Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  •   Notable Unreported Decision

Pain v Pain

 

[2006] QSC 335

 

SUPREME COURT OF QUEENSLAND 

 

CITATION:

Pain v Pain & Ors [2006] QSC 335

PARTIES:

MALCOLM DOUGLAS PAIN
(plaintiff)
v
WILLIAM DOUGLAS PAIN
(first defendant)
DELMA MARY PAIN
(second defendant)
TAITLANDS PTY LTD (ACN 010 486 727)
(third defendant)

FILE NO/S:

BS 5078 of 2004

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court Queensland at Brisbane

DELIVERED ON:

8 November 2006

DELIVERED AT:

Brisbane

HEARING DATE:

31 July 2006 – 7 August 2006

JUDGE:

Lyons J

ORDER:

1. It is declared that the first, second and third defendants have held the proceeds of sale of all the properties as to an amount of $732,000 by way of a constructive trust from the time of the sale. 

2. That the first, second and third defendant’s pay to the plaintiff an amount of $732,000 together with interest from 16 July 2003.

3. That the amount of $348,902 currently held on trust from the proceeds of the sale of Shillingford, together with interest thereon, should be paid to the plaintiff’s solicitor’s trust account in partial satisfaction of this award.

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – CONSTITUTION AND CLASSIFICATION OF TRUSTS GENERALLY – CLASSIFICATION OF TRUSTS IN GENERAL – CONSTRUCTIVE TRUSTS - INDEPENDENT OF INTENTION – GENERAL PRINCIPLES – whether a representation was made by the defendant to the plaintiff – whether it is unconscionable for the defendants to seek to rely on their legal rights – whether the plaintiff has an entitlement to the relief claimed

Austin v Keele (1987) 72 ALR 579 [considered]

Baumgartner v Baumgartner (1987) 164 CLR 137 [applied]

Flinn v Flinn [1999] 3 VR 712 [applied]

Muschinski v Dodds (1985) 160 CLR 583 [applied]

Rogers v Rogers [2001] VSC 141 [applied]

Swettenham v Wild [2005]QCA 264 [applied]

COUNSEL:

DB Fraser QC with A Moon for the plaintiff

GC Martin SC with JB Rolls for the first, second and third defendants

SOLICITORS:

Connolly Suthers Lawyers for the plaintiff

Damien Bourke and Associates for the first, second and third defendants

Introduction

  1. LYONS J:  The plaintiff, Malcolm Pain, is now 39 years old and is the only son of the first and second defendants, Bill and Delma Pain.  They also have a daughter Vickie who is 37 years old.  The first and second defendants conducted farming operations in the Jandowae region of Queensland for almost 40 years.  They started on a farm known as Nardoo which they purchased on 28 September 1965, and the farming enterprise was subsequently expanded to include three other properties called Taitlands, Tanyannah and Shillingford.  The first property was initially used for peanut farming but the farming operations expanded after the other properties were purchased to include cattle grazing, dairy farming and grain growing.
  1. This action arises because the plaintiff claims he worked on the farms all of his life without adequate recompense. In particular he states that after he left school he worked over a sixteen year period without wages in reliance on a representation by the first and second defendants that one day the farms would be his. The plaintiff and his parents had a falling out on two occasions and ultimately in June 2000 the relationship broke down irretrievably. Legal ownership in the four properties vested in the first, second and third defendants and the properties were sold between 2002 and 2003 for a total figure in excess of $2 million.
  1. The plaintiff’s claim is essentially that he relied on the first and second defendants’ representation that the farms would one day be his and he worked on the properties without appropriate remuneration. He claims that it is now unconscionable for the defendants to seek to rely on their legal rights. The plaintiff submits that the defendants have come under an equitable obligation to him by way of a constructive trust. He therefore seeks equitable compensation or equitable damages as well as common law relief.
  1. The defendants state that no representations were made and in any event the plaintiff has received sufficient recompense from them over the years he worked.
  1. The essential issue is whether the plaintiff has any entitlement to the relief claimed.

Historical Overview

  1. The essential facts can be conveniently summarised. The farming operations were initially conducted solely from Nardoo until 30 October 1979 when the nearby property Taitlands was acquired from the first defendant’s parents by the third defendant Taitlands Pty Ltd. The first and second defendants are the sole directors and sole shareholders of the third defendant. This second property was used predominantly for grazing cattle. On 23 June 1979 Trust Deeds were executed setting up the WD and DM Pain Family Trust with the first and second defendants nominated as the beneficiaries. Taitlands Pty Ltd held the property as trustee for the Pain Family Trust. These two properties Nardoo and Taitlands were operated as the family farms until 1990.
  1. On 4 June 1990 the grazing property, Tanyannah, was purchased by the third defendant. It is located some 12 km from the original family farms. The fourth property Shillingford was acquired by the third defendant as a dairy farm on 3 September 1993. It was acquired because the second defendant’s brother, Don Geall, who lived with the family from 1973 was interested in dairy farming. Nardoo was in the name of the first and second defendants, and Taitlands Pty Ltd was the registered proprietor of the other three properties.
  1. The properties were all basically worked together so that grain and other cattle feed was grown on the properties and cattle were fattened for sale in the family’s feedlots. The plaintiff worked all of the properties for many years starting at a young age when he was not at school or agricultural college. The plaintiff was encouraged to take up study at the Dalby Agricultural College by his parents and Mrs Pain agreed that she and her husband “were much involved and encouraged him to do that”.[1]  He was also encouraged to stay at the college.
  1. It is accepted by all parties that after completing two years at agricultural college in 1983 and 1984 he returned to work the farms with his parents, sister and his uncle Don Geall in an arrangement whereby they all worked the farms together.
  1. It was also agreed that the plaintiff was not paid wages but he did not have to pay for board, clothing or fuel and his parents also provided him with some money when they considered it appropriate. Apart from a period in 1985 when he had a period of about six months installing kitchens when he was not required on the farm, it is clear that the plaintiff worked extensively on the farms in the period from 1985 to 1992. It was also generally conceded that the plaintiff was responsible for the development of a feedlot on Taitlands, including the obtaining of the appropriate accreditation, the implementation of the system and the construction of a mixer for this purpose around 1986.
  1. When the family farming enterprises were expanded with the purchase of Tanyannah in 1990 there were discussions as to whether this property would be purchased in the plaintiff’s name however the property was purchased by the third defendant. During this period the plaintiff spent funds on the purchase of plant and machinery for use on the properties including a vehicle, a motorbike, a cattle crush, sprayrigs, a roller mill, lathe, as well as a plough. The defendants gave some peanut farming equipment worth $15,000 to the plaintiff.
  1. At times the plaintiff obtained short term local contract positions for which he received payment and from time to time payments were received from the defendants. There were also occasions when the plaintiff earned income from his own farming activities.
  1. Grain was grown at Nardoo and consisted of winter crops and summer crops of mainly barley and sorghum. There was significant work to be done in relation to ploughing, planting, spraying and harvesting these crops particularly as some fields were ploughed four to six times. The other work around the farms involved the running of the feedlot particularly the mixing of the feed as well as general cattle work such as branding, mustering and weaning. There was also a dairy farm run by the family.
  1. It is generally agreed that during the period of sixteen years from 1984 to 2000 the plaintiff had two significant absences. The parties agree that the first period was an absence of approximately 11 months and whilst there is no agreement as to dates, it would appear to have occurred from early 1992 to early 1993 and I accept that this was as a result of a disagreement between the plaintiff and the first defendant. The plaintiff then returned to the farms in early 1993 and there was a promise to pay him wages of $400 per week and whilst some money was initially paid, this only lasted for a short time. In October 1993 by a resolution of the third defendant the plaintiff was issued with 19 per cent of the shares in the third defendant. The share allocation was never registered with ASIC.
  1. After his return to the farms in 1993 the plaintiff worked the farms until June 1997 when the plaintiff again left the farms due to a disagreement with his father. For approximately 14 months he drove trucks and went harvesting. In September 1998 when his uncle broke his arm, he returned to the farms and I accept that this was as a result of a request from the first defendant.[2]  For a while he was promised and received wages. 
  1. From the evidence given by the family’s solicitor Mr Edgar it is clear that in early 2000 there was a discussion between the first and second defendants and the plaintiff about succession and estate planning issues. The proposal involved the plaintiff taking over management of the properties and he would receive $1,000 per month salary and the first and second defendants would receive $500 each. The first and second defendants also gave instructions to Mr Edgar to incorporate into their wills a provision whereby control of the third defendant would go to the plaintiff and he would receive the benefit of Taitlands and Tanyannah; his sister would receive Nardoo; and the Shillingford property would be left to Don Geall for his lifetime and then divided equally between the plaintiff and his sister. Wills in these terms were never executed.
  1. In June 2000 the relationships between all the parties broke down again and the plaintiff left the properties.
  1. The properties were subsequently sold between February 2002 and July 2003. The original purchase price and the sale price of the properties are as follows:

