Deen & Ors v Warapar Resources P/L & Ors [2009] QSC 414

SUPREME COURT OF QUEENSLAND CITATION: Deen & Ors v Warapar Resources P/L & Ors [2009] QSC 414 PARTIES: SULTAN MOHAMMED DEEN and KAMRUN NISHA DEEN AS TRUSTEES OF THE SMD FAMILY TRUST (first plaintiffs) ANDARUCIAN PTY LTD ACN 140 767 479 (second plaintiff) v WARAPAR RESOURCES PTY LTD ACN 118 886 392 (first defendant) ABDUL RAHMAN DEEN (second defendant) WARAPAR PTY LTD ACN 072 684 514 (third defendant) WARAPAR RESOURCES PTY LTD ACN 118 886 392 (plaintiff by counterclaim) v SULTAN MOHAMMED DEEN (first defendant by counterclaim) DEEN BROTHERS GROUP ABN 1776 1463 (second defendant by counterclaim) DEEN BROS PTY LTD (in liq) ACN 109 428 927 (third defendant by counterclaim) DEEN BROS TRANSPORT PTY LTD (in liq) ACN 109 428 873 (fourth defendant by counterclaim) DEEN BROS HOLDINGS PTY LTD (in liq) ACN 109 428 828 (fifth defendant by counterclaim) FILE NO/S: BS 1820 of 2008; BS 62 of 2008 DIVISION: Trial PROCEEDING: Claim ORIGINATING COURT: Supreme Court at Brisbane DELIVERED ON: 18 December 2009 DELIVERED AT: Brisbane HEARING DATE: 7-10 December 2009 JUDGE: McMurdo J ORDER: 1. The plaintiff’s claim is dismissed. 2. Pursuant to s 471B of the Corporations Act 2001 (Cth), -- 1 of 8 -- 2 leave is granted to proceed against Deen Bros Pty Ltd (in liq), Deen Bros Transport Pty Ltd (in liq) and Deen Bros Holdings Pty Ltd (in liq). 3. It is declared that the defendants to the counterclaim have no entitlement to occupy any part of land situated at 59 Colebard Street, Acacia Ridge and presently owned by Warapar Resources Pty Ltd including lot 3 on registered plan 130715 in the County of Stanley Parish of Yeerongpilly, Title Reference 15618033. 4. It is ordered that the defendants to the counterclaim vacate the land forthwith. CATCHWORDS: CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – OFFER AND ACCEPTANCE – GENERAL OFFERS AND THEIR ACCEPTANCE – where a Memorandum of Understanding was concluded embodying the whole contract but not including the subject land – whether there is an enforceable contract Corporations Act 2001 (Cth), s 471B Trade Practices Act 1974 (Cth), s 52 COUNSEL: R V Bowler for the plaintiffs and defendants by counterclaim S G Shearer for the defendants and plaintiff by counterclaim SOLICITORS: John M O’Connor & Company for the plaintiffs and defendants by counterclaim Frank Carroll Solicitor for the defendants and plaintiff by counterclaim [1] This is a dispute between two brothers: Mr Sultan Deen who is one of the plaintiffs, and Mr Rahman Deen who is one of the defendants. The plaintiffs claim to have an enforceable contract to purchase about seven hectares of land at Acacia Ridge. The land is in the registered ownership of the first defendant, Warapar Resources Pty Ltd. The contract, which is said to have been made orally in a conversation between these two men in 2006, is denied by the defendants. Mr Sultan Deen is occupying the land in question and there is a counterclaim for orders that he vacate the land and take with him all of that which he has brought onto it. [2] There is no separate title to the subject land. It is part of a parcel of about 38 hectares bordering Oxley Creek. The access is from Colebard Street. It is described as lot 3 on registered plan 130715 and I shall refer to it as lot 3. [3] In 1985 lot 3 was purchased by Valcrane Pty Ltd, a company associated with the then firm of Deen Brothers, which was constituted by Sultan Deen, Rahman Deen and their other brothers, Habib and Haneef Deen. For some time after then lot 3 was subject to registered mortgages to Custom Credit Corporation Ltd before it was refinanced by Mr Suliman Sabdia. He was the external accountant for the Deen Brothers partnership and for the partners individually. In 1993 his company, Canequail Pty Ltd, became the registered owner of lot 3 and remained so until 6 March 1996 when it was transferred to the third defendant, Warapar Pty Ltd, a company under the control of Rahman Deen. A month later it was transferred to -- 2 of 8 -- 3 Warapar Resources Pty Ltd, which he also controls. Canequail Pty Ltd was the registered owner only to secure the finance provided by Mr Sabdia. [4] In 1995 the partnership of Deen Brothers was dissolved by agreement. The four brothers asked Mr Sabdia, as their accountant, to read the terms of their agreement and to that end they met at Mr Sabdia’s house on 22 November 1995. Mr Sabdia then produced a document of some 12 pages headed “Memorandum of Understanding” and the four brothers signed each page. Mr Sabdia gave evidence in the defendants’ case. I have no reason to doubt the reliability or credibility of his evidence. He said that the Memorandum of Understanding represented a complete record of the consensus between the four brothers as it had been communicated to him. Of course there is the possibility that there was something else agreed which had not