SUPREME COURT OF QUEENSLAND

SUPREME COURT OF QUEENSLAND CITATION: Lanai Unit Holdings Pty Ltd v Mallesons Stephen Jaques (No 2) [2016] 242 PARTIES: LANAI UNIT HOLDINGS PTY LIMITED ACN 602 697 745 as trustee for the LANAI UNIT TRUST (plaintiff) FILE NO: DIVISION: PROCEEDING: v MALLESONS STEPHEN JAQUES (A Firm) (defendant) BS10583/14 Trial Division Application DELIVERED ON: 25 October 2016 DELIVERED AT: Brisbane HEARING DATE: 9 September 2016 JUDGE: ORDER: CATCHWORDS: Jackson J The order of the court is that: 1. Paragraphs 26-49 of the further amended statement of claim are struck out. 2. The plaintiff pay the defendant s costs of the application. PROCEDURE CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS PLEADINGS STRIKING OUT DISCLOSING NO REASONABLE CAUSE OF ACTION OR DEFENCE where the plaintiff alleges that the defendant engaged in misleading or deceptive conduct against the trustee of a unit trust, and the trustee was a person who suffered loss or damage under s 82 of the Trade Practices Act 1974 (Cth) ( TPA ) where the plaintiff was appointed as replacement trustee and alleges that the TPA claim vested in it under s 15(1) of the Trusts Act 1973 (Qld) ( TA ) whether damages under s 82 of the TPA can only be recovered by a person who suffers loss or damage by the contravening conduct whether the TPA claim is property within the meaning of s 15(1) of the TA whether automatic vesting under s 15(1) of the TA is subject to the provisions of the TPA so that the TPA claim was not vested in the plaintiff whether, if s 15(1) of the TA operates to vest the TPA claim in the plaintiff, it is inconsistent with s 82 of the TPA and invalid under s 109 of The Constitution

2 Acts Interpretation Act 1954 (Qld), s 6, s 9, s 36 Bankruptcy Act 1966 (Cth), s 58 Constitution Act 1867 (Qld), s 2 Corporations Act 2001 (Cth), s 477(2)(c) The Constitution, s 106, s 109 Trade Practices Act 1974 (Cth), s 52, s 75, s 82 Trustees Act 1962 (WA), s 10 Trusts Act 1973 (Qld), s 15 Uniform Civil Procedure Rules 1999 (Qld), r 171, r 293 Akai Pty Ltd v People s Insurance Co Ltd (1996) 188 CLR 418; [1996] HCA 39, cited Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568; [2005] HCA 26, applied Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (unreported, Federal Court of Australia, Beaumont J, 7 November 1994), followed Aquatic Air Pty Ltd v Siewart [2015] NSWSC 928, cited Augustus v Permanent Trustee Company (Canberra) Ltd (1971) 124 CLR 245; [1971] HCA 25, cited Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485; [1993] HCA 15, applied Bell Group NV v State of Western Australia (2016) 331 ALR 408; [2016] HCA 21, applied BHP Coal Pty Ltd v O & K Orenstein & Koppel AG [2008] QSC 141, followed Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; [2006] FCA 1352, followed Bride v Peat Marwick Mitchell [1989] WAR 383, considered Brookfield v Davey Products Pty Ltd (unreported, Federal Court of Australia, Branson J, 8 February 1996), cited Cant, Re Novaline Pty Ltd (in liq) (2011) 282 ALR 49; [2011] FCA 898, cited Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62; [2001] FCA 1106, followed Chubb Insurance Company of Australia Ltd v Moore (2013) 302 ALR 101; [2013] NSWCA 212, cited Cotterill v Bank of Singapore (Australia) Ltd (1995) 37 NSWLR 238, considered Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22, applied Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508; [2011] HCA 33, cited Kay s Leasing Corporation Ltd v Fletcher (1964) 116 CLR 124; [1964] HCA 79, cited Loxton v Moir (1914) 18 CLR 360; [1914] HCA 89, cited MG Corrosion Consultants Pty Ltd v Gilmour (2012) 202 FCR 354; [2012] FCA 383, cited Mobil Oil Australia Pty Ltd v State of Victoria (2002) 211

