Campbell v Turner & Ors

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - ILLEGAL AND VOID CONTRACTS - CONTRACTS ILLEGAL BY STATUTE - PARTICULAR STATUTES - the first defendants owned a large tract of land which they intended to subdivide - the plaintiffs entered into a deed with the defendants which purported to transfer one of the proposed lots to the plaintiffs for $30,000 - whether the transaction amounted to a sale - whether the deed was void by virtue of s 8 of the Land Sales Act 1984 (Qld) - whether the deed was void in whole or in part

EQUITY - GENERAL PRINCIPLES - EQUITABLE ESTATES AND INTERESTS - CREATION - the plaintiffs had conversations with the third defendant as to the possibility of their purchasing a lot in a subdivision the first defendants intended to create - the plaintiffs occupied and improved the proposed lot, and ran a bus business from the proposed lot, with the first defendants' knowledge - the plaintiffs entered into a deed with the defendants which purported to transfer the proposed lot to the plaintiffs for $30,000 - whether the conduct of the defendants created an equity of expectation - whether equities of expectation could arise out of a void deed - discussion of the content of any equities of expectation that arose

EQUITY - GENERAL PRINCIPLES - EQUITABLE ESTATES AND INTERESTS - GENERALLY - OTHER MATTERS - equity of expectation arose that the plaintiffs would obtain title to the proposed lot in exchange for $30,000, and if the proposed subdivision could not be completed the $30,000 would be returned immediately - the proposed subdivision could not go ahead - the $30,000 was not returned - what remedy is appropriate to do justice in the circumstances

EQUITY - GENERAL PRINCIPLES - OTHER MATTERS - the conduct of the first defendants created equities of expectation which were not fulfilled - whether the conduct of the third and fourth defendants is such as to make them accessorily liable

Land Sales Act 1984 (Qld) (as at 21 March 1990), s 8

Barnes v Addy (1874) LR 9 Ch App 244, applied

Brew v Whitlock [No 2] [1967] VicRp 102; [1967] VR 803, cited

Chalmers v Pardoe [1963] 1 WLR 677, cited

Chan v Cresdon Pty Ltd [1989] HCA 63; (1989) 168 CLR 242, cited

Crabb v Arun District Council [1976] Ch 179, cited

Day Ford Pty Ltd v Sciacca [1990] 2 Qd R 209, followed

DHN Food Distributors Ltd v London Borough of Tower Hamlets [1976] 3 All ER 462, cited

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 81 ALJR 1107, cited

Firmin v Gray & Co Pty Ltd [1985] 1 Qd R 160, cited

Francis v NPD Property Development Pty Ltd [2004] QCA 343; [2005] 1 Qd R 240, discussed

Giumelli v Giumelli (1999) 196 CLR 101, cited

Hospital Products Limited v United States Surgical Corporation & Ors [1984] HCA 64; (1984) 156 CLR 41, cited

Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125, cited

Humphries v Proprietors "Surfers Palms North" Group Titles Plan 1955 [1994] HCA 21; (1994) 179 CLR 597, cited

Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] AC 993, cited

McFarlane v Daniell [1938] NSWStRp 20; (1938) 38 SR (NSW) 337, cited

Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, cited

New South Wales v Scharer [2003] NSWCA 328, cited

Pacific Rim Developments Pty Ltd v Anketell [1999] NSWSC 304, cited

Paltara Pty Ltd v Dempster (1991) 6 WAR 85, cited

Riches v Hogben [1985] 2 Qd R 292, followed

Riches v Hogben [1986] 1 Qd R 315, cited

Roach v Bickle [1915] HCA 80; (1915) 20 CLR 663, cited

Terrell v Mabie Todd and Co Ltd [1952] 2 TLR 574, cited

Thomas Brown & Sons Ltd v Fazal Deen [1962] HCA 59; (1962) 108 CLR 391, cited

Timber Top Realty Pty Ltd v Mullens [1974] VicRp 39; [1974] VR 312, cited

Whitsunday Shire Council v Laguna Australia Airport Pty Ltd [2007] QSC 84, cited

Wood v Browne [1984] 2 Qd R 593, cited

[1] WILSON J: The first defendants and the third and fourth defendants (their adult children) owned large parcels of land at Burdell Downs in the City of Thuringowa in North Queensland, which they sold to Stockland (Constructors) Pty Limited in 2001. At the time of that sale, the plaintiffs were in possession of an area of approximately 0.8 hectares[1] of the land owned by the first defendants[2] where they had established a bus depot and workshop. The purchaser required the plaintiffs to vacate the site, and in October 2003 the bus business was relocated.

[2] This litigation concerns the circumstances in which the plaintiffs went into possession of that area of land and what recourse, if any, they have against the defendants.

[3] The first defendants' landholdings in Thuringowa included lots 1 and 2 on RP 740905 in the County of Elphinstone, Parish of Bohle. Lot 1 was approximately 78.5 hectares and lot 2 approximately 38.5 hectares in area. The description of lot 1 changed to lot 1 on RP 835468 in March 1992. Both lots were zoned "general industry" from the time the first defendants purchased the land in the early 1980s.[3]

[4] Burdell Road ran between lots 1 and 2 at 90 degrees off the Bruce Highway. It was a gravel road, and its intersection with the Bruce Highway was a gravel intersection. It provided the only access to lots 1 and 2 and two other parcels of land, one of them owned by the first defendants.[4]

[5] When the first defendants purchased lots 1 and 2 the Bruce Highway was a two lane highway with no median strip. This meant that traffic travelling in either direction on the Bruce Highway could turn on to Burdell Road to access lots 1 and 2. Similarly, vehicles travelling from lots 1 and 2 could turn from Burdell Road on to the Bruce Highway in either direction.[5]

[6] Burdell Road crossed a railway line (which ran parallel with the Bruce Highway but to the east of the highway) at an open level crossing not controlled by flashing lights or boom gates.[6]

[7] Prior to 1989 Mr Lionel Turner (one of the first defendants) considered developing lots 1 and 2 on several occasions - but he was frustrated by the large "front end costs" associated with conditions of subdivisional approval likely to be imposed by the Council, related to works to upgrade the intersection and the open level crossing and other infrastructure.[7]

In 1988 and 1989 the fourth defendant (with her father) made representations to Council for approval of a staged subdivision - that is subdivision on the basis that compliance with conditions requiring major expenditure would be deferred until after the initial subdivision of some lots which could be sold to obtain funds to complete part of the subdivisional works. They retained surveyors to prepare plans for the subdivision into 42 general industrial lots and to prepare the appropriate subdivisional application.[8]

[9] On 1 February 1989 the surveyors lodged two applications for subdivisional approval - the first to create lots 3 and 4, of 9.27 and 5.84 hectares on either side of Burdell Road. This was the land to be developed initially, and the Turners wanted to transfer it to the second defendant, a family company, which was to be the developer. The second application was to subdivide lots 3 and 4 into a total of 42 general industrial lots.[9] The plans showed that access would be via the intersection of Burdell Road and the Bruce Highway in its then existing condition.

[10] On 15 March 1989 the Council approved the first defendants' applications subject to conditions including -

"1.4 The intersection of the Bruce Highway with Burdell Road shall be upgraded in accordance with the requirements of and to the satisfaction of the Main Roads Department."[10]

[11] Neither of the first defendants gave oral evidence. They were elderly retired graziers with substantial landholdings in Queensland. Mr Lionel Turner was aged 82 and in poor physical and mental health. He suffered from a number of chronic illnesses including diabetes and high blood pressure and was recovering from a recent knee operation. His mental health had been poor since 1976, he had suffered a nervous breakdown in 1986, and he was continuing to take psychotropic medication to control a depressive illness. Mrs Elsie Turner swore that she had always deferred to her husband in matters concerning their land and businesses.

[12] The fourth defendant is an astute and intelligent woman with a formidable presence. She is well educated, holding a Bachelor of Science degree, a postgraduate Diploma in Nutrition and Dietetics and a Bachelor of Business (Accountancy). After living in Brisbane for some years, she returned to Townsville with her husband (a solicitor) in 1987. She was then aged 30. Because of her father's declining health, she gradually took the lead in her family's business affairs,[11] most relevantly in the development of lots 1 and 2. By September 1989 she was a director of the second defendant, along with her brother (the third defendant) and his wife. She described herself as "the front person", attending to correspondence and file maintenance, and to dealings with consultants, the Council and Government departments, but acting under the direction of her father. She was living on the other side of Townsville from lots 1 and 2, and in 1989 had to cope with a health problem of her own.[12] In August 1992 she gave birth to a child. Over the following years she exercised de facto control over matters relating to lots 1 and 2, assisted by trusted advisers such as Mr Peter Bugeja. Faced with insurmountable obstacles posed by the demands of the Main Roads Department ("MRD") and financial pressures, she calmly and dispassionately investigated what options the family had, and with considerable dexterity and steely determination ultimately negotiated a sale of the land to Stockland.

[13] The fourth defendant's credit was in issue in this proceeding. As I shall recount, there were significant conflicts between her evidence and that of Mr Campbell in relation to a number of alleged communications between them. I accept that the plaintiffs' entitlement to the land on which they established their bus depot was a matter of prime importance to Mr Campbell, while it was a comparatively minor part of a much bigger problem which confronted the fourth defendant over 13 years or more. And I accept the difficulties inherent in asking witnesses to recall whether certain conversations took place at nominated times over such a long period and if they did, their content. I have scrutinised her evidence closely and taken account of her composure in the witness box and of her responses to cross-examination, which were measured sometimes to the point of being calculated, in resolving these conflicts. I shall deal with each of these conflicts in due course.

[14] The third defendant is the antithesis of his sister. Three years her senior, he is a builder who described himself as concerned with "the physical side of the company's operations".[13] He left business dealings and matters of administration to the fourth defendant. He was a fishing and drinking mate of Mr Campbell, and he projected a knockabout, larrikin image in the witness box. He was fiercely loyal to his family, and his carefully crafted affidavit going to his dealings with Mr Campbell down the years coupled with assertions in cross-examination that he could recall nothing beyond its contents suggests a certain cunning and deliberate choice not to say anything which might harm his family's prospects in the litigation.

[15] Mr Matt Campbell operated a family business in Mt Isa - a bus company and a catering business. In time his three children were working in the family business. In about 1972 the plaintiff Wayne Campbell (one of the children) completed his apprenticeship with Mt Isa Mines as a fitter and turner, and then joined the bus company business as a mechanic in the workshop. His brother worked in the office and his sister's husband worked in the catering business.

