Consul Clearing & Credit Corporation Pty Ltd v Pilot Investments Pty Ltd [2025] QSC 319

SUPREME COURT OF QUEENSLAND CITATION: Consul Clearing & Credit Corporation Pty Ltd v Pilot Investments Pty Ltd [2025] QSC 319 PARTIES: CONSUL CLEARING & CREDIT CORPORATION PTY LTD ACN 056 754 164 (plaintiff) v PILOT INVESTMENTS PTY LTD ACN 072 375 172 (defendant) FILE NO/S: BS No 2761 of 2021 DIVISION: Trial Division PROCEEDING: Claim ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 28 November 2025 DELIVERED AT: Brisbane HEARING DATE: 9 and 10 October 2024; 20 and 27 August 2025 JUDGE: Kelly J ORDERS: 1. I declare that the defendant is entitled as an adverse possessor under Part 6, Division 5 of the Land Title Act 1994 (Qld) to be registered as the owner of an estate in fee simple in the land described as Lot 2 on RP737039, Title Reference 21548031. 2. The claim filed 10 March 2021 is dismissed. CATCHWORDS: REAL PROPERTY – TORRENS TITLE – INDEFEASIBILITY OF TITLE – EXCEPTIONS TO INDEFEASIBILITY – ADVERSE POSSESSION OF OTHERS AND POSSESSORY TITLE – where the plaintiff is registered as the owner of a property – where on 17 September 2018 the defendant lodged an application under s 99 of the Land Title Act 1994 (Qld) seeking to be registered as the owner of the property on the basis that it was an adverse possessor of the property – where the plaintiff started this proceeding seeking a declaration that it is the registered owner of the property and an order requiring the registrar to refuse the defendant’s application for adverse possession – where the defendant has counterclaimed for a declaration that it is entitled under the adverse possession provisions of the Land Title Act 1994 (Qld) to be registered as the owner of the property – where a claimant for adverse possession must -- 1 of 18 -- 2 establish the expiration of the relevant limitation period for the dispossessed owner to recover his or her land and satisfy the common law requirements of adverse possession – where possession must generally consist of an appropriate degree of evidence of physical control of the land in question and an intention to possess that land to the exclusion of all others including the paper owner – where the plaintiff accepts that the defendant has had adverse possession of the property since March 2016 but contends that this period has been insufficient to extinguish its title to the property – where the plaintiff alleges that in or about January 1996, the parties entered into an oral agreement by which the defendant would maintain the property and pay the rates and outgoings and could continue to use the property until it was required by the plaintiff or it was subsequently sold – whether such oral agreement was made – whether the court should declare that the defendant is entitled as an adverse possessor to be registered as the owner of the property Land Title Act 1994 (Qld), s 99 Limitation of Actions Act 1974 (Qld), s 13, s 24 Buckinghamshire County Council v Moran [1990] Ch 623, cited Cervi v Letcher (2011) 33 VR 320, cited County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193, cited Lawrence v Ciantar [2020] NSWCA 89, cited Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464, cited Powell v McFarlan (1977) 38 P&CR 452, cited Re Johnson [2000] 2 Qd R 502, cited Taycon Pty Ltd v Williams [2023] QSC 297, cited COUNSEL: P L Jeffery for the plaintiff P Somers for the defendant SOLICITORS: JNH Lawyers for the plaintiff K&L Gates for the defendant A dispute about adverse possession [1] This proceeding concerns a property at 4 Moa Lane on Thursday Island, the real property description of which is Lot 2 on RP 737039, Title Reference 21548031 (“the Property”). The plaintiff is presently registered as the owner of the Property. On 17 September 2018, the defendant lodged an application under s 99 of the Land Title Act 1994 (Qld) (“the Act”) seeking to be registered as the owner of the Property on the basis that it was an adverse possessor of the Property. The plaintiff was given a statutory notice by the registrar under the Act. On 10 March 2021, the plaintiff started this proceeding seeking a declaration that it is the registered owner of the Property and an order requiring the registrar to “refuse the defendant’s application for adverse possession dated 17 September 2018”. The defendant has counterclaimed for a -- 2 of 18 -- 3 declaration that it is entitled under the adverse possession provisions of the Act1 to be registered as the owner of the Property. Background matters [2] On 8 July 1992, Mr Perry Sutton and Mr Grahame Turk incorporated the plaintiff, which at that time was named Sydney Ports Pilot Service Pty Ltd. After its incorporation, the plaintiff entered into an agreement with the Sydney Ports Corporation pursuant to which the plaintiff secured the rights to provide marine piloting services in New South Wales (“the Sydney Ports contract”). At the time of these events, the shares in the plaintiff were held by Mr Sutton, Mr Turk and Queensland Coastal Pilot Services Pty Ltd, later known as Torres Pilots Pty Ltd (“TP”). Mr Sutton was then using TP as a corporate vehicle for a business which provided marine pilotage services in Queensland. [3] In or about 1993, marine piloting services in the Torres Strait became deregulated. Mr Sutton saw this development as an opportunity and advised Mr Turk that he wished to provide marine piloting services in the Torres Strait but, to do so, would need to acquire land to use as an operating base as well as boats. Mr Sutton had identified the Property as a suitable base, but TP did not have sufficient capital to purchase the Property. In or around June 1993, Messrs Sutton and Turk signed a contract of sale to purchase the Property from the Commonwealth of Australia for a purchase price of $195,000. By 7 September 1993, Messrs Sutton and Turk had become the registered proprietors of the Property as tenants in common in equal shares. At the time of its acquisition, a two-storey house existed