Fazari v Cosentino
[2008] WASC 149
•24 JULY 2008
FAZARI -v- COSENTINO [2008] WASC 149
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 149 | |
| Case No: | CIV:1266/2008 | 20 JUNE 2008 | |
| Coram: | LE MIERE J | 24/07/08 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed | ||
| B | |||
| PDF Version |
| Parties: | MARIA FAZARI IMMACOLATA COSENTINO |
Catchwords: | Caveat Application under Transfer of Land Act 1893 (WA) s 138C(1) for orders that the operation of caveats be extended until further order Mutual wills Whether caveator has an equitable interest in the properties Serious question to be tried Turns on own facts |
Legislation: | Transfer of Land Act 1893 (WA), s 138C(1) |
Case References: | Avco Financial Services Ltd v White [1977] VR 561 Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 Birmingham v Renfrew (1937) 57 CLR 666 Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 Custom Credit v Ravi Nominees (1992) 8 WAR 42 Healey v Brown [2002] WTLR 849 Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 Lewenberg & Pryles v Direct Acceptance Corporation Ltd [1981] VR 344 McMahon v McMahon [1979] VR 239 Nichols v Go-Tell Nominees Ltd (subject to deed of company arrangement) (1997) VConvR 54-573 Palmer v Bank of New South Wales (1975) 133 CLR 150 Re Goodchild [1997] 1 WLR 1216 Riverview Project Pty Ltd v Elleray [2007] VSC 150 Russell v Scott (1936) 55 CLR 440 Tremills v Tremills (Unreported, WASC, Library No 5540, 5 October 1984) |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
IMMACOLATA COSENTINO
Defendant
Catchwords:
Caveat - Application under Transfer of Land Act 1893 (WA) s 138C(1) for orders that the operation of caveats be extended until further order - Mutual wills - Whether caveator has an equitable interest in the properties - Serious question to be tried - Turns on own facts
Legislation:
Transfer of Land Act 1893 (WA), s 138C(1)
Result:
Application allowed
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Category: B
Representation:
Counsel:
Plaintiff : Mr P J Hannan
Defendant : Mr J C Curthoys
Solicitors:
Plaintiff : Aherns Lawyers
Defendant : GG Legal
Case(s) referred to in judgment(s):
Avco Financial Services Ltd v White [1977] VR 561
Barns v Barns [2003] HCA 9; (2003) 214 CLR 169
Birmingham v Renfrew (1937) 57 CLR 666
Composite Buyers Ltd v Soong (1995) 38 NSWLR 286
Custom Credit v Ravi Nominees (1992) 8 WAR 42
Healey v Brown [2002] WTLR 849
Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222
Lewenberg & Pryles v Direct Acceptance Corporation Ltd [1981] VR 344
McMahon v McMahon [1979] VR 239
Nichols v Go-Tell Nominees Ltd (subject to deed of company arrangement) (1997) VConvR 54-573
Palmer v Bank of New South Wales (1975) 133 CLR 150
Re Goodchild [1997] 1 WLR 1216
Riverview Project Pty Ltd v Elleray [2007] VSC 150
Russell v Scott (1936) 55 CLR 440
Tremills v Tremills (Unreported, WASC, Library No 5540, 5 October 1984)
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1 LE MIERE J: The plaintiff applies pursuant to s 138C(1) of the Transfer of Land Act 1893 (WA) for orders that the operation of two caveats be extended until further order.
Background
2 These proceedings concern things done by various members of the Cosentino family. I will refer to the members of the family by their given names, as did counsel in the course of the hearing. Domenico and Immacolata were married on 30 June 1951. Maria (born 17 September 1952) and Antonio (born 8 January 1957) are the only children of that marriage.
3 On 18 June 1997 Domenico and Immacolata each made a mutual will and agreed that neither would revoke his or her will without the written consent of the other.
