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Garlick & Anor v Quick & Ors [2014] VCC 398 (27 June 2014)

Last Updated: 25 July 2014

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

Revised

(Not) Restricted

COMMERCIAL LIST

GENERAL DIVISION

Case No. CI-13-00750

CRAIG GARLICK & ANOR	Plaintiffs

v.

KENNETH QUICK & ORS	Defendants

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	11–14 & 17-20 March 2014
DATE OF JUDGMENT:	27 June 2014
CASE MAY BE CITED AS:	Garlick & Anor v. Quick & Ors
MEDIUM NEUTRAL CITATION:	[2014] VCC 398

REASONS FOR JUDGMENT

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Catchwords: Proprietary estoppel – Promise to “foster” son that he would inherit his foster parents’ interest in a farm and trucking business – Whether reliance and detriment shown – Appropriate relief.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J. Isles	Stephen Peter Byrne

For the Defendants	Mr F. O'Loughlin	Sofra Solicitors

HIS HONOUR:

The Quick family have farmed land near Brim in North West Victoria since the late 19th Century. In 1989, three brothers farmed the property with their mother. Alan and Neil Quick were unmarried. The younger brother, Ken and his wife Robyn, had no children. In late 1989, Ken and Robyn took on the care and upbringing of a 10 year old boy, Craig Garlick.
Craig lived in nearby Warracknabeal with his father, “Joe”. Craig’s mother had died when he was two. Craig had started to “run wild” and his future was problematic. One weekend, Craig joined other children for a church outing to the Quick farm. It was a fortuitous meeting between Craig and Ken and Robyn Quick. Further visits followed and by the end of the year, the Quicks had arranged with Craig’s father for Craig to live with them at the farm.
Ken and Robyn Quick accepted full responsibility for Craig, including providing for his care, his education and encouraging Craig to participate fully in all aspects of their lives including the work of the farm. Their relationship developed and Craig was treated as their “adopted” son. In 2003, Ken and Robyn changed their wills and named Craig as their residuary beneficiary. From his mid-teens in about 1994, Craig became an integral part of the farming activities conducted by the Quick family, which following the death of Mrs Quick senior, and Alan Quick pursuing separate farming operations, has been limited to Ken, Robyn and Neil Quick.
After Craig turned 18 in 1997, this included a trucking business the Quicks established. In 2007, Craig married and he and his wife Alishia had two children in 2008 and 2010. In 2012, an argument between Ken and Craig led to a breakdown of the relationship and to the present litigation.
In the proceeding, Craig seeks an immediate share of the farm property and of the trucking business by the unencumbered transfer of the “MacLeans” property. He also claims the payment of certain superannuation entitlements.
The claims in respect of the farm property and trucking business are made on the basis of a number of representations referred to in the Statement of Claim as:
1. “the Quick Farm representation”;
2. “the Craig’s Trucking representation”;
1. “the MacLeans home block representation”;
1. “the second Craig’s Carting representation”.
The causes of action relied upon by Craig and Alishia are:
1. proprietary estoppel;
2. the failure of a joint venture;
1. unconscionable conduct;
1. unjust enrichment.
The determination of the proceeding involves consideration of:
1. the promises or “undertakings” alleged to constitute the representations;
2. the factual context in which the representations were alleged to have been made, particularly the parties’ conduct before and after each representation, in order to determine;
  1. whether there was reliance upon the representations;
  2. whether Craig and Alishia acted to their detriment on the basis of the representations;
1. in order to determine whether any and what relief is appropriate:
  1. the financial position of the farming operations including the trucking business;
  2. the contributions made by Craig and Alishia and the benefits received by them;
  3. the effect of the grant of relief on the Quick family members.

The alleged representations

The Quick Farm Representation: When Craig was 18 or 19, he had a discussion with Ken “about what was going to go on later on in life. And he just told me if I worked hard, that I’d inherit the farm”. The discussion was prompted by Craig asking about wages, because his friends who worked as labourers or truck drivers were receiving more than him. Craig said, “I was told by Ken that I’d inherit the family farm and the trucking empire if I stayed there. If I wasn’t told that I was going to inherit the family farm I would’ve moved on ... I would have started up a trucking business”.
In cross-examination of Craig, defendants’ counsel Mr O’Loughlin asked, “It was always planned that you would potentially inherit what the Quicks owned when they passed away?”. Craig agreed, although he denied the suggestion that the discussions had been “only over...the last three years” and said it was over a “longer” time.
Robyn Quick, in cross-examination, said that when Craig was 18, it would have been her view that Craig “may have inherited some of it [the farm]”.
During examination-in-chief, Ken Quick was taken to the pleading of the Quick Farm representation in the Statement of Claim. He denied that he had made the representation or had “a discussion along the lines of the [alleged] representation”. In 1997, the persons who would finally inherit the farm would be “whoever was the last Quick to die”. In cross-examination, Ken stated that, until Craig married, there were never any discussions that Craig “wasn’t receiving the income of a truck driver”.
The Craig’s Trucking Representation: When Craig was 18 or 19 and he had returned from contract harvesting in New South Wales, Craig said he had a discussion with Ken. Craig told Ken he “wanted to go driving trucks”. Ken responded that, “It was silly to go and drive for anyone else, or set up a trucking business and that I could operate it and that it had been mine”. Craig said that he understood this as meaning that “if anything happened to him [Ken] that I’d inherit the trucking business”. Craig said that “we went and looked at some trucks and then we bought a truck”. If Ken had not told him he would “inherit the trucking business”, he “probably would’ve went and tried to start up my own business,” or that he “would have ceased employment and went somewhere else”.
Craig said that between the ages of 21 and 32 he had a number of discussions with Ken, sometimes in the presence of Robyn, complaining about his rates of pay. Ken’s response during these discussions would be to say “that I was overpaid as it was and he also used to say that, ‘You know you’re going to inherit this place so you don’t need to have a big fat wage, just work hard, you’ll be right’”.
Craig was asked in cross-examination, “The only representation to you was that ultimately you may become the owner of the trucking business wasn’t it?”. Craig responded, “No, farm as well”. Mr O’Loughlin asked, “The trucking business was to be potentially yours only after it was fully paid for, wasn’t it?” to which Craig replied, “Not 100 per cent sure”.
Mr James McFarlane, a local farmer at Brim, gave evidence that in 2012 Mr Ken Quick phoned him about the fact that, after Craig had left the Quick farm cartage business, Mr McFarlane had transferred his work to Craig’s new business. Mr McFarlane said that Ken had told him Craig “would probably inherit the business anyhow but at that particular stage by doing that it was not – it was too early...That it would be his if he’d – had of played his cards right”.
Robyn Quick, in evidence-in-chief, described Craig’s “move into truck driving” (presumably when, as Ken said, Craig was about 19). “He’d been working on the farm for a while, carting a few sheep into the markets and things, but he wanted to make that more of a full-time profession, and I think – he may have even mentioned to Ken about going and driving for someone else, but Ken said, ‘Oh, no, we’ll just – we’ll just buy you a truck and you can drive that’, so that’s what we did”.
Robyn said “there was no talk about who owned the trucks or anything... but Craig was the one who was interested in trucks so in my mind Craig would have been the one who would own the trucking business, yes ... That was likely to occur when the – when the business was worth having, because when you’ve got lots of debt it’s – there’s not much point handing over something that there’s a lot of debt on, so our intention was that the trucks would be handed over to Craig when that debt was – well, when it was much more serviceable anyway, I suppose”. Robyn said that she did not know when “these intentions” were formed. She agreed that paying off the debts of the business “would have been achieved at some future point of time”.
Robyn said that on one occasion, which she seemed to reference by the fact that a report by ORM (the farm’s financial planners) had been distributed, “Craig said to Ken, ‘Oh, how are the finances going’, or something like that, and Ken said, ‘Oh, don’t worry about it, it’ll all be yours one day anyway’...in my mind the ‘it’ was the trucking business”. Robyn was asked what she understood by the expression “one day”. She said, “Well, in the will all the lands, all the property everything, was left to each Quick, it was to stay in the Quick family until everyone was gone”. Asked to whom it would then go to, Robyn answered, “to Craig”.
During examination-in-chief, Ken Quick was taken to the pleading of the Craig’s Trucking representation in the Statement of Claim. He denied that he had made a representation. When Craig was 19, Ken had a discussion with him “about buying a truck”. However, “there was no discussion about business, the kid wanted to drive a truck, the kid loved trucks, he wanted to drive a truck. There was no mention of business, we bought the truck, there was – the farm had a little bit of work for the truck, the truck had a little bit of work with the local bloke in Brim, but a little bit of work here and there so things just evolved from there”. In 1997, “we’re not dreaming about 10 trucks...This truck was so it didn’t cost the farm any money [or] be a burden to the farm...[T]rucking companies...are high risk setups and Neil and I always have that fear ‘cos we were farmers’”.
In cross-examination, Ken said that he and Neil “made the decision to buy this truck...We bought the truck because the kid had the ability to drive a truck, he loved trucks”. Ken was asked about Robyn’s evidence that Craig “was told that the business would be his at some stage when the debt was paid off”, and whether Ken was present during those conversations. Ken replied, “They think I was but I don’t know, I’m not sure, I’m not sure”. Ken was asked as to his belief “as to the time that it would take for the truck debts to be paid off”. He replied, “We were looking after the setup, it would have happened in the long term”. When asked whether “Craig would have ultimately acquired the trucking business in the long term”, Ken responded, “It’s obvious”. At another point in his evidence, Ken said in relation to the trucking business, “I was hoping one day it’d be theirs, yes” [i.e. Craig and Alishia’s]. Asked when, Ken replied, “Probably when I’m dead”.
The MacLeans home block representation: When Craig was about 20, he was still living in the main farmhouse with Ken and Robyn Quick. Craig’s girlfriend occasionally stayed at the house. There was a degree of unease about this and Craig said that there was a discussion with Ken and Robyn about him moving out of the main house. Craig said that he had a look at a couple of small farms but Ken “reckoned they were too dear”. In a conversation with Ken, Ken had offered for the farm to pay the cost of putting a demountable house on the MacLeans block provided Craig paid for the cost of fitting out the house.
Craig said that in a later conversation Ken had told him that “if one of them deceased that I’d inherit the house and the block of MacLeans”. Craig said that the conversation took place “around the time that the house was put there and fitted out”, but he was not sure whether it occurred before he started to spend money on the fit-out. Craig said that from that conversation, he “was of the understanding that when the house was put there that I would inherit the MacLeans block if anything happened and the house”. Craig said that if the house had not been put on the MacLeans block for him, “I probably would have rented a house in town”.
Later, when Craig and Alishia had children, they had discussed their need for extra space with Ken and Robyn. The Quicks had suggested that they might swap houses, with Craig and Alishia moving to the home block and Ken and Robyn moving into the house at MacLeans. Instead, it was agreed that Craig and Alishia would stay at MacLeans and the farm business paid for further extensions to the house on the MacLeans block. Craig was not specifically cross-examined about the MacLeans home block representation, apart from being asked who had paid the purchase price and installation costs for the house in 2002.
Robyn Quick gave evidence that the house site on MacLeans was chosen as “it was the obvious place because there was already power and water connected to there because there was an old farmhouse on that property that had burnt down earlier”. Robyn said she was not aware of any promises made to Craig associated with acquiring the house. Robyn Quick said that in 2004 Craig had “quite a lot of money [and] if he’d had the motivation he could have gone and bought his own property if he’d wanted to”.
During examination-in-chief, Ken Quick was taken to the pleading of the MacLeans home block representation in the Statement of Claim. He denied that he had made the representation or a similar representation to Craig. He said that in relation to the house, “Craig was keen to get it, we must’ve talked about it, we put the money in to buy it, shift it, and then we didn’t have any more money ... so Craig had to fix it up a bit if he wanted to live in it”. Ken gave evidence that it was “not true” that he led Craig “to believe if he brought it [the house] up to standard the property would be his”.
Neil Quick said that he was not aware of any discussions that “if Craig was to do any improvements to the property [i.e. the house], in other words make it liveable, that one day that would be his”.
The Second Craig’s Carting representation: In 2011, Craig’s Carting Pty Ltd was incorporated. Craig said that, in a discussion that occurred between Craig, Alishia, Ken, Robyn, Neil and the financial planner, Mr O’Callaghan, Ken had said that the company would run the transport business and own the trucks and that Craig “and Alishia are going to be 100 per cent shareholders of the company”. The plaintiffs relied upon this evidence as “the second Craig’s Carting representation”, although plaintiffs’ counsel, Mr Isles, conceded that, by itself, this representation did not entitle the plaintiffs to any relief.
Alishia, in her evidence, said that during the discussions about the formation of Craig’s Carting Pty Ltd, “I recall I signed papers and that I read that we were 100 per cent shareholders but...I can’t really remember more than that...I thought it was so that Craig and I were taking on more responsibility and that...Craig’s Carting was for Craig and myself and...our children”.
Robyn Quick said that Craig’s Carting Pty Ltd was created because “our accountant said that we would probably have a massive tax problem because we’d brought in a lot of money”. She said she did not know where Craig and Alishia “got that idea”, that they would be 100 per cent owners of the company as “we have quite a large debt on...the farm and the trucks and we still wanted to have input into that business”.
During examination-in-chief, Ken Quick was taken to the pleading of the second Craig’s Carting representation in the Statement of Claim. He denied that he had made the representation. He said that “as far as ownership goes...you could call it a business...but I must say, you know, I’m not going to hand that baton over when Neil and I are signing all the things, you know, all the guarantees. This is a long way down the track...There’s too much money at stake...I would have made sure we had a hand in there for a long time to make sure it was continued to run successfully”.
Ken said that the decision to make Craig and Alishia 30 per cent shareholders “was a decision that ORM made and we went along with it”. He said that Craig and Alishia were present whilst ORM explained the structure of the company.

