Laycock v Putty Community Association Incorporated

Associations Incorporation Act 1984 LEGISLATION CITED : Local Courts Act 1982 Supreme Court Act 1970 Uniform Procedure Rules

CASES CITED : Gibson Motorsport Merchandise Pty Limited v Forbes [2006] FCAFC 44 Landsal Pty Limited (in liquidation) v Other Building Society(1993) 113 ALR 643

PARTIES : John Kevin Laycock - Plaintiff Putty Community Association Incorporated - Defendant

COUNSEL : Mr P Mansfield, solicitor - Plaintiff Mr H Stowe - Defendant

SOLICITORS : Mansfield Switzer - Plaintiff Cragg Braye & Thornton - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

12945/06 - John Kevin LAYCOCK v PUTTY COMMUNITY ASSOCIATION INCORPORATED

JUDGMENT 1 HIS HONOUR: Nature of proceedings By an amended summons filed on 3 August 2006 the plaintiff seeks the following orders:

(1) That the decision of Magistrate Stephen Jackson in the Local Court at Singleton on 24 May 2006 be set aside.

(2) That this Court apply s23 of the Supreme Court Act 1970 to set aside the preliminary decision of Magistrate Stephen Jackson handed down at the Singleton Local Court on 24 May 2006 accepting jurisdiction.

(3) That this Court grant leave to appeal under s74(2)(a) of the Local Courts Act 1982 to set aside the decision of Magistrate Stephen Jackson handed down at the Singleton Local Court on 24 May 2006 in accepting jurisdiction.

(4) A declaration that the Local Court at Singleton does not have jurisdiction to hear and determine the proceedings in case No 97 of 2005.

(5) Indemnity costs. 2 The amended summons sets out what are described as "grounds of appeal" as follows: "1. His Honour erred at law by deciding that title to the land in question vests in the plaintiff by operation of law. 2. His Honour erred at law by accepting jurisdiction contrary to s67(1)(d) of the Local Courts Act 1982 (goods detained by their owner or some other person acting on the owner's behalf). 3. His Honour erred at law by accepting jurisdiction contrary to s67(1)(e) of the Local Courts Act 1982 (where title to land is in question). 4. His Honour erred at law by accepting jurisdiction contrary to s4(1)(a) and s65(1)(b) of the Local Courts Act 1982 in that the value of the goods concerned exceeded the jurisdictional limit of the Local Court. 5. His Honour erred at law by failing to give reasons for a finding of jurisdiction in the matter. 6. To allow the current action to continue at the Local Court will breach the terms of the original trust, cause an injustice to the trust beneficiaries and will be an abuse of process. 7. The preliminary decision of Magistrate Stephen Jackson has now tainted any continuation of the proceedings to the extent that the only possible outcome will be a significant injustice requiring the intervention of this Court. 8. To allow the matter to continue at the Local Court will impose unnecessary costs on the plaintiff/applicant acting as trustee in the absence of available trust funds. 9. Grounds to seek leave to amend the summons are based on the following factors: (i) That the current proceedings may continue to avoid duplication of process. (ii) The application is made early in the proceedings which will not prejudice the rights of the defendant/respondent. (iii) Section 23 of the Supreme Court Act 1970 is the more appropriate process to better resolve the issues between the parties in the interests of the administration of justice. (iv) The proposed amended summons contains no substantial changes to the issues in dispute and the relief sought." 3 As can be seen the document which forms the basis of the proceedings before me is something of a hybrid. It purports to seek leave to appeal and to appeal from the decision of his Honour Stephen Jackson LCM given on 24 May 2006 and by reference to s23 of the Supreme Court Act it seeks to transfer in some way not altogether clear, the proceedings to the Supreme Court so that henceforward they will proceed in this Court. 4 As I indicated in the course of submissions, I do not propose to accede to the transfer of the matter into the Supreme Court. The basis for that application has not been made out. In any event, the procedure chosen by the plaintiff for such an application is inappropriate. Accordingly, the only matter which is properly before me as duty judge and which I propose to determine, is whether any basis has been established by the plaintiff, either with leave or by way of direct appeal, for interfering with his Honour's decision in the Local Court at Singleton on 24 May 2006. 5 There is also a motion before me by the defendant seeking an order pursuant to r13.4 of the Uniform Procedure Rules that the proceedings be dismissed. Such a motion is unnecessary. Should the plaintiff fail to establish his challenge to his Honour's decision, the inevitable consequence is that the summons will be dismissed. 6 As was pointed out by the defendant, before the plaintiff is able to rely upon his amended summons, he needs the leave of the court to file and serve it and that leave has not yet been obtained. The defendant submits that such leave should not be granted since the application is hopeless and doomed to failure. 7 I propose to grant leave to the plaintiff to file and serve the amended summons. I have already indicated that those parts of the amended summons which seek to transfer the proceedings into the Supreme Court are misconceived and will in due course be dismissed. The balance of the amended summons seeking leave or purporting to appeal directly from the decision of his Honour is not so obviously hopeless or doomed to failure that leave to amend should not be granted. In my opinion they do raise an arguable issue.

