Davies v Davies
[2009] WASCA 238
•30 NOVEMBER 2009
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: DAVIES -v- DAVIES [2009] WASCA 238
CORAM: PULLIN JA
HEARD: 30 NOVEMBER 2009
DELIVERED : 30 NOVEMBER 2009
FILE NO/S: CACV 126 of 2009
BETWEEN: KEVIN STEPHEN DAVIES
Appellant
AND
JILLIAN MAY DAVIES
First RespondentTHE REGISTRAR OF TITLES
Second Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :KENNETH MARTIN J
File No :CIV 2588 of 2009
Catchwords:
Practice and procedure - Appeal - Application for stay of order - Turns on own facts
Legislation:
Nil
Result:
Application for stay of judgment dismissed
Category: B
Representation:
Counsel:
Appellant: In person
First Respondent : Ms N M E Breach
Second Respondent : No appearance
Solicitors:
Appellant: In person
First Respondent : Chris Baker & Associates
Second Respondent : No appearance
Case(s) referred to in judgment(s):
Chahwan v Euphoric (2009) 73 ACSR 252
Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308
Lidden v Composite Buyers (1996) 67 FCR 560
Meynert v Leafdale [2005] WASC 102
PULLIN JA: This is an application for a stay of orders made by Kenneth Martin J on 16 October 2009 when he ordered:
(a)that the application of the present appellant for extension of caveat K48980 in CIV 2588 of 2009 should be dismissed;
(b)that the extension of injunctive relief sought in the application be refused; and
(c)that the plaintiff pay the first defendant's costs of the application, including any reserved costs, to be taxed, the plaintiff once again being the appellant in these proceedings.
The appellant is the stepchild of the first respondent, Jillian Davies, and son of her deceased husband, Sidney Davies. The property which was the subject of the caveat was 31 Gnobar Way, Mullaloo (the Gnobar property), which had been purchased by the appellant's father and his stepmother. The injunction which the appellant sought to extend was in terms that Jillian was restrained from encumbering the Gnobar property 'by way of further advance'.
Jillian and Sidney were registered as joint tenants of the Gnobar property. Upon Sidney's death, title passed by survivorship to Jillian. Jillian has sold the property and settlement with the purchaser is due tomorrow or very soon after. If settlement occurs, then the purchaser will gain indefeasible title.
The caveat lodged by the appellant was in terms that the appellant claimed 'an estate in fee simple as an equitable claim to co-ownership'. The appellant contends that there was an arrangement between Sidney and Jillian whereby under this arrangement Jillian held her interest in the Gnobar property as constructive trustee for Sidney and on his death as constructive trustee for Sidney's estate.
I will not examine the circumstances because I will assume that there is some foundation for such a contention, although that will have to be decided at trial. I note that in effect Kenneth Martin J concluded that there was a serious question to be tried in relation to that claim although he regarded it as a weak claim.
When Sidney died intestate, an administrator was appointed. The administrator lodged a caveat to prevent any dealing with the property, claiming that the estate had an interest, presumably on the basis that Jillian held the property as constructive trustee. The administrator later withdrew the caveat after proceedings were commenced to have it removed or to have the caveat extended.
The appellant then lodged his caveat. The statutory declaration in support makes it clear that it is in effect the estate which has the interest in the property and that he, along with his siblings and Jillian, are entitled under the Administration Act 1903 (WA) to share in the distribution from the estate.
The appellant has commenced proceedings in Supreme Court action CIV 2726 of 2009 against Jillian seeking a declaration on behalf of the estate that she holds the property on trust for the estate. In those proceedings the administrator trustee has been joined as a party and the other beneficiaries have been joined.
The usual rule is that one of several persons entitled to a distribution in an unadministered estate has no caveatable interest in the property in that estate. The entire ownership of the property during the course of administration is vested in the personal representative of the deceased. The beneficiaries, as persons entitled to a distribution, have a right to compel due administration of the estate but that does not confer a caveatable interest in the property: see Meynert v Leafdale [2005] WASC 102. However, a question arises as to whether, in effect, the appellant may step into the shoes of the administrator trustee in circumstances where the trustee declines to pursue the claim which the appellant says that the trustee should be pursuing against Jillian.
There is some authority which is relevant to this question and I refer to Lidden v Composite Buyers (1996) 67 FCR 560 where Finn J referred to the normal rule that it is for the trustee to institute proceedings on behalf of a trust estate and not for the beneficiaries, but that there are circumstances where a beneficiary may sue in his own name and seek relief. Finn J concluded that beneficiaries' right to sue occurs only in exceptional circumstances.
In Chahwan v Euphoric (2009) 73 ACSR 252, Brereton J said that 'exceptional circumstances', the phrase used by Finn J in the Lidden case, seemed to involve no more than a failure by the trustee, excusable or inexcusable, to sue on a cause of action against a third party. Nothing more needs to be said about those two cases save to say that if 'exceptional circumstances' are made out merely by showing that the trustee refuses to take proceedings, then it would seem to be a substantial inroad to one of the justifications for the ordinary rule, which is to prevent multiplicity of actions.