on the Property. The top level was a self-contained living area with amenities and the bottom level could be used as an office space and had a kitchenette and bathroom. From in or about July 1993, Messrs Sutton and Turk permitted TP to use the Property to operate its business as a provider of pilotage services in the Torres Strait (“the TP business”). Since in or about July 1993, TP has continued to have possession of the Property for the purpose of conducting the TP business. [4] In December 1993, Mr Sutton was sued by some former Torres Strait pilots (“the Torres litigation”). Mr Sutton would ultimately successfully defend the Torres litigation. Whilst the Torres litigation was still on foot, the Sydney Ports contract was proving to be profitable for the plaintiff. Messrs Sutton and Turk decided to sell the Property to the plaintiff. On 20 December 1994, the plaintiff purchased the Property from Messrs Sutton and Turk for a price of $210,000. On 16 March 1995, the plaintiff became the registered owner of the Property. Since that time, the plaintiff has remained on the title as the registered owner of the Property. [5] In about 1992, Mr Turk was the Chief Executive Officer of Manettas Limited, a seafood distributor. Mr Chris Payne later became its Chief Financial Officer. Mr Payne began to provide Messrs Turk and Sutton with administrative, financial, consulting and accounting services. Mr Payne had another client, Mr Paul MacMahon, to whom he provided consulting services. Mr Payne was aware that Mr MacMahon had some experience in “grouping companies together in order to achieve favourable tax outcomes”. By in or around 1994, Mr MacMahon was a director of Bourse Holdings Pty Ltd (“Bourse”). 1 Contained in Part 6, Division 5. -- 3 of 18 -- 4 [6] Between in or about 1994 and in or about 1996, Messrs Turk, Sutton, Payne and MacMahon and Bourse became involved in dealings which involved restructuring the plaintiff. Pursuant to a share sale agreement dated 30 June 1994 (“the Share Sale Agreement”), Messrs Sutton and Turk and TP sold their shares in the plaintiff to Bourse. After that step was taken, in or about October 1995, the plaintiff failed to extend the Sydney Ports contract. [7] Following the loss of the Sydney Ports contract, on 1 January 1996, Messrs MacMahon and Payne became directors of the plaintiff and Messrs Sutton and Turk resigned as directors of the plaintiff. On 8 January 1996, Mr Sutton caused the defendant to be incorporated and Messrs Sutton and Turk were appointed as the defendant’s directors. On 1 February 1996, the plaintiff changed its name from Sydney Ports Pilot Service Pty Ltd to Consul Clearing & Credit Corporation Pty Ltd. The circumstances in which the directorships of the plaintiff changed, and the defendant came to be incorporated, are controversial. [8] At the core of the dispute is an oral agreement alleged by the plaintiff to have been made over the telephone in January 1996 by Mr MacMahon, on behalf of the plaintiff, and Mr Sutton, on behalf of the defendant, in which it was agreed that in exchange for Mr Sutton maintaining the house, paying rates and maintenance, Mr MacMahon would allow Mr Sutton to use the Property until it was later required by Mr MacMahon or subsequently sold. The Act and legal principles [9] It is convenient to first refer to the relevant sections of the Act and outline some uncontroversial principles of law. [10] A claim for adverse possession is available under s 99 of the Act to an “adverse possessor” in respect of a lot, being a separate, distinct parcel of land. An adverse possessor of a lot is defined to mean a person against whom the time for bringing an action to recover the lot has expired under the Limitation of Actions Act 1974 (Qld) (“the Limitations Act”) and who, apart from that Act, is entitled to remain in possession of the lot. Hence, a claimant for adverse possession must establish the expiration of the relevant limitation period for the dispossessed owner to recover his or her land and satisfy the common law requirements of adverse possession.2 [11] As to the relevant limitations period, s 13 of the Limitations Act provides: “13 Actions to recover land An action shall not be brought by a person to recover land after the expiration of 12 years from the date on which the right of action accrued to the person or, if it first accrued to some person through whom the person claims, to that person.” [12] Section 24 of the Limitations Act then provides that where the period of limitation prescribed by the Limitations Act within which a person may bring an action to recover land has expired, the title of that person to the land shall be extinguished. 2 Re Johnson [2000] 2 Qd R 502 at 505. -- 4 of 18 -- 5 [13] “Adverse possession” starts to run from the point in time when the owner, though entitled to possession, is not in possession, and the claimant is in adverse possession.3 Whether or not the owner knows that he or she has been dispossessed is immaterial.4 The inquiry is as to whether the putative adverse possessor has dispossessed the paper owner by going into possession of the land, for the requisite period without the consent of the paper owner, with the word “possession” being given its ordinary meaning.5 Possession must generally consist of an appropriate degree of evidence of physical control of the land in question and an intention to possess that land to the exclusion of all others including the paper owner.6 Acts showing possession may include acts such as fencing the property, residing on the property, paying rates and taxes due on the property and using the property for the purposes of the possessor.7 The kind of possession which will cause time to run under the Limitations Act is “open, not secret; peaceful, not by force; and adverse, not by consent of the true owner” coupled with the requisite intention.8 In this context, the word “adverse” means “adverse only to, or inconsistent only with the title evidenced by the certificate of title”.9 [14] In Powell v McFarlan,10 Slade J said: “The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. ... