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Hampton v Richardson

 

[2009] QCA 328

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

Court of Appeal

PROCEEDING:

Application for Leave s 118 DCA (Civil)

ORIGINATING COURT:

DELIVERED ON:

27 October 2009

DELIVERED AT:

Brisbane

HEARING DATE:

16 October 2009

JUDGES:

McMurdo P, Keane and Muir JJA

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

  1. Application for leave to appeal refused
  2. Applicant to pay the respondent's costs of and incidental to the application for leave to appeal on the standard basis

CATCHWORDS:

LIMITATION OF ACTIONS – EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS – FRAUD AND DECEIT – where applicant commenced proceedings for breach of trust almost two decades after alleged incident – where respondent pleaded statutory bar in defence below – where primary judge found applicant raised claim of fraud in reply to avoid statutory bar – where primary judge found applicant precluded by laches from bringing action – whether leave to appeal should be granted

District Court of Queensland Act 1967 (Qld), s 68, s 83, s 118

Limitation of Actions Act 1974 (Qld), s 27

Uniform Civil Procedure Rules 1999 (Qld), r 293

Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66, cited

Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, cited

Hampton & Ors v Richardson [2009] QDC 139, affirmed

Smith v Woodward [2009] QCA 119, applied

COUNSEL:

The applicant appeared on his own behalf

The respondent appeared on his own behalf

SOLICITORS:

The applicant appeared on his own behalf

The respondent appeared on his own behalf

[1]  McMURDO P:  I agree with Keane JA's reasons for refusing the applicant, Geoffrey Robert Hampton, leave to appeal under s 118(3) District Court of Queensland Act 1967 (Qld). 

[2] The Court invited Mr Hampton to address his strongest arguments as to why he should be given leave to appeal from the primary judge's order entering judgment for the respondent, Neil Charles Richardson.  Mr Hampton raised the following matters, in addition to those dealt with by Keane JA. 

[3] He first contended that his claim was for more than $250,000 once interest was taken into account and that therefore the District Court judge did not have jurisdiction to make any orders.  That contention is nonsensical for two reasons.  First, Mr Hampton brought his claim in the District Court and did not apply to have it transferred to the Supreme Court under s 83 District Court of Queensland Act.  He can hardly complain about the court's jurisdiction in those circumstances.  It is also inconsistent with s 68(3)(c) District Court of Queensland Act which states that:

 

"in any case where it is necessary to determine whether the monetary limit is exceeded – no account shall be taken of any amount awarded or liable to be awarded in the action by way of interest on any amount." 

[4] He next contended that he was denied procedural fairness because the proceedings before the primary judge were not in closed court; there was an email after the hearing between the judge's associate and Mr Richardson to which Mr Hampton was not privy; and he had no warning of the submissions on which Mr Richardson relied at the hearing. 

[5] Ordinarily, court proceedings are held in open court.  This demonstrates the openness and transparency of the judicial system.  Mr Hampton has not demonstrated any extraordinary circumstances that might have made the conduct of his hearing in open court procedurally unfair.  He has not produced any evidence to show that there was an email between the judge's associate and Mr Richardson at about the time of the hearing.  Even accepting there was one, he has not demonstrated that it may have amounted to procedural unfairness to him.  As to his final submission on this contention, the transcript of the hearing at first instance does not suggest that he requested an adjournment to familiarise himself with the written submissions put forward on behalf of Mr Richardson.  Nor has he demonstrated that his case would have been helped had he been granted an adjournment at this time and for this purpose.

[6] Mr Hampton also contended that the judge should have understood that the delay in bringing his claim against Mr Richardson was not his fault but that it was caused by his unfortunate personal circumstances.  The only evidence as to Mr Hampton's personal circumstances being the cause of the delay was general assertions in his own affidavit.  These were not supported by independent or expert evidence.  The primary judge adverted to these matters in her reasons[1] but in the end found them an unconvincing explanation for the inordinate and gross delay in pursuing his claim against Mr Richardson.[2]  That conclusion was plainly correct.

[7] Despite this Court giving Mr Hampton every opportunity to articulate why he should be granted leave to appeal, he did not point to any error on the part of the primary judge or provide any reasonable argument to demonstrate that the order giving judgment for Mr Richardson is unjust. 

[8] For these reasons, as well as for those given by Keane JA, his application for leave to appeal must be refused with costs.

[9]  KEANE JA:  Mr Richardson is a solicitor whose client, Mr Keating, devised a "get rich quick" scheme to exploit the differential interest rates charged on loans in Australia compared to those offered overseas.  The scheme operated by borrowing offshore at low interest rates and lending those borrowed funds in Australia at higher local rates so as to produce a profit.