[16] Campbell's Coaches Pty Ltd was incorporated in 1980 and it became trustee of the Campbell Unit Trust. Units in the trust were held by three companies, which were trustees for family trusts associated with each of the three children and their families respectively. Relevantly, Bardside Pty Ltd was the trustee for the Wayne Campbell Trust. Those three companies ran the family business in partnership.

[17] The business expanded beyond Mt Isa into other regions in North Queensland. In 1981 the plaintiffs (husband and wife) and their children moved to Townsville as part of the expansion. The family partnership was dissolved on 30 June 2003. The Townsville operation of Campbell's Coaches was transferred to Bardside Pty Ltd as trustee for the Wayne Campbell Trust.

[18] At the time of trial Bardside Pty Ltd was still trading as Campbell's Coaches. It was operating a fleet of 14 buses and coaches, and employing 10 staff.

[19] Mr Wayne Campbell was a practical, hardworking businessman. Whether because of naivety or some ill-considered desire to cut costs, he did not take any appropriate steps to ascertain and protect his family's legal position. While he agreed with the suggestion in cross-examination that his relationship with the Turners in 1989 was quite close and that it remained so over the following 13 years,[14] his friendship was really with the third defendant, who was about his age. He had some dealings with Mr Lionel Turner,[15] but little in common with the fourth defendant.[16] That said, he impressed me as an honest witness who did his best to recollect conversations and events over the years. I did not detect any deliberate lying or exaggeration in his testimony.

[20] The plaintiffs and the third defendant and his wife became friends in the 1980s after the plaintiffs moved to Townsville and purchased a home the third defendant had built on Mount Low Parkway to the west of the Burdell Downs estate. Mr Campbell and the third defendant were particularly good mates.

[21] During their first 8 or 9 years in Townsville the plaintiffs conducted their bus business from rented premises on Old Ingham Road. In or about late 1988 the owners were intending to sell the site and the plaintiffs were advised that they might have to vacate in the near future. Mr Campbell told the third defendant that he and his wife were "looking at buying some land to establish a depot and workshop for the business."[17] The third defendant replied that there might be land available from the Turner family's property at Burdell Road, Bohle. The second defendant was planning an industrial subdivision of part of lots 1 and 2 fronting Burdell Road.[18]

[22] According to Mr Campbell, in late January or February 1989 the third defendant told him that the land was zoned commercial, and took him to the proposed site on Burdell Road, approximately 500 metres past the gate near the Bruce Highway intersection. On that or a subsequent occasion the third defendant gave him a plan showing the land he suggested the plaintiffs buy: it was the plan which was subsequently annexed to a deed between the parties and labelled "B"; it was expressed to have been prepared on behalf of the first defendants,[19] and it showed 42 lots with two-way access to the Bruce Highway off Burdell Road.[20] The land was shown on the plan as "lot 4". The third defendant said the site itself would need to be marked out, and that his family would sell the plaintiffs the 2 acres or so marked as lot 4 for $30,000. He said they had Council approval for the subdivision, but did not yet have the deeds. He told Mr Campbell that the plaintiffs would get their own deed once the subdivision had been completed and the deeds had issued. The Turners would have the water supply connected to the land, and the plaintiffs could start occupying the site once they had paid the purchase price.[21]

[23] According to the third defendant he told Mr Campbell -

"We are thinking of putting some industrial on there. You might be able to go on to an acre or so and we'll see how we go."[22]

He told Mr Campbell that the proposal to subdivide the land involved the Turners connecting the water supply to the land, but that there would not be any sewerage connection or stormwater drainage. He told Mr Campbell they would not be upgrading Burdell Road, which was a gravel road, until the subdivision proceeded.[23] He denies the following -

(a) saying to Mr Campbell that the land was zoned commercial;

(b) showing Mr Campbell a plan of the industrial subdivision;

(c) saying that his family would sell lot 4 to Mr Campbell;

(d) discussing a figure of $30,000 or any other purchase price with Mr Campbell;

(e) saying that his family had approval for the subdivision;

(f) saying that Mr Campbell would get his own deed once the subdivision had been completed;

(g) telling Mr Campbell he could occupy the site once he had paid the purchase price;

(h) telling Mr Campbell he could put a caveat on the land until a separate deed issued;

(i) telling Mr Campbell that he would organise an agreement to be prepared or signed so that the plaintiffs could pay the purchase price of $30,000 and take up occupation of the land and make improvements.[24]

[24] The third defendant spoke with his father (one of the first defendants) and his sister (the fourth defendant) about the plaintiffs' using the site as a bus depot.[25]

[25] More than 18 years passed between the initial conversation between Mr Campbell and the third defendant and the trial. There were a number of subsequent conversations between them before a deed was executed in March 1990. It is not surprising that their versions of these conversations differ: it would be a rare witness who could remember with precision the fact and content of conversations which took place so long ago. Generally I prefer Mr Campbell's version, which I find more plausible and more consistent with the objective facts of their dealings before the execution of the deed. In summary, I am satisfied that between late 1988 and March 1990 Mr Campbell and the third defendant discussed the proposal that the plaintiffs establish a bus depot on the proposed lot 4 on a number of occasions. I am further satisfied that the third defendant discussed the proposal with his father (one of the first defendants) and his sister (the fourth defendant), as he did not have authority to deal with the land on the first defendants' behalf. There is no evidence of any direct communication between Mr Campbell and Mr Lionel Turner or the fourth defendant. I am satisfied that the third defendant said his family was planning an industrial subdivision and that he showed Mr Campbell a plan of subdivision comprising 42 general industry lots.[26] I am satisfied that he said his family would sell lot 4 to the plaintiffs for $30,000, that the plaintiffs would obtain their own deed once the subdivision had been completed, and that they could start occupying the site once they had paid the purchase price.

[26] Between February 1989 and March 1990 the plaintiffs took steps to have a shed and other improvements erected on the land. In March 1989 an application for building approval for the shed was submitted to the Thuringowa City Council. It was submitted in the name of the first defendants as owners; they appear to have signed their names in the place on the form where particulars of the owner were to be inserted - although at the bottom of the form the third defendant described himself as the owner and signed his name in that capacity.[27] A building permit was issued by the Council on 11 May 1989.[28]

[27] The surveyors organised by either Mr Lionel Turner or the fourth defendant pegged out the proposed lot 4 in about July 1989. The surveyors' invoice was addressed to Mr Lionel Turner.[29]

[28] The third defendant assisted Mr Campbell prepare the site for the laying of foundations by supplying and, to some extent, operating a backhoe, tip truck, grader and vibrator/roller. He arranged for the Burdell Road gate to be shifted down the road to a point beyond the entrance to the proposed lot 4.[30]

By early March 1990 the plaintiffs were ready to move on to the proposed lot 4.[31]

[30] The fourth defendant's husband was then a solicitor employed by Wilson, Ryan & Grose. In an affidavit tendered by the defendants he deposed that sometime in early 1990 Mr Campbell attended at his office and presented him with a cheque for $30,000. At the time he had no instructions from the first defendants regarding the matter and no knowledge of any proposed sale relating to the payment of $30,000. He refused to accept the cheque and said he would obtain instructions as to the form of any agreement.[32]

[31] After receiving instructions from the Turner family, Mr Owens prepared a deed between the first defendants as "owner", the second defendant as "Vendor" and the plaintiffs as "Purchaser" which was executed on 21 March 1990.[33]

1. Lionel Jospeh [sic] James Turner and Elsie Edith Turner are the owners of certain property described as Lots 1 and 2 on R.P. 740905 being the whole of the land contained in Certificate of Title Volume N1271 Folio 92 and Volume N1271 Folio 93 respectively Parish of Bohle County of Elphinstone delineated in red on annexure 'A' (plan number 6246/2) attached hereto.

2. The owners of the land propose to transfer the aforementioned property to the Vendor Bohle Grazing Pty. Ltd. so as to allow an industrial subdivision to be developed upon the subject property.

3. The property delineated in red on annexure 'A' is zoned general industry and the Vendor has obtained formal Council approval to a proposed industrial subdivision and the owner and Vendor have consented to allow the Purchasers to erect an industrial shed upon Lot 4 on the proposed subdivision and to use the said Lot 4 (hereinafter referred to as the subject Lot and delineated in blue on annexure 'B' hereto - plan number 6246/1) to conduct the business of a bus company, prior to the issue of a separate freehold title to the subject Lot.

4. The owners and the Vendor have agreed that upon the issue of a separate Certificate of Title the subject Lot will be transferred to the Purchaser free from encumbrances.

In consideration of the payment by the Purchaser to the Vendor of the sum of THIRTY THOUSAND DOLLARS ($30,000.00), receipt of which is hereby acknowledged, the Vendor undertakes and agrees to transfer the subject Lot to the Purchasers immediately upon issue of the separate Certificates of Title in respect to the subject land.

The owner and the Vendor acknowledges [sic] the Purchasers' beneficial and equitable rights with respect to the subject Lot and undertake that they will neither themselves nor in association with others do or perform any act, matter or thing which will in any way whatsoever endanger, lessen or derogate the Purchaser's rights in respect of the subject Lot.

The owner and the Vendor will take all steps in their power to ensure the protection of the Purchasers' rights herein and shall further take all such steps and execute all such documentation necessary to effect registration of the Purchaser's interest herein PROVIDED HOWEVER the Vendor shall not be bound to accept any unreasonable conditions imposed by the Thuringowa City Council to the proposed industrial subdivision.

In the event that the separate Certificates of Title are unable to issue in respect to the subject Lot, the Vendor shall immediately reimburse the Purchaser for any monies payable hereunder.

Upon any sale of the industrial subdivision prior to issue of the separate Certificate of Title to the Purchaser, the owner and the Vendor shall as a condition of such sale obtain from the proposed transferee an undertaking that it recognises the Purchaser's prior equitable rights in respect to the subject Lot and that the proposed transferee shall further transfer the subject Lot to the Purchaser upon the issue of a separate Certificate of Title from the Department of Freehold Land Titles.

The Vendor shall immediately upon the execution of this Deed of Agreement arrange for the provision of articulated town water supply to the subject Lot.