Assessment of witnesses

The issues in the case raised considerable emotion in the principal witnesses. Notwithstanding, the witnesses, and particularly Craig and Alishia Garlick and Ken and Robyn Quick, generally approached the task of giving evidence conscientiously. However, the events in respect of which they gave evidence extended over many years. In these circumstances it was not surprising that there were differences in recollections, particularly of conversations which in many cases were not precisely placed in time. Further, the emotional consequences of having to recall certain events occasionally made the responses of the witnesses appear aggressive, defensive or unresponsive.
In determining the critical issues in the case, I have found it difficult to simply prefer the evidence of any particular witness on all or most issues. I have instead tried to look at the context in which alleged discussions were said to have occurred and as to whether there are generally undisputed facts which are more consistent with the thrust of a particular witness’s evidence. It is apparent that over a period of years, many conversations will occur between family members who are in daily contact. Most of these conversations will be forgotten. On occasions, a particular remark may be given greater significance by one of the participants and perhaps more weight than was intended or was warranted. As Ken said, some “understandings” are not the subject of one specific discussion, but may “evolve” over time.

Proprietary estoppel – legal principles

In Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 (“Giumelli”), the High Court stated that equitable relief will be granted where it is founded upon, “an assumption as to the future acquisition of ownership of property which has been induced by representations upon which there had been detrimental reliance”. The Court said that this was “a well recognised variety of estoppel as understood in equity” (paragraph 6).
In Donis v Donis [2007] VSCA 89 (“Donis”), a decision of the Victorian Court of Appeal, Nettle JA (with whom Maxwell ACJ and Ashley JA agreed), referred to the situation where a person had encouraged the expectation of “the acquisition of an interest in property. In such cases the remedy relates to the understanding of the parties and the expectation that has been encouraged. Prima facie the estopped party can only fulfil his or her equitable obligation by making good the expectation which he or she has encouraged. The estopped party, having promised to confer a proprietary interest on the party entitled to the benefit of the estoppel, and the latter having acted upon the promise to his or her detriment, is bound in conscience to make good the expectation. It follows that the detrimental reliance that supports the estoppel need not constitute in any sense a consideration moving to the party bound. It is a unilateral element of the estoppel and not the price paid for it” (paragraph 19).
In Delaforce v Simpson-Cook [2010] NSWCA 84 (“Delaforce”), a decision of the New South Wales Court of Appeal, Handley AJA (with whom Allsop P and Giles JA agreed), said that the proprietary estoppel upheld by the trial judge was an “estoppel by encouragement. Such an estoppel comes into existence 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 their detriment. If these matters are established equity may compel the owner to give effect to that expectation in whole or in part” (paragraph 21).
Flinn v Flinn [1999] VSCA 109 (“Flinn”), a decision of the Victorian Court of Appeal, was a case where a claim in proprietary estoppel was based upon a promise to leave an interest in a farming property to the promisor’s, and his wife’s, adopted son. Brooking JA (with whom Charles and Batt JJA agreed), referred with approval to the statement of Carnwath J in Gillett v Holt [1988] 3 All ER 917 (“Gillet”) at 930, that, “The plaintiff needs to show words or conduct by the prospective testator which go beyond mere statements of intention, and which, having regard to all the circumstances, he can reasonably claim to have regarded as amounting to an irrevocable promise by the prospective testator as to how his estate would be disposed of” (paragraph 73).
In considering the question of, “How certain must the promise be?”, Brooking J considered that “a promise must be definite in the sense that there is a clear promise to do something even though the something promised is not precisely defined, and this has always been recognised in the cases” (paragraph 80).
After reviewing the cases and noting “the liberal approach exhibited by the authorities”, Brooking JA concluded that the promise found by the trial judge in the appeal before the Court, a promise of an unspecified interest in the farm to be devised by will was not too uncertain to found a proprietary estoppel – and that the later “making of the enhanced promise [some years later]...was by way of a natural progression”. The plaintiff had acted “on the faith of a promise at first vague (but not too vague to escape equity’s attention) and later ripening into a promise of the whole farm” (paragraph 94).
The revocable nature of a will does not affect the promise of a future proprietary interest if reliance and detriment can be shown. In Gillett, Robert Walker LJ said:

“...the inherent revocability of testamentary dispositions (even if well understood by the parties...) is irrelevant to a promise or assurance that ‘all this will be yours’...Even when the promise or assurance is in terms linked to the making of a will...the circumstances may make clear that the assurance is more than a mere statement of present (revocable) intention and is tantamount to a promise” (at 227-8, cited with approval by Handley AJA in Delaforce at paragraph 36).

Findings as to the making of the representations

The Craig’s Trucking representation: This was allegedly made when Craig was about 18 or 19, that is, in 1997 or 1998. It is probably the latter year because Craig said the discussion with Ken took place after Craig had returned from working interstate. According to Ken, Craig was not able to obtain a truck licence until he was 19. It is not clear whether the work interstate required a truck licence as Craig was apparently operating a harvester. Nevertheless, the fact that the discussion was about Craig wanting to leave the farm “to go driving trucks” probably dates the conversation at the time he was 19.
By 1998, Craig had been living with Ken and Robyn for about nine years. Craig was treated as their son. Ken said that “‘foster son’ [was] a term we used”. Craig was their only “child”. He participated in all aspects of their lives. He was cared for and provided for. Robyn altered her working hours to educate Craig at home. They went on holidays, including for extended periods, as a family. Ken and Neil taught Craig how to carry out the farm work. Craig was encouraged in his recreational pursuits, particularly those related to motorised vehicles. There are many photographs in evidence showing the early years Craig spent growing up on the Quick farm.
Craig lived continuously on the Quick’s farm from about December 1989. He had not sought to leave, although he appears to have had friends about his own age with whom he pursued social and recreational activities. He acquiesced in the decisions made for him by Ken and Robyn, particularly about his education. He appears to have thoroughly enjoyed his years growing up with the Quicks. I am not persuaded that the relationship between Craig and Ken and Robyn Quick, including matters of discipline and the emotions they felt or displayed, were anything out of the ordinary for that time and place.
When they made wills in 1997, Ken and Robyn did not include provision for Craig. Quick family members were the residuary beneficiaries. In 1995, Craig turned 16 and his formal schooling ceased. He worked full-time on the farm for the next three years or so and, with the encouragement of the Quicks, he pursued a series of farm education courses. Craig received a wage, although this was modest, and he was provided with full board and keep.
In 1997, Craig reached adulthood. He gained a driver’s licence and apparently was ready to pursue the vocation that others, including Ken and Robyn, had recognised; that he was “born to drive trucks”. At about the age of 18, Craig went to New South Wales and then to South Australia working for a contractor for an extended period. Craig was by this time regarded as a very hard worker. He showed initiative and drive and he was competent in the handling of his personal finances.
There is no dispute between the parties that when Craig was 18, or probably 19, Ken offered to “buy a truck” for him. This was not simply to be a truck for Craig to drive in pursuit of the activities at the farm. As Neil said, there had always been trucks on the farm. However, the previous trucks had been used for farm-related tasks and the Quicks had deliberately avoided any proposal to use their vehicles outside the farm for commercial purposes. Ken Quick knew that he was establishing a “trucking business”. Whilst the business might carry out work for the farm, its primary focus would be on outside work. This was confirmed by the contracts that were obtained.
Initially, Craig’s licence confined him to working within a one hundred kilometre radius of the “home base”. At first this was from the Quick farm, but soon Craig operated from another property some distance from Brim so that he could fulfil contracts that were then available. The “trucking business” was established as a minor part of the farm activities. The truck was purchased and financed by the farm. The decision was made by Ken Quick, presumably in consultation with Robyn and Neil. Until 2011, the business continued to operate with the general administrative and financial support of the farm business.
The business was not separated out until 2011, with the establishment of Craig’s Carting Pty Ltd. That it was to be “Craig’s” business was apparent from the name under which it apparently operated, from the start. “Craig’s Carting” was the name painted on the door of the first truck and on all later vehicles. The trucking business would not have been established if Ken and Robyn had not recognised that truck driving was Craig’s vocation and they had not provided financial and administrative support for this to happen. The business was Craig’s responsibility. He was to find work for the truck and to travel to wherever the work required. The truck operated under his name.
The business was obviously successful. Within 12 months, the Quicks had replaced the initial older vehicle with a new one which was safer and more comfortable. If the Quicks had not bought the first truck and established the business, Craig said he “probably would have went and started my own business”. Craig said Ken told him it would be silly for him to work for anyone else. In these circumstances, it is not surprising that Ken might have told Craig that the business “would be his”. Robyn conceded that this was the understanding and that the business would be Craig’s at a later stage when the debts had been cleared.
On the evidence, I consider it more probable than not that Ken Quick made the “Craig’s trucking representation” at about the time that he persuaded Craig to stay on the farm and work in the trucking business that would be established with the initial truck. In my view, it is likely that at this time Ken would have told Craig that the business “would be his”, although not immediately.
The deferral of any transfer of the business would have been obvious from the nature of the financial and other steps necessary to establish the business, which were outside the competence and life experience of the 19 year old. Craig said he was promised that he would “inherit” the trucking business. This presumably meant that upon Ken’s demise, or upon an earlier succession arrangement, Craig would take over the business.
The Quick Farm representation: This representation was allegedly made a fairly short time after the earlier representation, when Craig said he was 18 or 19. At that time, Craig said he raised the question of the wages he was paid which were less than his friends were receiving for similar work. One view of the evidence was that the “complaint” related to Craig’s wages for farm work. The evidence is not, however, clear as to whether Craig was in fact comparing his position with friends who were driving trucks.
Craig said that he was told by Ken that, “If I worked hard, I would inherit the farm”. This constituted, at most, a statement as to what would happen at some time, and probably a fairly considerable time, in the future. In 1998, Ken was aged about 43.
I consider that the joinder of the trucking business and the farm, as Craig’s future inheritance, was not improbable. The trucking business was part of the business operations conducted from the farm properties. Since the age of 16, Craig had been engaged full-time as a farm labourer working on the Quick farm. For years before that, Craig had been helping out with farm work. He continued to assist with the farm work, particularly during the early years of the trucking business.
In the circumstances, I accept that it is more probable than not that Craig, as Ken and Robyn’s “adopted” son, was seen as the likely successor to their interests in the whole of the farm operation, including the trucking business. Accordingly, I am satisfied that the Quick Farm representation was made.
The MacLeans home block representation: The representation was allegedly made when Craig was 20 in a conversation, “around the time that the house was put there and fitted out”. Craig said that he understood from this conversation that he would inherit the house and “the MacLeans block if anything happened”, presumably to Ken and Robyn.
It is unlikely, in my view, that Ken Quick intended the MacLeans block representation to refer specifically to the two titles constituting the MacLeans block. It is more likely that Ken was merely referring to the fact that, at some stage, Craig would inherit his and Robyn’s share of the whole farm, including MacLeans.
The second Craig’s Carting representation: It is unnecessary for me to make a definitive finding on this matter, as nothing of consequence flows from it. However, I consider it likely that at some stage it was anticipated that Craig and Alishia would, upon the incorporation of the new company, be the sole shareholders, particularly as they were the only directors and the company did not own the trucks.