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.” The real issues in dispute [15] The plaintiff accepts that the defendant has had adverse possession of the Property since March 201611 but contends that this period has been insufficient to extinguish its title to the Property. [16] The parties framed the real issues in dispute as follows: (a) Whether, in or about January 1996, in a telephone conversation, Mr MacMahon, on behalf of the plaintiff, and Mr Sutton, on behalf of the defendant, entered into an oral agreement by which: (i) the defendant would maintain the Property and pay the rates and outgoings; and 3 Ibid at 506. 4 Ibid at 506. 5 Cervi v Letcher (2011) 33 VR 320 at 325 [16]. 6 Buckinghamshire County Council v Moran [1990] Ch 623 at 636. 7 Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475. 8 Ibid at 475. 9 James Edward Hogg, The Australian Torrens System (W. Clowes, 1905) at 807. 10 (1977) 38 P&CR 452 at 470-1. 11 Ex 2, Tab 14 [29]. -- 5 of 18 -- 6 (ii) the defendant could continue to use the Property until it was required by the plaintiff or it was subsequently sold (“the First Issue”). (b) If the answer to (a) is no, then the plaintiff’s claim fails and the defendant is entitled to judgment on the counterclaim. (c) If the answer to (a) is yes, did such an agreement give rise to: (i) a licence to occupy the Property; or (ii) some other interest in the Property (such as a tenancy-at-will or a lease) (“the Second Issue”). (d) If the answer to (c) is that the alleged agreement gave rise to some other interest in the Property, then the plaintiff’s claim fails and the defendant is entitled to judgment on the counterclaim. (e) If the answer to (c) is that the alleged agreement gave rise to a licence to occupy the Property, then has that licence come to an end, and if so, when? (“the Third Issue”). (f) If the answer to (e) is that: (i) the licence to occupy has not come to an end, or came to an end after 9 March 2009, then the plaintiff’s claim succeeds and the defendant’s counterclaim fails; or (ii) the licence to occupy came to an end before 9 March 2009, then the plaintiff’s claim fails and the defendant is entitled to judgment on the counterclaim. [17] The plaintiff called Mr MacMahon as a witness. The defendant called Messrs Sutton, Turk and Payne as witnesses. The dealings involving Messrs Turk, Sutton, Payne and MacMahon [18] On or about 30 June 1994, the Share Sale Agreement was executed by Mr Turk, Mr Sutton and TP as “the Sellers”, by Mr MacMahon in his capacity as a director of Bourse as “the Buyer” and by the plaintiff. Pursuant to the terms of the Share Sale Agreement, the purchase price payable by the Buyer for the shares in the plaintiff then owned by the Sellers was $150,000. The sum of $15,000 was payable upon signing, with the balance of $135,000 payable within two years of the date of the Share Sale Agreement together with 10 per cent interest. The payment was structured in this way because the amount of $135,000 was intended to be paid “from the tax refunds that would be obtained by the plaintiff as a result of … grouping the plaintiff with other loss-making entities”. As security for the deferred payment, the Sellers accepted the personal guarantee of Mr MacMahon. Article 5 of the Share Sale Agreement provided that Messrs Turk and Sutton would enter into employment contracts with the plaintiff. Article 7 granted the Sellers an option to purchase from the plaintiff certain assets comprising issued shares in Nadana Pty Limited (“Nadana”) and Practel Pty Limited (“Practel”). [19] Mr Sutton recalled that the Share Sale Agreement resulted from a proposal by Mr Payne to restructure the plaintiff to merge it with “entities controlled by his other -- 6 of 18 -- 7 client” so that those entities’ accumulated tax losses might be shared with the plaintiff to achieve tax savings. He recalled that it was “a condition of that sale”, that he and Mr Turk would remain employed by the plaintiff and they would have an option to “transfer” certain assets of the plaintiff in the future. [20] Mr Turk recalled that the background to the Share Sale Agreement was that Mr Payne and Mr MacMahon had proposed a transaction whereby: (a) Bourse was to acquire the shares in the plaintiff; (b) Mr MacMahon would group the plaintiff with other entities associated with Mr MacMahon which had made tax losses; (c) by such an arrangement, the plaintiff could offset its profit against those tax losses; (d) Mr Sutton and Mr Turk would continue as employees of the plaintiff to ensure the continued provision of the plaintiff’s pilotage services and would be granted an option to acquire the plaintiff’s assets. [21] Mr Turk said in evidence in chief that it “was never intended that the Property would move out of Mr Sutton and my control, because it was used in connection with the Torres Strait pilotage business. The Queensland business was unrelated to the [business involving the Sydney Ports contract].” [22] In cross examination, Mr MacMahon said that Bourse was incorporated by him “as part of the transaction”. His evidence did not descend into any detail about the genesis or nature of “the transaction”. He accepted that, as a director of Bourse, he had signed the Share Sale Agreement. He accepted that the Share Sale Agreement was the agreement by which Bourse acquired shares in the plaintiff from Messrs Sutton and Turk and TP. [23] Mr Payne said that he was not involved in “the negotiation, formation or documentation of an initial agreement” between Messrs MacMahon, Turk and Sutton. He gave evidence of his “understanding” of the initial agreement which he indicated was based on his “discussions with each of them”. That understanding was that an agreement had been reached between Messrs MacMahon, Turk and Sutton which included the incorporation of overseas companies for tax structuring, Mr MacMahon’s company acquiring