew the Court’s attention to proprietary estoppel cases where the expectation concerned a testamentary disposition but the representor/promisor had not died (namely, Flinn v Flinn, Rodda v Ian Rodda Pty Ltd [2015] SASC 95 and Rodda v Ian Rodda Pty Ltd (No 2) [2015] SASC 128) (Plaintiffs’ Closing Submissions; plaintiffs’ supplementary submissions on relief dated 10 October 2017). The first defendant also drew attention to Giumelli v Giumelli and Sidhu v Van Dyke (observing that those cases may mark a departure from the notion of the “minimal intervention of equity”) and submitted that the “key consideration” was whether enforcing the expectation would exceed what could be justified by the requirements of conscientious conduct (referring to Giumelli v Giumelli at [42] and Verwayen) (see first defendant’s outline at [34]).

365. [1177]

     In those circumstances, to the extent that a question of the appropriate remedy arises in the present case in the context of an estoppel by acquiescence, I shall proceed on the assumption that proprietary estoppels share “common remedial considerations” (MGL at [17-285]; [17-110]).

366. [1178]

     Support for this approach may be found in the judgment of Macfarlan JA in Priestley v Priestley, his Honour expressly characterising (at [14]) that case as one of estoppel by acquiescence yet adopting (at [19]-[21]) Deane J’s statement of principle in Verwayen at 443 (to the effect that it is only where relief framed on the basis of the assumed state of affairs is “inequitably harsh” that lesser relief is awarded), being the approach which has been treated as the appropriate starting point in a case of proprietary estoppel by encouragement. The reliance in McNab v Graham at [98]-[102] upon Hamilton v Geraghty, an acquiescence case, may further support the commonality of remedial considerations to proprietary estoppels.

367. [1179]

     In Sidhu v Van Dyke, the plurality endorsed (at [79]) Brennan J’s observation in Waltons Stores v Maher that the relief equity extends is “analogous” to that given by “estoppel in pais” (in that context meaning estoppel by representation), namely “protection against the detriment which would flow from a party’s change of position if the assumption (or expectation) that led to it were deserted”.

368. [1180]

     The analogy is not perfect, insofar as equity permits the giving of relief on terms (cf National Westminster Bank plc v Somer International (UK) Ltd [2002] 3 WLR 64) and the cases display a (principled) flexibility to the question of remedy. The latter point is of particular relevance in a case such as the present (see Flinn v Flinn at [125]-[126]).

369. [1181]

     Nonetheless, the analogy illustrates that the underlying concern will be the fashioning of a remedy which protects each plaintiff from the detriment which would otherwise flow from his (or its) change of position if the first defendant is permitted to depart from the assumption or expectation he has encouraged (or deny the assumption in which he has acquiesced) (see Grundt at 674-675). The emphasis will be upon that which is required by way of “conscientious conduct” (Sidhu v Van Dyke at [83]). That concept does not exist at large – it is given content by close regard to the case law. Hence, the plaintiffs’ reliance upon the approaches taken in Flinn v Flinn and the Rodda cases, which I accept may assist in the resolution of the remedial issues arising from the fact that the plaintiffs’ assumption or expectation relates to testamentary assurances.

370. [1182]

     Practically speaking, the starting point has been described as a “prima facie entitlement” to relief framed on the basis of the assumed (or expected) state of affairs, which may involve the taking of positive steps by the first defendant (see Verwayen at 442; Giumelli v Giumelli at [42]; [50]; Donis v Donis at [19]; Delaforce at [63]-[65]; Sidhu v Van Dyke at [82]-[86]). This prima facie position will however yield to individual circumstances (Donis v Donis at [20]). Relevant circumstances may include practical considerations such as the need for a “clean break” (see Pascoe v Turner [1979] 1 WLR 431,438; Delaforce at [60]); the impact of the relief upon third parties; and concerns of proportionality (see Delaforce at [62]). In Verwayen, in a case of estoppel by conduct, it was recognised that in some cases an appropriate qualification may be that the party relying upon estoppel do equity (see at 442).

371. [1183]

     Both parties appeared to be in general agreement with this approach, as a matter of principle (see first defendant’s outline at [34]; Plaintiffs’ Reply Submissions at [310]ff). Although there was a faint suggestion by the first defendant that Giumelli v Giumelli and Sidhu v Van Dyke “illuminate what is meant by the minimal intervention of equity” (by which I assume was meant the concept of the “minimum equity to do justice”; see Delaforce at [59]) it was accepted that “on one view” those cases depart from any such notion (Defendant’s outline at [34]). That concession was rightly made (see Sidhu v Van Dyke at [58]).

