Barstow v The Public Trustee of Queensland [2017] QDC 318

DISTRICT COURT OF QUEENSLAND CITATION: Barstow v The Public Trustee of Queensland [2017] QDC 318 PARTIES: KENNETH FRANK BARSTOW (respondent/cross-applicant/plaintiff) v THE PUBLIC TRUSTEE OF QUEENSLAND (ABN 12 676 939 467) AS ADMINISTRATOR FOR MARGARET BERYL BARSTOW (applicant/respondent/defendant) FILE NO/S: D 10/17 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court at Gympie DELIVERED ON: 21 December 2017 DELIVERED AT: District Court at Maroochydore HEARING DATE: 3 November 2017 JUDGE: Long SC DCJ ORDER: 1. The application filed by the defendant on 25 October 2017, is allowed; 2. The cross-application filed by the plaintiff on 31 October 2017, is dismissed; 3. The Claim filed on 11 September 2017, is set aside and the Statement of Claim filed on 11 September 2017 is struck out; and 4. The plaintiff is to pay the defendant’s costs of the claim, application and cross-application, on the indemnity basis. CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COMMENCING PROCEEDINGS – SETTING ASIDE ORIGINATING PROCESS OR SERVICE THEREOF – Where the plaintiff filed a Claim and Statement of Claim, seeking relief against the defendant, in the capacity of administrator for the financial affairs of Margaret Beryl Barstow pursuant to an order of QCAT – Where the defendant has not filed any notice of intention to defend but filed an application that the Statement of Claim be struck out and the proceedings be dismissed on the basis that the proceedings have been -- 1 of 13 -- 2 instituted against the wrong defendant – Whether the proceedings have been instituted against the wrong defendant PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DETENTION, INSPECTION AND PRESERVATION – FREEZING ORDERS – Where the plaintiff made a cross-application seeking a freezing order restraining the defendant from disposing of, dealing with or diminishing the value of 43 Rocklea Drive, Southside – Whether it is just and convenient to make a freezing order COSTS – INDEMNITY COSTS – Where the defendant seeks the plaintiff pay the defendant’s costs of the proceedings on the indemnity basis pursuant to r 703 of the Uniform Civil Procedure Rules 1999 – Where the defendant informed the plaintiff that the proceedings have been instituted against the wrong defendant – Where the plaintiff took no steps to correct their error, despite being warned that costs of an application to strike out the proceedings would be sought against the plaintiff on an indemnity basis – Whether costs should be awarded on the indemnity basis LEGISLATION: District Court of Queensland Act 1967 ss 68(1)(b)(viii); 69 Guardianship and Administration Act 2000 s 35 Land Title Act 1994 ss 126(7); 129(2); 137 Public Trustee Act 1978 s 27(3) Uniform Civil Procedure Rules 1999 rr 16(e); 69; 93; 95(2); 96; 135; 171; 260D; 658; 703 CASES: Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 Energex v Sablatura [2009] QSC 356 Grassby v R (1989) 168 CLR 1 Guardianship and Administration Tribunal v Perpetual Trustees Qld Limited [2008] 2 Qd R 323 Legal Services Commissioner v Bone [2014] QCA 179 LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors [2013] QCA 305 Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 Public Trustee of Queensland v Sabdia [2012] QSC 358 COUNSEL: R Whiteford for the applicant/respondent/defendant D Topp for the respondent/cross-applicant/plaintiff SOLICITORS: Official Solicitor to the Public Trustee for the applicant/respondent/defendant CastleGate Law for the respondent/cross-applicant/plaintiff -- 2 of 13 -- 3 Introduction [1] On 11 September 2017, the plaintiff filed a Claim and Statement of Claim, seeking relief against the defendant, in the capacity of administrator for the financial affairs of Margaret Beryl Barstow pursuant to an order of QCAT, made on 14 January 2016.1 And it is common ground that by further order made on 26 May 2017, that appointment continues.2 [2] The relief sought by that Claim is: “1. A declaration that he is entitled to remain living in 43 Rocklea Drive Southside 4570, more particularly described as Lot 8 on RP 188758, County of Lennox, Parish of Woonga, Title Reference 16492074 (“43 Rocklea Drive”) rent free. 2. A declaration that he is a beneficiary sui juris of the constructive trust solely and absolutely entitled to one half of the corpus of the constructed trust, namely one half of 43 Rocklea Drive. 3. A consequential order, pursuant to Sections 114(2) and (3)(a) of the Land Title Act 1994 (Qld), that he be registered as proprietor of a one half share of 43 Rocklea Drive. 