 

  1. Nardoo purchased on 28 September 1965 for £12,000 and sold on 21 July 2003 for $352,000;
  1. Taitlands was purchased on 30 October 1979 for $82,000 and sold on 21 July 2003 for $621,500;
  1. Tanyannah was purchased on 4 June 1990 for $290,000 and sold on 16 July 2003 for $732,000;
  1. Shillingford was purchased on 3 September 1993 for $336,006 and sold on 19 February 2002 for $351,000.

The Plaintiff’s Claim

  1. The plaintiff’s case is essentially that he was urged to undertake study at the Dalby Agricultural College by his parents and that his parents represented to him that if he worked on the family farms then he would have an interest in them. The plaintiff alleges that by working on the farms he lost the opportunity to establish himself in another career or to financially secure his position in life and did not acquire real property on his own account. The plaintiff alleges that he only had a period of two years and five months away from the property over the 16 years and that during this time he built up the properties and applied his own savings in acquiring plant and equipment for use on the farms.
  1. The plaintiff claims that it is unconscionable of the defendants to seek to rely on their legal rights after the breakdown of the family relationship in circumstances where the plaintiff committed himself to the working, development and expansion of the family farms in the expectation of receiving an interest in the farms one day. The plaintiff alleges that he worked and applied his resources in reliance upon an expectation which was known to the defendants and/or utilised by them to their advantage and that they have therefore come under an equitable obligation to him by way of a constructive trust. The plaintiff submits that the constructive trust arose when the expectations could not be met due to the breakdown in the relationship between the parties and where there was no agreement as to what should occur in the circumstances of such a breakdown.
  1. Whilst the plaintiff in the Statement of Claim sought relief in the form of declarations that the defendants hold the various farming properties on trust for the plaintiff and orders that the defendants transfer the legal interest held by them to the plaintiff these forms of relief have not been available since 2003 when the properties were sold. The plaintiff consequently seeks an order that he recover from the defendants equitable compensation or equitable damages and an order that $384,902, which is the amount currently held on trust from the proceeds of the sale of Shillingford, together with interest earned, be paid to the plaintiff.
  1. In addition to or in the alternative, common law relief is also sought in the form of a payment of $16,000 plus interest, and an order that the defendants pay the plaintiff an amount of $30,000 per annum from 1 January 1985 to June 2000 by way of a “quantum meruit” for services provided by the plaintiff to the first and second defendants and interest on these sums. An order is also sought that the first and second defendants pay to the plaintiff the sum equal to the value of 19 per cent of the issued shares of the third defendant or alternatively that the defendants issue and transfer 19 per cent of the shares.
  1. The defendants state there were in fact no representations of the sort claimed by the plaintiff and that in any event the plaintiff received sufficient recompense for the use of his resources over the years. Expert reports were commissioned to deal with the issue of how much the plaintiff actually received from the defendants during the 16 years. The experts in their joint report were able to reconcile the amounts received to within $1 and the maximum amount the plaintiff received over the period of 16 years is $61,813.[3]  
  1. The plaintiff’s claim for equitable relief relies on the creation of a constructive trust. The first issue that needs to be determined is in what circumstances a constructive trust arises.

What is a Constructive Trust?

  1. The nature of a constructive trust has been described by Ford and Lee in their comprehensive work on Trusts as follows:

 

“In the second half of the twentieth century courts dealing with property disputes not governed by contract, express trust or legislation as to respective rights, have felt the need to look beyond the law of resulting trusts to resolve those disputes.  Principles have developed under which a court having equitable jurisdiction may under some conditions impose a constructive trust for the benefit of another person on a person who holds title to property to prevent unconscionable reliance on title.”[4]

  1. In Muschinski v Dodds[5] Deane J described a constructive trust in these terms:

 

“Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle.”