372. [1184]

     At least two particular issues arose from submissions, however: first, the nature and application of the concept of proportionality; and, second, the significance of the plaintiffs’ assumption or expectation being one relating to testamentary dispositions.

373. [1185]

     I observe that both arise as a consequence of views taken as to the content of the “prima facie entitlement” in the present case – both parties perhaps assuming that the plaintiffs’ “prima facie entitlement” was the immediate conveyance to the plaintiffs of the beneficial interest in the (remaining) properties (argument then focusing on the reasons for departure from that assumed starting point). To my mind, that rather begs the question now in issue (namely, the appropriate relief in respect of an induced assumption or expectation relating to another’s testamentary intentions). The short point may be that any “prima facie entitlement” in a case such as the present is to relief framed by reference to the assumed or expected state of affairs.

374. [1186]

     Turning first to the concept of proportionality, the plaintiffs submitted that, the prima facie measure of relief being to uphold a plaintiff’s expectation, “at least a persuasive and evidentiary onus” is cast on a defendant to argue that the prima facie remedy is “out of all proportion to the detriment” (Plaintiffs’ Reply Submissions at [307]). They submit that it is for the defendants to show that enforcing the expectation would be “inequitable” and that the defendants have not adduced any cogent evidence which does so (Plaintiffs’ Closing Submissions at [518]).

375. [1187]

     In my opinion, these submissions risk overstating the significance of the concept of proportionality. As was said in Delaforce by Allsop P (as his Honour then was) at [4]:

376. [1188]

     Some tension in the case law on the role of proportionality has been discerned, Professor McFarlane suggesting (Law of Proprietary Estoppel at [7.157]) that:

377. [1189]

     Consistently with the former of these suggested alternatives, in Priestley v Priestley, Emmett AJA (with whom McColl and Macfarlan JJA relevantly agreed) held (at [164]) that:

378. [1190]

     Although his Honour refers to a “promisee or representee” (and thus is seemingly contemplating an estoppel by encouragement case, which presupposes an express or implied promise or representation), the fact that the remark was made in the context of Priestley v Priestley, arguably a case of acquiescence ([14]; cf [132]-[133]), suggests that there is no distinction in principle in this regard.

379. [1191]

     Accordingly, it follows that proportionality will be applicable in the present case only if “proprietary relief” is “out of all proportion” to the detriment (Priestley v Priestley) which, on the balance of probabilities, the plaintiffs have sustained. (Pausing here I note the observation in MGL (at [17-110] that the language here – the phrase “out of all proportion” – is reminiscent of the language used in the context of the penalties doctrine(s).)

380. [1192]

     As a final observation on the question of relief on the plaintiffs’ jointly made proprietary estoppel claim, I note that after judgment was reserved the Victorian Court of Appeal delivered judgment in McNab v Graham. That case concerned, relevantly, the nature of the proprietary relief which may follow from the successful raising of an estoppel by encouragement in respect of testamentary assurances. I did not consider it necessary to invite further submissions: first, in view of the detailed submissions on relief that I had already received; and, second, given that the person against whom the estoppel is sought to be raised in the present case is alive (unlike in McNab v Graham) and that the present case therefore involves different remedial questions. Nonetheless, for completeness, I note that McNab v Graham (at [102]; [107]; [108]) confirms that, generally speaking and subject to consideration of all the relevant circumstances (as to which, see the discussion in Giumelli v Giumelli and Delaforce)):

381. [1193]

     I turn now to the significance of the fact that the sons’ assumption related to the first defendant’s testamentary intentions. In the course of oral submissions, a question arose (assuming the elements of a proprietary estoppel were otherwise established) as to the position of the first defendant between now and his ultimate death (T 1288.18-23). In debate with Senior Counsel for the plaintiffs the proposition was put that, if an order for conveyance of the properties were to be made, this would not be in accordance with the plaintiffs’ actual assumption or expectation. In other words, if (as I have found) the assumption or expectation was that the family farming business would operate on the first defendant’s farms (and in that sense the properties would be “held” for the benefit of the long-term benefit of the sons and/or E Co) and only later pass to the sons upon the first defendant’s death, then relief involving an immediate conveyance would go beyond a making good of the expectation (T 1289.11-20).

382. [1194]

     The plaintiffs’ response to this was (T 1289.24-28):

383. [1195]

     This position was then further developed in supplementary written submissions, which may be summarised as follows.

384. [1196]

     First, reliance is placed upon the analysis of Deane J in Verwayen at 441-442 as to a party’s “prima facie entitlement” to relief framed by reference to the assumed state of affairs, except where such relief would be “inequitably harsh” (an analysis which has been subsequently endorsed, as noted above). Attention is drawn to his Honour’s invocation of “the requirements of conscientious conduct”, the concept of proportionality, and the notion of relief on terms.

