FEDERAL COURT OF AUSTRALIA

George v Fletcher (Trustee) [2010] FCAFC 53

THE COURT ORDERS THAT:

1.                  The appeal is allowed in part.

2.                  Orders 1 and 2 of the orders made by the Federal Magistrates Court are set aside and the matter is remitted to that court for hearing and determination according to law.

3.                  Save as provided above, the appeal is dismissed.

4.                  The parties file and serve such written submission, if any, as to costs of the appeal within seven days from today.

5.                  Costs be reserved accordingly.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

RYAN AND LOGAN JJ:

1                     The appellant, Ms George (neé Cordes), became a bankrupt on 24 February 2006 upon her presentation of a debtor’s petition. In the course of the administration of her bankrupt estate a controversy emerged between her and her trustee in bankruptcy, the first respondent, Mr Fletcher as to whether particular real and personal property formed part of her bankrupt estate.

2                     By an amended application filed in the Federal Magistrates Court on 7 November 2008, Mr Fletcher, in his capacity as Ms George’s trustee in bankruptcy, sought declaratory relief in respect of, materially, Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 (the Moggill property), a Toyota land cruiser with the licence plate 590FXR, VIN Number: JT11UJA509019411 (V), Engine Number: 1FZ0444996 (the land cruiser) and a Hanoverian mare known as “Stellamarra” with the microchip number 939000001109809 (the horse). Ms George was at that time the only named respondent to that amended application. The second to sixth respondents to this appeal were later joined as respondents to that application.

3                     Section 27 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) confers on the Federal Magistrates Court jurisdiction, to make, amongst other orders, a declaration whether particular property is property divisible amongst the creditors of a bankrupt. That jurisdiction is concurrent with the like jurisdiction conferred by that section on this Court. Subject to the jurisdiction invested in the High Court by The Constitution (Cth), that concurrent jurisdiction in bankruptcy is exclusive, ie the Supreme Courts of the several States are no longer, as they for many years were, invested with Federal jurisdiction in bankruptcy.

4                     On 9 February 2009 the Federal Magistrates Court made declarations and orders relating to this property: Fletcher v George (No 6) [2009] FMCA 69. Those declarations and orders were as follows:

The Court declared:

1          That the Heads of Agreement dated 19 February 2008 and exhibited at WJF-8 to the Affidavit of William John Fletcher sworn 29 October 2008 remains valid and enforceable.

2          That as at 24 February 2006 the legal and beneficial ownership of Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 vests in Applicant as trustee of the bankrupt estate subject to the registered mortgage number 710055137 registered in favour of National Australia Bank Ltd ABN 12004 044 937.

3          That as at 24 February 2006 the legal and beneficial ownership of the Toyota landcruiser with the licence plate 590FXR, VIN Number: JT11UJA509019411 (V), Engine Number: 1FZ0444996 vests in Applicant as trustee of the bankrupt estate.

4          That as at 24 February 2006 the legal and beneficial ownership of the Hanoverian mare known as Stellamarra with the microchip number 939000001109809 vests in the Applicant as trustee of the bankrupt estate.

5          That Deed of Settlement between the Applicant and Susan Jane Wilson dated 28 October 2008 remains valid and enforceable and that it be performed.

The Court ordered:

6          That the application be adjourned for trial on issues arising from relief sought concerning title to chattels and related property stored at or located at Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 and in respect of relief sought in paragraphs 4 and 10 of the amended application.

7          That there be no order as to costs between the Fifth Respondent and the other parties to the application.

8          That in respect of Order 7 of these Orders there be liberty to apply by the First Respondent, Lauren Kay George.

9          That each party making an application for costs against any other party to the application file and serve upon the other party the subject of such application a written outline in support of such application, including a minute of proposed orders, on or by 4.00pm on 13 February 2009.

10        That any person in possession or control of the horse Stellamara with the microchip number 939000001109809 part with possession of the horse into the power of the applicant Trustee in Bankruptcy for Lauren Kay George or his nominee forthwith upon such demand by such person for possession of that horse.

11        That the application be adjourned for further mention to 9.30 am on 25 February 2009 in the Federal Magistrates Court of Australia at Brisbane.

5                     Ms George subsequently applied to a judge of this Court for leave to appeal against those declarations and orders numbered 1, 2, 3, 4, 5, 6, 9 and 10. On 25 March 2009 a Judge granted her leave to appeal against those declarations and orders: George v Fletcher (Trustee) [2009] FCA 264. The operation of those declarations and orders was stayed pending the hearing and determination of the appeal.

6                     A draft notice of appeal containing 17 proposed grounds of appeal was before the Court at the time when the leave to appeal application was heard. The assessment of the proposed grounds of appeal in the reasons for judgment in respect of the granting of leave is compressed. Her Honour observed (at para 16):

In this case the Federal Magistrate has delivered a thoughtful and thorough judgment in circumstances where not only was one of the key parties to this complex litigation (Ms George) without legal representation, but a great deal of information generated by Ms George was before his Honour. However, I consider that the issue raised by Ms George as to whether all of her evidence was properly available to the Federal Magistrate during the time his Honour was preparing the judgment, and therefore whether all of that evidence was taken into consideration by his Honour in his judgment, raises a question of justice such that an appeal from the decision of his Honour should be heard. [Emphasis added]

7                     Ms George argued the appeal herself. She was similarly unrepresented on the application for leave to appeal, in the court below and in then parallel proceedings in the Queensland Supreme Court concerning the title to the Moggill property, the horse and the land cruiser. The notice of appeal is prolix. The following are the grounds specified in the notice:

The solicitor for the 1^st Respondent mislead his honor the courts and his client by providing false and misleading evidence in non compliance of the rules of the court in a pursuit of ulterior motives resulting in the following injustice to the appellant;

1          His Honor erred in not allowing the appellants matter to proceed to trial witnesses to be called pleadings to close and defense and right of reply to defense to be finalized – resulting in a denial of Justice and Due process to the appellant.

2          His Honor erred in allowing the first Respondent to proceed with a summary judgment against the appellant without serving the appellant in accordance with rule no 5.02 which in turn caused prejudice to the appellant and further denial of Justice and Due Process.

3          His Honor erred in not hearing the appellant’s objections to inadmissible evidence filed by the first Respondent which in turn caused prejudice to the appellant and a further denial of Justice and Due Process.

4          His Honor erred in hearing the first Respondents application-raising an issue of estoppel from the matter being trialed twice as this issue had been partly determined and heard in the Supreme Court on the 16^th July 2008 and 5/9/08 in response to the same application of the first respondent dated 2/5/08.  Orders were made that the summary judgment application must be adjourned until determination of the trial question originally set down for hearing on the 3-5 November now due to be determined on the 18/20 of February 2009 in the Supreme Court.

5          His Honor erred in finding the evidence did not support the need to proceed to trial when no less than 2 High Court judges namely Justice Daubney on the 9/5/2008 and Justice Martin on the 16/7/2008 after perusal of the evidence made findings that “there is a serious question here and this matter needs to proceed to trial” His honor further made error in not reading the appellants evidence in chief as documents numbered 16,17,25,38,39,47,69 to support the trust were held in the Supreme court in preparation for trial next week and were not available to his honor when making the summary judgment which is reflected in his referencing of documents resulting in a multitude of errors and facts.

6          His Honor erred in proceeding to determine the application in the absence of the appellant’s evidence which was largely not before him and not available until after the trial of the matter in the Supreme court on the 20/2/2009.

7          His Honor erred in his decision to not hear the matter of fraud which forms a remedial constructive trust until after the determination of the summary judgment.

8          His Honor erred in his decision to not hear the pleadings on the constructive trust created by the plaintiff in her capacity as trustee who made $120000-00 in payments to the construction of the Moggill dwelling for the benefit of the trust after the date of the agreement 18/6/2005.

9          His Honor erred in not adjourning the matter and allowing the parties to proceed on the 9/2/2009 in the absence of the appellant and not in accordance with rule 13.03c (1) (a).  Resulting in the injustice to the appellant when handing down a summary judgment in the absence of the appellant who had been served with a signed with a signed seal order of the court stating the next hearing dates were to be the 8-10 March 2009 and not the date mentioned above.

10        His Honor erred in not setting aside the orders of the court dated 9/2/2009 under rule 16.05 (2)(a) as requested by the appellant prior to the appeal being filed.

11        The above circumstances resulted in his Honors error of hearing the summary judgment at its lowest case as described by the first respondent and not at its highest case as consented too by the parties resulting in Prejudice to the appellant.

12        His Honor erred in allowing the parties to inappropriately forum shop judges to seek advantage in their proceedings and create prejudice to the appellant by way of;

a/         allowing illegal exparte application’s by the 1^st respondent not in accordance with the rules of the court to obtain advantage in the proceedings.

b/         by filing misleading and false affidavits in relation to notification of service of hearing date 9/2/2009 and other matters of bankruptcy.

c/         allowing the 1^st respondent to illegally seize assets that have never been owned by the appellant and obtain consent orders by way of unconscionable acts placing third parties under duress to sign by way of threats which his honor wilfully shut his eyes too and refuses to hear the evidence thus resulting in a denial of justice to the parties and appellant.

d/         refusing to hear the appellant’s applications made under 178 of the bankruptcy act therefore sending these issues to the appeals court unnecessarily.

13        His Honor erred in allowing the Heads of Agreement to proceed when this matter has already been partly heard and determined on the 16/7/2008 findings made on the 5/9/08 in the Supreme Court of Brisbane and is therefore an issue of estoppel.  Resulting in Prejudice to the appellant by hearing the matter twice;

a/         and willfully shutting one’s eyes to the fact the agreement was made not in accordance with the rules of mediation and under unconscionable circumstances by the first respondent solicitor.  Who has a history of recorded findings of misconduct made against him by the legal practitioners licensing board and is presently under investigation by the legal commission and the police prosecutor for threatening behaviour against the appellant and continues to mislead his honor and the courts in this matter.

14        His Honor erred in dismissing the appellant’s application for his honour to stand down from the matter on the 8/12/2009 thus resulting in further injustice and prejudice to the appellant and today’s appeal.

15        His Honor erred when advising the appellant the matter of the horse will proceed to trial but failed to do so.

16        His Honor erred when not hearing the evidence and sending the matter to trial for the unconscionable conduct displayed by the first respondent’s solicitor in negotiating consent orders under duress and not in good faith following assets; horse, car, float.

17        His Honor erred in allowing the first respondent to bring on a spurious vexatious oral application in court to strip the appellant of the $50 of jewellery she was wearing to court that day which the appellant had received no service for in accordance with rule no 5.02.

[sic]

8                     Judged by reference to the observation, emphasised by us in the passage quoted above, made in the Court’s reasons for judgment for granting leave to appeal, the grounds specified in the notice of appeal are not just prolix but also travel well beyond what was seemingly intended by her Honour to be the subject of the grant of leave to appeal. Yet the order granting leave limits the grant of leave to appeal only by reference to particular identified paragraphs of the order of the court below, not by reference to any particular grounds of appeal.

9                     In instituting an appeal Ms George did not thereby commission a roving inquiry into the administration of her bankrupt estate or each aspect of the course of proceedings either in the court below or, as will be seen, in the Supreme Court of Queensland; she invoked appellate jurisdiction. That jurisdiction falls to be exercised by reference to the grounds identified in a notice of appeal.

10                  At the time when the application for leave to appeal was heard in March last year, as now, O 52 r 4 of the Federal Court Rules required the application for leave to be accompanied by an affidavit showing:

(a)        the nature of the case;

(b)        the questions involved; and

(c)        the reasons why leave should be given.

Ordinarily, the questions involved would be identified in a draft notice of appeal exhibited to that affidavit. An order granting leave to appeal would, in turn, ordinarily be cast by reference to so much of the questions so identified as were considered to warrant a grant of leave. The observation made in the reasons for judgment for the grant of leave to appeal may have taken the form it did because of the way in which the application for leave was argued. It does not though, in terms, explain why the order granting leave was not limited accordingly.

11                  The notice of appeal replicates the grounds proposed in the draft at the time leave to appeal was sought. Given the way in which the order granting leave is expressed, Ms George is hardly to be criticised for thinking that each of her proposed grounds was indeed the subject of the grant of leave. None of the respondents submitted that Ms George should be confined on the hearing of the appeal to the question identified by her Honour in the passage emphasised in the extract quoted above. Instead and in summary, their approach was that the learned federal magistrate had not made any error either in procedural or substantive law in making the declarations and orders on 9 February 2009.