3 CLR 1; [2002] HCA 27, cited Old UGC Inc v The Industrial Relations Commission of New South Wales (2006) 225 CLR 274; [2006] HCA 24, cited Park v Allied Mortgage Corporation Ltd (1993) ATPR (Digest) 46-105, followed Pritchard v Racecage Pty Ltd (1997) 72 FCR 203, considered R v Credit Tribunal; ex parte General Motors Acceptance Corporation, Australia (1977) 137 CLR 545; [1977] HCA 34, cited Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia (No 6) [2014] WASC 203, considered Solomons v District Court of New South Wales (2002) 211 CLR 119; [2002] HCA 47, cited The Owners Strata Plan No 5290 v CGS & Co Pty Ltd (2011) 81 NSWLR 285; [2011] NSWCA 168, cited Travel Compensation Fund v Blair [2003] NSWSC 720, cited UTSA Pty Ltd v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457, cited Victoria v The Commonwealth ( The Kakariki ) (1937) 58 CLR 618; [1937] HCA 82, cited Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581; [1934] HCA 3, cited Willoughby v Clayton Utz [2007] WASCA 5, explained COUNSEL: SOLICITORS: N Kidd SC for the plaintiff J McKenna QC for the defendant Levitt Robinson Solicitors for the plaintiff Thynne + Macartney for the defendant [1] Jackson J: In part, the further amended statement of claim ( FASOC ) alleges that the defendant engaged in misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ( TPA ) and that Lanai Apartments Pty Ltd as trustee of the Lanai Unit Trust suffered loss or damage. It is to be assumed that the loss or damage is alleged to have been suffered by the contravening conduct within the meaning of s 82 of the TPA. 1 The relevant allegations are made in paras 26-49 of the FASOC and I will describe these paras as the TPA claim. [2] The plaintiff is Lanai Unit Holdings Pty Ltd, not Lanai Apartments Pty Ltd. The explanation appears in paras 53 and 54 of the FASOC as follows: 53. On 7 November 2014, pursuant to clause 16.4 of the Unit Trust Deed, the Unit Holders, by instrument of appointment, appointed the plaintiff as the new trustee of the Unit Trust. 54. By operation of section 15(1) of the Trusts Act 1973 (Qld), the trust property of the Unit Trust was vested in the plaintiff by the instrument of appointment on 7 November 2014. 1 For the purposes of these reasons, it is unnecessary to separately consider s 87 of the TPA.

4 [3] The plaintiff alleges that in the circumstances the rights of the former trustee against the defendant vested in the plaintiff on 7 November 2014, including the TPA claim. [4] By par 45 of the defence the defendant alleges: 45. As to paragraphs 54 and 55 of the Statement of Claim, the Defendant: (a) (b) denies as untrue that the causes of action alleged under the TPA, in paragraphs 26-49 of the Statement of Claim, were assigned to or vested in the Plaintiff, because those causes of action are not assignable or transferable to a person or entity that did not suffer the loss claimed; otherwise, does not admit the allegations, because it has undertaken reasonable investigations but is unsure of the truth or falsity of the allegations made. [5] The defendant now applies to strike out the TPA claim on the ground that it does not disclose a reasonable cause of action 2 or for summary judgment 3 on the TPA claim on the ground that the plaintiff does not have a real prospect of success on that part of the plaintiff s claim. Because the application was argued in the way of a demurrer, on the assumption that the facts alleged in the FASOC are true but without me deciding any question of fact that would necessarily lead to a judgment, I propose to proceed under r 171. Section 82 of the TPA [6] At the relevant times, s 82(1) of the TPA provided: Subject to subsection (1AAA), a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVA, IVB or V or section 51AC may recover the amount of the loss or damage by action against that person or against any person involved in the contravention. (emphasis added) [7] The defendant submits that a line of cases starting with Park v Allied Mortgage Corporation Ltd 4 is authority for the proposition that damages under s 82 of the TPA for contravention of s 52 can only be recovered by a person who suffers loss by contravening conduct within the meaning of s 82(1). 