385. [1197]

     Second, it is submitted that the approach taken in cases such as Flinn v Flinn and the Rodda cases sheds light on the appropriate approach to be taken in a case of proprietary estoppel where the expectation concerns a testamentary disposition by the representor/promisor is alive. I shall consider those cases in due course.

386. [1198]

     Third, the plaintiffs advance specific submissions in relation to the effective “acceleration” of their expectation, submitting that: the first defendant has by his conduct forfeited any right to enter upon and remain on the properties; the plaintiffs may be obliged, as a condition of relief, to pay some compensation to the first defendant (amounting, on their calculation, to $260,421); if the plaintiffs are successful their costs (on a party/party basis) and their three-quarters’ share to the net proceeds of sale of Property No 12 are likely to be in excess of any such amount; and there ought be a legal set-off (pursuant to s 21 of the Civil Procedure Act 2005 (NSW)) or a set-off in equity pursuant to the Court’s inherent power to mould relief in equity.

387. [1199]

     Accordingly, it is submitted that the Court should order the first defendant to convey his properties (other than a particular property – House No 3 – in the town nearby the farms) to the plaintiffs, subject to an order that the plaintiff pay the first defendant $260,421, with that amount to be set-off against any liability the first defendant may have to the plaintiffs for costs.

388. [1200]

     In the event that acceleration of the plaintiffs’ expectations were to be refused, the plaintiffs submitted that the Court should order that the first defendant be prohibited from encumbering, alienating or otherwise dealing with the properties so as to preserve the plaintiffs’ rights until his death (that is, that orders of the kind made by Gillard J at first instance in Flinn v Flinn should be made).

389. [1201]

     For the first defendant it is submitted that whatever outcome (or outcomes) may be found favourable to one or more of the plaintiffs, if any, orders as sought by the plaintiffs which would see the first defendant’s farms transferred beneficially now to the plaintiffs should not be made. It is submitted that such an outcome would be disproportionate and against principle; and that it would mean the plaintiffs would obtain the benefit of what they say they expected (the land) without being required to do what they say they knew they were obliged to do (work with the first defendant in the family business). The first defendant submits that this would achieve a situation not in the contemplation of any party, namely the first defendant being left “without any assets at all and no source of income”, and the sons with land worth conservatively in the region of $20 million. (Pausing there, the plaintiffs emphasise that there was no evidence adduced as to the first defendant’s current financial and asset position.)

390. [1202]

     It is further submitted by the first defendant that, given the manner in which the plaintiffs now put their case, with a focus on the concept that the first defendant promised or represented that he would “hold” the land for the benefit of the sons and pass it to them by his will, there is no basis for an order of the type the plaintiffs seek. (That, however, does not in my opinion adequately take into account the authorities that contemplate that an acceleration of interest can be appropriate in certain circumstances – particularly Flinn and Rodda – see below.)

391. [1203]

     I have referred a number of times to the decisions in Flinn v Flinn and in Rodda v Rodda. Those cases are of particular assistance in considering the relief to be granted in the present case.

392. [1204]

     In Flinn, where the plaintiffs’ case on proprietary estoppel was made out, the relevant expectation was that, if the plaintiffs continued to operate the farm as they had in the past, then the farm and dairy business would be left to the plaintiffs upon the death of the survivor of the owners of the farm (the aunt and uncle of the plaintiff nephew), subject to two conditions, namely, that the plaintiffs would pay a sum of money to the owners’ son and that they would assume the liabilities over the farm.

393. [1205]

     The Court of Appeal in Victoria considered the question as to what was required to satisfy the equity that had arisen (from [118]ff). The appellant (the son) had submitted that the equity could be satisfied by the payment of a relatively small monetary sum and that the imposition of a constructive trust over the property was inappropriate. Brooking JA, with whom Charles and Batt JJA agreed, considered that the primary judge had been right to conclude that only the imposition of a constructive trust would satisfy the equity that had arisen (see [120]) and concluded that the present equity required that the plaintiffs receive the farm that they were promised ([119]). In that case, an argument had been put that there was a great discrepancy between the value of the plaintiffs’ work and the value of the farm.

394. [1206]

     Relevant in that case was the fact that one of the owners of the farm remained alive, she being elderly and having, it was said, lived much longer than anyone expected. Brooking JA said (at [126]) that:

395. [1207]

     After further argument as to relief, Brooking, Charles and Batt JJA delivered a further judgment on 25 August 1999 (reported at [1999] 3 VR 754; [1999] VSCA 134), and said (at [1999] 3 VR 762 [170]):

396. [1208]

     The Court reserved the question whether the order requiring payment to the son (of a sum in annual instalments secured over the property) ought be set off against the costs order in the plaintiffs’ favour for the primary judge to determine (see [173]).