4 The principal terms of Domenico's will are:
(a) I appoint my daughter, Maria, my executor and trustee;
(b) I give my son Antonio the land at 23 Warrajah Street;
(c) If my wife Immacolata survives me by 30 days I give the balance of my estate to her;
(d) If my wife does not survive me by 30 days my executors hold my estate on trust to be divided equally between my children Antonio and Maria.
5 The principal provisions of Immacolata's will were:
(a) I appoint my daughter, Maria, my executor and trustee;
(b) If my husband Domenico survives me by 30 days I give the balance of my estate to him;
(c) If my husband does not survive me by 30 days my executors hold my estate on trust to be divided equally between my children Antonio and Maria.
6 Domenico died on 1 July 1998. At the date of Domenico's death:
(a) Domenico was the sole registered proprietor of 23 Warrajah Street;
(b) Domenico was the sole registered proprietor of 53 Osborne Place;
(c) Domenico was the sole registered proprietor of 11 Warrajah Street;
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- (d) Domenico and Immacolata were the registered proprietors of 15 Warrajah Street and 35 Warrajah Street as tenants in common in equal shares;
(e) Domenico and Immacolata were the registered proprietors of 18 Warrajah Street as joint tenants.
7 On 10 February 1999 probate of the will of Domenico was granted to Maria, the executor appointed under the will. Maria, as executor of Domenico's will, caused Domenico's interest in the properties at 53 Osborne Place, and the properties at 11 Warrajah Street, 35 Warrajah Street and 15 Warrajah Street to be transferred to Immacolata and for Immacolata to be registered as the sole registered proprietor of 18 Warrajah Street. Accordingly, Immacolata was the sole registered proprietor of 53 Osborne Place, and the properties at 18 Warrajah Street, 11 Warrajah Street, 35 Warrajah Street and 15 Warrajah Street (together the Warrajah Street properties). Maria caused 23 Warrajah Street to be transferred to Antonio to give effect to the terms of Domenico's will.
8 On 21 February 2005 Immacolata executed a further will. The principal terms of the will were:
1. I revoke all former wills and testamentary dispositions;
2. I appoint jointly my children Antonio and Maria as executor and trustee of my will;
3. I give my estate to my trustee upon trust for my children, Maria and Antonio.
The word 'superseded' or two parallel lines are handwritten or drawn over each page of Immacolata's will of 21 February 2005.
9 Immacolata and Antonio executed a contract for sale of land dated 9 July 2007 by which Immacolata sold 53 Osborne Place to Antonio as trustee for the A Cosentino Family Trust for the purchase price of '$NIL'. On 14 November 2007 Immacolata and Antonio executed a transfer by which Immacolata transferred 53 Osborne Place to Antonio and herself as joint tenants. The transfer stated the consideration to be 'gift'.
10 On 18 December 2007 Maria lodged two caveats. The first caveat was in respect of the Warrajah Street properties. The second caveat was in respect of 53 Osborne Place. In each case the caveat stated that the estate or interest being claimed was 'as beneficiary of a constructive trust'. On 11 March 2008 Immacolata lodged an application for removal of the caveat in relation to the Warrajah Street properties and on 13 March 2008
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- Immacolata and Antonio lodged an application for the removal of the caveat in relation to 53 Osborne Place.
11 On 18 March 2008 Maria caused the originating summons to be issued in which she seeks orders that the operation of each of the caveats be extended or alternatively an injunction restraining Antonio and Immacolata from creating, disposing of, or dealing with any estate or interest in the properties the subject of the caveats.
12 On 18 March 2008 the plaintiff also issued a chamber summons seeking orders that each of the caveats be extended until further order and all parties have liberty to apply on 48 hours written notice. On 19 March 2008, by consent, I made orders extending the operation of each caveat until further order and adjourning the hearing of the summons to a special appointment. These reasons for judgment follow the hearing of that special appointment on 20 June 2008.
