McDowall v Reynolds

[1] Before me are applications by each party. The plaintiff, Donald McDowall, as executor of the Estate of Albert McDowall (deceased), seeks liberty to proceed with the estate's claims for a declaration that the defendant holds certain lands on trust on behalf of the estate. The defendant seeks leave to pursue his earlier application to have the plaintiff's claim permanently stayed or struck out as an abuse of process.

[2] The earlier hearing of this application resulted in an order being made to stay the claim until further order. The principal issue then was whether the pursuit of this proceeding, raising identical claims to those in action No 199 of 1989 (the "prior action") which had been dismissed for want of prosecution, amounted to an abuse of process. As appears from paragraphs [4] - [7] of my reasons, my decision to stay the proceedings until further order was influenced by a consideration of the authorities of Madden v Kirkegard Elwood and Partners[1], Williams v Zupp Motors Pty Ltd[2] and Birkett v James[3]. Further, there was an issue about identifying the scope of the relief available to the plaintiff insofar as any award of equitable damages could not be truly assessed until proceedings pending in the Land and Resources Tribunal ("the Tribunal") were finalised. Final orders of the Tribunal were in fact made on 5 December 2003.

[3] The present applications are interrelated. The parties agreed that the most appropriate course was to deal with the defendant's application, the outcome of which will determine both applications.

[4] The plaintiff's claim was filed on 9 October 2001 but not served until 31 July 2002 by which time the prior action had been struck out. In it, the plaintiff seeks the following relief:-

1. The declaration that the defendant holds the certain land on trust for the plaintiff;

2. An order that the trust be carried into execution by transfer of the land to the plaintiff;

3. Alternatively, equitable compensation or damages.

[5] The tortured path of the prior action before it was finally dismissed for want of prosecution 12 years later, is described in my earlier reasons for judgment dated 12 March 2002 (McDowall v Reynolds [2002] QSC 142). My reasons there should be read in conjunction with these reasons. The present claim appears to have been instituted in anticipation of the prior action being struck out. When the Statement of Claim was delivered on 31 July 2002 the defendant's response was to file this application on 20 August 2002. As a consequence the defendant has not formally delivered a Defence to the plaintiff's claim but has exhibited a draft of the proposed Defence.[4]

[6] To establish the trust the plaintiff relies upon two written agreements. The first was between Albert McDowall and William Robbins dated 15 October 1947 whereby Robbins agreed to subdivide part of his land described as Portion 110, Parish of Mowbray being land contained in the Deed of Grant No. N 265, Volume 97, Folio 4 (hereinafter referred to as "Portion 110"). The second was an agreement between Robbins and the defendant dated 22 February 1961 whereby the defendant undertook to Robbins to sign survey plans and execute relevant transfer so as to give effect to Robbins' obligation to Albert McDowall.

[7] The plaintiff asserts that these documents create an express trust by which the defendant holds that subject part of Portion 110 on trust for the plaintiff. The plaintiff alleges further that the defendant has fraudulently breached that trust by failing or refusing to cooperate with the plaintiff in procuring the subdivision of the subject part of the land and transferring it to the plaintiff. In the alternative, the plaintiff mounts claims based on the circumstances creating the constructive trust in respect of that subject part of the land and, in the further alternative, a contention that the defendant had been unjustly enriched such as to require restitution.

1. Albert McDowall executed a written agreement with Robbins in 1947 but contends that the agreement created no rights in the plaintiff other than contractual rights against Robbins and in particular, that it did not constitute the sale of land by Robbins to the plaintiff;

2. The defendant entered into an agreement with Robbins in 1961 but denies that by executing the agreement he acknowledged and declared that he holds the land on behalf of the plaintiff and denies particularly that he thereby became a trustee of any land for the plaintiff.

The defendant denies that he has acted in breach of trust or that he has acted fraudulently.

