Solicitors for applicant/defendant: Ayliffe and Ayliffe

Solicitors for respondent/plaintiff: Piggott Wood and Baker

ZEEMAN J I am required to determine an application made by the defendant whereby he seeks orders that the plaintiff's amended statement of claim be struck out and that judgment be entered in his favour. The application is expressed to be made on the basis that the amended statement of claim discloses no cause of action, is frivolous and vexatious and is embarrassing and prejudicial. The defendant claimed to invoke the inherent jurisdiction of the court although clearly the application is one authorised by the Rules of the Supreme Court, O28, r4. He expressly disclaimed any reliance on the Rules of the Supreme Court, O16.

2. The defendant made no submission that the amended statement of claim is embarrassing or prejudicial so that aspect requires no consideration. I received some evidence de bene esse. Such evidence may well be admissible on a consideration of whether the amended statement of claim is frivolous and vexatious. It is inadmissible on a consideration of whether it fails to disclose any reasonable cause of action. I have concluded that the amended statement of claim fails to disclose any reasonable cause of action. It follows that I need not consider whether the action, as framed in the amended statement of claim, is frivolous and vexatious. I have had no regard to the evidence.

3. By the amended statement of claim, the plaintiff claims damages in conversion and detinue, as well as a variety of declaratory or injunctive relief. All of the relief sought concerns certain timber on a property known as "Sunny Banks" of which, since about 1978, the defendant has been the registered proprietor, presumably for an estate in fee simple. It is fundamental to the relief claimed by him that, upon the defendant becoming the registered proprietor of the estate in the land, the plaintiff retained or obtained the ownership of the timber growing or felled on that land. All causes of action pleaded rely upon such ownership. If the facts pleaded in the amended statement of claim, if proved, are incapable of establishing that the plaintiff did retain or obtain that ownership, the plaintiff cannot establish any entitlement to any of the relief sought and no cause of action is disclosed.

4. The following paragraphs contained in the amended statement of claim are central to the plaintiff's case. The facts pleaded in those paragraphs are those upon which the plaintiff relies to establish his ownership of the relevant timber. If, as the defendant submits, those facts are incapable of establishing such ownership, then the amended statement of claim discloses no cause of action. The relevant paragraphs are the following:

"2 In November 1973 the Plaintiff entered into an agreement with A V Jennings Industries Limited and A G Webster and Wool Growers Limited whereby he inter alia granted to those companies the right to purchase all sawlog on the land for a period of fifteen years.

3 In or about 1978 the Plaintiff transferred the land to the Defendant subject to inter alia the reservation to the Plaintiff of the ownership of all the timber growing or felled on the land.

In or about 1978 by agreement evidenced in writing between (inter alia) the Plaintiff and the Defendant the Defendant agreed to retire from the partnership known as 'Hall Bros'. In consideration of the Defendant retiring from the partnership the Plaintiff agreed to transfer to the Defendant the land. It was agreed between the Plaintiff and the Defendant that the said transfer of the land would be subject to an existing mortgage in favour of the Commonwealth Development Bank of Australia and subject to the proviso that ownership of all the timber on the land would remain with the Plaintiff. The agreement concerning the reservation of ownership of the timber by the Plaintiff was partly oral, partly in writing and partly implied.

(i) Oral - in or about the early part of 1975 the Plaintiff telephoned the Defendant one evening. The following is the substance of the conversation which took place;

Plaintiff: Cliff - you will take 'Sunny Banks' less the timber rights for your share of the partnership?

Plaintiff: I do not care whether you farm it or flog it but I want you out of the partnership - the others are out (or are getting out) and I want you out too.

In a number of conversations between the Plaintiff and the Defendant between the conversation referred to above and on or about the 30th of June, 1978 the parties discussed the terms of the agreement by which it was proposed the Defendant would become the owner of 'Sunny Banks' in return for his share of the partnership.

(ii) Written - A deed of dissolution of partnership was executed by the Plaintiff and the Defendant in or about 1978. A copy of the document is in the possession of the Plaintiff's solicitors. A photocopy of the deed of dissolution has been previously supplied to the Defendant's solicitors at the Defendant's solicitors request. The document evidences an agreement between (inter alia) the Plaintiff and the Defendant made for valuable consideration and by which the Defendant became, subject to certain limitations and acknowledgments contained therein, the owner in fee simple of the land known as 'Sunny Banks'. In addition the timber on 'Sunny Banks' was expressly acknowledged to be subject to the terms of an agreement between the Plaintiff and A V Jennings Industries (Australia) Limited and A G Webster and Woolgrowers Limited dated the 10th of November, 1973.