Any monies payable to the Vendor hereunder shall be paid into the Trust Account of Messrs. Wilson Ryan & Grose, Solicitors of Townsville, pending the formal execution of the deed by all of the parties hereto.

Immediately upon the execution of this deed, Messrs. Wilson Ryan & Grose are hereby authorised to release any monies held in their Trust Account directly to the Vendor. Receipt of the properly executed deed by Messrs. Wilson Ryan & Grose will be sufficient authority of that firm to release the monies held in their Trust Account.

The Vendor shall be responsible for the costs of and incidental to the preparation of this deed (including stamp duty) and the Purchaser shall be liable for any stamp duty assessed upon the actual transfer of the subject Lot, PROVIDED HOWEVER that the parties hereto shall each be otherwise responsible for the payment of their own legal costs of and incidental to this matter.

The owner shall, if requested by the Purchaser, execute a consent caveat in favour of the Purchaser to protect the Purchaser's equitable rights in respect of the subject Lot pending the issue of a separate Certificate of Title and the Purchaser's interest becoming registered in the Department of Freehold Land Titles. The Purchaser shall at that time execute such documentation as is deemed necessary to withdraw the said consent caveat so as to allow the registration of a transfer in the Purchaser's favour.

1. The Purchasers acknowledge that they are aware that the owners of the property are the shareholders of the Vendor which is the company used by the owners for the development of the property and that the Purchasers will raise no objection to the existence of a prior unregistered transfer between the owners and the Vendor company with respect to the land delineated in red on annexure 'A' hereto."[34]

[33] The plaintiffs did not obtain independent legal advice before they executed the deed.[35] Mr Owens recalled the plaintiffs, the first defendants and the fourth defendant attending at his office and executing the deed; curiously he made no mention of the third defendant - this may have been an oversight.[36] According to Mr Campbell, he and his wife signed it at the same time as the first defendants. They could not remember whether the third and fourth defendants were there when they signed the deed. The company seal of the second defendant was affixed in the presence of the third and fourth defendants who signed the document opposite the seal. All of the signatures were witnessed by Mr Owens.[37] The third and fourth defendants both acknowledged that the signatures were theirs, but claimed to have no recollection of the deed.[38] It is dated 21 March 1990.

[34] The plaintiffs paid the $30,000 (which they had previously arranged to borrow) to Wilson Ryan & Grose that day. Although the deed provided for payment of the $30,000 to the second defendant,[39] according to the trust account receipt the moneys were received by the solicitors on behalf of the first defendants.[40]

[35] The fact of execution of the deed, whether or not it was void for contravention of the Land Sales Act 1984 (Qld), was an undisputed fact which assumed major significance in this case.

[36] I accept that the third defendant had no recollection of the deed.

[37] I have difficulty in accepting that the fourth defendant could not remember having executed a deed in relation to the plaintiffs' entitlement to lot 4. Down the years she was conscious of an obligation to the plaintiffs and she sought to make provision for it in various proposals for the land.[41] It is odd that she did not investigate the source and nature of that obligation. It is possible that the deed itself was not at the forefront of her mind as she grappled with so many issues over so many years. But her consciousness of some obligation to the plaintiffs was evident in her negotiations with Stockland (which I will address in some detail later). After the sale to Stockland the Turners' solicitors asked the plaintiffs' solicitors for a copy of the deed,[42] and the fourth defendant took legal advice in relation to it.[43] Perhaps that is when the notion of a "moral obligation" (a phrase she used on various occasions in her evidence[44]

) crystallised in her thinking. I do not accept that even at trial she still did not recall having executed a deed drawn by her husband in relation to the plaintiffs' entitlement to lot 4. This causes me to be sceptical about some of her other evidence (to which I shall come in due course).

[38] The Turners had water connected to the site, although there was delay in this being done. Mrs Campbell spoke to the fourth defendant about the delay, who in turn had the third defendant make necessary arrangements. According to the fourth defendant, the $30,000 paid to the first defendants by the plaintiffs was applied in advancing the subdivision, by paying the expenses incurred in installing water pipes under the Bruce Highway to connect the site to the town water supply.[45] The delay in connecting the water delayed the plaintiffs' commencement of the bus depot on the site until September 1990. The plaintiffs made further improvements to the site in the interim, and after the relocation of their business there. They remained in occupation until eventually forced to vacate by Stockland in 2003, without ever being asked to pay rent, rates or other outgoings in respect of the land, and never doing so.

The intersection of Burdell Road and Bruce Highway

[39] After receiving notice of the conditional approval for subdivision in March 1989 the Turners engaged Mr Neil McKee of Rankine & Hill Pty Limited, consulting engineers, to assist with the preparation of an engineering design for approval by the Council. It was part of his brief to manage negotiations with the Council and MRD in relation to access via the Burdell Road/Bruce Highway intersection and negotiations about the deferral of subdivisional conditions.

[40] Mr McKee undertook such negotiations and correspondence passed between him and MRD. At the time the deed was executed MRD's position was that it would not approve a median break at the intersection when the highway was upgraded to four lanes; it preferred a new intersection (to be constructed at the Turners' expense) at a point on the highway opposite Shaws Road, and a side road from Burdell Road to the new intersection. However, it was not possible to construct a side road in the location specified by MRD because the road reserve between the railway line and the upgraded highway was not wide enough to accommodate it and the Turners had no right to access the railway reserve. In March 1990 Mr McKee was instructed to inquire about the possibility of the Turners purchasing the railway reserve.

[41] Negotiations with MRD continued after the deed was executed. By October 1990 MRD's attitude was intractable: it insisted upon the Turners incurring the very substantial up-front costs of relocating the access point as a condition of approval. They did not have the resources to do so, and they did not own or have a right of access over the railway reserve.[46]

[42] The 42 lot configuration of the subdivision conditionally approved by the Council and contemplated by the deed depended upon access via a break in the median strip at Burdell Road. In October 1990 Mr McKee wrote to the Council proposing conditions on which 5 of the 42 lots[47] could be developed with the existing access from Burdell Road. The Turners reasoned that the existence of such lots occupied by businesses would improve their bargaining position with MRD for a break in the median strip when the highway was upgraded to 4 lanes. Council resolved to give favourable consideration to the development of 6 general industry lots with varied conditions, subject to the approval of MRD in relation to the continued temporary use of the existing Burdell Road access and open level crossing to service the proposed lots. However, MRD was prepared to approve access for 6 lots via the existing intersection only if the Turners agreed to fund the construction of a new access point in the future.

[43] The Turners lobbied the Council and the local member of State Parliament for support in persuading MRD to change its attitude. But their support was to no avail.

[44] The Council's conditional approval of the subdivision expired on 15 March 1991. In July 1991 the Council wrote to the first defendants advising that it had approved the upgrading of the open level crossing over Bundall Road to a flashing light standard on condition that the Turners met the costs. Supply and installation were expected to cost $108,000, and in addition they were expected to meet ongoing maintenance costs.

[45] The Turners concluded that the subdivision could not be achieved. The fourth defendant informed a Council meeting on 16 September 1991 that the subdivision had been abandoned.[48]

[46] The fourth defendant recalled Mr Campbell asking her about the progress of the issue of a separate title for the proposed lot 4 in late 1990 or early 1991. She told him they were having problems with MRD but that they were still working on meeting the conditions of subdivisional approval.[49]

The fourth defendant recalled attending a Christmas party organised by the plaintiffs at the shed in late 1991. She did not speak with either of the plaintiffs although Mr Campbell's brother approached her and asked her about the separate deed.[50]

Some time in 1992 Mr Campbell did some work on a cattle truck for Mr Lionel Turner. Mr Turner gave him a second hand Landcruiser in return. According to the fourth defendant she had a telephone conversation with Mr Campbell after that - on a date after she had a baby on 24 August 1992. She said she told Mr Campbell words to the effect -

"The subdivision is at an end and cannot proceed any further. We can never create the land [meaning proposed lot 4] off Burdell Road intersection. We are now going to have to come in via Shaws Road, but when we develop it, it will have to be with all the services and not like we have been trying to do. All we can do is to give you your money back."

She said Mr Campbell responded with words to the effect -

"I would rather wait here. The current 2 acre block isn't big enough anyway and I would prefer to get a 5 acre block. Don't worry about the $30,000. I want to stay until you can develop the land and then I will pay more for a bigger block."

She said they also discussed the expenses involved in the installation of traffic signals at the intersection.[51]

[49] Mr Campbell placed the conversation in about 1993 or 1994. Although he could not recall where it occurred, he recalled it was in person (rather than by telephone) and that it was not an organised meeting. He said the fourth defendant talked to him about the price of proposed railway signals at the level crossing and what MRD wanted her family to pay for them. He denied -

(a) that the fourth defendant said anything else about the subdivision - that it was not going ahead or that the Turners were unable to issue the plaintiffs with the separate certificate of title as promised;

(b) that the fourth defendant said the Turners would give the plaintiffs their money back;

(c) that he rejected any offer to repay the $30,000 (as no offer was made);

(d) that he said the plaintiffs would rather wait than accept their money back;

(e) that he would prefer a 5 acre block or that he would be happy to pay more for such a bigger block.[52]

[50] On neither version did the fourth defendant tell Mr Campbell relatively promptly after 16 September 1991 that the subdivision had been abandoned. I am satisfied that some time in the year or so after late August 1992 there was a conversation between them in which the fourth defendant complained about MRD's wanting her family to pay for the installation of railway signals at the level crossing. I prefer Mr Campbell's version of the conversation. I am not satisfied that the fourth defendant told him that the subdivision was at an end and that all the Turners could do would be to give him his money back. The Turners' recognition of some ongoing obligation to the Campbells in documentation prepared in subsequent years in relation to their attempts to deal with the land[53]

is inconsistent with the fourth defendant's assertion that she told Mr Campbell that the subdivision was at an end and that all they could do would be to give him his $30,000 back. Moreover, it would have been odd for someone as astute as the fourth defendant to have waited a year or more before informing him of this. And there is no evidence that the plaintiffs needed or had otherwise expressed any interest in acquiring 5 acres of land.

[51] Negotiations about the acquisition of the railway reserve continued until a land exchange was finalised in February 1993.