[9] Other issues raised on the pleadings concern whether the part of the land to be excised from Portion 110 has been, or can be, accurately identified and now whether the land can be subdivided. There is also a question of who should bear the responsibility for any failure to undertake the preparation of the survey plan. In addition to these factual issues, the defence raises legal issues of whether the relief claimed is statute barred pursuant to various provisions of the Limitation Act 1960 and whether the relief is no longer available by reason of the laches, acquiescence, waiver by conduct and delay of the plaintiff.

[10] It is necessary to take into account the manner in which the claims were pursued since first being raised in the prior action. The progress of that claim had the following features:-

On 7 April 1994 the defendant applied to have the claim struck out for the want of prosecution. Instead, the plaintiff was given liberty to proceed by order dated 2 September 1994. Thereafter there followed some activity for the next six months but after a year's inaction each of the parties gave to the other a Notice of Intention to Proceed.

In early 1997 the plaintiff applied to have the claim set down for hearing. This was refused. The delivery of an amended Statement of Claim was not accepted by the defendant and an application for it to be received was refused by Byrne J who adjourned the application to permit a re-drafting of the proposed amendment**.**

On 8 December 1997 the adjourned application for extension of time for delivery of the Amended Statement of Claim was heard together with an application by the defendant to strike out the action. The Amended Statement of Claim was allowed and was delivered on 15 December 1997. That order was the subject of an unsuccessful appeal which was determined on 9 September 1998.

On 20 October 1998 the Amended Defence was delivered. Thereafter, despite letters from the defendant's solicitors expressing concern about the effects of delay and the prejudice to their client, Albert McDowall took no further step.

On 12 March 2002 the action No 199 of 1989 was dismissed for want of prosecution.

[11] As mentioned in my earlier reasons ([2002] QSC 142), whilst this action was proceeding in the manner outlined above, there was on foot proceedings in the Mining Warden's Court which were then transferred to the Tribunal. The purpose of the 1947 agreement was to enable Albert McDowall to more securely exploit the limestone deposits known to be on the part of the land in respect of which he was granted a mining tenement. The recent decision of the Tribunal has confirmed the validity of Mining Lease 5402 and established the plaintiff's entitlement "to ingress into and egress from the tenement".[5] An application for leave to appeal this decision was refused.[6]

[12] In point of fact, Albert McDowall showed little interest in exploiting the limestone deposits in the almost 60 years since the agreement. There was little mining activity between 1947 and 1961. As at 1969 there was still apparent confusion about the area of the mining lease.[7] The last work on the mining lease appears to have occurred in 1989.[8]

[13] At the previous hearing of this application, I acted on submissions that because of changes in the local government by-laws, consent for a subdivision of this size could not now be approved and consequently the only relief available would be equitable damages.[9] A new feature emerged during argument before me which rather indicates that the intention of the present plaintiff is to pursue a quest for subdivision because the area of land might be suitable for a residential home site. It seems there has been a change to the Douglas Shire requirements through its Transitional Planning Scheme which came into effect in December 1996.[10] Consultants have advised the plaintiff that the changes provide the local authority with a limited discretion to consider proposals relating to subdivision of land within the Rural (Agriculture) Zone. The consultants' advice is highly qualified suggesting that "the subject subdivisional proposal is more complex and onerous on the [plaintiff] and does not guarantee the council's favourable consideration". To that evidence the plaintiff adds a valuation of the subject area of land by a real estate agent, Mr Wight, which suggests that Portion 110 might have a potential sale price of $700,000 - $1,500,000.[11] As a consequence the hoped for clarification of the likely quantum of equitable damages from the Tribunal's decision did not occur. The decision did, however, define the boundary of the mining lease.

[14] The defendant argues that this change of focus illustrates the opportunistic nature of the plaintiff's claim generally. The plaintiff argues that changes in planning law is irrelevant. If the defendant holds the land on trust for the plaintiff any change in the land's use or value is for the beneficiary to enjoy. For reasons that will become apparent this new evidence does not alter the considerations which are relevant to the determination of whether the present proceedings constitute an abuse of process.