Reliance and detriment – legal principles

In Flinn, Brooking JA stated that, a claimant must show “substantial detriment...occasioned to the claimant by reliance upon a promise. Unless the reliance occasions detriment, no equity will arise” (paragraph 96).
In Donis, Nettle JA stated that, “‘Detriment’ is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad enquiry as to whether departure from a promise would be unconscionable in all the circumstances” (paragraph 20).
At paragraph 34, Nettle JA noted that in the case on appeal, “the detriment suffered is of a kind and extent that involves life-changing decisions with irreversible consequences of a profoundly personal nature”. He was referring to the claimant’s decision to marry and move to live in a house on her parents-in-law’s property out of Melbourne.
In Delaforce, Handley AJA noted at paragraph 42 that, “The relevant detriment is not the loss flowing from non fulfilment of the promise or assurance”. He referred to the judgment of Dixon J (as he then was) in Grundt v Great Boulder Proprietary Goldmines Ltd [1937] HCA 58; (1938) 59 CLR 641 at 674-5, where it was stated that:

“It is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment”.

In Flinn, Brooking JA quoted at paragraph 121 from the judgment in Giumelli at 117-118 where the majority in the High Court had said, “Although the claimant had not suffered an appreciable loss of income by remaining in the partnership, the detriment suffered by him was the loss of the property which he worked to improve, not to obtain immediate income from that exercise but to gain the proprietary interest. For that [the claimant] gave up the opportunity of a different career path”.
In Sidhu v Van Dyke [2014] HCA 19, (“Sidhu”) the High Court considered the question of “the sufficiency of proof of detrimental reliance required to give rise to a sound claim for relief based on” proprietary estoppel (paragraph 2). The Court rejected the proposition that there was a “presumption of reliance”, the plurality stating at paragraph 50 that the statement by Brooking JA in Flinn does “not support the proposition”. The plurality noted at paragraph 71 that, “it is not necessary that the conduct of the party estopped should be the sole inducement operating on the mind of the party setting up the estoppel”. At paragraph 84, the plurality cited with approval the observations of Nettle JA in Donis that “the detriment suffered is of a kind and extent that involves life changing decisions...”, which comments the plurality considered were “apposite” to the facts of the case before the Court.

Findings on the issues of reliance and detriment

There was evidence to support Craig Garlick’s reliance, and the reasonableness of him relying, on the promises of Ken and Robyn Quick as well as evidence of Craig having acting to his detriment on the basis of those promises.
Before Craig met Ken and Robyn Quick he led a neglected, though independent life. His mother died when he was very young. His father had personal and health problems and apparently exercised very little control over Craig. Craig essentially seems to have run his own life and made his own decisions. Shane and Angie Cox said that, when Craig was “four years of age, [he] just popped up at our back door”. At times he “turned up...on the way to school and had breakfast at our house”. Donald Avery said that at this time, Craig “was getting himself off to school in the morning, if he went to school, getting his own breakfast”. Mr and Mrs Cox and Mr Avery were Warracknabeal residents and friends of Ken and Robyn Quick.
Robyn Quick gave evidence that Craig also spent a lot of time at the sale yards at Warracknabeal. She said that, “as a young child...he used to go out with the farmers from the sheep yards on sale days. So he knew a lot of people of different age groups and he was very good at conversing with anyone”.
At the church open day at the Quick’s farm, when Craig first met Ken and Robyn, it was, as Ken said, Craig who told Ken that he “would be coming back the next weekend”. Craig was invited back and after a number of visits was “adopted” as a member of the family. Both Ken and Robyn for their part, and Craig for his, wholeheartedly embraced the relationship and it appears to have developed and strengthened as time went on.
As Robyn’s sister-in-law, Donna Liersch said, “As a teenager, Craig grew in his trust of Ken and Robyn and showed his affection for them openly...We could see that he loved his life on the farm and he loved to be with Ken and Robyn. For Robyn and Ken, we could see that their parental role was fulfilled through having Craig to live with them. They supported and nurtured him as a son. They gave him love and affection, as well as guidance and discipline, whilst providing for Craig for his physical, medical and educational needs. Ken and Robyn and Craig were a picture of a happy close family, living together, talking together, having fun together”.
Shane and Angie Cox confirmed that, “After Craig had settled in to the Quick home and family it was what seemed like a perfect match. Craig was thriving on the farm life and the Quicks also helped him with his education as best they could, as Craig was well behind...Ken and Robyn were wonderful with Craig and seemed to love him exactly as their own...We attended Craig’s 18th birthday party/celebration which was a wonderful, and also emotional time. To see Craig become an adult and to reflect on the past at the same time, there were some emotional tears at this event, but all those in attendance were touched by the mutual love and respect Ken, Robyn and Craig had for each other”.
Craig had embraced the opportunities given to him by Ken and Robyn. When Craig was 18 or 19 he was told that one day he would inherit the farm, and he must have understood that this would involve not simply the acquisition of property and other assets, but him assuming responsibility for running the business of the farm, including the trucks. This was a conscious decision which Ken and Robyn made, although it is likely, as Ken said, that matters “evolved” as Craig’s position in the family developed.
At age 16, Craig’s home schooling ceased and he worked full-time on the farm, and completed some farming courses. At age 18 or 19, as Donald Avery said, “When Craig got his truck licence he was dead set keen on having a truck so they bought him a truck and away he went. He is a hard worker and he shows great work ethic”. Ken made the decision to purchase the truck for Craig to drive. As Ken said, Craig was “born to drive trucks”. Robyn had used this passion during her home schooling to enthuse Craig about basic literacy and numeracy.
For his part, Craig was quite happy to work on the farm, and to study to obtain qualifications by attending agricultural college. He wanted, however, to drive trucks, even if this meant leaving the farm, and he expressed that wish to Ken and Robyn. In his teenage years, Craig had acquired a number of motorised vehicles. Some of these were given to him, some he bought. No doubt the Quicks also assisted. However, Craig had also apparently used his own money. He seems to have always been resourceful even from his early years in Warracknabeal, when Donald Avery said it was “reported he had a bit of a record going that if you wanted a tractor sprinkler he had the resources to supply you with a tractor sprinkler”. He was later described by Ken as frugal or “tight” with his own money. I am satisfied that he was, from at least the age of 16 when he began to work full-time on the farm, and later when he started truck driving, aware that his friends doing similar work to him appeared to be better remunerated in their wages.
In 2002, when the arrangement was made to shift the demountable house to MacLeans for him to live in, Craig assumed financial responsibility for “fixing-up” the house, and by the end of that year had spent over $6,500.
In his final submissions, plaintiffs’ counsel, Mr Isles, referred to the following matters as constituting the detriment to Craig as a consequence of his reliance upon the representations:
1. “Craig forwent the opportunity of setting up his own trucking business” until later in life than was initially intended;
2. Craig “forwent the opportunity of buying a house in 2004”;
1. Craig “expended $84,000 in doing up a property in which he now has no interest”;
1. he “expended considerable time working on the house”;
2. he developed the trucking business which, it is conceded by Robyn Quick, would never have been established without Craig.
The evidence, in my view, supports a conclusion that Craig for his part accepted the life that was offered to him by Ken and Robyn and that, if he continued to live at Brim and play his part in the operation of the family businesses, he would ultimately be rewarded as their heir. From age 19, for a further 14 years to age 33 in 2012, Craig unreservedly accepted his responsibilities and worked as hard as he could to achieve the common goals.
Craig accepted the remuneration that was offered to him, and later the additional remuneration offered to Alishia and to their children. Their positions in the financial structure of the family business were determined largely by the financial managers in consultation with Ken and Neil. Whilst Craig and Alishia were provided with documentation and participated in some discussions, as Ken said, Craig took little interest in these matters. Whilst at times, he made his financial needs, and those of his family, known to Ken, Craig went along with what was decided as being in the best interests of the family. He was paid the nominated distribution by the appropriate trust, and certain accounts that he maintained with local suppliers were also paid. Otherwise, his taxation liabilities and insurance premiums were looked after by others on his behalf.
In my view, these circumstances are similar to those enunciated by the High Court in Giumelli at paragraph 27 that, “even if it be conceded that Robert had not suffered an appreciable loss of income by remaining in the partnership, the detriment suffered by him was the loss of the property which he worked to improve, not to obtain immediate income from that exercise but to gain the proprietary interest. For that, Robert gave up the opportunity of a different career path”. It is for this reason that Ken and Robyn Quick should be bound by the promises they made, albeit in happier times for all of them.