[52] Meanwhile the Turners came to accept that they would have to agree to construct a new intersection at Shaws Road in order to secure permanent two way highway access to lots 1 and 2. To absorb the increased costs they shifted their focus from an industrial subdivision to a broader subdivision including residential, commercial, industrial and public spaces. In October 1993 some of the land was rezoned from General Industry to partly Residential A, partly Residential B and partly Rural B.[54] The land occupied by the plaintiffs was unaffected: it was still zoned General Industry.[55]

[53] After lengthy negotiations, a deed between MRD and the first defendants regarding construction of the new intersection at Shaws Road was executed in June 1994.[56] By clause 3 -

3.1 The parties acknowledge and agree that certain further works including signalization will be required at the intersection ('the signalization works').

3.2 Turners agree to pay to The Director-General, Department of Transport ONE HUNDRED AND TEN THOUSAND DOLLARS as a contribution towards the cost of the signalization works. This sum is to be paid by five equal annual instalments due on 30 June each year, commencing on 30 June 1994."

"1.1 The Director-General Department of Transport acknowledges that the payment referred to in clause 3.2 shall be paid in full and final satisfaction of all requirements of the Director-General, Department of Transport in respect of the development of the Land as follows:

(a) as industrial land: the part of the Land as is already contracted to and used by Campbells Coaches;

(b) as local shopping so much of the Land only as may be necessary to service the residents of the Land; and

(c) as Residential A or B: the balance of the Land.

The Director-General, Department of Transport may require further contributions to infrastructure in respect of any other zoning or development which may be proposed on the Land."[57]

[54] In 1995 the Turners engaged consultants to prepare a master plan for the whole of lots 1 and 2 and adjoining lands owned by the first defendants ("the Later Subdivision"). It was submitted to Council and State government agencies, including MRD, in August 1996.[58]

[55] In 1995 and 1996 the first defendants were under pressure from the National Australia Bank to reduce the level of their indebtedness.

[56] The Turners were undertaking another subdivision, the Carinya estate, on nearby land. They were relying on cash flow from that estate to service loans in relation to the Burdell Downs subdivision. In March 1997 part of the Carinya estate was subject to significant flooding, and several houses were inundated with water. This resulted in a decline in land sales in the area generally, with adverse effect on the Turners' cash flow.

[57] In response to financial pressures, on 1 October 1997 the Turners entered into a commercial heads of agreement with the BMD Group for the Later Subdivision.[59]

[58] As a result of meetings between the Council, MRD and the Turners' consultant, it became clear -

(a) that the most suitable path for the major access road into the Later Subdivision would pass through the land occupied by the plaintiffs; and

(b) that the proposal for the development of Shaws Road would include a grade-separated intersection which, when fully constructed, would meet with the major access road into the Later Subdivision at the location of the land occupied by the plaintiffs and through the place where their shed was located.[60]

[59] At about this time the fourth defendant sought the assistance of Mr Peter Bugeja in coping with the family's financial difficulties. He had already had a hand in developing some of their farming land after responding to an advertisement they had placed in 1994. Mr Bugeja became involved in dealings with NAB and obtaining advice from an insolvency practitioner in Brisbane, and subsequently in attempts to market the land and ultimately in the sale to Stockland.[61] By the time of the trial he was still working very closely with the fourth defendant in the management of the family's business affairs.[62]

[60] There were two floods in the region which affected the Carinya estate - in March 1997 and again in January 1998.

[61] There was a meeting between the fourth defendant and Mr Campbell at the Carinya estate office. The fourth defendant remembered it being after the first flood,[63] while Mr Campbell remembered it as after the second flood.[64]

[62] According to the fourth defendant, during the meeting she explained to Mr Campbell -

(a) that the Turners were looking to enter into a joint venture with BMD to subdivide the site;

(b) that a high order road was necessary to access the new subdivision, and it would have to be constructed through the middle of his shed located on Burdell Road;

(c) that he would have to shift his operations, including the shed;

(d) that the Turners could sell him a 5 acre block if the subdivision went ahead - not on Burdell Road, but along the railway link; and

(e) that under their agreement with BMD the Turners were responsible for shifting him from the site.

She said Mr Campbell said that he wanted 5 acres, and that the move sounded good. He did not mention the deed or any rights arising under it, and did not say anything about owning the land on which the shed was located.[65]

[63] Mr Campbell's recollection of the meeting was different. He recalled discussion of the January 1998 flood, and the fourth defendant asking him to find out from his son how high the water was on the highway adjacent to the estate; he said she wanted to blame the Council for not clearing the regrowth in the nearby river. He said she did not tell him that the subdivision referred to in their agreement was not going ahead, and she did not offer him $30,000 or any other sum of money. He said he did not then (or on any other occasion) express a preference for a 5 acre block. The site was more than adequate for their needs; Sunbus, which had been a tenant of part of the site, had moved out, and they simply did not need more land. He did not recall the fourth defendant telling him who else might have been involved in the development of the land, and could not recall any mention of a joint venture partner. He did recall the fourth defendant saying that if the overpass were built, they would have to move. He replied that he would have no problem moving, as long as the Turners paid for it.[66]

[64] In December 1997 BMD withdrew from the joint venture at the conclusion of the due diligence period. The Turners tried unsuccessfully to find another joint venture partner.

[65] I accept that there was a conversation between the fourth defendant and Mr Campbell in which the fourth defendant told Mr Campbell that if the land were to be subdivided, the Campbells would have to move because access to the estate would have to be via an overpass constructed through the middle of their shed. I am satisfied that this conversation took place after the second flood and that it was along the lines deposed to by Mr Campbell: (a) Mr Campbell had no recollection of BMD or any other name being mentioned;[67] the fourth defendant was under mounting financial pressure, and I think it highly unlikely that she would have disclosed the fact of ongoing negotiations with a particular joint venture partner; and BMD had withdrawn from the joint venture in December 1997; (b) the plaintiffs had no need for a 5 acre block; and (c) given the longstanding relationship between the plaintiffs and the Turners and the fact that the plaintiffs had not only paid $30,000 but also expended considerable sums in improving lot 4, I think it is highly probable that Mr Campbell would have said they would move provided the Turners paid for it.

[66] According to the fourth defendant, the flooding in January 1998 further impacted on land sales and made their financial position untenable. They held discussions with NAB about the sale of the land mortgaged to it, including lots 1 and 2.[68] By a deed made on 1 April 1999 between NAB and the first, second and fourth defendants, the bank agreed to extend the expiry date for various finance facilities secured by the land until 28 February 2000, provided the Turners complied with their obligations under the deed to take steps to sell the land and discharge the debt.[69] In due course Knight Frank was appointed to market the land.

[67] According to the fourth defendant she telephoned Mr Campbell and arranged to meet him at the second defendant's office before the first advertisement for the sale of the land was run (which was in September 1999). She said that at the meeting she told Mr Campbell -

"You are going to have to relocate your bus depot. My parents have to sell the property. I didn't want you to see it first in the newspapers."[70]

On her evidence Mr Campbell accepted this; he gave no indication that he owned the site or that he would refuse to relocate.[71]

[68] Mr Campbell denied that this meeting occurred.[72]

[69] According to the fourth defendant and to Mr Bugeja, the fourth defendant had been apprehensive about how Mr Campbell would react to the news, and so they had agreed that Mr Bugeja should be present in the office during the meeting - not in the same room, but in a board room next door, with the connecting door ajar so that he could hear what was going on. Mr Bugeja said that after social pleasantries were exchanged the meeting lasted about 30 minutes. He corroborated the fourth defendant's version of what she told Mr Campbell. He said Mr Campbell did not say very much or show any emotion.[73]

[70] Mr Bugeja was someone on whom the fourth defendant relied and in whom she had confidence. His close allegiance to the Turner family interests coloured his evidence. He was careful in his responses to cross-examination - reluctant to expand on the contents of his affidavit, saying things such as, "No, I can't, I think I've done enough,"[74] and that he had conveyed "the most important snippet" of a conversation.[75] His demeanour was somewhat disdainful of the court process. In the circumstances his evidence should be approached with caution.

[71] I do not accept that the fourth defendant told Mr Campbell that the Turners had to sell the land. Previously when told he would have to relocate, he had said he would do so if the Turners paid for the relocation. It would have been quite out of character for him to have shown no emotion or made no response to news of an impending sale. If he were stunned into silence, the occasion would likely have made an indelible impression on him, so that he would not have forgotten it by trial. Perhaps, as counsel for the plaintiffs postulated in oral submissions, Mr Bugeja was mistaken about when he overheard a conversation between Mr Campbell and the fourth defendant: counsel suggested it was after the sale to Stockland in 2002.[76] But that would not explain the fourth defendant's evidence that he was present. The account of Mr Bugeja skulking in the adjoining room in case Mr Campbell reacted angrily is really quite bizarre: there is no evidence of his ever having behaved in an angry or aggressive way towards the fourth defendant; moreover she was a strong and independent woman; while Mr Bugeja was a trusted adviser to her, she gave no indication of needing his protection or that of anyone else in her many dealings in relation to the land. I reject the evidence of the fourth defendant and Mr Bugeja that this conversation took place, and that he was present in an adjoining room during it.

[72] Down the years the third defendant and Mr Campbell spoke from time to time as they passed each other on Burdell Road. According to the third defendant, on one occasion after the bank had said the Turners would have to sell the land, he told Mr Campbell -

"The bank is going to make us sell the land."[77]

He said Mr Campbell showed no emotion, and did not ask how the sale was going to affect the Campbells. Mr Campbell denied that this conversation took place, and said that the third defendant never mentioned anything like that to him.[78] I accept Mr Campbell's evidence in preference to that of the third defendant. It would have been consistent with the third defendant's loyalty to his family not to have disclosed their financial troubles, and consistent, too, with his leaving business matters to the fourth defendant.

[73] NAB issued notices of demand to the first and second defendants in February and April 2000[79] and on 23 June 2000 it issued notices of exercise of power of sale over various parcels of land, including lots 1 and 2.[80]

[74] Mrs Humphreys is a director of Townsville Earthmoving Pty Ltd, a company involved in land development in and around Townsville, both as a contractor and as a developer. She contacted the fourth defendant after learning from her NAB manager that the Turners were wanting to sell some residential land. According to Mrs Owens this was in about December 1999,[81] although Mrs Humphreys recalled it as being in August or September 2000.[82] According to the fourth defendant, in their initial telephone conversation Mrs Humphreys expressed interest in purchasing Carinya, but the fourth defendant told her that land was not for sale, and they then discussed the Burdell property.