  1. His Honour went on to say:

“Indeed, in this country at least, the constructive trust has not outgrown its formative stages as an equitable remedy and should still be seen as constituting an in personam remedy attaching to property which may be moulded and adjusted to give effect to the application and interplay of equitable principles in the circumstances of the particular case.”[6]

  1. It is also clear from this decision that a plaintiff seeking a declaration that a constructive trust exists must show that there is some legal or equitable principle operating in their favour which justifies the retention by the legal owner as unconscionable. As Deane J stated:

“Such equitable relief by way of constructive trust will only properly be available if applicable principles of the law of equity require that the person in whom the ownership of property is vested should hold it to the use or for the benefit of another.”[7]

  1. Ford and Lee state that in Australia “the provision of a remedy has depended upon the court being able to discern by analogy, induction, or deduction some appropriate existing legal or equitable principle capable of rationalising extension of a remedy to the new category of unconscionable reliance”.[8]  Two of the main categories include “an owner of a property compelled to honour an informal common intention with another person as to that other persons beneficial interest in the property held following other person’s suffering detriment on the faith of the common intention” and situations where “one party to a failed joint endeavour retaining property against another party where blame is not attributable for the failure of the joint endeavour and retention would be unconscionable”.[9]
  1. The authors state that a distinct advantage of a constructive trust is that a plaintiff can avoid the perceived inadequacies in the law of resulting trust and advancement because a court can give credit for non financial contributions and indirect contributions bearing on the relevant property.
  1. These two main categories in relation to constructive trust are referred to as the “common intention” principle cases which, Lord Oliver of Aylmerton in the English case of Austin v Keele,[10] stated was really a manifestation of proprietary estoppel and secondly, the category of cases which follow the Baumgartner principle. 
  1. The Baumgartner principle was set out in by the High Court in Baumgartner v Baumgartner[11] and is summarised as a category where:

 

“a relationship formed by parties has collapsed and property referrable to the relationship has been acquired in the name of one of them without any expression formal or informal of dispositive intention.  If it can be seen that the non title-holder contributed to the acquisition, improvement or maintenance of the property the court has an equitable jurisdiction to apportion the property between the parties.”[12]

  1. Ford and Lee make it clear there are limits to a constructive trust based on the Baumgartner principle as follows:

 

“The equitable jurisdiction to take into account indirect contributions in relationships not covered by statute in making an apportionment of property appears to have the following limits:

 

-there must be a dispute between parties to a relationship in the nature of a joint endeavour; for example, a commercial relationship by way of partnership or joint venture or a non-commercial relationship such as a domestic relationship;

-the dispute must be about property acquired or used for the purposes of the relationship;

-the relationship must have failed in the sense that its sub-stratum has disappeared and the relationship has collapsed;

-a party holding title to relationship property denies that the other party has any interest in or rights over the property;

-the party claiming an interest or rights must have made direct contributions in money, kind or labour towards the acquisition, improvement or maintenance of the property or indirect contributions in the relationship which saved expenditure which might otherwise have held back the acquisition, improvement or maintenance of the property; and

-the failure of the relationship must not be due to wrong-doing on the part of the party claiming the interest or rights.”

  1. A recent analysis of the nature of a constructive trust by legal academic John Dewar was in these terms:

 

“The flexibility of the imputed trust, its capacity to adapt itself to the contours of each relationship, has been made possible by the conceptual break from common intention.  It permits the outcome of a case to be informed by the nature of the parties relationship as evidenced by their own intentions, the reasonable expectations attaching to relationships of a particular type and the flow of gains and losses during it.  This avoids the potential unfairness, implicit in the older Australian case law and still present in the English, that recovery depends solely on what the parties agreed or intended: parties may agree to unfair outcomes.  The potential for unfairness remains, of course.  The circumstances in which a joint endeavour will be found to exist, or in which a claimant will be deemed to have gained as much as he or she have put in, are still matters of some uncertainty.”[13]

  1. Having determined the advantages and the essential elements of a constructive trust the question is whether those circumstances are present in the current case.
  1. The decision in this case turns on a number of important factual issues. In particular it can be seen that there should be an examination to determine if this is a common intention case or whether it is more appropriately described as a case involving a failed common endeavour. The first issue which needs to be determined is what is the true nature of the relationship between the parties given there is a family relationship between the main protagonists.

What was the nature of the relationship between the parties?

  1. What then was the basis of the relationship between the parties? The first and second defendants are clearly a hard working couple who started on one farm and then worked over a considerable period to build up their farming assets. They were ambitious to improve their position[14] and all the family worked together to do this.  As Mrs Pain stated in evidence “We just all worked as a family unit, and said that there wouldn’t be any wages because finance didn’t permit that”.[15]  It was clear from the evidence that Mrs Pain kept the books and managed the money and Mr Pain did the hard physical work.  He was described by neighbour Robert Storey who had known the family for a long time as “pretty quiet, didn’t talk sort of much at all”.[16] 
  1. The plaintiff lived on Nardoo with his parents until Taitlands was purchased in 1979, at which time the family moved in to that property. From 1975 the family had a period of two and a half years time away from the property when Mr Pain had a nervous breakdown and was under the care of psychiatrist Dr Neville Parker. The family moved to Hervey Bay to assist in his recovery and whilst Mrs Pain and her brother ran a music shop, Mr Pain did not work during this period.
  1. The plaintiff states that the whole nature of the relationship between the parties was based on a representation which was made to him and which he relied upon. This representation is set out in the Statement of Claim as follows:

 

“Approximately in the third or fourth week of the course at the Dalby Agricultural College in 1983 the plaintiff indicated to the first and second defendants that he was contemplating ceasing his study to return home.  The first and/or second defendant at or about that time urged the plaintiff to continue with his studies and said to the plaintiff words to the effect ‘try and stick it out as the farms will be yours one day’.”[17]

  1. The defendants submit that any statement made was not actually a representation but simply encouragement from a mother to her son during a difficult time. In her evidence the second defendant eventually confirmed that she had this conversation with her son during a drive back to the property and that she had subsequently discussed this with her husband. There is a dispute between the parties however as to what was actually said.
  1. After hearing the oral evidence given by the plaintiff and the first and second defendants at the hearing I accept the plaintiff’s version of events. The evidence given by the first and second defendants was totally unsatisfactory. Firstly they were both reluctant to answer questions directly particularly in relation to the issue of the representation and the answers they eventually did give were vague and elusive. They both downplayed any statements they had in fact made to the plaintiff and would not concede any matter which they perceived to be of any advantage to the plaintiff. At one point in the evidence at the hearing the first defendant had to admit that an answer he had given was a complete fabrication and untrue.[18]
  1. During her evidence the second defendant was elusive in her responses and clearly tried to minimise what she had said. Ultimately she had to accept that there had been a conversation as relied on by the plaintiff but then tried to say that what she really would have said was along the lines he ‘may’ end up with ‘a’ farm rather than ‘would’ get ‘the’ farm. When Mrs Pain finally accepted under cross examination that there had been a conversation she then stated that there was of course a proviso to whatever she had said along the following lines: “As I said previously, in the conversation of 20 years ago, nothing was said about payment. Malcolm knew true well that whatever you wanted in life you had had to pay for. We had to purchase all our properties and he knew that”.[19]   
  1. The first defendant also states that it didn’t matter to him if the plaintiff stayed on the farm or not. The following interchange with the first defendant is however illustrative of the fact that the defendants actually needed the services of the plaintiff:

“But in 1984, you were keen to do better, to improve the properties, make more money?----Yeah, why not.