[10]  Mr Keating introduced the scheme to the three plaintiffs (Mr Hampton, Mr Wyatt, and Mr Herford) at a meeting in July 1990.  The plaintiffs agreed to participate in the scheme by contributing a "blocking fee", which would facilitate the raising of funds offshore.  Mr Richardson was present at the meeting. 

[11]  The plaintiffs paid their contributions into the trust account of Mr Richardson.  No profits eventuated.  Mr Hampton and Mr Wyatt recovered a portion of their capital contribution, but Mr Herford recovered none of his contribution.

The proceedings below

[12]  In 2008, almost two decades after the events in question, the plaintiffs commenced proceedings alleging that Mr Richardson breached his duty to them as trustee of the contributions paid to him.  The plaintiffs claim that Mr Richardson made statements about conditions precedent to the dispersal of the contributed funds, and that those conditions were not met before the moneys were paid away in breach of trust.  The plaintiffs allege that Mr Richardson remains in breach of his duty as trustee in failing to repay to them the balance of their capital contribution together with interest.

[13]  Mr Richardson denies that he made the statements attributed to him by the plaintiffs.  Mr Richardson alleges that Mr Keating, the plaintiffs, and two other individuals, Mr Boland and Mr Drought, constituted a syndicate headed by Mr Keating and that the instructions he received from Mr Keating were received on behalf of the plaintiffs as members of the syndicate.  Accordingly, Mr Richardson contends that he received and dispersed funds on Mr Keating's instructions on behalf of the plaintiffs and with their authority.

The issue at first instance

[14]  The plaintiffs filed their claim and statement of claim on 11 June 2008.  An amended statement of claim was filed on 13 October 2008.  Mr Richardson filed a notice of intention to defend and defence in November 2008.  In his defence, Mr Richardson denied the plaintiffs' allegations, and alleged:

 

"Alternatively, if the plaintiffs have suffered loss by reason of breach of trust or other default on the part of the defendant, then:

 

(a)such loss was suffered by reason of the payment of the defendants' funds to Wilkinson's account in or about August 1990;

(b)such loss was suffered more than six years prior to the commencement of this proceeding;

(c)accordingly, this action is barred by the operation of section 27(2) of the Limitations of Actions Act [sic]."

[15]  On 5 January 2009, the plaintiffs filed a reply, which asserted:

 

"[Mr Richardson] is estopped from setting up and relying upon … Section 27(2) of the Limitation of Actions Act because the Plaintiffs claims herein are made as beneficiaries under the trust … and [Mr Richardson] acted fraudulently in breach of that trust …"

[16]  On 18 May 2009, Mr Richardson filed an amended defence.  It stated:  "… the plaintiffs … are precluded by their laches from bringing or maintaining an action for breach of trust …"

[17]  Mr Richardson's amended defence also alleged that his files in respect of the transaction were destroyed in 2007.  Further, one of the syndicate members has died and essential witnesses cannot be located.  This was said to prejudice a fair trial in the proceedings.

[18]  On Mr Richardson's behalf an application was made to the learned primary judge for summary judgment against Mr Hampton pursuant to r 293 of the Uniform Civil Procedure Rules 1999 (Qld) ("the UCPR").  Mr Richardson also sought to have the plea of fraud in the plaintiff's reply struck out on the basis that "pleading fraud merely to defeat a limitation defence constitutes an abuse of process".  On that hearing only Mr Hampton appeared.  He represented himself.

[19]  The learned primary judge held that Mr Richardson's pleaded defence of laches denied Mr Hampton any real prospect of succeeding in his claim.  There was no need for a trial of his claim.  Her Honour entered judgment for Mr Richardson in the action by Mr Hampton.

The decision at first instance

[20]  The learned primary judge considered the arguments advanced by Mr Richardson with respect to striking out Mr Hampton's statement of claim as prejudicing a fair trial and constituting an abuse of process.[3]  Ultimately, her Honour concluded that the equitable defence of laches denied Mr Hampton any prospect of relief in equity.  Her Honour said:[4]

 

"The Plaintiffs' claim is equitable. Delay (or laches) grounds a defence to an equitable claim for compensation. In considering whether it is a complete defence to the claim consideration must be give to the length of the delay; the nature of the acts done during this period which might be of prejudice to the defendant; the justice of the matter (The Duke Group Ltd (in Liq) v Alamain Investments Ltd [2003] SASC 415 at [151] - [159]).