13 On 28 April 2008 Maria commenced by writ of summons in this court action CIV 1445 of 2008 (the Equity action). The defendants in the Equity action are Immacolata and Antonio. In the Equity action Maria claims the following relief:
(a) A declaration that upon her death the executor or administrator of Immacolata's estate holds all of her estate including the Osborne Place property and the Warrajah Street properties upon constructive trust for Maria and Antonio in equal shares;
(b) A declaration that during her lifetime Immacolata holds the Osborne Place property and the Warrajah Street properties upon constructive trust for Maria and Antonio in equal shares;
(c) A declaration that during her lifetime Immacolata is bound not to dispose, sell, transfer, charge or mortgage the Osborne Place property or the Warrajah Street properties without Maria's written consent;
(d) In the alternative to (c), a declaration that during her lifetime Immacolata is bound not to dispose of the Osborne Place property and Warrajah Street properties save for full value and not to dissipate the proceeds of sale of those properties other than in the payment of ordinary living expenses or acquisition of replacement assets available for distribution to Maria and Antonio under the provision of Immacolata's first will;
(e) An order setting aside the Osborne Place contract;
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- (f) An order setting aside the Osborne Place transfer;
(g) An order requiring Immacolata and Antonio to execute all such documents and cause all such dealings to be registered under the Transfer of Land Act 1893 (WA) as are necessary to make Immacolata the sole registered proprietor of the 53 Osborne Place property;
(h) An injunction restraining Immacolata and Antonio from disposing, selling, transferring, charging or mortgaging the Osborne Place property without Maria's written consent pending performance by them of the order claimed in (g);
(i) An injunction restraining Immacolata from disposing, selling, transferring, charging or mortgaging the Osborne Place property and Warrajah Street properties without Maria's written consent;
(j) In the alternative to (e) to (i), damages under s 25(10) of the Supreme Court Act 1935 (WA).
14 The Transfer of Land Act s 138C(2) provides, amongst other things, that the court may make an order extending the operation of the caveat if it is satisfied that the caveator's claim has or may have substance. The onus lies on the caveator to satisfy the court that his or her claim to an interest in the property - that is, that he or she has a caveatable interest in the property - raises a serious question to be tried. If the caveator demonstrates there is a serious question to be tried that he or she has an interest in the property, then the court, in the exercise of its discretion whether or not to make an order extending the operation of the caveat, will have regard to the balance of convenience. Where the caveator has raised a serious question to be tried that he or she has an interest in the property it will be unusual for the court not to make an order extending the operation of the caveat: Custom Credit v Ravi Nominees (1992) 8 WAR 42.
15 The plaintiff claims that she has an equitable interest in the Osborne Place property and the Warrajah Street properties which arises out of the agreement between Domenico and Immacolata to make mutual wills.
The mutual wills doctrine
16 Mutual wills arise where two people have made an agreement as to the disposal of their property through wills and each has, in accordance with the agreement, executed a will. The doctrine is based upon the mutuality of obligations; each testator making provisions by will in return for provisions made by the other: see generally Croucher R 'Mutual
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- Wills: Contemporary Reflections on an Old Doctrine' (2005) 29(2) Melbourne University Law Review 390.
17 In Birmingham v Renfrew (1937) 57 CLR 666 Dixon J described the doctrine as follows:
[A] contract between persons to make corresponding wills gives rise to equitable obligations when one acts on the faith of such an agreement and dies leaving his will unrevoked so that the other takes property under its dispositions. It operates to impose upon the survivor an obligation regarded as specifically enforceable. It is true that he cannot be compelled to make and leave unrevoked a testamentary document and if he dies leaving a last will containing provisions inconsistent with his agreement it is nevertheless valid as a testamentary act. But the doctrines of equity attach the obligation to the property. The effect is, I think, that the survivor becomes a constructive trustee and the terms of the trust are those of the will which he undertook would be his last will (683).