12                  As the hearing of the appeal evolved, it became apparent that each party considered that the determination of the following issues would resolve the appeal:

(a)                Did the learned magistrate err procedurally in determining summarily so much of the bankruptcy trustee’s application as related to the Moggill property, the Heads of Agreement, the horse and the land cruiser, including whether, in so doing, there was a denial of procedural fairness?

(b)                Did the learned magistrate err in law in making the declarations and orders as to the Heads of Agreement and also whether the Moggill property, the horse and the land cruiser were part of the property of the bankrupt?

It will also be necessary to make some observations about a further issue which Ms George sought to agitate on the appeal, which was whether, as she had requested at the hearing, the learned federal magistrate ought to have disqualified himself from the further hearing of the matter because there existed a reasonable apprehension of bias.

13                  Answering these questions will, we apprehend, address the issue which apparently engaged her Honour’s interest when granting leave as well as such wider questions as the parties themselves considered were raised by the appeal, having regard to their submissions. It will also answer the questions of substance that lie behind the prolixity of the notice of appeal. We consider that the interests of justice are best served by approaching the determination of the appeal in this way.

14                  Answering these questions requires us to detail the history of this matter in the court below and the learned federal magistrate’s reasons for making the declarations and orders in question. It also requires us to describe in greater detail the proceedings in the Queensland Supreme Court to which Ms George, Mr Fletcher and others are parties.

15                  At the time when the bankruptcy trustee’s application to the Federal Magistrates Court was filed there was already a proceeding in the Queensland Supreme Court concerning the Moggill property, the land cruiser and the horse: Lauren Kay Cordes as Trustee for Alexander George v Dr Peter Ironside P/L & Ors, SC No 3747 of 2008. An appeal from a judgment given in that court’s Trial Division in that matter was awaiting determination at the time when the appeal was argued before us. It has since been determined. Given the common substratum of facts and issues and the interplay between the Queensland Supreme Court proceeding and that in the court below, we considered it prudent to defer the determination of this appeal until the Queensland Court of Appeal had given judgment and to afford the parties an opportunity to make such supplementary submissions as they might have been advised as to the consequences for the present appeal of the judgment of the Queensland Court of Appeal. We have taken those supplementary submissions into account.

16                  A summary, which we gratefully adopt, of the parties to, and issues in, the Queensland Supreme Court proceeding is offered by Holmes and Chesterman JJA in Lauren Kay Cordes as Trustee for Alexander George v Dr Peter Ironside P/L [2009] QCA 302 at [7]-[12] in dismissing an appeal by Ms George against an order made in the Queensland Supreme Court’s Trial Division permanently staying that proceeding:

[7]           The action in this Court was commenced in April 2008. The parties named in the claim were the appellant, “Lauren Kay Cordes as trustee for Alexander George”; the company; Dr Ironside; the National Australia Bank; and (by later inclusion) the trustee in bankruptcy. (An attempt by the appellant to join her sister, the ex-wife of Dr Ironside, was unsuccessful.) In her statement of claim (as amended), the appellant pleaded that she had created a trust in 1998 in favour of her infant son, Alexander George, and had settled the Moggill property on him by means of a “signed trust deed” on 16 February 2003.

[8]           The pleading as to the arrangement between Dr Ironside, the company and the appellant is very difficult to understand. The thrust of it seems to be that the company was to pay $400,000 and the Moggill property, subject to an existing mortgage to the National Australia Bank, was to be transferred to it, but leased back to the appellant. Strangely, the tenancy agreement also provided that she and her son were to retain a life interest in the property. At the same time, however, the arrangement was conditional on the company’s holding the property in trust for her son, and undertaking to transfer it back to the appellant at any time she wished.

[9]           The appellant went on to plead that unconscionably, in breach of trust and in breach of their agreement, Dr Ironside and the company refused to reconvey the property, used it as security for loans in the amount of $2 million, lodged a caveat on the title,  and entered the Family Court agreement with the trustee in bankruptcy. The National Australia Bank was joined as an accessory to their breach of trust. Against the trustee in bankruptcy, it was pleaded that he knowingly assisted in the breach of the trust by failing to reconvey the property and asserting his interest in it. The appellant alleged that she had signed the Family Court agreement under duress.

[10]         By way of relief, the appellant sought orders setting aside the sale agreement, the transfer of the property to the company and the mortgage to the National Australia Bank, with removal of the caveat and the mortgage, and orders that the Moggill property be reconveyed to her “in fee simple and life estate” and the land title register corrected accordingly. In the alternative, she asked for declarations that the transfer, mortgage and Family Court agreement were invalid, and an order for specific performance of the agreement between her, the company and Dr Ironside, by way of a registered transfer of the property to her. In addition, she sought damages against Dr Ironside, the company, and the National Australia Bank.

[11]         Part of the statement of claim concerned chattels seized by the trustee in bankruptcy. They included a horse and a motor vehicle, both of which the appellant said were owned by her sister, who had agreed to give the appellant “life use” of them. The trustee in bankruptcy had also seized a horse float, some smaller personal items belonging to the appellant and a rocking horse belonging to the appellant’s son. The appellant pleaded that the trustee executed warrants (one assumes for the purpose of recovering property), in the process “breach[ing] legal privilege”, resulting in “valuable stolen jewellery and damages to the Moggill property”. A further allegation is that the trustee refused to allow her to take action to set aside a costs assessment notice, in respect of legal fees which were the cause of her bankruptcy, and but for which she could achieve a discharge.

[12]         The appellant sought specific performance of the agreement to allow the appellant life use of the horse and vehicle, the setting aside of the consent orders made for transfer of that property to the trustee with a declaration that it remain vested in her sister, not the trustee, and return of the rocking horse. At the hearing before the learned primary judge, however, in order to deflect the argument about bankruptcy jurisdiction, the appellant disavowed other forms of relief sought in the statement of claim. They were: a declaration that the Moggill property did not vest in the trustee in bankruptcy; declarations that the vehicle and the horse float vested in her (the former as trust property, the latter as “tools of trade”); declarations that warrants were illegally executed and that a solicitor for the trustee in bankruptcy “breached legal privilege”; a declaration that she “be discharged” in February 2009, three years after she became bankrupt; an order for return of her personal items; damages resulting from the seizure of assets; the setting aside of the costs assessment notice which had caused her bankruptcy; and a declaration that she was illegally detained (the connection of which to the pleading is obscure).

17                  As will be seen, the allegations made by Ms George in the amended statement of claim in the Queensland Supreme Court, which are summarised in this extract, came to have a particular importance in the proceeding in the Federal Magistrates Court by virtue of directions which that court made and by virtue of the way in which it dealt with a summary judgment application made by the bankruptcy trustee.

18                  The reference in this extract from the joint judgment to “the appellant’s sister” is a reference by their Honours to Ms Susan Wilson, the fifth respondent in the appeal to this Court. Ms Wilson is, as their Honours record, the former wife of Dr Ironside, the third respondent in the appeal to this Court. The “Family Court agreement” referred to in the extract is an agreement pursuant to which issues in relation to the Moggill property were, at least purportedly, settled by the signing of an agreement titled “Heads of Agreement” by all who later came to be parties to the proceedings in the Supreme Court and in the court below, except for the fourth respondent, the National Australia Bank (the Bank).  It is to those “Heads of Agreement” which the declaration made by the Federal Magistrates Court refers. Under that agreement, Ms George abandoned any claim to the Moggill property and it was agreed, inter alia, that the second respondent, Dr Peter Ironside and the third respondent, the company which bears his name (DPIPL) would do all things necessary to transfer the Moggill property to the bankruptcy trustee to allow him to sell it.

19                  Materially for present purposes, having regard to s 27 and s 31 of the Bankruptcy Act and to Scott v Bagshaw (2000) 99 FCR 573 and Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380, the Court of Appeal upheld a conclusion reached in the Trial Division that the Queensland Supreme Court did not have jurisdiction to determine a controversy as to whether the bankruptcy trustee had title to the Moggill property, the horse and the land cruiser; rather, that jurisdiction was exercisable only by this Court or the Federal Magistrates Court.

20                  On 4 November 2008 the bankruptcy trustee’s application was listed for hearing in the Federal Magistrates Court on 8 December 2008 for three days. At the same time that court made orders, amongst others, that:

(a)                each party to give discovery in respect of categories of documents listed in schedule A to the order within 28 days;

(b)                Ms George be committed to prison.

21                  The order of committal seemingly related to a failure by Ms George to answer a question in relation to the whereabouts of the horse. That committal order is not the subject of this appeal. It is noteworthy though that Ms George was not released from custody until 12 November 2008, apparently on the basis of her undertaking that the horse would be kept safe and not transferred or encumbered pending the hearing and determination of the bankruptcy trustee’s application. Also noteworthy is that the limit of time specified by the order in respect of discovery expired on 5 December 2008, a Friday, with the trial fixed to commence on the following Monday.

22                  On 18 November 2008 the Federal Magistrates Court refused an application by Ms George to stay the bankruptcy trustee’s amended application pending the hearing and determination of the Queensland Supreme Court proceeding: Fletcher v George (No. 5) [2008] FMCA 1628. At the same time the Federal Magistrates Court gave directions in respect of the hearing of that amended application, the effect of which was that the amended statement of claim which Ms George had filed in the Supreme Court proceeding stand as her pleading in respect of the bankruptcy trustee’s application, subject to such additions or variations as she might specify to the parties on or before 21 November 2008. It was further directed that documents filed in the Supreme Court proceeding be taken to be filed in the bankruptcy trustee’s application. The directions then made also anticipated the possibility that Ms George might make additions or variations by a further direction that she additionally file and serve on or before 21 November 2008 copies of any documents to be relied upon by her. In that event, other parties were given until 28 November 2008 to file any affidavits and supporting material. The evident intent of these directions was to avoid putting the parties to the expense of further preparing material which already had been filed in the Queensland Supreme Court and to allow for the supplementation of that material should a party be so advised.

23                  It is evident from the reasons which the learned federal magistrate delivered on 18 November 2008 that his Honour considered that there was a common substratum of facts and issues as to title to property in the proceeding before the Federal Magistrates Court and in the then proceeding before the Supreme Court and that the determination of the questions raised involved an exercise of jurisdiction “in bankruptcy”. It seems to have passed unnoticed by all concerned that day that the times fixed for the filing of any further material were shorter than the maximum time limited by the order of 4 November 2008 for the giving of discovery.

24                  When the forthcoming trial in the Federal Magistrates Court was drawn to the attention of the Queensland Supreme Court that court vacated a review hearing which had been scheduled to occur on 8 December 2008 in respect of the proceeding in that court with liberty to restore the matter to the list on 14 days notice. In so ordering the learned supreme court judge observed that the proceeding in that court was nowhere near ready for trial. That observation, we feel sure, influenced Ms George’s thinking in relation to the readiness for trial of the Federal Magistrate’s Court proceeding.

25                  Ms George sought from this Court leave to appeal against the Federal Magistrates Court’s refusal on 18 November 2008 to stay its proceedings. That application was, in light of the then imminent substantive hearing in the Federal Magistrates Court, heard urgently. Leave to appeal was refused: George v Fletcher (Trustee) [2008] FCA 1848.

26                  Pursuant to the listing order of 4 November 2008, the bankruptcy trustee’s amended application came on for trial in the Federal Magistrates Court on 8 December 2008.

27                  That trial was not, with respect, conducted or continued in what one might term a conventional way. By that we mean that, after the announcement of appearances, and subject to the resolution of any adjournment or other initial application, the bankruptcy trustee, as the applicant in the court below, was not called upon to open his case, identify the material upon which he relied as evidence in chief, deal with objections, if any, to that material and then successively produce for cross examination such witnesses as had by notice been required to attend for that purpose. Nor was that followed then by calling upon each respondent to present, as the case may be his, her, or its case. The adoption of an unconventional procedure has had the unfortunate effect of adding a conjectural element to delineating precisely what constituted the material before the court below for the purposes of the trial and the summary judgment application.