been passed on to Mr Sabdia. But this is unlikely. The evident purpose of Mr Sabdia’s participation and of the Memorandum of Understanding was to ensure that there was a complete record of whatever had been agreed. That is confirmed by the first page of the document which recorded that: “The attached schedules from 1 to 11 on pages 1 to 11 is the complete summary of the understanding reached, subject to Suliman Sabdia, checking the additions, the calculations and determine [sic] the final amount owing by one party to the other.” [5] Schedule 1 of the document was headed “Assets and Liabilities to be Taken Over by Sultan & Habib Deen”. It listed certain pieces of real property, including a parcel at 160 Bellwood Street and three parcels at Bowhill Road, Acacia Ridge. It also referred to “Tancred” against which was written “50%”. [6] Another page was a schedule was headed “Assets and Liabilities to be Taken Over by Rahman & Haneef Deen. The first item appearing in that schedule was as follows: “ ASSETS LIABILITIES 59 Colebard Street 1. S. Sabdia” This land was lot 3. This schedule also referred to “Tancred 50%”. [7] The asset shown as “Tancred” was in truth not an asset of the partnership or of any of the partners. It was land close to lot 3 which had once been the site of an abattoir conducted by Tancred Brothers. It was owned by interests associated with a Mr Wanless and a Mr Gay. They had other interests in the area, and in particular in land which abutted, and in some places encroached upon, lot 3, which was used for the Archerfield Speedway. [8] It is common ground that at that time there was a prospect of a joint venture between the owners of the Tancred land and the four brothers, for the exploitation of the Tancred land by sand mining. The intention of referring to the Tancred land in this document was to record the brothers’ agreement or understanding that the opportunity to participate in this joint venture was to be enjoyed equally by the four of them. So much is common ground. But there are marked differences between the versions of the two brothers involved in this case as to what was then agreed about lot 3. [9] On Rahman Deen’s version, it was agreed that lot 3 in its entirety would go to Rahman and Haneef Deen, subject to their repaying Mr Sabdia. This explains his name appearing under the heading “Liabilities” next to the reference to this -- 3 of 8 -- 4 property. There was no agreement or understanding that the others, Sultan Deen in particular, would have any entitlement to lot 3 or any part of it. He said that no dollar figure was shown against this property because it was not partnership property, and therefore it did not have to be brought into the final accounting of the partnership. [10] On Sultan Deen’s version, there was a part of lot 3, constituted by about seven hectares, which was then proposed to be conveyed to the interests of Mr Wanless and Mr Gay as part of the proposal for the Tancred land. At least by implication, all four brothers were to be entitled to this seven hectare portion so that, in effect, they could invest it in the proposed joint venture. Accordingly, Mr Sultan Deen says that the Memorandum of Understanding is incomplete, because it contains no reference to such an agreement or understanding about these seven hectares. Indeed, on its face the Memorandum of Understanding is inconsistent with Sultan Deen’s version. [11] The proposed joint venture of the Tancred land did not proceed. There is no evidence of the making of a contract for that land. But within the documents tendered by consent, there is a contract of sale between Warapar Pty Ltd as vendor and two companies associated with Mr Wanless and Mr Gay as purchasers. The contract is undated but it appears to have been made in 1997.1 The document defined lot 3 to be “the Warapar Land”. It was agreed that lot 3 would be subdivided to create a parcel of seven hectares described as “the lot”. That parcel was described in item H of the schedule to this contract as: “Proposed lot … being that part of the Warapar Land shown hatched on the plan of survey contained in Schedule 1 consisting of an area of seven hectares.” The agreed price was $70,000. The contract made no reference to the Tancred land or to any joint venture. [12] The subdivision included a proposed easement of part of the remaining area of lot 3 to provide access from Colebard Street to the lot. And it referred to the balance of lot 3 as “the retained land”, defining it in item J of the reference schedule to be the land “shown hatched on the plan of survey contained in Schedule 3…”. The contract was conditional upon obtaining all necessary consents for the subdivision. The completion date was fixed at 30 days from notification by the purchasers that the conditions had been satisfied. As it happened the Brisbane City Council did not approve the subdivision and this contract of