Douglas & Anor v Nelson [2007] QDC 141

DISTRICT COURT OF QUEENSLAND CITATION: Douglas & Anor v Nelson [2007] QDC 141 PARTIES: MARY DOUGLAS (First Plaintiff) AND CRAIG DOUGLAS (Second Plaintiff) AND JESSICA KATE NELSON (Defendant) FILE NO/S: BD1490/06 DIVISION: Civil PROCEEDING: Application for summary judgment ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 4 July 2007 DELIVERED AT: Brisbane HEARING DATE: 22 May 2007 JUDGE: Tutt DCJ ORDER: The application for summary judgment by the first and second plaintiffs against the defendant be dismissed with costs of and incidental to the application to be reserved. CATCHWORDS: Application for summary judgment – whether defendant/respondent has any real prospect of success – whether defendant/respondent has any legal or equitable interest in funds held in solicitor’s trust account. Uniform Civil Procedure Rules 1999 (Qld) r 292. Part 19 Property Law Act 1974 (Qld). Deputy Commissioner of Taxation v Salcedo [2005] QCA 227. COUNSEL: Mr M K Conrick for the plaintiffs/applicants. Mr R M Galloway for the defendant/respondent. -- 1 of 8 -- 2 SOLICITORS: D M Wright and Associates for the plaintiffs/applicants. K L King and Associates for the defendant/respondent. Introduction: [1] This is an application by the plaintiffs (“applicants”) for a primary order that summary judgment be entered against the defendant (“respondent”) pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (“UCPR”). [2] The substantive relief sought by the applicants in the proceeding before the court is essentially a declaration that the respondent to this application (defendant in the proceeding) has no legal or equitable interest in funds presently held in a solicitor’s trust account, being the proceeds of the sale of real property at Toonumbar (“the Toonumbar property”) in country New South Wales and that those funds be released at the direction of the applicants. 1 Background facts: [3] The applicants are mother and son. It is alleged that the applicant Craig Douglas and the respondent shared “a de facto relationship existing from 2001 until 2004” and “for the purposes of these proceedings the court would have to act on the assumption that Ms Nelson may establish that fact at any trial of that issue”.2 [4] Over a number of years from 1995 the applicant Mary Douglas financially assisted her son Craig Douglas in a number of respects and in or about 2001 further assisted 1 See applicant’s application filed 30 April 2007 and paragraph [2] of applicant’s written submissions. 2 Hearing transcript p 3 lines 35-37. -- 2 of 8 -- 3 the applicant Craig Douglas to purchase a home unit in Queanbeyan, Australian Capital Territory (“the first unit”). [5] The first unit was subsequently sold and a second unit was purchased in Queanbeyan which was also sold in 2003 “for about $90,000. The proceeds were paid to Mrs Douglas in discharge of the loans. She held those funds in an account. She used some of them from time to time and put other money into the account.”3 [6] In or about January 2004 the applicant Craig Douglas and the respondent purchased the Toonumbar property in the respondent’s name only, from the funds “principally” held in the first applicant’s account referred to in paragraph [5] above. Subsequently the Toonumbar property was sold in April 2005 and it is the proceeds of this sale which is the subject of dispute between the applicants and respondent. [7] In addition to the current proceeding the respondent has also filed an application against the applicants seeking among other things orders against the applicant Craig Douglas “… for a property adjustment order pursuant to the provisions of Part 19 of the Property Law Act 1974 (Qld) (“P. L. A. claim”) in respect of the proceeds of sale of the Toonumbar property as well as ancillary orders against both applicants.4 [8] In the supporting affidavit to the P. L. A claim the respondent to the current application sets out a summary of her version of the financial history from “the commencement of cohabitation” with the applicant Craig Douglas including the contributions she alleges she made to the relationship in various ways for which she seeks a property adjustment order referred to in paragraph [7] above. 3 Hearing transcript p 4 lines 21-24. 4 Exhibit KLK-1 to the affidavit of Karen Louise King filed by leave on 22 May 2007. -- 3 of 8 -- 4 [9] The applicants also called under subpoena the principal of the respondent’s former solicitor’s firm on the question of whether his firm “… acted outside Ms Nelson’s instructions”5 and although the respondent’s counsel objected to this evidence the issue was not advanced in any detail as the solicitor called was not the person who actually acted for the respondent and he could comment on the matter only from his own “observation of the file”.6 Applicants’ submissions: [10] The applicants submit that their “… case is quite straightforward”7 in that it was the applicant Mary Douglas’s funds which were used to purchase the Toonumbar property and she did not learn that the property had been purchased in the respondent’s name until months later. [11] The applicants submit that the consequence of this arrangement was that the respondent “… held the title to lot 136 on a resulting trust for Craig Douglas”.8 Further to this it is submitted that the respondent “… has in a number of documents authored by her made clear admission that she had no beneficial interest in lot 136”.9 [12] It is further submitted that in or about February/March 2005 the parties agreed that the Toonumbar property be sold and that the respondent had authorised the applicant Mary Douglas “… to act in the sale of lot 136 …” and “… to have all cheques resulting in the sale of lot 136 payable to Mrs Douglas”.10 5 Hearing transcript p 21 line 48. 6 Hearing transcript p 22 line 35. 