28                  This departure from convention seems, in no small part, to have been a reaction to the very particular challenges presented in dealing with Ms George. Judging by the transcript, she was querulous. Ms George also appeared on the hearing of the appeal. With all due respect to her, we do not underestimate the challenges which the learned federal magistrate faced in conducting a trial in respect of the bankruptcy trustee’s amended application. Litigants in person not infrequently present particular challenges not just for judicial officers but also for the lawyers for represented parties in the orderly conduct of a proceeding. Here, those challenges were compounded not just by a querulous litigant in person but also by the then co-existence of the Queensland Supreme Court proceeding brought by Ms George.

29                  The learned federal magistrate questioned the bankruptcy trustee and the other respondent parties as to their respective positions. In essence the response of the bankruptcy trustee and the respondents other than Ms George was that none sought to run a “positive case”. The bankruptcy trustee contended that the Moggill property had never been held in trust. Dr Ironside and DPIPL sought to rely upon the Heads of Agreement and the Bank joined with this but further contended that it had, irrespective of interests in the Moggil property claimed by other parties, a mortgage security registered on the title in good faith and without any prior notice.

30                  After quite some exchanges between the various parties and the learned federal magistrate the bankruptcy trustee made an oral application for so much of that application as concerned in whom the Moggill property, the land cruiser and the horse were vested to be determined summarily on the basis that Ms George’s response to the bankruptcy trustee’s amended application had no reasonable prospect of success. That response, as envisaged by the interlocutory directions, took the form of the statement of claim in its then amended form which she had filed in the Queensland Supreme Court.

31                  Save for Ms George, the respondents to the bankruptcy trustee’s amended application (the second to fifth respondents to this appeal) each contended that Ms George’s case, taken at its highest, did not support her assertion that each of these items of property was, at the commencement of her bankruptcy, held by her in trust. The submissions made by the bankruptcy trustee in respect of the summary judgment application were not confined in their scope to whether Ms George’s amended statement of claim, if viewed as a response to the bankruptcy trustee’s amended application, raised any triable issue. Rather, those submissions extended to taking at their highest a series of documents which formed part of Ms George’s evidence in the Queensland Supreme Court in respect of her allegation that the Moggill property was held on trust by her. A corollary of the submissions, so far as the Heads of Agreement was concerned was that Ms George had no interest as trustee or otherwise to compromise so that whether her agreement had been given under duress or otherwise was irrelevant to the efficacy of that agreement. The submissions attributed to Ms George’s case in the Federal Magistrates Court had nothing more than an evidentiary content derived from affidavits already filed in the Queensland Supreme Court.

32                  Ms George did not support that manner of disposition of the bankruptcy trustee’s amended application in the court below. She requested that the bankruptcy trustee’s amended application proceed to a full trial. Consistently with that position she had filed by leave on 8 December 2008 an application which sought compliance by the bankruptcy trustee, DPIPL and the Bank with notices requiring “disclosure” of documents. It is evident from the references in this application to the Uniform Civil Procedure Rules (Qld) (UCPR) and from an alteration to its heading that it was originally prepared for use in the Queensland Supreme Court proceeding. In context though it was plainly a complaint by her about compliance by those respondents with the terms of the order with respect to discovery made by the Federal Magistrates Court on 4 November 2008. The application for summary judgment was apparently viewed by those respondents as a way of rendering unnecessary consideration of Ms George’s complaint concerning discovery.

33                  In the course of making her submissions, Ms George requested that all of the issues in her statement of claim in the Queensland Supreme Court in its then amended form be heard in the Federal Magistrates Court. Even as then amended, those issues were as summarised in the extract from the Court of Appeal’s judgment, quoted at [16] above. At various times, she foreshadowed calling an expert witness, four officers of the bank by subpoena and later “8 witnesses”. His Honour asked her whether she was applying for an adjournment of the trial. Ms George replied that she was not but rather that she was applying for “trial directions”. It is obvious from the transcript that she misunderstood the import of his Honour’s question. As a layperson acting for herself that in no way stands to her discredit for it is equally obvious from the answer that she gave that she was seeking, in substance, an adjournment of the trial and the making of further interlocutory directions. Apart from Ms George’s complaint about “disclosure”, another basis for her adjournment application was that, since the trial dates had initially been appointed on 4 November, she had been in custody until 12 November 2008 which had inhibited her ability to prepare for the trial.

34                  On 9 December 2008 Ms George made an application for the learned federal magistrate to disqualify himself on the basis that there existed a reasonable apprehension of bias. His Honour dealt with that application. For reasons which he gave ex tempore, his Honour declined the application.

35                  The upshot was that, having declined the invitation to disqualify himself, the learned federal magistrate decided to proceed with the bankruptcy trustee’s application for summary judgment.  On 10 December 2008 his Honour reserved judgment on that application. At the same time his Honour appointed 9 February 2009 as the date for a three day trial of the other outstanding issues on the applications before the Federal Magistrates Court.

36                  The sealed copy of the order recording the adjournment to 9 February 2009, pronounced orally on 10 December 2008, initially and erroneously recorded the adjourned hearing’s commencement date to be 9 March 2009. This error was corrected by an amendment of the order on 12 January 2009. In her submissions before us, Ms George acknowledged receipt of the listing order in respect of the adjournment in its original, erroneous, form but asserted that she was not aware of any hearing to be held in February 2009.

37                  In the meantime, on 23 December 2008, Ms George had filed an “amended statement of claim” in the Federal Magistrates Court. A like document was apparently also filed at about that time in the Queensland Supreme Court proceeding. The extract which we have quoted above from the joint judgment delivered in the Court of Appeal summarises Ms George’s statement of claim in this amended form. Over the course of January 2009 there were also filed in the Federal Magistrates Court an amended defence by the bankruptcy trustee, an amended defence and counterclaim by Dr Ironside and DPIPL and an amended defence by the Bank. Each of these was a replication of a like pleading which those parties had respectively filed at that time in the Supreme Court. That these amended pleadings would be filed after judgment had been reserved on the application for summary judgment seems to have been anticipated by all concerned at that time.

38                  On 4 February 2009 the bankruptcy trustee’s application and other then outstanding matters were listed for mention in the Federal Magistrates Court on the initiative of the learned federal magistrate. Each of the parties except Ms George appeared that day.

39                  The occasion for the mention was that, after judgment on the summary judgment application had been reserved, the Queensland Supreme Court had requested the return of its file in respect of the proceeding in that court. That proceeding had been dormant following the vacation in November 2008 of the date fixed for the review hearing in that court but since then had been revived to permit a hearing in respect of a number of separate questions. That hearing came on in February 2009, after the Federal Magistrates Court had given the judgment the subject of this appeal. In the result, the Queensland Supreme Court Judge hearing the separate questions formed the view that those questions were not apt for separate determination and sent the matter off to trial. That trial occurred in April 2009. It was from the judgment at that trial that Ms George appealed to the Court of Appeal.

40                  Inferentially, the request of the Federal Magistrates Court by the Queensland Supreme Court for the file’s return may well have been due to the need to place the amended pleadings on that court’s file in readiness for the then pending hearing in respect of the separate questions. In any event, the file was returned as requested but this had left the Federal Magistrates Court without the material which, by its earlier direction, was taken to be material filed in relation to the bankruptcy trustee’s application.

41                  The transcript of 4 February 2009 discloses that the learned federal magistrate was aware of the filing after 10 December 2008 in the Federal Magistrates Court of the amended statement of claim by Ms George and made aware by counsel then appearing for the bankruptcy trustee of the filing of “a response” to that pleading by his client. The transcript records an exchange between that counsel and the learned federal magistrate about further trusts alleged by Ms George in the latest version of her statement of claim and of investigations undertaken by the bankruptcy trustee which were said to disclose that the properties concerned were, according to the relevant certificate of title, held by her in her own right or by her and her then husband in their own right.

42                  Further, after reference to the reclaiming of its file by the Queensland Supreme Court, the transcript records the following exchange between the learned federal magistrate and counsel for the bankruptcy trustee:

FEDERAL MAGISTRATE:  Well, these properties [referring to properties in South Australia once held by Ms George] have been sold, haven’t they?

MR KELSO:  Yes, many, many, many years ago.

FEDERAL MAGISTRATE:  Yes, I thought so.  Okay.  So that’s why I’m not unduly troubled – although I’d like to see the trust deeds – because I imagine the argument would be that any trusts may – or everything may have moved into the later transactions so – but ultimately I’ll hear parties on that point on Monday if people want to take – or want to advance any arguments in relation to that.

I’m conscious that – well, my associate informs me that somebody has informed her that there will be objection to the statement of claim.  Can I indicate that I would like to dispose of the claim, accepting the statement of claim, if it’s at all possible.  So if the parties could make their best endeavours to see if there really are any significant issues of substance that arise on the statement of claim so that they might focus their objections on those matters.

Okay.  Well, I’ll put the statement of claim to one side.  But the next matter I wanted to hear the parties on was really this.  Can I indicate to the parties that I am about 95 per cent finished – through the exercise, after my judgment, I have a couple of minor issues to deal with.  They in part relate to material that was on the Supreme Court file.  Not to suggest that there’s a turf war on here between this Court and the Supreme Court, but the files were returned to the Supreme Court and the Supreme Court has indicated they won’t be returned to this Court unless somebody brings a cross vesting application.

I don’t think that’s necessary.  For a start, I’m not anxious to hear a claim by Ms George as the trustee which she wants to prosecute.  Not that I – and in any event, you’d have to bring your cross vesting application in the Federal Court to get orders and then have the matter transferred back to me.  So it’s a complicated process.  But I don’t think it’s necessary in any event.

All I need to see are a couple of affidavits.  What I’d like the parties to do if they could please is look at the Supreme Court file and photocopy and make available for me and I’ll mark as exhibits when we resume on Monday any of those affidavits which the parties think should be before me for the purpose of dealing with the application.

There would in my mind be two in particular.  There is an affidavit referred to as being sworn by Ms Cordez in the Supreme Court proceedings on 26 September 2008.  The reference in the transcript doesn’t give me a filing date I’m afraid so it will be something after 26 September.  And there’s also a reference in the transcript to an affidavit by Ms Cordez concerning a resulting trust.  It seems to be an affidavit which she filed in those proceedings in support of her assertion that there is a resulting trust in her favour or somebody’s favour, I’m not sure how she addresses it.  But in any event, that’s how the transcript reads.

I am obviously keen to see both parties’ affidavits and any other affidavits which the parties might think are relevant and are on the Supreme Court file.  As I indicated earlier in the application I am prepared – or I do wish to deal with those issues that are before me and I will accept material that has been filed in the Supreme Court proceedings to this proceeding or at least copies of that material if the originals can’t be secured.

MR KELSO:  My instructing solicitors, your Honour, will be able to get that material and circulate it- - - -

FEDERAL MAGISTRATE:  If they could.

MR KELSO:  - - - -      I’m told by 4 pm tomorrow.

FEDERAL MAGISTRATE:  I’d appreciate that thanks, Mr Kelso.  That then just leaves me to address the matter that – the final matters that need to be agitated without any sense seeking to bind myself or without foreshadowing the outcome of the application.

At this stage it seems that only matters that I think I’ll need to hear evidence on will be matters that concern the declarations of trust in respect of the chattels, being the jeweller and the furnishings.

Now, again, with Ms George not being here I’m not sure how we’re going to convey to her my observations about these matters today.  Perhaps efforts could be made to let her know that I’d be expecting to hear her evidence on that matter when we commence on Monday.

I hope what I – subject to any submissions that might be made, what I propose to do is to deliver the reasons for judgment hopefully by Friday afternoon, if not by Friday or early Monday morning and then you can have a couple of hours to reflect upon the matters there and we can then proceed to hear the evidence as I say, that deals with the issues that I think need to be agitated orally.

43                  After the mention on 4 February 2009 and under cover of a letter of that same date, the solicitors for Dr Ironside and DPIPL lodged with the Federal Magistrates Court and copied to the other parties in the proceedings in that court copies of affidavits which had been filed in the Supreme Court on behalf of their clients and which, in their opinion, “ought to be placed before his Honour”. They did this in accordance with what they apprehended to be a direction made on 4 February 2009 by the learned federal magistrate. On 6 February 2009 Mr Humzy-Hancock a solicitor in the employ of the solicitors for the bankruptcy trustee swore and caused to be filed in the Federal Magistrates Court an affidavit to which he exhibited what he swore were true copies of the affidavits which had been filed on behalf of Ms George in the Queensland Supreme Court proceedings. He did this in compliance with an undertaking given to the Federal Magistrates Court on behalf of the bankruptcy trustee at the mention on 4 February 2009.

