Calderone v Perpetual Trustees Victoria Ltd
[2007] VSC 155
•18 May 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 5886 of 2007
| ANTIONETTA CALDERONE | Plaintiff |
| v | |
| PERPETUAL TRUSTEES VICTORIA LTD ABN 47 004 027 258 | Defendant |
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JUDGE: | WILLIAMS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3 May 2007 | |
DATE OF JUDGMENT: | 18 May 2007 | |
CASE MAY BE CITED AS: | Calderone v Perpetual Trustees | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 155 | |
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PRACTICE AND PROCEDURE – Application for interlocutory order restraining mortgagee from taking possession of property pursuant to judgment for possession – Claimed priority of interest as tenant in possession under s 42(2)(e) Transfer of Land Act 1958.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A Trichardt | Nanscawen Lawyers |
| For the Defendant | Mr S Marantelli | Hall & Wilcox |
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HER HONOUR:
The application
The plaintiff (“Mrs Calderone”) has commenced a proceeding by writ filed on 27 April 2007 seeking relief recognising her interest as a tenant in possession of the property at 63 Euston Road, Hughesdale, Victoria (“the property”) under s 42(2)(e) of the Transfer of Land Act 1958 (“the Act’). Australvic Property Management Pty Ltd (“Australvic”) is registered as the proprietor of the property. The defendant (“Perpetual”) is a registered mortgagee. Perpetual has obtained an order for possession of the property against Australvic and has instructed the Sheriff to execute a warrant for possession of the property. On 26 April 2007, the Sheriff’s Office gave Mrs Calderone a Final Notice to vacate the property.
By a summons issued on 27 April 2007, Mrs Calderone seeks an injunction restraining Perpetual from taking possession of the property before the adjudication of her claim. She has been granted an interim injunction in the terms of the interlocutory order sought, pending the Court’s determination in relation to her application.
The Act
Section 42 of the Act was in the following terms at all relevant times :
42. Estate of registered proprietor paramount
(1)Notwithstanding the existence in any other person of any estate or interest … which but for this Act might be held to be paramount or to have priority, the registered proprietor of land shall, except in case of fraud, hold such land subject to such encumbrances as are recorded on the relevant folio of the Register but absolutely free from all other encumbrances whatsoever, except—
(a)the estate or interest of a proprietor claiming the same land under a prior folio of the Register;
(b)as regards any portion of the land that by wrong description of parcels or boundaries is included in the folio of the Register or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.
(2)Notwithstanding anything in the foregoing the land which is included in any folio of the Register or registered instrument shall be subject to— …
(e)the interest (but excluding any option to purchase) of a tenant in possession of the land;
Material
Mrs Calderone has sworn affidavits in support of her application on 27 April and 1 May 2007, respectively. Mr Brendan Swift of her solicitors has also sworn an affidavit in support on 27 April 2007. There is no material filed by Perpetual in response.
The facts
It is common ground that the property was purchased in 1990 by Seventh Asteroid Pty Ltd (“Seventh Asteroid”). Seventh Asteroid had been incorporated on 16 August 1982. Mr Calderone was appointed as a director on that date and Mrs Calderone became a director on 19 January 1990. Mr Calderone was the principal executive officer of the company between 19 January 1990 and 8 December 1995. He was appointed the company secretary on 15 January 2002 and he and Mrs Calderone each hold one of the two issued ordinary shares. Mrs Calderone remained a director of the company until 30 April 1999.
It would appear from the material before the Court that the property was transferred to Australvic by Seventh Asteroid by a transfer of land dated 21 July 2006 signed by Mr Calderone. Australvic became registered as the proprietor of the property on 18 August 2006. Perpetual’s mortgage was registered on the same day.
Mrs Calderone’s affidavits record her account of events. She states that she and Mr Calderone met in about 1980 at the café he owned in Springvale. They began discussing their future together in about November 1985.
Mr Calderone then lived at 58 Euston Road, Oakleigh with his parents. According to Mrs Calderone, he identified the property, situated on the opposite side of Euston Road from his parent’s home, as the place where they would live together with their family in the future.
The couple became engaged on about 9 February 1990 and planned to marry on 22 July 1990. They agreed to have what Mrs Calderone describes as a “relatively traditional Italian relationship” in which her husband would be responsible for financial matters and she would stay at home, caring for any children they might have.
