IN THE SUPREME COURT OF QUEENSLAND O.S. No. 801 of 1997 TOWNSVILLE

IN THE SUPREME COURT OF QUEENSLAND O.S. No. 801 of 1997 TOWNSVILLE IN THE MATTER of The Trusts Act 1973 IN THE MATTER of COLLEEN PILCHOWSKI, RITA PILCHOWSKI and MERVYN JOHN PILCHOWSKI (RETIRING TRUSTEES) IN THE MATTER of RONALD EDWARD PILCHOWSKI and COLLEEN PILCHOWSKI (NEW TRUSTEES) IN THE MATTER of The Trusts Act 1973 O.S. No. 802 of 1997 IN THE MATTER of RONALD EDWARD PILCHOWSKI, MERVYN JOHN PILCHOWSKI and COLIN PILCHOWSKI (RETIRING TRUSTEES) -and- -and- -and- -and- IN THE MATTER of COLIN PILCHOWSKI and RITA PILCHOWSKI (NEW TRUSTEES) REASONS FOR JUDGMENT - CULLINANE J. DELIVERED THE TWENTY-NINTH DAY OF AUGUST, 1997 In these matters the applicants sought by a Summons in each matter a declaration that a Form 1 transfer from retiring trustees to new trustees dated the 30th April, 1997, is void and of no force and effect. In subsequent submissions it has been suggested that the Summons might be treated as a request for advice as to the validity of the transfer.

A brief statement of the relevant facts which are identical in each case is as follows. The applicants sought to have new trustees take the place of existing trustees and to have the new trustees registered as the proprietors of the relevant lands. The applicants did not wish the trust in either case to appear on the register. Whilst it is possible to have a trust appear on the register (See Division 6, Part 6 of the Land Titles Act 1994) it is not required that it so appear. Indeed the registration of a trust can only occur if the procedure provided for in Section 110 of the Act is followed. In seeking to have the new trustees registered as the proprietors of the lands the applicants follow what is said to be the practice of the Titles Office. In following this practice, no reference to the trust appeared in the transfer documents. In Form 24 where reference is made to the name of a trust, this was left blank. A consideration of $1-00 was shown in the Form 1. The applicants therefore sought to achieve the intended result by:- a) a transfer (showing a nominal consideration of $1.00) of the freehold title from the retiring trustees to the new trustees and subsequent registration; b) the execution of a Deed of Change of Trustees. The Commissioner of Stamp Duties has requested certain information from the solicitors for the applicants and has indicated that if requests are not complied with and information provided the Commissioner will proceed to appoint a valuer to conduct a valuation of the property. The Commissioner contends that on the face of the Form 24 and the transfer the properties are not held in trust

but as tenants in common in equal shares. In fact the transfers relate that the property is held as jointtenants. The Commissioner of Stamp Duties has expressed the view that the transfer is assessable to duty and has sought the above information. In a later letter he sought evidence as to the existence of the trust. He has expressed interest in the chronology of the acquisition of the land in relation to the establishment of the trust. The solicitor for the trustees sought the return of the transfer on an undertaking that it would not be acted upon. The Summons is entitled in the matter of the Trusts Act and contains an endorsement that it was not intended to serve it on any person. The officer of the Commission of the Office of State Revenue with whom the solicitor for the trustees was dealing was informed of the intention of the applicants to approach the Court and was asked to indicate whether he wished to obtain a copy of the material to be filed. Two days prior to the hearing the officer was forwarded copies of the material and there is some affidavit material which suggests that an indication was given by him through others that he did not intend to appear. Since the hearing the Court has received a letter from the Crown Law Office dated the 22nd August, 1997, to the following effect: The Commissioner has been served with application seeking a declaration that a Form 1 Transfer from the Retiring Trustees to the New Trustees dated 30 April 1997 is void and of no force and effect. The Commissioner has formed the opinion under Section 22(2)(b) of the Stamp Act that the document is charged with duty but is unable to assess the document until he is provided with further information which he has requested....

