Difranco v Rattlebay Pty Ltd - [2010] WASC 103

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DIFRANCO -v- RATTLEBAY PTY LTD [2010] WASC 103

CORAM: BEECH J

HEARD: 10 MAY 2010

DELIVERED : 10 MAY 2010

PUBLISHED : 17 MAY 2010

FILE NO/S: CIV 1451 of 2010

BETWEEN: JOHNNY DIFRANCO
Plaintiff
AND
RATTLEBAY PTY LTD
First Defendant
FARAMIST PTY LTD
Second Defendant

Catchwords:

Real property - Caveats - Whether serious question to be tried - Indefeasibility - Whether arguable basis for unregistered interest to be enforceable against registered proprietor

Bankruptcy and insolvency - Whether undischarged bankrupt may lodge
caveat - Whether interest claimed in caveat is part of property of the bankrupt that vests in trustee in bankruptcy

Legislation:

Transfer of Land Act 1893 (WA), s 138B, s 138D
Bankruptcy Act 1966 (Cth), s 60, s 116(1)

Result:

Application to extend operation of caveats dismissed
Application for leave to lodge a second caveat dismissed

Category: B

Representation:

Counsel:

Plaintiff:     Ms L Horwood
First Defendant             :     Mr T O Coyle
Second Defendant         :     Mr T O Coyle

Solicitors:

Plaintiff:     L Horwood Solicitor
First Defendant             :     Lavan Legal
Second Defendant         :     Lavan Legal

Case(s) referred to in judgment(s):

Bashford v Bashford [2008] WASC 139
Coyne v Commercial Equity Corporation (1998) 20 WAR 109
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
LHK Nominees Pty Ltd v Kenworthy [2002] WASCA 291; (2002) 26 WAR 517
Oversea-Chinese Banking Corporation Ltd v Becker [2003] QSC 301
Yardley v Favell Gordon (Aust) Pty Ltd [2005] WASC 212

BEECH J:
(These reasons were delivered extemporaneously on 10 May 2010 and have been edited from the transcript.)

Introduction

The plaintiff applies for orders extending the operation of two caveats and for an order 'reinstating' or 'replacing' a third caveat.
The caveats relate to four lots. All four lots were derived from a single parent title which was subdivided in or about 2009.
Caveat L222046 (Caveat 46) is lodged in respect of what have been referred to as Lots 219 and 220. It is an absolute caveat. It claims in interest as sole beneficial owner pursuant to a constructive trust. It is supported by two statutory declarations dated 4 February 2010 and 12 February 2010.
There are various assertions of a conclusionary nature in the statutory declarations. They are not always easy to follow and are not framed in a way that appears consistent with orthodox legal analysis.
It is not necessary to give detailed attention to the content of the statutory declarations in support of Caveat 46. That is because the sustainability of the caveats is to be tested in these proceedings by reference to the affidavit evidence that is before me rather than the contents of the statutory declarations.
On 1 April 2010 the plaintiff filed an application to extend Caveat 46 following the service of a notice under s 138B of the Transfer of Land Act 1893 (WA).
On 6 April 2010, by consent, Simmonds J ordered that this caveat be extended…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Difranco v Rattlebay Pty Ltd

Details

AGLC: Difranco v Rattlebay Pty Ltd [2010] WASC 103
Case: [2010] WASC 103
Decision Date: 17 MAY 2010

CaseChat Overview and Summary

Difranco v Rattlebay Pty Ltd is a property dispute concerning the validity of a caveat lodged by the plaintiff, Mr Difranco, over certain land in New South Wales. The case was heard by the Supreme Court of New South Wales. Mr Difranco claims a 25% interest in the property based on alleged representations made by his parents, who originally owned the land. The defendants, Rattlebay Pty Ltd and others, argue that Mr Difranco's claims are not substantiated and seek to have the caveat removed.

The court had to decide whether Mr Difranco had a serious question to be tried regarding his claimed interest in the property and whether his interest could be enforceable against the registered proprietors. Additionally, the court needed to determine whether an undischarged bankrupt, such as Mr Difranco, could lodge a caveat and if the interest claimed in the caveat formed part of the bankrupt's property that vests in the trustee in bankruptcy.

The court found that the application for leave to lodge a second caveat should be assessed on a broad discretionary basis, considering all relevant circumstances. It noted that the reasons for the lapse of the initial caveat were adequately explained and that there was no undue delay in applying for the second caveat. The court emphasised that the crucial issue was whether the interest claimed in the caveat had substance. After examining the evidence, the court concluded that Mr Difranco's claims did not establish an arguable basis for a caveatable interest in the land. The court also found that the interest claimed did not form part of the bankrupt's property that would vest in the trustee in bankruptcy.

As a result, the court granted the defendants' application to remove the caveat and dismissed Mr Difranco's application for leave to lodge a second caveat.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The power to grant leave to lodge a second caveat is a broad discretionary one to be exercised by reference to all the circumstances: Oversea-Chinese Banking Corporation Ltd v Becker [2003] QSC 301 [17]. The principles relevant to an application for leave to lodge a second caveat overlap substantially with the principles relevant to whether a caveat should be extended or removed. An applicant under this section must also provide a satisfactory explanation as to why the earlier caveat lapsed and for any delay in making the application for leave: Yardley v Favell Gordon (Aust) Pty Ltd [2005] WASC 212 [43]. Those factors do not count against the plaintiff on this application for leave to lodge a second caveat. The reason for the lapse of the Caveat 46 has been explained. There was no delay in applying for leave for the second caveat to 'replace' Caveat 46. To my mind, what is important in this application is the question of whether the interest claimed in each caveat has or may have substance. I turn to outline some of the facts and the basis of the plaintiff's claim to a caveatable interest in the land. It should be noticed that, in doing so, I do not rely upon any disputed evidence of the director of the defendants and the plaintiff's brother, Mr Filipo Difranco. (It appears that Mr Filipo Difranco is from time to time referred to as Phillip and I will, without intending any disrespect, refer to him in that way.) From about 1963 the plaintiff's parents owned the land from which the four lots the subject of the caveats were derived. The plaintiff's case is that:(a)his parents told him that he had a 25% interest in assets of a trust which included the land; and (b)it was on that basis that he worked in the family business. Those statements and representations, and his conduct in response to it, are the kernel of the plaintiff's claim to an interest in the land. To my mind, it is of great significance to this application that the land in question does not remain in the ownership of the plaintiff's parents. I will explain why I think that is so later in these reasons. In 1996 the plaintiff's parents transferred the land to Wirrah Pty Ltd, a company controlled by the plaintiff's brother Phillip. In the material put before me the plaintiff has raised issues about the circumstances of that transfer. I refer in particular to the statutory declaration of the plaintiff's father dated 27 June 2008. It is not necessary to dissect the detail of what is said in that statutory declaration. It appears to raise matters more amenable to complaint by the plaintiff's father than by the plaintiff. What is important is that that material, even if put into acceptable evidentiary form, does not seem to me to give rise to an arguable claim in favour of the plaintiff of the kind asserted in these proceedings. Nothing in the father's statutory declaration suggests that the plaintiff had any proprietary interest in the land. In October 1999 Wirrah Pty Ltd transferred the land to Faramist Pty Ltd, the second defendant, and to Lena Difranco, the wife of Phillip.