Laycock v Registrar General of New South Wales

[2012] NSWSC 248

Supreme Court

New South Wales

Medium Neutral Citation:

Laycock v Registrar General of New South Wales [2012] NSWSC 248

Hearing dates:

21 February 2012

Decision date:

21 February 2012

Jurisdiction:

Equity Division

Before:

Rein J

Decision:

Plaintiff's summons dismissed.

Catchwords:

EQUITY - trusts and trustees - death of trustees - purported appointment of new trustees - appointment invalid

EQUITY - trusts and trustees - application to court for judicial advice pursuant to Trustee Act 1925 must be by a trustee

REAL PROPERTY - torrens title - indefeasibility of title cannot validate an invalid appointment of trustee

Legislation Cited:

Associations Incorporation Act 1984
Charitable Trusts Act 1993
Real Property Act 1900
Trustee Act 1925

Cases Cited:

Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66

Texts Cited:

J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia, 7th ed (2006)

Category:

Principal judgment

Parties:

John Kevin Laycock (Plaintiff)
Registrar General of New South Wales (First defendant)
Attorney General of New South Wales (Second defendant)
Kendall Murray Ferguson (Third defendant)
Putty Community Association Inc (Fourth defendant)

Representation:

Counsel:
C Mantziaris (Second defendant)
H Stowe (Third and fourth defendants)
John Kevin Laycock (Plaintiff in person)

Solicitors:
Legal Services, Land & Property Information, Department of Finance and Services (First defendant)
Crown Solicitor (Second defendant)

File Number(s):

SC 2011/68579

EX TEMPORE Judgment

1. These proceedings arise out of a transfer of land at Putty, New South Wales by Daniel Stephen Ellis to George Henry Gibbs, William Fraser and Wilfred Cobcroft on 7 February 1918. The transfer was expressed as being "Upon Trust for the use of the residents of Putty for public, religious and social gatherings and for such other purposes as the said residents may from time to time determine" ("the Trust"): see page 25 of Exhibit A (all page references hereafter are to Exhibit A). At the same time, a caveat was lodged against any dealings inconsistent with the Trust: see page 30. It was a Registrar General's caveat which was the type of caveat utilised at that time and for many years afterwards.

1. The land had built upon it a community hall. By 1983, all of the three named trustees had died, the last surviving trustee being Mr Cobcroft.

1. In 1986, a meeting was held at the hall which was described as the first meeting of the Putty Social Committee, and the meeting purported to appoint as trustees Mr John Kevin Laycock, the plaintiff in these proceedings, Mr Kendall Murray Ferguson, the third defendant in these proceedings, and a Mr Owen Ellis, who himself passed away some years ago.

1. In July 1986, Messrs Laycock, Ferguson and Ellis were registered as proprietors of the land pursuant to application number W389434. There has apparently been tension in the Putty community over the years. In part, this may be due to the creation of the Putty Community Association Inc ("PCA"), established in 1987 as an unincorporated association. In 2002 the PCA was incorporated pursuant to the Associations Incorporation Act 1984. The PCA is the fourth defendant in these proceedings. The Attorney General of New South Wales has been joined as the second defendant in these proceedings.

1. The first defendant, the Registrar General of New South Wales, has filed a submitting appearance in the proceedings and has indicated through correspondence that he undertakes not to register any other person as the registered proprietor of the land until the conclusion of these proceedings: see Exhibit 3D1.

1. Mr Laycock commenced these proceedings by his summons, which is at page 2, tab 2 of Exhibit A. In those summons he seeks the following relief:

"Relief claimed

1) By way of judicial advice for a declaration that on the facts and circumstances of the case that John Kevin Laycock and Kendall Murray Ferguson hold the property described in the Title Folio 1/960250 upon Charitable Trust.

2) By way of judicial advice that the plaintiff is entitled to remain as registered proprietor of the said property.

3) By way of judicial advice that the plaintiff is entitled and obliged to retain Certificate of Title to Title Folio 1/460250 in his possession.