44                  On 9 February 2009 the learned federal magistrate delivered reasons for judgment in respect of the summary judgment application. Ms George did not appear that day. Having delivered judgment in respect of the summary judgment application, his Honour went on to deal with other issues in the proceedings with which we are not concerned.

45                  In his reasons for judgment, the learned federal magistrate summarised the “Background Facts”, as revealed by the material before him, in relation to the Moggill property as follows:

18.       For many years prior to the relevant marriage the bankrupt worked in the banking industry. She lived in South Australia and had acquired property in her own right. It was said that at the time of her marriage she had at various times owned four pieces of real estate in South Australia.Although not strictly material to this application I note that in her matrimonial proceedings before Barry J in 2005 her evidence (which was accepted on that point) was that at that time she owned a property at Karsbrook with her first husband. There does not appear to have been evidence of the other three properties although I note there was reference in evidence by her to a unit. Evidence of the other holdings was not in dispute.

19.       The realisation of her real estate holdings was said to have provided the source of funds which were eventually available to her and her second husband to purchase the former matrimonial home at Pullenvale. That property was purchased in 1998 and registered in her name. It was accepted by Barry J that the property was purchased solely in her name for appropriate reasons. Despite it being purchased solely in her name His Honour accepted and treated it as matrimonial property for the purpose of the property proceedings between the bankrupt and her former spouse although he did accept “a large proportion of the funds used as equity for the Pullenvale property came from the [bankrupt]” although “to the extent of $200,000 as claimed, I am unable to (find)”.

20.       After the bankrupt and her husband separated in 2001 the bankrupt unilaterally liquidated the Pullenvale property realising a sum of approximately $743,000. She used part of the funds to acquire the Moggill property which was then vacant land. The historical search reveals the registration of transfer occurred on 23 December 2003 and a certificate of title then issued. A mortgage with the National Australia Bank was registered on 14 July 2004. This approximates with the date of contract for the construction of a house on the Moggill property. Although the bankrupt referred to the construction agreement as being executed in about June 2005 (T page 191 line 5) it seems likely that the reference to 2005 is in error as I note from the contract of sale executed on 18 June 2005 that the “present use” of the property was noted as “residential” and it purported to provide for a long term lease-back arrangement. It is unlikely that such an agreement would have been concluded in the absence of the construction of the dwelling upon the property.

21.       From the chronology provided in the Family Court proceedings it is apparent the property was acquired prior to the resolution of that dispute and accordingly remained matrimonial property as defined.

22.       As contended by the Trustee it is plain the bankrupt could not have had title of the Moggill property to convey to any third party interest in that property as trustee or otherwise at least until after the orders of Barry J made on 29 April 2005.

23.       It follows the Moggill property, which by that time appears to have included the completed residence, was from that time capable of disposition by the bankrupt but not before.

24.       In June 2005 the bankrupt in her own right entered into a contract to sell the Moggill property to the second respondent Dr Peter Ironside Pty Ltd (DPIPL) for a sum of $400,000. The contract was not subject to any encumbrances but did include provision for a 30 year tenancy agreement in her favour at a set rental. The bankrupt contends that at the same time a collateral agreement to transfer the property back to her by DPIPL was also concluded.

25.       On 14 September 2005 a memorandum of transfer giving effect to a contract of sale dated 18 June 2005 was executed by the bankrupt as a vendor. Shortly before this time on 27 August 2005 the hand written memorandum of transfer providing for a transfer of the Moggill property by DPIPL to the bankrupt in trust for Alexander George of a “fee simple life estate” (sic) was executed by DPIPL. It is to be noted that there was no formal contract in writing prepared in support of that transfer. The consideration was noted on the transfer to be “$400,000 (four hundred thousand dollars) on or before death”. There was some debate about the nature of the interest transferred i.e. whether it was fee simple or merely a life interest but for present purposes that matter is not material.

26.       Only the transfer from the bankrupt to DPIPL was ever registered. The evidence does not suggest that any third party ever had notice of the unregistered transfer executed by DPIPL on 27 August 2005.

27.       In the meantime relations between Dr Peter Ironside and the bankrupt’s sister, Susan Jane Wilson (formerly Ironside), soured. They separated and commenced property proceedings in the Family Court. The Moggill property formed part of the matrimonial estate in that proceeding. The bankrupt sought to intervene in those proceedings to protect her claimed interest. The interest claimed by the bankrupt was in respect of the Moggill property itself. The terms of the heads of agreement made the subject of orders of 26 February 2008 in the Federal Magistrates Court in the Ironside proceeding relevantly provided:

2.         (Dr Peter Ironside) shall do all acts and things reasonably necessary and whether in his personal capacity as director or as shareholder of (DPIPL) so as to ensure that the total mortgage debt secured by the National Australia Bank upon the property situate at 130 Land Place, Moggill in the State of Queensland is not more than $500,000...as at the date of sale contemplated by the heads of agreement.

28.       Otherwise the bankrupt as intervenor abandoned any claims “whether on her own account or as trustee with respect to the (Moggill) property.”

29.       In the meantime the Trustee had become aware of the Ironside proceeding and the bankrupt’s intervention in it. The Trustee in turn intervened as the bankrupt’s trustee. As the Ironside proceeding was settled without need for judicial intervention the Trustee was able to negotiate a suitable outcome which involved the transfer of the Moggill property to him.

30.       The bankrupt was also party to the Heads of Agreement and appears to have agreed its terms.

31.       By reason of the Heads of Agreement the Moggill property was transferred to the Trustee pursuant to a memorandum of transfer executed on 2 April 2008.

32.       However shortly after that time it appears the bankrupt recanted on her earlier position agreed by the Heads of Agreement and sought to lodge a caveat to prevent registration of the transfer.

33.       In a letter written in support of the caveat the bankrupt claimed the Moggill property ought to have been registered in the name of the bankrupt as trustee for Alexander George.

46                  In addition to the facts summarised in this excerpt some further facts elsewhere referred to in the learned federal magistrate’s reasons for judgment should be mentioned. His Honour (at para 84) makes reference to the following allegation in para 2(e)(xvii) of Ms George’s amended statement of claim of 19 December 2008 with respect to the Moggill Property:

(xviii)    The resulting trust dated 27/11/97 was declared by parole on this date and further declared in writing by trust deeds dated 11/5/2002 and 5/12/2003 and those trusts deeds disclosed above in part 2 along with affidavits dated 26 September 2008. [sic]

47                  After that reference, his Honour stated (at para 85), “Despite numerous requests made of the bankrupt no trust deed dated 1997 has ever been produced by her. She has been afforded numerous opportunities to present such a deed which (prior to her most recent pleading) she maintains exists.” With all due respect, if there were a trust originally created, as Ms George alleged, “by parole”, the absence of any written declaration of trust in 1997 is hardly surprising. Further, it does not follow that a trust originally created by parole in respect of property in 1997, could not have later been evidenced in writing. It is not necessary to dwell further on this aspect of the reasons for judgment for, as will be seen, there is error enough in the way in which the two alleged written declarations of trust put forward by Ms George were dealt with.

48                  Each of these alleged declarations took an unusual form. As to the trust declaration dated 1 May 2002 (the reference to 11 May 2002 in the pleading is a transcription error) and for the purposes of determining the summary judgment the learned federal magistrate accepted (at para 87) the following:

On 1 May 2002 the bankrupt endorsed a copy of the then current reprint of the Trusts Act 1973 (Qld) (“the Trusts Act”) (Reprint 4A) with the following words:

“Property trust 130 Airley Road Pullenvale Queensland 4069 Lauren Kay Cordes as trustee for Alexander William George dated 1st May 2002 holding a life interest of mother/child referred to as above dob 4/7/1964 and _/11/1997 respectively.

1-2-2002 Lauren Kay Cordes

__________________________________

dated Signed Trustee”

49                  His Honour likewise found (para 88) that there were no other markings on the balance of this reprint of the Trusts Act.

50                  As to the trust deed dated 5 December 2003, and again for the purpose of determining the summary judgment application, the learned federal magistrate found (para 110 – 112):

110.      In December 2003 part of the proceeds of the Pullenvale property were applied by the bankrupt to the acquisition of the Moggill property. The bankrupt entered into a contract to purchase the Moggill property on
5 December 2003. There was no suggestion of any third party having an interest in that property together with her at that time.

111.      On the same date as the contract to purchase that property the bankrupt endorsed a copy of the then current reprint of the Trusts Act(Reprint 4B) with the following words:

o                    “Property trust agreement amendment original trust agreement dated 1 May 2002.

o                    Lauren Kay Cordes as trustee for Alexander William George property trust lot 13 Survey Plant 145714 County of Stanley Parish of Moggill dated 5 December 2003 holding life interest of mother and child on the above property --- Lauren Kay Cordes.”

112.      The bankrupt contends that this effected a variation of the May 2002 trust in particular by the substitution of the Moggill property for the Pullenvale property as the relevant trust property.

51                  In respect of the Moggill property, Ms George’s case was that it had been acquired with the proceeds of a property at Pullenvale of which she was the registered proprietor. On 1 May 2002 she had declared in writing in the terms indorsed on the copy of the Trusts Act, that she held that property on trust. In turn, the proceeds of the sale of the property at Pullenvale had been used to acquire, in 2003, and thereafter to improve the Moggill property.

52                  In her amended statement of claim and as summarised in the passage which we have quoted from the joint judgment in the Queensland Court of Appeal, the Moggill property was later the subject of an alleged arrangement between Ms George as trustee, Dr Ironside and DPIPL.

53                  So far as the administration of Ms George’s bankrupt estate is concerned, the importance of  whether the Moggill property was, at the commencement of her bankruptcy, held in trust lies in the exception for which s 116(2)(a) of the Bankruptcy Actprovides to the general rule, stated in s 116(1)(a) of that Act. The general rule is that:

(a)        all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge.

…

is property divisible amongst the creditors of the bankrupt.

54                  The relevant exception is in respect of property “held by the bankrupt in trust for another person”.

55                  The learned federal magistrate accepted a submission made on behalf of the bankruptcy trustee, Dr Ironside, DPIPL and the Bank, which each repeated before us on the appeal, as the centrepiece of their respective submissions, that, even if, as they disputed, either of the indorsements on a copy of the Trusts Act was sufficiently certain to create a trust, “there was a failure to undertake all the necessary steps required at law to effect a transfer and registration of [Ms George’s] interest to the purported trust as are required pursuant to the provisions of the [Land Title Act 1994 (Qld)]” (reasons for judgment, para 101). His Honour further found (at para 103) in respect of the 1 May 2002 declaration that:

[T]here only can be an effective gratuitous transfer once the donor has done all those things prescribed by statute or the common law for the transfer of the legal title that have to be done by the donor and cannot be done by anyone else; see section 200 of the Property Law Act. Again the learned authors of Principles of the Law of Trusts summarised the principle as follows:

If an intending settlor attempting to establish a gratuitous trust by transfer of a legal title does not take those steps to satisfy the legal requirements for transfer to the intended trustee that only he or she can take, the intended trust never comes into existence. The property remains with the intending settlor unaffected by any trust referable solely to an attempted transfer.

56                  This reasoning was repeated in respect of any possibility that there could be a valid trust in respect of the Moggill property even assuming that this did not fail for want of certainty.

57                  Recalling that the application for summary judgment was made orally, and even though the learned federal magistrate came, by looking to affidavit evidence, to range more widely than just deciding a separate question of law summarily, on one reading of the transcript of the trial in December and the application made to his Honour, his understanding of it was that a discrete question of law was apt for summary resolution. We make that observation particularly having regard to the following statement which his Honour made to Ms George:

FEDERAL MAGISTRATE:  No, we’re having a trial now, Ms George.  Now, what Mr Coulsen [then counsel for the bankruptcy trustee] wants to do is rather than have to run through a whole lot of evidence he says is unnecessary, he wants to see if he can persuade me to strike the application out on this point on a matter of law.  Now, that’s something he’s entitled to do at any time, whether he does it before we hear the evidence or after we hear the evidence but ultimately - - -

The separate question, the resolution of which was thought to be fatal to any prospect of success on the part of Ms George, was, as we have just noted, identified by the learned federal magistrate as whether “there was a failure to undertake all the necessary steps required at law to effect a transfer and registration of [Ms George’s] interest to the purported trust as are required pursuant to the provisions of the [Land Title Act 1994 (Qld)]”

58                  For present purposes, it is desirable to examine the correctness of the submissions made to us and the conclusion reached in the court below on the point.