sale was thereby terminated. [13] The purpose of that contract of sale was expressed in cl 3.1 as follows: “3.1 The Vendor and the Purchaser acknowledge that improvements to Lot 1 on RP164672 owned by Bonueville Pty Ltd encroach on the Warapar Land and that the Vendor has agreed to sell the Lot to the Purchaser because of the encroachment.” [14] The seven hectares designated as the proposed lot constituted that part of lot 3 which Sultan Deen now contends was agreed to be retained for the benefit of all four partners after the dissolution of their partnership in 1995. He is unable to 1 It is described in the index of list of agreed documents (Exhibit 5) as an agreement “dated April 1997” which is consistent with what appears on page 16 of the document. -- 4 of 8 -- 5 produce any plan or other document which was in existence in 1995 which would have defined that part of lot 3. Nor did he give evidence of any conversation by which the four brothers in some way defined that area of seven hectares. Instead he suggested that the area of seven hectares was defined by his marking the plans which were in schedules 1 and 3 of Warapar Pty Ltd’s 1997 contract. His evidence was that when the proposed joint venture of the Tancred land came to nothing, he and Rahman Deen immediately went to the plans within that 1997 contract and: “We marked on the plan the area that was belonging to Warapar and what area was still belonging to the four of us. Now, we clarified that at the time, and the document was marked up at the time, the both of us together.”2 Sultan Deen was then referred to those pages of the 1997 contract which depicted the lot and the retained land respectively in schedules 1 and 3. He gave evidence that in Rahman’s presence, he drew the hatching which appears on the pages. This agreement, and the fact of Sultan Deen marking the document in this way, is denied by Rahman Deen. [15] Sultan Deen’s evidence as to marking these pages of the contract cannot be accepted. The contract itself referred to areas being “hatched” on those pages. It was in that way that the plans within schedules 1 and 3 to that document designated “the lot” as the land to be sold and the “Retained Land” which was to be subject to certain covenants in favour of the purchasers intended to bind the vendor and its successors. Moreover, on another schedule to this document,3 similar “hatching” was used to designate the proposed easement, and again that corresponds with the contract’s definition of the easement as the area shown as hatched on that plan. [16] Sultan Deen says that the next relevant conversation was in late 2005. He had been conducting an earthmoving and demolition business from the land at 160 Bellwood Street, which was one of the properties which went to him and his brother Habib upon the dissolution of the partnership, as recorded in the Memorandum of Understanding. However, that property was to be sold and Sultan Deen needed somewhere to store some of his equipment. At the same time in 2005, he purchased the assets of his brother Habib. Sultan Deen claimed that this included what, consistently with his case, was Habib’s one-fourth share in the seven hectares from lot 3. There is no document which evidences the transfer of such an interest from Habib Deen. [17] It was in these circumstances that Sultan Deen says that he told Rahman of his acquisition of Habib’s interest and that at the same time (late 2005) he said to Rahman that: “I formed a trust and that I would be transferring my interest to the trust … and from then on I would be dealing with it as trustee for the trust.” As to the trust, it should be noted that the proceedings were commenced by Sultan Deen and his wife as trustees of a certain trust. At the commencement of this trial I added the second plaintiff, Andarucian Pty Ltd, which is said to be the current trustee. It appears that the change in trusteeship coincided with the recent bankruptcy of Sultan Deen. 2 Transcript 3-21. 3 Schedule 2 on p 106 of Exhibit 5. -- 5 of 8 -- 6 [18] Rahman Deen denies that there was a conversation as to such a change in ownership of the seven hectares. On his case, of course, there had been no agreement or understanding whatsoever in relation to this land, other than that recorded in the Memorandum of Understanding. [19] Sultan Deen then said there was a further conversation in 2006, in which he told Rahman that he needed to move everything from Bellwood Street and that his whole business would have to be moved to the seven hectare parcel. He said that he then produced “the plan” and suggested that it would be better for Sultan Deen to have “the eastern section of it …”. On his version, Rahman said: “No, that’s where I want to set up my office and my stockpiles, so you can have the western end of it with an easement through the property to your section”. He said that they immediately “marked the plan up together