Mr Richardson has a solid foundation for raising that defence. The plaintiffs delayed commencing proceedings for almost 18 years after they can be assumed to have become aware of the alleged fraud. Mr Hampton contemplated civil proceedings as early as 1995 but did not act on it until 13 years later. The non-specific assertions about the impact of his personal circumstances are insufficient answer to such a lengthy delay. In the meantime he pursued a complaint against Mr Richardson which was investigated and dismissed for lack of evidence. There is no suggestion there is further evidence which might now cast doubt on the conclusion reached by the QLS. Rather, the court would be in a poorer position to assess the matter than was the QLS because documents have been destroyed, some witnesses are no longer available and those that are may be presumed to have some dimming of memory given the substantial passage of time.

Mr Richardson is gravely prejudiced. A trial is not required to establish the nature and extent of the prejudice. It is impossible for Mr Richardson to properly defend this claim given what has transpired since the transaction occurred. Particularly, delay has resulted in a loss of evidence with a considerable potential to 'cast a different complexion on the matter' (Orr v Ford (1989) 167 CLR 316 at 330). The consequences of the considerable delay render it unjust for the court to grant equitable relief. I am satisfied that laches is a complete defence to the plaintiff's claim."

[21]  Accordingly, her Honour was persuaded to exercise her discretion under r 293 of the UCPR in favour of Mr Richardson.[5]

[22]  The learned primary judge entered judgment in favour of Mr Richardson, and ordered Mr Hampton to pay costs on the standard basis.

Mr Hampton's application to this Court

[23]  Mr Hampton, on his own behalf and without legal representation,[6] seeks leave to appeal pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld).  It is the practice of this Court to grant leave to appeal pursuant to s 118(3) of the District Court Act where it is necessary to correct a substantial injustice and there is a reasonable argument that an injustice has occurred. 

[24]  Mr Hampton seeks to challenge the learned primary judge's decision on various grounds.  Mr Hampton's application is difficult to understand.  Mr Hampton's written submissions in this Court expand upon the extensive contentions made in his application, but those submissions do not disclose any other arguable ground of appeal.  On 7 September 2009, Mr Hampton filed submissions in reply in this Court, which canvass his understanding of the facts and the law in this matter.  These written submissions, which run for 15 pages, do not advance Mr Hampton's case in any intelligible way.  Mr Hampton also made oral submissions in support of his application for leave to appeal.  Understandably, Mr Hampton struggled to meet the demands of presenting his oral submissions.  It is evident that Mr Hampton is concerned with many matters, such as ongoing investigations by the Crime and Misconduct Commission, which are not relevant to the matters in issue in the present proceedings.  In particular, Mr Hampton expressed a number of complaints about the process below which did not afford a basis for concluding that the learned primary judge's decision was affected by error. 

[25]  This Court recently affirmed in Smith v Woodward:[7]

 

"The requirement of leave to appeal in s 118(3) of the District Court Act is intended to limit the extent to which litigants … may make further claims on [the judicial] system (Ferrus v Queensland Police Service [2006] QCA 57 at 5). In order to warrant a grant of leave to appeal under s 118(3) of the District Court Act, an applicant should at least "come to grips … with the task of showing how" the reasoning of the District Court judge is wrong (Saunders v Bowman [2008] QCA 112 at [17])." 

[26]  Only one of Mr Hampton's proposed grounds of appeal articulates an intelligible argument of error on the part of the learned primary judge: 

 

"Appellant [sic] seeks the vested authority of the Court of Appeal and its general powers to void the Hearing of the 22 May 2009 sighting undue prejudice borne upon the First Plaintiff [that is, Mr Hampton] by the interlocutory limitation whereby, with all due respect of Her Honour Kingham DCJ, wrongly applied s 27 (2) of the Limitation of Actions Act 1974, (That which is subject to s 27 (1) of the Act); whilst under an obligation of the Court to uphold s 27 (1) of the Limitation of Actions Act 1974, flagrantly, by non-specific performance failed to invoke s. 27 (1) of the Limitation of Actions Act 1974."

[27]  From this assertion, I take it that Mr Hampton seeks to challenge the learned primary judge's application of the Limitation of Actions Act 1974 (Qld) ("the Act") in entering judgment for Mr Richardson. 

[28]  Doing the best I can to comprehend Mr Hampton's argument, I understand it to be that the learned primary judge erred in treating s 27(2) of the Act as a complete answer to Mr Hampton's claim.  As will be seen, this argument misconceives the basis on which Mr Hampton's claim was held to fail. 

Mr Richardson's submissions

[29]  Mr Richardson relies upon the arguments that the learned primary judge accepted with respect to the equitable defence of laches.  Further, on Mr Richardson's behalf it is submitted that:

 

"The issue raised was whether, in the proceedings conducted in the lower Court should be permitted to continue in circumstances where the respondent has suffered prejudice caused by a 19 year delay between when the cause of action arose and when the action was commenced.

