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The Facts

Rural property purchased by couple and managed on share farming basis

A married couple bought a rural property on the northwest peri-urban fringe of Sydney in 1969. Both held high-profile jobs in fields unrelated to agriculture, so for the whole of the time between the purchase and the death in 2016 of the wife, who outlived her husband, the property had to be run by a manager on a share farming basis.

The claimant was the son of the man who had managed the property until 1974, after which the claimant, then 22, took over, and remained as the manager until the death of the wife.

Under the will of the wife - the sole owner of the property after her husband's death - the property was left to one of her two daughters; and there was a gift of a little over $200,000 to the claimant.

Claimant starts legal action alleging broken promise to leave him the farm

The claimant started legal action, saying that on various occasions the wife had assured him that the property would be his when she died.

He said that in sticking with the task of managing the property for such a long time, he had relied on that assurance; that the wife should have known that; and that he, and not the daughter, should become the property owner.

Claimant lives rent-free on property and receives retainer

The arrangements under which the claimant share farmed the property were mainly organised by the husband. The 25-hectare property was variously used as a citrus orchard, for grazing cattle, and for growing vegetables for sale; although it was not really a fully commercial enterprise, and would have been more accurately described as a hobby farm.

The claimant lived in a rent-free house, received a regular retainer (which in the absence of other benefits would not have been a living wage), and had all operating costs met except fuel, which was shared.

Absence of documentation to confirm arrangements

These arrangements were purely word-of-mouth; there was nothing written down. The claimant asserted that during the 1980s, three oral promises were made to him; two by the husband, and one by the wife, after the husband's death.

The court referred to these as "the representations", although the claimant characterised them as "succession plans".

Claimant's account of representations made to him

According to the claimant, the first of the representations was that in his will, the husband would give the claimant a "life interest" in the property, under which it would be left to the two daughters, but on the condition that the claimant could live there until he died, or decided to leave.

The second representation, the claimant said, was that the husband, expecting that he would shortly die, told him that he would leave the property to his wife in his will; but she and he had agreed that when she died, she would leave the property to the claimant.

The third representation (strongly disputed in evidence) was that, after the death of the husband, the wife had said to the claimant that in her will she would leave the property "and a sum of money" to him.

Details of wife's will become known after her death

When the wife died, it was discovered that she had left the property not to the claimant, but to one of the couple's two daughters instead.

There was, however, a bequest to the claimant of $200,000, subject to adjustment by any change in the CPI between the date of the will and the date of distribution of the assets.

When the wife died, the claimant commenced proceedings in the Supreme Court of NSW, claiming the property was held on trust for him.

Supreme Court finds in favour of claimant

Those proceedings were determined in favour of the claimant. The reasons given were complex, but the central theme was that the claimant would not have remained in such uncertain and poorly remunerated work had he not done so in reliance on the representations, and that this reliance was reasonable.

The beneficiary daughter appealed to the NSW Court of Appeal, which unanimously dismissed her appeal, taking, in broad terms, the same view as the Supreme Court. The daughter then appealed to the High Court.

CASE A

The case for the daughter

CASE B

The case for the claimant

The first two representations the claimant describes as being made by my father before his death are implausible, and it has not been established that the third representation by my mother was made at all.
Even if the court accepts the evidence about the representations, to the extent that they related to the wills, the representations were simply statements made at a particular point in time. Anyone can later have a change of mind about the content of their will, so that the representations were not "assurances" the claimant could rely on to override what was said in my mother's will.
The claimant's contention that he had relied to his detriment on the representations (by sticking with a job with only modest rewards, when he could have found much better remunerated work) should be rejected, especially as, apart from the alleged representations, my parents did nothing else to encourage the claimant to remain managing the farm.
My parents were not even aware that the claimant's long-term service was based on his expectation of inheriting the farm.
The gift in my mother's will of $200,000 to the claimant is enough, and the terms of my mother's will should be upheld. I should inherit the farm.

I am being truthful about the representations made to me.
I relied on the representations to my detriment by remaining as the farm manager, when I could have left and taken more favourable employment.
It was reasonable for me to have relied on the representations.
Both the wife and the husband knew (or if not, ought to have known) that my loyalty in remaining as farm manager was because I was relying on inheriting the farm.
The bequest of $200,000 should stand, because the wife told me that she would leave me the farm "and a sum of money".

So, which case won?

Cast your judgment below to find out

Geoff Baldwin
Disputes and litigation
Stacks Champion

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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