(iii) Implied - it was an implied term of the agreement, it being necessary to give the agreement business efficacy, that the Plaintiff, his servants or agents, should have reasonable access to the land as might be necessary to enable the Plaintiff's timber to be removed therefrom. The terms of the agreement are also to be implied from the part performance by the Plaintiff and the Defendant in that the Plaintiff continued to sell timber to A V Jennings Industries (Australia) Limited and A G Webster and Woolgrowers Limited and their assigns and to harvest pulp wood from the land after the transfer of the land to the Defendant, with the Defendant's knowledge and co-operation.

4 Further or in the alternative the Defendant agreed that the Plaintiff would continue to have the exclusive right to take from the land all of the timber growing or felled on the land following the transfer of the land by the Plaintiff to the Defendant in or about 1978.

In consideration of the Defendant retiring from the partnership business known as 'Hall Bros' and agreeing that the Plaintiff would continue to have the exclusive right to harvest and sell the timber on the land the Plaintiff agreed to transfer to the Defendant the land subject to an existing mortgage in favour of the Commonwealth Development Bank of Australia.

The agreement concerning the Plaintiff's exclusive right to the timber on the land was partly oral, partly in writing and partly implied and the Plaintiff repeats the further particulars provided in paragraphs (i) - (iii) under paragraph 3 hereof.

5 The agreements referred to in paragraphs 3 and 4 have been partly performed.

The Plaintiff continued to sell timber to A V Jennings Industries (Australia) Limited and A G Webster and Woolgrowers Limited and their assigns and to harvest timber on the land following the transfer of the land to the Defendant with the Defendant's knowledge and co-operation."

5. The case pleaded by the plaintiff is that the ownership of the timber was reserved by him upon the transfer of the land (presumably of the fee simple therein) to the defendant or, alternatively, acquired by him pursuant to an agreement taking effect upon the transfer having occurred. The amended statement of claim does not distinguish between growing and felled timber, although it might be thought that ownership of the latter would always have remained with the plaintiff, subject to abandonment (see Re Jigrose Pty Ltd (1994) 1 Qd R 382). It may be that the timber which had been felled and remained on the land at the time of the transfer has long been removed and is irrelevant to the plaintiff's claim. In any event, as the plaintiff limits his claim to one based on a reservation or alternatively on contract, I need not be concerned with any other basis upon which it might be said that he remained the owner of felled timber after the transfer occurred.

6. The plaintiff relies on the same set of particulars, namely those appearing in par3, to establish the reservation and the acquisition of a contractual right to the timber. Those particulars require close consideration. They form part of the pleading. If the facts asserted by the particulars, if proved, are incapable of establishing either the reservation or the contractual right, the amended statement of claim discloses no cause of action. The bare assertion of a reservation and, in the alternative, of a contractual right, must be understood in the light of the particulars. Those assertions are to be understood as assertions that, by reason of the facts pleaded in the form of particulars, the plaintiff reserved unto himself the right to the timber or, alternatively, acquired a contractual right to the timber. Although relevant facts pleaded appear under a heading "Particulars" those facts form an integral part of the amended statement of claim. Those facts are not in the nature of further and better particulars. They are facts which O21, r3(1) requires to be pleaded as they form part of "the material facts on which the (plaintiff) relies for his claim".

7. It may be doubted whether the draftsman of the amended statement of claim appreciated the nature of a reservation. What amounts to a reservation appears from the following passage taken from the judgment of Lord Denman CJ in Doe d Douglas v Lock (1835) 2 Ad and E 705 at 743-745; [1835] EngR 474; 111 ER 271 at 287:

"Lord Coke, in his Commentary on Littleton, 47 a, says, 'Note a

diversity between an exception (which is ever of part of the

thing granted, and of a thing in esse), for which, exceptis,

salvo, preter, and the like, be apt words; and a reservation

which is always of a thing not in esse, but newly created or

reserved out of the land or tenement demised.' In Sheppard's

Touchstone, p 80, 'A reservation is a clause of a deed whereby

the feoffor, donor, lessor, granter, andc doth reserve some new

thing to himself out of that which he granted before:' and,

afterwards, 'This doth differ from an exception, which is ever

of part of the thing granted, and of a thing in esse at the time;

but this is of a thing newly created or reserved out of a thing

demised that was not in esse before; so that this doth always

reserve that which was not before, or abridge the tenure of that

which was before.' And afterwards, 'It must be of some other

thing issuing, or coming out of the thing granted, and not a

part of the thing itself, nor of something issuing out of another

thing.' And afterwards, 'If one grant land, yielding for rent,

money, corn, a horse, spurs, a rose, or any such like thing;

this is a good reservation: but if the reservation be of the

grass, or of the vesture of the land or of a common, or other

profit to be taken out of the land; these reservations are void.'