59                  An express trust may be created either by declaration or by transfer. The reasons for judgment of the learned federal magistrate and the submissions of the parties to the appeal, save for Ms George, proceed upon the assumption that a transfer or assignment of the Pullenvale property or the Moggill property, as the case may be, was necessary in order that it be held on trust by Ms George. This is wrong. At the time of each of the alleged written declarations, Ms George was already the registered proprietor of the land in question. This being so, the position is as stated in Heydon JD and Leeming MJ, Jacobs’ Law of Trusts in Australia (7^th ed, LexisNexis Butterworths, 2006) (Jacobs’) at [622] and [623]:

Declaration of Trust

[622]    The second principal mode by which a trust may be constituted is by declaration. What is required is a statement, intended to be final and binding, that property owned by the settlor is thereafter held on trust for another. … No consideration is required. Because the trust property is already owned by the trustee, the principles in Milroy v Lord do not apply; indeed, that is the force of Milroy v Lord.

[623]    The declaration must be manifested in writing signed by the person making the declaration if the trust property is land or any interest in land. … [Footnote references omitted]

60                  In respect of the need, referred to in para 623 of Jacobs’, for a declaration to be in writing if the trust property is land or an interest in land, the learned authors cite s 23C(1)(b) of the Conveyancing Act 1919 (NSW) and its interstate equivalents. In Queensland, that equivalent is s11(1)(b) of the Property Law Act 1974 (Qld) (Property Law Act), which provides:

11        Instruments required to be in writing

(1)        Subject to this Act with respect to the creation of interests in land by parol—

…

(b)        a declaration of trust respecting any land must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will

61                  If nothing else, the alleged indorsements on the respective copies of the Trusts Act 1973 (Qld) (Trusts Act) were a manifestation in writing and signed by the person able to declare a trust, Ms George. Ms George complied with this necessary formality in relation to the holding of land in Queensland on trust.

62                  Section 109(a) of the Land Title Act 1994 (Qld) (Land Title Act) provides, materially:

109      How interest as trustee may be registered

A person may be registered as trustee of an interest in a lot only by the registration of—

(a)        an instrument transferring the interest to, or creating the interest in favour of, the person as trustee; or

(b)        a request to vest the interest in the person as trustee.

As can be seen, s 109(a) of the Land Title Act draws upon the proposition of general trust law that a trust in respect of property may be created either by assignment or declaration; hence the reference in the alternative to an instrument “creating the interest in favour of” the person as trustee. As its heading indicates, the section is concerned with how an interest as trustee in respect of land or an interest in land may be registered, not with how such an interest may validly be created. Section 110(1)(b) of the Land Title Act permits a registered owner of land in Queensland to lodge an instrument of transfer “to declare that the registered owner holds the interest in a lot as trustee”. This provision is facultative. Such an instrument may be registered. If so, it alerts those who search the title to the existence of a trust in respect of the registered proprietorship of the land in question. It does not, however, have the effect that a declaration of trust in respect of freehold land which conforms with s 11(1)(b) of the Property Law Act is nonetheless ineffective to create a trust in respect of that land if an instrument declaring that the owner holds the land on trust is not registered.

The prevailing position in Queensland is accurately summarised thus in MacDonald, McCrimmon, Wallace and Weir, Real Property Law in Queensland (3^rd ed, Thomson Reuters, 2010) at [5.100]:

No equitable interests in land can be registered under the Land Title Act. The Torrens system is concerned with the registration of, and dealings with, legal estates and interests in land. Generally, equitable interests are kept off the register. This is not to suggest that equitable interests in Torrens land have been abolished. Trusts may be created and a person may be registered as a trustee of an interest in a lot.

63                  Section 200 of the Property Law Actis concerned with the effect in equity of voluntary assignments. It has no application to a situation where no assignment is necessary in order to constitute a trust.  That section provides:

(1)        A voluntary assignment of property shall in equity be effective and complete when, and as soon as, the assignor has done everything to be done by the assignor that is necessary in order to transfer the property to the assignee—

(a)        even though anything remains to be done in order to transfer to the assignee complete and perfect title to the property; and

(b)        provided that anything so remaining to be done is such as may afterwards be done without intervention of or assistance from the assignor.

(2)        This section is without prejudice to any other mode of disposing of property, but applies subject to the provisions of this and of any other Act.

64                  Though the indorsements on the copies of the Trusts Act constituted necessary formalities in respect of the holding of land in Queensland on trust, it is a separate question whether the declarations recorded or evidenced there were sufficiently certain to allow the ascertainment of the terms of the trust. The learned federal magistrate accepted a submission of the bankruptcy trustee and the respondents other than Ms George that neither read separately nor in conjunction were these declarations sufficiently certain. That position was repeated in the submissions of the same parties before us. It is neither necessary nor appropriate for the purposes of disposing of this appeal to determine the correctness of that conclusion. That is a question for trial. That conclusion is founded first on the following accurate statement of principle in Jacobs’ [at [501]), “[t]he overall question is whether in the circumstances of the case, and on the true construction of what was said and written, a sufficient intention to create a trust has been manifested.” Further, it only becomes necessary to consider the effect, taken in conjunction with the overall circumstances proved, of the indorsements on the Trusts Act, if the Heads of Agreement is set aside. If that agreement is not set aside then the acquisition by the bankruptcy trustee of the title to the Moggill property is clear.

65                  Also raised in the course of the bankruptcy trustee’s submissions was whether either of the indorsements recorded on the Trusts Act copies could be received in evidence having regard to s 487 of the Duties Act 2001 (Qld) as neither bore any impression in respect of the payment of duty under that Act. This seems to have been raised in passing below with Ms George asserting that she had lodged each document with the Commissioner of State Revenue only to have them returned on the basis that stamping of such instruments was no longer required. The subject is not mentioned in the reasons for judgment in the court below, seemingly because Ms George’s case, or what was assumed to be her case, was being taken at its highest. Again, whether it ever becomes necessary to consider the question of stamp duty depends upon conclusions reached in respect of the Heads of Agreement which, we repeat, is a matter for trial.

66                  At the time when Ms George sold the property at Pullenvale and then acquired and subsequently improved the Moggill property, she was separated from her then husband and there were unresolved matrimonial proceedings in the Family Court of Australia. Those proceedings were not finally determined in that Court until 2005. As to this the learned federal magistrate observed (at para 22 and para 23):

22.       As contended by the Trustee it is plain the bankrupt could not have had title of the Moggill property to convey to any third party interest in that property as trustee or otherwise at least until after the orders of Barry J made on 29 April 2005.

23.       It follows the Moggill property, which by that time appears to have included the completed residence, was from that time capable of disposition by the bankrupt but not before.

His Honour thus accepted a submission made before him on behalf of the bankruptcy trustee that another reason why the Moggill property could not have been the subject of any validly constituted trust was that Ms George was not able to make a declaration of trust in respect of the property until the final resolution of the Family Court proceeding because it was, before then, “matrimonial property”.

67                  At the time of the first alleged declarations of trust Ms George was the registered proprietor of the Pullenvale property and at the time of the second alleged declaration of trust, of the Moggill property. The institution of a proceeding in the Family Court with respect to the property of the parties to a marriage whereby that Court may come to make an order under s 79 of the Family Law Act 1975 (Cth) in respect of that property does not, ipso facto, alter the legal or beneficial ownership of that property. The Family Court is, by s 79, granted a very broad power to alter interests in respect of the property of the parties to a marriage. Further, by virtue of, and subject to, the conditions and restrictions in Part VIIIAA of the Family Law Act, those powers extend to the making of orders which affect third parties. Those powers may, therefore, have extended to declaring that either or each of Ms George’s alleged declarations of trust were void. However, unless and until any order altering her interest in the property were made, the validity of a prior declaration of trust would not be affected. There was never any such order. The learned federal magistrate was, with respect, in error in considering that the Moggill property was not capable of being the subject of a trust declaration by Ms George before the Family Court made its order on 29 April 2005.  When queried in the course of oral submissions on the appeal about these paragraphs of the reasons for judgment of the Court below, Counsel for the bankruptcy trustee did not seek to uphold them.

68                  Holmes and Chesterman JJA noted in the extract from their joint judgment which we have quoted at [16] above, that Ms George’s description of the June 2005 arrangement which she alleges in her amended statement of claim to have made with Dr Ironside and DPIPL is very difficult to understand. With respect, we share that view and agree with the summary their Honours offer as to its meaning. The learned federal magistrate has also offered a summary of the arrangement in his reasons for judgment (para 24 to para 26, quoted at [45] above). The learned federal magistrate’s summary draws not only upon the amended statement of claim but also on whatever material it was that came to be read and relied upon for the purposes of the disposal of the application for summary judgment. Irrespective of the summary to which one looks, the arrangement does not involve any voluntary assignment of the Moggill property. That is so in respect both of that part of the alleged arrangement which involved transfer of the Moggill property to DPIPL and that which provided for the transfer back of the property to Ms George. Section 200 of the Property Law Act was not relevant to the arrangement either as pleaded by Ms George or as summarised by his Honour.

69                  A further consideration is that, if the Moggill property had been held in trust as a result of declarations made or confirmed in 2002 or 2003, its transfer to DPIPL would have been contrary to the terms of such a trust as then established. However, it does not follow from this that Ms George ought to be regarded as acting only in her own right in making the June 2005 arrangement alleged. It is neither necessary nor appropriate for the purpose of deciding this appeal to resolve that question. It is enough to note the possibility, raised by Ms George both in her pleading and suggested on the face of the relevant instrument of transfer. Further, and as the learned federal magistrate  himself noted (at para 126):

There was a factual dispute concerning this matter. The Trustee and DPIPL and Dr Ironside allege the words “life interest” and “in trust for Alexander George” have been added later. That is to say that the transfer merely purported to effect a transfer by DPIPL back to the bankrupt, simpliciter upon payment by her to it of “$400,000 on or before (her) death”. A debate arises concerning the original transfer; the bankrupt alleging her holding in the capacity of trustee with DPIPL and Dr Ironside denying that matter. [Emphasis added]

The existence of that factual dispute ought, at the very least, to have sounded a cautionary note about the appropriateness of proceeding to summary judgment as to whether the title to the Moggill property had passed to the trustee in bankruptcy.

70                  That cautionary note is not muted by the Heads of Agreement. It was pursuant to the compromise supposedly reflected by that document that the Moggill property was to be transferred to the bankruptcy trustee, subject to the Bank’s rights under its mortgage. Ms George, however, alleged that she had signed the Heads of Agreement under duress. Further, even acknowledging the difficulties in understanding presented by her amended statement of claim, at least some of the claims purportedly compromised by the Heads of Agreement were claims that Ms George had advanced in what she alleged was her capacity as a trustee.

71                  Also purportedly compromised by the Heads of Agreement were the “resulting or constructive trust” claims which Ms George advanced. The learned federal magistrate observed (at para 146) of Ms George’s amended statement of claim that her “use of the term ‘resulting trust’ in her pleading was inconsistent and contextually inappropriate”.  We agree. A like observation may be made in respect of her use in that pleading of the term “constructive trust”. His Honour also observed (at para 144) of the material before him that, “at best [her] case in support of her allegation of the existence of a resulting trust could be premised upon her personally contributing $421,000 to the cost of the house constructed on the Moggill property. She contends for an interest in respect of that sum for her son.” As to this, his Honour expressed the view (at para 145) that, “given she personally made the contribution any resulting trust would have to be in her favour”. Such an interest, his Honour reasoned, vested in the bankruptcy trustee.

72                  To conclude that the personal contributions described had given rise to a resulting trust at all is to misconceive the nature of a “resulting trust”. A trust of this description (also known as an implied trust) “arises by presumption of law in favour of the settlor or the settlor’s representatives” (Jacobs’ at [1201]). In general, a trust of this kind arises in one or the other of the following ways:

(a)        where a settlor has transferred property to trustees but has not disposed of, or not wholly disposed of the beneficial interest in that property; and

(b)        where the purchaser of property directs that it be transferred into the name of a third person and there is nothing to indicate an intention that the third person should take the property beneficially.