4. Costs.” [3] The defendant has not filed any notice of intention to defend but and on 25 October 2017, filed an application for the following orders: “1. Pursuant to Rule 135 of the Uniform Civil Procedure Rules 1999 that the Defendant be given leave to make this Application despite not having filed a Notice of Intention to Defend. 2. Pursuant to Rule 171 of the Uniform Civil Procedure Rules 1999, and in the Court’s inherent jurisdiction, that the Statement of Claim be struck out. 3. Pursuant to Rule 658 of the Uniform Civil Procedure Rules 1999, and in the Court’s inherent jurisdiction, that the proceedings be dismissed. 4. That the Plaintiff pay the Defendant’s costs of the proceedings on the indemnity basis. 5. Further or other order as the Court seems just.” [4] On 30 October 2017, the plaintiff cross-applied for the following: “1. That pursuant to Rule 260A of the Uniform Civil Procedure Rules 1999, a freezing order be made restraining the Defendant from disposing of, dealing with, or diminishing the value of 43 Rocklea Drive Southside, more particularly described as Lot 8 on RP 188758, County of Lennox, Parish 1 See Statement of Claim (“SOC”) at [2.2]. 2 See Affidavit of CJ Miles, filed 25/10/17 at [2(b)] and Exhibit CJM-1. -- 3 of 13 -- 4 of Woonga, Title Reference 16492074 (“43 Rocklea Drive”) until further order. 2. Further, or in the alternative, that pursuant to Rules 260D(2) & (3) of the Uniform Civil Procedure Rules 1999, a freezing order be made restraining Margaret Beryl Barstow, Warren Day and any and all present and future attorneys, litigation guardians, guardians and/or administrators of Margaret Beryl Barstow from disposing of, dealing with, or diminishing the value of 43 Rocklea Drive until further order. 3. Further, or in the alternative to paras 1 and/or 2 hereof, that the plaintiff be granted leave pursuant to Section 129(2) of the Land Title Act 1994 to lodge a further caveat with the same caveator and on the same grounds as the grounds stated in the Plaintiff’s caveat numbered 718060678 and lodged 1 June 2017. 4. No order as to the costs of the cross-application. 5. Such further or other order as this Honourable Court deems fit.” [5] Some uncontentious contextual facts are that Margaret Beryl Barstow (“Mrs Barstow”): (a) Is the registered proprietor of the residential property at 43 Rocklea Drive, Southside, Gympie; (b) Has, since 16 November 1978, been married to the plaintiff but since March 2015 has been afflicted by Alzheimer’s disease and now resides in an aged care facility; and (c) Is under a legal incapacity due to dementia. [6] By way of some further context for the plaintiff’s claim and cross-application, it is contended that: (a) Although both of their matrimonial homes have been solely owned by Mrs Barstow, the plaintiff has improved each property by provision of his own labour and resources; (b) In 1985, each of them made wills, respectively leaving their entire estate to the surviving spouse; (c) Although not discovered by him until September 2015, in December 2009 and when in Warrnambool, Victoria and visiting her sister there, Mrs Barstow revoked her former will, by making a new will which left the plaintiff only a life interest in the property at 43 Rocklea Drive, with a gift over to the children of Mrs Barstow’s sister, in the context of otherwise leaving the residuary estate divided amongst those children; and -- 4 of 13 -- 5 (d) One of the children of Mrs Barstow’s sister and the named executor of her estate in her 2009 will, made application, on 3 April 2017, to QCAT, to be appointed to replace both the plaintiff as the appointed guardian and the defendant as the appointed administrator for financial matters, of Mrs Barstow.3 As determined on 26 May 2017, that application was only successful in the first respect and the defendant remains as the appointed administrator for financial matters. However, the plaintiff refers to statements made by that applicant in connection with those proceedings, indicative of the potentiality of sale of the property of 43 Rocklea Drive.4 [7] The plaintiff is concerned, at the age of 86 years, for his situation and particularly as to his continued place of residence. He has otherwise deposed as to the limitation of means available to him to secure alternative accommodation and further explains that his claim has been brought in the further context of his immediate response to lodge a caveat in respect of the property at 43 Rocklea Drive, but which has lapsed due to “proceedings not being