The Commissioner hereby informs the court that it does not intend to be represented at the hearing or make any further submission. It is clear that power to grant declaratory relief is a wide and flexible one and the authorities demonstrate the extent to its reach. In Russian Commercial and Industrial Bank -v- British Bank for Foreign Trade Ltd. (1921) 2 A.C. 438 Viscount Dunedin said at p. 448: The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought. That statement has received the approval of the High Court of Australia in a number of cases. See Forster -v- Jododex Aust. Pty. Ltd. (1972) 127 CLR 421 at p. 437 per Gibbs J., University of New South Wales -v- Moorehouse (1974-1975) 122 CLR 1, and Ainsworth -v- Criminal Justice Commission (1991-1992) 175 CLR 564 per Brennan J. at p. 596 where he said: The circumstances that call for the making of a declaration are not present if there be no real controversy to be determined. The characteristics of a controversy fit for determination by judicial declaration were stated by Viscount Dunedin in Russian Commercial and Industrial Bank -v- British Bank for Foreign Trade, Ltd: The question must be a real and not a theoretical question; the person raising it must have a real interest to raise it; he must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought. In Ainsworth the matter was put in this way in the joint judgment of Mason C.J., Dawson, Toohey and Gaudron JJ. at pp. 581 and 582:

It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which it is neither possible nor desirable to fetter... by laying down rules as to the manner of its exercise. However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have a real interest and relief will not be granted if the question is purely hypothetical, if relief is claimed in relation to circumstances that [have] not occurred and might never happen or if the court's declaration will produce no foreseeable consequences for the parties'. Whether the Commissioner might be regarded as an appropriate contradictor was not an issue. It seems clear that, whilst the documents were sent to the Commissioner, neither the applicants nor the Commissioner regarded the latter as having any real interest in resisting the relief sought. Senior Counsel for the applicants conceded that the Court could not treat the Commissioner as a respondent. The applicant primarily contended that the authorities to which I have referred should not be regarded as laying down essential pre-conditions to declaratory relief in all cases. Reference was made to some cases in which the issue was said not to be a real issue but rather hypothetical in nature. I was also referred to cases in which it was said the parties were not really in dispute and that the requirement that there be a contradictor who has a true interest to oppose the declaration sought is not an invariable one. There are authorities which fall into a category of what might be described as friendly proceedings and in which declarations have been made. An illustration of this type of case is Thorne -v- Motor Trade Association (1937) AC 797. However in a later House of Lords judgment Sunlife Assurance of Canada -v- Jarvis (1944) AC 111 Viscount Simon at p. 113 explained the rationale for the Courts entertaining a declaration in such circumstances:

What is sometimes called a friendly action is not necessarily open to this objection either in the first court or an appeal for the respective parties in such an action argue for different results and the winner gains something which he would not gain if he lost. The same comment might be made about some of the authorities upon which reliance has been made such as Dinari Ltd. -v- Hancock Prospecting Pty. Ltd. (1972) 2 NSWLR 385. In none of the cases to which I have been referred has there been a declaration granted ex parte nor has there been a declaration granted in circumstances in which competing or at least differing interests were not represented though those interests may even have been represented by the same solicitor although different counsel as in Dinari Ltd -v- Hancock Prospecting Pty. Ltd. (supra). In such circumstances, as the author of Declaratory Orders 2nd Ed. P.W. Young says at p. 204:...they are both, as reasonable men, interested in the outcome of the litigation and will govern their future relationship depending on its result. The evidence does not satisfy me that there is presently an issue of a kind required for declaratory relief and it seems clear that there is not a properly interested person who can be regarded as having a true interest to oppose the declaration sought. At one time the applicants were inclined to suggest that it was sufficient to place the matter on the basis that all trustees retiring and new (for all of whom senior counsel appeared) desired to have the issue determined. I am not satisfied that this would be sufficient to justify declaratory relief. No issue as between the trustees was identified and the circumstances generally would suggest that their interests all lie in the one