You couldn’t afford to pay wages to people that help you with the work on the property?----No, I suppose we couldn’t.”[20]

  1. I am satisfied that the first and second defendants encouraged the plaintiff to go to agricultural college and indeed to stay there. I am also satisfied that there was a representation made in the terms alleged by the plaintiff which was that he should stay at college because one day the farms would be his. I found the plaintiff to be truthful and careful in his evidence and he clearly had a good memory of the conversation and had in fact taken it to heart. It has clearly been his motivator for a significant period of time. I do not accept the second defendant’s contention that the statement was nothing more than encouragement from a mother to her son.
  1. The second defendant also made a statement to the effect that the plaintiff should have known that any statement she made was qualified by the fact he should have known that you had to earn what you got in life. This statement is significant. It substantiates the fact that the second defendant did actually make the representation alleged. Her evidence really comes down to saying ‘well I made the statement but he should have known better’. Furthermore, the statement is very illustrative of the nature of the evidence the second defendant gave. This statement is actually untrue. It implies that the first and second defendants worked for everything they had and that no one had helped them towards the purchase of their properties. This is factually incorrect as the first and second defendants had been assisted substantially by Mr Pain’s father in relation to the purchase of Taitlands whereby they were given an interest free loan for a little under a third of the purchase price for ten years.[21]  They were also assisted by the second defendant’s brother Don Geall in relation to the purchase of property.  Mr Geall stated in evidence that he gave his sister $67,000 in 1973 and that he subsequently put $170,000 into the purchase of Shillingford when it was purchased in 1993.[22]    
  1. In preferring the plaintiff’s version of events I also find that the objective external events provide considerable substantiation of his version. The first defendant had a breakdown in the mid seventies in trying to manage just one farming property, Nardoo, and when they returned to the farm after a two year break the family took over another property, Taitlands. It would have been important to the family to have some assistance around the farms for the first defendant given their reluctance to employ outside labour and their admission that they could not afford to do so.
  1. There was clearly considerable advantage to the family in retaining the plaintiff’s labour around the properties as the evidence shows that they did not employ outside labour. The family did it or no one did it. When it was directly put to Mrs Pain that both she and her husband were “pretty keen to have Malcolm stay and help with the hard work” she replied “yes”.[23]
  1. Importantly the evidence of the plaintiff was that every time he left the property the family struggled to manage and in particular I accept his evidence that during his absences “there was things being neglected on the farm” and “things not being kept up”.[24]  He also gave evidence that on his return to the properties in 1993, work was needed to restore the feedlot in particular and that other work was neglected while he was away.  I accept the plaintiff’s evidence that in 1998 the first defendant rang the plaintiff and said “…there’s a lot of work to do and – couldn’t handle it any more”.  The evidence of Don Geall in particular supports this as he stated in his evidence that if the plaintiff had not returned in 1998 when he broke his arm, they would have had difficulty managing.  The plaintiff also gave evidence that on his return in 1998 the feedlot had been closed down.[25]  This substantiates the plaintiff’s claim that during his absences the family’s farming operation was under strain.  
  1. When the plaintiff finally left the properties his sister moved out to Tanyannah to assist and stayed there until the farming operations subsequently started to wind up.[26]  Shillingford was sold within 18 months and all the properties were sold within three years. 
  1. In addition, the evidence which all parties agree on is that the plaintiff did actually return to work on the farms after college. The first defendant’s own evidence was that the plaintiff left the agricultural college with a lot of skills and he could have got a job in a variety of industries. Instead of seeking work elsewhere, the plaintiff returned to the farms and he agreed to an arrangement whereby he would not be paid wages. I am satisfied that it would be more likely than not that such an arrangement would only have been entered into by the plaintiff if there was a representation made that he would gain some benefit in doing so. The benefit was that he would get the farms one day.
  1. It was submitted by the defendants that for such a representation to be relied upon it needs to be clear and unambiguous and this statement was not clear as there was no certainty as to how long he would have to work the farms or what he would receive in return. It was submitted that such a discussion would not have contemplated a gift of all of the farms at some indeterminate time in the future in return for completion of studies particularly when only two farms were owned when the discussion was held. It was further stated that even if there was such a representation upon which the plaintiff could have relied it ceased by 1990, when Tanyannah was purchased. The defendants submit that he must have known that if there was any such representation it was no longer in force.
  1. As I have indicated I accept that the evidence shows that a representation was made to the plaintiff that one day the farms would be his. This was a representation made when the defendants owned only two farms namely, Nardoo and Taitlands. Clearly there was no detailed discussion between the parties and there was no detail about how other parties’ interests would be accommodated namely the defendants, his sister and his uncle. I am satisfied however that there was a general representation that he would end up with the farms. There was however no detail as to how this would be achieved or how all the other relevant parties’ interests would be accommodated. Implicit in the representation was an understanding that there would have to be some sort of accounting for everyone’s interests. Indeed in evidence the plaintiff indicated that he had saved $100,000 so he could set his parents up somewhere when he took over the farms.[27]   
  1. Furthermore the future conduct of all parties is in accord with this representation. I do not accept that this general representation died or was superseded. All of the subsequent conduct of the defendants in fact reinforces the plaintiff’s belief that he was going to eventually end up with the farms and that the defendants knew or must have known that he was operating on the basis of this representation. When it was suggested in 1990 that at the age of 22 he should purchase Tanyannah in his own name, the plaintiff stated he wanted it to be run as part of the family enterprise.
  1. Whilst there was a potential therefore for the original representation to be superseded by a new arrangement whereby the plaintiff set up his own operation, there was in fact no rearrangement. The purchase by Taitlands Pty Ltd of the property was in fact a restatement that the properties would be owned by the defendants and the enterprise would be run as a whole by the family with all of them supplying their labour. There was now more work for the family to pursue and clearly all of the farms were essentially conducted as one operation. Grain planted and harvested on one property was used to feed cattle in pens on a different part of the property. It was one complete operation with the dairy farm added later as an additional component. It was clear from Mrs Pain’s evidence that the farms were run by the family as a family unit and that there would be no wages as finances didn’t permit it. There was clearly a common endeavour between the defendants and the plaintiff. When the first defendant was asked directly in evidence whether the plaintiff “was working with you and your wife and Don in a family enterprise?” He replied “Yes”.
  1. There is also objective evidence that the plaintiff was working the farms without adequate recompense. Firstly when the plaintiff returned to the property in 1993 there was an acknowledgement by the first defendant that things would be better than when the plaintiff left in 1992 and that he should be paid something and an amount of $400 was offered by the defendants.[28]  It was at this time that he was told he had a 19 per cent interest in the third defendant.  This was clearly an incentive to keep the plaintiff on the farm as his services were needed.  When he returned in 1998 he was initially offered $2,000 a month out of the milk cheque[29] with discussion that he would be paid $1,000 per month in the future.   On both occasions after a short period the wages were not paid but the plaintiff continued to stay on the properties and work the farms.  The experts’ reports[30] on economic loss show that in relation to amounts received from the defendants in lieu of wages, the years 1994-5 and 1998-9 were the only years where the plaintiff’s income was in the vicinity of $12,000.  In the other years the plaintiff’s income ranged from $400 up to $9,000 and was often in the vicinity of between one thousand and four thousand dollars.
  1. This evidence endorses the fact that he was clearly not on the properties to earn wages but as part of a common endeavour with greater rewards coming to him in the future. He clearly only stayed in reliance on the original representation as there were no other rewards keeping him there.
  1. The defendants and the plaintiff clearly do not communicate well and there was also a troubled relationship between the plaintiff and his father. Whilst nothing was said with precision, I am satisfied the evidence establishes that the plaintiff acted on the representation initially and he returned in reliance of the revival of the representation which was that if he returned to the farms, he would get his reward in the future. Whilst some monetary amounts were offered to him they were not amounts that were reflective of appropriate wages and they were in fact discontinued on both occasions even though the plaintiff continued to work the farms. The defendants clearly had to know he was returning to work the farms with them in reliance on the representation of reward in the future. Indeed they relied on him doing so. This kept the original general representation alive.
  1. The plaintiff on numerous occasions tried to get the first and second defendants to articulate the details of what he was in fact to receive in the future. This is evidenced by the promise to sort things out in 1993 when he returned but nothing was done. In 1998 there was a further promise that something would be sorted out but nothing was done. When the plaintiff finally left in 2000 it was because it was clear that despite discussions with the solicitor about him taking over management nothing in fact was going to change.
  1. In addition the representation by the first and second defendants to the plaintiff that he would be given a 19 per cent interest in the third defendant is also substantiation that the representation was made and that the farms were run as a common endeavour. The statement by the second defendant to the plaintiff in 1995 that they would gift him Tanyannah - to which the plaintiff replied “is that all I get” - is further substantiation of the initial representation and its continued operation and the working of the farms together as a common enterprise. In fact the evidence is clearly that the farms were all operated together as a family business, everyone put in plant and labour and brands were pooled. When Don Geall contributed $67,000 and then $170,000 later on towards the purchase of Shillingford the property was registered in the name of the third defendant. The evidence also clearly shows that machinery and equipment was shared between all of the family irrespective of who bought it.
  1. I am satisfied that there was an original representation that in the future the plaintiff would have an interest in the properties and that this representation did not cease to operate. I am also satisfied that the plaintiff joined in the enterprise in reliance on the representation and that all the properties were run as part of a joint enterprise.