Breakdown of the relationship

Craig lived at the Quick farm between 1989, when he was 10, until 2012, when he was 33. At some stage in 2012 the relationship broke down. The events leading up to the breakdown are not clear. The evidence about this matter was confusing and can only be pieced together from the evidence of all the principal witnesses. Robyn Quick’s sister-in-law, Donna Liersch, in a written statement, referred to “Ken’s heartfelt speech at Craig’s 30th birthday [in 2009] in front of more than 50 people, family and friends”, when Ken had “conveyed an endorsement of Craig for how far Craig had grown from where he had come as a child to becoming a respected member of the community and able to hold a vocation”.
There were obviously some tensions in the relationship between Craig on the one hand and Ken and Robyn on the other. It is difficult, however, to get any real sense of these matters. The following issues were referred to in the evidence:
1. Craig appears to have been universally respected as a very hard worker and competent manager of the trucking business;
2. there were suggestions in the evidence of Ken, Robyn and Neil, that Craig at times overrated his importance in the success of the trucking business and his involvement in the farm activities. Reference was made to newspaper articles where Craig had taken credit for establishing the trucking business himself;
1. serious problems arose with about 3,000 sheep agisted on a property near Hamilton. In 2012, about 500 sheep died. Craig was in charge of the operation and Ken relieved him of the responsibility. I will refer to the evidence concerning this incident in more detail;
1. at some time in 2012, an incident occurred at Brim involving a request by Craig to Ken for assistance moving sheep. Alishia dated the incident as happening in May. Although the incident must have been before August 2012, it might have occurred later than May. The incident was stated by plaintiffs’ counsel, Mr Isles, as having precipitated the breakdown of the relationship. Craig Garlick gave evidence obliquely referring to the incident. Nevertheless, it appears to have been the catalyst for the breakdown of the relationship. I will refer to the evidence concerning the incident and its aftermath in greater detail;
2. Robyn Quick gave evidence about a conversation in which Ken apparently told Craig he was “a robber and a thief”, referring to an incident with a neighbour’s sheep. Robyn was not present at the conversation. The matter had not been put to Craig in cross-examination and was not later referred to by Ken in his evidence;
3. on 17 August 2012, solicitors acting for Craig and Alishia Garlick wrote to Ken and Robyn Quick (although the letter was apparently wrongly addressed to “Mr & Mrs N R Quick”). The letter assumed that the relationship between the parties had broken down. It referred to the Garlicks having been seeking “to facilitate a reasonable and businesslike separation of all assets and activities (both personal and business)”. Ken gave evidence that he was very upset to receive this letter;
4. Craig referred in his evidence to a letter he received in October or November 2012. This was after he said he was “told I was finished” by Ken. In an email from Craig to Ken and Robyn on 19 October, Craig resigned as a director of Craig’s Carting Pty Ltd;
5. a letter dated 30 October 2012 to Craig and Alishia written by Robyn on the letterhead of Brinsmeade Farms Pty Ltd, referred to a number of arrangements consequential upon the changed circumstances;
6. the resignation by Craig as a director of Craig’s Carting Pty Ltd was accepted in a letter dated 12 November 2012 from Neil, Ken and Robyn under the letterhead of Craig’s Carting Pty Ltd. The letter requested Craig to “return trucking equipment and keys to the depot together with any other documents or property belonging to either Craig’s Carting Pty Ltd or Brinsmeade Farms Pty Ltd”.
Condah Farm Incident: Prior to 2012, because of poor feed conditions on the farm, land was agisted at Condah near Hamilton and about 3,000 sheep were taken there. Craig was responsible for the operation. Apparently, the sheep suffered from worm infestation from the rich feed. The local conditions in southern Victoria were quite different from the conditions at Brim where the warmer weather killed the worms. In mid-2002, large numbers of stock, perhaps 500, died at the Condah property. Ken told Craig to “finish up” with the sheep at Condah. George Sibley, a farmhand at the Quick farm, said that at the end of 2011 (although it was more likely to be 2012), he went down to Condah to deal with the sheep which had died from worms or which were suffering from footrot.
In cross-examination by defendants’ counsel, Mr O’Loughlin, it was suggested to Craig that there had been “a serious row with Mr Ken Quick” over the “dead sheep at Condah”. Craig responded, “Not sure about a row”. In his evidence, Ken said he was alerted to the problems at Condah in June 2012. He said that because of the type of “grass in the southern area” the sheep should have been pre-drenched. Ken said that, “We were unaware of that”. He said he told Craig that Craig “was finished with the sheep at Condah” and that in the conversation he had a “raised voice”.
Robyn also gave evidence that it was a “very different strategy looking after the sheep down there” because the sheep have access to a lot of Rye grass which “was something new to us”. After Ken found out about the sheep dying, “it was soon after that that Ken relieved Craig of the sheep duties”.
Loading sheep at Brim incident: In his opening, Mr Isles said that in November 2012, the relationship was brought to an end. He said that Craig had been rounding up sheep into holding pens and had asked Ken for help. Ken had later said that he and Craig could not work together anymore and Craig “would have to go”.
When Craig was asked in evidence-in-chief about “a particular instance” of a disagreement that led to him being told by Ken that he was “finished”, Craig responded “I don’t want to comment”. Questioned further about “the bust-up”, Craig said that “all it was is when I was getting some sheep in. That’s what started it and it just went on from there”.
Alishia gave evidence that Ken had told Craig to “leave the property” in May 2012. She said Craig “was moving sheep. He had a couple of mobs to get into the holding pens before the stock agent came to weigh and assess the sheep for market. Craig was having difficulty getting the sheep in, to my knowledge, he phoned Ken, who was quite upset with Craig phoning because he hadn’t had his breakfast”.
Craig was apparently the primary source of this information. However, Alishia said that she received a phone call from Ken that morning at “about five to nine” whilst she was in Warracknabeal. Ken stated “his disgust that Craig...was too hard to deal with”, although he “couldn’t really give me an answer as to what happened”.
Alishia said that Ken phoned her again that evening. The gist of the call was that “he’s throwing us out; we don’t deserve anything; we’ve come with nothing; he [Craig] leaves with nothing”. After speaking with Alishia, Ken spoke with Craig. Conversations followed with Neil and Robyn. Both of them said they “didn’t believe that it needed to be a separation”. Alishia and Craig did not want a separation but they were told by Ken, “It wasn’t going to be patched up”. Alishia was not cross-examined about these matters.
Robyn said that in 2012, “Craig was snitchy [and] it wasn’t pleasant in the workplace”. She referred to them receiving a letter from the Garlicks’ solicitor. She was not sure of the timing but related it to when she and Ken “discontinued the disbursement, because Craig said that, if he would drive, he wanted to get the driver’s wage plus the disbursement”. Robyn could not “recall a row between Ken and Craig mid-2012”. She gave evidence of a conversation between Alishia and Ken at Robyn and Ken’s home one morning in which Alishia “was yelling and this went on probably for about 15 minutes”, although Robyn said she “didn’t hear the content of it”.
In cross-examination, Robyn said that “after the solicitor’s letter we did ask that they vacate” their house on the MacLeans property. Earlier, Robyn had said that Ken had never asked Craig and Alishia to leave, and she believed they were making up that evidence. Ken appeared to deny that he had, at any time, “verbally” asked the Garlicks to leave. He thought this may have arisen in response to the Garlicks’ solicitor’s letter dated 17 August. He said, “if that’s what the letter says that’s what we did” (i.e., asked Craig and Alishia to leave). No such request was in fact made in Ken, Neil and Robyn’s letter dated 12 November 2012.
Ken Quick said in evidence that he did not have a “heated telephone discussion” with Alishia “in mid to late 2012”. He recalled Alishia coming to the office one morning and “it was very heated, she was yelling at me...I told her to leave in not a very good manner...I just told her to get out of here, get out of the office”.
Ken was asked in evidence-in-chief about the Condah sheep but was not asked about an incident when Craig had asked for his assistance to round up sheep at Brim. In cross-examination, Mr Isles asked Ken whether he remembered the incident at Brim that Craig had described in which “he asked you for some help to come and round up some sheep”. Ken responded, “Neil and I felt like we were Craig’s slaves”. Ken said, “I am sick of it” but said, “I did not tell him to leave...I did not tell him he was finished on the farm...I didn’t tell him to leave the farm. I didn’t tell him to do anything like that”.
Ken agreed that Craig had asked him for help shifting some sheep that Craig needed to load, but said, “I didn’t get there when he expected me to because I talked to the neighbour”. When he got to Craig, Ken said Craig “would have just went crook at me”. Ken said, “I’ve got no idea what I said to him”. Ken continued that, from “time-to-time in arguments like that I would have honestly just said to ‘P off’, you know, and that would be it but it was never, never a written statement to leave the farm or anything stupid like that, it was just the way we were. But I don’t remember telling him to ‘P off’ that day but I suppose that would be my natural thing, I suppose, to do that, but I wouldn’t – I wouldn’t have been telling him to leave the farm, I would have told him to do that a thousand times, to ‘P off’ that is and leave me alone. It was taken out of context all the time”.
Ken said he could not remember a phone call with Alishia. He said “I don’t think it ever happened”. He said he did not remember contacts with Craig and Alishia “to try and smooth this over”. At no time did he ever tell Craig “orally” to leave the MacLeans property.
Neil Quick denied that he had ever given any “advice in relation to the current matters”. He said that in “late 2011” he had said that “family affairs should be sorted out over the table”, although that comment related to an incident in which Craig had left gates open whilst moving sheep which had resulted in Ken being unhappy because Ken had found sheep all over the road and he had needed to put them back in the paddock.
I accept that it is more probable that, after the sheep incident at the Brim farm, Ken had told Craig to leave the farm and had repeated this in later conversations with Alishia and Craig. I am satisfied that this was more than a simple statement that Craig “P off...and leave me alone”. I accept Alishia’s evidence of the detail of the conversation she had with Ken by telephone shortly after the incident. I accept Craig and Alishia’s evidence in relation to this matter, in part because of the failure by Ken and Robyn to give any evidence of the “heated” conversations they say took place at this time. Further, there seems no other credible explanation for Craig and Alishia having formed the belief that they were required to leave the farm.
Despite efforts by Craig and Alishia to sort out the problem, Ken refused to back down. The letter from the Garlick’s solicitors to Ken and Robyn in August 2012 made the situation irretrievable.

Relief – legal principles

Brooking JA in Flinn at paragraph 119, in considering the issue of, “How to satisfy the equity”, referred to Giumelli as having established that:

“in cases of what is commonly called proprietary estoppel, in which it may be said that prima facie departure from the assumed state of affairs is contrary to the requirements of conscientious conduct, it is a question depending on all the circumstances of each case whether departure is to be permitted. The court may require the party estopped to make good the assumption, and may in an appropriate case impose terms upon the other party. On the other hand having regard to the requirements of conscientious conduct by the party estopped and, in an appropriate case, to the need to avoid injustice to third persons, the court may decide that some lesser relief is appropriate”.

Handley AJA in Delaforce stated the following principles in relation to the granting of relief:
1. in a claim based on proprietary estoppel, relief is granted where a person has changed their position to their detriment in reliance upon encouragement by another person to do so “in the expectation of obtaining a proprietary interest” (paragraph 21);
2. relief is not “limited to removing or reversing the detriment suffered by the party entitled to the estoppel” (paragraph 56);
1. “the court must look at the circumstances in each case to decide in what way the equity can be satisfied” (paragraph 57);
1. “the court does not exercise an unfettered discretion but adopts a principled approach” (paragraph 58);
2. “relief may be moulded to recognise practical considerations such as the need for a clean break...the court must also take into account the impact of its orders on third parties and any hardship or injustice they would suffer” (paragraph 60);
3. the relief must not be “out of all proportion” (paragraph 62);
4. the relief may take account of the fact that the circumstances of the representor have changed (paragraph 80).
In Sidhu, the plurality at paragraph 85, when considering what relief was appropriate, stated that, “where the unconscionable conduct consists of resiling from a promise or assurance which has induced conduct to the other party’s detriment, the relief which is necessary in this sense is usually that which reflects the value of the promise”.
The plurality at paragraph 83, stated that “the requirements of good conscience may mean that in some cases the value of the promise may not be the just measure of relief” noting the statement of Deane J in The Commonwealth v Verwayen (1990) 170 CLR 394 at 441 that, “There could be circumstances in which the potential damage to an allegedly estopped party was disproportionately greater than any detriment which would be sustained by the other party”.