397. [1209]

     In Rodda, a case of proprietary estoppel by encouragement, the issue of the “acceleration” of a testamentary expectation where the testator was not yet deceased was considered in the Supreme Court of South Australia (in a principal judgment at [2015] SASC 95; and as to final orders for relief at [2015] SASC 128). The relevant expectation was that the plaintiff would, at some time in the future, assume ownership of the assets of his father’s farming business including the ownership of two particular properties, but the plaintiff also understood that he would provide, out of the properties, for his siblings’ legitimate inheritance expectations and for a comfortable retirement for his father in his later years.

398. [1210]

     In the first of the two decisions, Nicholson J said (at [303]-[305]):

399. [1211]

     His Honour approached the question from the starting point that the remedy is the fulfilment of the expectation engendered and said that it was a case of identifying an equity in terms of compensation for proved equivalent detriment, accepting that “[t]he equity is a broader one based on the just and conscionable satisfaction in appropriate fashion of the equity arising from the expectation created in another by encouragement or representation” ([306]). His Honour emphasised the importance of keeping the defendant to the representation or encouragement where that had been relied on by the plaintiff “to abandon a course of conduct that could have led to a different outcome” (citing what was said in Delaforce by Allsop P, as his Honour then was, as to the loss of a chance that is not fanciful or not realistic), noting the son’s “unwavering intention to acquire his own capital asset, a farm in his name”. His Honour went on to say that relief was to be moulded to recognise practical considerations, such as the need for a clean break, and to take into account the impact of any orders on third parties and any hardship or injustice they, or indeed, the party estopped would suffer, noting that any relief will be dependent on the facts and circumstances of the particular case.

400. [1212]

     His Honour put forward (and invited submissions on) two “pathways” by which he considered that the plaintiffs’ equity would be satisfied: the first, involved the declaration of a constructive trust in the plaintiffs’ favour over one of the two properties, together with a substantial fund by way of equitable compensation (to be secured by a charge over the second property), the amount of which his Honour contemplated determining with a “broad axe approach”, noting the father’s relatively advanced age for a full time active farmer; the second, being to order the payment of equitable compensation by reference to the value ascribed to the respective properties (secured by a mortgage or charge registered over both properties). In his Honour’s second judgment, following further argument as to the form of relief, orders were made substantially in accordance with the first of those pathways, the principal relief being the declaration of a constructive trust over one of the two properties.

401. [1213]

     In the present case, one of the overriding practical considerations in my opinion is the need so far as possible to achieve a “clean break” in circumstance where the family relationship has clearly broken down. The circumstances to take into consideration also include that, had the first defendant not resiled from the expectation, the properties would remain the subject of the lease to E Co. While it may well be that the first defendant would have had the expectation that he could have access to (and reside in) one or more of the properties during his lifetime, he chose to sell the property understood by the sons to be his intended “retirement block” (Property No 8) and he is not presently permitted to have access to the remaining farming properties (due to his parole conditions) (and has not had access thereto since before his imprisonment). The plaintiffs argue, by reference to the address noted in the first defendant’s affidavit of 5 May 2017, that the first defendant now has a residential address in Sydney (and there was no demur to this proposition).

402. [1214]

     The plaintiffs thus submit that any order for the transfer of the farms to them should not be subject to any right of residence in favour of the first defendant and that, since he has not given evidence about his assets or any need in relation thereto, there should be no question of an order for his maintenance (akin to that made in Flinn v Flinn).

403. [1215]

     At the outset, I note that any relief in relation to E Co is subsumed in the relief to be granted to the individual plaintiffs as discussed below. In relation to A’s separate proprietary estoppel claim, which does not need to be the subject of relief in light of the relief to be granted on the primary proprietary estoppel claim, I would have considered it disproportionate to grant relief by way of the transfer to A of title to Property No 4, in circumstances where the amount of expenditure by A (even accepting the figures put forward by A) is dwarfed by the value of the property as a whole; and where, in my view, the relevant representation or expectation related only to the homestead and not to the property as a whole. Had A’s separate claim for relief fallen for determination in isolation I would have concluded that the appropriate relief was an order for compensation calculated by reference to the cost of the renovations, or the value to the first defendant of the improvements to the property carried out at A’s cost, whichever be the greater, in circumstances where A himself appears to have understood that the arrangement was one pursuant to which the property might at some time be sold and that, if sold, he would then be compensated for the cost of the renovations in some fashion.