direction. I am not persuaded that there is any basis for entertaining the proceedings on these grounds. As Hutley J.A. said in Acs -v- Anderson (1974) 1 NSWLR 212 at 215: The power given to the Court is to make binding declarations of right, that is, not right in the abstract, but right as against a particular designated legal person. The author of Declaratory Orders (supra) puts the matter in this way at para. 210: The basis of the Australian Courts system is as we have seen the same as the old English system, an adversary system. To work such a system does not involve persons having rights in vacuo but the rights of the plaintiff vis a vis the defendant. Thus, not only is it necessary to have a defendant who is a proper contradictor so that the Court will have before it persons who can put before it all the appropriate material necessary for proper consideration to be made, but also unless there is a proper defendant, any res judicata will, except perhaps in a persuasive sense, be valueless to him because there will be no proper person who will be bound as a matter of law to recognise the plaintiff's alleged right. It is conceivable that a declaration of the kind sought made in the circumstances I have described might be of value to the applicants in subsequent proceedings. However this in itself cannot in my view be a basis upon which to grant a declaration. As Moffitt P. said in McGarrigle -v- Public Service Board (1979) 1 NSWLR 292 at 295: Arguments in the Johnco Nominees case (6), and findings in the present case, relied upon the claim or view, first, that a declaration would arm the plaintiff with a weapon or argument for use in negotiations with some statutory body or government, or would provide an estoppel, in some undefined or undetermined way, in proceedings in some court or tribunal; and that it would

also provide an authoritative ruling concerning the exercise of power in other cases in relation to other persons not parties to the proceedings. If this be a correct assessment of reasons for decision in the instant case, or of the argument in the Johnco Nominees case (7), with respect, these considerations do not provide a legitimate basis for the making of a declaration. I recognise that the authorities establish that the nature of the issue which is sufficient to satisfy that aspect of the necessary conditions for the granting of declaratory relief will not necessarily be defeated because there is some hypothetical element to it or because the dispute may not necessarily crystallise or that the particular issue involves only a part of a wider issue. This matter was discussed in Ainsworth (supra) and see also Chief Constable of the North Wales Police -v- Evans (1982) 1 WLR 1155. For the reasons set out above I am not persuaded that it is appropriate to grant the declaratory relief sought. It was suggested that the matter however might be approached upon the basis not of a declaration but of the answer to a question posed by the applicants as trustees under the Trusts Act whether the transfer was of legal force and effect and that it should be answered no. A course something like this was followed in Dinari Ltd. -v- Hancock Prospecting Pty. Ltd. (supra). I have already indicated that the differing interests were represented although the application might be regarded as falling within the category of friendly actions in that case. However it is plain that what the applicants are seeking is in substance a declaration whether in those express terms or in the nature of an advisory judgment that the transfer is void and of no effect. In my view it is not possible to circumvent the necessary circumstances for the granting of declaratory relief by simply posing the issue as a question.

Section 96 of the Trusts Act (1973) provides as follows: (1) Any trustee may apply upon a written statement of facts to the court for directions concerning any property subject to a trust, or respecting the management or administration of that property, or respecting the exercise of any power or discretion vested in the trustee. (2) Every application made under this section shall be served upon, and the hearing thereof may be attended by, all persons interested in the application or such of them as the court thinks expedient. This Section has a counterpart in most of the other States. In the present case the question which arises is as to the effect of a transfer in circumstances where the Commissioner of Stamp Duties has raised certain queries about the transaction. I do not think that an issue of this kind falls within the ambit of Section 96 which permits a trustee to seek directions in respect of a matter falling within the subject matters referred to in Section 96(1) and who will be protected if he acts in accordance with it. The applicants through senior counsel made it clear that the remedy which would be most suitable to their needs would be rectification of the transfer document. However as this was explained to me this would be a futility in view of the practice of the Titles Office and would not achieve any practical benefit to the applicants. It is not necessary to consider the merits of the claim that the transfer is void and of no effect or the arguments advanced in support thereof beyond noting in passing, in relation to the claim based upon a nominal consideration not intended to be paid, the remarks of Hobhouse J. in Vantage Navigation Corporation -v- Suhail

and Saud Bahwan Building Materials LLC (The ALEV ) (1989) 1 Lloyd's Law Reports 138 at 147: Ultimately the question of consideration is a formality as is the use of a seal or the agreement to give a peppercorn. The result will be both summonses are dismissed.