Submissions on the question of relief

Mr Isles opened the plaintiff’s case on the basis that the relief sought in relation to the proprietary estoppel claim was the transfer of the whole of the MacLeans property to the plaintiffs. In final submissions, Mr Isles contended that payment of the sum of between $900,000 and $1.2 million would redress the injustice to the plaintiffs. Mr Isles submitted that the Court should declare that the MacLeans property was held for or on behalf of the plaintiffs pursuant to a constructive trust. This, he said, would make the transfer to the plaintiffs duty free. Mr Isles submitted that, in addition to the declaration, a cash payment should be made.
Mr Isles argued that the property, or payments of up to $1.2 million, would:
1. give the plaintiffs a capital sum from which to establish a business;
2. accord with the profits which had been generated by the trucking business, which had benefited the farm;
1. cover the amount that would be awarded for the restitutory claim of unjust enrichment.
The two titles comprising the MacLeans property have an agreed value of $319,900 for one title of 352 acres and $580,100 for the other title of 689 acres, with a total value of $900,000. The property was purchased by Ken Quick in 1980. Craig and Alishia Garlick have lived in the house on the property since 2004. That house was moved to MacLeans in 2002 following what Craig said was the MacLeans home block representation. The farm business paid for the house and its removal to and installation at MacLeans. Craig paid for the cost of fixing it up which, between November 2002 and March 2011, totalled $84,691.89. The farm business later paid the cost of extensions to the house after the birth of the Garlick’s second child in 2010.
Apart from the area immediately surrounding the house, the balance of the MacLeans land has been used by the farm business for cropping. The area surrounding the house appears, from the aerial photographs, to comprise about 15-20 acres and is wholly within the smaller MacLeans allotment. Access to the house is from Brim West Road through the smaller MacLeans allotment. MacLeans is apparently seven kilometres by road from the Quick home property.
I consider, in relation to the Quick farm representation, that there are a number of factors to consider when determining whether it is appropriate to make an order which would effectively transfer part of the farm property to Craig and Alishia. The factors include the following:
1. the Quick farm block has been in the Quick family for many generations;
2. the other blocks were purchased in 1976, 1980, 1982 and 2011;
1. apart from MacLeans which is owned by Ken, Wilson’s and Hood’s which are owned by Neil, and Hollands by Quick Property Holdings Pty Ltd, the remaining titles are in the joint proprietorship of Ken and Neil Quick. It was not alleged at the trial that Neil made any representations to Craig;
1. the farming operations are conducted over the whole of the Quick farm;
2. currently Ken is aged 59 and Robyn 58. They therefore have a significant life expectancy;
3. there is no particular part of the Quick farm (apart from MacLeans) that has any specific association with Craig and Alishia.
In the circumstances, it is apparent that, apart from the transfer of MacLeans, monetary compensation would be the only other method of doing equity to the plaintiffs. Some possible methods of calculating such compensation, other than those suggested by Mr Isles, would be:
1. to calculate the present value of Ken and Robyn’s share of the farm, including stock, plant and equipment and to discount the value to take account of their anticipated life expectancy;
2. to attempt to calculate the contribution made by Craig and Alishia to the building up of farm assets, less an allowance for farm liabilities and perhaps also to the benefits already obtained by Craig and Alishia.
In relation to the trucking business, the trucks and equipment are owned by Quick Property Holdings Pty Ltd as trustee for Craig’s Carting Holdings Trust. The trucking operations were conducted by Craig’s Carting Pty Ltd until November 2012, although it is likely that the trucking operations are now conducted through another entity. The trucking operations are located at the Quick’s home property. The business owns up to 12 trucks which were purchased by the Trust with finance obtained upon the security of Quick family assets, presumably the farm properties.
Since the relationship ended, Craig has set up a trucking operation himself. He purchased two trucks with financial help from his father-in-law. He has taken over many of the customers and contracts which were previously handled by the Craig’s Carting Pty Ltd business.
In view of the ownership of the trucks and equipment by the Trust and the liabilities in respect of those trucks secured over the farm properties, it is not possible to transfer the trucks or equipment of the trucking business to Craig, as appropriate relief in respect of the Craig’s trucking representation. It would, in the circumstances, be appropriate to require monetary compensation to be paid. This might be calculated by reference to:
1. the profits generated by the trucking business;
2. the assets of the trucking business, including a portion of the truck fleet and the goodwill of the business;
1. a capital sum which might enable Craig to establish his own business on a sound financial footing.
In assessing any such sum, allowance would need to be made for:
1. the contribution by Ken, Robyn and Neil Quick in the establishment and maintenance of the trucking business;
2. the likely time at which the business would have been transferred to Craig and Alishia in accordance with the promise;
1. the extent of the goodwill of the business which has passed to Craig because of the customers who followed him to his new business.

Evidence of financial matters

Little oral evidence was led by the parties in relation to the financial position of the farm, including the trucking business, and of the Quick and Garlick family members. The evidence-in-chief and cross-examination of Craig and Alishia and of Ken and Robyn about financial matters was very limited. Craig and Alishia took little notice of the detail and all, including Ken and Robyn, relied upon the financial consultants. The oral evidence of the valuers was also limited to one or two specific points of dispute.
The documentary evidence of the financial matters is, however, reasonably extensive. No witness with any expertise was called by either party to interpret the financial documents. There was no dispute between the parties that the documents were what they purported to be. There was, however, a significant dispute as to the financial benefits that had been derived by the family members, particularly from the Trust.
Defendants’ counsel, Mr O’Loughlin, relied on his interpretation of the documents to support submissions that no relief was appropriate because Craig and Alishia Garlick had been appropriately remunerated during the years they spent at the Quick’s farm. Mr Isles did not make a detailed rebuttal to these submissions.
I have attempted, through my own examination of the documentary evidence, to understand the financial benefits received by the Garlicks. I do not consider that, upon analysis, the evidence necessarily supports the submissions made by Mr O’Loughlin. I am concerned also, that where the evidence might support the proposition that the Garlicks had received significant financial reward during their time on the farm, Craig and Alishia were not given the opportunity, in cross-examination, to explain many of the supposed benefits.
I will take the financial years 2009-10 and 2010-11 as examples. The actual Trust distributions for Craig and Alishia and their children, as shown in the Trust accounts, are as follows:

	2010	2011
Craig	$71,509	$99,819
Alishia	$71,509	$99,819
Child 1	$3,602	$3,300
Child 2	$3,602	$3,300
TOTAL	$150,000	$206,238

A comparison with other figures extracted from the financial evidence shows:

	2010	2011
Budgeted Trust distribution of the Garlick family (from the ORM budget reports)	$60,000	$60,000
Trust profit distribution entitlements for the Garlick family (from the Brinsmeade Farms Trust accounts) (paragraph 117)	$150,222	$206,238
Beneficiaries profit distribution summary (from the Brinsmeade Farms Trust Accounts) (paragraph 119)	$161,425	$119,519
Brinsmeade Farms Trust Accounts – ledger entries (paragraph 120)	$163,939	$119,569
Transfers of Trust disbursements to Craig and Alishia’s bank accounts (from the defendants’ solicitor’s summaries) (paragraph 128(a))	$52,700	$60,000

The Brinsmeade Farms Trust “Beneficiaries Profit Distribution Summary” contains entries for income tax, physical distribution and life assurance. These purport to be actual disbursements by the Trust. No payment was made to the two children in respect of their allocated trust distributions. When added together, the total disbursements by the Trust for the Garlicks was stated as follows:

		2010	2011
Craig	Income tax withheld	$5,961	$16,176
	Physical distribution	$76,545	$43,698
	Super life assurance	$1,207	$1,207
Alishia	Income tax withheld	$1,167	$14,740
Alishia	Physical distribution	$76,545	$43,698
Total disbursements by the Trust for the Garlicks		$161,425	$119,519

To obtain some understanding of these total disbursements, it is necessary to examine the detail of the appropriate ledgers of Brinsmeade Farms Pty Ltd “Transaction Detail by Account” for “Disbursement Craig”, “Disbursement Alishia”, “Insurance Private”, “Private Vehicle Alishia/Craig”, “Super Life Assurance”, “Tax Paid Craig” and “Tax Paid Alishia”. The relevant accounts at the defendants’ Court Book Volume 2, tabs 35 and 36, show:

	2010	2011
Disbursement Craig	$116,048	$48,149
Disbursement Alishia	$31,422	$29,872
Insurance Private	$1,218	$1,446
Private Vehicle Alishia/Craig	$7,048	$7,979
Super Life Assurance	$1,075	$1,207
Tax Paid Craig	$5,961	$16,176
Tax Paid Alishia	$1,167	$14,740
TOTAL	$163,939	$119,569

When an analysis is made of the detail of the ledger for “Disbursement Craig”, it is apparent that this includes dog food (presumably for working dogs), the cost of the extensions to Craig and Alishia’s house on the MacLeans block and the loan repayments to Westpac in respect of a “Prado” motor vehicle. Although these expenses were considered appropriate farm expenses, they were allocated to the particular ledger, “Disbursement Craig”.
Schedule A to the plaintiffs’ Statement of Claim lists “Rex White” as a “builder” who did work in 2003 and 2004 when the house was placed on MacLeans. In 2009-10, the Trust paid accounts to Rex White totalling $47,106. Other accounts paid in that year, which also appear to relate to the house extension, totalled $31,060. In 2010-11, the Trust paid further sums totalling about $7,500 in respect of the house extension. The total expenditure by the Trust on the house extensions over the two years appears to be over $85,000. The payments to Westpac in respect of the Prado were $668 per month or about $8,000 each year.
It was asserted during the trial that “the Farm” had paid for the house extensions in 2010 and that this was an example of a financial benefit received by the Garlicks. Whilst it no doubt was, it is important that the benefit is not counted twice, the second time being as part of the Trust’s ”disbursements” to Craig and Alishia.
In my view, it is not possible to rely upon the “Trust profit distribution” or the “physical distribution” in the Trust accounts as an accurate indication of the actual benefits received by the Garlicks.