[75] A meeting took place at Mrs Humphreys' office attended by Mrs Humphreys and the fourth defendant and Mr Peter Bugeja representing the Turner interests.

[76] According to Mrs Humphreys the fourth defendant took her on an inspection of the land including a drive along Burdell Road. Mrs Humphreys pointed out the Campbell's Coaches' bus depot and asked what would happen to it. The fourth defendant replied, "We would have to relocate them."[83] Mrs Humphreys said she had recently met the plaintiffs personally, but she did not know whether they had a lease or any other form of tenure over the site. The fourth defendant told her that whilst the land was for sale, she would like to retain some interest in any development project relating to it; she gave Mrs Humphreys a copy of a Knight Frank valuation and marketing proposal, which she said had been put together for the purpose of earlier negotiations with the BMD Group. Mrs Humphreys said that following the inspection she did not pursue any further interest in the opportunity and she had no further dealings with the fourth defendant or the Turner family in relation to the land.[84]

[77] According to the fourth defendant she and Mr Bugeja told Mrs Humphreys that they were looking for a joint venture partner or to sell the land outright. Mrs Humphreys said she was going to see her accountant in Ipswich when she went south for a holiday and that she would get back to them on her return to Townsville. She denied taking Mrs Humphreys on an inspection of the land or a drive along Burdell Road. She denied ever discussing the situation with Mr Campbell with Mrs Humphreys.[85]

By letter dated 21 January 2000 addressed to the fourth defendant, Mrs Humphreys wrote -

Thank you for the time and interest given to us for the proposal of securing future englobo parcel or parcels. We had put what time we had into assessing the Burdell Downs Property. We have had three properties to consider and we have made an offer on one of those. This would be our preferred project (if successfull [sic] with our offer). [B]oth in time, capital outlay and return. This property is of similiar [sic] nature and it has been held in their family since 1946 - So we are at a very tense negotiating stage. We would prefer to keep the site confidential to give our agent every chance for negotiations.

We wish you every success with the future development of 'Burdell Downs'".[86]

[79] In late 2002 the Campbells engaged Mrs Humphreys' company to help them relocate from Burdell Road and to carry out earthworks and building works at their new depot.

[80] I find it impossible to resolve the conflicting accounts of the dealings with Mrs Humphreys, who was not cross-examined. Given the date of Mrs Humphreys' letter, I accept the fourth defendant's account of when the dealings occurred. If the conflict were resolved in Mrs Humphreys' favour, all that might turn on it would be a further reflection on the credit of the fourth defendant and Mr Bugeja.

[81] Stockland first expressed interest in the whole Burdell site, including lots 1 and 2, in 1999. After discussion with NAB the Turners rejected the offer Stockland made at that time.

[82] Negotiations recommenced in 2001, and culminated in a contract of sale dated 10 September 2001 by which Stockland purchased a large tract of land, including lots 1 and 2 and other land owned by the first defendants and lands owned by the third and fourth defendants for $3.25 million.[87] Settlement took place on or about 18 October 2001.

[83] Before the terms of the contract were finally agreed, the fourth defendant endeavoured to have Stockland agree to the creation of a two acre block for the plaintiffs' bus depot. She did not tell Mr Campbell about this.[88] A draft contract[89] contained this provision -

12.1 The buyer, at a time suitable to the buyer, shall transfer to LIONEL JOSEPH JAMES TURNER, ELSIE EDITH TURNER, LYNDEL ISABEL OWENS and HERBERT SAMUEL TURNER (or the survivor of them) as tenants in common in equal shares an area of land selected solely by the buyer being not less than 8,000 square metres which is zoned so that the operation of a bus depot may be lawfully conducted on the land.

12.2 The buyer shall pay the costs of the transfer of the land including survey fees, Local Government fees, stamp duty and registration fees.

12.3 LIONEL JOSEPH JAMES TURNER, ELSIE EDITH TURNER, LYNDEL ISABEL OWENS and HERBERT SAMUEL TURNER acknowledge and agree that the obligation of the buyer to transfer the said land to them is personal to them and is not transferable.

12.4 The buyer and the sellers agree that rates and land tax in respect of the lot transferred shall be adjusted between them as and from the date of transfer. Rates and land tax shall be adjusted as if clause 2.5 of the Terms of Contract applied and 'settlement date' referred to in the said clause 2.5 read 'transfer date'. The buyer and sellers agree that any adjustment calculated under this clause shall be paid within thirty (30) days of the date the lot is transferred."

However, Stockland's inquiries of the Council revealed that it was highly unlikely it would approve the use of any part of the land being acquired as a bus depot. It wanted this provision removed from the contract.[90]

[84] In the form in which it was executed the contract contained the following clauses -

7.1 The seller of the second parcel discloses to the buyer that Lot 1 on Registered Plan 835468 is registered on the Environmental Management Register under the Environmental Protection Act 1994. The sellers warrant that the balance of the property sold is not registered on any register maintained under the Environmental Protection Act and that they are not aware [of] circumstances by virtue of which any notification should be given under the Environmental Protection Act.

8.1 The seller of the second parcel warrants to the buyer that Campbell's Coaches Pty Ltd occupy as a tenant at will an area of approximately 0.8 hectares on part of Lot 1 on Registered Plan 835468 for the purposes of a coach storage and maintenance yard. The buyer agrees that at settlement it shall take no objection to the tenant at will and that the sellers shall do all things reasonably required of them to have the tenant at will give up occupation of the land no later than such date as is eighteen (18) months from the settlement date.

9.1 Notwithstanding completion of this Contract, the sellers shall produce [to] the buyer and CLIVE JEREMY HAMILTON SCOTT within two (2) years of the settlement date either:-

(a) a Suitability Statement ('suitability statement') for Lot 1 on Registered Plan 835468 issued by the administering authority under the Environmental Protection Act 1994 ('administering authority') listing Lot 1 on Registered Plan 835468 as suitable to be developed for residential purposes in accordance with Exposure Setting A in Table 9 under the Guidelines for the Assessment and Management of Contaminated Land in Queensland dated May 1998 subject to a Site Management Plan; or

(b) a decision ('decision') by the administering authority to remove Lot 1 on Registered Plan 835468 from the register on the basis that it is no longer contaminated land.

12.1 The buyer, at a time suitable to the buyer, shall transfer to LIONEL JOSEPH JAMES TURNER, ELSIE EDITH TURNER, LYNDEL ISABEL OWENS and HERBERT SAMUEL TURNER (or the survivor of them) as tenants in common in equal shares an area of land selected solely by the buyer seller being not less than 8,000 square metres which is zoned so that the operation of a bus depot may be lawfully conducted on the land.

12.2 The buyer shall pay the costs of the transfer of the land including survey fees, Local Government fees, stamp duty and registration fees.

12.3 LIONEL JOSEPH JAMES TURNER, ELSIE EDITH TURNER, LYNDEL ISABEL OWENS and HERBERT SAMUEL TURNER acknowledge and agree that the obligation of the buyer to transfer the said land to them is personal to them and is not transferable.

12.4 The buyer and the sellers agree that rates and land tax in respect of the lot transferred shall be adjusted between them as and from the date of transfer. Rates and land tax shall be adjusted as if clause 2.5 of the Terms of Contract applied and 'settlement date' referred to in the said clause 2.5 read 'transfer date'. The buyer and sellers agree that any adjustment calculated under this clause shall be paid within thirty (30) days of the date the lot is transferred."

Further, by handwritten amendment the "Campbells Coaches Improvements" were listed as Excluded Fixtures.

[85] During the negotiations with Stockland the fourth defendant learnt that lot 1 on RP 835468 (part of which was occupied by the Campbells) had been entered on to the Environmental Management Register because of potential contamination. This related to the plaintiffs' installation of a 15,000 litre underground tank for distillate storage, which the Turners had not known about. The fourth defendant telephoned Mr Campbell and asked whether he had an underground diesel tank at the bus depot, to which he replied, "Yes." She asked whether he knew the land was on the Contaminated Land Register, to which he replied, "No."[91]

[86] According to Mr Campbell, he heard a rumour that the land had been sold in or about early 2002. He approached the third defendant at the Burdell Road railway crossing when this exchange occurred -

Herb Turner: "There's people interested. I don't think it's going to happen. They haven't come up with the money."[92]

The third defendant denied ever saying this.[93] I accept Mr Campbell's evidence that the conversation did occur.

[87] About a month later Mr Campbell received by fax from Stockland a letter dated 4 March 2002 in these terms -

"We are aware that your company occupies lands that are currently in the ownership of our Group. The lands are currently the subject of a planning study for future uses as a master planned residential community.

We advise that under the terms of the purchase contract, your company was to vacate the land eighteen months from the date of settlement and would become a Tenant at Will during this period.

With respect to the Tenancy at Will, our company will wish to enter into discussions regarding rental of the aforementioned land during the tenancy and your obligations under the Contaminated Land Act with respect to your continued use of the site.

Would you please contact the undersigned by no later than Friday, 8th March 2002 to discuss the aforementioned issues."[94]

He immediately telephoned Mr Wayne Rex of Stockland. Mr Rex rejected his assertion that the plaintiffs owned the land, and told him that Stockland had bought the whole of the land the previous year.

[88] Mr Campbell engaged solicitors, and on their advice kept a diary of further discussions concerning this matter. In so far as Mr Campbell and the fourth defendant gave differing accounts of the occurrence and content of subsequent conversations, I accept the evidence of Mr Campbell, at least to the extent it is supported by his contemporaneous diary records.

[89] Mr Rex telephoned Mr Bugeja and told him of the conversation. Mr Bugeja told the fourth defendant of his conversation with Mr Rex, and she rang Mr Campbell and arranged a meeting in her office. She recalled that during that conversation, Mr Campbell referred to "a piece of paper" that proved he owned the land. She did not ask him what he meant. She said in her affidavit sworn on 21 May 2007 "... I now assume he was referring to the deed."[95]

[90] The meeting took place on about 13 March 2002. According to Mr Campbell, the fourth defendant said that the first defendants had been forced to sell the land. She also told Mr Campbell that the Turners had to decontaminate the land.[96]

[91] According to the fourth defendant, she told Mr Campbell that her parents had had to sell the land to avoid sale by NAB. She offered Mr Campbell a 3 acre block of land on Mt Low Parkway, which he rejected saying that it was too far out and that he wanted money. She confirmed that the Turners could assist them to move, and that all they asked was that the plaintiffs move from the property in April 2003. Mr Campbell undertook to move in the 18 month period stipulated in the contract. According to her, the meeting concluded with Mr Campbell saying he would speak to his legal advisers and get them to work something out with hers.[97]

About a week later the fourth defendant and an engineer, Mr Messer, visited the bus depot and Mr Campbell showed them the location of the fuel tank and the soakage trenches.[98]

[93] Stockland's solicitor wrote to Mr Campbell again on 18 March 2002[99] wanting "to regularise" Campbell's Coaches' occupation of the bus depot and offering the following -

Outgoings: your company should meet its proportionate share of general rates for the property together with all water consumed on the property.

