Dillon, Re [1994] QSC 312

IN THE SUPREME COURT OF QUEENSLAND O.S. No. 605 of 1994 Before the Hon. Mr Justice Thomas IN THE MATTER of the LAND TITLE ACT - and - IN THE MATTER of certain Caveats lodged by BARBARA NOEL DILLON JUDGMENT - THOMAS J. Judgment delivered 25/11/1994 CATCHWORDS: CAVEAT - removal - caveator paid money to owner some years before - allegation of trust - absence of evidence - case based on anticipated discovery - no serious question to be tried on available evidence, and no sufficient reason to suspect that a case exists. Counsel: R. Lilley for the Applicant P. Dunning for the Respondent Solicitors: R.G. Kilner & Black for the Applicant Michell Sillar Nicholsons for the Respondent Hearing date: 17 November 1994 -- 1 of 6 -- IN THE SUPREME COURT OF QUEENSLAND O.S. No. 605 of 1994 IN THE MATTER of the LAND TITLE ACT - and - IN THE MATTER of certain Caveats lodged by BARBARA NOEL DILLON JUDGMENT - THOMAS J. Judgment delivered 25/11/1994. This is a summons for the removal of caveats upon five separate parcels of land. Three of the parcels are owned by the applicant Mr De King and the other two are owned by his company Queensland Business Investment Property Consultants Pty Ltd. The caveator (respondent) is Ms Barbara Dillon. I shall set out briefly what the evidence is capable of indicating, recognising that in the present exercise I am not making final determinations of fact. Over a period of about fifteen months (between November 1989 and February 1991) Ms Dillon and Mr De King lived together. The evidence suggests that their association was not sexual, but they shared an interest in golf, engaged in some business activity together, and were companions. They lived at Buderim, in Melbourne, and in the United States. The association seems to have broken up by mutual consent in February 1991 following a number of disagreements or misunderstandings. During the period of their association, Ms Dillon contributed fairly substantial sums of money, totalling about $178,000. The moneys were paid to Mr De King or according to his direction. About $45,000 of this was applied to the acquisition of a house property at Buderim in which the parties resided. Another $20,000 was applied to the purchase of a car. The balance was intended to be applied for the purposes of a -- 2 of 6 -- 2 partnership consisting of the two of them, which was based upon a business developed by Mr De King known as Mela. Its main activities centred around the production of melaleuca oil and the sale of products for use by dogs and human beings. Some of the money seems to have been used for the living and travelling expenses of the parties and some of it to have been applied in and concerning the development and the conduct of the Mela business. Ms Dillon alleges, but on the information available to her cannot prove, that her money was not used in the ways already mentioned, and that Mr De King must have retained her money in such a way that he used it for the acquisition of the five properties over which Ms Dillon has lodged caveats. Alternatively it is said that he must have used it to acquire other assets through which the acquisition of the five properties can be traced. Mrs Dillon originally lodged eight caveats, but in a previous proceeding it was ordered by consent that the caveats on three of the properties be removed. The properties in question in the present proceedings may conveniently be described by numbers namely as Lot 44, Lot 180, Lot 263, Lot 22 and Lot 19. The properties are situated at Noosaville, Sunshine Beach, Gympie and elsewhere. Lots 44, 180 and 263 are owned by Mr De King. Lots 22 and 19 are owned by his company. They were acquired at various times in 1993 and 1994, well after the association between him and Ms Dillon had ceased. On a number of the properties, Mr De King has built houses, and on Lot 180 he has caused a townhouse development to proceed. In most instances these projects (the acquisition of the land and the construction of houses thereon) have proceeded by means of joint venture arrangements between Mr De King and other parties. In each instance the interest claimed by Ms Dillon is "as beneficial owner of an estate in fee simple" and the grounds of claim are "pursuant to a constructive and/or resulting trust created by the use of the caveator's funds to purchase the property on the grounds pleaded in the -- 3 of 6 -- 3 statement of claim annexed to this caveat". The statement of claim pleads total payments by the plaintiff to the defendant of $178,000 in 1989 and 1990. It then pleads that in 1993 and 1994 the defendant acquired for his own benefit and in his own name various properties including the five which are the subject of this application. The statement of claim continues - "the funds used by the first defendant to acquire the first defendant's properties and the second defendant to acquire the second defendant's properties were directly and/or indirectly the funds that were provided by the plaintiff as pleaded herein. These are the best particulars the plaintiff can provide prior to discovery." Discovery has not yet been completed. In earlier proceedings between Ms Dillon and Mr De King, Ms Dillon alleged a partnership between the parties and that their contributions had been for partnership purposes. Mr De King denied the