As the learned authors of Jacobs’ state (at [1201]), “In these circumstances, the law presumes that the settlor or purchaser, as the case may be, intended to retain the beneficial interest that has not been disposed of.” Ms George’s allegation that the money spent in improving the Moggill property was spent with the intention of benefiting her son was inconsistent with the existence of any intention on her part that she retain any beneficial interest in any part of that money. Further, in reaching factual conclusions as to the events which had occurred, it is necessary carefully to excise Ms George’s ex post facto engrafting of misunderstood and inconsistently used legal concepts on to her description of those events. If the declarations that she stated she indorsed on copies of the Trusts Act were indeed made at the time and were, in the circumstances, in law sufficient to create a trust, it may be that the correct characterisation of the money progressively spent on the improvements to the Moggill property is that it represented further sums held and expended in terms of a trust in respect of that land created by declaration. Such issues though are matters for resolution at trial.

73                  First and foremost, the bankruptcy trustee’s claim to the Moggill property was grounded in the Heads of Agreement. Whether, as Ms George contended, it should be set aside because it had been signed by her under duress was factually controversial. Whether what would remain in relation to that property, if the Heads of Agreement were set aside, was an interest which passed to the bankruptcy trustee by operation of the Bankruptcy Act at the commencement of Ms George’s bankruptcy or did not so pass because it was held by her in trust also depended on the resolution in the first instance of factually controversial issues.

74                  The learned federal magistrate considered that the case was one apt for summary judgment pursuant to the power conferred on the Federal Magistrates Court by s 17A of the Federal Magistrates Act 1999 (Cth (the Federal Magistrates Act).  With respect, we emphatically disagree.

75                  His Honour correctly concluded (at para 13) that s 17A of the Federal Magistrates Act conferred a power to grant summary judgment equivalent to that conferred on this Court by s 31A of the Federal Court of Australia Act 1976 (Cth), to grant summary judgment in proceedings before it. In so doing, his Honour referred to these remarks by Lindgren J in White Industries Australia Ltd v Commissioner of Taxation (2007) 160 FCR 298, at [50] to [54]:

[50]      Section 31A of the FCA Act, like O 20 of the FCR, is concerned with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form. Section 31A(1) is comparable to O 20 r 1 in that they are both concerned with summary judgment for the party who is prosecuting the proceeding. Section 31A(2) is comparable to O 20 r 2 in that they are both concerned with dismissals of proceedings. The word “judgment” in s 31A(2) is defined in s 4 of the FCA Act to mean “a judgment, decree or order, whether final or interlocutory, or a sentence”. It is convenient in the context of the present case to think of the judgment to which s 31A(2) refers as an order of dismissal of a proceeding.

[51]      Is there a difference between the concept of no reasonable cause of action being disclosed (O 20 r 2(1)(a)) and no reasonable prospect of successfully prosecuting a proceeding (s 31A(2))? The only difference that suggests itself to me is that the latter makes plain that there may be taken into account the unavailability of evidence necessary to bring success at trial, whereas it is arguable that the former does not permit the unavailability of such evidence to be taken into account.

[52]      In the present case, the unavailability of evidence is not an issue. The respondents’ motion for summary dismissal is founded on their notice of objection to competency and on facts that are not in dispute: the existence of the guidelines, Mr O’Neill’s making of his decision under them to allow access to documents 226–238, and the giving of the notices to produce in the appeal proceedings.

[53]      The “no reasonable prospects of success” formula of s 31A is that which was adopted in r 24.2 of the United Kingdom’s Civil Procedure Rules (the CPR) following the recommendation of Lord Woolf, Master of the Rolls, in his Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in England and Wales, HMSO, London, 1996, Ch 12, ss 31–36. The same test has been adopted in rr 292(2) and 293(2) of Queensland’s Uniform Civil Procedure Rules 1999.

[54]      Under s 31A I must be satisfied that the applicants have no reasonable prospect of success, but as s 31A(3) makes clear, this does not mean that I must be satisfied that the proceeding is hopeless or bound to fail. I suggest that the legislature’s intention in enacting s 31A was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Cmrs (1949) 78 CLR 62 at 91–2 ; [1949] ALR 333 at 347–8, and General Steel Industries Inc v Cmr for Railways (NSW) (1964) 112 CLR 125 at 129–30 ; [1965] ALR 636 at 638–9: see Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753 at [15].

These remarks have since frequently been cited with approval by various judges of this Court. They offer valuable guidance in relation to the background to the enactment, purpose and meaning of s 31A and its equivalent, s 17A. The suggestion made by Lindgren J (at [54]), with which we agree, that the intention of the legislature in enacting s 31A was to “lower the bar for obtaining summary judgment” does not carry with it the additional proposition that the intention was to remove the bar completely. True it is that s 31A is not concerned just with pleadings but with substance, not form. The mere presence of a factual controversy, however trifling, implausible, tenuous or tangentially relevant is not a bar to the exercise of the power conferred by s 31A to grant summary judgment. That would be inconsistent with the way in which the phrase “no reasonable prospect of success” is to be read in light of s 31A(3) (and s 17A(3)).

76                  Here, though, in respect of the Moggill property and the Heads of Agreement there were substantial issues of credit to resolve upon the resolution of which depended whether a range of difficult legal issues may or may not have fallen for determination. There was never a proper occasion for entering summary judgment in respect of the Moggill property or the Heads of Agreement. His Honour’s apprehension of the existence of particular factual disputes in relation to the Moggill property should have led him to this conclusion in the circumstances of the present case.

77                  Considerations arising from the procedure adopted for the hearing and determination of the proceeding may have distracted the learned federal magistrate from why the case in respect of the Moggill property and the Heads of Agreement was not apt for summary judgment.

78                  The case before the Federal Magistrates Court was one in which the bankruptcy trustee sought declaratory relief that particular property had been vested in him by the operation of the Bankruptcy Act. It was erroneous for the bankruptcy trustee to submit to the court below that he was “not running a positive case”. In the Federal Magistrates Court, it was for the bankruptcy trustee to introduce evidence to support findings of fact on the balance of probabilities which led to the legal conclusion that the property concerned had vested in him by operation of the Bankruptcy Act. The bankruptcy trustee carried the onus of proving the requisite facts. Ms George was a necessary respondent. She chose to contest the claim for relief made by the bankruptcy trustee. In relation to the Moggill property so it was for her to introduce evidence which, if accepted, showed that the property fell within the exception created by s 116 of the Bankruptcy Act which she contended to be applicable.

79                  In the Queensland Supreme Court proceeding, the bankruptcy trustee, as a respondent, could well be said to be prosecuting a “negative” rather than a “positive” case. Even though the adoption, for the purposes of the proceeding in the Federal Magistrates Court, of the pleadings of the parties in the Queensland Supreme Court was undoubtedly well-intentioned, it was also apt to mislead as to the nature of the proceeding before the Federal Magistrates Court and on whom lay the burden of proving the claim for relief in that court. Even had all parties been legally represented, the adoption of pleadings in what might be described as converse proceedings in another court would have been fraught with the risk of confusion as to the party bearing the onus. In a case where the only contradictor amongst the respondents was without the benefit of legal representation this risk was even more pronounced. As it is, the application for summary judgment which was brought in the Federal Magistrates Court has the appearance of an application for summary judgment in the Queensland Supreme Court proceeding and seems to have been treated accordingly. Had the Supreme Court pleadings not been adopted, it may have been more obvious for all concerned that it was for the bankruptcy trustee to begin and that his claim for relief was pregnant with factual controversy. 

80                  There is nothing in the transcript of the mention of the application on 4 February 2009 in the Federal Magistrates Court which shows that proof of the service on Ms George of a notice of listing for that day was before the Court. The respondents did not point to any such evidence in their submissions on the hearing of the appeal. One of the obligations to accord procedural fairness which attend the exercise of judicial power is to afford to a party to a legal proceeding an opportunity to be heard. In itself, Ms George’s absence on that day did not mean that the obligation was breached for it may have been that she had received due notice of the mention but had simply chosen not to attend. Had that been so, she would have been afforded an opportunity to be heard. Here, though, proof of due notice of that opportunity was neither addressed nor evidenced on 4 February 2009. In those circumstances, the proceeding ought to have been adjourned for later mention with directions for the giving of notice of the date of the adjourned hearing.

81                  This mention and the material introduced for consideration as a result related wholly to that part of the claim which concerned the Moggill property and the Heads of Agreement. The irregularity provides an additional reason why so much of the orders made below as were related to the Heads of Agreement and in whom the Moggill property is vested should be set aside.

82                  The potential for confusion introduced by an uncritical adoption for the purposes of the proceeding in the Federal Magistrates Court of the pleadings in the Queensland Supreme Court is no less applicable to the bankruptcy trustee’s claims for relief in respect of the horse and the land cruiser. No separate trial had been ordered by the Federal Magistrates Court in respect of the bankruptcy trustee’s claim that each of these items had vested in him.

83                  In respect of these items of property as well, the trial did not commence in any orthodox way having regard to the status of the bankruptcy trustee as the applicant for relief. As with the Moggill property, the case for the bankruptcy trustee was not opened and the material relied upon as the evidence in chief was not identified. Rather, so far as the horse and land cruiser were concerned, on 8 December 2008, at what was supposed to be the commencement of the trial of the bankruptcy trustee’s claim for relief, the Court sought to have Ms George identify the material upon which she relied in respect of these two items of property. Given this mode of proceeding, Ms George’s amended statement of claim in respect of these two items of property, if treated as a response to the bankruptcy trustee’s claim in the Federal Magistrates Court, put her case no higher than a right to “life use” of the horse and the land cruiser on the basis that each was owned by her sister, Ms Ironside, the fifth respondent.  The definition of “property” in s 5 of the Bankruptcy Act is sufficiently wide that the right of use pleaded by Ms George constituted property which passed to her trustee in bankruptcy, assuming in her favour that the position was as she had pleaded it to be. Further, on 8 December 2008, the bankruptcy trustee did point to evidence he had filed which disclosed that Ms Ironside had, by a Deed of Settlement with the bankruptcy trustee dated 28 October 2008, agreed to transfer the horse and the land cruiser to the bankruptcy trustee. Thus, there was nothing revealed at the trial in December 2008 which suggested that Ms George had a reasonable prospect of successfully defending this part of the claims for relief made by the bankruptcy trustee.

84                  Further, even if, as the learned federal magistrate allowed in his reasons for judgment, contrary to Ms George’s pleaded position, there had been evidence which showed that Ms Ironside held either the horse or the land cruiser in trust for Ms George, the beneficial interest in each item of property had passed to her bankruptcy trustee on the commencement of her bankruptcy. The exception for which s 116(2)(ca) of the Bankruptcy Act provided in respect of means of transport was inapplicable in the case of the land cruiser because, on the only valuation evidence before the Federal Magistrates Court, that vehicle had a value in excess of the prescribed amount.

85                  These conclusions were open on 10 December 2008 when judgment on the application for summary relief was reserved. They were not affected by the listing of the matter for mention on 4 February 2009 or Ms George’s absence from attendance that day.

86                  In the circumstances, we do not see any error in the learned federal magistrate having entertained and upheld an application for summary judgment under s 17A of the Federal Magistrates Act in respect of the bankruptcy trustee’s claim insofar as it related to the horse and the land cruiser.

87                  As foreshadowed, we propose to make some observations about an allegation of bias which appears in the notice of appeal but which is not referred to in the reasons for judgment in respect of the grant of leave to appeal. We make these observations because such an allegation is always a serious one and lest it be thought, in light of the general nature of the order granting leave, that it has passed unnoticed.

88                  Such an allegation, especially when made by a disappointed litigant without legal training who has appeared for him or herself may be nothing more than an emphatic, if inaccurate, way of expressing disagreement with a conclusion which has been reached by a judicial officer. However, it was not in this sense that Ms George made the allegation in her notice of appeal.

89                  There is no evidence which would support a finding of actual bias. The question is whether there was any error in the learned federal magistrate’s declining in the course of the trial in December 2008 not to disqualify himself because of the existence of a reasonable apprehension of bias. As to this, we again remind ourselves that Ms George had by then been refused leave to appeal in respect of an earlier, pre-trial, refusal by his Honour to adjourn the trial. The question then becomes whether, in the events which had happened between then and the trial ruling, his Honour ought to have disqualified himself so that any resultant order at the trial ought to be set aside.  Those events included a directions hearing on 5 December 2008 and the commencement of the trial on 8 December and its continuation on 9 December to the point of his Honour’s ruling.