the shares in the plaintiff and Messrs Turk and Sutton continuing to use the Property and having “the right to subsequently acquire the Property and other assets used in the operation of the marine pilot business”. Mr Payne referred to these aspects of the initial agreement as “the Transaction”. In cross examination, he explained that whilst he had introduced Messrs MacMahon, Turk and Sutton he had not been directly involved in “the initial negotiation”. He conceded that “At a later point in time, I put together parts of the document … Parts of various documents”. It was unclear to what document or documents he was referring. [24] Having regard to the weight of the evidence, I make the following findings: (a) At some time prior to 30 June 2024, Mr Payne introduced Messrs Sutton and Turk to Mr MacMahon; -- 7 of 18 -- 8 (b) The purpose of that introduction was to facilitate Messrs Sutton, Turk and MacMahon exploring a possible restructure of the plaintiff with a view to enabling the plaintiff to take advantage of tax losses accumulated by entities controlled by Mr MacMahon; (c) The parties entered into the Share Sale Agreement with the purpose of effecting a restructure of the plaintiff with a view to enabling the plaintiff to take advantage of tax losses accumulated by entities controlled by Mr MacMahon; (d) Pursuant to the Share Sale Agreement: (i) the purchase price payable by the Buyer for the shares in the plaintiff owned by the Sellers was $150,000; (ii) the sum of $15,000 was payable upon signing, with the balance of $135,000 payable within two years of the date of the Share Sale Agreement with 10 per cent interest; (iii) as security for the deferred payment, the Sellers accepted the personal guarantee of Mr MacMahon; (iv) Messrs Turk and Sutton were to enter into employment contracts with the plaintiff to ensure the continued provision of the plaintiff’s pilotage services; and (v) the Sellers were granted an option to acquire shares in Nadana and Practel. [25] Mr Turk said in evidence in chief that once the plaintiff lost the Sydney Ports contract, Messrs Turk and Sutton had no need to continue in business with Mr MacMahon. He recalled that in or about late 1995, after the loss of those contractual rights, the trio reached “an agreement to separate our interests”. He added: “Part of this agreement was that certain assets of [the plaintiff], including the Property, would be transferred to Mr Sutton and I, or our nominee”. [26] Mr Sutton referenced the loss of the Sydney Ports contract and gave the following evidence in chief: “As such, in or about late 1995, a further agreement to the following effect was reached with Mr MacMahon to deal with [the plaintiff]: (a) [The plaintiff] would dispose of its assets and some of its investments, including: (i) Equipment used in the Sydney Business; (ii) The Property; (iii) Shares in [Nardana] and [Practel] …; (b) [The plaintiff] would retain investments it made in 1994-1995 …; -- 8 of 18 -- 9 (c) The Property would be acquired by a new company Mr Turk and I were to incorporate, and would be used in the operation of the [Torres Strait business] carried on by [TP]; (d) Mr Turk and I would resign as directors of [the plaintiff]”. [27] Mr Payne recalled that around this time, Mr Turk informed him of the following matters. Mr Turk had become frustrated with dealing with Mr MacMahon, Mr MacMahon was over-complicating and prolonging “the transaction” and given the loss of the Sydney Ports contract, Mr Turk wanted to “separate his and Mr Sutton’s affairs from Mr MacMahon”. Mr Payne further recalled that Mr Turk “asked me to become involved to review the steps taken by the parties under the Transaction (that is, by about late-1995 or 1996) and to assist in organising the separation, which I did”. [28] Mr MacMahon’s evidence in chief made no reference to the plaintiff’s business, the Sydney Ports contract or to the plaintiff having lost that contract in or about October 1995. He made ambiguous reference to “the time of the investment and final takeover” in January 1996. Under cross examination, he accepted that he had been aware that the plaintiff had carried on a business of providing pilot services in Sydney Harbour and that, in 1996, he had become aware that the plaintiff had lost the Sydney Ports contract. [29] Mr MacMahon’s evidence in chief about the business dealings with Messrs Turk, Sutton, Payne and Bourse was as follows: “At the time of taking over [the plaintiff], Mr Sutton expressed that he sought to continue to use the property for the operations of the piloting business. At the time of the investment and final takeover (sic) January, 1996 and payment of monies to his fellow shareholder and himself I had a telephone conversation with Mr Sutton relating to his use of the house located on (sic) property. During that conversation I agreed with him that in exchange for him maintaining the house property, paying rates and maintenance on its (sic) that I would continue to allow him to use the property until it was required by me or subsequently sold. He expressed that he would like to buy the property. At that time, I had ample assets and owned other properties in Australia in various corporate vehicles and the agreement made (sic), I believed confirmed a good long term investment strategy”. [30] Mr Sutton denied that any such telephone conversation had occurred. He recalled that he had briefly met Mr MacMahon on two separate occasions at the Sydney fish markets. Other than those two meetings, he recalled that “the communications that we had with Mr MacMahon were via Chris Payne”. He was adamant that he had never had a telephone conversation with Mr MacMahon. [31] It is uncontroversial that, on 1 January 1996, Messrs Turk and Sutton resigned as directors of the plaintiff and Messrs MacMahon and Payne were appointed in their place. [32] On 8 January 1996, Mr Payne sent a facsimile to Mr Sutton which attached a document headed “Proposal” (“the Payne document”). Mr Payne could not