filed in time” and which was then removed, as a consequence of action taken by the defendant. And he notes that he is now unable to re-lodge a caveat, without the leave of a court. He otherwise notes the prospect of his bringing a family provision claim, in the event that he survives Mrs Barstow.5 [8] There is some evidence before the Court suggestive of a value of the property at 43 Rocklea Drive, at around $330,000, which is also contended to be “at least $187,500 more than what [Mrs Barstow] paid”.6 And except as later noted, the jurisdiction of this Court in respect of the matter was not otherwise put in issue. Defendant’s application [9] It is convenient to first consider the application made by the defendant, as it effectively seeks to strike out the substantive proceeding that is before the Court pursuant to s 68(1)(b)(viii) of the District Court of Queensland Act 1967 (“DCA”). 3 That application was successful as far as guardianship for healthcare is concerned but not in any other respect: Exhibit CJM-1 to affidavit of CJ Miles, filed 25/10/17. 4 Affidavit of KF Barstow, filed 31/10/17. 5 Pursuant to Part IV of the Succession Act 1981. 6 Affidavit of KF Barstow, filed 31/10/17 at [14] and Exhibit KFB-1. -- 5 of 13 -- 6 And that understanding of the jurisdiction of this Court, necessarily underpins any exercise of power pursuant to s 69 of the DCA, as such is premised upon being “for the purposes of exercising the jurisdiction conferred by this part”. [10] Although and in addition to relief sought pursuant to the identified provisions of the Uniform Civil Procedure Rules 1999 (“UCPR”), relief is also sought by resort to the power of the Court to control its processes, which and notwithstanding the reference to “inherent jurisdiction”, is recognised as an implied power of a court, such as this one which exercises limited statutory jurisdiction.7 [11] Underlying the defendant’s application is the obviously correct contention that the proceedings have been instituted against the wrong defendant: (a) The defendant is not, by virtue of appointment as Mrs Barstow’s financial administrator, her litigation guardian for proceedings instituted in the civil courts,8 or a trustee of her estate;9 and (b) The Statement of Claim does not plead any conduct of the defendant as Mrs Barstow’s administrator as giving rise to any cause of action and the defendant is not responsible for the past acts of Mrs Barstow, in his capacity as her administrator or otherwise. And in any event the appropriate way in which to bind Mrs Barstow to any relief which is sought, is by her being the defendant to the proceeding.10 [12] A potential problem for the plaintiff was identified and commented upon, in Energex v Sablatura.11 The problem is that notwithstanding the power of the Court, on the face of UCPR 95(2) to appoint a litigation guardian for a party to a proceeding who is legally incapacitated, s 27(3) of the Public Trustee Act 1978 may preclude a court from making such an order in respect of the Public Trustee and then and in the absence of some other appointment, UCPR 93 and 96 would operate to prevent the continuance of the proceeding. However, there is no prohibition upon the defendant electing to become the litigation guardian. 7 See Grassby v R (1989) 168 CLR 1 at pp 16-17. 8 See Energex v Sablatura [2009] QSC 356 at pp 4-5. 9 Guardianship and Administration Tribunal v Perpetual Trustees Qld Limited [2008] 2 Qd R 323 at [48], Public Trustee of Queensland v Sabdia [2012] QSC 358 at [36]. 10 See the written submissions for the defendant at [10]. 11 [2009] QSC 356 at pp 5-7. -- 6 of 13 -- 7 [13] Neither that problem nor the reliance placed for the plaintiff on the notation of the extent of the obligations of the defendant as financial administrator for Mrs Barstow, in Public Trustee of Queensland v Sabdia,12 including in respect of “a legal matter relating to the adult’s financial or property matters” and which includes “use of legal services to bring or defend a proceeding before a court, tribunal or other entity”,13 serve to change or obviate the requirement for the appointment of a litigation guardian under the UCPR. And the misconception underlying the plaintiff’s opposition to this application has been to mistake the power that may be exercised by the defendant in respect of the protection of the interests of Mrs Barstow, with some legal interest in or ownership of her property, such as may make the defendant amenable to orders in respect of that property. [14] Contrary to the contentions or concerns raised for