90                  In Johnson v Johnson (2000) 201 CLR 488 at [11] to [13], (pp 492 to 493) Gleeson CJ and Gaudron, McHugh, Gummow and Hayne JJ, in their joint judgment observed:

It has been established by a series of decisions of this Court that the test to be applied in Australia in determining whether a judge is disqualified by reason of the appearance of bias (which, in the present case, was said to take the form of prejudgment) is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide.

That test has been adopted, in preference to a differently expressed test that has been applied in England, for the reason that it gives due recognition to the fundamental principle that justice must both be done, and be seen to be done. It is based upon the need for public confidence in the administration of justice. "If fair-minded people reasonably apprehend or suspect that the tribunal has prejudged the case, they cannot have confidence in the decision." The hypothetical reasonable observer of the judge's conduct is postulated in order to emphasise that the test is objective, is founded in the need for public confidence in the judiciary, and is not based purely upon the assessment by some judges of the capacity or performance of their colleagues. At the same time, two things need to be remembered: the observer is taken to be reasonable; and the person being observed is "a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial".

Whilst the fictional observer, by reference to whom the test is formulated, is not to be assumed to have a detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice. The rules and conventions governing such practice are not frozen in time. They develop to take account of the exigencies of modern litigation. At the trial level, modern judges, responding to a need for more active case management, intervene in the conduct of cases to an extent that may surprise a person who came to court expecting a judge to remain, until the moment of pronouncement of judgment, as inscrutable as the Sphinx. In Vakauta v Kelly Brennan, Deane and Gaudron JJ, referring both to trial and appellate proceedings, spoke of "the dialogue between Bench and Bar which is so helpful in the identification of real issues and real problems in a particular case." Judges, at trial or appellate level, who, in exchanges with counsel, express tentative views which reflect a certain tendency of mind, are not on that account alone to be taken to indicate prejudgment. Judges are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. On the contrary, they will often form tentative opinions on matters in issue, and counsel are usually assisted by hearing those opinions, and being given an opportunity to deal with them.

[Footnote references omitted]

91                  A study of the transcript of the directions hearing on 5 December 2008 reveals nothing more than an earnest endeavour by the learned federal magistrate to determine whether the matter was ready for trial on 8 December and to identify the issues for trial. There is certainly evidence of what is described in the passage we have quoted from the joint judgment in Johnson v Johnson as “active case management” but nothing more than that. Further, having regard to the transcript of that directions hearing, a fair minded lay observer would, in our opinion, conclude that his Honour had, in circumstances which also reveal Ms George’s tendency to be querulous, been solicitous to ensure that she and all of the parties were afforded a fair opportunity to be heard.

92                  So far as the trial proper is concerned, it did not, as we have observed, commence in a conventional way, having regard to the fact that it was for the trustee in bankruptcy first to commence his case. However, it was open, having regard to the absence, even on her pleading, of a reasonable basis for apprehending how the horse and the land cruiser had not passed to the bankruptcy trustee, to question her closely at the outset about the basis for resisting this aspect of the bankruptcy trustee’s application. It was also within the discretion of the learned federal magistrate to permit an application for summary judgment to be made orally and to dispense with whatever formal requirements might otherwise have attended the bringing of the application. That, in respect of the granting of summary relief in respect of the Moggill property and the Heads of Agreement, the exercise of that discretion can be seen to have miscarried does not at all entail that a fair-minded lay observer could reasonably apprehend or suspect that the his Honour had prejudged the case. To the contrary, by entertaining the application for summary judgment the learned federal magistrate, far from indicating a pre-judgment of the case, suggested only that it was possible, after hearing from all of the parties, to determine the case summarily. There is no basis for attributing error to the learned federal magistrate in refusing to disqualify himself, as Ms George requested, on the basis of the existence of a reasonable apprehension of bias.

93                  For these reasons, the appeal should be allowed in so far as it concerns the relief granted in the court below in respect of the Heads of Agreement and the Moggill property. Orders 1 and 2 of the orders made below should be set aside and so much of the proceeding as concerns the claim for relief in respect of the Heads of Agreement and the Moggill property be remitted to the Federal Magistrates Court for hearing and determination according to law. The appeal should otherwise be dismissed.

94                  As to costs, our provisional view, having regard to the length of time occupied on the hearing of the appeal of issues touching on the Moggill property and the Heads of Agreement, is that the bankruptcy trustee and the other respondent parties should be regarded as having substantially failed with the consequence that there should be no order as to costs. However, if only out of an abundance of caution, we shall, for the present, refrain from making any order in respect of the costs of the appeal pending the filing and serving, within seven days from the date hereof, of such written submission, if any, as any party may wish to make on the subject of costs.

Associate:

Dated:         27 May 2010

REASONS FOR JUDGMENT

Marshall J:

95                  I have had the considerable advantage of reading, in draft form, the reasons of Ryan and Logan JJ.  I gratefully adopt the background facts which gave rise to the appeal in this Court.  I also adopt their Honours’ reasoning and determination with regard to the chattels (the four-wheel drive vehicle) and the horse.  I also express my agreement as to the analysis by Ryan and Logan JJ on the appellable point of actual bias arising from the Federal Magistrate’s determination.

96                  However, I regret that I differ from their Honours as to the disposition of the appeal and consequent orders.  I disagree as to the analysis provided by their Honours on the issues of procedural fairness and duress, and on whether the Federal Magistrate erred in summarily dismissing the application initiated on behalf of the trustee.

Summary judgment from the Federal Magistrates Court

97                  One of the points in issue on appeal was the correctness of the view, of the Federal Magistrate, that the application by the trustee should be dealt with summarily under s 17A of the Federal Magistrates Act 1999 (Cth) (the Federal Magistrates Act).  On or about November 2008, the trustee brought an application in the Federal Magistrates Court.  In it he sought declarations that the Family Court Agreement, (signed by all parties to the Family Court proceeding between Dr Ironside and his then wife, including Ms George; see the reasons of Ryan and Logan JJ at [18]), remained valid and enforceable, and that legal and beneficial ownership of the Moggill property vested in the trustee, subject to the mortgage with the National Australia Bank.

98                  Ms George purported to act as the litigation guardian on behalf of her infant son during the proceeding.  She claimed that the Moggill property was subject to a trust, in favour of her and her infant son.  As such, she contended the property did not form part of her bankrupt estate.

99                  In the Federal Magistrates Court, the trustee contended that, given the bankrupt’s evidence, at its best, Ms George’s claims concerning the trusts must fail as a matter of law.  The second, third and fourth respondents adopted this contention.  As a consequence, the trustee and the other respondents sought to have the substantial matters in the application resolved on a summary basis pursuant to s 17A of the Federal Magistrates Act.  That section provides:

(1)        The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)        the first party is prosecuting the proceeding or that part of the proceeding; and

(b)        the Court is satisfied that the other party has no reasonable prospects of successfully defending the proceeding or that part of the proceeding.

(2)        The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)        the first party is defending the proceeding or that part of the proceeding; and

(b)        the Court is satisfied that the other party has no reasonable prospects of successfully prosecuting the proceeding or that part of the proceeding.

(3)        For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)        hopeless; or

(b)        bound to fail

for it to have no reasonable prospects of success.

(4)        This section does not limit any powers that the Federal Magistrates Court has apart from this section.

100               Section 17A is the cognate of s 31A of the Federal Court of Australia Act 1976 (Cth) (the Court Act), which provides as follows:

31A     Summary judgment

(1)        The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)        the first party is prosecuting the proceeding or that part of the proceeding; and

(b)        the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

(2)        The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)        the first party is defending the proceeding or that part of the proceeding; and

(b)        the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)        For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)        hopeless; or

(b)        bound to fail;

for it to have no reasonable prospect of success.

(4)        This section does not limit any powers that the Court has apart from this section.

101               In an authority cited by the learned Magistrate, White Industries Australia Limited v Commissioner of Taxation (2007) 160 FCR 298, Lindgren J remarked, at [50], that “section 31A of the FCA Act, like O 20 of the Rules [of this Court], is concerned with the bringing and defending of proceedings, not just with pleadings; with substance, not just with form...”.  His Honour went on to say, at [54], that:

Under s 31A I must be satisfied that the applicants have no reasonable prospects of success, but as s 31A (3) makes clear, this does not mean that I must be satisfied that the proceeding is hopeless or bound to fail. I suggest that the legislature’s intention in enacting s 31A was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by such authorities as Dey v Victorian Railway Commissioners (1949) 78 CLR 62.

102               In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited (2008) 167 FCR 372, Rares J expanded upon the procedures to be followed and tests to be applied under s 31A in the following terms, at [45]:

The character of a judgment under s 31A is identified by the test which the section prescribes.  The judgment is a determination that the proceeding or part of the proceeding ... “has no reasonable prospect of success”.  Thus, when the Court gives judgment for a party under s 31A (1) or (2) it is exercising a jurisdiction similar to the implied or inherent power of the Court to protect its own processes from proceedings which are an abuse of those processes.  By enacting s 31A, the Parliament broadened the categories of case in which the power summarily to determine proceedings could be exercised.  It is inherent in the power conferred by s 31A that the Court need not, and does not ordinarily determine the proceedings on their merits after a full trial.  A decision under s 31A is that the claim or defence has "no reasonable prospect of success".  It is not that the claim or defence has been proved so that the right or cause of action or defence merges into judgment and loses its independent existence: Blair v Curran [1939] HCA 23; (1939) 62 CLR 464 at 531-532 per Dixon J.  Rather, the power conferred by the section authorises the Court to make a decision summarily that there is no reasonable prospect that if a trial were to take place the claim or defence would succeed.  The section requires a prediction of the outcome of a trial on the merits but is not an actual adjudication of those merits.

103               At [58] his Honour went on to state:

…It is safe to infer that one of the purposes of the Parliament in enacting s 31A and its cognate provisions was to enable each of the High Court, the Federal Magistrates Court and this Court to deal under s 31A or its analogues where appropriate with any matter within its jurisdiction.  Given that a frequent issue in litigation under the Migration Act 1958 (Cth) was whether constitutional writ relief ought be granted to an applicant, the expression "give judgment" in ss 31A (1) and (2) must have been intended to include a power enabling the Court, expeditiously and without a full trial, to either grant constitutional writ relief or dismiss proceedings in which that relief was sought.

104               To similar effect, Gordon J identified a variety of factors to which resort was to be had in assessing an application under s 31A at [126]:

(1)        identification of the cause of action pleaded;

(2)        identification of the pleaded facts said to give rise to that cause of action;

(3)        a review of the evidence (if any) tendered in support of the claim for judgment;

(4)        identification of the defence pleaded;

(5)        identification of any facts pleaded which are said to give rise to the defence; and

(6)        a review of the evidence (if any) tendered in defence of the claim.

105               Here, the learned Magistrate correctly took the evidence at its highest and considered whether, as a matter of law, there was an arguable prospect of Ms George establishing a trust in respect of the Moggill property, in accordance with the above factors referred to under s 31A of the Court Act.  Section 17A requires a prediction of the outcome of a trial on its merits.  His Honour applied the proper test according to the above principles referred to, under s 17A, and concluded there were no reasonable prospects of the appellant successfully defending the trustee’s application. His Honour also stated that the evidence before him did not support any basis for a finding of an express, resulting, or constructive trust.  He was correct to do so, as the evidence before him did not establish the existence of any trust, constructive or otherwise.  Throughout his reasoning the learned Magistrate discussed, in considerable detail, each of the contentions as well as the evidence put forward by Ms George and determined that it did not give rise to the existence of any trusts.  In my view, the learned Magistrate’s conclusion, as well as the method by which he reached it was correct.

Testamentary trust

106               Ms George contends that there is a testamentary trust that she effected by way of her will over the Moggill property to take effect while she was still alive.  If Ms George’s intention was to create a testamentary trust, even if the will were in writing, this would not give rise to any legal or equitable right on the part of her son while Ms George remains alive.  As Bennett J said in Klewer v Official Trustee in Bankruptcy (No 2) [2008] FCA 1788 at [50]:

…A ‘beneficiary under [a] will derives, while the testator remains alive, no legal or equitable right or title from the will: all the beneficiary has is the prospect of acquiring a right or title if the testator dies in the lifetime of the prospective beneficiary without revoking or altering the will’ (Meagher, Heydon and Leeming, Meagher, Gummow and Lehane’s Equity: Doctrines & Remedies (4th ed, LexisNexis Butterworths, 2002) at [6-190]). As was stated Re Parsons; Stockley v Parsons (1890) 45 Ch D 51, at 55, per Kay J (approved in Ogden Industries Pty Limited v Lucas (1968) 118 CLR 32, at 37):

It is indisputable law that no one can have any estate or interest, at law or in equity, contingent or other, in the property of a living person to which he hopes to succeed as heir at law or next of kin of such living person.  During the life of such person no one can have more than a spes successionis, an expectation or hope of succeeding to his property.

