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Court and Tribunal Decisions- Australia
Queensland Court of Appeal (McPherson JA, McMurdo P, Pincus JA)
[1999] QCA 110
13 April 1999
Setting aside — equity — fiduciary duties — trusts and trustees — implied trusts — wills — grant of letters of administration — standing to sue — limitations of actions — amendment of statement of claim — whether government owes fiduciary duty to Aboriginals.
The appellants brought proceedings in the Supreme Court of Queensland claiming an entitlement to share in the reward money for the capture of the bushranger Ned Kelly as the descendants and heirs of two Aboriginal troopers of the Queensland Native Mounted Police who had participated in his arrest at Glenrowan. The statement of claim alleged breach of contract and breach of fiduciary duty by the Queensland Government. The statement of claim was struck out at first instance on the grounds that the plaintiffs had not obtained any grant of letters of administration or probate in the troopers’ estates, and so lacked standing to sue.
On appeal to the Queensland Court of Appeal.
1. McMurdo P, McPherson JA (Pincus JA dissenting) — while at common law the plaintiffs lacked standing to sue because they were unable to establish that letters of administration had been taken out before proceedings commenced, in equity it would suffice if the proceedings were brought in the capacity of an administrator and letters of administration were taken out before the hearing date: Humphreys v Humphreys [1734] EngR 51; (1734) 3 PWMS 349; 24 ER 1096 referred to.
2. McPherson JA — the paragraphs in the statement of claim alleging breach of fiduciary duty by the Queensland Government faced significant obstacles, but it was not completely clear that the plaintiffs’ case was demonstrably futile: Director of Aboriginal Advancement v Peinkinna (1978) 52 ALJR 286 referred to.
3. McMurdo P, McPherson JA — although the statute of limitations would also appear to be a significant hurdle for the appellants, interlocutory proceedings are not usually the forum to decide this issue: Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 followed.
The appeal was allowed, but the plaintiffs’ action was stayed until further order to ascertain whether the plaintiffs were in a position to obtain letters of administration in respect of their respective ancestors’ estates.[1]
1. This is an appeal against an order dismissing an action no 9023 of 1997 instituted in the Supreme Court by the plaintiffs Kurt Noble and May McBride against the State of Victoria as first defendant and the State of Queensland as second defendant. The plaintiffs claim to be descendants and ‘inheritors’ of the estates respectively of Jack Noble, who died in 1926, and Gary Owens, who died in 1935.
2. Jack Noble and Gary Owens were Aboriginals who, it is alleged, were troopers in the Queensland Native Mounted Police and, during the period 1879 to 1881, served in the capacity of ‘black trackers’, as they were known then. They were members of a contingent of Queensland Police, under the command of Sub-Inspector Standish O’Connor, who in 1879 volunteered to take part in an operation being undertaken in Victoria to locate and apprehend members of the Kelly gang, who at that time were eluding capture. There is material in the record which shows, or suggests it is capable of being shown, that the late Mr Noble and Mr Owens were present and acquitted themselves well at the final action at Glenrowan, when Ned Kelly and his accomplices were arrested after a gun battle in which those present came under heavy fire for some hours.
3. The governments of the colonies (as they then were) of Victoria and New South Wales had together offered rewards totalling £8000 for the capture of the Kelly gang, and, in response to public advertisements, claims for a share in the reward money were received from some 92 individuals. Among the claimants were members of the police contingent from Queensland including Mr Noble and Mr Owens. The claims were referred for assessment to a tribunal described as the Police Rewards Board, which, after hearing evidence in 1880 and 1881, published a report (or it may be an award) allocating shares of the reward money to those who were considered to merit recognition for the part they had played in the successful operation. The published list of those recognised included some individuals who are described simply by their first names, as ‘Jackey, native tracker’ and ‘Barney, native tracker’, who it is said can be identified as Mr Noble and Mr Owens respectively.