In Brooke's Abridgment, title Reservacion, pl 46, it is said,

that if a man leases land, reserving common out of it, or the

herbage, grass, or profits of the land demised, this is a void

reservation, for it is parcel of the thing granted, and is not

like where a man leases his manor and the like, except White Acre,

for there the acre is not leased; but here the land is leased;

therefore the reservation of the herbage, vesture, or the like,

is void. It must be observed, however, that, though in Co Lit

47 a the distinction between a reservation and exception is

pointed out, yet in page 143 a, speaking of the word reservation,

Lord Coke says, 'Sometime it hath the force of saving or

excepting. So as sometime it serveth to reserve a new thing,

viz a rent, and sometime to except part of the thing in esse that

is granted.' He does not, however, go on to illustrate that

position; and as, only two pages before, in 142 a, he had said

to the same effect as he had done in the former reference in

47 a, that 'a man upon his feoffment or conveyance cannot reserve

to him parcel of the annual profits themselves, as to reserve the

vesture or herbage of the land or the like, for that should be

repugnant to the grant,' we cannot take this language of Lord Coke

in 143 a as identifying an exception and a reservation."

8. The particulars contained in par3 do not plead any facts which even remotely are capable of leading to the conclusion that the transfer executed by the plaintiff reserved unto the plaintiff the right to, or ownership of, any timber on the land. The particulars do not purport to be particulars of the transfer but only of the agreement pursuant to which the transfer was effected. Even if it could be said that the particulars plead an agreement which provided for a transfer subject to the reservation pleaded, that is incapable of establishing that the transfer contained such a reservation. The transfer may or may not have given effect to such an agreement. The plaintiff does not plead that it did. If any such right is pleaded, it is a contractual right (see Stanford v Bayne (1922) VLR 283 at 289 per Schutt J).

9. For the purposes of the present application, I assume that such agreement, if any, which is pleaded by par4 of the amended statement of claim did not merge in the transfer. The particulars assert that the agreement was partly oral, partly in writing and partly implied and then pleads facts in relation to each. Of relevance to the particulars is the agreement pleaded in par2, pursuant to which, at a time when the plaintiff was the owner of the land, two companies acquired from him the right to purchase all saw logs on the land for a period of fifteen years.

10. It may well be arguable that the facts pleaded could justify a conclusion that there was an agreement between the parties whereby the defendant acknowledged that subsequent to the transfer he would be bound by the timber sale agreement earlier entered into by the plaintiff and agreed that, notwithstanding his ownership of the land, he would have no entitlement to receive any payments to be made by the purchasers under the timber sale agreement. However, the plaintiff has not pleaded such an agreement and expressly disclaimed reliance on any such agreement.

11. The conversations pleaded in par3(i) are not pleaded as constituting any form of concluded agreement, nor can those conversations add anything to that pleaded in pars3(ii) and (iii). That part of the pleading has earlier received judicial consideration. In Hall v Hall B48/1991, at 4, I said that those conversations "hardly suggest any form of concluded agreement and are indicative of being no more than negotiations leading up to the execution of the agreement". In Hall v Hall B62/1995, at 3, Crawford J put it more forcefully, and in my respectful view, correctly, when he said that the "oral statements referred to in par(i) plainly do not amount to anything other than preliminary conversations".

12. Paragraph 3(ii) pleads a deed of dissolution of partnership containing a term whereby the defendant acknowledged that the transfer of the land to him by the plaintiff was subject to the timber sale agreement pleaded in par2. That is the only relevant term of the dissolution deed which is pleaded. Such a term is incapable of being construed as conferring upon the plaintiff the ownership of all timber upon the land, whether or not it was the subject of the timber sale agreement. That agreement was limited to saw logs and did not operate after 1988. The agreement contended for by the plaintiff is one of indefinite operation and concerning all timber, whether in the nature of saw logs or otherwise.

13. Paragraph 3(iii) is the product of very confused draftsmanship. Two quite distinct matters are pleaded. The first part of this paragraph pleads that the agreement between the parties contained an implied term that the plaintiff would have reasonable access to the land to enable his timber to be removed therefrom. For present purposes that assertion is irrelevant. It is incapable of providing assistance in determining whether any agreement is pleaded at all. It is only if an agreement is pleaded that it becomes relevant to consider whether it contained any, and if so what, implied terms.