404. [1216]

     On the primary proprietary estoppel claims made by each of the sons, I have concluded that, in the circumstances of the present case, an order that has the effect of accelerating the interest of the sons in the properties they expected to inherit on their father’s death is appropriate to make good the relevant expectations of the sons (in order to satisfy the equity arising on their jointly made proprietary estoppel case) and that this is not out of all proportion to the equity raised; nor, subject to what I am about to say as to the compensation for loss of the future lease payments, will this prejudice the position of the first defendant (not only because he currently cannot have access to the properties because of his parole conditions but also because, had he not resiled from the expectations, the properties would be the subject of ongoing leases).

405. [1217]

     The qualification I make as to this is that, apart from the need for E Co to make good the arrears of rent (which I accept should be off-set against the amounts paid by E Co or the sons for the amounts for which the first defendant was liable under the Agreement to Lease to pay – insurance and rates and taxes), which the plaintiffs accept the first defendant must recover up to the date of judgment, it is appropriate (and the plaintiffs accept this) that the first defendant also be compensated for the loss of rent he would otherwise have received for E Co’s lease of the properties until his death. The plaintiffs submit (and I accept) that this would appropriately be effected by a payment representing the net present value of the rent for the period of the first defendant’s remaining life expectancy.

406. [1218]

     The plaintiffs argue that the first defendant’s net position under the Agreement for Lease, after deducting amounts paid for insurance, rates and taxes for the properties from the (varied) annual lease fee of $100,000, was that the first defendant was “only notionally ahead”, an outcome that they say is hardly surprising because the first defendant’s intention, as at November 2011, was that he was holding the farms for his sons with the intention that his sons would inherit the farms on his death; and his intention with respect to the initial Agreement for Lease agreed on 17 March 2004 was that he would not make a profit on the lease (and would not obtain a financial benefit from it). The plaintiffs submit that the first defendant’s intention with respect to the variation of the Agreement for Lease agreed in November 2011 was that he would not financially benefit from entering into the variation of the Agreement for Lease with his sons; the only substantial benefit for the first defendant under the variation of the Agreement for Lease in November 2011 was to withdraw Property No 8 from the operations of E Co, which then enabled the first defendant to move to that property (where he lived from late November 2011 until imprisoned on 6 July 2012).

407. [1219]

     The plaintiffs have referred to the prospective life expectancy tables published by the Australian Bureau of Statistics (of which it is submitted that judicial notice can be taken) and say that, on the Australian Life Tables 2013-2015 published by the Australian Bureau of Statistics, a man of the first defendant’s age in NSW has an average life expectancy of 12.0 years.

408. [1220]

     In respect of the net present value of the amounts that might accrue in the future to the first defendant in relation to the lease in the future, the plaintiffs make a number of assumptions. First they suggest the adoption of an inflation rate of 2.7% based on the 10 year Australian Government bond rate for September 2017 (which the plaintiffs submit is the appropriate discount rate because it represents the market’s best estimate of interest rates over the next ten years and is favourable to the first defendant being based on the negligible risk factor of default by the Commonwealth). Second, they assume that the lease fee does not increase but that the amounts payable for insurance, rates and taxes (to be deducted from the lease fee) do increase at the present CPI for insurance and financial services. Next they discount the net result back to 1 January 2018 (the assumed notional judgment date) and estimate the net result to accrue to the first defendant in the middle of the calendar year. Their net present value calculation for the period from 2018 to 2029 produces a net negative amount to the first defendant from 2024 onwards. Thus the plaintiffs argue that, even with modest inflation, the benefits to the first defendant in the earlier years (up to 2024) are cancelled by the losses in later years.

409. [1221]

     I do not accept that the compensation for the loss of the income stream from the lease should proceed on the assumption that the lease fee would not increase over the balance of the first defendant’s life expectancy, nor on the basis that the first defendant’s intention would be to obtain no more than a notional amount from the lease. The compensation must reflect the fact that the family business structure will effectively come to an end. Thus the calculations, though useful as an indicative exercise, should not be adopted.

410. [1222]

     In my opinion, the appropriate compensation to be ordered on the acceleration of the sons’ interest in the farms would be based on the net present value of the market rent for the farms over the period of the first defendant’s now life expectancy based on the statistical tables (on the assumption that the first defendant, as the notional lessor of the farms in that scenario, would bear the responsibility for insurance, rates and taxes). For that purpose, a regime should be put in place for an independent valuer to be appointed to opine as to the market rent for comparable properties over the relevant period.

