Interfinancial Limited v Squadron Boat Sales Pty Ltd
[2006] QDC 53
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- Interfinancial Limited v Squadron Boat Sales Pty Ltd[2006] QDC 53
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Interfinancial Limited v Squadron Boat Sales Pty Ltd[2006] QDC 53
Interfinancial Limited v Squadron Boat Sales Pty Ltd[2006] QDC 53
DISTRICT COURT OF QUEENSLAND
CITATION: | Interfinancial Limited v Squadron Boat Sales Pty Ltd [2006] QDC 053 |
PARTIES: | INTERFINANCIAL LTD Plaintiff v SQUADRON BOAT SALES PTY LTD Defendant |
FILE NO/S: | BD1323/05 |
DIVISION: | |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court, Brisbane |
DELIVERED ON: | 10 March 2006 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 3 March 2006 |
JUDGE: | McGill DCJ |
ORDER: | Summary judgment refused; application otherwise adjourned; costs reserved. |
CATCHWORDS: | TRUSTS AND TRUSTEES – Quistclose trust – whether creditor entitled to enforce trust to pay money to nominated creditors. Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (1978) 141 CLR 335 – cited. Re Australian Elizabethan Theatre Trust (1991) 30 FCR 491 – considered. Mercantile Mutual Insurance (Aust) Ltd v Farrington (1996) 130 FLR 365 – considered. Thiess Watkins White Ltd v Equiticorp Australia Ltd [1991] 1 Qd R 82 – considered. Twinsectra Ltd v Yardley [2002] 2 AC 164 – considered. |
COUNSEL: | G. D. O'Sullivan for the plaintiff D. P. O'Brien for the defendant |
SOLICITORS: | James Watt & Co for the plaintiff Brian Bartley and Associates for the defendant |
- [1]This is an application for summary judgment under rule 292, in respect of part of the plaintiff’s claim, and for further and better particulars. Ultimately the application in its latter respect was not pressed at this time, and is appropriately adjourned, for reasons that will emerge from the history of the action.
History of the action
- [2]The action was started by a claim filed on 15 April 2005 claiming $91,438.07 for services rendered by the plaintiff to the defendant together with interest. It was alleged that the services had been rendered pursuant to an agreement made on 21 June 2004. On 8 June 2005 a notice of intention to defend and defence were filed; the latter alleged that the plaintiff had breached certain implied terms of the agreement, as a result of which the plaintiff was not entitled to payment pursuant to the agreement. In addition it was not admitted that the plaintiff had expended time or incurred outlays to the extent alleged, and alleged that the time taken was unreasonable and unnecessary for the provision of the services, and that any outlays were incurred without the authority of the plaintiff and were therefore not recoverable.
- [3]On 13 December 2005 an amended statement of claim was filed which alleged that a named third party had in two payments in 2004 paid a sum of money to the defendant “as funds earmarked for the specific purpose of paying nominated creditors specified amounts” and the funds were held in trust by the defendant for that purpose, that the payments included a one-third share of the amount claimed in the action and $11,000 previously paid by the defendant and referred to elsewhere in the pleading, and that on or about 9 December 2004 the third party had informed the plaintiff that this payment had been made. It was alleged that as a result the defendant held $30,479.36, being one-third of the amount outstanding to the plaintiff, on trust for the plaintiff, and claimed payment of that sum as money held by the defendant on trust for the benefit of the plaintiff.