14. The second part of par3(iii) pleads facts which, the plaintiff asserts, if proved, permit the drawing of the inference that the agreement pleaded was entered into between the parties. It may well be that those facts would permit the drawing of the inference that there came into existence an agreement whereby the defendant acknowledged that subsequent to the transfer he would be bound by the timber sale agreement and agreed that the plaintiff would continue to have the entitlement to receive any payments to be made by the purchasers under that agreement. However those facts do not permit the drawing of an inference that the plaintiff acquired additional rights to timber on the land. The facts pleaded include an assertion that the plaintiff harvested pulp wood from the land after the transfer with the defendant's knowledge and co-operation. Nothing is said as to the basis upon which this occurred. No inference can be drawn from the bare facts pleaded that what occurred was done in the exercise of pre-existing contractual rights.

15. It is not sufficient for the plaintiff to be able to say that the matters pleaded in par3(iii) are consistent with the parties having entered into the agreement which is pleaded. Something more is required to enable that inference to be drawn. Before the inference can be drawn that a particular agreement was entered into, the existence of such an agreement must be more than merely consistent with the facts pleaded from which the inference is sought to be drawn. It must be an inference which is capable of being drawn to the exclusion of inconsistent inferences.

16. Although it concerned the question of part performance in relation to a contract not satisfying the Statute of Frauds, the decision of the Full Court of the Supreme Court of Victoria in Thwaites v Ryan [1984] VicRp 7; (1984) VR 65 is relevant. The same considerations apply to the question of whether alleged part performance is part performance of the contract alleged and to the question of whether facts pleaded enable the inference to be drawn that a particular contract came into existence. I adopt the following passage from the judgment of Fullagar J (with whom the other members of the Court agreed) at 77:

"As I apprehend the law in Victoria at present, it is wrong first

to postulate the contract pleaded and then to ask if the alleged

acts were a part performance of it, or of a contract of its

general nature: see the joint judgment of Isaacs and Rich JJ

in McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69 at pp 77 - 9. One must

first seek to find such a performance as must imply a contact,

and then proceed to ascertain the general nature of such contract

as the performance implies, and then to compare that result, if

one gets to it, with the general nature of the contract pleaded.

Their Honours, with whom Powers J agreed, said: 'No harm can

arise from reversing the order as a matter of convenience in

taking evidence, provided the necessary elements of part

performance are borne in mind and properly applied to the

circumstances when the facts come under consideration. But if

the terms of the oral bargain are first ascertain, and then

the alleged acts of part performance are judged of merely by

their consistency with or applicability to that bargain, grievous

error may result.'

In Cooney v Burns [1922] HCA 8; (1922) 30 CLR 216, at p 231, Isaacs J added a

word of warning apposite to cases where a variety of different

acts are relied upon as showing part performance: 'No argument

was addressed to us on the effect of conjunction, to show its

significance in this case. The combination of several acts of

true part performance might create the importance of the part

performance relied upon, which equity requires in such a case.

But I am quite unable to see the mere multiplicity of distinct

acts, none of which separately answers the necessary description,

can change the essential nature of any of them. And it is the

essential nature of the acts referred to which we have to

determine, no question being raised as to the sufficiency of

their importance."

17. The facts pleaded in par3(iii) are perfectly consistent with the plaintiff having acquired no rights to timber at all, save and except those rights which he had acquired under the agreement pleaded in par2 of the amended statement of claim and those which the defendant conferred upon him after the transfer had occurred.

18. It follows from the reasons which I have expressed that the plaintiff has not pleaded facts capable of establishing that he acquired any of the contractual rights which he claims to have acquired pursuant to a contract with the defendant. The amended statement of claim fails to disclose any cause of action. Accordingly it should be struck out.

19. The defendant seeks further orders that the action be dismissed and that he have judgment. I am not persuaded that I should make such orders at this stage. The plaintiff has long relied on the present amended statement of claim or a pleading to substantially the same effect. However, the defendant has not taken the point that it discloses no cause of action until after the certificate of readiness was filed. It may be the case that the particulars given by the plaintiff are the best particulars which he is able to give. If that is the position, then the action should be dismissed. I do not consider that I should take that step without affording the plaintiff the opportunity to seek leave to deliver a further statement of claim.

1 that the amended statement of claim, dated 12 December 1995, be struck out;

2 that otherwise the application be adjourned sine die;

3 that any application by the plaintiff to deliver a further statement of

4 that any such application be accompanied by a draft of the proposed further statement of claim.

21. If such an application is made, it will require consideration in order to ascertain whether it discloses any reasonable cause of action. If no such application is made, it will be a matter for the defendant to have the application re-listed before me. In that event the plaintiff could anticipate that the action would be dismissed.