Factual background 8 Putty is a small community in the Singleton area. Located in the town of Putty is a piece of land with a community hall and some other structures erected upon it ("the land"). The certificate of title to the land is folio 36 of volume 2876. In 1918 the land was transferred to George Henry Gibbs, William Fraser and Wilfred Cobcroft as joint tenants "upon trust for the mercy of the residents of Putty for public, religious and social gatherings and for such other purposes as the said residents may from time to time determine". Two of those trustees died in the 1930's and the remaining trustee died in 1983. By that time the community hall had become dilapidated and the land had accumulated a substantial debt for unpaid rates. 9 On or about 8 February 1986 a meeting of Putty residents took place in a social context to discuss the future of the community hall. Twenty-four members of the Putty community attended. Those persons nominated three replacement trustees in respect of the land: Kendall Murray Ferguson, Owen Edward Ellis and John Kevin Laycock (the plaintiff in these proceedings). On 14 July 1986 those three persons were registered on the certificate of title as the registered proprietors and trustees of the land. 10 On the same occasion as the new trustees were appointed (8 February 1986), the meeting decided to form a committee. An election was held for the appointment of officers and the Putty Social Committee, an unincorporated association, came into existence. There is a dispute as to whether the election occurred after or before the nomination of the trustees. In February 1987 the Putty Social Committee changed its name to the Putty Community Association. 11 Of the three "new trustees" Owen Edward Ellis died in 1992 and Kendall Murray Ferguson resigned. 12 Since 1986 the Putty Community Association and other community members have refurbished the community hall, paid off debt and as of the present time the hall is a valuable asset of the Putty community. 13 On 24 June 2002, the Putty Community Association became incorporated under the Associations Incorporation Act 1984 and is now known as the Putty Community Association Inc (the defendant in these proceedings). It is common ground that even if the plaintiff does not have the certificate of title in his possession, he has access to it and it is under his control. Following its incorporation the defendant requested that the plaintiff deliver up to it the certificate of title so that the defendant could become registered as owner of the land. The plaintiff has refused to deliver the certificate of title to the defendant. 14 A statement of claim was filed in the Local Court on 17 November 2005 with the defendant as plaintiff and the plaintiff as defendant seeking an order that the plaintiff deliver to the defendant the certificate of title. The matter is currently proceeding in the general division of that court. The basis for the action is that the defendant is the direct successor to the Putty Social Committee. It appointed the plaintiff as trustee of the land. Accordingly, as between him and it, the defendant submits that the plaintiff is estopped from denying its entitlement to the document. As the successor to the Putty Social Committee the defendant says that title to the land vests in it by operation of Schedule 2 to the Associations Incorporations Act. 15 In his defence the plaintiff denied that the defendant had any entitlement to the certificate of title and denied that it had any entitlement to be registered as proprietor of the land. He denied that the defendant is the successor to the Putty Social Committee. The defence also raised a number of jurisdictional issues. These were that the value of the "goods" in the claim exceeded $72,000 and that the claim involved a dispute as to title to land. 16 Before embarking on a hearing of the matter, his Honour decided to hear argument on the jurisdictional issue. The parties were invited and did provide written submissions to the court. Oral submissions were then made on 3 May 2006. His Honour delivered judgment on 24 May 2006 in relation to the jurisdictional question. It is that decision which is the subject of the summons before me. 17 His Honour in what he described as a "preliminary decision" rejected the argument that on the pleadings the defendant's action was one in which title to the land was in question. His Honour determined that the only matter before him was who was entitled as between the defendant and the plaintiff to possession of the certificate of title evidencing title to the land, not the question in whom the title resided. 18 His Honour determined that at this stage of the proceedings he was satisfied that the court did have jurisdiction to deal with the defendant's claim. Having made what his Honour characterised as a "preliminary decision", his Honour adjourned the matter to enable the parties to consider their position.