For the purposes of the application in the lower Court the respondent accepted that the facts are as pleaded in the amended Statement of Claim and amended Defence.  The respondent did not seek to rely on any evidence which purported to establish that one version should be preferred over the other.  In essence the argument in the lower Court was that because of the appellant's delay, it would be inequitable or otherwise unfair to permit the proceedings to continue. …"

Discussion

[30]  The learned primary judge did not err in holding that Mr Hampton's action could not succeed after delay of the order which has accrued in this case.  Mr Hampton's argument fails to appreciate that his action was bound to fail for reasons other than the operation of s 27(2) of the Act.

[31]  Section 27(2) of the Act relevantly provides that "an action by a beneficiary to recover trust property or in respect of a breach of trust … shall not be brought after the expiration of 6 years from the date on which the right of action accrued."  Section 27(2) operates subject to s 27(1), which relevantly provides that:

"A period of limitation prescribed by this Act shall not apply to an action by a beneficiary under a trust, being an action–

(a)in respect of a fraud or fraudulent breach of trust to which the trustee was a party or privy; …"

[32]  Mr Hampton's claim is an equitable claim.  Quite apart from the Act, equity does not permit the bringing of claims which are so stale that their pursuit is itself contrary to the conscience of equity.  Lord Blackburn described the principle expressed in the equitable defence of laches in Erlanger v New Sombrero Phosphate Co,[8] "a court of equity requires that those who come to it to ask its active interposition to give them relief, should use due diligence, after there has been such notice or knowledge as to make it inequitable to lie by."[9]

[33]  In this case the learned primary judge held that Mr Hampton was to be denied relief in equity because his delay in commencing his action precluded him from succeeding in his claim.

[34]  Mr Hampton argues that the learned primary judge erred by not affording him the benefit conferred by s 27(1) of the Act by way of limitation on the effect of s 27(2) of the Act upon beneficiaries who are putatively defrauded.  This argument ignores the inference drawn by the learned primary judge that Mr Hampton's claim of fraud on the part of Mr Richardson was no more than a transparently recent invention, raised, without any foundation, solely to avoid the adverse consequences that would ensue from the application of s 27(2) of the Act.  The inference drawn by her Honour was open to her. 

[35]  It is well settled that allegations of fraud must be pleaded with particularity.  Prior to the hearing of the application for summary judgment the plaintiffs had been invited to particularise the fraud involving Mr Richardson which was relied on by them.  No response was forthcoming.  In these circumstances, the learned primary judge was entitled to regard the allegations of fraud as being raised merely to delay the determination of the case on the merits and devoid of substance. 

[36]  In any event, as I have observed, Mr Hampton's claim failed, quite apart from s 27 of the Act, because it is so stale that it would be contrary to the conscience of equity to allow it to proceed.

Conclusion and orders

[37]  The decision of the learned primary judge was correct.

[38]  The application for leave to appeal should be refused.

[39]  Mr Hampton should pay Mr Richardson's costs of and incidental to the application for leave to appeal on the standard basis.

[40]  MUIR JA:  I agree with the reasons of Keane JA and with the orders he proposes.

Footnotes

[1] Hampton & Ors v Richardson [2009] QDC 139 at [8], [9].

[2] Hampton & Ors v Richardson [2009] QDC 139 at [16].

[3] Hampton & Ors v Richardson [2009] QDC 139 at [25] – [29].

[4] [2009] QDC 139 at [31] – [33] (citations footnoted in original).

[5] [2009] QDC 139 at [34].

[6] Mr Wyatt filed a notice of discontinuance in the primary proceedings. Mr Suthers, a solicitor instructed to appear on behalf of the plaintiffs, was granted leave to withdraw from the proceedings on the basis that Mr Hampton wished to represent himself, and that Mr Herford had apparently not wanted to participate in the proceedings: see Hampton & Ors v Richardson [2009] QDC 139 at
[6] – [7].

[7] [2009] QCA 119 at [16] – [17].

[8] (1878) 3 App Cas 1218.

[9] (1878) 3 App Cas 1218 at 1279. See also Bridgewater v Leahy (1998) 194 CLR 457 at 494 [125].

Close

Editorial Notes

  • Published Case Name:

    Hampton & Ors v Richardson

  • Shortened Case Name:

    Hampton v Richardson

  • MNC:

    [2009] QCA 328

  • Court:

    QCA

  • Judge(s):

    McMurdo P, Keane JA, Muir JA

  • Date:

    27 Oct 2009

Litigation History

Event Citation or File Date Notes
Primary Judgment - - QDC
Appeal Determined (QCA) [2009] QCA 328 27 Oct 2009 -
Special Leave Refused [2010] HCASL 25 11 Mar 2010 -

Appeal Status

{solid} Appeal Determined - {hollow-slash} Special Leave Refused (HCA)