18 A mutual wills agreement cannot make a will irrevocable. If a will is revoked and a later one made in its place, the latter will is valid. But the disposition of the estate may be bound by the terms of the agreement through the imposition of a constructive trust, regardless of the terms of the last will.
The defendant's position
19 For the purposes of this hearing the defendant concedes that Domenico and Immacolata made an agreement by which Immacolata agreed to execute a will in substantially the same terms as Domenico and not to revoke the will except with his consent during his lifetime or after his death with the consent of his executor. However, the defendant says that the effect of the mutual wills agreement was not to crystallise the assets of Domenico as at the date of his death so that Immacolata cannot dispose of them. The defendant says that by his will Domenico gifted Immacolata the balance of his estate. He did not give specific properties. During his lifetime he may have sold and purchased different properties so that his estate as at the date of his death may or may not have included the caveated properties. Since Immacolata survived Domenico the will obliges Immacolata to leave her estate equally to Antonio and Maria; but the terms of the will do not require Immacolata to leave the properties or assets she received from Domenico's estate to Antonio and Maria equally. The defendant says that her obligation was to leave her will unchanged and to leave her property as at the date of her death in accordance with the terms of that will. The estate that is to be left in accordance with her will is her estate as at the date of her death. However, she says the mutual will
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- agreement does not require her to retain any property she owned as at the date of Domenico's death, or received from his estate until her death.
20 The defendant says that the mutual wills doctrine as explained by Dixon J in Birmingham v Renfrew requires that she leave her estate equally between Antonio and Maria. The trust that crystallises is her estate as at the date of her death - not Domenico's estate as at the date of his death. During her lifetime, Immacolata says, she can deal as absolute owner with the property passing under the will of Domenico.
21 In Birmingham v Renfrew Dixon J said that, like the doctrine of secret trusts, the doctrine of mutual wills arises from the equitable jurisdiction for the prevention of fraud by 'fastening equities upon property because of a testamentary disposition made in reliance upon an understanding or promise' (688).
22 In Barns v Barns [2003] HCA 9; (2003) 214 CLR 169 [85] Gummow and Hayne JJ referred to the points emphasised in Birmingham v Renfrew and in the secret trusts cases. Their Honours said:
The propositions are:
(i) it is the disposition of the property by the first party under a will in the agreed form and upon the faith of the survivor carrying out the obligation of the contract which attracts the intervention of equity in favour of the survivor;
(ii) that intervention is by the imposition of a trust of a particular character;
(iii) the subject-matter is 'the property passing [to the survivor] under the will of the party first dying';
(iv) that which passes to the survivor is identified after due administration by the legal personal representativewhereupon 'the dispositions of the will become operative';
(v) there is 'a floating obligation' over that property which has passed to the survivor; it is suspended during the lifetime of the survivor and 'crystallises' into a trust upon the assets of the survivor at death (footnotes omitted).
23 In Trusts Law in Australia (2nd ed, 2003) 529 Denis Ong writes:
The critical conceptual weakness in the doctrine of mutual wills is the nebulosity of the surviving party's rights and obligations in the period between the death of the first party to die and the death of the surviving party. What are the rights and obligations of the survivor during this
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- intermediate period? In Barns v Barns Gummow and Hayne JJ stated that a floating obligation existed only 'over the property which has passed to the survivor' under the will of the first party to die (ie Gummow and Hayne JJ thought that the floating obligation would not exist over property acquired by the survivor otherwise than under the will of the first party to die). However, Gummow and Hayne JJ also stated in Barns v Barns that the floating obligation crystallised into a trust (at the death of the survivor) upon 'the assets of the survivor' (ie upon all of the assets of the survivor, and not only upon the residue of those assets acquired by the survivor under the will of the first party to die).
How is it possible for a floating obligation existing only 'over that property which has passed to the survivor' under the will of the first party to die to crystallise (at the survivor's death) upon, not only that property (or the residue thereof), but also upon the otherwise acquired property of the survivor?
