Re Heathridge Pty Ltd - [1998] QSC 243

IN THE SUPREME COURT
OF QUEENSLAND

O.S. No 8183 of 1998

Brisbane
[Re Heathridge Pty Ltd]
Before the Hon. Justice Atkinson

IN THE MATTER of Heathridge Pty Ltd ACN 010 009 962
- and -
IN THE MATTER of s.82 of the Trusts Act 1973
- and -
IN THE MATTER of s.114 of the Land Title Act 1994

CATCHWORDS: TRUSTS - application to correct register by trustee - registration of an interest by trustee - whether court order required - effect of s.114 of the Land Title Act 1994.

Counsel:Mr G Brandis for the applicant

Solicitors:Walsh Halligan Douglas for the applicant

Hearing Date: 10 September 1998

REASONS FOR JUDGMENT - ATKINSON J

Judgment delivered 5 November 1998

This matter came before the court in a chamber application on the part of Heathridge Pty Ltd as trustee for the Bruce Gutteridge Family Trust for an order under s.82 of the Trusts Act 1973 vesting in Heathridge Pty Ltd as trustee of the Bruce Gutteridge Family Trust, an undivided one-fifth share of an estate in fee simple as tenant in common of the land described as Lot 4 on Registered Plan No 43372, County of Stanley, Parish of Toombul, City of Brisbane being that land more particularly described as Certificate of Title Volume 5240 Folio 100 (“the land”). The land is currently registered in the name of Peter Thomas Auckland (deceased). An order was sought in the alternative under s.114 of the Land Title Act 1994 that Heathridge Pty Ltd as trustee of the Bruce Gutteridge Family Trust be registered as the proprietor of a one undivided fifth share of an estate in fee simple as tenant in common of the land.
Mr Brandis of counsel appeared on the hearing of the application on behalf of Heathridge Pty Ltd. There was no appearance by the Registrar of Titles who had been served with the application.
It is necessary to refer to the facts that led to the making of the application. On 1 April 1974 Brian Halligan who was then a partner in the firm of MacGillivray Halligan Thompson, created as settlor the Bruce Gutteridge Family Trust (the “Trust”). The original trustee under the Trust was Allan Donn Patterson. In 1975 after the death of Mr Patterson, Peter Thomas Auckland was appointed as Trustee. The interest in the land was acquired. On 25 November 1977, Mr Auckland retired as trustee and a deed of appointment appointed Bunker No 59 Pty Ltd as trustee of the trust. On 30 June 1978 Bunker No 59 Pty Ltd changed its name to Heathridge Pty Ltd (“Heathridge”). Mr Auckland remains the registered title holder of an undivided one-fifth share of the land. Mr Gutteridge swears that Mr Auckland acquired and held the one-fifth interest in the land as trustee for the trust but inadvertently this was not shown on the Certificate of Title.
On 1 September 1998 Mr Halligan had a conversation with Graham Mitchell the Acting Registrar of Titles. Mr Mitchell said in his opinion the appropriate procedure for the alteration of the register to record the title and name of Heathridge Pty Ltd as trustee of the trust was an application to the court for a vesting order.
Mr Auckland died on 22 June 1989. Perpetual Trustees (formerly known as Queensland Trustees Limited) is the sole executor of Mr Auckland’s estate. The sole beneficiary under his will was Audrey Fay Auckland. The income from the building on the land was always received by the trust and treated as trust income and income tax returns have been lodged by the trust. The rates on the land have always been paid by the trust. Mrs Auckland has sworn an affidavit saying that to the best of her knowledge her husband never had any beneficial interest in the property and she consented to the property vesting in the name of Heathridge as trustee. The request for her to swear the affidavit was made by Mr Halligan to her solicitor who was satisfied that there was no reason why she should not sign the affidavit in support of the application. He so advised her and she executed the affidavit without hesitation.
Mrs Auckland, Perpetual Trustees, the executor of the estate of Mr Auckland and the Registrar of Titles were all served with the application and affidavit material. However none of them appeared on the hearing of the application. The senior account manager of Perpetual Trustees has sworn an affidavit consenting to an order as have the other holders of the remaining four-fifths interest in the land.
On 10 September 1998, the Court ordered pursuant to s.114 of the Land Title Act 1994 that:
1.Peter Thomas Auckland be removed from the freehold land register as proprietor of an undivided one-fifth share of an estate in fee simple as tenant in common of the land described in the schedule ("the land"); and
2.Heathridge Pty Ltd ACN 010 009 962 as trustee of the Bruce Gutteridge Family Trust, be registered as proprietor of the undivided one-fifth share of an estate in fee simple as tenant in common in the land, previously registered in the name of Peter Thomas Auckland.
The schedule described the land as lot 4 on Registered Plan No 43372, County of Stanley, Parish of Toombul, City of Brisbane being that land more particularly described in Certificate of Title Volume 5240 Folio 100.
Section 114 of the Land Title Act 1994 provides as follows:
"Apply for Supreme Court Order
114.(1) This section applies to -
(a)the Attorney-General; or
(b)the trustee or beneficiary under a trust; or
(c)a personal representative, a devisee or anyone else interested in -
(i)a lot of a deceased registered proprietor; or
(ii)the trust involving a lot of a deceased registered proprietor.