411. [1223]

     As to the proceeds of sale of Property No 12, as noted earlier, I am not persuaded that there was any discussion at the September 2002 meetings as to what was to happen if any one or more of the farming properties were to be sold during the first defendant’s lifetime. I consider that, implicit in the expectation that the first defendant would hold onto or retain the properties during his lifetime and that the properties would pass to the sons on his death, would be the practical result that any sale of the properties during the first defendant’s lifetime would occur only after consultation and agreement with the sons. What would then happen to the sale proceeds (whether they would be shared between the four family members, equally or otherwise, or made available for re-investment in the family business) would then be a matter for agreement at the relevant time. I do not accept that the evidence establishes on the balance of probabilities that the first defendant created or encouraged an expectation at the September 2002 meetings that any sale proceeds would be shared equally between the four family members or reinvested in the family business. However, nothing turns on this because, to make good the expectation that the properties would be held until his death and then inherited by the sons, it is in my view necessary (in the case of Property No 12 which has in fact been sold) that the first defendant account in some way for the proceeds of sale of that property. As adverted to earlier, there might well have been an argument that the whole of the proceeds ought to be made available to the sons. However, that is not what was sought and the sons did not at the time object to the sale (not realising at that time that their father might later change his will). In those circumstances, in order to make good the expectation, I consider that it is appropriate that there be a set-off, against the sum to be paid to the first defendant by way of compensation for the loss of the future income stream from the lease of the rural properties, of three-quarters of the sale proceeds of Property No 12, i.e., the sum of $600,000, with interest from the date of settlement of that sale.

412. [1224]

     As adverted to above, the plaintiffs submit that, in the absence of evidence of the first defendant’s current asset position (and thus his ability to satisfy any order for costs), an order for compensation in favour of the first defendant that is payable before costs are assessed and the account in respect of Property No 12 is finalised exposes them to the risk that they will pay money to the first defendant where, on a final accounting, the amount owed to them by the first defendant would be greater than the amount paid over by them. Thus they seek an order that the first defendant’s liability to the plaintiffs (in respect of the proceeds of sale of Property No 12, and any order for costs made in favour of the plaintiffs against the first defendant) be set-off against any debt found in favour of the first defendant. (That said, the submission as to the lack of evidence of the first defendant’s current assets leaving the plaintiffs not able to assess his inability to meet a costs order seems somewhat inconsistent with the proposition that, in the absence of information as to his asset position, it should not be accepted that the first defendant would be left with nothing if the expectation of the sons in relation to the farms is accelerated.)

413. [1225]

     In relation to the first defendant’s existing shareholdings in E Co and EM Co, I am of the view that it was implicit in what was understood by the first defendant to be his sons’ expectations in entering into the new family business that they would have the benefit of that family business going forward after his death. On that basis it would be appropriate to order that the first defendant’s shares in E Co and EM Co be acquired by the sons at a value that represents their present worth (determined by an independent valuation of the shares). It would be appropriate that the shares be valued on the assumption that E Co is in a position to continue its farming operations, but is liable to reimburse the first defendant both for the book value of the cattle transferred to it in 2003 and for the advances recorded in E Co’s accounts (without interest). Moreover, I am of the view that such an order is necessary to effect a clean break. However, as indicated earlier in the summary section of these reasons (at [78]-[80] above), I will hear submissions on this aspect of the relief.

Cross-claim

1. [1226]

   Many of the matters raised in the cross-claim have been dealt with in the course of the consideration of the plaintiffs’ claims. In particular, the claims for relief in relation to the termination of the Agreement for Lease are now moot, given that I am of the view that the properties should be transferred to the sons.

2. [1227]

   As to the claim for unpaid rent, as already noted, in light of the concession made by the first defendant in cross-examination (at T 843.16-37) the first defendant’s claim against E Co for unpaid rent is limited to the period from 2014 to the present, with an allowance made for the cost of insurance in that period. Adopting an approximate figure for insurance of $50,000 per annum, the first defendant says this results in an amount of $200,000 that is due from E Co.

3. [1228]

   The plaintiffs, on the other hand, say that the costs of the “farmpack” insurance paid by the plaintiffs since the first defendant’s imprisonment have been: $52,050 in respect of the period ending 23 November 2014; $48,681 for the period ending 23 November 2015; $49,519 for the period ending 23 November 2016; and $50,698 for the period ending 23 November 2017. They say that, estimating rates and taxes with an increase from the 2014 amount of 2% a year, together with interest calculated on a notional (and, as it turns out, wildly optimistic) judgment date of 1 January 2018, the amount owing to the first defendant in respect of the lease fee for the financial years ending June 2014 through to June 2017 would be calculated at $57,378.