Consideration 19 As the plaintiff appreciated, in order for the matter to be properly before me, the plaintiff had to bring himself within either s73 or s74 of the Local Courts Act 1982. These provide: "73(1) A party to proceedings under this Part who is dissatisfied with the judgment or order of a Court sitting in its General Division may appeal to the Supreme Court against the judgment or order, but only as being erroneous in point of law. … 74(1) A party to proceedings under this Part who is dissatisfied with the judgment or order of a Court sitting in its General Division may appeal to the Supreme Court against the judgment or order on a ground that involves a question of mixed law and fact, but only by leave of the Supreme Court. (2) A party to proceedings under this Part who is dissatisfied with any of the following judgments or orders of a Court sitting in its General Division may appeal to the Supreme Court against the judgment or order, but only by leave of the Supreme Court. (a) an interlocutory judgment or order; (b) a judgment or order made with the consent of the parties, (c) an order as to costs." 20 The defendant did not accept that what his Honour had done was a "judgment or order of a Court". It submitted that his Honour had been at pains to make it clear that what he was doing was giving a preliminary decision as to jurisdiction. It was not a final decision as envisaged by s73 and did not involve a judgment or order as there provided. Reliance was placed by the defendant on such cases as Landsal Pty Limited (in liquidation) v Other Building Society(1993) 113 ALR 643 and Gibson Motorsport Merchandise Pty Limited v Forbes [2006] FCAFC 44. 21 I agree that s73 of the Local Courts Act cannot apply to the plaintiff's application. The plaintiff has to bring himself within subsection 74(2) before the proceedings before me are competent. 22 On behalf of the defendant it was submitted that even though subsection 74(2) refers to "an interlocutory judgment or order" there still must be an actual judgment or order from which to appeal. It submitted that the preliminary decision of his Honour did not come within either category. I do not agree. The decision by his Honour was of an interlocutory kind. While it was not final, it did have the practical effect of allowing the matter to continue before his Honour rather than be dismissed for want of jurisdiction which would have been its fate had his Honour determined that he did not have jurisdiction. Accordingly I am of the opinion that the plaintiff's appeal is competent, but that he requires leave pursuant to subs74(2) of the Local Courts Act 1982. 23 In relation to the merits of the application if leave were to be granted, the plaintiff submitted that his Honour had erred in determining that he could decide the matter raised on the pleadings in the Local Court without determining title to land. The plaintiff submitted that the practical effect of his Honour's decision on the question of who was entitled to possession of the certificate of title would be to determine title to the land and that this was expressly excluded from the jurisdiction of the Local Court by subs67(1)(e). This provided: "67(1) A Court does not have jurisdiction under this Part in any of the following circumstances: … (e) proceedings in which the title to land is in question, other than proceedings on a claim in respect of which the question of the title to land is merely incidental." 24 I am not persuaded that his Honour erred in his preliminary decision as to jurisdiction. While title to the land on which the community hall stands is in question as between the parties, it was not "in question" in the "proceedings" before his Honour. I agree with his Honour that, so far, the only issue before him is the question of who is entitled to possession of the actual certificate of title as between the plaintiff and the defendant. This is a document which of itself is of only nominal value. Even if his Honour found in favour of the defendant in the Local Court proceedings, this would not determine title to the land. The defendant would have to get itself registered as owner on the title and that is when the question of title to the land might properly arise. That, however, is not a matter which is before his Honour. 25 It should also be noted that the argument on the preliminary question as to whether or not his Honour had jurisdiction to hear the defendant's claim took place on the basis of written and oral submissions and on the basis of certain assumptions as to the facts of the case. The Local Court has not yet received any evidence, it has not made any findings of fact and as I read the decision by his Honour, it has not made a final determination as to jurisdiction. Depending on the evidence which is ultimately led in the matter and the findings which his Honour makes, his Honour may well determine at some later point in the proceedings that the jurisdictional question needs to be reconsidered and that the Local Court does not have jurisdiction. 26 Even if I were to grant leave to appeal from his Honour's decision, the appeal would fail. It would fail for two reasons. Firstly, I am not persuaded that his Honour erred in his preliminary decision as to jurisdiction. Secondly, it seems to me that the application for leave to appeal and therefore any appeal is premature. As his Honour indicated, his decision as to jurisdiction was a preliminary one and not a final decision. There is as yet, no evidence or factual findings upon which this Court could itself make a final determination as to jurisdiction. 27 For the above reasons, therefore, I decline the plaintiff's application for leave to appeal from the decision of his Honour on 24 May 2006.

Orders 28 The orders which I make are as follows:

(1) Summons dismissed. (2) The plaintiff to pay the defendant's costs of the summons. **********

13/09/2006 - amendment to cover sheet - Paragraph(s) n/a

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