4. In the case of those and the other trackers, the amount awarded is shown as £50.0.0 each. With respect to them, the Reward Board made the following recommendation:
In dealing with the claims of the Victorian and Queensland native trackers, the board has not intended to in any way depreciate their services; but they feel that it would not be desirable to place any considerable sum of money in the hands of persons unable to use it. They therefore recommend that the sums set opposite to their names be handed to the Queensland and Victorian Governments to be dealt with at their discretion.
5. The complaint of the plaintiffs in action no 9032 of 1997 is that Mr Noble and Mr Owens never received the £50 awarded to them, and their claim is that it, together with compound interest, now be paid to the plaintiffs as the rightful descendants of those who earned the rewards. There is a good deal of material in the record to substantiate the plaintiffs’ claim that the money was never accounted for to the two men in question, although whether that happened through default on the part of the colonial Government of Victoria or of the Government of Queensland it is, on the information presently available, not possible to say. The report of the Reward Board simply recommended that ‘the sums set opposite to their names be handed to the Queensland and Victorian Governments to be dealt with at their discretion’. For my part, I would be inclined to read that as a recommendation that the sums in question were to be paid either to the Queensland Government or to the Victorian Government according to whether the nominated tracker was a member of the Queensland or the Victorian police contingent; but it may be possible to construe it as recommending payment in the first instance to the government of Victoria for distribution by it to the Government of Queensland. However that may be, the money awarded to those two Queensland policemen seems never to have reached them, and a search of records so far available to the plaintiffs has failed to disclose what happened to it. By contrast, it is said, other members of the Queensland police contingent duly received their share of the reward allocated to them.
6. Whether the share of the reward awarded to Noble and Owens was paid over, if at all, to Victoria or to Queensland has some consequences for the cause or causes of action on which the plaintiffs seek to rely in these proceedings. An identifiable fund of reward money as such may never have existed at all, as distinct merely from a promise to pay a reward from government funds in the event that members of the Kelly gang were captured through the efforts of one or more persons who acted on the offer of a reward. The plaintiffs’ statement of claim in the action is not a professionally drawn document, but it is far from being as deficient as some instances of that kind. Paragraph 1 alleges that Noble and Owens were members of a detachment of Queensland Native Mounted Police, ‘who were contracted by the Victorian Government’, with the approval of the Queensland Government, in 1879 to travel to Victoria to take part in tracking and capturing the Ned Kelly gang. A second paragraph, also numbered 1, alleges that the terms of the agreement were that the troopers were [asked] to volunteer, and that all would receive a fair share of the reward money. There is material in the appeal record that is readily capable of supporting a conclusion to that effect. Ordinarily, no doubt, it might be difficult for a police officer to establish a right to receive a reward for doing no more than his or her duty. Performing a service that one is already under a legal duty to carry out is, at common law, not generally sufficient to constitute valuable consideration for a promise to pay, or to pay more, for that service. But it would be surprising if the law required members of the Queensland police force in 1879 to serve, or to risk their lives in serving, in the pursuit of lawbreakers in Victoria, which is no doubt why they were asked to volunteer for the work. In that respect, the case is somewhat analogous to that of the off-duty policeman considered in Byrne v Hoare [1965] Qd R 135.
7. Allegations that Noble and Owens served in Victoria, that they engaged in tracking the Kelly gang, and that they came under fire at Glenrowan on 29 June 1880, appear in paragraph 2 of the Statement of Claim. It is also alleged there that, by doing so, they earned their promised ‘fair share’ of the reward. That, if proved, might very well suffice under the principle in R v Clarke [1927] HCA 47; (1927) 40 CLR 227 to establish that, in doing what they did, Mr Noble and Mr Owens were acting in reliance on, or upon the faith of, the promise contained in the reward, of which it seems they were made aware before volunteering in Queensland, offered by the two colonial governments. Establishing what precisely was a ‘fair share’ of that reward might perhaps have presented a difficulty were it not that, as is alleged in para 3 of the statement of claim, the Police Rewards Board on 16 April 1881 fixed the amount of their share at £50 each. It thus rendered certain what previously was, or may have been, uncertain in amount, as well as finding that the ‘consideration’ for the promise to reward was fully executed.