- [4]There had been no pleading to the amended statement of claim filed prior to 16 February 2006 when the application was filed seeking summary judgment in respect of that part of the plaintiff’s claim based on the enforcement of the trust for the share of the money paid by the third party. However, on 1 March 2006, before the application was heard, an amended defence and counterclaim were filed on behalf of the defendant. That asserted a breach of the agreement by way of a counterclaim for damages, but raised an entitlement to set off the amount recoverable under the counterclaim against any moneys owing to the plaintiff. The defendant alleged that part of the services which the plaintiff alleged it carried out for the defendant, and which the defendant admitted the plaintiff had agreed to provide, were part of a commercial due diligence to be undertaken by the plaintiff in respect of the defendant’s business. It was alleged that this occurred in the context of a proposal for the defendant and another to form a joint venture, and a proposal for the third party referred to earlier to invest in this proposed joint venture, subject to the commercial due diligence. It was alleged that the reports prepared by the plaintiff for this purpose were prepared without the exercise of reasonable care and skill, and that as a result they were inaccurate, and gave an incorrect impression as to certain matters. It was further alleged that as a result of that breach, the third party withdrew its offer to invest and the proposed joint venture never proceeded.
- [5]I can see that in principle such a claim could exist, although it might be difficult to prove. It would be necessary to show that the plaintiff’s work was done without reasonable care and skill, and that if it had been done with reasonable care and skill it would have produced a report with which the proposed financier would have been satisfied, so that the proposed joint venture would have proceeded, and further, that the defendant is worse off because of this, that is worse off because the joint venture did not proceed. Paragraph 24 appears to base the claim specifically on the proposition that the defendant was put to expense in exploring the proposed joint venture in the sum of over half a million dollars, which expense would have been reimbursed had the joint venture proceeded. On the basis of this the defendant claimed damages for breach of contract in a sum approaching $1.7 million.
- [6]It is not at all clear from the pleading how what appears to have been a wasted costs claim for damages of just under $560,000[1] becomes a claim for damages of three times that amount, but in either case, the claim is for an amount in excess of the jurisdiction of this court. Section 86 of the District Court of Queensland Act therefore applies; either party has 14 days in which to apply to the Supreme Court to transfer the action to that court. This court has jurisdiction in respect of the counterclaim only if that period expires with neither party making such an application, or the application being made but the Supreme Court deciding that the counterclaim should remain in this court. The period of 14 days not having expired, it seems to me clear that I have no jurisdiction at the moment in relation to the counterclaim.
- [7]The plaintiff had delivered a request for particulars which sought particulars under four headings. Two of them have apparently been provided, and the two that the plaintiff sought to pursue were of paragraphs in the defence which were omitted in the amended defence. Counsel for the plaintiff submitted that those paragraphs have now become in effect part of the counterclaim, but it seems to me that so long as this court has no jurisdiction in relation to the counterclaim it necessarily follows that it has no jurisdiction to order particulars of the counterclaim. In those circumstances the application, so far as it seeks particulars of the counterclaim, must be adjourned for consideration, if it is pressed, in time by whatever court ultimately comes to have jurisdiction.
Background to the claim
- [8]The facts underlying the plaintiff’s claim based on the trust are straightforward enough, and all appear from correspondence[2] or the affidavit read on behalf of the defendant.[3] The third party referred to earlier provided a letter of intent by which it agreed to contribute one-third to the costs payable by the defendant. The affidavit does not exhibit a copy of the letter of intent and does not clarify what is meant by costs payable by the defendant, but in due course the defendant claimed to the third party that those costs included both the amount already paid to the plaintiff and the amount the plaintiff now claims. In about August 2004 the defendant sought a payment on account of this contribution, and the third-party paid $75,000 to the defendant which was said on behalf of the defendant not to have been paid in respect of any particular invoices or costs incurred to that date.
- [9]After the third party withdrew from the proposed deal, its representative advised that it was keen to finalise its involvement with the transaction as soon as possible. The defendant on 23 November 2004 sent the third party “the accounting for the proposed Shipworks Group transaction based on invoices we have to hand. Noted are the outstanding invoices as well as the invoices that have been settled. Backup documentation of the accounts has been provided for your book keeping needs. We look forward to receiving payment by return.” Attached was a list of “expenses incurred” to 10 different entities, in a total of $566,437.32. The list included the amount of $102,438.07 to the plaintiff, of which $11,000 was said to have been paid and $91,438.07, the amount claimed by the plaintiff in the action, to be outstanding. On the basis that these figures, the share payable by the third party was said to be $188,812.44[4], credit was given for the $75,000 already paid, and the balance said to be owing was the $113,812.44.