4. [1229]

   The first defendant took issue with the plaintiffs’ method of calculation (T 1418.49), characterising it as based upon “totally unsupportable assumptions and figures as to what the rent will be in the future”.

5. [1230]

   Accordingly, the final orders will need to resolve the method of calculation of the relevant amount owing by way of rent for the period up to judgment having regard to the amounts paid by the plaintiffs in respect of rates taxes and insurance in the period from 2014 to date in respect of the properties.

6. [1231]

   The other money claim against E Co is the money due under the first defendant’s loan account. The first defendant says that this has been treated as a proper debt in the books of the company; and that, although the email evidence showed that the first defendant was considering forgiving the debt, the fact that consideration has been given to forgiving a debt shows that it must be owing. (I would agree with the last proposition subject to the qualification that what it shows is that as at the time consideration was being given to forgive the debt the first defendant (or the second defendant as his attorney) considered it to be owing but that subjective belief does not establish that it was in fact a loan in the first place.)

7. [1232]

   The first defendant notes that, at T 875, he was cross-examined about both the E Co account in his favour and moneys recorded as due to him from his sons and, in that cross-examination, he agreed that the record of moneys due from the sons was wrong and did not reflect a true debt position. However, he says that this does not impugn the legal enforceability of the debt due from E Co (noting that he makes no claim by his cross-claim to recover the amounts shown in this accounts as loans to his sons).

8. [1233]

   The first defendant says there is no dispute as to its amount, namely $2.12 million. Therefore the first defendant says there should be a judgment in his favour against E Co in the amount of $2.32 million being the total of the rent claim and the debt claim.

9. [1234]

   It is not disputed that the first defendant bears the onus of establishing that the amounts were advanced by way of loan and the recording of the amounts as a loan in the books of the company is no more than prima facie evidence of such a debt (see Gray v Gray at [16]; Schmierer v Taouk at [59]). The fact that the moneys advanced were recorded as a loan in the accounts of E Co is not determinative in this regard, particularly given that the practice of the first defendant’s accountant (Accountant No 2) appears to have been to record all moneys advanced by the first defendant (whether to the company or to his sons and whether or not the first defendant expected repayment) as being a loan (and Accountant No 2 did not give any evidence to explain how he came to record these amounts in the accounts). That was not the first defendant’s intention in relation to moneys advanced to his sons and, from the evidence given by him in cross-examination, it was not his intention (subject to how the business performed) in relation to moneys advanced to E Co or shown in the accounts as payable by E Co for the cattle transferred to it in 2003. There was no evidence as to any agreement being struck for the payment of moneys in respect of the cattle or for the advances over the years. I am not persuaded on the balance of probabilities by the first defendant’s evidence (set out above at [66]-[65]) that the advances to E Co were made by way of loan repayable during his lifetime.

10. [1235]

    Further, I am satisfied that the expectation on the part of the sons, encouraged and understood by the first defendant, was that the sums advanced to E Co by the first defendant for the purposes of the family business farming operations (and the transfer to E Co of the cattle at book value) would not be payable during their father’s lifetime (again, I refer back to the evidence set out above at [66]). That would have been relevant had the first defendant’s claim for repayment been considered in isolation. However, if there is now to be (as I think there must be) a clean break between the sons and the first defendant in relation to the operation of the family farming business, and the clean break encompasses the buy-out by the sons of the first defendant’s shares in the relevant family companies (E Co and EM Co), it would not in my view be unconscionable for the first defendant to require the repayment of those moneys, assuming a reasonable payment regime which will not jeopardise E Co’s ongoing business and operations.

11. [1236]

    As to the amounts claimed by the first defendant from his sons, liability for the amounts owing by the sons under the W Deed (totalling $156,250) is admitted. Those amounts were due on 30 April 2014. The plaintiffs calculate, applying interest yields, the amount owing at 1 January 2018 at $172,417. That did not appear to be challenged by the first defendant. The plaintiffs thus calculate the total amount owing to the first defendant (as at 1 January 2018) as being: $57,378 owing by E Co in respect of the unpaid lease fee in the period 1 July 2013 to 30 June 2017; plus $172,417 owing by the sons under the W Deed. (From that they argue should be deducted the net loss of $2,293 in respect of the future rent period under the lease – leading to a net amount of $227,502 but, as noted above, I do not accept that the manner in which they have calculated the figure for compensation for loss of future rent to be the appropriate measure.) Those calculations will need to be re-done having regard to whatever was the actual amount paid for rates, taxes and insurance for the properties in the relevant period.