8. Once this stage is reached, the two men had, on the face of it, a good claim in law to the amounts in question. In legal parlance, their claim would be characterised as arising in debt on an executed consideration, as to which the legal position is clear. It is, as the High Court said in Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560, 570, that:
speaking generally, the defendant must allege and prove payment by way of discharge as a defence to an action for indebtedness in respect of an executed consideration.
The practical result is that, once an indebtedness is proved to have arisen, the onus shifts to the debtor to establish a valid discharge or other grounds sufficient in law to amount to an effective release of the debt. Subject to what follows, it would be for the first defendant Victoria to prove it discharged its indebtedness by paying the reward sums of £50 either to the government of Queensland as recommended or to the claimants themselves, and not for the plaintiffs to establish that Mr Noble and Mr Owens were never paid.
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11. Subject to the relevance on an application of this kind of some other questions, such as the statute of limitations and the provisions of the Police Act 1863 that were raised by the defendants or one of them, the action is not so plainly unsustainable as a matter of contract law that striking it out at this stage would ordinarily be justified. This is, however, to ignore the very point on which the learned Chamber Judge decided the application in favour of the defendants. Stated briefly, it is that the persons named as the plaintiffs in the action had no standing to sue on behalf of, or as representing, the estates of the two deceased policemen Mr Noble and Mr Owens. Neither of them left a will appointing an executor, and none of the plaintiffs has ever obtained a grant of letters of administration. The rule of law is clear that an executor may, before grant of probate, validly institute an action to vindicate rights of the deceased which on death vested in that executor, and that he or she may succeed in obtaining judgment in that action provided only that a grant of probate in favour of the plaintiff executor is produced at trial. But it is equally clear that the benefit of this rule of law does not extend to the administrator of the estate of a deceased person who died intestate. A recent discussion of the rule appears in the decision of the Privy Council, in an appeal from Trinidad, in Austin v Hart [1983] 2 AC 640, 647-648, where many of the English decisions are discussed. Those decisions have been followed in Australia, and it is necessary here to refer only to Minister of State for the Interior v R T Co Pty Ltd [1962] HCA 29; (1962) 107 CLR 1, 7, where Taylor J observed that, although after a grant of administration has taken place ‘the administrator’s title relates back to the death of the deceased whom he represents, it has been consistently held that this element of retroactivity is incapable of sustaining a writ issued before the grant’.
12. According to that rule, which was acted on by the learned judge in striking out the action in the present case, the fatal flaw in action no 9023 of 1997 is that neither of the plaintiffs had, at the time or since the writ issued, obtained a grant of administration; and that, if either were to succeed in doing so now, the action would because of this defect nevertheless be doomed to fail at the trial. Even with the benefit of such a grant, the plaintiffs as administrators would still have had no right of action at the time the proceedings were instituted, which, for the purpose of this rule, is the relevant time at or occasion on which the question falls to be considered.
13. So far, however, I have been considering the matter solely from the standpoint of the common law. The rule in equity was always different. Speaking of it in 1893, Williams Law of Executors & Administrators, 9th ed (1893), vol 1, at 342-343, had this to say:
In Chancery, however, the practice was not quite so strict, for a bill in Chancery could be filed before a plaintiff had taken out letters of administration and it was sufficient to have them at the hearing, but the bill had to allege that they were already obtained. This difference of practice seems to remain notwithstanding the Judicature Act.
A statement to similar effect appears in Daniell’s Chancery Practice, 7th ed (1901), vol 1, at 352, where, after commenting on the rule permitting an executor to support an action by producing a grant of probate dated after action brought, the learned editors go on:
and in like manner, a plaintiff may bring an action as administrator before he has taken out letters of administration and it is sufficient to have them at the hearing.