5 The defendant submits 2 Uniform Civil Procedure Rules 1999 (Qld), r 171. 3 Uniform Civil Procedure Rules 1999 (Qld), r 293. 4 (1993) ATPR (Digest) 46-105. 5 The full list of the cases considering the issue (in different contexts including at trial, on the hearing of a separate question and on applications for summary judgment, joinder or strike out) is as follows: Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (unreported, Federal Court of Australia, Beaumont J, 7 November 1994), 19; National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514, 538-539; Brookfield v Davey Products Pty Ltd (unreported, Federal Court of Australia, Branson J, 8 February 1996); Pritchard v Racecage Pty Ltd (1997) 72 FCR 203; Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62; Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd (2004) 220 ALR 267; Boston

5 that the construction of s 82 given by the many cases on which it relies has the effect as if the relevant part of the text of s 82(1) emphasised earlier expressly provided: [only] a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Pt V may recover the amount of the loss or damage by action... [8] I accept that submission. In reaching that conclusion, among the relevant cases, I mention Park, Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd, 6 Pritchard v Racecage Pty Ltd, 7 Chapman v Luminis Pty Ltd (No 4), 8 Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd 9 and BHP Coal Pty Ltd v O & K Orenstein & Koppel AG. 10 [9] Most of those cases were concerned with the question whether a person who suffers loss or damage under s 82 can assign their claim to another person, but not all of them can be explained on that basis. In particular, Pritchard v Racecage Pty Ltd considered the effect of a Territory statute that provided for survival of causes of action of a person who dies as part of the property of their estate. 11 [10] Paragraph 54 of the FASOC alleges that s 15(1) of the Trusts Act 1973 (Qld) ( TA ) operated in law to vest the former trustee s cause of action in the plaintiff. Sub-section (1) provides: (1) Where a new trustee is appointed the instrument of appointment vests, subject to the provisions of any other Act, the trust property in the persons who become and are the trustees as joint tenants without any conveyance, transfer or assignment. [11] The defendant submits that it is unnecessary to consider whether s 15(1) purports to operate upon a former trustee s claim for damages under s 82 of the TPA. The source of that submission seems to lie in Pritchard v Racecage Pty Ltd where the Full Court of the Federal Court said: However, in my view, the estate of the deceased can not satisfy the statutory requirement of s 82 of the [TPA] of being a person who suffers loss or damage. Nor can the estate, in my view, satisfy the statutory requirements of s 87 of the [TPA] of being a person Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 236 ALR 720; Salfinger v Niugini Mining (Australia) Pty Ltd (No 3) [2007] FCA 1532, [109]-[110]; BHP Coal Pty Ltd v O & K Orenstein & Koppel AG [2008] QSC 14, [76]; Pearl Coast Divers Pty Ltd v Cossack Pearls Pty Ltd (2008) 249 ALR 59, 593 [7]; No Taswind Farm Group lnc v Hydro-Electric Corporation (No 1) [2014] FCA 347; Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia (No 6) [2014] WASC 203, [16]-[22]; Aquatic Air Pty Limited v Siewert [2015] NSWSC 928. And see Tosich v Tasman Investment Management (2008) 250 ALR 274, 286 [37]-[38]; MG Corrosion Consultants Pty Ltd v Gilmour (2012) 202 FCR 354; Cant, Re Novaline Pty Ltd (in liq) (2011) 282 ALR 49, 359 [19]; QNI Resources Pty Ltd v Sino lron Pty Ltd [2016] QSC 62, [100]. 6 (unreported, Federal Court of Australia, Beaumont J, 7 November 1994), 19. 7 (1997) 72 FCR 203, 218. 8 (2001) 123 FCR 62, 116-117 [204]-[206]. 9 (2006) 236 ALR 720, 733 [52]-[53]. 10 [2008] QSC 141, [76]. 11 Law Reform (Miscellaneous Provisions) Act 1956 (NT), s 5; cf Succession Act 1981 (Qld), s 66.