- [10]The third party replied on 9 December 2004 that it was satisfied that “the payments you propose to make to the parties identified in the schedules are within the obligation” of the third party to contribute under the letter of intent. There was some complaint about a failure to comply with the accounting requirements of the letter of intent, but a cheque for the amount claimed, $113,812.44 was enclosed, said to be the third party’s “pro rata share of the consulting fees identified in your schedule”.
- [11]The letter continued:
“Our cheque for $113,812.44 is sent to you:
- As a tender in full and final settlement of all costs for which [the third party] is obliged to contribute pro rata pursuant to its obligation in Part V of the LOI signed on 17 July 2004. Your acceptance of our cheque and deposit of it to the credit of your account will constitute acceptance of our tender on the terms stated in this letter.
- Our cheque is paid to you as funds earmarked for the specific purpose of paying the parties identified in the schedule the amount said to be outstanding in the schedule and as such is a payment in trust to you for that purpose.
- If you do not wish to accept our cheque on the basis on which it is tendered, please return it to us.
We refer to our payment of $75,000 payable on 19 August 2004 in terms of Part V of the LOI following your request for our pro rata contribution. We confirm that the payment of $75,000 was made to you in trust and earmarked for the purpose of paying costs incurred by Squadron in terms of Part V of the LOI. For our records, please provide us with an account, which identifies when, to whom and what amounts were paid by you with the funds provided to you by us.”
- [12]There is no evidence as to whether and how the latter request was complied with. The offer was accepted, and the defendant claims to have subsequently paid or settled all accounts still outstanding other than the accounts rendered by the plaintiff.
The plaintiff’s argument
- [13]The plaintiff’s claim is that the effect of the letter of 9 December 2004 was that the payment was impressed with a trust and that the defendant by accepting that payment held the money on trust to pay the parties identified in the schedule the amounts said to be outstanding in the schedule. It was also submitted that the letter is evidence that the earlier payment was made and accepted on the same trust. Accordingly, the defendant has received overall one-third of the amount claimed in total by the plaintiff, and accordingly holds that money received from the third party, to the extent that it includes one-third of the amount payable to the plaintiff, on trust for the plaintiff.
- [14]The plaintiff’s argument in relation to this is certainly attractive. The defendant, by claiming and receiving contributions from the third party on the basis of the whole of the plaintiff’s claim, but then disputing the entitlement of the plaintiff to recover that amount in respect of its claim, appears to me to be blowing hot and cold.[5] To make matters worse, it was submitted on behalf of the defendant that the whole of the money received had already been expended; if true, that means that money which had been paid to the defendant in part as a one‑third contribution to the amount payable to the plaintiff has been used by the defendant to discharge other liabilities, presumably to pay part of its share of the amount payable to the other, undisputed creditors. It seems wrong for the defendant to receive money on the basis that part of it is to be paid to the plaintiff, and then use it for its own purposes.
The defendant’s argument
- [15]Nevertheless, the defendant submits that for a number of reasons the amount claimed by the plaintiff is not now recoverable from it in this way. It was first submitted that in relation to the $75,000 the defendant’s evidence is inconsistent with the imposition of any trust at the time of payment, and that it was not open to the third party to seek to impose any trust on that amount retrospectively on 9 December 2004. The plaintiff submitted that the effect of the letter of 9 December 2004 was that the tender was conditioned inter alia on the acceptance by the defendant of the trust on those terms in respect of the earlier amount of $75,000, but that is not what the letter said. In terms it was an assertion that the earlier payment was made on such terms, but that that was so is disputed by the defendant, and that is an issue of fact which I cannot resolve. At best therefore the plaintiff can prove that the amount of $113,812.44 was received on trust, and that it is entitled to recover an appropriate pro rata share of that amount.