Did the Plaintiff make direct contributions towards the acquisition, improvement or maintenance of the property?

  1. The evidence is clear that the plaintiff did work on the farms and as I have indicated I accept that this was done in reliance on the representation that he would ultimately end up with the farms. It was implicit in this representation that there was an expectation on the part of the first and second defendants that he would therefore work the farms and indeed he did so. The plaintiff initially worked on the farms substantially without wages from 1984 until 1992 which is a period in excess of seven years. On his return in 1993 he worked on the farm until 1997 and then returned in September 1998 until June 2000. The calculations show that he worked the properties for over 13 years and that this was substantially without payment. It is agreed that he received no more than $61,813 during this period and did not receive the wages he would have been entitled to if he had been actually employed by the defendants.[31] 
  1. The next question is what should the plaintiff have earned during the period? It is difficult to reduce this figure to a simple mathematical calculation as there is dispute between the parties as to the hours the plaintiff worked during the period. The defendants in their evidence tried to diminish the contribution made by the plaintiff. They alleged that because he mainly worked on machines his contribution was somehow less than the contribution they had made which was based more on physical labour. The first defendant conceded however that this was what the plaintiff had been taught and indeed this was where his strengths lay. It would also appear that the plaintiff did all of the servicing of the machines used on the property. I do not accept that the plaintiff’s contribution was a lesser contribution because he worked more predominantly with machinery.
  1. The plaintiff states that he worked about 60 hours a week and never took annual leave but did not work on public holidays. The defendants state that he worked nothing like 60 hours a week and initially instructed that the hours varied from 15 to 20 hours per week. This was later changed to 20 to 30 hours per week. In evidence at the hearing the first defendant conceded that in their instructions to the accountants in relation to calculating the work done by the plaintiff his estimate had underestimated the time the plaintiff had expended. The first defendant conceded that their estimate did not in fact cover all of the activities the plaintiff had been involved in particularly work on the dairy farm, the work on the feedlot and travelling between properties or on farm business. When the first defendant was specifically asked “…when you’ve been giving instructions to your experts to try to quantify how much Malcolm might be entitled to, you have endeavoured to minimise the amount of time that Malcolm spent on the properties haven’t you?”. The first defendant then replied “It appears so”.[32] 
  1. In this regard once again I prefer the evidence of the plaintiff as the first and second defendants also gave unsatisfactory evidence in this regard at the hearing. Both defendants also totally minimised the plaintiff’s contribution to the feedlot when the objective evidence is that he did all of the paperwork required to get the feedlot accredited as well as designing and constructing the mixer. The first defendant would not even say his son was a good farmer until he was forced to agree.[33]   The evidence of the plaintiff’s sister endorsed the long hours when she indicated that “sometimes he would get up there at 7, 8 o’clock in the morning and yeah, would go home sort of around dark”.[34]  I accept the figure of an average of 60 hours per week worked by the plaintiff.  This is on the basis that the farms were a seven day a week operation and there was a feedlot involved for a substantial part of the year as well as grazing, dairying and grain production spread over four properties. 
  1. Apart from the question of the hours worked on the property the task of trying to assess the true nature of the plaintiff’s contribution to the whole enterprise is a difficult one for a number of reasons. Significantly the second defendant kept the books for the whole enterprise and there are a number of accounting entries which the plaintiff states he did not benefit from despite what the book entries showed. Furthermore at times the plaintiff would receive payments from the defendants but not consistently. There were also times when the plaintiff earned income from activities that he undertook which were unrelated to the defendants. It is clear that at times when he was living on the farm he would do work in the local area as a bailing contractor or do other harvesting work for other farmers. There is also some evidence that the plaintiff would undertake grazing and farming activities independently from the defendants and he would grow crops and sell cattle and benefit from the proceeds. In this regard the defendants point to figures in their reply which set out the number and sale price of cattle which were sold but which the plaintiff disputes.
  1. The full extent of the dispute as to the correct calculation of the plaintiff’s economic loss is set out in the Joint Statements of the Forensic Accountants[35]and it refers to these elements.  In this report the accountant retained for the plaintiff gives a figure of $347,125 as the figure for the plaintiff’s notional wages at a labourer’s rate during the period based on a 60 hour week.  Importantly this figure takes into account the periods the plaintiff was away from the property for both the lengthy periods previously referred to and also takes into account time the plaintiff spent working on his own enterprises.  The report from the accountant retained on the first and second defendants’ behalf however only gives a figure of $113,729 for the notional wages.  In preferring the evidence of the plaintiff in this regard I am satisfied that those calculations are made on a more realistic basis.  I note in this regard that the calculations are based on payment as a station hand rather than as a manager.  Payment at the higher rate of a manger would in fact be a more realistic basis given the nature of the activities the plaintiff was carrying out and the qualifications he received at the agricultural college.          
  1. I also accept that when the plaintiff left college he had acquired a range of skills which would have made him highly employable in a number of industries. The first defendant also conceded this in evidence. When asked about the plaintiffs skills as a farmer he stated:

 

“That’s why we sent him to ag college so they could get skilled, and they skilled them boys any way possible.  They could have went in any industry in Australia.  They were very well educated.” and later “There was heaps and heaps of other industries that he could have fitted into beautifully.”[36]

This is a clear acknowledgement of the skills the plaintiff received at college and the fact that he was eminently employable in other industries.  There was also evidence that on the occasions that the plaintiff did work off the farms he received more than the defendants were paying him.  When he agreed to come back to the farm in 1998 on the basis he would receive $2,000 from the milk cheque he had earned $13,400 in the previous three months.[37]

  1. The plaintiff did not however take up employment opportunities elsewhere but gave the defendants the benefit of the skills he had acquired. In particular the evidence at the hearing indicated that the plaintiff was mainly responsible for the servicing of all the machinery on the property. Indeed the plaintiff indicated at the hearing that one of the other occupations he would have pursued was as a diesel mechanic.[38]  The defendants had the benefits over a long period of time of his undoubted skills in this regard.
  1. I am satisfied that without the plaintiff’s contribution the enterprise would not have succeeded to the extent that it did. Firstly it was his knowledge and experience that improved the farming practices particularly in relation to the feed lot. It was common ground that a small feedlot had existed on Taitlands but that this was then developed by the plaintiff using his knowledge and skills he acquired at the agricultural college. The plaintiff explained the extensive paperwork that was required to get the feed lot accredited and I am satisfied that this would not have been done by the first and second defendants themselves given the technicalities involved in the accreditation process.
  1. Furthermore, it was also conceded that the first defendant had a 40 year history of nervous problems including breakdowns and anxiety attacks as well as a bad heart. I do not accept that the farming enterprises would have flourished to the extent that they did without the contribution of the plaintiff. Two farms were hard work but four farms was an even greater undertaking and could not have been achieved without the contribution of the plaintiff.
  1. The plaintiff was much more than a station hand and advanced the interests of the defendants to a considerable extent. In particular the Schedule of Receipts and Payments[39] shows that there was an increase in the fortunes of the defendants after the feedlot was instituted.  The defendants were able to buy new machinery, pay off debts, improve properties, increase cattle numbers and acquire further property.  They were also able to pay off the indebtedness on Taitlands.  The second defendant in her evidence specifically agreed that all of this had been able to be achieved.[40]  
  1. When the plaintiff went to college in 1983 the farming enterprise was in debt, operating with older machinery and unable to afford to pay wages. It had taken the defendants twelve years to pay off Nardoo by six monthly instalments to the second defendant’s uncle. It had cost £24,000 in September 1965. They had acquired Taitlands in September 1979 for $82,000 without putting in any equity.[41]  They financed $55,000 from the bank with $27,000 required to be paid back after ten years interest free.  At the time the plaintiff commenced to work on the farms after college the defendants and their company Taitlands Pty Ltd owned between them Taitlands, Nardoo and a property at Point Vernon, which six years later was sold for about $100,000 as well as some cattle.
  1. Nineteen years later when the properties were sold they received $2,056,500 for the four properties. They also had plant and equipment and cattle which according to their balance sheets as at 30 June 2002 had a combined value of a little over $120,000. In getting to that result they had borrowed $170,000 from Don Geall when Shillingford was acquired and the accounts also reflected a liability as at 30 June 2002 for cattle and trade creditors of $243,804. Otherwise the liabilities consisted of a loan from the first and second defendants. It is clear that the first and second defendants’ net asset position had increased very considerably. Although the two farms alone were quite hard work once the two farms became four the work was even harder.
  1. When the plaintiff left the properties it is clear he left with little by way of comparison. He had the Toyota Utility he had purchased in 1993, he received some plant and equipment which he later sold for $9,900 and he had saved $100,000 over the previous sixteen years from the proceeds of cattle sales, grain sales and from his outside work.

Has there been Unconscionable Conduct on the Part of the Defendants?

  1. Has one party benefited to the extent that it would be unfair for that situation to remain? Clearly the defendants have benefited to a greater extent than the plaintiff. The properties have been sold and the first and second defendants have retired with the bulk of the proceeds of sale. Whilst the proceeds of Shillingford have been held in trust the proceeds of the sales of the other properties have been applied by the defendants in various ways. This includes the acquisition by them in 2003 of a property of 20 acres at Cooroy for $590,000 which has now appreciated in value. The Minutes of a Meeting[42] of Taitlands Pty Ltd as Trustee for the WD and DM Pain Family Trust dated 21 October 2005 sets out the accounts for the Trust for the year ending 30 June 2004 and indicates that there was a resolution adopting the accounts “showing a Net Profit of $122168 and a gross Capital Gain of $921234”.  It was further resolved that that there be a distribution of “$521701 to the first defendant and $521701 to the second defendant”.
  1. The plaintiff experienced unemployment after leaving the farms and has not had the use of any of the funds to purchase property. Has there been unconscionable conduct on the part of the defendants? Clearly the refusal by the defendants to in any way recompense the plaintiff for his contribution to the joint enterprise is unconscionable. As Atkinson J stated in Swettenham v Wild

 

“In determining what constitutes unconscionability, one is not left “at large to indulge random notions of what is fair and just as a matter of abstract morality”.  In this case, as in Muschinski v Dodds, the conduct which has an unconscionable character is the respondent’s conduct in seeking to assert and retain the benefit of a legal interest in the property without making any allowance for the fact that the appellant contributed a disproportionate amount of the cost of its purchase, where, as here, no arrangement had been made between the parties as to what should happen in the unforeseen circumstances of the collapse of the relationship.  There is a need to call in aid the principle of equity applicable to preclude the unconscionable assertion of legal rights in this class of case, just as in Muschinski v Dodds it was held that “equity requires that the rights and obligations of the parties be adjusted to compensate for the disproportion between their contributions to the purchase and improvement of the … property.”[43]