[15] The contemporaneous documents have now been exhibited in full. This raises questions of whether the true effect of them can be reliably determined without the evidence of the persons who were active at the time various agreements were reached.

[16] The 1947 agreement by its paragraph 5 provided that Albert McDowall would be responsible for the cost of surveying the subject area of land but that William Robbins would "sign and execute any necessary Survey Plans and other Instruments...and do all such other acts and things necessary to facilitate the registration of a Plan of Survey...".[12] The actual engagement of a surveyor would seem to be a task of little difficulty for either party. The important act is the acceptance of the survey by the registered proprietor and the signing of the plan and the transfer. This agreement had annexed a sketch plan showing basic measurements only but no detail as to the access area which was to be part of the land to be transferred.[13]

[17] There was a further agreement made on 27 August 1950 which, inter alia, provided for Albert McDowall to have an option to purchase various parts of Portion 110. The terms of this agreement also dealt with arrangements for the survey of access to and from the subject area of land. The option provided for by this agreement was expressly declined by Albert McDowall in 1958. The agreement contained a description of the subject area of land as being "approximately 14 acres purchased from Robbins".[14]

[18] The 1961 agreement by which Robbins transferred the registered title to Portion 110 to the defendant is accompanied by a sketch plan which refers to a rectangular area 14 chains x 7 chains plus a triangular area with an access road. The dimensions of this plan are not capable of precise measurement but it is sufficient to observe that they are different to the sketch plan[15] in the 1947 agreement and the description in the 1950 agreement. The Tribunal did not rely on any of the above information in fixing the boundaries of the mining lease but rather fixed the area by reference to its own survey.

[19] The exhibited letters between November 1959 and October 1962[16] showed a strong desire on the part of Albert McDowall for Robbins, and subsequently Reynolds, to arrange the survey. What is not clear is why he did not attend to the engagement of the surveyor himself when there was no express refusal by Robbins to sign any plan or transfer. Then there is reference to a plan for the defendant to "buy back" the area yet to be excised from Portion 110. The Public Curator (as the office was then described) was apparently involved. This proposal and variation of access arrangements prompted correspondence from Albert McDowall to the defendant.[17] It is not clear whether this correspondence under the hand of Albert McDowall relates directly to the two agreements relied upon as founding the plaintiff's claim. As well there are the comments in the file of the defendant's solicitor, Mr Davis (deceased), which suggests a reluctance on the part of Albert McDowall to proceed with the survey and indeed, some hearsay information from a surveyor Mr Michael that he had been asked not to proceed.[18] The fact that Mr Davis and Albert McDowall are dead means that the circumstances which give rise to these comments cannot be explored. The whereabouts of Mr Michael is not stated but even if he is alive the reliability of his recall after 40 years would be highly questionable. Also the conduct of the claims by Albert McDowall marked by long periods of inaction and the need to seek the indulgence of the Court on various occasions also suggests a lack of interest in pursuing the relief now claimed.

[20] As appears from my earlier reasons staying this claim until further order, I rely particularly on a decision of the Full Court Williams v Zupp Motors Pty Ltd[19]. There the Court held that the fact that a party had a prior action dismissed for want of prosecution did not itself have the result of constituting the institution of new proceedings on the same issue as being an abuse of process. The defendant now relies upon various statements found in the decision of The High Court of Australia in Batistatos v Roads and Traffic Authority of New South Wales[20]. That case concerned a claim for damages for personal injury because of the negligence of a road making authority's failure to properly design, construct or maintain a section of roadway. The plaintiff there was rendered quadriplegic as a result of his motor vehicle crashing on that section. The incident occurred in August 1965. He was mentally incapacitated such that the normal limitation periods did not apply to him. Proceedings were commenced on his behalf on 21 December 1994 - 29 years after the incident. The pleadings closed in 1996 and an application for permanent stay was made in the year 2000. No blame was attributed to any person for the delay. Rather, the defendant sought to have the proceedings permanently stayed or dismissed on the ground that the objective consequence of the lapse of time between the incident and the commencement of proceedings was that a fair trial was no longer possible and so constituted an abuse of process.