recall -- 9 of 18 -- 10 how he had come to prepare the Payne document. The copy of the Payne document in evidence, is not entirely legible. The Payne document is broadly structured by reference to the following headings: “History (until Dec 95)”, “Now (Jan 96)”, “Future (after Dec 95)”, “Optimum Structure” and “Details”. [33] Under the heading “History (until Dec 95)”, the following is noted. The plaintiff was said to have commenced operations in October 1992 and in June 1994 had started making profits. In June 1994, the plaintiff’s shareholders decided to sell their shares to Bourse for a price of $150,000, “being the face value of the shares (hence no capital gain)”. The agreement for sale required the key shareholders to remain employed by the plaintiff. The Sellers retained an option to purchase certain assets and there was vendor financing in that $135,000 of the purchase price was not payable until “at latest June 1996”. The new shareholders had a 100 per cent shareholding in several companies having compatible operations which had created a loss during the 1994-1995 financial year. The “net result” was that the group operating costs of the newly related companies, referred to as the “Bourse Holdings Group”, absorbed the profits made by the plaintiff during the 1994-1995 year. [34] Under the heading “Now (Jan 96)”, the following is noted. The plaintiff had lost the Sydney Ports contract and incurred losses. The plaintiff needed to “dispose of the remains of the … assets”, sell off some investments and keep core assets. The plaintiff intended to sell the remnants of “the business”, sell the Property to “New Co 2 Pty Ltd” and sell its investments in Nadana and Practel to “New Co 1 Pty Ltd”. [35] Under the heading “Future (after Dec 95)”, the following is noted. The plaintiff was to continue with marina operations, coastal and river dredging and property development. TP would continue with running “the Qld pilot business” and “owning assets including boats, equipment and [the Property]”. [36] Under the heading “Optimum Structure”, there is a reference to “New Co 2 Pty Ltd” being the resident “operating company” which would own the Property, the boats, spare parts and equipment library, with TP being a separate subsidiary. [37] As to the Payne document, under cross examination, Mr MacMahon said “This is Payne’s, obviously, version of things … So that’s obviously what Payne has put together and has sent to whoever”. Mr MacMahon’s counsel did not cross examine Mr Payne about any aspect of the Payne document. [38] Mr Turk referred to the Payne document as having been provided to him by Mr Payne. He said that the document recorded “the agreement reached by Mr Sutton and I with Mr MacMahon regarding the future of [the plaintiff] and its assets”. He said that the document also referred to “discussions I had had with Mr Sutton and Mr Payne regarding how Mr Sutton and I would structure our holdings of the pilotage and other assets including the Property”. [39] On 8 January 1996, the defendant was registered and Messrs Turk and Sutton were appointed as its directors. Messrs Turk and Sutton caused the defendant to be registered for the purpose of “acquiring and holding the Property”. The sole shareholder of the defendant was T&S Holdings Pty Ltd (“T&S Holdings”), of which Mr Sutton was the sole director. -- 10 of 18 -- 11 [40] On 31 January 1996, Mr MacMahon sent a facsimile to Mr Turk with a reference “Sydney Ports Pilot Service Pty Ltd”. The facsimile relevantly stated: “I write to you on behalf of Consul Clearing & Credit Corporation Pty Ltd formerly known as Sydney Ports Pilot Service Pty Ltd, to confirm that this company has in recent weeks restructured its maritime operations. In the past the company has had from time to time had use of your boat known as "Phantom" and expended monies to that end. We nevertheless now wish to confirm following our recent meeting and agreement that all such arrangements are at an end, all obligations from either party to the other are now fulfilled and that this company has now (sic) claims whatsoever against you or your boat.” [41] On the same day, 31 January 1996, Mr MacMahon sent a facsimile to the defendant under the reference “Sydney Ports Pilot Service Pty Ltd”. That facsimile relevantly stated: “I write to you on behalf of Consul Clearing & Credit Corporation Pty Ltd formerly known as Sydney Ports Pilot Service Pty Ltd, to confirm that this company has sold and transferred to your company (Pilot Investments Pty Ltd) for valuable consideration, the following: 4 ‘cutter boats’ known as: 1. ‘June Lewis’ 2. ‘Hurricane’ 3. ‘Pacifica’ 4. ‘Pampero’ Pursuant to the terms of sale, I confirm that it is your obligation as Purchaser and having physical possession to ensure that the appropriate notations are recorded in the relevant maritime registers. In this regard, I confirm that I am available to sign any forms which may be required to effect the above at your convenience. In addition I wish to confirm that this company has consented to the use by your company and ownership by your holding company of the Business Name. ‘Sydney Ports & Pilot Service’.” [42] Astills Lawyers were engaged by the defendant to act on its behalf. [43] On 22 February 1996, Astills sent a letter to the plaintiff’s directors regarding the purchase of the Property which was in the following terms: “RE: PILOT INVESTMENTS PTY LTD PURCHASE FROM SYDNEY PORTS PILOT SERVICE PTY LTD PROPERTY SITUATE: LOT 2 CHESTER STREET, THURSDAY ISLAND We refer to the above matter and to our telephone conversation with Mr Chris Payne. As discussed, we enclose herewith Form 1 Transfer and Form 24. The Form 1 Transfer needs to be signed by Sydney Ports Pilot Service Pty Ltd (now known as Consul Clearing & Credit Corporation Pty Ltd) -- 11 of 18 -- 12 where we have indicated by attaching the common seal of Consul Clearing & Credit Corporation Pty Ltd and having two (2) Directors or a Director and Secretary sign through the seal. There is no