Among the authorities cited in support of that proposition, Horner v Horner (1853) 23 LJ Ch 10 is an instance in which Kindersley V-C struck out a plea to a supplemental bill in Chancery presented by children of the intestate that raised the point that letters of administration had not been granted until two days after the bill was filed. In dismissing the plea, the learned Vice Chancellor said it was argued that:
it would be necessary that a plaintiff, if he were the person to take out letters of administration, must sustain the character of administrator before he can file his bill; but that is not the case; and it would be quite sufficient for the plaintiff to obtain the letters before the case comes on for hearing to give him a right of suit.
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17. ... It is to my mind by no means impossible for one or more of the living descendants of the original Mr Noble to trace a right to succeed on his death intestate in 1935. The matter is complicated by the number of descendants and the complexities at his death in 1935 of the Queensland law of succession, which is helpfully discussed in an article by Mr W A Lee in (1966) 5 UQLJ 141, at 161ff. The claim as plaintiff by Mrs McBride presents somewhat greater difficulty because of the apparent absence of evidence of marriage of the original Mr Owens to Jenny Bowman, who is shown as the mother of Maidie Ross. Before the matter was placed on a statutory footing by s 35 of the Succession Acts Amendment Act of 1968, the Crown had formerly followed a practice of voluntarily waiving in favour of an illegitimate child its right to take personal property as bona vacantia; but this practice was held to be unconstitutional in Re Bonner (Deceased) [1963] Qd R 488.
18. In any event, s 29(1) of the Public Trustee Act 1978 provides that the Public Trustee may apply for an order to administer where a person has died intestate, whether before or after the Act, leaving property situated in Queensland. On an application to that effect, the Public Trustee is entitled ‘as of right’ to an order to administer: s 29(4); but that right, which has so far not been exercised in the case of any of these deceased persons, is subject to s 29(4A), which authorises the court to grant administration to someone who would be entitled to a grant of administration and who applies for it. These provisions must be read in conjunction with s 6 of the Succession Act 1981, which confers a general jurisdiction to grant letters of administration of the estate of any person deceased whether before or after the Act. Such a grant may be made even though no estate was left in Queensland, and may also be made to such persons as the court thinks fit: see s 6(3). Under this provision, the court has a general discretion to make a grant to someone other than the person ordinarily entitled on intestacy if no such person has applied for such a grant: see W A Lee, Manual of Queensland Succession Law §828 (4th ed), at 110, and authorities cited in note 52 on that page. It is by no means impossible to conceive of such a grant being made to one or more of the descendants of Mr Noble or Mr Owens if he, she or they were to apply for it. In view of the provisions of s 10 of the Racial Discrimination Act 1975 (Cth), it seems unlikely that s 75 of the Community Services (Aboriginal) Act 1984 would stand in the way of such a grant being made; but that question is not one that requires detailed consideration on this occasion. Suffice to say that a grant of administration to the plaintiffs in respect of the intestate estates respectively of Mr Noble and Mr Owens is not, legally speaking, necessarily out of the question.
19. The decision of this question may therefore in the end turn upon the possibility of regarding the plaintiffs’ action as one that is, or that by appropriate amendment perhaps can be, framed in equity. If it is or can be, the rule in equity, and not the common law rule relied on by the defendants, would apply to it; and striking out the action might not then be the proper course to adopt. I have already said that the allegations in paras 1 to 5 of the statement of claim are capable of sustaining a claim in debt at common law. Paragraphs 6 and 7 set up a claim or claims in damages, which are put forward in the following terms:
6. Claim for damages
The plaintiffs claim Pecuniary Damages against the Victorian Government for withholding payment of Reward Monies owing to JACK NOBLE and GARRY OWENS. This financial deprivation caused many years of suffering as both JACK NOBLE and GARY OWENS, together with their families were incarcerated in Aboriginal Confinement Camps because they could not show any visible means of support after leaving the Queensland Native Mounted Police Force. The Reward Money was to contribute to their retirement with dignity and provide security for the descendants. The Aboriginal Protection Acts exempted Aborigines from ‘protection’ if they owned their own home.