7 Paragraph [5] of applicants’ written submissions. 8 Ibid paragraph [9]. 9 Ibid paragraph [17]. 10 Ibid paragraph [25]. -- 4 of 8 -- 5 [13] The respondent subsequently withdrew those instructions which the applicants say she was not entitled to do as at all times the respondent held the property under the presumption of a resulting trust. [14] The applicants further submit that the respondent’s allegations contained in her defence do not establish that she has any “… real prospect of successfully defending any part of the plaintiff’s claim” and that “… there is no basis to deny the plaintiff’s judgment on their claim”.11 Respondent’s submissions: [15] The respondent concedes that she authorised “the proceeds of sale” of the Toonumbar property to be paid to the applicant Mary Douglas but submits that at the time she was “feeling harassed and intimidated” but subsequently “… and before the settlement … changed her mind and wrote to the conveyancers withdrawing her consent”. 12 [16] Ultimately the respondent submits that there is an issue raised as to whether there was agreement between her and the applicant Mary Douglas as to the reason for the respondent agreeing to the funds to be paid to the applicant Mary Douglas but in any event it is submitted on behalf of the respondent that at least part of those funds “… are prima facie assets of the relationship”13 between her and the applicant Craig Douglas and because the respondent has raised issues which should be ventilated at trial, in the exercise of the court’s discretion, the applicants’ application should be refused as they do not satisfy the requirements for r 292 of the UCPR. 11 Paragraphs [63] and [75] of the applicants’ written submissions. 12 Paragraphs [11] and [12] of respondent’s written submissions. -- 5 of 8 -- 6 The law: [17] Rule 292 of the UCPR provides as follows: “(1) A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant. (2) If the court is satisfied that— (a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and (b) there is no need for a trial of the claim or the part of the claim; the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.” [18] The test to be applied when considering whether summary judgment should be entered for either a plaintiff or defendant in a proceeding under rr 292 and 293 of the UCPR has been the subject of consideration by our Court of Appeal in the matter of Deputy Commissioner of Taxation v Salcedo [2005] QCA 227 (“Salcedo”). [19] As stated by Williams JA at paragraph [11] with whom McMurdo P and Atkinson J agreed: “… Rule 292 and r 293 brought about significant changes in the law and procedure relating to summary judgment. The wording of r 292 and r 293 is clearly based on the drafting used in Part 24 of the Civil Procedure Rules (UK) which came into force in the United Kingdom in 1999. In Swain v Hillman [2001] 1 All ER 91 the Court of Appeal had to consider r 24.2, the equivalent of r 292. Lord Woolf MR said at 92: "The words 'no real prospect of succeeding' do not need any amplification, they speak for themselves. The word 'real' distinguishes fanciful prospects of success or … they direct the court to the need to see whether there is a 'realistic' as opposed to a 'fanciful' prospect of success." Later, again speaking of the rule, he said at 94: 13 Para 18 of respondent’s written submissions. -- 6 of 8 -- 7 "It saves expense; it achieves expedition; it avoids the court's resources being used up on cases where this serves no purpose, and I would add, generally, that it is in the interests of justice. If a claimant has a case which is bound to fail, then it is in the claimant's interests to know as soon as possible that that is the position. Likewise, if a claim is bound to succeed, a claimant should know that as soon as possible." In his reasons at 95, Pill LJ accepted that the term "real" was used in contradistinction to "fanciful". The third member of the court, Judge LJ, whilst recognising that summary judgment was a "serious step", went on to say at 96: "This is simple language, not susceptible to much elaboration, even forensically. If there is a real prospect of success, the discretion to give summary judgment does not arise merely because the court concludes that success is improbable." …” [20] It is unnecessary for me to repeat what Williams JA said further in paragraphs [12] to [17] inclusive of his judgment but it is suffice to say that those paragraphs provide a succinct summary of the “test” to be applied by a judicial officer when considering an application for summary judgment under the UCPR. Further to this the comments of Atkinson J at paragraphs [42] and [45] are also apposite. Findings: [21] On the basis of the “background facts” referred to in paragraphs [3] to [9] above; the respective submissions both written and oral made by respective counsel and reliance upon the dicta expressed in Salcedo above I am not satisfied that the applicants have discharged the onus required to enable the court to be satisfied to make an order within the terms of r 292(2) of the UCPR as on the material set out above I am not satisfied that the respondent has “… no real prospect of successfully defending” the applicants’ claim in that she has raised sufficient issues on the material filed in this proceeding and application, which should be properly -- 7 of 8 -- 8 ventilated at trial in a consolidated proceeding to have all matters in dispute between the parties finally resolved. [22] I find therefore in the exercise of my discretion that the applicants are not entitled to summary judgment against the respondent as claimed. Order: [23] My order in this matter will therefore be as follows: The application for summary judgment by the first and second plaintiffs against the defendant be dismissed with costs of and incidental to the application to be reserved. -- 8 of 8 --