Remuneration received by the Garlicks and the Quicks

After Craig’s schooling finished at age 16 (in 1995), Craig was paid a small wage as a farm worker. Robyn said that the wage was set by reference to the relevant Award. Budgets were prepared by the financial planners each February. In 1998, Craig turned 19. It was budgeted that he would be paid a wage of $13,200 for the year February 1998 to January 1999. Neil was also budgeted to receive drawings of $13,200 and Ken and Robyn to each receive $9,000.
In the following years, until October 2003, the pattern of payments was similar. In about October 2003, Craig commenced receiving distributions from the profits of the Brinsmeade Farms Trust that were credited to the accounts of the beneficiaries of the Trust. There is a dispute between the parties as to whether the amounts credited to the beneficiary accounts for Craig and Alishia and, after 2009, for their children, was reflected in the amounts actually received by them.
These matters were only superficially canvassed in the oral evidence of the Garlicks and Quicks, who had little understanding of how the accounts operated. Alishia had prepared a summary from Craig’s bank statement showing the transfers from the Trust. The document was analysed and updated by the defendants’ lawyers, to include a summary also of Alishia’s bank statements.
In relation to the Trust beneficiaries’ profit distribution summary and the general accounts of the Trust for the years 2006-2013, the following conclusions should be drawn from the evidence:
1. the amounts transferred regularly from the Trust to the Garlicks’ bank accounts (as recorded by Alishia and updated by the defendants’ lawyers) are shown in the Trust ledger in respect of Craig and Alishia. The defendants’ solicitors’ analysis shows receipts in Craig and Alishia’s bank accounts as follows:

Year	Craig	Alishia	Total
1996	$8,335		$8,335
1997	$11,630		$11,630
1998	$12,110		$12,110
1999	$12,650		$12,650
2000	Not available		Not available
2001	$13,930		$13,930
2002	$18,885		$18,885
2003	$17,838		$17,838
2004	$16,663		$16,663
2005	$15,500		$15,500
2006	$22,500		$22,500
2007	$24,000		$24,000
2008	$23,331	$8,000	$31,331
2009	$22,000	$24,000	$46,000
2010	$26,000	$26,700	$52,700
2011	$30,000	$27,600	$57,600
2012	$30,000	$30,000	$60,000
2013	$24,331	$10,000	$34,331

there are also items in Craig and Alishia’s Trust ledger which appear to be payments made on their behalf by the Trust to third parties, for example, suppliers. These third party payments were not put to Craig and Alishia in cross-examination;

the beneficiaries’ profit distribution summaries also refer to taxation payments made and insurance premiums paid on behalf of the beneficiary. These amounts are generally supported by Trust ledger entries;

the distributions bear no relation to the budgeted Trust distributions, which for Craig were $24,000 for each of the years 2005-2008, and $30,000 for the years 2009-2012. There were similar amounts budgeted for Alishia from 2008. However, the figures shown as the actual Trust distributions for Craig and Alishia and their children, in the Trust accounts, are as follows:

Year	Craig	Alishia	Child 1	Child 2	Total
2006	$82,000				$82,000
2007	$2,000				$2,000
2008	$11,000				$11,000
2009	$40,153	$40,153	$2,500		$82,906
2010	$71,509	$71,509	$3,602	$3,602	$150,222
2011	$99,819	$99,819	$3,300	$3,300	$206,238

Mr O’Loughlin produced a table setting out the beneficiaries’ profit distribution summaries. The table generally, although not entirely, reflects the original summaries from the accounts. The summaries commence in 2006 and show negative closing balances for both Craig and Alishia in 2013. Craig’s balance is -$136,491.25 and Alishia’s is -$27,139.41. The closing balances for the Quicks in 2013 were: Neil, -$173,883.02; Ken, -$214,728.57; Robyn, $47,938.93.
Whilst Mr O’Loughlin’s table seems to be largely accurate and is supported by the Trust’s accounts, it is difficult to draw the conclusion that Mr O’Loughlin submits should be reached, that no relief should be granted to Craig and Alishia Garlick because they had been appropriately remunerated for the years they had spent on the farm. Whilst it is clear that Alishia’s summary of the monies transferred by the Trust to Craig and her bank accounts are not the sum of the benefits they received, it cannot be concluded, in my view, that:
1. Craig and Alishia received the same benefits as Ken and Robyn from the Trust, although over the last few years that appears to have been the intention of the budgeted figures;
2. the benefits that Craig and Alishia received necessarily reflected what was a fair return and equivalent to what they would have received:

i. if they had received wages for their labour;

if they had shared in the growth of the assets of the farm and trucking businesses, particularly the capital gains in respect of the farm properties and the goodwill of the trucking business;
the remuneration was appropriate compensation in lieu of the fulfilment of the promises made to Craig and Alishia Garlick by Ken and Robyn Quick.

Assets of the Quick family group

The Quick’s farm comprises the following land:
1. Quick’s home block comprising 478 acres on one title which has been held in the Quick family since the 1890s. Since December 1998, the property has been jointly owned by Ken and Neil Quick and has three dwellings, a piggery and truck sheds. The agreed valuation (including “ Wardles” – item (b)) was $1,060,000;
2. Wardles comprising 499 acres on one title. This property was purchased jointly by Ken and Neil Quick in 1976. The property is held by them as tenants in common in equal shares. The property was valued as part of the Quick’s home block. The total agreed valuation is $1,060,000;
1. Hoods comprising 514 acres on one or two titles. This property was purchased by Neil Quick in 1982. The agreed valuation (including “Wilsons” – item (d)) is $780,000;
1. Wilsons comprising 322 acres on three titles. This property was purchased by Neil Quick in 1980. The property was valued with Hoods. The total agreed valuation is $780,000;
2. MacLeans comprising two titles of 352 and 639 acres purchased by Ken Quick in 1980. The agreed valuation of the smaller lot is $319,900 and of the larger lot is $580,100 (total $900,000);
3. Hollands comprising 377 acres on two titles was purchased by Quick Property Holdings Pty Ltd as Trustee for the Quick Property Trust in 2011. The agreed valuation is $331,000;
4. Sturrocks was purchased in about July 2010 for approximately $250,000 by Quick Property Holdings Pty Ltd as Trustee for the Quick Property Trust. The property does not appear to form part of the farm properties which are to be taken account of in the proceeding.
The structure of the business operations is as follows:
1. Brinsmeade Farms Pty Ltd was incorporated in September 2003 and is the trustee of the Brinsmeade Farms Trust. It conducts the cropping and piggery operations, and, until the end of March 2011, the trucking business. Robyn Quick is the sole director of the company and Neil and Ken Quick are the shareholders. The beneficiaries of the Trust have included both the Quicks and the Garlicks, but are likely in the future to only include Ken, Robyn and Neil Quick and whoever else they consider should be beneficiaries of the Trust;
2. Quick Property Holdings Pty Ltd was incorporated in May 2010 and is the trustee of both the Quick Property Trust and Craig’s Carting Holdings Trust. The Quick Property Trust owns Hollands and Sturrucks and will hold any future farm land purchases. Craig’s Carting Holdings Trust holds all the plant and equipment of the trucking business. Neil and Ken Quick are the directors and shareholders of the company. It is likely that in the future, the beneficiaries of the Trust will be Quick family members;
1. Craig’s Carting Pty Ltd was incorporated in March 2011 to conduct the trucking business. The directors were Craig and Alishia Garlick. They were also the shareholders with Brinsmeade Farms Trust. The present position of the company is unclear.
The valuations of these operations according to the 30 June 2013 financial statements (as recorded on Exhibit P2) are:
1. Brinsmeade Farms Trust - $3.38 million;
2. Quick Property Trust - $0.84 million;
1. Craig’s Carting Holdings Trust - $0.96 million;
1. Craig’s Carting Pty Ltd - $0.6 million.
These valuations were not agreed by the parties, and an analysis of the financial records of the entities is undertaken in the following paragraphs.

Disputed valuation of the trucking business

The valuation experts engaged by the parties to value the land, holdings and the business operations of the Quick family largely reached agreement. The only disputes of any significance related to:
1. the valuation of goodwill of the trucking business;
2. an allowance for the contributions made by Ken, Robyn and Neil Quick to the trucking business.
In relation to the valuation of goodwill, the plaintiffs’ expert Mr Leigh Harry considered that the goodwill should be valued at $750,000. The defendants’ expert, Mr Tom Fitzgerald, considered that no value should be ascribed to the goodwill of the business.
Mr Harry valued the goodwill as at June 2012 using the “excess earnings method”. This involved capitalising the average-weighted EBITDA (earnings before interest, taxation, depreciation and amortisation) of $258,910 at a rate of 2.9 times. Mr Fitzgerald did not dispute the use of a capitalisation rate of 2.9 times. He said that he would not, however ascribe any amount to future maintainable earnings.
Both Mr Fitzgerald and Mr Harry had examined the total sales for the three years ended 30 June 2010, 2011 and 2012. In each of these years, the income from the trucking business was significantly affected by the Kalari Sands Contract which terminated in February 2012. The Kalari Sands contract was very profitable. It guaranteed full-time work, two shifts each day, for one or usually two trucks. The contract ran for 27 months until February 2012, although initially it was anticipated it would last between 6 and 24 months.
The impact of the contract of the trucking business is shown by the following table:

	2010	2011	2012	2013
Kalari Sales	$1,696,847	$2,770,736	$1,409,665	$Nil
Percentage of total sales	59%	59%	33%	0%
Other customers	$1,193,380	$1,929,986	$2,841,232	$2,300,668
Percentage of total sales	41%	41%	67%	100%
Total income	$2,890,227	$4,700,722	$4,250,897	$2,300,668

Mr Fitzgerald calculated the contribution made by the Kalari contract to the profitability of the operation of the trucking business. He did this by analysing the fixed expenses of the business and the operating expenses which depended on the level of business generated (such as fuel and replacement of tyres). This analysis showed that, after the Kalari contract finished, the profitability of the trucking business reduced considerably so that “the loss of revenue and the related profit impact would by itself eliminate any consideration of excess earnings”.
Mr Fitzgerald also relied upon the reduction of sales in the year to 30 June 2013, and the resulting effect upon the profitability of the business, as confirming the trend which he attributed to the loss of the Kalari contract. In my view this analysis ignores:
1. the critical effect on the business of Craig’s departure in November 2012;
2. the fact that the Kalari contract was only ever going to be a short term arrangement, effectively a bonus for a limited period rather than a feature of the ongoing business;
1. the sales to other customers also increased substantially during the period of the Kalari contract from $1.2 million in the year to 30 June 2010 to $1.9 million in the year to 30 June 2011 (an increase of 61%), and to $2.8 million to the year ended 30 June 2012 (an increase of 47%). The sales decreased in the year to 30 June 2013 (to $2.3 million following Craig’s departure);
1. after the termination of the Kalari contract in February 2012 there was a “very substantial investment in and expansion of the trucking fleet”. Between 15 March and 20 July 2012, six new vehicles were purchased at a total cost of $1.2 million. Mr Harry’s view was that this “suggested a great deal of business confidence from the owners” that, notwithstanding the cessation of the Kalari contract, the significant growth in other work shown over the previous two years would continue.
The reason for Craig’s departure from the trucking business is of critical importance. I have previously examined this issue. I consider that it was not a matter of Craig’s choosing; he attempted to resolve the problems with Ken and stay on. There is little doubt in my view that Craig’s departure from the business of Craig’s Carting after about 13 years had a very significant effect. In these circumstances, I consider it appropriate to assess the value of the trucking business as if the arrangements in place at 30 June 2012 would have continued.
Craig would have continued to manage the operations and it is likely that, notwithstanding the loss of the Kalari contract, the replacement work would have continued to increase. The additions to the fleet would lead to more efficient running costs, and the sale of the older less efficient vehicles would reduce the indebtedness of the business. Accordingly, I am more persuaded that Mr Harry’s valuation of the goodwill of the business, as at 30 June 2012, should be preferred.
It is clear, however, that some allowance should be made for the contribution to the business of the “personal exertions” of Robyn, Ken and Neil Quick. The instructions Mr Fitzgerald received was that their contributions to the trucking business were “30, 15 and 10 hours per week respectively”. My assessment of the evidence given about the contribution by each of them to the different facets of the farm business would lead to a slightly different conclusion. I would assess their respective contributions to the trucking business at 20, 10 and 5 hours. This would require a deduction of $178,045 from Mr Harry’s calculation of $750,000 for the goodwill of the trucking business. The calculation is as follows:

	Salary	Oncost	Total
Robyn Quick	$31,200	$3,900	$35,100
Ken Quick	$15,600	$1,950	$17,550
Neil Quick	$7,800	$975	$8,775
Total	$54,600	$6,825	$61,425
	Total $61,425 x 2.9 = $178,133

This sum must be deducted from the figure of $750,000. The appropriate valuation of goodwill as at 30 June 2012 is $571,867.