Special Conditions: (1) your company to use the land in conformity with the requirements of the Environmental Protection Authority.

(2) At the end of the term, your company is to remove its improvements on the land and make good."

[94] Mr Campbell contacted the fourth defendant. According to Mr Campbell he asked her whether Stockland knew that the plaintiffs had signed an agreement and paid $30,000. She replied that she had told Stockland that the Turners had a "moral obligation" to them. Mr Campbell faxed a copy of the Stockland letter to the fourth defendant, and they spoke again about 12.30 pm that day. According to Mr Campbell the fourth defendant "again said that Stockland knew of [their] agreement with the Turners"; she rang again 5 minutes later and said she had faxed a copy of Stockland's letter to her solicitor, Mr Baxter.[100]

[95] According to the fourth defendant when Mr Campbell rang he said words to the effect -

"What's going on with the land? Stockland has just contacted me and told me I need to pay $30,000 a year rent."

"That's not my understanding; you can stay on the land until April 2003 at no cost. At that stage you will have to move out."[101]

She said she suggested to Mr Campbell that he write back immediately and offered to provide a draft letter, which she subsequently did on 28 March 2002 after sending it to her solicitor to check.[102] She said she had told Stockland that the Turners had a moral obligation to the plaintiffs.[103]

[96] According to Mr Campbell he had a further telephone conversation with the fourth defendant on 27 March 2002 after which she faxed him the draft letter (which was not on letterhead and which was dated 16 March 2002).[104] The next day she faxed him another copy of the same letter (this time on letterhead and dated 28 March 2002).[105] He did not send the letter (in either form) to Stockland, but instead contacted his solicitor.

[97] Correspondence passed between the parties' solicitors; upon request by the Turners' solicitors, on 22 April 2002 the plaintiffs' solicitors provided a copy of the deed executed in March 1990.[106]

[98] With the help of his diary notes, Mr Campbell recalled that it was in a discussion at the bus depot on 28 May 2002 that the fourth defendant offered him 3 acres of land on the Mt Low Parkway and help to relocate. He said the offer was in response to his raising the issue of compensation; that he did not respond to it because he did not believe it to be genuine.[107]

On 28 October 2002 the solicitors for the plaintiffs wrote to the solicitors for the Turners in these terms -

"As you will by now be aware, the recent sale by your clients to Stockland (Constructors) Pty. Ltd. of Lots 1 and 2 on RP 740905 involved a blatant contravention of your clients' contractual and equitable obligations to our clients. In the circumstances, we are instructed to institute legal proceedings against your clients for damages and/or an account of profits and, possibly, for other relief.

Would you please let us know within seven days of the date of this letter whether your clients are prepared to admit liability and to attempt to negotiate a compromise of our clients' claims."[108]

[100] This was followed by further conversations between Mr Campbell and the fourth defendant. Mr Campbell demanded reimbursement of the costs of moving the shed and improvements from Burdell Road to a new site, and half the cost of purchasing a new property. The fourth defendant mentioned the possibility of acquiring some Government land. On 28 November 2002 the fourth defendant rejected Mr Campbell's demands, and offered to repay the $30,000 the plaintiffs had paid for the land in 1990. She did not offer any interest. Mr Campbell rejected her offer.[109]

[101] In December 2002 the plaintiffs found a new site at lots 24 and 25 Crocodile Crescent, Bohle. They relocated to that site by early October 2003.

Was there an agreement between the plaintiffs and the first and second defendants?

[102] The plaintiffs alleged that there was an agreement between them and the first and second defendants which was partly oral and partly in writing - in so far as it was oral, its terms were to be implied from what was said between Mr Campbell and the third defendant in about January or February 1989 and the third defendant's signing the application for building approval for the shed, and in so far as it was in writing, it was in the deed executed in March 2000.[110] The defendants pleaded that the whole agreement was to be found in the deed, which was void pursuant to the Land Sales Act 1984.[111]

While I generally accept Mr Campbell's version of the discussions he had with the third defendant before the deed was executed, I am not persuaded that those discussions were intended to create legal relations between the plaintiffs and the first defendants. They were informal in nature and not intended to bind the parties at that stage. The third defendant did not have authority to deal with the land on the first defendants' behalf. By reducing their agreement to writing, the parties are presumed to have intended that the deed represent their entire agreement.[112]

[104] When the deed was executed, s 8 of the Land Sales Act provided -

"8. Restriction on selling and purchasing. (1) A person shall not sell or purchase relevant land unless -

(a) in the case of relevant freehold land, the subdivisional plan of survey relating to it has been approved by the appropriate Local Authority under its common seal before the event that marks the entry of a person upon the purchase;

(b) in the case of relevant leasehold land, the lessee thereof has obtained the permission or approval of the appropriate Minister to the subdivision by reason whereof the land is relevant leasehold land before the event that marks the entry of a person upon the purchase,

and that approval or permission subsists at the time of such event.

(1A) In paragraph (b) of subsection (1) the expression 'appropriate Minister' means -

(a) in the case of a holding under the Land Act 1962-1984, the Minister of the Crown who at the relevant time is charged with the administration of that Act;

(b) in the case of a miner's homestead within the meaning of the Miners' Homestead Leases Act 1913-1982, the Minister of the Crown who at the relevant time is charged with the administration of that Act.

(2) An instrument made in contravention of this section is void and any person who had paid money thereunder shall be entitled to recover the amount thereof, together with the amount of interest (if any) that had accrued in respect of that amount since the money was so paid, by action as for a debt due and owing to him by the person to whom the money was paid.

(3) A person who contravenes this section by reason of a purchase by him of relevant land is not guilty of an offence by virtue of this section or section 32."

"(2) A reference in any provision of this Act to a sale or purchase of relevant land or a proposed lot shall be construed as a reference to a sale or purchase entered upon by a vendor or purchaser under an instrument made after the commencement of the provision in which the reference occurs."

"Relevant land" included "relevant freehold land", which meant -

(b) in relation to a case where land under the provisions of the Real Property Acts is being or is about to be subdivided by means of a plan of survey, the proposed subdivisional portions thereof".[113]

"Sell" and "purchase" were defined as including respectively -

(c) enter upon a transaction that has as its object the grant of a right (not immediately exercisable) to purchase or to be given an option to purchase; and

(c) enter upon a transaction that has as its object the acquisition of a right (not immediately exercisable) to purchase or to be given an option to purchase,

(d) sign an instrument that is intended to legally bind a signatory to purchase,

(e) enter upon a transaction or sign an instrument with a view to any person securing or attempting to secure another's agreement to sell".[114]

[105] No subdivisional plan of survey relating to lots 1 and 2 had been approved by the Council at the date of the deed. The defendants submitted that the deed was an "instrument" under which the second defendant and the plaintiff entered upon a sale and purchase of lot 4,[115] and that it was accordingly void in its entirety pursuant to

s 8(2). The plaintiffs submitted only part of the deed was void, either because it contained two "instruments" (one an agreement of sale and purchase and the other an express trust) or because the offending provisions could be severed from the deed.

[106] In the plaintiffs' submission the deed contained obligations of sale and purchase in these provisions -

• clause 1 - the transfer bargain;
• the second limb of clause 3 - the obligation to effect registration of the subject lot;
• the second limb of clause 9 - the stamp duty obligation on transfer of the subject lot;
• the second limb of clause 10 - the obligation to withdraw a consent caveat to permit registration of the subject lot;
  1. clause 11 - the provision to not object to the prior unregistered transfer as between the first defendants and the second defendants in respect of the annexure 'A' land (see Recitals A and B)[116]

and an express trust was created by these provisions -

• clause 2 - the obligation on the part of the first and second defendants to acknowledge the plaintiffs' beneficial and equitable rights with respect to the subject lot and a negative stipulation not to endanger etc those rights;

• the first limb of clause 3 - a positive stipulation by the first and second defendants to take all steps in their power to ensure the protection of the plaintiffs' rights;

• clause 4 - an obligation to immediately reimburse the moneys paid under the Deed (see clauses 1 and 9) in the event that separate Certificates of Title were unable to issue - that is, sale and purchase was not possible;

• the first limb of clause 5 - an obligation to give notice and obtain recognition of the plaintiffs' prior equitable rights from any third party purchaser of the first and second defendants' industrial subdivision (see Recital C);

• the second limb of clause 5 - an obligation to bind any such third party purchaser to transfer the subject lot to the plaintiffs upon the issue of a separate Certificate of Title;

• clause 6 - an obligation to immediately connect water to the subject lot;

1. the first limb of clause 10 - provision for a consent caveat to protect the plaintiffs' equitable rights.[117]

[107] The second defendant and the plaintiffs clearly did purport to enter upon the sale and purchase of lot 4 under the deed. Even if it could be construed as containing 2 sets of obligations as contended for by the plaintiffs, the deed was invalidated in its entirety by s 8(2) of the Act, which struck at "an instrument" made in contravention of the section. "Instrument" is defined in Halsbury's Laws of England[118] as "a document under which some right or liability, whether legal or equitable, exists", and in its ordinary meaning an "instrument" is a "formal legal document ... a formal writing of any kind".[119] I note that at the time the deed was executed "instrument" was not defined in the Acts Interpretation Act 1954 (Qld).[120] There was only one "instrument" executed, and the effect of s 8(2) of the Land Sales Act was to avoid it in its entirety.[121]

[108] The operation of s 8(2) in avoiding the instrument in its entirety necessarily defeats the plaintiffs' argument that the offending sale and purchase provisions can be severed from the deed. Even if that were not so, this is not a case where severance would be permitted. The payment of the $30,000 and the promises relating to the conveyance of lot 4 upon the issue of a separate title were central to the agreement, and I infer that the parties would not have entered into an agreement in their absence.[122]