need to have your signatures to the document witnessed. We note that we are acting on behalf of Pilot Investments Pty Ltd only in relation to documenting the transfer of the property to it and that you are acting on your own behalf in this regard. We are instructed by Mr Perry Sutton that the Purchaser Company will make its own arrangements directly with you in relation to the consideration expressed in the Transfer. Our instructions are limited to the documenting of the transfer, stamping and registration. When we receive from you the Form 1 Transfer and Form 24, we shall assume that the abovementioned arrangements have been completed. If you have any queries in relation to the above, please do not hesitate to contact the writer.” [44] The transfer enclosed by the letter identified the transferor as the plaintiff, the transferee as the defendant and the consideration as $200,000. [45] On 22 February 1996, Astills sent a letter to the defendant’s directors regarding the Property in the following terms: “RE: PURCHASE FROM SYDNEY PORTS PILOT SERVICE PTY LTD PROPERTY SITUATE: LOT 2 CHESTER STREET, THURSDAY ISLAND We refer to the above matter and to our telephone conversation with Mr Perry Sutton. We confirm your instructions to prepare a Transfer of the abovementioned property. We have today forwarded to Mr Chris Payne, a Director of Sydney Ports Pilot Service Pty Ltd, the Form 1 Transfer and Form 24 for signing by him and another Director or Secretary of that Company. We now enclose herewith our Memorandum of Costs & Disbursements for our professional costs, Government stamp duty and registration fees and our outlays involved in this matter. Please forward to us your cheque in payment of our Memorandum so that, upon receipt of the signed Form 1 Transfer and Form 24, we can stamp and then lodge the same for registration in the Titles Office. We shall also need you to provide us with a written valuation from a Licensed Real Estate Agent who has local knowledge of the land values etc in the area where this property is situated. We note that you have previously mentioned the name of Tropical Reef Real Estate as an agency familiar with this property. If you have any queries in relation to the above, please do not hesitate to contact the writer.” [46] The enclosed memorandum of costs and disbursements noted that the estimated stamp duty on the transfer was $5,600. -- 12 of 18 -- 13 [47] On 14 March 1996, Mr MacMahon provided a memorandum to Messrs Payne, Turk and Sutton which was expressed as an “Update re current situation as per your queries in sequential order” (“the MacMahon memorandum”). [48] The MacMahon memorandum was a lengthy document which dealt with a number of topics and matters. Relevantly, the MacMahon memorandum mentioned the current state of dealings with the shares in Practel and Nadana. It included a lengthy section headed “Offshore Structure” which referenced the incorporation of companies in Guernsey and the United Kingdom. It described the proposed incorporation in Guernsey of a company “Pilot Limited”. It referred to that company as the “head of a chain” and as “the most important in the structure”. There was a statement that Pilot Limited “had to be first established and as its first action sought the establishment of Pilot Limited UK.” There was then reference to the incorporation of a UK subsidiary, Pilot International Limited. [49] The further relevant parts of the MacMahon memorandum may be set out as follows: “2. Sale of Assets A. Sale of land in Queensland. The company seal for Consul Clearing and Credit Corporation has been applied for and shall be affixed to the Transfer for the Sale of Land in respect to the Queensland property. I have ascertained that Stamp Duty is payable within 60 days of the date of contract noting that the contract must be lodged within 30 days of the date of signing of the transfer. This has recently been attended to and a cheque in the amount of $6,097 has been forwarded to Astill’s Solicitors in Brisbane. The only matter outstanding is the obtaining of a written valuation from a licenced real estate agent. When Perry gave instructions to the firm it was decided not to prepare a Contract for Sale and hence the Queensland Commissioner for Stamp Duties now needs to assess the value of the property before stamping the transfer.” … 4. Tax Returns The tax returns for the company are presently being finalised and Ian Jolly has been away all this week and will return to his office next week and a meeting has been set for Wednesday to review and settle same. … 8. Money Transfers There has been a total of $690,000 (in three instalments) transferred from the Commonwealth Bank to Bourse Holdings Pty Limited. -- 13 of 18 -- 14 This company has in turn booked the payment of same to its parent Immohold Limited (on shore UK company) by way of previous declared dividends. The sum of $340,000 was all that was actually remitted with the remainder staying with Bourse Holdings Pty Limited (ie $350,000). You will recall Bourse had to pay $135,000 and $15,000 to the shareholders of SPPS. Immohold Limited has in turn booked/paid these monies to its parent Syceia Limited (a Jersey/Guernsey registered Channel Island company) which maintains bank accounts in Amsterdam and Luxembourg. This company has in turn arranged for monies to be deposited on a bank account with the National Westminster in Guernsey. New Guernsey company Pilot Limited has received from its eight founding shareholding the sum of being an amount in pounds (being the equivalent of $340,000) by way of a shareholders loan. This Guernsey company has in turn arranged and is presently in the process of transferring these monies to an account being opened by Stoneham Langton & Passmore. The only delay so far has been the fact that the London firm concerned and recommended has recently undergone a name change due to a restructure in their partnership which took place in January at which time they moved offices and changed telephone and tax numbers, as well as trust accounts. Details of these changes can all be confirmed by Perry contacting his colleague in Brisbane. Notwithstanding the above the Guernsey lawyers have instructions that as soon as Pilot International Limited has bank accounts open that those monies (the equivalent of $340,000) are to be deposited into that account. 