Relief – consideration of options

A capital sum from which to establish a business: Mr Isles submitted that the payment of a capital sum to the plaintiffs would provide them with the means to establish a business. It is likely that Mr Isles was simply referring to an appropriate reason for the provisions of a capital sum by way of relief rather than a basis by which to calculate the relief which should be granted.
In my view, it is appropriate that were such relief to be granted, it should be sufficient to enable the plaintiffs to establish themselves in a trucking business, similar in nature although not necessarily in size, to the business in which Craig worked between 1998 and 2012. In this regard, it is necessary that the business should include the two elements the valuers considered in relation to the Craig’s Carting business, namely goodwill, plant and equipment, including trucks and trailers.
In relation to goodwill, account would need to be taken of the fact that much of the goodwill of Craig’s Carting was associated with Craig himself. He had over many years attracted customers and maintained their custom by the standard of service provided, In regards to the level of plant and equipment, including trucks and trailers, needed to maintain a reasonable level of business to compensate the Garlicks for the non-fulfilment of the farm and trucking business promises, regard should be had to the build-up of the business, and particularly the fleet, over the years of operation of Craig’s Carting, and the fact that the Garlicks’ present trucking business has only two trucks financed by Alishia’s father.
Benefits to the farm of the trucking business profits: Exhibit P5 is an analysis of the income, expenditure and net operating profit before income tax of the trucking business from 2006 to 2013. Until 2011, Craig’s Cartage operated as part of the Brinsmeade Farm Trust. In 2012 and 2013, the business was operated by Craig’s Carting Pty Ltd although the trucks were owned by either Craig’s Carting Holding Trust (for the newer vehicles) or Brinsmeade Farms Trust (for the older vehicles), and leased to Craig’s Carting Pty Ltd.
As a consequence, the Profit and Loss Statement for the years to 2011 include substantial expenses for “insurance” and “interest”. For 2012 and 2013, the equivalent entries are for the “lease” payments to the two trusts. The relevant figures are as follows:

Year	Income	Expenditure	Net operating profit before tax
2006	$983,769	$840,923	$142,846
2007	$998,822	$930,230	$68,593
2008	$1,441,151	$1,264,910	$200,244
2009	$1,751,644	$1,728,920	$22,724
2010	$3,000,026	$2,662,642	$337,384
2011	$4,898,741	$4,227,293	$671,449
2012	$4,437,963	$4,388,744	$49,019
2013	$2,431,503	$2,883,815	$-492,312

It is difficult to ascertain the relative size and importance of the farming activities and the trucking operation to the whole of the businesses conducted at and from the Quick’s farm.
The latest financial overview of the Quick’s farm is contained in the Annual Review for 2012 of Brinsmeade Farms Pty Ltd prepared by ORM and dated 27 February 2012 (plaintiffs’ Court Book, tab 10). At page 225, a table headed “Assets and Liabilities at 27th February 2012” forms part of the report and compares the position with annual reviews going back to 1995. The following figures are extracted for the year to February 1999 (when Craig was 18 or 19) and the years 2009 to 2012:

Assets	Feb 1999	Mar 2009	Mar 2010	Mar 2011	Feb 2012
Land & Improvements	$937,550	$2,783,300	$2,783,300	$3,032,200	$3,032,200
Machinery	$454,500	$2,399,520	$2,583,770	$3,292,290	$3,950,552
Cattle & Sheep	$36,990	$80,240	$120,200	$623,300	$703,075
Pigs	$74,600	$775,000	$746,850	$648,270	$647,290
Hay on Hand	$18,140	$10,000	$17,333	$2,400	$4,000
Grain on Hand & Pools	$143,500	$99,600	$597,450	$638,446	$440,684
Stores on Hand	$0	$61,100	$77,800	$64,900	$72,645
Debtors	$0	$169,000	$362,127	$796,797	$417,832
Investments	$91,162	$200,138	$235,092	$250,127	$256,842
Craig’s Carting Trading a/c	-	-	-	-	$100,155
NAB Grain Trading a/c	-	-	$74,714	$4,397	$54,588
Total Assets	$1,756,442	$6,577,898	$7,598,636	$9,353,128	$9,679,862
Less Liabilities
ANZ Trading Account	$65,627	$738,351	$852,525	$836,020	$700,000
Livestock Trading Account	$470,618	$33,700	$47,076	$214,427	$264,931
Commercial Bill (was FDA)	-	$546,362	$518,798	$481,089	$450,807
Commercial Bill - Piggery	$0	$0	$0	$0	$0
Commercial Bill – Hollands	-	-	-	$250,000	$250,000
ANZ Bank Bills	-	$230,000	$214,615	$169,230	$153,846
Machinery Finance	$233, 164	$1,252,993	$1,140,879	$1,643,044	$2,178,383
Sisters - Unsecured	$0	$0	$0	$0	$0
Creditors	$0	$27,674	$179,629	$258,575	$612,565
Total Liabilities	$769,409	$2,829,079	$2,953,523	$3,852,385	$4,610,532
Equity	$987,033	$3,748,818	$4,645,113	$5,500,743	$5,069,331
Equity	56%	57%	61%	59%	52%

Other figures for the years 2008–2013 can be derived from the financial accounts, and particularly the comparative trial balances, of the Brinsmeade Farm Trust for the years to 30 June 2009, 2011 and 2013. The following figures for the years 2008 and 2009 are derived from the Brinsmeade Farms Trust accounts including the comparative trial balance as at 30 June 2009 (part of Exhibit P5), for 2010 and 2011 from the accounts including the comparative trial balance as at 30 June 2011 (plaintiffs’ Court Book Volume 2, tab 5) and for 2012 and 2013 from the accounts including the comparative trial balance as at 30 June 2013 (part of Exhibit P9 and plaintiffs’ Court Book Volume 1, tab 3). I have used the following figures (which are extracts from, or compilations of, figures in the trial balances) as a check against the figures contained in the 2012 Annual Review of Brinsmeade Farms Pty Ltd.

	2008	2009	2010	2011	2012	2013
Income
Sales-sheep	$137,834	$158,240	$123,311	$581,927	$383,560	$163,378
Sales-pigs	$1,251,010	$1,876,530	$1,928,954	$1,674,911	$1,429,092	$1,595,992
Cartage receipts	$1,368,767	$1,660,249	$2,890,227	$3,493,697	N/A	N/A
Proceeds from crops	$173,746	$230,109	$380,936	$535,609	$606,120	$823,989
Proceeds from wool	$22,067	$7,823	$9,854	$71,874	$84,717	$115,040
Contracting income	$31,644	$75,954	$6,903	$14,956	$54,562	$11,831
Assets
Closing stock-sheep	$30,654	$2,286	$108,601	$233,123	$239,748	$77,479
Closing stock-pigs	$240,535	$354,895	$173,009	$95,058	$80,580	$176,427
*Plant and equipment*
Farm	$705,040	$799,340	$829,922	$1,048,258	$1,576,122	$1,576,122
Trucking	$1,464,135	$1,718,701	$2,449,398	$2,664,398	$2,664,39*	$2,268,39*
Piggery	$1,047,962	$1,054,780	$1,054,780	$709,129	$722,347	$722,347
Liabilities
Farm loans	$857,229	$722,155	$699,309	$614,923	$1,689,450	$1,942,572
Truck and trailer loans	$1,153,519	$1,032,104	$1,753,658	$1,462,502	$1,023,374	$543,152
Number of trucks	(9)	(11)	(11)	(10)	(9)	(5)
*Craig’s Carting Holdings Trust
Plant and equipment-at cost less accumulated depreciation					$1,118,919	$895,134
Truck and trailer loans					$1,213,502	$1,485,030
Number of trucks					(2)	(2)

It is difficult to reconcile the figures from the 2012 Annual Review with the figures in the trial balances for the Brinsmeade Farms Trust and the Craig’s Carting Holdings Trust. In some cases, the problem may have arisen from an incorrect interpretation of the accounts and the trial balances. Nevertheless, a comparison of the figures, and a comparison of the figure for “land and improvements” in the 2012 Annual Review with the agreed valuations of the farm property provides a basis for determining:
1. the extent of the trucking business as part of the Quick’s Farm activities, particularly taking account also of the income of the trucking business in recent years as set out in paragraph 139;
2. the growth of the operations since Craig became actively involved in the business activities;
1. what Craig would have received if the promises made to him had been fulfilled at the present time.
Craig Garlick’s contribution to the farm and trucking business: There is an alternative claim based on unconscionable conduct. The plaintiffs’ statement of claim asserts that the defendants should hold “their respective interests” in the farm and the trucking business “pursuant to a constructive, implied or resulting trust in shares referable to the contributions made by [Craig Garlick] towards the improvement, conservation and ... maintenance of the ...farm [and] the trucking business. I will consider this matter further in reaching my conclusions on the appropriate relief.
Craig Garlick’s claim based on unjust enrichment: In his final submissions, Mr Isles submitted that Craig “had been dealt with very unfairly on the basis that he worked for so little money in circumstances where he could have worked and received a substantial income”. Mr Isles submitted that since 2003, Craig “could have received between $80,000 and $100,000 as a truck driver and yet his receipts for that period...on the defendant’s calculations are $528,639.76”. This was “a shortfall of $371,360.24”, compared to Craig having received $90,000 per annum for 10 years. I do not believe that this matter requires further consideration in my determination of the appropriate relief. There is an insufficient evidentiary basis to support a claim made in this way.