4) By way of interlocutory relief an order that the Registrar General of New South Wales be restrained until further order from entering the name of any other person as proprietor of property described in the Title Folio 1/960250 on the register."

1. The Attorney General has cross-claimed in the proceedings the relief sought by the Attorney General as set out page 7 of Exhibit A:

"Relief claimed

1) A declaration that there is no validly appointed trustee or trustees to the Trust created by Memorandum of Transfer A392482 on 7 February 1918.

2) A direction pursuant to s 13(2) of the Charitable Trusts Act 1993 that the matter be referred to the Attorney General for the Attorney General to establish a scheme pursuant to ss 13(1)(c) and 12 of that Act.

3) An order pursuant to s 71(1) of the Trustee Act 1925 that the property described in the Title Folio 1/960250 vest in the trustee or trustees appointed by the Attorney General pursuant to the scheme established by the Attorney General under the referral directed in para 2.

4) An order that the plaintiff deliver forthwith to the Attorney General, the Certificate of Title to Folio 1/960250 and all records relating to the administration of the Trust.

5) An order that the plaintiff pay the Attorney General's costs of the proceedings on a party party basis.

6) Such other orders as the Court sees fit."

1. Mr Ferguson has, by letter, purported to resign as the trustee and he does not contest that he was ever validly appointed as trustee.

1. Mr Laycock accepts that he was not validly appointed pursuant to s 6 of the Trustee Act 1925 but contends that he is a trustee by virtue of the matters set out in paragraphs 9 to 19 of his affidavit sworn on 3 March 2011 to which I shall return in a moment.

1. The Attorney General's position is that since no valid appointment of the trustee of the Trust has been made, the matter should be referred to him pursuant to s 13(2) of the Charitable Trusts Act 1993.

1. Section 13 is in the following terms:

"(1) The Attorney General may establish a scheme under this part:

...

(c) in accordance with the referral from the court under subsection (2).

...

(2) If the Court directs that a scheme for the administration of the Charitable Trust be established the Court may, by order, refer the matter to the Attorney General for the Attorney General to establish the scheme in accordance with the directions (if any) of the Court."

1. The parties are agreed that the Trust established in 1918 was and is a Charitable Trust.

1. The relief sought by Mr Laycock in the summons appears to be a hybrid of judicial advice and declaratory and injunctive relief, but I shall put that difficulty to one side, as Mr Laycock informed me that what he seeks is judicial advice pursuant to s 63 of the Trustee Act . In my view, that application is misconceived, in short, because the advice is in reality for determination on contested matters and Mr Laycock is not seeking advice as to whether he should or should not do something in order to gain the protection granted to a trustee from a suit at the hands of beneficiaries of the Trust: see Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand [2008] HCA 42; (2008) 237 CLR 66.

1. But there is an even more fundamental issue which is whether or not Mr Laycock is, in fact, a trustee at all. If he is not a trustee, he cannot seek relief under s 63 of the Trustee Act and he has no standing to bring these proceedings. Mr Laycock accepted the determination of his position as trustee was critical to the case he has brought and this was also accepted by Mr Mantziaris for the Attorney General; Mr Stowe, for the third and fourth defendants submitted that the Court should determine that issue first.

1. I set out paragraphs 9 to 19 of Mr Laycock's affidavit sworn 3 March 2011:

"9) By 1986, I observed that the Putty Hall had become significantly dilapidated and outstanding rates had accumulated. Following discussions with Owen Ellis (son of original donor), I sought advice from the Registrar General's Department as to how the legal title could be regularised. I there spoke to a person who introduced himself as a legal officer but whose identity I am unable to recall.

10) The thrust of the advice provided was that we should call a meeting of the Putty residents to elect new trustees, minute the meeting, allocate the Certificate of Title and answer requisitions that the office of the Registrar General may raise.

11) I communicated the substance of that advice to Mrs Margaret Ferguson who, with her husband, played a prominent role in local affairs. A meeting of Putty residents was held on 8 February 1986 following a notice circulated to residents issued under the hand of Olive Oxford and Margaret Ferguson as fellow residents.