in colour …” He was asked whether he had the plan which was so marked up and he replied “Yeah” but he did not produce that. He said that it was not a plan with areas shaded in different colours which was tendered as exhibit 8.4 It was in that conversation in which, on the plaintiffs’ case, the agreement for which they contend was made. [20] The plaintiffs’ case is dependent upon the alleged agreement for the beneficial ownership of seven hectares of lot 3 as claimed by Sultan Deen to have been made in 1995. Absent that agreement, Sultan Deen had no interest or entitlement to any part of lot 3 and the plaintiffs’ case would fail at least because the contract upon which they sue would not be supported by any consideration. Their case is that the consideration came from the agreement by Sultan Deen to give up his interest over the whole of the seven hectares in exchange for the sole ownership of what he describes as the western section. Further, if Sultan Deen had no basis for a claim to any part of lot 3, it would be fanciful to suggest that Rahman would agree to give that land to him. [21] I find that there was no agreement or even an understanding reached in relation to lot 3 in 1995 as Sultan Deen contends. As I have said, I accept Mr Sabdia’s evidence that he recorded all of the agreement or understanding which had been communicated to him. I see no reason why the partners would have seen fit to withhold this element, an agreement as to seven hectares of lot 3, from their instructions to Mr Sabdia. Nor do I think it likely that they overlooked that element when doing so. The meeting of the partners and Mr Sabdia took several hours and the Memorandum of Understanding does refer to lot 3. In addition, there is no document which would have defined the seven hectares at the time of this meeting. Rather, Sultan Deen says that such a document did not exist until 1997. And this was said to be constituted by the documents which were schedules 1 and 3 of Warapar’s 1997 contract, falsely claimed to have been as marked or “hatched” by Sultan Deen. Any agreement as to the seven hectares in 1995 would have been unenforceable for the apparent uncertainty in the definition of the land. But that absence of definition also demonstrates the unlikelihood of the agreement itself. [22] Moreover, the link between the seven hectares and the proposed joint venture upon the Tancred land, which is an essential element of Sultan Deen’s version, is far from demonstrated. The terms of the contract made with the interests of Mr Wanless and Mr Gay in relation to the seven hectares indicate otherwise. As discussed, the 4 Transcript 3-28. -- 6 of 8 -- 7 expressed purpose of that sale was to meet the predicament caused by an encroachment. [23] Accordingly in 2006, when the subject agreement is said to have been made, there was no arguable claim which Sultan Deen could have made for any of lot 3. I accept Rahman Deen’s evidence that there was at no time an agreement or understanding that Sultan Deen would have any proprietary interest in any of lot 3. Rather, Sultan Deen was given a bare licence to use part of lot 3, which appears to have been part of the seven hectares the subject of the 1997 contract, for the temporary storage of his equipment. [24] The defendants’ case also has some support in the evidence of Mr Fazal Deen, who is a cousin of these brothers. He was present at a meeting, which he thought occurred at sometime in 2003 or 2004, attended by Rahman, Sultan and Habib Deen, at which Rahman was asked whether the others could park some machinery on lot 3 temporarily. He said that Rahman replied that he had no objection but that he wanted the property “returned to the same order that it was given”. He recalls another meeting in 2005 or 2006 between Rahman and Sultan Deen in which they they discussed the parking of Sultan’s machinery on lot 3. He recalls that Rahman said that he wanted the land kept “clean and tidy” because “he was having trouble with the Department of Environment” and he recalls Rahman Deen saying “You can use the land, but I don’t want anything dumped on the land. I want this land returned to the way it was”.5 He said there was no discussion in his presence as to the transfer of any ownership in lot 3. [25] The plaintiffs also plead that Mr and Mrs Sultan Deen were induced to believe that they were entitled to the land which is claimed, by representations made on behalf of the defendants, and that acting upon that belief they undertook works on the land such as the construction of a road across lot 3 to facilitate the conduct of their earthmoving and demolition business from the land which they claim. I accept that something of a road was constructed. And they also constructed a large shed. But this estoppel case relies upon the events being according to Sultan Deen’s evidence, which I have rejected. On Rahman Deen’s evidence, which I