- [16]The defendant’s next submission was that the letter, insofar as it imposed a trust, imposed what is called a Quistclose trust,[6] by adopting the classic terminology of that trust, that the moneys were “earmarked for the specific purpose” of paying creditors. It was submitted that a trust of this nature was not enforceable by the intended recipients of the moneys, such as a creditor in the position of the plaintiff. It was submitted that that proposition was established by recent decisions of the courts, and in particular statements by Lord Millett in Twinsectra Ltd v Yardley [2002] 2 AC 164 and Bryson J in Mercantile Mutual Insurance (Aust) Ltd v Farrington (1996) 130 FLR 365 were relied upon.
The authorities
- [17]In the former case the appellant provided short term finance to a developer on the security of a solicitor’s guarantee. The money was paid on an undertaking given by the solicitor at the company’s request that:
“1. The loan moneys will be retained by us until such time as they are applied in the acquisition of property on behalf of our client.
- The loan moneys will be utilised solely for the acquisition of property on behalf of our client and for no other purposes.
- We will repay to you the said sum of one million pounds together with interest.”
- [18]In fact, he simply handed the money over to another solicitor for the developer, on the basis of the developer’s assurances that the money would be used for the acquisition of property. Some of it ultimately was, but the second solicitor took the view that he was not bound by the first solicitor’s undertaking, and some of the money was paid away for other purposes on the client’s instructions. The first solicitor went bankrupt, and the appellant sued the second solicitor on the ground that he had dishonestly assisted in a breach of trust by the first solicitor. That gave rise to two questions: was the money held by the first solicitor on trust, and if so, had the second solicitor’s involvement in the first solicitor’s breach of trust been dishonest? The trial judge answered both of these questions in the negative. The Court of Appeal reversed both findings.
- [19]All members of the House of Lords agreed that the first solicitor held the money on trust, but four of their Lordships reinstated the somewhat surprising finding by the trial judge that, notwithstanding that the second solicitor was aware of all of the facts, he had not been dishonest.[7] On this point, however, Lord Millett dissented, favouring an objective test. However, Lord Millett also dealt separately with the trust question; the other judgment on the trust question was that of Lord Hoffmann, who held, simply on the basis of the terms of the undertaking, that the first solicitor held the money on trust for the lender, subject to a power to apply it by way of loan to the developer in accordance with the undertaking: page 169. Lord Slynn agreed with Lord Hoffmann; Lord Hutton agreed on this point with both Lord Hoffmann and Lord Millett, and Lord Steyn agreed with both Lord Hoffmann and Lord Hutton.
- [20]Lord Millett ultimately came to the same conclusion, that the money was held on trust for the appellant, subject to the developer’s right to apply it to the acquisition of property. It followed that payment of the money to the second solicitor was a breach of trust. In the course of arriving at this conclusion, however, he gave a detailed analysis of a Quistclose trust[8], and dealt with the question of what happened to the beneficial interest in such a trust, concluding that, at least in general, it remained with the lender. Perhaps unsurprisingly he endorsed the views that he had expressed in an article in 1985 in the Law Quarterly Review: 101 LQR 269.
- [21]There were, however, three important differences between the circumstances of that case and the facts in the present case: the payment made by the appellant was by way of loan, whereas the payment here by the third party was in discharge of a contractual obligation. As well, there were in that case no identified ultimate recipients. The money was to be used in a particular way, but not to be paid to any known or identifiable people or class of people. Here, the beneficiaries of the payment were specifically identified creditors. It follows from this second point that in Twinsectra Ltd there was necessarily no communication by the appellant to the intended beneficiaries of the fact of the payment, but in the present case the plaintiff was told by the third party specifically that the payment was made and on what terms.[9]
- [22]The article referred to dealt with the question of who could enforce a Quistclose trust, a situation where A lends a sum of money to B for the specific purpose of enabling him to pay his creditors, C. He concluded that there were two categories of cases: if the main intention was to benefit C, or A’s object would be frustrated if he were to retain a power of revocation, the transaction will create an irrevocable trust in favour of C enforceable by C but not by A. On the other hand, if A’s intention was to benefit B though without vesting the beneficial interest in him, or to benefit himself by furthering some private or commercial interest of his own and not to benefit C, then the transaction will create a trust in favour of A alone and will be enforceable by A alone. In the latter case whether B had a duty or merely a power to apply the money for the stated purpose would depend on whether A had an interest in seeing the money so applied. But communication to C of the arrangement prior to A’s revocation would affect an assignment of A’s equitable interest to C and convert A’s revocable mandate into an irrevocable trust for C. As to this last point, authorities were cited as supporting the proposition that where the existence of the arrangement was communicated to the creditors an irrevocable trust in their favour was created, although he preferred to see this as an example of an assignment of A’s beneficial interest, because that was more consistent with the rest of his analysis.