It is suggested that when Dixon J, in Birmingham v Renfrew, referred to a floating obligation 'during the lifetime of the survivor', he was referring to a floating obligation over all of the assets of the survivor existing from time to time 'during the lifetime of the survivor', so that, at the survivor's death, that floating obligation would crystallise upon all of the assets owned by the survivor at his death, so as to constitute a trust of those assets for the benefit of those persons intended by the parties to the mutual wills compact to benefit.
Nevertheless, even Dixon J's exposition of the doctrine of mutual wills in Birmingham v Renfrew leaves uncertain the rights and obligations of the survivor (footnotes omitted).
24 In Birmingham v Renfrew Dixon J:
The purpose of an arrangement for corresponding wills must often be, as in this case, to enable the survivor during his life to deal as absolute owner with the property passing under the will of the party first dying. That is to say, the object of the transaction is to put the survivor in a position to enjoy for his own benefit the full ownership so that, for instance, he may convert it and expend the proceeds if he choose. But when he dies he is to bequeath what is left in the manner agreed upon. It is only by the special doctrines of equity that such a floating obligation, suspended, so to speak, during the lifetime of the survivor can descend upon the assets at his death and crystallise into a trust. No doubt gifts and settlements, inter vivos, if calculated to defeat the intention of the compact, could not be made by the survivor and his right of disposition, inter vivos, is therefore, not unqualified. But, substantially, the purpose of the arrangement will often be to allow full enjoyment for the survivor's own benefit and advantage upon condition that at his death the residue shall pass as arranged (689).
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25 Dixon J referred expressly to a constructive trust attaching to the assets of the survivor:
But I do not see any difficulty in modern equity in attaching to the assets a constructive trust which allowed the survivor to enjoy the property subject to a fiduciary duty which, so to speak, crystallised on his death and disabled him only from voluntary dispositions inter vivos. On the contrary, as I have said, it seems rather to provide a reason for the intervention of equity. The objection that the intended beneficiaries could not enforce a contract is met by the fact that a constructive trust arises from the contract and the fact that testamentary dispositions made upon the faith of it have taken effect. It is the constructive trust and not the contract that they are entitled to enforce (690).
26 During his or her lifetime, the survivor has some power of disposition, but it is qualified. As Dixon J explained, gifts and settlements 'calculated to defeat the intention of the compact' could not be made. The limitations on the survivor's freedom of action depend on the nature of the promises made. In Birmingham v Renfrew, the survivor was given an absolute interest and therefore had considerable freedom to dispose of the property. The survivor could not make another will, but he could deal with the property in the ordinary course. It was, however, not an unqualified power.
27 It is not clear what are gifts 'calculated to defeat the intention of the compact'. Rosalind Croucher suggests that instruments similar to wills, such as settlements on the settlor for life with remainder interests, particularly if coupled with a power of revocation, would meet this description: see Croucher (405). Croucher suggests that the transaction in Russell v Scott (1936) 55 CLR 440 is such a transaction. In that case an elderly lady and her nephew opened a joint bank account. The funds were all contributed by the aunt. The account was used solely for the purposes of supplying the aunt's needs. The aunt intended her nephew to take beneficially whatever balance stood to the credit of the account at her death and told him so. It was held that the presumption of a resulting trust in favour of the aunt was rebutted and the nephew's legal right by survivorship to the balance of the account prevailed.