Mrs Calderone sought reassurance from her fiancé that the property would be their future home and that it “would never be used in his businesses”. She remembers Mr Calderone stating that the property would be “safe” and that she need not worry about it. Mrs Calderone sought a written assurance in relation to the property and recalls reading something which Mr Calderone had written at that time. She exhibits to her 27 April 2007 affidavit a copy of the reverse side of a copy certificate of incorporation in relation to Seventh Asteroid. She states that Mr Calderone took that document “from some papers” and showed it to her after she had had a discussion on 26 April 2006 with her solicitor, Mr Swift. She deposes to having recalled, when shown the document, that she had seen it many years ago and that she believes it is the document she saw at the time she sought the written assurances from Mr Calderone.
The copy document contains the following endorsement:
July 1990
This confirms that you Antoinette being my wife and as this is our matrimonial home this house is yours to live in for the rest of your life.
your loving Rocky [signature]
Mrs Calderone relies upon that document as evidence of her status as a tenant in possession under s 42(2)(e) of the Act.
Mrs Calderone claims to have known nothing of the transfer of the property to Australvic or the mortgage to Perpetual. Nor did she know that John Matthies & Co, her husband’s solicitors, had lodged a caveat on 29 January 2007, allegedly on her behalf, claiming an interest described as an “equitable interest as life tenant in possession”. The caveat states the “grounds of claim” in these terms: “[u]nder an agreement made in or about the month of February 1990 between the caveator and Seventh Asteroid Pty Ltd”. Mrs Calderone contends that she knew nothing of the caveat. However the interest described in the caveat is of the same type as that which she claims to have in this proceeding.
By an originating motion filed on 23 April 2007, Australvic commenced proceeding no 5862 of 2007 in the Court against the Registrar of Titles and 14 other defendants, including Mrs Calderone. Australvic seeks the removal of caveats, including the 29 January 2007 caveat lodged by John Matthies & Co allegedly on Mrs Calderone’s behalf.
Mrs Calderone’s 27 April 2007 affidavit also exhibits a copy of a facsimile transmission of a document entitled “Declaration of Trust” purporting to be have been made by Australvic on 12 August 2005. Under the terms of the deed, Australvic acknowledges and declares that the property is held by it on trust for Seventh Asteroid. The trust document records that no moneys were paid by Australvic to Seventh Asteroid by way of consideration for the “prior transfer by the Beneficiary to the Trustee of the Trust Property”.
Mrs Calderone argues that the status quo should be maintained. She claims that there is no alternative accommodation available for herself and her family. She alleges that she is obliged to care for her three school aged children. One of her children is ill at home. She claims not to have sufficient funds to enable her to rent a house or to pay for removalists, because her husband controls the family finances and money she earns as a waitress is spent on feeding the family and meeting housekeeping expenses. She contends that damages would be an inadequate remedy to compensate her for the loss she would suffer if obliged to vacate the property.
Submissions
Counsel for Mrs Calderone submits that s 42(2)(e) of the Act should be interpreted widely so as to include an equitable life interest of the type claimed under the alleged agreement between Mrs Calderone and her husband.
Counsel refers to the statement of the relevant principle by Gibbs ACJ in Barba v Gas and Fuel Corporation[1]:
“In Burke v Dawes ((1938) 59 C.L.R. 1, at pp. 17-18 ), Dixon J discussed as follows the effect of an earlier Victorian statutory provision which corresponded to s 42(2)(e) :
In Victoria these words have received an interpretation and an application as a result of which any person in actual occupation of the land obtains as against any inconsistent registered dealing protection and priority for any equitable interest to which his occupation is incident, provided that at law his occupation is referrable to a tenancy of some sort, whether at will or for years. Thus, a purchaser under a contract of sale, who at law is in possession as tenant at will of the vendor, has been held protected in respect of his equitable ownership as purchaser (Robertson v Keith((1870) 1 V.R. (E.) 11); Sandhurst Mutual Permanent Investment Building Society v Gissing ((1889) 15 V.L.R. 329)), a lessee in respect of an option to purchase contained in his lease (McMahon v Swan([1924] V.L.R. 397)) and a wife in respect of an equitable life interest claimed under an unsigned separation agreement made with her husband (Black v Poole((1895) 16 A.L.T. 155)). a’Beckett J decided the last named case in deference to previous decisions and against his own opinion, which he stated to be that ‘those words were intended to refer to a tenancy as ordinarily understood arising out of an agreement under which the person in possession was allowed to occupy in consideration of some kind of rent or service of which the proprietor was to have the benefit.’ The cases are collected and criticised by the late Dr Donald Kerr in his work on the Australian Lands Titles (Torrens) System (1927), at pp 75 et seq. But the interpretation has stood for nearly seventy years, and it would, I think, be most undesirable now to undertake the re‑examination of its correctness.”
[1](1976) 136 CLR 120 at 140.