9. Documents Copies of all relevant documents and Letter of Instruction are to be forwarded to you as soon as the originals are received in one bundle. Please advise which if any you need in the interim. Please phone if you require any further information or clarification in regard to these matters.” [50] The balance of the purchase price under the Share Sale Agreement, $135,000, had fell due for payment on 30 June 2016. The payment was not made. [51] Mr Sutton gave the following evidence. He understood from the MacMahon memorandum that Mr MacMahon was taking steps to establish an international company structure and that funds had been remitted to overseas companies including -- 14 of 18 -- 15 the balance of the purchase price and that those monies would be paid to Pilot International Limited. Mr MacMahon proved difficult to contact and Mr Sutton eventually formed the view that Mr MacMahon did not intend to transfer the Property to the defendant. He made various inquiries, and it emerged that no international companies had been established on behalf of Messrs Turk and Sutton. [52] Mr Sutton gave unchallenged evidence that by in or about 1997, he had come to realise that Mr MacMahon was not going to perform the further agreement reached in relation to the plaintiff following the loss of the Sydney Ports contract and was not going to incorporate the overseas companies or sign the forms necessary to transfer the Property to the defendant. Mr Turk gave unchallenged evidence describing unsuccessful attempts to contact Mr MacMahon from in or about the second half of 1996. From in or about 1997, he formed the view that the plaintiff would not be transferring the Property to the defendant in accordance with the further agreement. [53] The Sellers under the Share Sale Agreement never received the balance of the purchase price, being $135,000. [54] The document being the transfer of the title of the Property to the defendant was not executed. [55] Despite title not being transferred to the defendant: (a) the plaintiff’s accounts for the financial year ending 30 June 1996, did not record the Property as an asset of the plaintiff; and (b) the defendant’s accounts for the period ending 31 December 1995 and for the financial year ending 30 June 1996, recorded the Property as an asset of the defendant. [56] Each of Messrs Turk, Sutton and Payne presented as witnesses who were intent on doing their best to truthfully recall events that had occurred some three decades prior. Their respective recollections were apparently not perfect but that is entirely understandable. They each made appropriate concessions during their evidence. Mr MacMahon was an unimpressive witness. His evidence in chief was very limited and did not address relevant events. In cross examination he appeared to be evasive and dismissive. He did not appear as a witness who was intent on providing his actual recollection of events. I generally preferred the evidence of Messrs Turk, Sutton and Payne to the evidence of Mr MacMahon. [57] Having regard to the oral evidence, the documents referred to in paragraphs [40], [41], [43] and [47] and the conduct of the parties, I make the following findings about the facts and circumstances which occurred around the time of and following the plaintiff’s loss of the Sydney Ports contract: (a) Following the loss of the Sydney Ports contract, the plaintiff incurred losses and needed to dispose of assets and investments. (b) Messrs Sutton and Turk and Mr MacMahon, acting on behalf of the plaintiff, reached an oral agreement regarding the future of the plaintiff and its assets (“the restructuring agreement”). (c) Pursuant to the restructuring agreement, TP would continue with running the TP business, a new company would be incorporated to own assets required to -- 15 of 18 -- 16 operate the TP business including boats, equipment and the Property and the plaintiff would cause the Property to be transferred to the new company. (d) Following the entering into of the restructuring agreement and consistent with its terms: (i) on 8 January 1996, Messrs Turk and Sutton caused the defendant to be registered and were appointed as its directors; (ii) the sole shareholder of the defendant was T&S Holdings, of which Mr Sutton was the sole director; and (iii) Messrs Turk and Sutton caused the defendant to be registered for the purpose of acquiring the Property. (e) By 22 February 1996, Astills Lawyers had been and were engaged by the defendant to act on its behalf in relation to the transfer of the Property by the plaintiff to the defendant. (f) Astills’ instructions were limited to documenting the transfer, stamping and registration. (g) The defendant was to make its own arrangements directly with the plaintiff in relation to the consideration expressed in the transfer document. (h) Astills prepared a transfer document for the purpose of effecting the transfer of the Property by the plaintiff to the defendant. (i) The transfer document identified the transferor as the plaintiff, the transferee as the defendant and the consideration as $200,000. (j) On 22 February 1996, Astills forwarded the transfer document to the plaintiff. (k) Astills estimated the stamp duty payable on the transfer as $5,600. (l) The defendant was to provide Astills with a written valuation of the Property to facilitate the payment of stamp duty and registration of the transfer. (m) Following the MacMahon memorandum, Mr MacMahon proved elusive and could not be contacted and he did not take steps to incorporate the international companies or to effect the transfer of the Property in accordance with the restructure agreement. (n) The