Relief – conclusions

In my view it is appropriate that the relief to which Craig Garlick is entitled should be a monetary sum and should only be related to the transfer of the MacLeans property if Ken and Robyn Quick choose to do so, or fail by a particular date to pay the sum I propose to order.
The calculation of that sum should take account of the following matters:
1. Craig worked full time on the farm from age 16 to age 19 and thereafter when his commitments to the trucking business permitted;
2. Craig worked in the trucking business from its establishment, when he was 19 in 1998, until about the end of 2012, over 13 years;
1. the remuneration Craig, and his family members, either received or derived the benefit of, was less than he might have received if paid wages as an employee performing the tasks he did;
1. the remuneration Craig received was calculated by the farm’s financial consultants having primary regard to the overall interests of the farm and the Quick family interests;
2. the trucking business would not have been established if it had not been for Craig’s passion to drive trucks;
3. the trucking business was operated primarily by Craig, although supported by the financial resources of the farm and the oversight, particularly of Ken;
4. the trucking business expanded because it was successful and was an appropriate diversification of the business operations of the farm;
5. the trucking business generated substantial revenue and its profitability enabled the growth of the business and the farm;
6. Craig was from about the age of 19 promised that he would inherit the trucking business and Ken’s and Robyn’s share of the farm;
7. in 2003, Craig was named the residuary beneficiary in Ken’s and Robyn’s wills and the surviving appointer of the Brinsmeade Farm Trust;
8. Ken is now aged 59 and Robyn is aged 58. Both appear to be in good health. Based on the present farming activities of Ken’s brothers, who have continued farming into their 60’s in the case of Neil and 70’s in the case of Alan, it is likely that Ken and Robyn would have continued to run the farm for perhaps a further 10 to 15 years;
1. it is likely that the trucking business, including its assets and liabilities, would have been transferred to Craig within the next 5 years;
1. Ken and Robyn Quick’s share of the farm assets at the present time is about $3.67 million, calculated as follows:

Real property ($1.59 million)	$530,000	50% of the value of the Home Block and Wardles
	$900,000	100% of the value of MacLeans
	$165,500	50% of the value of Hollands
	$1,595,500
Plant & equipment ($1.15 million)	The figure of $3.95 million in the 2012 Annual Review is likely to also include the trucks and other equipment of the Trucking business. The item “plant and equipment” for the farm and piggery in the financial accounts, of about $2.3 million, is likely to be the appropriate figure. Fifty per cent of $2.3 million is $1.15 million.
Stock on land ($0.93 million)	The 2012 Annual Review includes figures which total $1.86 million. This may be an underestimate as the figures in the financial accounts for the item “sales-pigs” itself averages $1.7 million per annum between 2009 and 2013. This item is, however, an income item and I will use a figure of $.93 million, being 50% of $1.86 million.

at about the end of 2012, the value of the relevant assets of the trucking business was likely to be about $2.1 million, and Ken and Robyn Quick’s share $1.05 million, calculated as follows:

Plant & equipment

($1.05 million)

The figure of $3.95 million in the 2012 Annual Review includes plant and equipment for both the farm and the trucking business. In the financial accounts, the items for “farm” ($1.57 million) and “piggery” ($0.72 million), total about $2.3 million. The figure for “trucking” is $2.2 million. Whilst the total is higher than the $3.95 million figure in the 2012 Annual Review, I propose to use the figure of $2.1 million, 50% of which is $1.05 million.

Goodwill

I have previously valued the goodwill at $571,867. However, I consider that no allowance should be made for goodwill as a significant part (at least 50%) has devolved upon Craig Garlick as a result of him having left the trucking business and started his own.

from the total of these relevant assets, $4.72 million (the total of $3.67 million and $1.05 million), must be deducted the liabilities of the farm and trucking business. I will limit the liabilities to borrowings as the other liabilities (for example, creditors) seem to be cancelled out by other assets, including debtors. The total of these loans in the financial accounts of both the Brinsmeade Farm Trust and the Craig’s Carting Holding Trust total about $3.96 million. This figure seems to equate with the figures in the 2012 Annual Review;

however, the figure was probably increased by the borrowings in 2012 to purchase new trucks and may be reduced by the sale of the trucks that were replaced. Nevertheless, I will allow liabilities to be deducted of $4 million, 50% relevant to the farm and 50% to the trucking business;
the value of the farm should be reduced by 66.6% to take account of the sum being received now, rather than in about 10 to 15 years. That sum is $3.67 million less 50% of the farm liabilities of $1 million equals $2.67 million. Reduced by 66.6%, the sum is $0.88 million;
the value of the trucking business should be reduced by 25% to take account of the sum being received now, rather than in about 5 years. That sum is $1.05 million, less liabilities of $1 million equals $50,000. Reduced by 25% leaves the sum of $37,500;
50% of the amount of $84,691.89 and 50% of the amounts of about $85,000 allocated to Craig’s Trust distribution account for the house extensions in 2010/11 should be allowed for the fact that the MacLeans property with the house may not pass to Craig, and the Garlicks may need to relocate. I will make a further allowance in the calculation of the monetary sum to cover that event;
the remaining 50% of these sums will be regarded as fair compensation for occupation of the house rent free for about 10 years;
finally, the negative balance in the Trust distribution accounts of Craig (-$136,491) and Alishia (-$27,139), and the positive balances in their childrens’ accounts ($16,304) totalling -$147,326 should be deducted.

Accordingly, the sum to which Craig should be entitled is $855,174, calculated as follows:

Share of farm	$880,000
Share of trucking business	$37,500
Reimbursement of house expenses	$85,000
	$1,002,500
Less Trust account balance	$147,326
	$855,174

I will round this sum to $850,000.

Alternative causes of action relied on

As alternatives to their claim based upon proprietary estoppel, the plaintiffs relied upon causes of action founded in the failure of a joint venture, unconscionable conduct and unjust enrichment. In my view, a detailed examination of these matters is not required by reason of the conclusions I have reached in relation to the primary claim.
Failure of a joint venture: In certain circumstances, a claimant may be entitled to the relief necessary to prevent the unconscionable retention of a “windfall” which has resulted from unexpected circumstances, for example the collapse of a joint endeavour (Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583), or a breakdown in relations (Henderson v Miles (No. 2) [2005] NSWSC 367).
In my view, for the reasons adopted by Handley AJA at paragraph 53 of Delaforce, this is “a proprietary estoppel case, as distinct from a windfall equity case [and] the expectation basis of the equity favours the view that the prima facie entitlement is to satisfaction of the relevant expectation [unless there are] special circumstances which required an award of something less than the plaintiff’s expectation”.
Unconscionable conduct: The plaintiffs allege in their statement of claim that it would be “unconscionable” for Ken and Robyn Quick to hold their interests in the farm and the trucking business “free of the interest” of Craig Garlick. It is claimed that Craig’s interest should be “referable to the contribution made by [Craig] towards the improvement, conservation and ...maintenance of the ...farm [and] the trucking business.”
It is essential in order for relief to be granted in respect of a claim based in proprietary estoppel which permits a departure from the promise made, as Brooking JA said in Flinn at paragraph 119, for there to be circumstances which would make it “contrary to the requirements of conscientious conduct” to enforce the promise. Similarly, Nettle JA in Donis at paragraph 20, said that the requirement to show “detriment” to establish proprietary estoppel “must be approached as part of a broad enquiry as to whether departure from a promise would be unconscionable in all the circumstances”. Accordingly, it is unnecessary to consider this claim in the alternative.
Unjust enrichment: The claim for unjust enrichment is based on what is alleged to be the underpayment of Craig from the age of 18 for his work “as a general farm hand and truck driver [working] 6 days a week for in excess of 60 hours per week”.
The claim is calculated as the difference between what Craig actually received and what he would have been paid between 1995 and 2012, either $40,000 per annum as a farm labourer or $60,000 per annum as a driver. Craig’s actual receipts for his labour was said to be the amounts paid into his bank account as calculated by Alishia.
There are a number of difficulties with this claim as pleaded, and for these reasons I consider it should not be accepted as the basis for the grant of relief:
1. Craig was 16 in 1995. He turned 18 in 1997;
2. Mr Isles conceded that the defendants’ solicitors calculation of the transfers to both Craig’s and Alishia’s bank accounts was a more accurate reflection of the remuneration actually paid to them;
1. there was no evidence that the appropriate wages between 1997 and 2012 were $40,000 per annum for a farm labourer or $60,000 per annum for a driver;
1. since about 2003, Craig, and since 2009, Alishia and their children, received distributions from the Trust and not wages;
2. the Trust distributions were for amounts more than the amounts transferred to their respective bank accounts, although there is difficulty reconciling the dispute as to the appropriate inclusion of the payments for the beneficiaries’ tax liabilities and some other accounts.

Claim for superannuation contributions not deducted

A claim of $22,487.42 was made for superannuation contributions it was said the Quick’s farm as Craig’s employer was obliged to deduct pursuant to the Superannuation Guarantee (Administration) Act 1992. The amount of $22,487.42 was calculated as the relevant percentage, between 6% and 9% of Craig’s remuneration for the financial years 1997 to 30 June 2013.
Whilst there is no dispute that Craig worked at the Quick’s farm, either on the farm or in the trucking business from the year 30 June 1997 through to about the end of 2012:
1. the relevant percentage is applied to the amount transferred to Craig’s bank account as recorded by Alishia. This is clearly not the actual remuneration received by Craig. However, Craig’s remuneration for his labour would have, in each year, been more than the amount upon which the claim is calculated;
2. after about 2003, Craig received a distribution from the Trust rather than wages. It is not clear whether, in these circumstances, a “deduction” was required to be made.
In my view, it is not appropriate to determine the claim on this unsatisfactory basis. However, it is clear both in relation to this claim, and the alternative claim based on unjust enrichment that, if Craig had not stayed working on the farm or in the trucking business, after the age of 18 he would have pursued other employment or business opportunities. Alternative employment for someone with Craig’s work ethic is likely to have been far better remunerated than the benefits he received between 1997 and 2012 by remaining on the farm. If Craig had remained an employee, he would have been paid high wages and would have accumulated superannuation benefits. These matters have, generally, been taken into account in the determination of the relief under the proprietary estoppel claim. No further relief is appropriate.

Orders

Based upon the conclusions I have previously reached I prepose to order that there be judgment for the first plaintiff against the first and second defendant that the first and second defendant pay to the first plaintiff the sum of $850,000.
As this sum is in the region of the valuation of MacLeans, the property at which Craig Garlick and later his family have lived for the last 10 years, that property should pass to Craig Garlick unless in the meantime, Ken and Robyn Quick pay the sum of $850,000 to Craig Garlick. It is appreciated that the payment of such a large sum of money may take some time to organise, particularly as MacLeans is likely to be part of the security for the farm and trucking business loans. I will attempt to make provision for that in the proposed orders.
Before making final orders, I consider that I should allow the parties the opportunity to study my reasons for judgment and, if they wish, to address further limited submissions. I have during the course of my reasons referred to various figures derived from documentary material tendered in evidence. I have made my own interpretation of this material, often without the assistance of oral evidence or submissions from counsel.
It is appropriate therefore, that the parties should be able to make further submissions on the following matters:
1. the calculation of the amount of the judgment, where it is considered that I have misapplied figures from the documents in evidence;
2. the form of the judgment and specifically in whose favour and against whom the orders should be made. I consider, at present, that the appropriate order is for there to be judgment for the first plaintiff against the first and second defendants and to dismiss the claim against the third defendant.
I would therefore propose that final orders be in the following form:
1. Judgment for the first plaintiff against the first and second defendants that, unless the first and second defendants pay to the first plaintiff the sum of $850,000 on or before 30 September 2014, it is declared that the first defendant holds all his right title and interest in the whole of the property known as MacLeans, Brim West Road Brim, being the whole of the land contained in Certificate of Title Volume 5887 Folios 205 and 206 for and on behalf of the first plaintiff and when called upon to do so by the first plaintiff transfer the property to him free of all encumbrances and at the expense of the first and second defendants.
2. Judgment for the third defendant against the plaintiffs that the claim against him be dismissed.
I intend therefore to make the following orders today:
1. By 4pm on 16 July 2014, the parties must advise the Associate to His Honour Judge Anderson in writing with a copy to the opposite parties, as to whether they agree to the proposed orders or whether they wish to make further oral submissions to the Court, including the question of the costs in the proceeding.
2. If a party wishes to make further oral submissions:
  1. there shall be a further hearing before His Honour Judge Anderson on 21 July 2014 at 10.00am;
  2. the parties shall deliver to the opposite parties by 4pm on 18 July 2014 a document limited to no more than 3 pages setting out a summary of each matter the party intends to raise at the hearing;
  1. the parties shall attempt, prior to the hearing to resolve the matters raised in the summary documents.

3. Reserve costs.

4. Reserve liberty to apply.

- - -

Certificate

I certify that the preceding 49 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 27 June 2014.

Dated: 27 June 2014

Catherine Kusiak

Associate to His Honour Judge Anderson

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