28 Counsel for the plaintiff referred to Palmer v Bank of New South Wales (1975) 133 CLR 150 as a case apparently against him. In 1965 a testator agreed with a married couple that if on the death of his companion they would look after him until his death he would not revoke a will by which he had left the whole of his estate to them. On the death of the companion in 1967 the couple came to live with the testator and looked after him until his death in 1971. In 1970 the testator and a friend opened
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- a joint account with a bank which either could operate and to the balance in which at the death of the first to die the survivor was to be entitled. The testator and the friend contributed to the account in unequal shares and at the testator's death the account was in credit. The will was not revoked by the testator. In an action by the couple claiming that the balance in the account formed part of the testator's estate, it was found that his contributions to the account were made with the knowledge that his obligation to the couple would thereby be diminished and for that purpose, and that, although the testator had promised not to revoke his will, he had not promised that his assets at death would include any particular items of property. Barwick CJ, with whom the other members of the court agreed, found that a promise to make and not revoke a will in favour of a named person may be broken by a transaction inter vivos which is testamentary in its form or nature, but that the creation of the joint account was not in the nature of a testamentary transaction and not a breach of his promise. Barwick CJ found that the underlying reasoning in a line of cases is that whilst a person who promises to leave his property to others by will is free to divest himself of property by a transaction inter vivos, he may not enter into an illusory transaction by which he appears, contrary to realty, to have parted with his property, or into a transaction by which he keeps an interest in the property during his lifetime, arranging the transaction so that the property passes on his death to the person into whose name he had transferred it. To do that is to deal with the property in a testamentary fashion in breach of the promise (159). In reference to Birmingham v Renfrew Barwick CJ said:
It was conceded in Birmingham v Renfrew that the making of an agreement for mutual wills did not preclude the alienation of property during the lifetime of the promisors. When in that case Dixon J spoke of 'gifts and settlements, inter vivos … calculated to defeat the intention of the compact' he no doubt had in mind gifts and settlements which were either testamentary in nature or which were in contravention of the terms of the particular contract, spelled out of the expressions actually used, bearing in mind the circumstances in which it was made (162).
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- person on his death, while really retaining it for himself in his lifetime would be in breach of a promise that he would leave his property by will to the promisee (159).
30 In this case the plaintiff says that the transaction by which the plaintiff, by way of gift, transferred the Osborne Place property to the second defendant and herself as joint tenants, is a testamentary transaction in the sense used by Barwick CJ in Palmer's case and is an inter vivos gift calculated to defeat the intention of the compact between the first defendant and the deceased, as that expression was used by Dixon J in Birmingham v Renfrew. It is not necessary to reach a final decision on that matter for the purposes of this application. It is sufficient that the plaintiff makes out a serious question to be tried. I find that she has done so.
31 The plaintiff also relies upon Healey v Brown [2002] WTLR 849. Mrs Brown and her husband were beneficial joint tenants of their matrimonial home. They agreed to make mutual wills in identical form. Each left the whole of his or her estate to the survivor and, in the event of being the survivor, left to the claimant, Ms Healey, who was Mrs Brown's niece, all his or her interest in the matrimonial home. The remainder of the estates were left to the defendant who was Mr Brown's son by an earlier marriage. In pursuance of the agreement they executed identical wills in 1996. In January 1997 Mrs Brown died having left her will unrevoked. In August 1997 Mr Brown transferred the property from his sole name into the joint names of himself and the defendant for no consideration. In 1999 Mr Brown died having made no alteration in his will. However, the disposition of the property into the joint names of himself and the defendant in 1997 had the effect of defeating the object of the mutual wills agreement since on Mr Brown's death the property passed to the defendant by survivorship and Ms Healey received no interest in it. Ms Healey contended that the property was left by the defendant on trust for her and that she was entitled to have it transferred to her. David Donaldson QC sitting as a deputy judge of the chancery division seems to have approached the matter in the same way as if Mrs Brown had effectively left her share of the property to Mr Brown by her will even though the property was held jointly and passed to Mr Brown not by operation of Mrs Brown's will but by survivorship. The deputy judge held that equity could intervene to impose a constructive trust on the property in the hands of the defendant as successor in title to Mr Brown. However, his Honour held that he was bound by Re Goodchild [1997] 1 WLR 1216 to confine any constructive trust that was imposed to the property received by the survivor from the first to die and
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- could not impose any trust on the survivor's own property. Accordingly, because one half of the property had belonged to Mr Brown in any event, only the half share formerly belonging to Mrs Brown was subject to a trust. The deputy judge held that the property in the defendant's hands was held by the defendant for himself and Ms Healey in equal shares.