plaintiff never signed the transfer document to effect the transfer of the Property from the plaintiff to the defendant. (o) By in or about 1997, the plaintiff had evinced an intention no longer to be bound by or to perform the restructure agreement or to perform its obligation to pay the balance of the purchase price under the Share Sale Agreement. (p) From in or about 1997, the Sellers under the Share Sale Agreement appear to have accepted the plaintiff’s repudiation of the Share Sale Agreement and Messrs Sutton and Turk appear to have accepted Mr MacMahon’s repudiation of the restructure agreement. (q) From in or about 1997, there was no arrangement or agreement between the plaintiff and the defendant by which the defendant remained in possession and occupation of the Property. -- 16 of 18 -- 17 [58] Mr Sutton gave unchallenged evidence that since the incorporation of the defendant, the TP business has been carried on by TP as the entity carrying out operational activities including employing staff and the defendant has owned the assets of the TP business. It was not in dispute, and I find, that the defendant has: (a) since 1996, paid all rates for the Property issued by the Torres Shire Council; (b) from July 1996, been responsible for repairs and maintenance on the Property, including the 56 matters set out in paragraph 41 of the defence; (c) between March 2000 and July 2001, caused the Property to be connected to the Thursday Island sewerage system; (d) from 2002, caused insurance to be taken out over the Property; (e) from April 2002, caused electricity to be supplied to the Property and paid the supply of electricity; and (f) from 2008, paid the land tax in respect of the Property. [59] Further, since 1996, a cyclone fence has surrounded the Property and only TP has had access to the Property for the purpose of carrying on the TP business. [60] Some other matters are not controversial. On 8 January 2006, the plaintiff was de- registered as a company. On 29 October 2008, Mr MacMahon pleaded guilty to identity and tax fraud. On 1 July 2013, the defendant leased the Property to TP. On 14 October 2015, Mr Sutton applied for and caused the plaintiff to be re-registered. Mr Sutton became a director of the plaintiff from 14 October 2015 to 3 March 2016. In or about March 2016, Mr MacMahon sought to re-take control of the plaintiff. On 1 July 2018, the defendant and TP renewed the lease over the Property for a further three years. On 1 July 2023, the defendant re-leased the Property to TP for a period of five years. The First Issue [61] In the case of an alleged oral agreement, the surrounding circumstances and post- contractual conduct are relevant to deciding the existence and terms of the agreement.12 The plaintiff alleges that in or about January 1996, in a telephone conversation, Mr MacMahon, on behalf of the plaintiff, and Mr Sutton, on behalf of the defendant, entered into an oral agreement by which the defendant would maintain the Property and pay the rates and outgoings and could continue to use the Property until it was required by the plaintiff or it was subsequently sold. Mr MacMahon gave evidence of an oral agreement which he made in a telephone conversation with Mr Sutton in which it was agreed that, in exchange for Mr Sutton maintaining the house, paying rates and maintenance, Mr MacMahon would continue to allow Mr Sutton to use the Property “until it was required by Mr MacMahon or subsequently sold”. [62] The alleged oral agreement is not evidenced by any writing, including any subsequent correspondence. Notably, Mr MacMahon sent written correspondence detailing matters concerning the legal relationship between the defendant and the plaintiff but 12 County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [7], [20]; Lawrence v Ciantar [2020] NSWCA 89 at [114]; Taycon Pty Ltd v Williams [2023] QSC 297 at [70]. -- 17 of 18 -- 18 none of his correspondence references the alleged oral agreement. The defendant retained Astills to act on its behalf and there is no mention of the alleged oral agreement in Astills’ correspondence nor was there any attempt to formalise its terms. The alleged agreement depends for its existence upon the oral evidence of Mr MacMahon. I reject Mr MacMahon’s evidence on this issue. I accept the evidence of Mr Sutton to the effect that there was never any telephone conversation and I find that the alleged oral agreement was never made. [63] The weight of the evidence, including the objective evidence constituted by the subsequent conduct of the parties also supports the finding that no such oral agreement was made. The following objective evidence is more consistent with the parties having entered into the restructure agreement rather than the oral agreement alleged by Mr MacMahon: (a) Astills, as the defendant’s lawyers, prepared and sent the transfer document to the plaintiff; (b) the content of the MacMahon memorandum which refers to the plaintiff intending to affix its seal to the transfer by which the Property was to be transferred from the plaintiff to the defendant; (c) the plaintiff’s accounts for the financial year ending 30 June 1996, which did not record the Property as an asset of the plaintiff; (d) Mr MacMahon’s 31 January 1996 facsimile to Mr Turk stated “following our recent meeting and agreement” and notably made no reference to any telephone conversation. The Second and Third Issues [64] The parties accepted that in the event the plaintiff failed on the first issue, the defendant was entitled to judgment on the counterclaim. That conclusion follows from my earlier findings, particularly those at paragraphs [24], [57] and [58]. Orders [65] I declare that the defendant is entitled as an adverse possessor under Part 6, Division 5 of the Act to be registered as the owner of an estate in fee simple in the land described as Lot 2 on RP737039, Title Reference 21548031. [66] The claim filed 10 March 2021 is dismissed. [67] I will hear the parties as to costs. -- 18 of 18 --