- [23]Quistclose had been referred to much earlier in the High Court: in Australasian Conference Association Ltd v Mainline Constructions Pty Ltd (1978) 141 CLR 335 Gibbs ACJ with whom the other two members of the majority of the court agreed said at page 353 that Quistclose:
“is authority for the proposition that where money is advanced by A to B, with the mutual intention that it should not become part of the assets of B, but should be used exclusively for a specific purpose, there will be implied (at least in the absence of an indication of a contrary intention) a stipulation that if the purpose fails the money will be repaid, and the arrangement will give rise to a relationship of a fiduciary character, or trust.”
- [24]In the particular circumstances of that case, however, which are quite different from the present, there was no finding that there was any trust in favour of the party standing in the position of A.
- [25]There have been a number of subsequent Australian cases where the principle has been discussed, and sometimes applied. It was distinguished by Meagher JA with whom Gleeson CJ agreed in Ausintel Investments Australia Pty Ltd v Lam (1990) 19 NSWLR 637 at 647-8, in terms which suggested that the basic principle was part of Australian law.[10] In Thiess Watkins White Ltd v Equiticorp Australia Ltd [1991] 1 Qd R 82 de Jersey J, as his Honour then was, applied the principle in circumstances where a company leasing construction equipment was required to lodge a sum of money on deposit with a particular company as security for payment of rent under the lease. The plaintiff was entitled to interest on the money, but agreed not to withdraw it without the consent of the lessor, and the lessor was authorised to appropriate any part of the deposit necessary to discharge money due by the plaintiff under the lease. By the time the leases had been completed, the company into which the money had been deposited was in provisional liquidation, and it was important to be able to enforce equitable remedies against it. His Honour held that the money was held on trust for the plaintiff, subject to any entitlement of the lessor. He doubted that an intention that funds be kept separately by the trustee from its own assets was essential to the creation of the trust: page 84.
- [26]In Re Australian Elizabethan Theatre Trust (1991) 30 FCR 491 Gummow J had to consider whether gifts made to the Trust, which then made grants to various bodies in order to support the performing arts, were held by it on trust for particular bodies in circumstances where, when making the gifts to the Trust, donors had expressed a preference for the gift to be applied to that particular body. The Trust was a deductible gift recipient so that unconditional gifts to it were tax deductible for the donors, whereas the bodies to which grants were made, whether pursuant to an express preference or otherwise, did not have that status. His Honour had little difficulty in concluding that there was in the circumstances no trust, and nothing to deprive the Trust of the beneficial interest in the money donated, but in the course of doing so there was some discussion of the Quistclose principle, including at page 503 some reference to the proposition in the article by Lord Millett that if the creditors are notified this amounts to an assignment to them of the lender’s rights giving the creditors an equitable interest in the fund, which suggests some support.