[21] The effects of the lapse of time relied upon related to the defendant's inability to obtain records (police, hospital, local authority, RTA and insurer of the risk), difficulty in identifying and locating persons actively involved in the design and construction of the road and the fact that the road had altered substantially in the intervening period. The conclusion reached by the majority (Gleeson CJ, Gummow, Hayne and Crennan JJ) included a reference to the fact that limitations which did not run, or had not expired, against a particular plaintiff operated indifferently to the existence of delay. They held as follows:-

"[64] It is a long, and impermissible, step to deny the existence of what may be a countervailing right of a defendant by imputation to the legislature of an intent, not manifested in the statutory text, to require the court to give absolute priority to the exercise by the plaintiff within the limitation period of the right to initiate proceedings. The truth is that limitation periods operate by reference to temporal limits which are indifferent to the presence or absence of lapse of time which may merit the term "delay"."

[22] The majority in their reasons eschewed controlling terminology such as "exceptional circumstances" and "oppressive conduct" which had been used as benchmarks in certain cases. See Birkett v James[21]. They said:-

"[69] The descriptions, rather than definitions, given in this Court and set out earlier in these reasons post-date Birkett v James and do not provide any ground for a requirement of oppressive conduct by the plaintiff. Rather, as in the circumstances of the present case, attention must be directed to the burdensome effect upon the defendants of the situation that has arisen by lapse of time. The Court of Appeal held that this was so serious that a fair trial was not possible. The result was that to permit the plaintiff's case to proceed would clearly inflict unnecessary injustice upon the defendants.

[70] What Deane J said in Oceanic Sun Line Special Shipping Company Inc v Fay with respect to the staying of local proceedings, is applicable also to a case such as the present one. His Honour emphasised that there was no "requirement that the continuance of the action would involve moral delinquency on the part of the plaintiff"; what was decisive was the objective effect of the continuation of the action.

[71] In assessing that effect, there must be taken into account the consideration expressed by Dixon J in Cox v Journeaux [No 2] and set out earlier in these reasons. Bryson JA in terms did so. He went on to remark in that connection that the defendants had not shown that the plaintiff's action was 'clearly without foundation'. But, he concluded that there was 'in practical terms nothing of utility to place in the balance against the defendants' claim for a permanent stay'."

[23] In the majority's reasons there had been cited with approval, passages from cases by which an understanding by what is meant by the term "abuse of process" can be gained. In Ridgeway v The Queen[22] Gaudron J said:-

"The powers to prevent an abuse of process have traditionally been seen as including a power to stay proceedings instituted for an improper purpose, as well as proceedings that are 'frivolous, vexatious or oppressive'. This notwithstanding, there is no very precise notion of what is vexatious or oppressive or what otherwise constitutes an abuse of process. Indeed, the courts have resisted, and even warned against, laying down hard and fast definitions in that regard. That is necessarily so. Abuse of process cannot be restricted to 'defined and closed categories' because notions of justice and injustice, as well as other considerations that bear on public confidence in the administration of justice, must reflect contemporary values and, as well, take account the circumstances of the case. That is not to say that the concept of 'abuse of process' is at large or, indeed, without meaning. As already indicated, it extends to proceedings that are instituted for an improper purpose and it is clear that it extends to proceedings that are 'seriously and unfairly burdensome, prejudicial or damaging' or 'productive of serious and unjustified trouble and harassment'."[23]

"Although the categories of abuse of procedure remain open, abuses of procedure usually fall into one of three categories: (1) the court's procedures are invoked for an illegitimate purpose; (2) the use of the court's procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court's procedures would bring the administration of justice into disrepute."[24]