  1. There is however other conduct which has been particularly reprehensible on the part of the defendants and that is they held out to the plaintiff in 1993 that he had been given a 19 per cent interest in the third defendant and that this was a valuable asset when this was not the case. It has to be concluded that they deliberately misled the plaintiff. The circumstances were that on 16 October 1993 there was a Directors Meeting at the property which is evidenced by handwritten Minutes.[44]  The Minutes record that the parties in attendance were the plaintiff, the first and second defendants, Don Geall and the family accountant, Mr McCorley.  The minutes record that the following allotment of shares occurred:  WD Pain-51 shares, DM Pain-51 shares, MD Pain-38 shares, DG Geall-38 shares, VN Jukes- 20.  In his evidence to the court Mr McCorley advised that despite the changes to the shareholding and the appointment of the plaintiff as a director, the changes were never registered at ASIC because he received instructions from the first defendant countermanding what had been advised at the meeting of the company. 
  1. The defendants agreed that the registration had been countermanded because they had concern that the plaintiff could lose part of his entitlement to a female partner that he was living with at the time. It is clear from the evidence that by December 1993 the defendants were proceeding on the basis that no change in the shareholding had occurred. However, the plaintiff worked on the family farms for four years from October 1993 to 1997 on the basis of the impression given by the defendants at the family meeting that he had a valuable asset. The defendants knew this was not true. When the second defendant was asked why she did not inform the plaintiff about the countermand as to the shares, she responded “he never asked”.[45]  In his evidence the first defendant, whilst at first indicating he could not find the plaintiff to tell him he ultimately accepted that the plaintiff was on the farms at the relevant time and that what he had done was designed to “keep him interested in the operations” and was so that he “would have a real stake in what was going to happen in the future”.[46]  The first defendant admitted that what he had done was in fact quite dishonourable. [47]

Is there a Constructive Trust?

  1. In coming to a determination in this matter I am satisfied that the evidence supports the following specific findings of fact:

 

  1. There has been a joint endeavour between the first, second and third defendants and the plaintiff whereby they undertook farming operations in respect of farming properties owned by the first, second and third defendants.  The joint endeavour occurred as a result of representations made to the plaintiff that he would end up with the farms one day.  
  1. The properties were worked as substantially one operation whereby grain was grown on parts of the property and cattle were grazed and fattened for sale in the family’s feedlot.
  1. The plaintiff worked the farms during the period 1984 to 2000, with a period of two and a half years in total away from the farms, substantially without wages.  
  1. The plaintiff acquired skills at the Dalby Agricultural College, returned to the farm equipped with those skills and the defendants had the benefit of those skills.
  1. The plaintiff could have earned a wage significantly more than the amount of money which he received from the defendants during this time.
  1. The defendants led the plaintiff to believe that he owned 19% of the shares in the third defendant and was a director of the company.  The registration of this information with ASIC was countermanded by the first defendant but not advised to the plaintiff.
  1. The first, second and third defendants built up a substantial property holding as a consequence of the efforts of the plaintiff. 
  1. The plaintiff has not been compensated for his contributions to the joint endeavour and all of the benefits have been enjoyed by the defendants.
  1. In terms then of the requirements needed to satisfy the criteria set out in the Baumgartner principle I am satisfied that there is a dispute between the parties in relation to a joint endeavour. The dispute is about property used for the purposes of the joint endeavour. The relationship has failed and the whole substratum of the relationship has failed as the properties were sold in 2002 and 2003 and a farming enterprise is no longer conducted by the family on those properties. The first, second and third defendants deny that the plaintiff has any interest in or rights over the property. I am further satisfied that the plaintiff has made direct contributions to the joint endeavour of his labour, skills and knowledge. I am satisfied that the failure of the relationship is not due to the wrongdoing of the plaintiff but would seem to be a result of the first and second defendants continued failure to formalise the joint endeavour.
  1. I am also satisfied that the parties have not determined how their respective rights are to be determined upon the failure of the joint endeavour. In this regard the following quote from Deane J in Muschinski v Dodds is particularly relevant:

“In circumstances where the parties neither foresaw nor attempted to provide for the double contingency of the premature collapse of both their personal relationship and their commercial venture, it is simply not to the point to say that the parties had framed that overall arrangement without attaching any condition or providing any safeguard specifically to meet the occurrence of that double contingency.  As has been seen, the relevant principle operates upon legal entitlement.  It is the assertion by Mr Dodds of his legal entitlement in the unforseen circumstances which arose on the collapse of their relationship and planned venture which lies at the heart of the characterisation of his conduct as unconscionable.  Indeed, it is the very absence of any provision for legal defeasance or other specific and effective legal device to meet the particular circumstances which gives rise to the need to call in aid the principle of equity applicable to preclude the unconscionable assertion of legal rights in the particular class of case.”[48]

  1. I am satisfied that a constructive trust arose in the circumstances of this case on the basis of the principles enunciated in Baumgartner. There should therefore be a declaration that the plaintiff had an interest in the four properties owned by the first, second and third defendants pursuant to a constructive trust. The properties have been sold but the defendants have received the proceeds of sale and their net worth would appear to be $1,500,000 as a result of the sale.
  1. On the basis that a constructive trust has been found to exist on this principle of a joint endeavour I do not consider it necessary to determine whether a constructive trust could also have been found to exist on the basis of a common intention such as would be sufficient to establish promissory estoppel.

What is the Appropriate Relief?