It is not necessary to say any more about those cases because the application which is sought for a stay or a suspension of the judgment under the Civil Judgments Enforcement Act 2004 (WA) requires that considerations to be taken into account are those set out in Eastland Technology Australia Pty Ltd v Whisson (2003) 28 WAR 308.
Where a party has recovered a judgment from a court which is under challenge on appeal and an application is made for a stay, then the usual rules are that the successful litigant at first instance will ordinarily be entitled to enforce the benefit of the judgment pending the determination of any appeal. It is for the applicant for a stay to move the court to a favourable exercise of its discretion. It will not do so unless special circumstances are shown justifying the departure from the ordinary rule.
A question then to consider is whether or not an order is necessary to preserve the subject matter or integrity of the litigation or where refusal of a stay could create practical difficulties in respect of the relief which may be granted on appeal. There is no issue in this case that if a stay is not granted, that the Gnobar property will be sold and if the object is to recover the Gnobar property, the appeal will be rendered nugatory because the property is going to settle in the near future and once settled, as I have indicated, the purchaser will gain indefeasible title and it will not be recoverable. However, the Eastland Technology case indicates that even if it can be shown that the appeal will be rendered nugatory, the stay will still be refused unless it can be established that the appeal process ultimately has reasonable prospects of success.
If that hurdle can be overcome, the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant; where, for example, a grant of a stay will occasion hardship to the respondent which may not be alleviated by the terms upon which the stay may be granted.
The position is that the Gnobar property has been sold by Jillian and I have been informed, without there being argument about this, that she intends using the funds, once settlement takes place, to settle the purchase of another property which is known as 6 St Louis Avenue, Hocking. If she cannot proceed with that transaction, that means she will come under possible claim by the purchaser of the Gnobar property who will not be able to gain title if an injunction or caveat prevented that transaction being completed, and by the vendor of the Hocking property if the funds to settle are not available. Furthermore, the interests of those persons have not been represented before this court. When a third party is likely to be affected by an order of the court, an order is usually not made unless that party has been served and has had the opportunity of making submissions.
The first part of the application is for a stay of the order which has had the effect of removing the caveat. I have been informed that following Kenneth Martin J's order the caveat was indeed removed. In those circumstances there is no utility in making an order concerning the caveat order made by Kenneth Martin J - that is at par 1 of his order - because it is impossible for this court to restore the caveat which has already been removed. Section 138D of the Transfer of Land Act 1893 (WA) would allow the Supreme Court to make an order giving leave for the lodgement of a further caveat, thereby overcoming the statutory prohibition on the lodgement of a further caveat where a first caveat has been withdrawn. That order giving leave for the lodgement of a further caveat can only be made by the Supreme Court and the Supreme Court must mean, in context, the Supreme Court sitting in the General Division and not the Court of Appeal Division. As a result, there is no basis for this court making a stay order in relation to Kenneth Martin J's order refusing to extend caveat K48980.
Then the next question is whether or not there should be a stay of the order that Kenneth Martin J made refusing the injunctive relief sought in the application. As I understand it, what his Honour meant by that was that he would not further extend the operation of the injunction which was an injunction made by the consent of the parties and recorded in a minute of consent orders, the consent order document being dated 16 September 2009. That contained within it an order that the first defendant, that is Jillian, be restrained from encumbering 'by way of further advance' the Gnobar land.
The extension of that injunction if a stay were granted would have no utility at all because it is not suggested that there is likely to be any further encumbrance by way of further advance in relation to the Gnobar property.
The reason for refusing the stay of the order in relation to the caveat is that there is no utility in such order. It may be possible to formulate an order under s 15 of the Civil Judgments Enforcement Act which would have the effect of doing what the caveat was doing before it was withdrawn, and which prevented any dealing with the Gnobar property However, I am not satisfied that I should make any order under s 15 in view of an undertaking which has been offered by the respondent in the following terms:
(1)the first respondent undertakes to use the funds from the sale of 31 Gnobar Way, Mullaloo to settle the purchase of 6 St Louis Avenue, Hocking (the Hocking property);
(2)the first respondent undertakes not to sell or otherwise encumber the Hocking property unless by order of the General Division of the court; and
(3)the first respondent will be relieved of the undertaking referred to in par 2 if the appeal is dismissed.
If the appellant is prepared to extend the usual undertaking which must be offered where an injunction is granted in return for the respondents' undertaking, then the respondents' undertaking will be accepted.
Finally, the appellant seeks a stay of the costs order that was made against him, but I am not prepared to grant such a stay. It would be very unusual for a court to stay a costs order in circumstances where there is evidence before the court that the first respondent has property which would allow the payer of the costs to recover that payment. Even though that property is subject to a claim, it is at the moment the first respondent who is the owner. I am not prepared to make a stay in relation to the costs order.
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