Gibbs ACJ went on to note McTiernan J’s agreement with Dixon J and the similar views of Latham CJ and Evatt J. He concluded that the question should be regarded as settled[2].
[2]See also: Skosples v Perpetual Trustee Victoria Ltd [2004] VSC 336 at [12] – [13] per Osborn J.
Counsel for Perpetual does not make any submissions disputing that a person in possession of land as the holder of an equitable life interest would properly be characterised as a tenant in possession of the land under s 42(2)(e) of the Act. He rather argues that there is insufficient evidence to establish that there is a serious question to be tried as to whether Mrs Calderone has the interest she claims.
Counsel relies on the absence of any reference to Seventh Asteroid or the property in the writing on the back of the certificate of incorporation. He submits that the document is “an artifice designed to stay eviction”.
He then makes submissions on the basis that the interest claimed under s 42(2)(e) is alleged to have arisen under a lease. He argues that no lease has been created in favour of Mrs Calderone because there is no evidence of either any consideration passing from her or any right to exclusive possession. He contends that the caveat apparently lodged on her behalf itself does not refer to a tenancy. Nor is a lease referred to in allegedly relevant correspondence between her solicitors and the firm representing Perpetual exhibited to Mr Swift’s affidavit.
He also points out that there is no affidavit material from Mr Calderone corroborating his wife’s account, nor any explanation of its absence. He also notes that the trust deed was allegedly made by Australvic some 12 months before it became registered as proprietor of the property.
Finally counsel for Perpetual relies upon the absence of material from Mr Calderone or medical evidence relating to the condition of the ill child. He argues that Mrs Calderone has not established that the injunctive relief sought should be granted on the basis of the balance of convenience.
Counsel for Mrs Calderone responds that it is apparent that there is a triable issue as to the existence of relevant facts. He argues that the balance of convenience favours the grant of the injunction to maintain the status quo until the issues between the parties can be dealt with by the Court.
Conclusions
I am satisfied that there is a serious question to be tried as to whether Mrs Calderone obtained an equitable life interest entitling her to possession of the property and rights as against Seventh Asteroid and, subsequently, Australvic and Perpetual, under s 42(2)(e) of the Act.
As the extracted passage from Barba v Gas and Fuel Corporation set out at [17] above indicates, the equitable interest of a life tenant in possession is one which could be protected under s 42(2)(e). The operation of the sub-section is not restricted to the protection of interests arising under leases.
In my view, the written endorsement on the back of the copy certificate of incorporation of Seventh Asteroid might be viewed as evidence of an agreement, made between Mrs Calderone and Mr Calderone as a representative of Seventh Asteroid, to the effect that she should have a life interest in the property to be acquired by the company. There is also some evidence of Mrs Calderone’s subsequent assumption of a mutually agreed role as homemaker and of her financial contributions to the welfare of the family by payment for food and housekeeping expenses. This might be regarded as evidence of consideration in relation to an agreement for the purchase of the property by Seventh Asteroid on an express trust for her, as a tenant for life. It might also be regarded by the Court as giving rise to a constructive and implied or constructive trust in circumstances in which it would be inequitable or unconscionable for Seventh Asteroid to deny that she held such an interest in all the circumstances.[3]
[3]See Muschinski v Dodds (1984-1985) 160 CLR 583 at 593-5 per Gibbs CJ.
Australvic’s interest would be subject to any equitable life tenancy in Mrs Calderone’s favour under s 42(2)(e) of the Act, even if it were not held to have taken its interest as registered proprietor on trust for Seventh Asteroid.
Further, in my view, the balance of convenience favours the retention of the status quo. There is no affidavit material before me from Perpetual. As a result, there is no evidence contesting Mrs Calderone’s allegations that she has no alternative accommodation and lacks the financial resources to relocate herself and her family. Perpetual retains its registered interest and there is no evidence of likely prejudice to it if the order sought were to be made. There is no evidence to suggest that it could not be compensated by an award for damages in relation to any consequential loss it might sustain.
Counsel for Mrs Calderone has informed the Court that he is instructed to give the usual undertakings as to damages on behalf of his client.
In all the circumstances, it seems to me that, notwithstanding the absence of evidence from Mr Calderone, there would be a lower risk of injustice in the event that Mrs Calderone does not ultimately make out her claim, in preserving the status quo than in permitting her eviction at this point[4]. I am persuaded that the existing interim relief should be continued by an interlocutory injunction in the terms sought.
[4]See: Bradto Pty Ltd v State of Victoria [2006] VSCA 89 at [35] per Maxwell P and Charles JA.
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