12. [1237]

    As to the Westpac Deed, the need for relief in that regard now relates only to the release of the personal guarantee given by the first defendant. The plaintiffs should, as a condition of the relief to be granted in their favour on the proprietary estoppel claim, be required to obtain a release of that guarantee from the bank and, if such a release cannot be procured from the bank for any reason, the plaintiffs should be ordered jointly and severally to indemnify the first defendant for any liability arising under that guarantee (secured by way of charge over the farming properties to be transferred to the sons).

Set-off

1. [1238]

   Finally, I consider that in all the circumstances of this unfortunate family dispute there should be a set-off, as against the amount payable to the sons in respect of three-quarters of the proceeds of the sale of Property No 12 (plus interest from the date of settlement) of: the amounts payable by the sons to the first defendant under the W Deed (together with interest on the W Deed amounts from the date they were due), the amounts payable by E Co to the first defendant for unpaid rent to 30 June 2017; and the amounts payable by E Co in reimbursement of the moneys advanced to it by the first defendant over the years (including the book value of the cattle).

Costs

1. [1239]

   It would in the ordinary course be appropriate for the plaintiffs to have their costs of the proceedings in light of the outcome. If there is any dispute as to that or any alternative order is sought, that can be dealt with on the basis of written submissions and I will make directions in that event.

2. [1240]

   Finally, as to the proposed set-off in relation to costs, I am inclined to the view that it is best to avoid as far as possible scope for ongoing disputes and that such a set-off as sought by the plaintiffs would be the most likely to achieve this. Therefore I propose to order that, to the extent that there is a surplus payable to the first defendant (plus the amount payable to him for compensation in respect of loss of future rent) this should be set-off against any costs orders made in favour of the plaintiffs.

Orders

1. [1241]

   For the above reasons I consider it appropriate to order that the first defendant transfer to the third, fourth and fifth plaintiffs (as tenants in common in equal shares) within, say, 28 days the properties listed in the second further amended statement of claim and all farming equipment and machinery on those properties that is currently owned by the first defendant; that the first defendant account to the third, fourth and fifth plaintiffs for three-quarters of the proceeds of sale of the property referred to as Property No 12 in these reasons (with interest on that sum from the date of settlement); for judgment to be entered for the first defendant against the third, fourth and fifth plaintiffs for the sum admitted to be owing under the W Deed and interest thereon from the date it should have been paid; that judgment be entered for the first defendant against the first plaintiff for the agreed arrears of rent from 2014 to June 2017 (less the amount paid for insurance, rates and taxes in respect of the leased properties by E Co in that period); and to order that there be a set-off in relation to the monetary sums ordered to be paid.

2. [1242]

   I also consider that an order should be made that, as a condition of the relief to be given in respect of the plaintiffs’ jointly made proprietary estoppel claims, the third, fourth and fifth defendants should pay to the first defendant a sum representing the net present value of the market rent for the properties from the date of judgment for the period of the first defendant’s life expectancy on the Australian Life Expectancy Tables (as valued by an independent valuer); and that the properties should be charged in favour of the first defendant for the said amount. Further, as a condition of the said relief, the third, fourth and fifth defendants should be ordered to procure the release of the personal guarantees provided by the first defendant for the loan facilities for the P and C Hotels referred to in these reasons and should (subject to hearing submissions on this aspect of the relief) be ordered to acquire the first defendant’s shares in E Co and EM Co (as valued by an independent valuer on the basis referred to earlier in these reasons).

3. [1243]

   If orders are made for the acquisition of the first defendant’s shares in E Co and EM Co, then there should also be orders made for the payment to the first defendant of the amounts recorded in the books of the first defendant and E Co as advances made to E Co over the years and for there to be payment to the first defendant of the book value for the cattle transferred by him to E Co in 2003. Those orders need to make provision for a payment regime and for security to be provided for the payment of those amounts (over the properties) if payment of the said amounts is not made at the time of transfer of the properties to the third, fourth and fifth plaintiffs.

4. [1244]

   For the present, I propose only to make orders in relation to procedural matters and to make directions for the parties to prepare short minutes of order (and submissions if those cannot be agreed) in order to reflect these reasons. It may be necessary for there to be a brief oral hearing on those matters if agreement cannot be reached between the parties.

5. [1245]

   I therefore order as follows:

   1. (1)

      To the extent necessary, give leave pursuant to r 35.2(3) for both parties to use the affidavits referred to at [296]-[297] of these reasons notwithstanding that the deponent was not made available for cross-examination.

   2. (2)

      Direct the parties to prepare short minutes of order to reflect these reasons and to forward those and any brief written submissions in relation to those orders to my associate by 4pm on 24 April 2018.

   3. (3)

      Reserve the question of costs.