6 who is a party to the proceeding or a person who has suffered, or is likely to suffer, loss or damage : Park v Allied Mortgage Corporation Ltd; National Mutual Property Services (Australia) Pty Ltd v Citibank Savings Ltd. For similar reasons to those set out under the heading Question 2 concerning the rule in Baker v Bolton, I am of the view that the Law Reform (Miscellaneous Provisions) Act 1956 (NT), which provides for the survival of actions to the estate of a deceased person, has no relevance to the proper construction of ss 82 and 87 of the [TPA]. 12 (citations omitted) [12] However, in my view, that language cannot foreclose the question of the application of s 15 of the TA raised by par 54 of the FASOC. In this context, has no relevance is a shorthand way of saying either that properly construed s 15(1) does not apply to the TPA claim or that if it purports to do so it is invalid. The initial question, therefore, is whether the TPA claim is property within the meaning of s 15. [13] The term property is not defined in the TA. 13 However it is defined by the Acts Interpretation Act 1954 (Qld) ( AIA ) as follows: 14 Property means any legal or equitable estate or interest (whether present or future, vested or contingent, or tangible or intangible) in real or personal property of any description (including money), and includes things in action. [14] The width of the interests included by those words is apparent. The correct approach to the proper construction of s 15(1) calls for the interpolation of the text of the definition into the text of the provision. 15 Thus, s 15(1) provides, in part, that: Where a new trustee is appointed the instrument of appointment vests, subject to the provisions of any other Act, the trust interest (whether future or intangible) in personal property of any description and include[ing] things in action in the persons who become and are the trustees as joint tenants without any conveyance, transfer or assignment. [15] There is no decision of which I am aware on the present question. The closest comparator is Rosebridge Nominees Pty Ltd v Commonwealth Bank of Australia (No 6). 16 That case concerned s 10 of the Trustees Act 1962 (WA), which corresponds to s 15 of the TA. Notwithstanding s 10, Le Miere J decided that a cause of action for damages under s 82 of the TPA was not able to be maintained by a new trustee appointed in place of a former trustee because the former trustee was the person who suffered loss or damage. 12 (1997) 72 FCR 203, 218-219. 13 The definition of trust property in s 5 of the Trusts Act 1973 (Qld) uses the word property but does not define it. 14 Acts Interpretation Act 1954 (Qld), s 36(1) and Sch 1 (definition of property ). 15 Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568, 574-575 [12]. 16 [2014] WASC 203, [22]-[24].

7 [16] There are a number of cases dealing with insolvency, whether by bankruptcy or company winding up, that are relevant. [17] In the context of a company winding up, the question has arisen whether a liquidator is able to sell and assign a claim under s 82 of the TPA under s 477(2)(c) of the Corporations Act 2001 (Cth) ( CA ). Some cases have proceeded on an assumption that it can be done. 17 Others take a contrary view. 18 The answer to this question is not authoritatively decided at present. In my view, it is a question of the proper construction of ss 477(2)(c) and 82. It is not necessary, or possible in my view, to reconcile the cases under s 477(2)(c). [18] As to bankruptcy, s 58(1)(a) of the Bankruptcy Act 1966 (Cth) ( BA ) provides: (1) Subject to this Act, where a debtor becomes a bankrupt: (a) the property of the bankrupt, not being afteracquired property, vests forthwith in the Official Trustee or, if, at the time when the debtor becomes a bankrupt, a registered trustee becomes the trustee of the estate of the bankrupt by virtue of section 156A, in that registered trustee [19] In 1989 in Bride v Peat Marwick Mitchell 19 a bankrupt husband and wife commenced an action making claims against a firm of chartered accountants. The question arose whether their claims had vested in their trustee in bankruptcy. If they had done so the plaintiffs had no standing to sue the defendants. Malcolm CJ said: In Bride v Australian Bank Ltd and Stewart (unreported; Federal Court, French J, 26 July 1988) it was held that a claim by the appellants against the bank and Stewart for damages for conspiracy and false, misleading and deceptive conduct and a claim to set aside the sale of the business of Oatmilling of Katanning was a chose in action which had vested in the trustee and remained so vested, notwithstanding discharge. The claim for damages in that case was based upon similar allegations to those made by the appellants in the present case. The decision of French J was affirmed by the Full Court of the Federal Court in Bride v Australian Bank and Stewart; (unreported, Federal Court, Beaumont, Burchett and Lee JJ, 5 December 1988). Thus, both at first instance and on appeal the Federal Court reached the same conclusion on the standing point. 20 17 Cant, Re Novaline Pty Ltd (in liq) (2011) 282 ALR 49, 54 [21]; UTSA Pty Ltd v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 457, 463. 18 Brookfield v Davey Products Pty Ltd (unreported, Federal Court of Australia, Branson J, 8 February 1996); on appeal (unreported, Full Court of the Federal Court of Australia, von Doussa, O'Loughlin & Lehane JJ, 12 September 1996); Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62, 116-117 [205]-[207]; Aquatic Air Pty Ltd v Siewart [2015] NSWSC 928, [87]. 19 [1989] WAR 383. 20 [1989] WAR 383, 393.

