The dispute in the case of Laird v Vallance  VSCA 138, heard before the Court of Appeal in Victoria, centered around the ownership of a farm named ‘Harkaway’, owned by Keith and Ellen Laird and the claims of constructive trust and proprietary estoppel made by their children, Neale and Stuart.
Keith and Ellen Laird were the owners of a farm, where they lived for several years. Over the years, two of their seven children, Neale and Stuart, became actively involved in the property. Neale resided at the farm and managed cattle, while Stuart operated a plant nursery on a section of the property.
In 2006, Keith and Ellen made their wills, leaving Harkaway to Stuart and Neale equally. The wills also mentioned that they made greater provision for Stuart and Neale due to their contributions to the property during their lifetime.
In 2012, Keith passed away, and in 2018, an administrator, Suzanne Lyttleton, was appointed to handle Ellen’s estate due to her declining cognitive function. Facing difficulties accessing liquid funds, Ms. Lyttleton decided to sell Harkaway to meet Ellen’s urgent care needs. Stuart and Neale opposed the sale of the farm.
Stuart alleged that his parents told him that he would inherit the farm because he was working for them without pay. He relied on this promise and continued to work on various properties owned by his parents, receiving only pocket money. Similarly, a subsequent promise allowed Stuart to start a plant nursery on a portion of Harkaway without any fees, with the understanding that he would help on the farm when needed.
Neale, on the other hand, claimed that his parents told him in the 1990s that they wanted him to have the entirety of Harkaway, but they were uncertain about its future due to potential rezoning and increased council rates. There was another ‘promise’ made by the parents that was related to expenses Neale had incurred in maintaining Harkaway, and his parents told him they would pay him back if they sold any land.
In 2002, the government released a new metropolitan planning scheme that identified Harkaway as part of the ‘Green Wedge’ to be preserved. After this, Keith and Ellen provided further assurances to Neale, that he would get Harkaway if he continued to manage the property and assist them.
In 2020, three proceedings were commenced in the Trial Division concerning Harkaway:
- Ellen, through her administrator, initiated a proceeding against Neale and Stuart, seeking summary possession of Harkaway under Order 53 of the Supreme Court (General Civil Procedure) Rules 2015.
- Neale filed a claim against Ms. Lyttleton, Ellen’s administrator, contending that Harkaway was held on a constructive trust for him.
- Stuart filed a proceeding against Ellen’s administrator, Ms. Lyttleton, claiming that Harkaway was held on a constructive trust for both him and Neale.
The Primary Judge’s Decision
All three proceedings were consolidated and heard together by McMillan J. On 18 June 2021, McMillan J delivered her judgment, concluding that neither Neale nor Stuart had established their claims of constructive trusts over Harkaway. Subsequently, on 15 March 2022, she made orders dismissing Neale’s and Stuart’s constructive trust claims and required them to pay the costs of the three proceedings. The judge concluded that the oral representations that Neale and Stuart relied on were ambiguous and were not properly corroborated by any contemporaneous document.
Furthermore, in relation to Neale’s claim, her honour said that the alleged oral representations made by Keith and Ellen were in direct contradiction to what was recorded in their wills.
The claims were accordingly dismissed.
Neale and Stuart, unsatisfied with the outcome, sought leave to appeal the judge’s orders. The case involved the testimonies of key witnesses, including Stuart, Neale, and Susan, who provided evidence about conversations and promises made within the family regarding the inheritance of Harkaway.
Held by the Court of Appeal
The Court of Appeal upheld the decision of the primary judge and denied leave to appeal to both Neale and Stuart.
- Neale’s Claim:
Neale claimed that his parent represented to him that the whole farm would pass on to him. The Court found that the representations upon which Neale relied were ambiguous, and he had not provided sufficient evidence to demonstrate that his reliance on the representations was reasonable.
Neale also raised an argument regarding proprietary estoppel by acquiescence which the court said was without merit since he did not raise this argument during the trial. The Court dismissed his claim of being denied procedural fairness, as the primary judge had considered relevant factors, such as estate debts and the potential injustice to third parties, in determining the outcome. Consequently, the Court rejected Neale’s appeal for leave.
- Stuart’s Claim:
Stuart alleged that promises made to him by Keith and Ellen were that on their retirement or death, would pass the Harkaway to him and to any other sibling who similarly assisted. The promises made were ultimately fulfilled by the provisions in Ellen’s will, which left the farm to both Stuart and Neale as tenants in common with equal shares. However, the Court found that Ellen had adhered to the promises alleged by Stuart, and thus, there was no justification to invoke equity based on proprietary estoppel on Stuart’s behalf. Therefore, Stuart’s appeal for leave was also denied.
In conclusion, the Court of Appeal confirmed the dismissal of the claims made by Neale and Stuart regarding constructive trust and proprietary estoppel. As a result, both Neale and Stuart were denied leave to appeal the decision of the primary judge.
This case serves as an important legal precedent in the context of proprietary estoppel and constructive trust, reiterating the significance of clear and reasonable reliance on representations and the fulfillment of alleged promises in such claims.