12) Although I was absent from that meeting (my apologies were tendered) I was one of three persons elected as trustee of the Putty Hall land by the Putty residents in attendance. The minutes reflect that at the same meeting the residents resolved to form the Putty Social Committee which was to be the forerunner of the Putty Community Association Inc (PCA).

13) I have been a financial member of both of those organisations since each was formed.

14) The minutes record the address of Margaret Ferguson to members of the Putty community where she states at para 5; "We intend tonight to discuss the hall's future, but before we can begin official business we have to firstly appoint new trustees and a new social committee."

15) The minutes reflect the new trustees were appointed by a gathering of Putty residents prior to the formation of the Putty Social Committee solely as replacements for the deceased trustees. There is no suggestion the new trustees were appointed as trustees for the Putty Social Committee subsequently formed.

16) I did not express any objection to my election as trustee, nor did I seek any remuneration. I have always been prepared to act in an honorary capacity from the time of my appointment.

17) The original Certificate of Title was eventually located and submitted to the Registrar General with whatever other documents were required.

18) Registration was effected on 14 July 1986. The register does not reflect anything other than the registered proprietors are trustees for the residents of Putty and for no other persons or organisations. The register contains only the endorsement: "Consequent upon the appointment of Owen Edward Ellis, Kendall Murray Ferguson and John Kevin Laycock as new trustees."

19) To the best of my knowledge, documents submitted included:

(i) application for transfer,

(ii) statutory declaration of Margaret Jean Ferguson,

(iii) statutory declaration of Owen Edward Ellis,

(iv) notice to Putty residents by Olive Oxford and Margaret Ferguson,

(v) address to Putty residents by Margaret Ferguson,

(vi) minutes of meeting 8 February 1986."

(emphases removed)

1. The general law in relation to the consequences of death of a trustee is set out in J D Heydon and M J Leeming, Jacobs' Law of Trusts in Australia, 7 th ed (2006) at [1575], particularly in the passages:

"Any trustee is clothed with the office of trustee and an estate in the trust property. Upon the death of a trustee, whether a sole trustee or one of a number of trustees, the office does not devolve on the trustee's legal representatives. No one can legally execute a trust unless nominated so to do by the settlor or testator or appointed so to do by or by direction of such settlor or testator, by Act of Parliament or by the court. (Re Crunden and Meux's Contract [1909] 1 Ch 690 [see in particular pages 696 to 697].)

Therefore, if the deceased trustee was the sole or last surviving trustee, the office, where the trust is an active trust, becomes vacant. The legal representative of such a deceased trustee has no power to act in the execution of the trust although, where there are no active duties to perform, the legal representative has power to transmit the property to persons absolutely entitled. (Robson v Flight (1865) 4 De GJ & S 608; 46 ER 1054)"

1. There are five possible routes to the appointment of a trustee when one takes into account the general law and legislative intervention. They are:

(1) the trustee is appointed by the deed or trust instrument;

(2) the trustee is appointed by person nominated for the purpose of appointing new trustees or by instrument (see s 6(4)(a) of the Trustee Act);

(3) where the legal representatives of the last surviving or continuing trustee appoint the new trustee (see s 6(4)(b));

(4) by the court; or

(5) by the Attorney General pursuant to s 12(3) of the Charitable Trusts Act.

1. Mr Laycock meets none of these criteria. His alleged route of appointment is not one which is recognised at law, and it follows that he is not a trustee and he cannot seek judicial advice pursuant to s 63 of the Trustee Act.

1. To the extent that Mr Laycock's submissions rely implicitly on the effect of registration combined with the effect of s 42 of the Real Property Act 1900, I agree with the submissions of Mr Mantziaris and Mr Stowe that the effect of registration for the purpose of indefeasibility cannot validate, as between Mr Laycock and the Trust, an invalid appointment.

1. It follows, in my view, that Mr Laycock is not a trustee and is not entitled to bring these proceedings as trustee whether for judicial advice or otherwise and accordingly, that his summons must be dismissed.

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Decision last updated: 20 March 2012