Disappointment and disillusionment followed as claims for payment of Reward Monies on behalf of the Trackers by their Officer in Charge Sub-Inspector O’Connor as well as personal requests by GARY OWENS at Maryborough, Queensland, and 18 years later by Archibald Meston, the Protector for Aborigines failed to have the Victorian Government pay this long outstanding debt of honour.
7. The Plaintiffs claim Pecuniary Damages against the Queensland Government for failure of their Fiduciary Duty to act in the proper manner as Protector of the interests of JACK NOBLE and GARY OWENS. This was clearly indicated by the written request by Archibald Meston, the Queensland Protector of Aborigines on 16 September 1898 ...
20. As to this, the first question is whether either or both of these allegations can be considered as raising sustainable claims in equity. What is pleaded in para 7, which is the only allegation specifically directed against the second defendant the State of Queensland, is evidently intended to raise a claim of some such kind. It may be taken as complaining that that defendant failed to discharge what is alleged to be fiduciary duty on its part to protect the interests of Mr Noble and Mr Owens as Aboriginal people. Paragraph 6, which is directed against the first defendant State of Victoria, is rather ambiguous. It speaks of that defendant ‘withholding payment of the reward moneys’; as such it could perhaps be read as an allegation that the Victorian Government had received, but kept, the money consisting of the two sums of £50 that the Rewards Board in 1881 recommended should ‘be handed to’ the Queensland and Victorian Governments; or it could (as I rather think it must) be construed as an allegation simply of consequential loss or damage that is claimed to have flowed from non-payment of that money to the two men in question. It is not, as I see it, a distinct allegation that the first defendant received the money on behalf of the two policemen but failed in its duty of accounting for it to them. If it were, it might be capable of being sustained as an allegation of a breach of trust on the part of that defendant.
21. It may nevertheless be desirable to consider whether it is, or would be, possible to raise an equitable claim against either or both of the defendants on the facts as in the record they are suggested to be. If a specific sum of £50 each was in fact ‘handed to’ the colonial government of Victoria for payment to Mr Noble and Mr Owens, then that defendant might fairly be regarded as having received the money in trust for those two individuals. The problem is, however, not only that there is nothing to suggest that the first defendant or, for that matter the second defendant, ever in fact received a specific sum on those terms; but that the material pleaded and relied upon by the plaintiffs strongly suggests the contrary. The terms on which payment was recommended by the Records Board was that the sums of £50 be handed to the two governments of Queensland and Victoria ‘to be dealt with at their discretion’. That course was recommended not because those two policemen were not entitled to receive it, but because it would (or so it was said) place ‘a considerable sum of money’ in the hands of ‘persons unable to use it’. Nowadays it is not altogether easy to conceive of persons who are unable to use a considerable sum of money; but it is not part of our appointed function to judge the propriety, or lack of it, of decisions taken in the past that were at the time influenced by attitudes which many would now utterly reject. The question is whether those two paragraphs of the statement of claim would, on any view of them, be capable, whether by amendment or otherwise, of sustaining some form of relief in equity.
22. As to that, the plaintiffs in their submissions before this Court argued that there was authority for holding that a fiduciary duty on the part of the Queensland Government existed in favour of Aboriginals in the State, or at least that it did so at times in the past when Mr Noble and Mr Owens were alive. In this context, reliance was placed upon a passage in the reasons of Toohey J in Mabo v Queensland (No 2) [1992] HCA 23; (1992) 175 CLR 1, 200-203. What was said by his Honour there, and the decisions that were referred to including that of the Canadian Supreme Court in Guerin v The Queen [1984] 2 SCR 335, 376, were specifically related to the obligations of the Crown as the relevant executive government to act in a fiduciary manner in dealing with questions of land to which some form of ‘native title’ can be made out. In that context, it is, however, necessary to begin by recalling that in Canada relations between the Crown and the indigenous inhabitants of that country have, as regards land, been regulated to a large extent by the Royal Proclamation of 1763 and subsequent treaties, which, or some of which, are referred to in R v Secretary of State, ex parte Indian Association of Alberta [1982] 1 QB 892 and Manuel v Attorney-General [1983] Ch 77. Nothing quite like the Proclamation or those treaties has ever existed in Australia; but, even if it did, it would have little, if any, relevance to the claim now advanced in the present case. The plaintiffs’ claim is in no way related to land occupied or formerly occupied by Aboriginals, but exclusively to personal property in the form of money that was promised or to be paid by a colonial government to persons some of whom happened to be Aboriginals.