32 There is a serious question to be tried that the transfer by Immacolata of her interest in the property at 53 Osborne Place to Antonio and herself as joint tenants by way of gift was an inter vivos gift 'calculated to defeat the intention of the compact' between Domenico and Immacolata and 'is for the purpose in hand a testamentary transaction which would be in breach of [the] promise to leave by will' the whole of her estate to Maria and Antonio.
33 In considering whether the plaintiff has a proprietary interest in the Osborne Place and Warrajah Street properties it is important to know the time at which a third person beneficiary obtains an interest under mutual wills. The earliest time that an interest could accrue to the third person beneficiary is the death of the first contracting party to die. In Birmingham v Renfrew Dixon J referred to the survivor's obligation as being 'a floating obligation, suspended, so to speak, during the lifetime of the survivor [which] can descend upon the assets at his death and crystallise into a trust' (689). In Ford HAJ & Lee WA, Principles of the Law of Trusts, vol 2 [22.2660] the authors say:
Dixon J may have characterised the obligation in that way to allow for the husband's particularly wide power of disposition by way of analogy with the wide power of a company to dispose of its assets after giving a floating charge over them. Whether a floating charge is a present charge over assets now held or to be acquired, coupled with a licence to the chargor to deal with the assets in the ordinary course of business, or whether it is no more than a charge of such future assets as are held at the time of crystallisation in the future, is a matter of debate.
34 It is not necessary for the purposes of this hearing to finally determine the issue. I find that there is a serious question to be tried that the plaintiff has an equitable interest in the property of Immacolata, including the Osborne Place property and the Warrajah Street properties. The equitable interests arose upon the death of Domenico.
Does the plaintiff have a proprietary interest in the properties?
35 The next question is whether the equitable interest in which the plaintiff arguably has in the Osborne Place and Warrajah Street properties is a proprietary interest sufficient to sustain a caveat.
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36 Any proprietary interest at law or in equity will support the lodgement of a caveat. The interest of a beneficiary under a constructive or an implied trust can support a caveat: McMahon v McMahon [1979] VR 239; Riverview Project Pty Ltd v Elleray [2007] VSC 150. A claim under an equitable charge is sufficient to support a caveat: Avco Financial Services Ltd v White [1977] VR 561; Composite Buyers Ltd v Soong (1995) 38 NSWLR 286. The interest arising by reason of financial contributions towards the cost of erecting a 'granny flat' or other form of accommodation has been held sufficient to support a caveat: Tremills v Tremills (Unreported, WASC, Library No 5540, 5 October 1984).
37 I find that there is a serious question to be tried that the plaintiff has an equitable interest in the Osborne Place and Warrajah Street properties sufficient to support the caveats.
38 A caveator has no right to prohibit registration of a dealing where the caveator's claimed interest in the land would not entitle the caveator to object were the assistance of the court to be invoked: Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222; Lewenberg & Pryles v Direct Acceptance Corporation Ltd [1981] VR 344; Nichols v Go-Tell Nominees Ltd (subject to deed of company arrangement) (1997) VConvR 54-573.
39 However, the case was argued on the basis that the issue was whether or not the plaintiff had an equitable interest in the properties sufficient to support a caveat. In those circumstances it is not appropriate to consider what dealings with the Osborne Place or Warrajah Street properties the plaintiff has a right to prohibit.
40 If, as I have found, there is a serious question to be tried that the caveator has an equitable interest in the relevant properties, the court will not normally order the removal of the caveat and there is no reason to do so in this case. Accordingly, I will order that the operation of the caveats be extended until further order. The operation of the caveats should continue until the substantive rights of the parties are determined in the Equity action. The plaintiff must, of course, pursue those proceedings with all due expedition.
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