accept, there is no basis for an estoppel. Similarly there is no basis for a claim that there was a contravention of s 52 of the Trade Practices Act 1974 (Cth) by the defendants, in that Rahman Deen made representations to the effect that Mr and Mrs Sultan Deen “could have a 3.5 hectare area of land on lot 3 marked on the plan with a right of access over lot 3 to Colebard Street West”. Again, the case fails at least because it is dependent on the truth upon Sultan Deen’s version of events. The plaintiffs’ case, which is for various orders to the end of transferring one-half of the seven hectares to (ultimately) the third plaintiff as the new trustee of Sultan Deen’s family trust, should be dismissed. [26] I turn to the counterclaim. It is common ground that Sultan Deen commenced to occupy at least part of lot 3 from about 30 September 2006. He brought onto the land a considerable number of items of heavy machinery and other equipment associated with his business, all or most of which is still on the land. As mentioned, he constructed a large shed. He has also caused to be dumped a large quantity of material excavated from various sites in and around Brisbane. He is subject to a prosecution brought by the Brisbane City Council in respect of his use of this land. 5 Transcript 3-77. -- 7 of 8 -- 8 [27] I accept Rahman Deen’s evidence that he did not give permission to his brother to deposit most of this excavated material. I accept his evidence that there were some exceptions in relation to material which was deposited relatively recently. By far the majority of this material was deposited without Rahman Deen’s consent. He gave evidence, without objection, that this would cost more than one million dollars to remove. But there is no claim for damages for the cost of that removal or otherwise. A counterclaim for mesne profits was pleaded for the occupation by Sultan Deen after 19 October 2007 when, it is common ground, Rahman Deen demanded that the property be vacated. But at the trial, that claim for mesne profits was not pursued. That is explained by Sultan Deen’s recent bankruptcy and the liquidation of his companies which were joined as defendants to the counterclaim. (There is also a defendant to the counterclaim named as Deen Bros but this appears to be a business name used at relevant times by Sultan Deen.) No doubt because of the nature of the relief sought by the counterclaim, the companies which are defendants to that counterclaim did not oppose the grant of leave to proceed and such leave will be granted.6 [28] As the current registered owner, Warapar Resources Pty Ltd counterclaims for a declaration that the occupation by Sultan Deen “and his related entities” of land, constituted by lot 3 and also land described as lot 927 on Crown Plan SL7167, is unlawful. It is not entirely clear that the land which has been occupied by Sultan Deen or his companies extends beyond lot 3. There will be a declaration that the defendants to the counterclaim have no entitlement to occupy any part of land situated at 59 Colebard Street, Acacia Ridge and presently owned by Warapar Resources Pty Ltd including lot 3 on registered plan 130715 in the County of Stanley Parish of Yeerongpilly, Title Reference 15618033. It will be further ordered that the defendants to the counterclaim vacate the land forthwith. [29] The other relief sought is that the defendants to the counterclaim remove all “goods, chattels, machinery, buildings, building and construction waste, construction materials, demolition waste and soil that [they] have placed on the land”. As noted, some of the material placed on the land, although a relatively small part of it seems, was placed with the consent of Rahman Deen. However, the more important obstacle to the grant of this relief is that it would involve a very large cost. Of course, that is why the order is sought. But assuming that the cost of removal of the waste materials and soil is anything like the estimate of more than one million dollars provided by Rahman Deen, there is no possibility that an order for its removal could be performed. The cost of the removal of the buildings which Sultan Deen caused to be erected would be substantial but I have no evidence as to any amount. The same may be said of the cost of removal of the various items of large machinery. Consistently with the terms of the licence according to Rahman Deen’s evidence, I accept that all of these items and the building must be removed by Mr Sultan Deen and any other defendant to the counterclaim which has placed the item upon the land. The same applies to most of the waste material and soil. But it would be futile to order the removal of any of this. [30] Accordingly, upon the counterclaim there will be a declaration and injunction requiring the defendants by counterclaim to immediately vacate the land. 6 Corporations Act 2001 (Cth), s 471B. -- 8 of 8 --