- [27]There was further discussion, and application, of the Quistclose principle by the New South Wales Court of Appeal in Salvo v New Tel Ltd [2005] NSWCA 281. The appellants paid money into an account held by the respondent company’s solicitors, on trust for the appellants, and subsequently authorised part of the money from that account to be applied by that company as part of the deposit payable under an agreement to acquire another company. Ultimately that agreement did not go ahead, and the deposit was returned to the respondent. The respondent having gone into liquidation, a dispute arose as to whether the appellants could trace into the returned deposit, and the Court of Appeal confirmed the finding of the trial judge that they could. The judgments contain some discussion of the Quistclose principle but not anything presently relevant. They certainly suggest it is a well-established principle.
- [28]Counsel for the defendent also relied on a passage in the judgment of Bryson J in Mercantile Mutual Insurance (Australia) Pty Ltd v Farrington (1996) 130 FLR 365 at 377, that “the disposition of the Quistclose cases does not appear to support the view that a Quistclose or purpose trust confers an equitable interest on the person to whom it was intended that the payment should be made.” In my opinion, however, this was a reference to the ordinary case referred to by Lord Millett where the beneficial interest remains with the person who provided the money. But it does not follow from this that cases cannot arise, such as those recognised in the article in the Law Quarterly Review, where the outcome will be otherwise.
Analysis
- [29]In my opinion this question turns entirely on the construction of the letter from the third party to the defendant, the letter from the third party to the plaintiff, and the surrounding circumstances proved by the defendant’s affidavit.[11] The matter is therefore one that I can resolve on an application for summary judgment: there is no need for a trial.[12] In my opinion it is quite clear that the payment on 9 December 2004 to the defendant was intended to be on the basis that the defendant held the money on the trust stated in the letter, and the money was plainly accepted on that basis. If anything is clear, it is that the third party was determined that under no circumstances was the defendant to obtain any beneficial interest in this money. In these circumstances, the beneficial interest can only lie with the third party, or with the creditors, including the plaintiff.
- [30]The payment was not one of loan, but a payment which was in discharge of the third party’s contractual obligation to the defendant to contribute towards moneys payable to various identified people including the plaintiff. The payment would be irrevocable, at least in the absence of the agreement of the defendant, and on the analysis of Lord Millett completely irrevocable upon notice of the payment being given to the creditors, or at least to the plaintiff. In these circumstances, it is very difficult to see why the beneficial interest in the fund paid should remain with the third party, rather than pass to the creditors. But even apart from this, on the analysis of Lord Millett in the article, which appears to have at least some support from Gummow J, once notice was given to the creditors, they are entitled to enforce their rights in respect of the money paid. I respectfully agree with that analysis.[13] In these circumstances, the fact that notice was given to the plaintiff means that the plaintiff has an equitable interest, and is therefore entitled to enforce the trust on which the defendant held the money; I do not know whether the other creditors were also given notice, but it is unnecessary to determine who else can enforce the trust.
- [31]There remains, however, one difficulty for the plaintiff: the trust was in terms “for the specific purpose of paying the parties identified in the schedule the amount said to be outstanding in the schedule.” The total amount said to be outstanding in the schedule was $333,098.10, considerably more than the amount of the payment made by the third party. Significantly, this covered only six of the 10 parties listed in the schedule; in respect of four of them the defendant asserted in the schedule that the full amount of the costs attributable to that party had been paid. In these circumstances, the obligation was not to use the money to pay each of the 10 persons in the schedule one-third of the “total costs” incurred. Rather the obligation was to use the whole of the money in discharging, so far as it went, the outstanding obligations to the six creditors who according to the schedule were still owed money in respect of expenses within the terms of the agreement. But there is nothing in the letter to indicate that there was any obligation to divide that sum among those six creditors in any particular way. On that matter, in my opinion the defendant had a discretion. All of the money had to be applied to discharging the six debts referred to in the schedule, but which debts and to what extent was a matter of choice for the defendant.
- [32]That does not mean that there were no obligations enforceable by the plaintiff. A member of a specific class of beneficiaries can enforce the equitable obligation on the defendant to use the money solely for the purpose on which it is held on trust.[14] But since the defendant could in the due execution of that trust deal with the whole of the money without making any payment to the plaintiff, the plaintiff does not have an equitable right to require any particular amount to be paid to it. For this reason, the claim made in the present action, which is a money claim, is not appropriate relief.[15] Accordingly, summary judgment for equitable relief in respect of this part of the claim cannot be given on the terms claimed.