the plaintiff, there is no impediment nor restriction (ethical or otherwise) in properly pursuing Mrs Barstow in respect of her legal and equitable interest in the property,14 but it would then remain to be seen whether any obstacle to pursuit of any such claim arises pursuant to UCPR 96. In this regard it may be noted that: (a) There is nothing in the material before the Court evidencing that the defendant has given any indication of being opposed to or has ruled out becoming Mrs Barstow’s litigation guardian, in such circumstances; and (b) Although it could be the case that the defendant may not be amenable to court order obliging such an appointment, nevertheless and as the financial administrator appointed under the Guardianship and Administration Act 2000 s 35 (“GAA”), there is the following statutory obligation: “35 Act honestly and with reasonable diligence A guardian or administrator who may exercise power for an adult must exercise the power honestly and with reasonable diligence to protect the adult’s interests. Maximum penalty—200 penalty units.” 12 [2012] QSC 358. 13 See [2012] QSC 358 at [32]-[35] and the defns. of “financial matter” and “legal matter” in Schedule 2 of the GAA. 14 UCPR 109 provides for service on an incapacitated person and there are the provisions for appointment of a Litigation Guardian. -- 7 of 13 -- 8 [15] Accordingly, it must be concluded that the defendant’s application should be allowed, so as to relieve the defendant from the burden of the incorrectly directed proceedings and the potentiality of personal liability for any adverse costs order.15 And in this context, the defendant should have the benefit of a grant of leave pursuant to UCPR 135, having sought to take the step of bringing this application rather than first filing, even a conditional notice of intention to defend, upon the basis of not incurring additional costs.16 [16] The power to grant the relief sought and as to striking out the Statement of Claim and Claim is sufficiently to be found, respectively in UCPR 171 and UCPR 16(e) and in any event, UCPR 658 may also be seen as a sufficient source of power and as being based upon the recognition of the implied power of this Court to control its own processes. Apart from the considerations arising under his cross-application, the plaintiff did not contend otherwise. But and in the course of argument and more as a hopeful invitation rather than pursued submission,17 it was contended for the plaintiff that the Court did have power to allow the substitution of a party. That may be correct,18 but the countervailing considerations include that: (a) No such application had been or was then made, despite the fundamental problem in attempting to sue the Public Trustee as defendant, having been brought to the attention of the plaintiff’s lawyers immediately upon service of the Claim and Statement of Claim;19 and (b) On the hearing of this application the defendant raised some contentions as to perceived shortcomings in the sufficiency of the pleading of a cause of action in the Statement of Claim.20 However and in the absence of specific application and notice thereof, neither issue was or could be the subject of any meaningful debate or consideration, on this application. And neither is it necessary to resolve either issue in order to determine 15 Notwithstanding any right of claim of indemnity from Mrs Barstow, as may exist for the defendant. 16 See defendant’s submissions at para 12, and cf: Reeves-Board v Queensland University of Technology [2002] 2 Qd R 85 at [15], Markan v Queensland Police Service [2015] QCA 22 at [17] and Chidgey v The State of Queensland [2015] QDC 19. And there was no contention otherwise by the plaintiff. 17 T1-5.37-44. 18 See UCPR 69. 19 See Exhibit CJM-4 to the affidavit of CJ Miles filed 25/10/17. 20 T1-19.10 – 20.10. -- 8 of 13 -- 9 this application, as there is no suggestion of impediment to the recommencement of properly directed proceedings and this would also provide the opportunity for any necessary reflection upon the pleading, in the light of the issues flagged on this application. The cross-application [17] The conclusion that it is appropriate to grant the relief sought by the plaintiff and to strike out the claim, effectively prevents any exercise of power pursuant to s 69 of the District Court of Queensland Act 1967 and therefore ability to make any order under s 129(2) of the Land Title Act 1994 (“LTA”). That is because the Court is only empowered, pursuant to s 69, “for the purposes of exercising the jurisdiction conferred