[24] The defendant brings this application, invoking the Court's exercise of its "inherent jurisdiction" or rather, as described in Walton v Gardiner[25] its "inherent power to prevent misuse of its procedure which would be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people." [26]

[25] The Uniform Civil Procedure Rules do not, by express terms, provide for the striking out of a claim on the grounds of "abuse of process". Rule 389A deals with applications in an existing proceeding which would be judged to be frivolous or vexatious or an abuse of process within the meaning of those expressions for the purpose of the Vexatious Proceedings Act 2005. There are express provisions concerning the striking out of pleadings and for striking out claims for the want of prosecution, however they are not appropriate to the type of application which is before me. Accordingly, I propose to deal with the applications on the basis of an inquiry as to whether there has been an abuse of process such that the claim should be permanently stayed.

[26] The defendant bases his application for a permanent stay on the following grounds:-

(i) The fact that the claim was not prevented by a limitation period is not relevant to the determination of whether it constitutes an abuse of process;

(ii) The prospect of establishing a trust by reference to express terms is slight because none of the terms obliged the defendant to arrange for a survey for the purpose of the excision of the subject land and there is no evidence that he has committed any breach of his obligations;

(iii) The true circumstances in which the agreements were formulated cannot be established because of the deaths of relevant witnesses;

(iv) There is uncertainty in describing what is the trust property because of the differing descriptions of the area intended to be subdivided from Portion 110 and the fact that the only formal survey prepared in 1989 was not accepted by the plaintiff.[27]

(v) The defences of laches, acquiescence and waiver are affected by the death of relevant witnesses and by delay.

[27] As to this last proposition Mr Philp of Senior Counsel for the plaintiff relied on remarks in Spry, Equitable Remedies (6th ed) at p 226 which reads as follows:-

"Laches is established when two conditions are fulfilled. In the first place, there must be unreasonable delay in the commencement or prosecution of proceedings; in the second place, in all circumstances the consequences of delay must render the grant of relief unreasonable or unjust."

Asserting that evidence establishes an express trust the plaintiff argues that the defendant is not able to make out the defence.

[28] Mr Griffin of Queen's Counsel for the defendant contends that by the time the defendant entered into the 1961 contract, no survey had been performed, no transfer of the subject area of land had been effected and the contract between Robbins and the defendant provided, not that the defendant would survey their land but rather that Robbins would survey the land and if Robbins did so, that Reynolds would then transfer the newly created lot to Albert McDowall. Despite his awareness that Robbins had not arranged the survey as he had agreed, Albert McDowall did nothing to compel Robbins to complete his agreement. The loss of relevant witnesses is seriously prejudicial to the task of both establishing the existence of a constructive trust and unjust enrichment or to countering any such suggestion. Further, any claim for unjust enrichment would be caught by a limitations bar.

[29] Ultimately the plaintiff submitted that the relief sought is discretionary and the balancing of any detriment to the defendant does not outweigh the existence of a potentially meritorious claim. I do not accept this proposition. The approach laid down in Batistatos is that once there is a finding of an abuse of process then discretion plays no part. Once such a finding is made the only result is that the action must be stayed.

[30] On the topic of uncertainty in the description of the trust property, there is undoubted inconsistency between the sketch plans and the description of the area of land for the proposed new lot. The sketch plans and descriptions are different again from the area of the mining lease as determined by the Tribunal. Such inconsistencies might perhaps have been resolved had oral evidence been available to explain them. Now that the only persons who could have assisted in this regard are deceased, the uncertainty will remain. For a trust to be created, the property to be held by the trustee must be definite at the time at which the creator of the trust purports to create it or else be definitely ascertainable from the facts then existing. See Ford and Lee, "Principles of the Law of Trust" 2nd ed at [414]. Whilst such uncertainty remains neither party is in a position to properly litigate this important issue.