23. In my respectful opinion no decision in Australia has gone so far as to hold that Aboriginals in Queensland are, or at any time in the past were, the beneficiaries of either a general or a specific fiduciary obligation on the part of the government of either Queensland or Victoria which, in the circumstances like those disclosed here, would have required it to ensure that the reward money the subject of this claim was paid to Mr Noble and Mr Owens; or which would have imposed on those governments, or either of them, a liability in damages or to pay compensation in equity for failing to do so. If such a fiduciary obligation did exist, then the plaintiffs in Director of Aboriginal Advancement v Peinkinna (1978) 52 ALJR 286 could have expected to fare better than they did in that litigation before the Privy Council; as also might the plaintiffs in Tito v Waddell (No 2) [1977] Ch 106. In that case, Megarry V-C specifically rejected ([1977] Ch 106, 224-225) a claim by the inhabitants of Ocean Island or their descendants that the Crown was, in 1913 or later, subject to fiduciary obligations arising out of its dealings with respect to their rights in land which was later mined and exploited to obtain phosphate, to the substantial profit of those concerned and at considerable loss to the Banaban owners of the land. Despite the fact that in several instances the relevant instruments in that case expressly referred to a ‘trust’, the Vice-Chancellor concluded that trustee and fiduciary obligations did not attach to the Crown in its character as the government of the Gilbert and Ellice Islands. The same may equally be said of several of the statutes and instruments considered by the Privy Council in Director of Aboriginal Advancement v Peinkinna (1978) 52 ALJR 286.
24. The plaintiffs in the present case are at least one, if not two, possible steps removed from the position of the claimants in each of those decisions. Not only is their claim not based on ownership of land, but the instruments on which they found that claim nowhere use the expression ‘trust’ or anything like it. On the contrary, the recommendation of the Police Rewards Board in 1881 was, in terms, that the two amounts of £50 in question were to be handed over to one or more of the defendants ‘to be dealt with at their discretion’. A discretion of that general kind is, on the face of it, quite at odds with the strict duty that ordinarily attaches to a person who receives money in the character of a trustee. It is much more consistent with the idea of a power in the recipient to do what it chooses with the money received rather than to hold and deal with it as a trustee is bound to do. The analogy, if any, is at best with what are sometimes still described as ‘precatory trusts’, which impose no legal or equitable obligation at all: Ford & Lee, Principles of the Law of Trusts, 3rd ed §2200.
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26. This has the consequence that in the end the question remains whether it was judicially correct to strike out the plaintiffs’ claim in this action, and to do so peremptorily and before trial. It was accepted on behalf of the defendants that doing so involved an exercise of the power under either O 22, r 28 or of the inherent jurisdiction of the court. The existence of that jurisdiction was recognised, and its genesis explained, in Metropolitan Bank v Pooley (1885) 10 App Cas 210, 215, 223. It is well settled that in Australia, as Barwick CJ said of the power in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, 130, great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. The lack of a cause of action must, as his Honour had already said in that case, be ‘clearly demonstrated’ before the court’s powers of summary dismissal are exercised.
27. For reasons already given, it is to my mind not completely clear that the case sought to be made here is in law demonstrably futile. It all depends, as I have said more than once, on what happened to the reward money. It is, however, true that in the present form of the action, the plaintiffs themselves do not appear to be entitled to sue in respect of it. Whether they can, without having obtained a grant of letters of administration when the writ issued, bring themselves within the principle or practice mentioned by Williams and Daniell by obtaining such a grant and appropriately amending the statement of claim, is a question about which argument was not addressed on appeal. As matters stand, they may never be able to do so.