The plaintiffs are entitled to return of the $30,000 pursuant to s 8(2) of the Land Sales Act.[123]

[110] The plaintiffs allege in the alternative that they acquired an equity of expectation, which equity will intervene to protect. They claim relief against the first defendants by way of disgorgement of profits from the Stockland transaction or alternatively equitable compensation for breach of fiduciary duty. They claim similar equitable compensation against the third and fourth defendants on the basis that they are accessorily liable for the first defendants' breach of fiduciary duty.[124]

[111] In Riches v Hogben[125] McPherson J described the equity of expectation as -

"... a form of equitable estoppel that arises where the plaintiff is led by the defendant's representations to expect that he has been or will be given an interest in property of the defendant, and where the plaintiff is encouraged by the defendant to act to his detriment on that representation: see Meagher, Gummow & Lehane: Equitable Doctrines and Remedies, 2nd ed., para. 1717; Ford & Lee: Principles of the Law of Trusts, para. 2240. Many of the cases involve improvements to the land of the defendant carried out in the belief that the plaintiff had acquired an interest in that land: see Dillwyn v. Llewelyn [1862] EngR 908; (1862) 4 De G. F. & J. 517; 45 E.R. 1285; Raffaele v. Raffaele [1962] S.A.R. 29; Inwards v. Baker [1965] EWCA Civ 4; [1965] 2 Q.B. 29. However, it is clear from Crabb v. Arun District Council [1976] Ch. 179 both that the principle is applicable to representations or assurances as to future conduct, and also that it is not confined to acts done on the property of the defendant. The acts or conduct in question may have been done on or with reference to the plaintiff's own property, as in Rochdale Canal Co. v. King (No. 2) [1853] EngR 399; (1853) 16 Beav. 530, 51 E.R. 924; and ; (1862) 32 Beav. 630, The critical element is the conduct of the defendant after the representation in encouraging the plaintiff to act upon it: see ; , 379, Kitto J. That is what makes it unconscionable for the defendant to deny the right which the plaintiff has been led to expect: , 195, Scarman L.J.; cf. also The relief granted in equity may take the form of restitution; but is capable of extending to require the defendant to fulfil the expectation he created: at pp. 198-199."

The correctness of this principle was affirmed on appeal.[126]

[112] In applying this principle it is necessary to identify not only the representations made to the plaintiffs, but the expectations or assumptions claimed to arise from those representations, upon which the plaintiffs claim to be entitled to relief in equity.

[113] The plaintiffs alleged in their statement of claim -

"3A Upon the faith of the aforesaid agreement and the expectations and assumptions set out in paragraphs 2B and 3 hereof, the Plaintiffs entered into and remained in possession of the Plaintiffs' parcel, making substantial further improvements thereto, duly paid the price under the deed, and used the Plaintiffs' parcel and the improvements for the conduct of a bus company business."

They went on to provide particulars of pre-deed improvements costing at least $48,017.01 and post deed improvements effected between 21 March 1990 and 8 April 2002, valued as at 22 October 2001[127] at $275,000. The pleading continued -

"3B Further to the expectations and assumptions set out in paragraphs 2B and 3 hereof, the Plaintiff's [sic] made the post-deed improvements in partial reliance upon the Second Defendant's continuing retention of the price paid under the deed.

1. In the premises, from February 1989 or subsequently the First Defendants held the Plaintiffs' parcel on trust for the Plaintiffs pursuant to an express or, alternatively, a constructive trust."

They alleged that in breach of the first defendants' duties as an express or alternatively a constructive trustee -

(a) the first and second defendants failed to subdivide lot 4 from the land, to procure a separate certificate of title for lot 4 and to transfer lot 4 to the plaintiffs free from encumbrances;[128] and

(b) the first defendants completed the sale of the land (including lot 4) to Stockland without obtaining an undertaking in accordance with clause 5 of the deed.[129]

They alleged that the third and fourth defendants were accessories to the breaches of trust and liable as such.[130]

[114] In paragraphs 2B and 3 the plaintiffs pleaded the conversations relied on for the oral part of the alleged agreement, and some of the provisions of the deed as follows -

"2B. Insofar as it was oral, the aforesaid agreement was made in or may be inferred or implied from a discussion or discussions between the first named Plaintiff and the Third Defendant in or about January or February of 1989 whereby:

(a) the first named Plaintiff said to the Third Defendant words to the effect 'We are looking at buying some land to establish a depot and workshop for the business';

(b) the Third Defendant said to the first named Plaintiff words to the effect 'There might be some land available from my family's property at Burdell Road, Bohle. The land is zoned commercial. You might be able to purchase a couple of acres from our family company, Bohle Grazing.';

(c) the Third Defendant showed to the first named Plaintiff a plan depicting the land (which later became annexed to the deed) and said to the first named Plaintiff words to the effect 'The site itself would need to be marked out. My family will sell you the two acres or so marked as Lot 4 for $30,000.00. We have Council approval for the subdivision, but we haven't yet got title deeds. You will get your own deed once the subdivision has been completed and deeds have issued.'

(d) the Third Defendant further said to the first named Plaintiff words to the effect 'We will arrange to have the water put on. You can start occupying the site once you have paid the purchase price. You can put a caveat on the land to protect your interests until a separate deed has issued.';

(e) the Third defendant discussed with the first-named Plaintiff the matters pleaded at paragraph 6B(a)(ii) hereof;

and the matters alleged at paragraph 6B(a)(ii) hereof.

1. Insofar as it was made in writing, the agreement was made in the deed, and the Plaintiffs, the First Defendants and the Second Defendant thereby covenanted and agreed that:-

(a) In consideration of the payment by the Plaintiffs to the Second Defendant of the sum of $30,000.00 (the receipt of which was thereby acknowledged), the Second Defendant would transfer the Plaintiffs' parcel to the Plaintiffs immediately after the issue of a separate Certificate of Title in respect of the Plaintiffs' parcel (clause 1);

(b) Pending the transfer of the Plaintiffs' parcel to the Plaintiffs:-

1. The First Defendants and the Second Defendants acknowledged the Plaintiffs' beneficial and equitable interest in the Plaintiffs' parcel and undertook that they would not (whether by themselves or in association with any others) do or perform any act, matter or thing which would in any way whatsoever endanger, lessen or derogate the Plaintiffs' fights in respect of the Plaintiffs' parcel (clause 2);

2. The First Defendants and the Second Defendant would take all steps in their power to ensure the protection of the Plaintiffs' rights under the Deed and would to that end take all such steps and execute all such documentation as might be necessary to effect registration of the Plaintiffs' interest in the Plaintiffs' parcel (clause 3);

(c) Upon any sale of the land prior to the issue of a separate Certificate of Title to the Plaintiffs, the First Defendants and the Second Defendant would as a condition of such sale obtain from the proposed transferee an undertaking that the proposed transferee recognises the Plaintiffs' prior equitable rights in respect of the Plaintiffs' parcel and that the proposed transferee will transfer the Plaintiffs' parcel to the Plaintiffs upon the issue of a separate Certificate of Title to the Plaintiffs' parcel (clause 5)."

"6B(a)(ii) On 16 March 1989, the Third Defendant signed an Application for Approval of Building Work on behalf of the First Defendants, as owner of the Plaintiffs' parcel, to enable the Plaintiffs to obtain the approval by the Council of the City of Thuringowa of the proposed industrial shed to be constructed by the Plaintiffs upon the Plaintiffs' parcel".[131]

[115] The defendants' primary defence was that because the deed was void, any expectations arising from it were also void.[132] In their submissions they put forward 3 sound reasons, which I accept, why this was so -

(a) A plaintiff's entitlement to an equitable interest in land exists only to the extent that the agreement from which that interest is said to arise can be specifically performed.[133] Because the deed was void, the plaintiffs could not obtain specific performance, and so no equitable interest in the land arose in their favour.

By the constructive trust claim the plaintiffs seek to estop the defendants from relying on the invalidity of the deed. There is a public policy consideration underlying s 8 of the Land Sales Act, namely the protection of the interests of consumers in dealings with property developments.[134] The plaintiffs are therefore precluded from raising an estoppel to overcome the effect of the statute.[135]

Equity will not aid a party to enforce an unlawful agreement.[136]

[116] The plaintiffs' case as pleaded was that the first defendants held the land on trust (either express or constructive) for them,[137] and that obligations arising from that proprietary right were breached by the trustee.[138] It is not to the point that the relief they sought was personal rather than proprietary in character, since the foundation for such relief was a proprietary interest in the land. The deed was void. It could not be a source of that proprietary interest. Nor could any valid expectations arise from it.

Expectations arising independently of the contents of the deed

[117] The plaintiffs' case as pleaded was that the expectations arose from a combination of the oral representations and the deed. As I have endeavoured to explain, the deed could not give rise to valid expectations. In my view expectations arose independently of the contents of the deed - expectations which the defendants (or some of them) encouraged the plaintiffs to act on. This scenario was not part of the plaintiffs' case as pleaded, and so not a basis for giving them the relief they claimed. In the following paragraphs I shall consider what expectations arose independently of the contents of the deed, and what, if any, relief the plaintiffs would be entitled to for their non-fulfilment, if (contrary to my view) such relief could be granted in this proceeding.

[118] What s 8(1) of the Land Sales Act prohibits is the "sale or purchase" of relevant land, and s 8(2) renders an instrument under which a vendor and purchaser enter upon a sale or purchase of relevant land void. It does not invalidate an instrument under which parties enter upon a transaction of some other character, such as express trust.[139] While the deed was an instrument of sale and purchase and so void in its entirety, s 8(1) would not oust the Court's jurisdiction to impose a constructive trust arising independently of the contents of the deed if that were otherwise appropriate.[140]

[119] In the period prior to March 1990 the third defendant made the representations to Mr Campbell which I have discussed in paragraph [25]

. I infer from the first defendants' allowing the plaintiffs to enter into possession of lot 4, the first and third defendants' signing the application for building approval, the absence of demur from the first defendants to the plaintiffs' making improvements, and the parties' execution of the albeit void deed[141] that the first defendants both knew and approved of the representations the third defendant made to Mr Campbell prior to March 1990 and encouraged the plaintiffs to act in reliance on them.