[31] As to the defendant's assertion of prejudice by reason of not having Albert McDowall available for cross-examination, it must be observed that there is obvious prejudice to the plaintiff's claim also. One expects there would be considerable difficulty in the plaintiff making out a claim for constructive trust without the evidence of McDowall and other persons who could speak directly of the circumstances existing in 1961. This factor was referred to in Batistatos citing the remarks of Bryson JA as follows:-

"To my mind the simple and overwhelming clear position is that no useful evidence is available upon which to conduct a trial into the question whether the plaintiff's injuries were caused by negligence of the defendants, and no further search or inquiry is in anyway likely to locate any such evidence; so that a trial of the proceedings could not arise above a debate about the effects of scraps of information, and it is impossible to inform the date with any realistic useful information."[28]

Those words sum up the situation here, both with respect to the plaintiff's claim and the potential defences. Evidence by which a trust is sought to be established is far from complete and there is no likelihood this situation will change.

[32] In the end, the Court is left with a 42 year lapse of time between the events giving rise to the cause of action and making of a claim. In the meantime there is a history of dealing, negotiations and prevarication which might lead to a conclusion that even if there were an express trust (upon which issue I express no view) it may have been abandoned or waived by word or conduct. It seems to me there are serious difficulties about the identification of the trust property, and the terms of the trust which impose obligations on the defendant and what conduct on his part amounted to a breach of those terms. When one looks at the plaintiff's reliance upon alternative claims of there being a constructive trust or unjust enrichment, the problems are compounded by the death of the major witnesses and the essential unreliability of evidence based upon witnesses' recall of events so long ago. There is significant prejudice to the defendant by reason of the unavailability of witnesses who might well be expected to assist in the defences he proposes to raise.

[33] The history of delays in bringing the first action to trial, I attribute essentially to the fault and lack of concern on the part of Albert McDowall. The various interlocutory applications between 1994 and 2002 were made necessary by his unwillingness to bring the action to finality. I have already commented in my reasons for striking out the prior action of the impact of delay.

[34] In the time that has elapsed since the institution of the current proceedings, the further changes, particularly the death of Albert McDowall, has further convinced me that it is no longer possible to have a fair trial of the issues, first raised in 1989, about events which commenced in 1947 through to 1961. I find therefore that the continuation of this action would result in an abuse of the Court's process and for that reason it should be permanently stayed.

[35] I propose to order that the defendant's costs of the claim to be assessed on the standard basis should be paid by the plaintiff. As I have not heard the parties on the issue of costs, the order will take effect after the elapse of 21 days from the date hereof. Any party wishing to seek a different order for costs has leave to deliver written submissions on the issue within 14 days from the date hereof.

2. The plaintiff's application for liberty to proceed with the claim is dismissed.

3. With effect from 21 days from the date hereof unless further ordered the plaintiff pay the defendant's costs of and incidental to the claim (including reserved costs) to be assessed on the standard basis.

4. Each party have leave to make written submission on the issue of costs within 14 days from the date hereof.

[1] [1983] 1 Qd R 649

[2] [1990] 2 Qd R 493

[3] [1978] AC 297

[4] Ex "BT 1" to the affidavit of Bernard Treston sworn 8 August 2006

[5] Paras [5]-[7] of the Reasons of Deputy President Kingham [2003] QLRT 169

[6] See McDowell v Reynolds [2004] QCA 245

[7] Reasons of Deputy President Kingham (supra) paras [19] - [22]

[9] Paras [20], [21] [2002] QSC 142

[10] See affidavit Donald Keith McDowall sworn 16 March 2006 - ex DKN31

[12] Ex DKM-1 to affidavit of Donald Keith McDowall sworn 16 March 2006

[13] Ex DKM-1 to affidavit of Donald Keith McDowall sworn 16 March 2006

[19] [1990] 2 Qd R 493

[20] [2006] HCA 27

[21] [1978] AC 297

[22] [1995] HCA 66; (1995) 184 CLR 19

[27] Plaintiff's Answers to Interrogatories ex "BT2" Affidavit of Bernard Treston sworn 6 January 2006