- [33]In these circumstances it is unnecessary to determine whether the defendant is correct in submitting that, even if the plaintiff had been entitled to recover a particular amount on the basis the defendant held that amount on trust for it, the defendant was entitled to set off its claim for damages in the counterclaim in respect of that amount.
- [34]It was also submitted on behalf of the plaintiff that, even apart from the trust claimed, in circumstances where it was admitted that some work had been done and therefore (subject to the set off) the plaintiff was entitled to some payment, it was appropriate to give judgment for the amount sought in the application on the basis that the plaintiff on the evidence must have done work of at least that value. There are difficulties in relation to the evidence, but it seems to me that the main problem with an argument of that nature is that, in circumstances where there is essentially a claim on the basis of a particular amount of work having been done, where the defendant wants to dispute, or at least put the plaintiff to proof of, the amount of the work done, that can really only properly occur at a trial. In circumstances where the plaintiff’s remuneration depends on the amount of work the plaintiff actually did, the defendant is entitled to put the plaintiff to proof on that and ordinarily the way in which that is to occur is at a trial. In such a situation, although it may well be clear enough that the end result of a trial will be that the plaintiff will obtain judgment for something, and perhaps even judgment for at least the bulk of the claim, in my opinion it cannot be said that there is no need for a trial of the action. This alternative argument must therefore also fail. In those circumstances, summary judgment cannot be given under rule 292.
- [35]If the application for summary judgment were the only matter raised in the application, it would be dismissed with costs. This is not a situation where the terms of the defence invited an application for summary judgment, nor where doubt as to the recoverability arose only as a result of affidavit evidence filed by the defendant in response to the application which may at a trial be shown to be wrong. However, the plaintiff also sought other relief in the application, in relation to particulars, which as I have already indicated cannot be dealt with at the moment. Accordingly, in my opinion the appropriate course is simply to reserve the costs incurred to date until the whole of the application has been determined.
Footnotes
[1] One-third of which has been reimbursed anyway by the third party.
[2] Exhibit PRJ7 to the affidavit of Rodgers filed 16 February 2006.
[3] Affidavit of Price sworn 1 March 2006, filed by leave.
[4] One-third of $566,437.32.
[5] This however cannot give rise to any estoppel, although the defendant’s action is evidence as an admission that the amount is owed by it.
[6] Named after Barclays Bank Ltd v Quistclose Investments Ltd [1979] AC 567, in which such a trust was recognised.
[7] On the basis that it had not been shown that that solicitor had realised that by the ordinary standards of reasonable honest people his behaviour was dishonest. This conclusion was reached in the teeth of the statement by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2AC 378 at 389 that in this context dishonesty was an objective standard. It is I think a good illustration of how departure from the objective standard of dishonesty can produce unsatisfactory results.
[8] The analysis of Lord Millett was cited as authoritative by Barrett J in Frontier Touring Co Pty Ltd v Rodgers [2005] NSWSC 668.
[9] Affidavit of Rogers Exhibit PJR7, a letter from the third party enclosing the letter from the defendant to the third party and the third party’s letter from the defendant.
[10] See also, more recently, Pratten v Pratten [2005] QCA 213 at [10].
[11] The subjective intentions of the parties, including the third party, are irrelevant: Twinsectra (supra) at p. 169, p. 185.
[12] Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232.
[13] Lord Millett’s article and judgment are persuasive, and carry his authority as a Lord of Appeal in Ordinary, and inaugural McPherson Lecturer. His dissent on the dishonesty point if anything heightens my respect for him.
[14] Jacobs’ Law of Trusts in Australia (5th Ed 1986) p. 61.
[15] For this purpose I will assume that the claim is wide enough to include an injunction requiring the defendant to pay the particular sum claimed to the plaintiff.