I am satisfied that this conduct of the first and third defendants gave rise to an expectation on the part of the plaintiffs that in exchange for $30,000 they would obtain title to lot 4 in the proposed industrial subdivision and they could conduct their bus business on it in the meantime.

After the execution of the deed the first defendants further encouraged the plaintiffs to act on the representations by receiving and retaining the $30,000, having the water supply connected, and allowing them to conduct their bus depot there.

The first defendants had the carriage of the subdivision. The conduct giving rise to the expectation on the part of the plaintiffs that they would acquire lot 4 in the proposed industrial subdivision in exchange for $30,000 also gave rise to two other expectations -

(a) that the first defendants would act in good faith and take all steps reasonably necessary to complete the subdivision; and

(b) that if the subdivision could not be completed and they could not acquire title to lot 4, the first defendants would immediately repay the $30,000.

[123] In determining what was reasonably necessary to complete the subdivision the standard of reasonableness is that of a reasonable and prudent landowner acting properly in his own interests; there was no obligation to act in such a way as to "face ruin".[142]

I am satisfied that the first defendants acted in good faith and took all reasonable steps to procure the industrial subdivision in their dealings with the Council and MRD up until 16 September 1991 when the fourth defendant informed the Council of the abandonment of the subdivision. The MRD requirements were such that they did not have the financial resources to satisfy them; by the fourth defendant they had explored various avenues to overcome the hurdle, but to no avail. By then it had become impossible to complete the subdivision, and impossible to fulfil the plaintiffs' expectation that they would obtain lot 4 in the industrial subdivision in return for the $30,000 which they had paid. The plaintiffs' expectations would have been satisfied by repayment of the $30,000, allowing them to remove whatever improvements they could and wished to remove and not requiring them to restore the land to its previous condition.[143] But none of the defendants told the plaintiffs that the subdivision had been abandoned and there was no attempt to repay the $30,000.

[125] Over the ensuing years the first defendants treated the plaintiffs shabbily in retaining the $30,000 and not telling them that they could not create lot 4 at least until 1998. In the conversation between Mr Campbell and the fourth defendant after the flooding of the Carinya estate, the fourth defendant told him that if the land were to be subdivided, the plaintiffs would have to move because access to the estate would be via an overpass through the middle of their shed. At least from that point the plaintiffs must be fixed with knowledge that the subdivision by which they expected to acquire lot 4 was not going ahead. Indeed it is probably a fair assessment of Mr Campbell's evidence to say that even before then his thinking had shifted (perhaps subconsciously) to an expectation that lot 4 would be created by some subdivision of the land, rather than by the particular industrial subdivision contemplated.[144] But of course it was not part of the plaintiffs' case that any such further expectation arose, let alone one that equity would protect.

That the defendants (or at any rate the fourth defendant) were conscious of some "moral obligation" to the plaintiffs, which they sought to satisfy by having the plaintiffs' position recognised in various negotiations down the years, is no answer to the first defendants' failure to fulfil the plaintiffs' expectation that if the industrial subdivision could not be completed and they could not acquire title to lot 4, they would immediately repay the $30,000. Their conduct was unconscionable.[145]

[127] If relief could be granted in this proceeding for non-fulfilment of expectations arising independently of the contents of the deed, would the third and fourth defendants be fixed with liability as accessories to the first defendants' breach of duty?

[128] There is strong evidence that the fourth defendant knew of the arrangements under which the plaintiffs occupied lot 4, including -

(a) From her return to Townsville in 1987 the fourth defendant progressively assumed de facto control of the Turner family's business affairs.

(b) By September 1989 she was a director of the second defendant which the family intended to be the vehicle for the subdivision.

(c) The third defendant discussed the proposal that the plaintiffs establish a bus depot on lot 4 with her and their father.

(d) She executed the deed (which had been drawn by her husband) on behalf of the second defendant.

(e) She had a conversation with Mrs Campbell about the supply of water to the site, and had the third defendant attend to it.

(f) To her knowledge, the $30,000 was applied to advance the subdivision.

(g) Mr Campbell's brother spoke to her about the issue of a separate title at the Christmas party in 1991.

(h) She gave evidence of conversations with Mr Campbell, both before September 1991 and after, in which she said she kept him informed. Even where I have rejected her evidence in favour of Mr Campbell's, the fact that she gave the evidence is consistent with her having knowledge of the arrangement.

(i) She endeavoured to provide for the plaintiffs in various proposals down the years, and even in her negotiations with Stockland.

(j) She was clearly aware of the improvements effected by the plaintiffs, and the presence of the bus depot was a constant reminder of them.

[129] The third defendant clearly had knowledge of that arrangement -

(a) He the one with whom Mr Campbell had relevant discussions.

(c) He executed the deed on behalf of the second defendant.

(d) He arranged for the water supply to be connected.

[130] Under the principle in Barnes v Addy[146] -

"Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees."

The form of liability referred to in the last sentence has commonly been summarised as turning on (i) "knowing receipt or dealing" and (ii) "knowing assistance".[147] If the third and fourth defendants were to be found liable for the first defendants' unconscionable conduct in this case, it would be under the second limb - that is, knowing assistance.

[131] The fourth defendant had the conduct of the first defendants' affairs in relation to the subdivision. And she had knowledge of the arrangement under which the plaintiffs occupied lot 4. In the circumstances, I would have no hesitation in finding her accessorily liable for their unconscionable behaviour.

[132] The mere fact that the third defendant knew of the arrangement under which the plaintiffs occupied lot 4 would not be enough to make him accessorily liable for the first defendants' unconscionable behaviour. It would be necessary to show also that he assisted in that behaviour, a matter of which I am unpersuaded. The family's business dealings were conducted by the fourth defendant, and he took no part in them.

[133] In fashioning a remedy the Court should look for "the minimum equity to do justice".[148] The plaintiffs have claimed equitable compensation for breach of a constructive trust. While a constructive trust will not always create or recognise a proprietary interest,[149] in this case the plaintiffs' claim is based on a constructive trust of that character.[150] In determining the minimum equity to do justice, these are the salient features of this case -

(a) The industrial subdivision could not be achieved. In those circumstances the plaintiffs' expectation was not that they would have a proprietary interest in the land, but that the $30,000 would be repaid.

(b) The plaintiffs had the use of lot 4 for 13 years without paying rent, rates or other outgoings. That produced a benefit to the plaintiffs in the order of $27,000.[151]

The bus business was not operated by the plaintiffs personally, but by Bardside Pty Ltd as trustee for the Wayne Campbell Trust.

Approximately $30,000 of the cost of the pre-deed improvements was paid for by the plaintiffs; the rest was paid for by companies with which they were associated.[152] Although the evidence as to who paid for the post-deed improvements is not so precise, it is a fair inference that not all the costs were met by the plaintiffs personally.[153] The plaintiffs submitted that the proper object of the Court's inquiry should be the extent of the detriment occasioned by the defendants' conduct, and that the fact that some of the expenditure was undertaken by companies associated with them did not detract from the detriment sustained.[154] In my view this is too simplistic an analysis in the circumstances of this case where the bus business belonged to one of the companies which outlaid moneys for improvements.[155]

When the business was relocated the new site was acquired by the plaintiffs as trustees of the W & M Campbell Superannuation Fund for approximately $220,000[156] and other relocation costs of approximately $290,000 were incurred. Of the $290,000, only about $59,000 was paid by the plaintiffs personally.[157]

When the business was relocated, the plaintiffs removed almost all of the improvements.[158]

As a result of the operations of the bus business the first defendants had to expend over $50,000 to decontaminate lot 4 (pursuant to their obligations to Stockland).[159]

(h) The plaintiffs have claimed in excess of $1 million by way of disgorgement of the profit made by the defendants on the sale to Stockland.[160] That figure is grossly disproportionate to the minimum equity that would be necessary to do justice in circumstances where the expectation of the plaintiffs was confined to repayment of the $30,000 if the industrial subdivision could not be achieved.

[134] In the circumstances the equity of expectation would be satisfied by an order for repayment of $30,000 plus interest from 16 September 1991.

[135] (a) Under the Land Sales Act the plaintiffs are entitled to recover the $30,000 from "the person to whom the money was paid".[161] The first defendants proposed to transfer the land to the second defendant, although this was never done. By the deed the second defendant purported to sell lot 4 to the plaintiffs. Although the deed provided for the $30,000 to be paid to the second defendant, it was in fact received and retained by the first defendants.[162]

In these circumstances, an order for repayment should be made against the first defendants.

(b) On the case pleaded, the plaintiffs are not entitled to relief in equity for non-fulfilment of an equity of expectation. If they were, relief would not exceed repayment of the $30,000 plus interest from 16 September 1991.

(c) In all the circumstances I consider that there should be an award of interest on the $30,000 from 21 March 1990 pursuant to s 47 of the Supreme Court Act 1995 (Qld). It should be assessed at 9 per cent per annum.

(a) the first defendants pay the plaintiffs $30,000 plus interest at 9 per cent per annum from 21 March 1990 to judgment;

(b) the claim against the second, third and fourth defendants be dismissed.

1. [1] 1.98 acres.
2. [2] Fourth Further Amended Statement of Claim, [3A]; Defence to the Third Further Amended Statement of Claim, [3(d)]. Note that the Fourth Further Amended Statement of Claim was filed by leave on the second day of the trial (22 May 2007); the defendants did not amend their pleading.
3. [3] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [15]-[18].
4. [4] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [19]-[20].
5. [5] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [21].
6. [6] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [22].
7. [7] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [23]-[24].
8. [8] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [32]-[42].
9. [9] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), exhibit LIO-8.
10. [10] Affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), exhibit LIO-9.
11. [11] Transcript of the trial, p 238.
12. [12] Transcript of the trial, p 175.
13. [13] Affidavit of H S Turner, filed 11 May 2007 (exhibit 11 on the trial), [6].
14. [14] Transcript of the trial, p 91.
15. [15] Affidavit of W A Campbell, filed by leave 21 May 2007 (exhibit 6 on the trial), [25], [78]; transcript of the trial, pp 95-96; affidavit of L I Owens, filed 11 May 2007 (exhibit 10 on the trial), [80].
16. [16] Transcript of the trial, p 223.
17. [17] Affidavit of W A Campbell, filed by leave 21 May 2007 (exhibit 6 on the trial), [26]; affidavit of H S Turner, filed 11 May 2007 (exhibit 11 on the trial), [15].