8 [20] Similarly, in 2007 in Willoughby v Clayton Utz 21 the plaintiff when bankrupt started a proceeding against a firm of solicitors. It is not entirely clear whether a claim was made under the TPA. However, the court at first instance dismissed the proceeding on the basis that the cause of action against the defendant was property within the meaning of the BA and therefore vested in the trustee in bankruptcy at the date on which they accrued. 22 The decision was not overturned on appeal. [21] In my view, Bride at least arguably supports the conclusion that a claim for damages under s 82 of the TPA is capable of constituting property. Although the claim may not be assignable, it is a right of action of value that can be vested as property under the BA and is capable of being realised into money by enforcement by the trustee under that Act. [22] A similar conclusion was reached in 1995 in Cotterill v Bank of Singapore (Australia) Ltd. 23 At that time, s 5(1) of the BA defined property to mean, in part: personal property of every description and includes any interest or profit, whether present or future, vested or contingent arising out of or incidental to any such personal property. [23] The question in Cotterill was whether a claim, like the TPA claim in this case, was vested in a trustee in bankruptcy, as property of the bankrupt, by s 58(1) of the BA and able to be sold by the trustee in bankruptcy under s 134(1) of the BA. After a consideration of the history and interpretation of similar provisions under earlier legislation, Bainton J said: This examination of the New South Wales and of the Commonwealth legislation leads me to conclude, first that both were modelled upon the United Kingdom legislation commencing with the Bankruptcy Act 1869; secondly that the construction put upon that Act by the English decisions to which I have referred is equally applicable to and should be put upon the present Commonwealth Act; thirdly that property of the bankrupt as defined in s 5(1) of the present Commonwealth legislation which passes to the Official Trustee and which may be realised by him includes what may be described as a bare chose in action such as one relying upon s 52 of the Trade Practices Act 1974 (Cth) and finally, for the reasons enunciated by Brett LJ in Seear v Lawson and by Chitty J in Guy v Churchill that the bankruptcy legislation authorises a disposal which would, apart from such legislation, be champertous and for that reason not recognisable by any Court. 24 (emphasis added) [24] Despite that reasoning, the defendant submits that the operation of the BA to vest a claim in a trustee in bankruptcy should be treated as one arrived at by the process of construing the TPA and BA together as Acts of the same Parliament. It submits that does not undermine the proposition that the TPA claim is not property under the TA 21 [2007] WASCA 5. 22 [2007] WASCA 5, [18]. 23 (1995) 37 NSWLR 238. 24 (1995) 37 NSWLR 238, 254.

9 because it is confined to the former trustee as the person who suffered any loss or damage by any contravening conduct. [25] The legislative purpose and general effect of, inter alia, s 15 is described in Ford and Lee, The Law of Trusts, 25 as follows: It is important that the property of the trust and the powers, authorities and discretions of the trustees should be vested in newly appointed trustees either upon their appointment or as soon as possible afterwards; and as far as it effectively can statute attempts to do this It is possible by legislation to vest chattels in new trustees merely by virtue of the document of appointment; but for the vesting of more sophisticated forms of property, in particular land and choses in action, further steps must be taken The effect of these provisions is that the appointment of new trustees operates as a statutory assignment of the trust property vesting it in the new trustees, and divesting it from the trustees whom they replace But effective as the assignment may be as between the former trustees and those who replace them the new trustees will be under a duty to perfect their title by notifying the relevant obligors or by registration as may be required by the character of each particular item of the trust property. [26] Having regard to the definition of property from the AIA set out above, and using that definition for the purposes of s 15 of the TA, it seems to me that a claim for damage under s 82(1) of the TPA is capable of constituting property within the meaning of s 15(1) of the TA. The conclusion that s 15(1), generally speaking (and subject to the proviso to be discussed next), is intended to operate widely on all rights and interests is supported by the text, the legislative purpose, and the decision of the High Court upon a comparator provision in Loxton v Moir. 26 [27] The remedial purpose of s 15(1), as the general machinery to effect the transfer of property comprising all forms of rights and interests by automatic vesting, subject to the proviso, is illustrated by the decision in Loxton that a chose in action not assignable at common law was vested by the operation of a similar provision. [28] The defendant submits that notwithstanding the reasoning in Loxton or the bankruptcy cases, the TPA claim is not property under s 15 of the TA because it is a personal right not capable of constituting a thing in action. It principally relies on two cases: MG Corrosion Consultants Pty Ltd v Gilmour 27 and The Owners Strata Plan No 5290 v CGS & Co Pty Ltd. 28 [29] In MG Corrosion, Barker J held that a right of action under s 1317H of the CA was not assignable and therefore did not constitute a thing in action. 29 In The Owners 25 Ford and Lee, The Law of Trusts (Law Book Co, 3 rd Ed, 2016), [8390]-[8400]. 26 (1914) 18 CLR 360. 27 (2012) 202 FCR 354. 28 (2011) 81 NSWLR 285. 29 (2012) 202 FCR 354, 359 [18].