partnership, but when the matter came on before Ryan J on 16 March 1993, consented to an order for the taking of accounts. An account has been prepared on his behalf by Mr Benham, and whilst it has been criticised by another accountant, it contains extensive details of expenditure that is at least consistent with expenditure for the purposes of the Mela business and for living expenses of himself and Ms Dillon. An updated version of the account appears as ex. E to Mr De King's affidavit filed 15 November 1994. The expenditure is complete within the period 1 December 1989 and 3 April 1992. The submission by counsel for Ms Dillon is that when they commenced their association Mr De King had "no money" and considerable debts; that now her money has been spent, and Mr De King owns various properties which he did not formerly own. The submission is that it may be inferred that her money was the real source of his acquisition of these properties in 1993 and 1994. I have listened to lengthy submissions, and have reserved the matter so that I could read the material fully. Quite simply there is no evidence that any of Ms Dillon's money, or any asset -- 4 of 6 -- 4 which her money was used to acquire, was used in the acquisition of any of the properties in question. There is nothing more than Ms Dillon's disbelief of his account and her continuing suspicion. Not only is there an absence of evidence to this effect, but positive evidence has now been produced on behalf of Mr De King showing the other sources of the moneys used for the relevant acquisitions. The evidence of Mr Coxon, Mr Mutton and Mr Hargraves, which includes copies of various letters and contemporaneous documents, suggests that these parties financed the acquisition of the relevant properties and that they also supplied further money which was used in the carrying out of various projects on some of the lots. I do not propose to set out the evidence concerning each parcel of land. Although some details are not entirely consistent with some statements made by Mr De King, the evidence as a whole (including other evidence of financing by Mr De King from a finance company), strongly suggests that all these properties were acquired with funds other than those provided by Ms Dillon between November 1989 and February 1991, and that her earlier financial dealings with Mr De King had nothing to do with these later dealings. It may well be that Ms Dillon has a valid money claim based on some form of exploitation of her resources whilst the parties were in a happier arrangement, but there is absolutely no evidence to found any proprietary claim against the properties which Mr De King later acquired. The evidence shows some urgency in clarifying the position concerning the caveats. Other parties, including Mr Hargraves, have rights in relation to various properties and they need to be dealt with in order that Mr De King's obligations in relation to these parties may be properly discharged. He also requires further funds from Westpac to complete his project, and these are currently withheld whilst the caveats remain upon the title. On the evidence before me the claim to any proprietorial interest in these properties by -- 5 of 6 -- 5 Ms Dillon is without any current foundation. Her counsel conceded that in a removal of caveat application under s.127 of the Land Title Act his client bears the onus of showing that there is a serious question to be tried which would justify leaving the caveat undisturbed (cf. Re Jorss' Caveat (1982) Qd.R. 458, 465; Ridge v. Incentive Programs Pty Ltd (in liqn) (1985) Q.Conv.R. 54-172). I do not consider that any such serious question arises on the evidence. I may say that were I of the view that the evidence raised a serious question to be tried, I should have resolved the question of balance of convenience in favour of the caveator, partly on the basis of undertakings offered on Ms Dillon's behalf, and also on the basis that a genuine proprietorial claim would be likely to be defeated because the caveatees will undoubtedly deal with the properties once the caveats are removed (cf Re Hogben (1985) Q.Conv.R. 54-157). However, the caveats should be removed because the evidence does not raise a serious question to be tried to justify their continuation, and there is no sufficient reason to suspect that a case exists. Ordinarily the application would be allowed with costs. However, it seems to me that the salient evidence upon which this result follows (particularly that of Messrs Coxon, Mutton and Hargraves) was not produced or foreshadowed until the day before the hearing of the application. Indeed, this evidence is something of a departure from earlier over-simplifications sworn to by Mr De King (see, for example, his affidavit filed on 26 July 1994). He did not expose any positive case in the defence, merely denying that Ms Dillon's money was used in the acquisition of the properties. No positive indication of the actual moneys that were used in their acquisition was given until the day before the hearing of the application. This has in all likelihood contributed to the continuation of the litigation and has certainly contributed to its magnitude. In these circumstances, there should be a substantial limitation of costs and I shall hear further submissions from counsel. -- 6 of 6 --