28. On the other hand, it is undoubtedly a serious step to prevent all of the plaintiffs from ever attempting to put their pleadings and their case in better shape for trial. Instances in which actions have been peremptorily struck out for what may be described as a want of title in the plaintiffs to claim the relief sought do not appear to have been common in practice. Apart from the kind mentioned in Austin v Hart [1983] AC 640, where letters of administration have not been obtained before an action under the Fatal Accidents Act, one of the few instances I have been able to locate is Shillito v Bent [1973] VicRp 76; [1973] VR 762, where the plaintiffs’ action was dismissed because the interest which they were claiming had already vested in their trustees in bankruptcy. The right of action which they were seeking to enforce belonged by statute not to them but to their trustees. Another familiar example may be the case of a shareholder who, in contravention of the rule in Foss v Harbottle, attempts in his own name to enforce rights belonging to a company of which he is a member; but it is also not uncommon in cases of that kind not to dismiss the action altogether, but rather to stay it; and that is the course which, all matters considered, may well be more appropriate here. Order 22, r 28, which confers the jurisdiction, also invests the court with power to stay rather than dismiss the action; and in General Steel Industries Inc v Commissioner for Railways [1964] HCA 69; (1964) 112 CLR 125, 137, Barwick CJ implied in what he said that a stay would be appropriate if the case was one in which the plaintiff could improve his position by amending the pleadings.
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30. ... To any legally trained mind, the obvious answer to the plaintiffs’ claim lies in the statute of limitations. Traditionally, such statutory provisions have in a case like this been regarded as barring the remedy and not the right, and so as having the character of rules of procedure rather than of substance. See, for example, Pedersen v Young [1964] HCA 28; (1964) 110 CLR 162, 166. As such, the matter would be governed by the law of Queensland which in 1881 applied a limitation period of six years to a contractual claim like this: see Statute of Frauds and Limitations of 1867, s 16. On that footing, an action in contract to recover the reward would have been barred in 1887 or at latest in 1888. There was, it seems, originally no corresponding statutory provision in Queensland with respect to a breach of trust until the enactment of s 52 of the Trustees and Executors Act of 1897 or, at latest, until s 25(2) of the Limitation Act of 1960. Some of the difficulties inherent in these provisions are mentioned by Megarry V-C in Tito v Waddell (No 2) [1977] Ch 106, 246-251, who inclined to the view that fiduciary claims were not subject to those limitation periods.
31. It is, however, not necessary to investigate these matters further because, in Australia at least, the law seems to be that a plea of the statute of limitations cannot be relied on to justify striking out an action as an abuse of process. A different view has on one occasion been adopted in England by Stephenson LJ in Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398, 408, but it was not followed by Vincent J in Palmdale Insurance Co v L Grollo & Co Pty Ltd [1986] VicRp 41; [1986] VR 408. For the present it is not necessary to go further than to refer to Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514, where Mason CJ, Dawson, Gaudron, and McHugh JJ said:
We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases.
Their Honours were there speaking of a case in which the gist of the action was the damage sustained, which is here not so of either of the causes of action on which it is sought to rely. But, in a matter of this kind, there is always a question whether an answer to the plea under the statute may yet be found. As Pincus JA remarked in the course of argument on the appeal, a complete acknowledgment in writing by the defendants or one of them might come to light in the course of discovery in the action. That may at present seem very unlikely; but, for all that, a decision to strike out an action summarily as an abuse of process ought in the end to be based on the inherent weaknesses of the action itself, and not on what appears to be the potential strengths of a defence to which an answer may yet emerge.