by this part”. In any event, the application for any such order should also be made against Mrs Barstow and served in accordance with the UCPR. [18] Further, it may be discerned that much of the approach of the plaintiff has been premised upon concerns as to prospective actions, including as may be taken by persons who presently lack capacity to do so. That may be exemplified by noting another misunderstanding that was demonstrated in the plaintiff’s opposition of the defendant’s application. It was sought to contrast the actions of the defendant in taking steps in having the lapsed caveat removed from the registered title, with the defendant’s stance that he held no interest in Mrs Barstow’s assets. This was on the assumption that the Public Trustee must have acted as “caveatee” (as defined in Schedule 2 to the LTA) in doing so. The assumption was that the Public Trustee must therefore have acted as “someone (other than the caveator) who has an interest in the lot”. [19] However, the general request form for that removal of caveat,21 provides no support for any such implication. Presumably the application was for an exercise of the Registrar’s power under s 126(7) of the LTA and that power is not premised upon there being any particular applicant. Moreover and although in the form, the applicant is stated to be “the Public Trustee of Queensland”, the form itself allows for execution by the applicant or a solicitor and in any event and under the appointment as Mrs 21 Exhibit KFB-5 to the affidavit of KF Barstow, filed 31/10/17. -- 9 of 13 -- 10 Barstow’s financial administrator, the Public Trustee is empowered to take such action for her.22 Further, it may noted that the current appointment of the Public Trustee for Mrs Barstow, includes specific requirements as to the notification of that appointment to the Registrar of Titles.23 [20] The reality of the situation is that the Public Trustee remains as the administrator for financial matters for Mrs Barstow, with the duty which has been noted above. And it may be noted that there is no reference in the material to any statement of intention of the Public Trustee as to: (a) Sale of the property; or (b) Any change or prejudicial action to the plaintiff’s current residential circumstances. And as already noted, nothing to indicate any inclination let alone intention, to not take the responsibility, consistently with the duties stated in s 35 of the GAA, of acting as the litigation guardian for Mrs Barstow, upon any properly recommenced proceeding. [21] The position is conceded by the defendant to be different in respect of the relief sought pursuant to UCPR 260D. But that is only because of the possibility of a “freezing order” of the kind sought, being made upon the basis of the plaintiff having “a prospective cause of action that is justiciable in [this] Court”.24 Otherwise and as has been noted, the defendant raised criticisms as to whether the current pleading, even if it was to be directed to Mrs Barstow, presented “a good arguable case”25 or “a prima facie cause of action”.26 [22] As previously noted, it is unnecessary to dwell on these criticisms at this point. That is because and for the exercise of the Court’s discretion to make any freezing order, it is necessary for the applicant to also demonstrate that it is just and convenient that the order be made, in order to protect against a danger of disposition of the property 22 Such as is expressly recognised by s 137 of the LTA. 23 Consistently with s 21 of the GAA; see Exhibit CJM-1 to the affidavit of CJ Miles filed 25/10/17. 24 See in particular UCPR 260D(2) and also 260A(1). Although UCPR 260D(2) is expressed as applicable to “an accrued or prospective cause of action” usually a freezing may be obtained in respect of a cause of action that is complete; see Zucker v Tyndall Holdings plc [1993] 1 All ER 124. And there may at least be greater difficulty in establishing a sufficient basis for such an order on the basis of a prospective judgement, which is speculative or dependant on the prospect or anticipation of a cause of action arising in the future. 25 UCPR 260D(2). 