  1. It is also clear from the decision in Roger v Rogers[49] that considerable flexibility may be exercised in granting relief in this type of case and it is a question of having regard to the circumstances of the case to decide in what way the equity can be satisfied.
  1. The plaintiff has made several prayers for relief in his Statement of Claim including a claim for equitable compensation or equitable damages. In the current circumstances, having found a constructive trust but that the property has dissipated the appropriate relief should be in terms of equitable compensation. The time for assessment of such a claim on the basis of Flinn v Flinn[50] is at the date of the hearing. 
  1. It is important however to do equity as between all of the parties. If the instructions as to the wills to be prepared by Mr Edgar are any guide the plaintiff would have ultimately on the death of his parents ended up with Tanyannah and Taitlands and on the death of Don Geall half of Shillingford. That was of course in the future and presumably the plaintiff would have continued to work on all the properties for many years before that occurred. That scenario will never happen now. What then is the plaintiff’s appropriate entitlement on the failure of the relationship? It must be remembered that the first and second defendants had purchased Nardoo in 1965 and Taitlands in 1979 which was prior to the plaintiff returning to the farm on a full time basis. He did however assist in reducing the indebtedness on those properties and improved their profitability.
  1. It must also be remembered that other parties also contributed to the family farming enterprise although not to the extent that the plaintiff did. The plaintiff’s sister Vickie did not live on the farms from 1986 to 2000 except for holiday periods of six weeks to two months per year. The plaintiff’s uncle Don Geall worked on the farms from 1973 until the year 2003 when all the properties were sold. However during this period Mr Geall stated in evidence that for many years he would be absent for the period of October to April or May each year when he travelled south to work on a friend’s property.
  1. There are some figures which give some assistance in trying to determine an appropriate figure particularly the notional economic loss figure and the valuation of the business. On the basis of the report of the plaintiff’s accountant, which I accept as the more accurate report, and leaving to one side the limitation issue, the plaintiff’s actual economic loss together with interest during the period is in the vicinity of $634,657. Importantly this amount factors in figures for the plaintiff’s own farming activities. I also accept that the value of the business was estimated to be $1,069,787 as at 30 June 2000 and that with interest at the Supreme Court rate to 31 July 2006 this would be $1,671,972.
  1. Ultimately however in trying to determine the true nature of the plaintiff’s loss I accept that the plaintiff’s major contribution to the whole farming enterprise related to the ability for the family to acquire and manage Tanyannah. The plaintiff’s parents were essentially managing the first two properties with the help of Don Geall prior to the plaintiff returning from college. After the plaintiff’s return the family had enough money and enough labour to buy and manage an additional property namely Tanyannah. When Tanyannah was purchased the plaintiff lived on it and worked it as well as assisting with the other enterprises. Similarly when Shillingford was purchased Don Geall lived there and was mainly responsible for that.
  1. Ultimately the fact that the plaintiff stayed on the farms meant the family was able to purchase and manage to run Tanyannah in addition to what they were already doing. The fact that Don Geall stayed on the property meant that Shillingford was able to be managed in addition to what they already had. In many ways the manifestation of the plaintiff’s contribution is Tanyannah. It was his major addition to the joint endeavour.
  1. The evidence at the hearing in many ways indicated that in the parties minds Tanyannah was notionally the plaintiff’s and Shillingford was notionally Don Geall’s. Tanyannah had in fact been offered to the plaintiff on two occasions by the defendants. When it came up for sale in 1990 the first and second defendant discussed whether it should be purchased by the plaintiff. Subsequently when the plaintiff was trying to clarify his entitlement over all of the farms the defendants offered to transfer it to him which prompted the response “is that all I get”. The property was purchased in 1990 for $290,000 and later sold in 2003 for $732,000. Rather than buying this property himself the plaintiff wanted this property run as part of the common endeavour. I accept that by acquiring Tanyannah as part of the common endeavour the plaintiff missed the opportunity to purchase the property and pay it off.
  1. I accept the plaintiff’s submission that a starting point for the process of assessment of compensation is this figure of $732,000 together with interest at the prescribed rate since 16 July 2003 which was the date of sale. I consider however given that the defendants worked the properties for 40 years and had the major role in the establishment of the initial two properties and indeed all of the responsibility in relation to the loans and running of the business as well as the fact that there are two other parties, namely Don Geall and the plaintiff’s sister Vicky, who also contributed to the success of the properties that compensation should be limited to this figure. Given the value of the equitable compensation the common law claims do not need to be considered as this compensation figure is a figure which appropriately covers all of the plaintiff’s loss.
  1. A further matter which needs to be considered is the fact that the proceeds of the sale of Shillingford have been held in a Trust Account pending the outcome of these proceedings. An order will need to be made in relation to these funds together with interest on this amount. Given that the parties seem to notionally consider Shillingford to be Don Geall's it should be made quite clear that there is no finding that Don Geall has any indebtedness to the plaintiff.
  1. In all of the circumstances therefore the appropriate orders are:

(1)A Declaration that the first, second and third defendants have held the proceeds of sale of all the properties as to an amount of $732,000 by way of a constructive trust from the time of the sale. 

(2)That the first, second and third defendant’s pay to the plaintiff an amount of $732,000 together with interest from 16 July 2003.

(3)That the amount of $384,092 currently held on trust from the proceeds of the sale of Shillingford, together with interest thereon, should be paid to the plaintiff in partial satisfaction of this award.

  1. I will hear Counsel for the parties as to Costs.

Footnotes

[1] Transcript of Proceedings, p 225, l 22-24.

[2] Transcript of Proceedings, p 86, l 8-9.

[3] Exhibit 4.

[4] Law Book Co, Principles of the Law of Trusts, 3rd ed., vol 2 (at service 39 of September 2006)
¶ 22080.

[5] (1985) 160 CLR 583 at 614.

[6] (1985) 160 CLR 583 at 615.

[7] (1985) 160 CLR 583 at 616.

[8] Law Book Co, Principles of the Law of Trusts, 3rd ed., vol 2 (at service 39 of September 2006)
¶ 22020.

[9] Law Book Co, Principles of the Law of Trusts, 3rd ed., vol 2 (at service 39 of September 2006)
¶ 22020.

[10] (1987) 72 ALR 579 at 587.

[11] (1987) 164 CLR 137.

[12] Law Book Co, Principles of the Law of Trusts, 3rd ed., vol 2 (at service 39 of September 2006)
¶ 22080.

[13] John Dwyer, ‘Imputed Trusts and Family Disputes:  a Tale of Two Jurisdictions’ in Kam Fan Sin (ed), Legal Explorations Essays in Honour of Professor Michael Chesterman Thomson (2003) 81, 97.

[14] Transcript of Proceedings, pp 209 and 226.

[15] Transcript of Proceedings, p 209, l 21.

[16] Transcript of Proceedings, p 192, l 51.

[17] At para 18B.

[18] Transcript of Proceedings, p 320, l 46.

[19] Transcript of Proceedings, p 230.

[20] Transcript of Proceedings, p 332, l 38-42.

[21] Exhibit 40.

[22] Transcript of Proceedings, p 367, l 2-18.

[23] Transcript of Proceedings, p 224, l 45.

[24] Transcript of Proceedings, p 80, l 3-4.

[25] Transcript of Proceedings, p 86, l 1.

[26] Transcript of Proceedings, p 356.

[27] Transcript of Proceedings p 94, l 9-10.

[28] Transcript of Proceedings, p 80, l 1-33.

[29] Transcript of Proceedings, p 87, 129.

[30] Exhibits 3, 4, 35, 36. 

[31] Exhibit 4, Page 1 of Schedule 1.

[32] Transcript of Proceedings p 313, l 54.

[33] Transcript of Proceedings, page 328, line 56

[34] Transcript of Proceedings page 354 line 45

[35] Exhibit 4

[36] Transcript of Proceedings, p 319, l 10-25.

[37] Transcript of Proceedings, p 87, l 43.

[38] Transcript of Proceedings p 105, l 51.

[39] Exhibit 7.

[40] Transcript of Proceedings p 351-352.

[41] Transcript of proceedings p 316.

[42] Exhibit 33.

[43] [2005] QCA 264 at [43].

[44] Exhibit 29.

[45] Transcript of Proceedings, p 258, l 130.

[46] Transcript of Proceedings, p 318, l 54-55.

[47] Transcript of Proceedings, p 321, 50.

[48] (1985) 160 CLR 583.

[49] [2001] VSC 141.

[50] [1999] 3 VR 712.

Close

Editorial Notes

  • Published Case Name:

    Pain v Pain & Ors

  • Shortened Case Name:

    Pain v Pain

  • MNC:

    [2006] QSC 335

  • Court:

    QSC

  • Judge(s):

    Lyons J

  • Date:

    08 Nov 2006

  • White Star Case:

    Yes

Litigation History

No Litigation History

Appeal Status

No Status