10 Strata Plan No 5290, the Court of Appeal of New South Wales held that a building contract that was expressly agreed not to be assignable did not constitute a chose in action or property that a liquidator could sell or assign. 30 These cases support a powerful argument against the TPA claim constituting a thing in action, but that may not exhaust the relevant inquiry as to the meaning of property in s 15(1). [30] In the end, I find it unnecessary to decide the width of the meaning of property in s 15(1). Instead, I proceed by assuming that the TPA claim is capable of constituting property within the meaning of s 15(1). Proviso to s 15(1) [31] The defendant submits that if the TPA claim is capable of constituting property under s 15(1), that section does not apply to it because it is excluded by the operation of the proviso, namely that vesting of property by automatic transfer under s 15(1) is subject to the provisions of any other Act. The defendant submits that the TPA is such an Act, and that its provisions are inconsistent with s 15(1) of the TA operating to vest the TPA claim in the plaintiff. [32] By s 6(1) of the AIA, the word Act in an Act means an Act of the Queensland Parliament. Clearly, that meaning would not include the TPA as an Act of the Commonwealth Parliament. However, that definition may be displaced if the context or subject matter otherwise indicates or requires. 31 [33] The text of s 15(1) was proposed by the Queensland Law Reform Commission in A Report of the Law Reform Commission on the Law Relating to Trusts, Trustees, Settled Land and Charities, 32 with the following comment about the proviso: Clause 15 makes provision, consequential upon the preceding three clauses, for automatic vesting of trust property in the event of appointment of new trustees or retirement. The operation of special formalities regulating transfer of various forms of property is preserved in cl. 15(3), which has been redrawn in the light of criticism that the original provision contained in the Working Paper did not take sufficient account of the very wide variety of forms of property registration under various enactments in this State, e.g., the Real Property Acts, Land Act, The Miners Homestead Leases Acts, etc. One of the difficulties in formulating an appropriate provision is that in the case of some of these Acts the process of registration is as much the product of practice as of statutory enactment. But we believe that the provision which we now propose will cater for this contingency, as well as for that which has also been mentioned to us, namely the requirement of Ministerial or other consent to dealings with certain kinds of property. 30 (2011) 81 NSWLR 285, 300-302 [64]-[75]. 31 Acts Interpretation Act 1954 (Qld), s 32A. 32 QLRC No. 8 (1971) pp 14-15.