26 See Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321 – 2. -- 10 of 13 -- 11 and so as to defeat the benefit of any judgment that might be obtained by the plaintiff.27 Here the concern can only be as to such disposition prior to the plaintiff having opportunity to establish his equitable interest in the property and the consequence that he will be unable to continue to reside there.28 [23] In this instance, not only are there the valid criticisms made by the defendant as to the breadth of the orders sought by the plaintiff, but: (a) Given the effective control now residing in the Public Trustee as financial administrator for Mrs Barstow, any danger of disposition of the property so as to defeat any judgment that the plaintiff may now seek, must be regarded as more apparent than real; and (b) Any assessment of the arguability of any claim which is to be pursued against Mrs Barstow is best to be dealt with upon any further considered pleading filed in respect of any such claim. [24] Accordingly, it is not demonstrated to be just and convenient to make any order pursuant to UCPR 260D and certainly not to the extent that has been sought. And the cross-application by the plaintiff should be dismissed. Conclusion [25] Therefore, there will be orders upon the allowance of the defendant’s application to set aside the Claim and striking out the Statement of Claim, both filed on 11 September 2017. And the cross-application of the plaintiff will be dismissed. [26] In that eventuality, the defendant has sought and is entitled to have his costs of the proceeding, claim, application and cross-application, paid by the plaintiff. In addition, he seeks the payment of those costs upon the indemnity basis pursuant to UCPR 703. It is sought to engage the principles discussed in Colgate-Palmolive Company v Cussons Pty Limited29and particularly in identifying that the “special or unusual features” warranting such an order in this case are that: 27 See Ninemia Maritime Corporation v Trove GmbH & Co KG (The Niedersachsen) [1984] 1 All ER 398. 28 It is simply not to the point that he may obtain a life interest in the event of the passing of Mrs Barstow, or that he may anticipate bringing an application for family provision pursuant to Part 4 of the Succession Act 1981, in that event. 29 (1993) 46 FCR 225 at 233. -- 11 of 13 -- 12 (a) The claim made against the Public Trustee was plainly unsustainable and that this should have been evident from the outset to the plaintiff and his advisors and was a claim which “ought never to have been made”; (b) Moreover it is pointed out that the plaintiff’s lawyers took no steps to correct their mistake despite: (i) Being told on 18 September 2017 that Mrs Barstow was the correct defendant and not the Public Trustee;30 and (ii) The letter of the Public Trustee of 13 October 2017 explaining why the claim made against the Public Trustee was not sustainable, with reference to relevant authorities and which proffered the opportunity to discontinue by 18 October 2017, failing which costs of an application to strike out would be sought against the plaintiff on the indemnity basis;31 and (iii) A further letter from the Public Trustee of 17 October 2017, which again warned the plaintiff and his advisors in similar terms;32 and (c) That the failure to succeed on the cross-application was largely consequential to the futility of seeking to maintain and/or salvage something out of the mistakenly commenced proceeding against the Public Trustee. [27] The principles as to an award of costs on the indemnity basis were reviewed in LPD Holdings (Aust) Pty Ltd & Anor v Phillips, Hickey and Toigo & Ors33 and again in Legal Services Commissioner v Bone.34 It should be concluded here that the conduct of the plaintiff in bringing the claim against this defendant and in opposing the defendant’s application, whilst not as such vexatious, was unreasonable conduct and such as to warrant the awarding of costs on the indemnity basis. And that this should also include the costs of the dismissed cross-application, as being also unsuccessful, to a significant extent, consequentially to the conclusions upon the defendant’s 30 See Exhibit CJM-4 to the affidavit of CJ Miles, filed 25/10/17. 31 Ibid at Exhibit CJM-6. 32 Ibid at Exhibit CJM-9. 33 [2013] QCA 305 at [21] – [22]. 34 [2014] QCA 179 at [67] – [71]. -- 12 of 13 -- 13 application. The plaintiff’s asserted impecuniosity and concerns for his future do not, in reality, provide any sufficient answer to these propositions. [28] Accordingly, the orders are as follows: (a) The application filed by the defendant on 25 October 2017, is allowed; (b) The cross-application filed by the plaintiff on 31 October 2017, is dismissed; (c) The Claim filed on 11 September 2017, is set aside and the Statement of Claim filed on 11 September 2017 is struck out; and (d) The plaintiff is to pay the defendant’s costs of the Claim, application and cross-application, on the indemnity basis. -- 13 of 13 --