(2) A person to whom this section applies may apply to the Supreme Court for an order that a named person be registered as proprietor of a lot.
(3) The Supreme Court may make 1 or more or the following orders -
(a)That a person be registered as proprietor of the lot;
(b)That a person be removed from the freehold land register as proprietor of the lot;
(c)That a caveat be lodged to protect the person’s interest in the lot;
(d)That a person advertise in the specified form, content or way;
(e)That cost be paid by any person or out of any property.
(4) The Registrar must register particulars of an order if a request to register the order is lodged and an office copy of the order is deposited.
(5) An order does not vest an interest in the lot until it is registered."
In this case the application was made by a trustee under the trust being Heathridge, who was also a person interested in the trust involving a lot of a deceased registered proprietor. The trustee made an application to the court for an order that it be registered as proprietor of a lot. The court has the power to so order and the Registrar is obliged to register details of the order if a request to register the order is lodged and an office copy of the order is deposited. The court was satisfied on the hearing of the application that the removal of Mr Auckland’s name as proprietor and the replacement by Heathridge was necessary to give effect to the true state of ownership of the property and to correct the register which showed that the land was held beneficially by a deceased person. Such an order was unopposed on the appearance in court by Heathridge. In these circumstances the Registrar must register the particulars of the order.
It was submitted that an alternative method of reaching a similar result might have been an order under s.82 of the Trusts Act 1973 vesting the land in Heathridge as trustee of the Trust. Section 82 of the Trusts Act provides:
"82.(1) The court may make an order, in this Act called a "vesting order", which has effect as provided in section 90.
(2) A vesting order may be made in any of the following cases, namely -
(a)where the court appoints or has appointed a new trustee;
(b)where a new trustee has been appointed out of court under any statutory or express power;
(c)where a trustee retires or has retired;
(d)where a trustee is under a disability;
(e)where a trustee is out of the jurisdiction of the court;
(f)where a trustee can not be found;
(g)where a trustee, being a corporation, has ceased to carry on business or is under official management or is in liquidation or has been dissolved;
(h)where a trustee neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue or recover any property according to the direction of the person absolutely entitled to the same for 28 days next after a request in writing has been made to the trustee by that person;
(i)where it is uncertain who was the survivor of 2 or more trustees jointly entitled to or possessed of any property;
(j)where it is uncertain whether the last trustee known to have been entitled to or possessed of any property is alive or dead;
(k)where there is no personal representative of the last trustee who was entitled to or possessed of any property or where it is uncertain who is the personal representative of that trustee or where the personal representative of that trustee can not be found;
(l)where any person neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue for or recover any property in accordance with the terms of an order of the court;
(m)where a deceased person was entitled to or possessed of any property and his or her personal representative is under a disability;
(n)where property is vested in a trustee and it appears to the court to be expedient to make a vesting order.
(3) Where the provisions of subsection (2) are applicable, they extend to a trustee entitled to, or possessed of, any property either solely or jointly with any other person and whether by way of mortgage or otherwise.
None of the clauses of subsection 82(2) seems appropriate to the situation except perhaps the broad discretion given under subclause (n). Certainly it does not explicitly cover the situation where the trustee has died. This distinguishes the situation from that which applied in Ex Parte CRA Exploration Pty Ltd [1983] 1 Qd R 310 where the matters specified in s.82(2)(f), (k) and (n) of the Trusts Act 1973 had been established.
It is appropriate that the order be made under s.114 of the Land Title Act rather than a vesting order under the Trusts Act. In so saying I am aware of the caution which the court should exercise in ordering a correction of the register: Wilde & Harris v. Byrne [1987] 2 Qd. R. 822. However the introduction of the broad discretionary power to correct the Register given by s.114 makes the reliance on the two-stage process under the Trusts Act and the Land Title Act unnecessary where the registered proprietor is a trustee who has retired as trustee and subsequently died. Significantly, the Parliament added s.114(4) to the clause recommended by the Law Reform Commission[1] to make the order of the Court readily enforceable. Absent the enactment of s.114, it would have been necessary for the Court to make a vesting order under s.82 of the Trusts Act together with an order to give effect to it under s.110A of the Land Title Act.
[1]Queensland Law Reform Commission "Consolidation of Real Property Acts" Report No 40.
In these unusual circumstances it is appropriate for the simplified procedure available under s.114 of the Land Title Act be used and the power of the Court to amend the Register be exercised as was ordered by the Court on 10 September 1998.