11 [34] Notwithstanding its remedial purpose and the apparent width of the language of s 15(1) to achieve the purpose of automatic vesting, there are some limits to the operation of s 15(1) in addition to the exceptions created by the proviso. [35] For example, the proviso would except from automatic vesting a legal interest in land held under the Land Title Act 1994 (Qld) because a legal interest land under that Act may only be transferred by registration under that Act. However, a trustee of a trust situated in Queensland may hold land under the equivalent New South Wales Act, under which a legal interest in the land can only be transferred under the New South Wales Act. It was not suggested that s 15(1) would operate to automatically transfer the legal title to land under those Acts because the proviso does not extend to an Act made by another Parliament. These examples could be multiplied to illustrate that the interpretation urged in reliance on s 6 of the AIA should not be adopted. [36] This case is not an occasion for a detailed consideration of the legal discourse upon the constitutional operation of a Queensland Act. But the existence of that legal framework and its effect does bear upon the proper construction of s 15(1) and its operation in relation to s 82 of the TPA and the TPA claim. [37] Of course, s 15(1) is a law enacted for the peace welfare and good government of the State of Queensland, then supported under s 2 of the Constitution Act 1867 (Qld) and the federal compact made under The Constitution as recognised in s 106. Subsequent developments, including ss 2, 3 and 6 of the Australia Act 1986 (UK) and s 8 of the Constitution of Queensland 2001 (Qld) do not affect that. [38] The limit of the State s constitutional power would not have supported a law simply providing for the transfer of property of interstate or Territory trusts because of the absence of a territorial connection. 33 But it was not suggested in argument that s 15(1) could not validly provide for automatic vesting of property located interstate or in a Territory held by a trustee of a trust of which the law of Queensland was the proper law. [39] The general rule of construction is that State legislation applies only to, inter alia, things in and of the State. 34 There is also a presumption that statutory provisions are understood as having no application to matters governed by foreign law. 35 But the presumption is subject to a contrary intention. 36 [40] In the common law of private international law, the administration of a trust is governed by the proper law of the trust. In Australia, it was once common for a trust to be constituted in one State or Territory with an express selection of another State or Territory s laws as the law for the administration of the trust in an attempt to avoid the operation of some local statutes of the jurisdiction of administration, particularly taxing Acts. A question may arise as to the application of the statutory 33 Mobil Oil Australia Pty Ltd v State of Victoria (2002) 211 CLR 1, 22 [9], 34 [48] and 53-54 [112]; cf Akai Pty Ltd v People s Insurance Co Ltd (1996) 188 CLR 418, 443. 34 Solomons v District Court of New South Wales (2002) 211 CLR 119, 130 [9]; see also Acts Interpretation Act 1954 (Qld), s 35. 35 Wanganui-Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581, 601. 36 Old UGC Inc v The Industrial Relations Commission of New South Wales (2006) 225 CLR 274, 283 [23]; Chubb Insurance Company of Australia Ltd v Moore (2013) 302 ALR 101, 132-133 [144]- [147].

12 laws of the selected State to trusts constituted interstate. 37 The difference may matter as even similar laws in different jurisdictions may be held to operate differently. [41] It is not necessary to analyse the case law further for the purposes of this case. It supports the conclusion that s 15(1) does not automatically vest all property of a trust except where that would be inconsistent with a Queensland Act. In my view, it is not intended that s 15(1) would operate irrespective of the restrictions upon the transfer or vesting of property that may exist under the laws of another State or Territory applying to that property. [42] Against that background, the defendant submits that the proviso operates to exclude from automatic transfer the right of a person to recover damages under s 82 of the TPA, because properly construed s 82(1) provides that only the person who suffers the loss or damage may recover it by action. [43] Initially I was concerned that this point gave a meaning to the proviso which was wider than the ordinary meaning of the text. However, I have concluded that s 15(1) including the proviso is properly construed to exclude from automatic transfer property that an Act of another State or Territory Parliament provides may not be transferred. In substance, s 15(1) is a machinery provision, and is not intended to operate to override the operation of a contrary applicable statute, whether it is a law of Queensland or another jurisdiction in the Australian federation. [44] It seems but a small step from that point to conclude further that properly construed s 15(1) does not operate to automatically vest property contrary to a law being an Act of the Commonwealth. [45] The defendant relies on s 9(1) of the AIA which provides in effect that an Act of the Queensland Parliament is to be interpreted as operating to the full extent of, but not to exceed, Parliament s legislative power. [46] I am not persuaded that s 9(1) is applicable here. The limit of legislative power raised by the defendant is that if s 15(1) would operate to vest the TPA claim it is inconsistent with s 82(1) and invalid to the extent of the inconsistency under s 109 of The Constitution. [47] But invalidity under s 109 does not turn on the legislative power of a State Parliament. Section 109 operates where there is a conflict between an otherwise valid State law and a valid Commonwealth law. It invalidates a State law in effect by providing that the Commonwealth law is paramount. The State law remains fallow, underlying the paramount Commonwealth law and invalidated only to the extent of the inconsistency and only for so long as the Commonwealth law remains. To the extent that it is not inconsistent the State law continues to operate. If the Commonwealth law is repealed, the previously inconsistent State law operates from that point. [48] There is no occasion under s 109 or otherwise to interpret the State law as having a meaning limited to the extent of any inconsistency under s 109. If that were the 37 See, for example, Augustus v Permanent Trustee Company (Canberra) Ltd (1971) 124 CLR 245, 259; Compare Kay s Leasing Corporation Ltd v Fletcher (1964) 116 CLR 124, 143-144.