32. In the course of what I have said in these reasons, I have from time to time referred to material in the record, and to matters that are not strictly the subject of any specific allegation in the pleadings. The authorities justifying such a course are collected in Cox v Journeaux (Nos 2) [1935] HCA 48; (1935) 52 CLR 713, 720, where Dixon J said that, on an application like this, where an abuse of the jurisdiction is urged as the reason for dismissing an action, the court is not concluded by the manner in which the litigant formulated his case in his pleadings. It may consider the undisputed facts. Further, it is not limited to cases where there is no dispute of fact. The present case is one where, despite the form of the defences or the way in which the statement of claim has been formulated, it seems clear that on the material before us, Mr Noble and Mr Owens had in 1881 an apparently valid claim to the reward allocated by the Victorian Police Rewards Board. If an action had been commenced by either of them at that time, it is not altogether easy to see how the defendants could have justified their failure to pay the sums awarded. It is true that action no 9032 of 1997 was commenced without taking the precaution of obtaining a grant of letters of administration; but, having regard to what is said on that subject in Williams and Daniell, it is not necessarily fatal to the action that that step was not taken before issuing the writ, provided it is done before the trial and in conjunction with an appropriate amendment to the pleading. At least that is so if the claim can be formulated in equitable form as for a breach of trust on the basis that one or other of the two defendants received the reward money but failed to account for it to Mr Noble or Mr Owens. The case is therefore one in which they may yet be able to improve their position before trial.
33. The true weaknesses in the plaintiffs’ prospects of success seem in the end to be the very real problem presented by the statute of limitations; but, for the reasons given, it does not seem to me to be a matter that, on the present state of authority in Australia, would justify striking out the action altogether as being an abuse of the process of the court. In the result I am persuaded that, for the time being at least, the matter is one in which the action, rather than being struck out, ought to have been stayed in order to enable the plaintiffs to see if they are able to attend to the deficiencies in their case that are mentioned in these reasons.
34. I would accordingly allow the appeal; set aside the order made below; and order that the action be stayed until further order. As to the costs of the appeal, I would make no order; as to the costs below, I would order that those costs be costs in the cause. If the action never proceeds to trial, but is ultimately struck out or dismissed for want of prosecution or otherwise, those costs can no doubt be disposed of on an application made under O 90, r 13: see R v Gold Coast City Council, ex parte Raysun Pty Ltd [1971] QWN 13.
McMurdo P delivered a separate judgment concurring with McPherson JA.
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3. The central question is whether the primary judge was right in holding that the appellants could not sue for the rewards because they have not been granted administration of the estates. This is rather a technical point, but it has practical implications: if the appellants are right in their argument, then it would appear that any descendant of a person who died intestate, however long ago, may bring an action in the Supreme Court claiming to represent the estate. Presumably, every one of such descendants would be entitled to bring his or her own action.
...
6. In my view, under the Chancery practice the ordinary rule was that the right the plaintiff relied on had to be vested at the time of institution of the suit: Attorney General v Avon Corporation [1863] EngR 881; (1863) 3 De G J & Sm 637, 46 ER 783, followed in Evans v Bagshaw (1870) 39 LJ Ch 145; see also the notes of the older cases referred to at 29 and 30 in vol 1(1) of the series now modestly called The Digest. There was an exception to that rule in respect of suit before the grant of letters of administration, brought for the protection of the estate, by an estate beneficiary; the present is not such a suit. It seems, further, that the exception was applicable only where, at the time the point was taken, a grant had been made; that follows from the opposite results of the two applications dealt with by the Lord Chancellor in Humphreys v Humphreys. Whether or not the existence of the exception should be treated as having survived the statements of the relevant rule in the three 20th century decisions to which I have referred (in the High Court, the English Court of Appeal and the Privy Council), its scope is not wide enough to save the appellants in the present case. I note that the strength of the general rule that an administrator derives title from the grant only is emphasised in the recent work The Law and Practice of Intestate Succession by Sherrin and Bonehill (Sweet and Maxwell, 1994) at 56.
7. I regret that, for these reasons, I am in disagreement with McMurdo P and McPherson JA; I think that the learned primary judge’s conclusion was correct and that the appeal should be dismissed. But were I not of that view, I would allow the appeal only to the extent of replacing dismissal of the action with an order for a stay; the appellants could then attempt, if so advised, to obtain grants of administration.
I would dismiss the appeal with costs.
[1] The full text of this judgment is available at <www.austlii.edu.au/au/cases/qld/QCA/1999/110.html>.
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