107               Even if the learned Magistrate’s finding below in relation to Ms George’s intention to create an inter vivos express trust were wrong, any express trust in favour of her infant son would be unenforceable because of the operation of s 11 of the Property Law Act 1974(Qld) (Property Law Act), which requires that interests in land be registered in writing.  Without writing there can be no new interest or disposition conveyed to another person.  Section 11 of the Property Law Act provides:

11        Instruments required to be in writing:

(1)        Subject to this Act with respect to the creation of interests in land by parol:

(a)        no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorised in writing, or by will, or by operation of law; and

(b)        a declaration of trust respecting any land must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person’s will; and

(c)        a disposition of an equitable interest or trust subsisting at the time of the disposition, must be manifested and proved by some writing signed by the person disposing of the same, or by the person’s agent lawfully authorised in writing or by will.

(2)        This section does not affect the creation or operation of resulting, implied or constructive trusts.

108               Transfers of real property are governed by the legislation applying to the transfer of Torrens Title.  As Lewin on Trusts states, “[t]he section is satisfied if the trust is manifested and proved by and subsequent acknowledgment by the trustee, as by an express declaration by him, or any memorandum to that effect”.  (Lewin on Trusts, Express Lifetime Declarations of Trust, (Sweet & Maxwell, 2000) at [3-13]).

109               The equivalent provision to s 11 of the Property Law Act can be found in New South Wales: in s 23C (1) (b) of the Conveyancing Act 1919 (NSW) (the Conveyancing Act).  In Halloran v Minister Administering National Parks and Wildlife Act 1974 (2006) 229 CLR 545 at [45], it was said that s 23C of the Conveyancing Act “requires, among other matters, that a disposition inter vivos of an equitable interest subsisting at the time of the disposition ‘must be in writing’ signed by the disponer or the agent of the disponer lawfully authorised in writing (s 23C (1) (c))”.  Writing is a necessary requirement to establish a voluntary oral declaration of trust respecting land by a person holding full beneficial interest therein.  Ms George points to a trust deed established by her in 1997.  There has been no trust deed produced by Ms George dated 1997 or thereafter.  Furthermore, there was no attempt to convey the land into trust and it remained registered in Ms George’s name, until Ms George transferred it to Dr Ironside’s company (DPIPL).  There was no documentary evidence provided by Ms George creating an inter vivos express trust.  As well, no evidence was presented to support the existence of an implied trust.  The Federal Magistrate was correct in determining that there was no enforceable express or implied trust over the Moggill property.

Declaration of trust

110               Ms George submits that she made a binding declaration of a trust over the Moggill property for the benefit of her infant son.  Ms George purports to have declared a trust and settled property into that trust voluntarily, that is to say gratuitously.  However, a trust will only come into existence once the donor has done all the things necessary to effect the transfer.  As much appears from s 200 of the, Property Law Act, which provides:

a voluntary assignment of property shall in equity be effective and complete when, and as soon as, the assignor has done everything to be done by the assignor that is necessary in order to transfer the property to the assignee.

111               In Ford & Lee Principles of the Law of Trusts at [3140] the following is said:

…there is an effective gratuitous equitable transfer once the donor has done all those things prescribed by statute or the common law for the transfer of the legal title that have to be done by the donor and cannot be done by anyone else.  In Queensland that rests upon statute and in other jurisdictions the test is based on the reasoning of a majority of the High Court in Corin v Patton (1990) 169 CLR 540.

If an intending settlor attempting to establish a gratuitous trust by transfer of a legal title does not take those steps to satisfy the legal requirements for transfer to the intended trustee that only he or she can take, the intended trust never comes into existence.  The property remains with the intending settlor unaffected by any trust referable solely to the attempted transfer.

112               As Ms George was the beneficial owner of the legal title over Moggill, she claimed to vest an equitable interest by the declaration of that trust for the benefit of her son.  Once declared, the trust must be capable of registration (see Cope v Keene (1968) 118 CLR 1).  As the Federal Magistrate points out at [135] of his reasons, failure to lodge the transfer for registration prior to sequestration was fatal in establishing the existence of a trust.  Although legal ownership does not have to be transferred, there are nevertheless statutory formalities which must be satisfied when there is an intention to create a trust over real property.  A declaration of trust cannot be used simply to give effect to an uncompleted intention to transfer property.  If a transfer is intended to take effect as a transfer it cannot later be given effect by treating it as a declaration of trust.  Usually, equity will not perfect an imperfect gift; see Corin v Patton (1990) 169 CLR 540, at 549, per Mason C.J. and McHugh J.

113               Ms George alleges indorsements on respective copies of the Trusts Act 1973 (Qld) (Trusts Act), were a manifestation in writing and signed by herself, the person cable of declaring the trust.  The learned Magistrate determined that the declarations recorded or evidenced therein were not sufficiently certain to allow for the ascertainment of the terms of the trust.  The trustee contended that the purported trust by Ms George fails because the memorandum states the trustee holds the property, not on trust for the beneficiary, but rather the beneficiary holds a life interest in the property.  The Federal Magistrate accepted this submission, on the basis of the difficulty he noted, which arose by the words used, that prima facie seem to be granting a life interest to Ms George as trustee for the benefit of her son.

114               There is also no vesting date, which may give rise to issues concerning the perpetuity period.  As such, there was a failure to undertake all the necessary steps required at law to effect the transfer and registration of the trust Ms George claims as an interest in land, which is required pursuant to the Land Title 1994 (Qld).  Nevertheless, even if the declaration of a trust did not fail for uncertainty, the Heads of Agreement, (see the reasons of Ryan and Logan JJ at [18]), which Ms George signed, had not been set aide.  Therefore, whatever interests, legal or equitable, in the Moggill property vested with Ms George, her interests now vest with the trustee pursuant to s 58 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act).

Constructive and or resulting trust

115               Ms George claims that a constructive trust was imposed upon the Moggill land in or about December 1997.  Impositions of constructive trusts as an equitable remedy arise from unconscionable dealings, whether by a fiduciary or otherwise.  Ms George led no evidence that there were any unconscionable dealings which could give rise to a constructive trust.  As the Federal Magistrate said at [149] of his judgment, the trustee submitted that, putting Ms George’s evidence at its highest, Ms George’s case may be that a constructive trust was imposed upon Dr Ironside’s company in respect of its alleged unconscionable dealing in the failing to reconvey the Moggill property.  Even if a constructive trust were imposed, it does not follow that the trustee now holds some benefit or gain also on constructive trust for the bankrupt.  Again there, has been no evidence or pleading to suggest that the trustee has knowingly assisted or is knowingly concerned in the failure to reconvey the Moggill property.

116               Ms George also submits that child support payments, paid to her by way of her ex-husband, formed a constructive trust for the benefit of her infant son. The Federal Magistrate, at [144] of his reasons, said that:

At best the bankrupt’s case in support of her allegation of the existence of a resulting trust could be premised upon her personally contributing $421,000 to the cost of the house constructed upon the Moggill property.  She contends for an interest in respect of that sum as trustee for her son.

117               However, as the Federal Magistrate correctly points out those payments were made to the parent, not to the child.  These are Ms George’s own personal funds.  It was never the money of her son, nor does her son become the beneficiary of a constructive trust.  Even if monies were paid for the benefit of the child in the improvement of the Moggill property in trust, there was no express trust created.  Given that Ms George personally made the contributions, the trust would therefore be in her favour and her interests now vest with the trustee.

Life tenancy submissions

118               Ms George submits that there is a life tenancy in favour of her and her son in the Moggill property.  A tenancy agreement was said to have occurred on 18 June 2005.  However, no such interest is registered.  Ms George claims that the source of such an interest is said to be the contract between Dr Ironside and his company.  A concurrent transfer of the Moggill property was executed on 27 August 2005, so as to transfer the Moggill property back to Ms George in trust for her son, subject to a life interest, by Ms George. The trustee alleges that the words “life estate” and in “trust for Alexander”, were added at a later date and not at the time the contract was executed.  The contract for sale provided for a 30 year tenancy at a fixed rent.  It is unclear whether Ms George claims a life tenancy as an estate in land, in which case, ordinarily, rent would not be paid, or as a residential tenancy.  As the Federal Magistrate points out, it is unclear whether that claim has its basis in the tenancy agreement of 18 June 2005 or the notations upon the transfer executed on 27 August 2005.  If Ms George’s claim is premised upon the former then the tenancy agreement is a contract falling within the control of the trustee pursuant to s 58 of the Bankruptcy Act, not being exempt property pursuant to s 116 of the Bankruptcy Act.  If the claim is premised on the latter, the trust has not been established.  As the Federal Magistrate correctly points out, at [142], Ms George’s submission in this regard must also fail for uncertainty.

Procedural Fairness

119               Ms George alleged that she was denied procedural fairness by the Federal Magistrates Court, by that Court dealing with matters concerning her without her being present.  This issue arises out of the mention which took place before the Federal Magistrate on 4 February 2009.  On 10 December 2008, his Honour adjourned the proceeding to 9 February 2009, with a view to giving judgment on that day.  After 10 December 2008 and before 4 February 2009, the parties were sent notification of a listing of a mention before the Federal Magistrate on 4 February 2009.  Ms George did not attend the mention.  Matters were discussed at the mention which were relevant to the disputed ownership of the Moggill property.

120               The Federal Magistrate expressed surprise at Ms George’s non-attendance on 4 February 2009.  During the proceeding on 4 February 2009, the learned Magistrate raised the issue whether certain “purported trust deeds” were “in fact just transfer documents”, (at page 1 of the transcript of proceeding).  During the hearing of the appeal, Ms George had made no claim not to have received notification of the listing of the 4 February mention and gave no reason for her non-attendance in the Court below on that day, except to say that she was “not available”.  In those circumstances it is difficult to see how Ms George was denied procedural fairness.  As much is especially so when one considers that the Federal Magistrate said he was prepared to deal with the issues raised before him on 4 February 2009, on 9 February 2009, saying at page 2 of the transcript of proceeding that:

“…although I’d like to see the trust deeds – because I imagine the argument would be that any trusts may – or everything may have moved into the later transactions so – but ultimately I’ll hear parties on that point on Monday if people want to take – or want to advance any arguments in relation to that”.

Duress

121               A remaining issue is whether Ms George signed the Heads of Agreement under duress.  Ms George claims that she signed the Heads of Agreement in the Family Court mediation between Dr Ironside and his ex-wife under duress and that the Federal Magistrate erred in summarily dismissing the proceeding on that basis.  The claims by Ms George that she signed the Heads of Agreement under duress are factually controversial.  The case of duress raised by Ms George, on appeal and in the Federal Magistrates Court, was a weak one not founded in any persuasive submission or on any probative facts.  It was a mere unsubstantiated allegation which the Federal Magistrate, having regard to the evidence before him (see the reasons of Ryan and Logan JJ, at [31]), was entitled not to accept or not to place any weight on during the hearing.

122               The learned Magistrate accepted the view that, Ms George had no interest or standing as trustee or otherwise in the mediation because it was a matter in respect of which, she had no surviving interest due to not having successfully established the existence of any trust.  As such, it did not matter whether the agreement was signed under duress because without the creation of a trust or without an effective trust, there could be no complaint as to duress.  Therefore, Ms George’s claims as to duress were irrelevant to the efficacy of the Heads of Agreement.

Summary

123               In my view the learned Magistrate correctly directed himself as to the proper test for summary judgment under s 17A of the Federal Magistrates Act and put Ms George’s evidence at its highest.  The learned Magistrate correctly found that the Moggill property was personally beneficially owned by Ms George, and not held in trust for her benefit or that of her infant son.  No issue of lack of procedural fairness or duress properly arises.

124               As no error of law has been identified by Ms George, I would order that the appeal be dismissed with costs, to be taxed in default of agreement.

Associate:

Dated:         27 May 2010