13 proper construction, upon repeal of the Commonwealth law the State law would not operate from that point. [49] Even though the answer does not lie in s 9(1) of the AIA, in my view, s 15(1) should still be construed to operate so that it does not apply to effect an automatic vesting where an Act of the Commonwealth relating to property would prohibit or restrict transfer or vesting of that property. [50] It follows, accordingly, that if the TPA claim is property within the meaning of s 15(1), still the subsection did not vest the TPA claim that Lanai Apartments Pty Ltd may have had as trustee in the plaintiff when the plaintiff was appointed as the new trustee of the Lanai Unit Trust under the Lanai Unit Trust Deed. [51] Accordingly, in my view, on that ground the defendant s application to strike out the relevant parts of the FASOC must succeed. Section 109 of The Constitution [52] However, if I were wrong in that conclusion, there would remain a question whether s 15(1) of the TA is inconsistent with s 82(1) of the TPA by operating to vest the TPA claim in the plaintiff, so that to the extent of the inconsistency it shall be invalid under s 109 of The Constitution. [53] Because I have reached the view that s 15(1), properly construed, does not automatically vest the TPA claim, it is unnecessary to express my views about s 109 in detail. [54] The plaintiff relies upon s 75(1) of the TPA. That section provided in effect that Pt V of the TPA was not intended to exclude or limit the concurrent operation of any law of a State or Territory. Section 82 is in Pt VI, not Pt V. However, I do not find it necessary to consider whether s 75 had any effect on the operation of s 82. 38 The relevant question in this case is one of direct inconsistency as that expression is used in this area of discourse. The answer to that question is not affected by a statement of intention such as that made in s 75(1). 39 [55] The most recent decision of the High Court on direct inconsistency under s 109 is Bell Group NV v State of Western Australia. 40 That case reaffirms the continuing relevance of the question whether the State law would alter, impair or detract from the operation of a law of the Commonwealth Parliament, 41 a test first articulated in 1937 in The Kakariki. 42 [56] I have accepted the defendant s submission that the construction of s 82 given by the many cases on which it relies has the effect as if the relevant part of the text of s 82(1) emphasised earlier expressly provided: 38 Compare Travel Compensation Fund v Blair [2003] NSWSC 720, [75]-[76]. 39 R v Credit Tribunal; ex parte General Motors Acceptance Corporation, Australia (1977) 137 CLR 545, 563-564. 40 (2016) 331 ALR 408. 41 (2016) 331 ALR 408, 422 [51]. 42 Victoria v The Commonwealth ( The Kakariki ) (1937) 58 CLR 618, 630; and see Jemena Asset Management (3) Pty Ltd v Coinvest Ltd (2011) 244 CLR 508, 523-524 [36]-[39].

14 [only] a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Pt... V may recover the amount of the loss or damage by action... [57] The plaintiff submits that at trial it might be found that s 82 should not be construed in that way in relation to the TPA claim. But, in my view, that finding is not open to a judge of the Trial Division of this court at trial. That question of construction has been decided at the level of an intermediate Court of Appeal in the Full Court of the Federal Court in Pritchard v Racecage Pty Ltd and a judge of this court is bound to follow that decision on the proper construction of a section of Commonwealth legislation unless convinced that it is clearly wrong. 43 [58] From that point, it follows that the operation of s 82 does not permit a person who is not the person who suffers loss or damage by the conduct done in contravention of s 52 to recover any damages for loss or damage under that section, subject to the operation of bankruptcy and winding up laws. [59] To the extent that s 15(1) would vest the TPA claim in the plaintiff it would confer a right to recover any loss or damage under s 82 upon a person who is not the person who suffered the loss or damage. [60] In my view, that would be a clear alteration, impairment or detraction from the operation of s 82 and to that extent would be invalid under s 109 of The Constitution. [61] On that alternative ground, the defendant s application to strike out the relevant parts of the FASOC or to dismiss the proceeding would also succeed. 43 Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, 492; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 151-152 [135].