Garwoli v Garwoli
[2015] SASC 1
•14 January 2015
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
GARWOLI v GARWOLI
[2015] SASC 1
Reasons of Judge Dart a Master of the Supreme Court
14 January 2015
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - EXTENSION
Application under s 191 (d) of the Real Property Act 1886 requiring caveator to show cause why caveat should not be removed - interest claimed as beneficiary under a will - will revoked by later will - no caveatable interest established - caveat to be removed.
Real Property Act 1886 s 191(d); Inheritance (Family Provision) Act 1972 , referred to.
Pua Hor Ong & Ors v Wu You Yang Pty Ltd & Ors [2008] SASC 365; Quek v Beggs (1990) 5 BPR 11,761; Re Robertson and Another (1944) 44 SR (NSW); Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd and Another [1994] 1 VR 672, considered.
GARWOLI v GARWOLI
[2015] SASC 1JUDGE DART:
This is an application, made pursuant to the provisions of s 191(d) of the Real Property Act 1886 (“the RPA”), requiring the defendant (caveator) to show cause why a particular caveat should not be removed. In my opinion the defendant has failed to establish an entitlement to have the caveat remain. I propose to order that the caveat be removed.
Background
The plaintiff is the grandson of the late Mrs Ludmila Von Garwoli (“the deceased”) who died on 25 February 2014 aged 103. The defendant is the son of the deceased. The evidence discloses that during the latter years of her life the plaintiff was her principal carer. The deceased owned a residential property at Magill (“the land”) and in 1997 she transferred an interest in the land to the plaintiff as joint tenant.
In April 2009 the defendant took the deceased to see solicitors for the purpose of preparing a new will. The will was executed on 22 April 2009. It appointed the defendant as the sole executor and made him the sole beneficiary of the residuary estate of the deceased. At the same time the solicitors prepared a Memorandum of Transfer. The effect of that document was to sever the joint tenancy with the plaintiff so that the deceased held her joint interest in the Magill property as a tenant in common. If that position had existed at the time of the death of the deceased, her interest in the property would have fallen into her estate.
On 29 May 2009 the deceased made a further will revoking the April will. In that will the plaintiff was appointed as the executor and all of the residuary estate was given to him. At the time that will was executed the solicitor who prepared the will obtained a medical certificate establishing that the deceased had testamentary capacity.
It is not clear whether the April 2009 document purporting to sever the joint tenancy was ever lodged at the Lands Title Office. It appears that as at the time of the deceased’s death the title still recorded her as a joint tenant with the plaintiff. The Certificate of Title currently records the plaintiff as the sole registered proprietor.
On 17 March 2014 the defendant lodged a caveat on the property at Magill. The caveat claimed:
An equitable estate in fee simple in some (at present) indefinable share in the land above described as the sole beneficiary of the estate of his late mother the Caveatee Ludmila Von-Garwoli who died on 25 February 2014 pursuant to a certain Last Will and Testament of Ludmila Von-Garwoli dated 22 April 2009 and/or as a person entitled to make a claim in respect of the estate of a deceased person entitled to claim the benefit of the Inheritance (Family Provision) Act 1972.
The legal issues
The entitlement to lodge a caveat arises under s 191 of the RPA, which provides as follows:
Any settlor of land or beneficiary claiming under a will or settlement, or any person claiming to be interested at law or in equity, whether under an agreement, or under an unregistered instrument, or otherwise howsoever in any land, may lodge a caveat with the Registrar-General forbidding the registration of any dealing with such land, either absolutely or unless such dealing shall be expressed to be subject to the claim of the caveator, or to any conditions conformable to law expressed therein.
There appear to be two difficulties confronting the caveator in this matter. The first is that there is a later will which on its terms expressly revokes the will relied upon by the defendant to claim a caveatable interest.
The second issue is that, regardless of which will should be admitted to probate, there is a doubt as to whether the land falls into the estate in any event. The Registrar-General has treated the deceased’s interest in the land as being that of a joint tenant. After the death of the deceased, the plaintiff lodged an application to register the death. The right of survivorship means the whole interest in the land remains with the plaintiff.[1] The plaintiff now is the sole registered proprietor of the land. Regardless of which will prevails, as matters currently stand, the land does not fall into the deceased estate.
[1] Re Robertson and Another (1944) 44 SR (NSW) 103 at 105.
The claim of the defendant is that the May 2009 will was executed under the undue influence of the plaintiff and, accordingly, liable to be set aside. If that occurs, the April 2009 will would become the operative will.
The immediate question is, then, in the circumstances as they presently exist, does the defendant have a caveatable interest? The short answer is no. The defendant’s claim to have a caveatable interest arises because the RPA provides that a beneficiary under a will may lodge a caveat. The defendant is not currently a beneficiary under a will, because the will on which he relies has been revoked by a later will. In respect of the later will, he is not a beneficiary. That is enough to dispose of this matter.
The defendant says that he has a right to have the Court set aside the latter will by reason of the fact it was procured by the undue influence of the plaintiff. That is said to create the caveatable interest. In my opinion, that does not presently assist him. For the purpose of establishing a caveatable interest, there is a well-established difference between having an equitable interest in land and having a mere equity in respect of land. The latter does not support a caveatable interest. The nature of the interest claimed by the defendant, as explained below, should be treated as being the equivalent of a mere equity.
In Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd and Another[2] the Court of Appeal in Victoria had to consider the position of a mortgagor who claimed that its mortgagee had sold land in breach of its duty to obtain the best price. The sale had created an equitable interest in the purchaser. The Court held that a procedural right to apply to set aside a transaction for fraud or undue influence was a mere equity rather than an equitable right and, accordingly, did not create a caveatable interest.[3] If the subject transaction in Swanston had been set aside by the Court the mortgagor would then have had an equitable interest. It is not until the Court makes such an order that the equitable interest comes into existence.
[2] [1994] 1 VR 672.
[3] Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd and Another [1994] 1 VR 672 at 675.
It seems by analogy the same situation arises here. The defendant is not currently a beneficiary under a will of the deceased. He claims an entitlement to set aside a will which will then make him a beneficiary under the earlier will. In my opinion, it is best to treat the defendant as having the equivalent of a mere equity and, accordingly, not an interest that would support a caveat. That position will change if the Court subsequently sets aside the May 2009 will.
The second limb of the caveat is that the defendant is a person entitled to make a claim under the Inheritance (Family Provision) Act 1972 (“the Act”). An entitlement to make a claim under the Act does not give rise to a caveatable interest.[4] Further, until the Court determines otherwise, the land does not form part of the estate and therefore cannot be the subject of a claim under the Act.
[4] Quek v Beggs (1990) 5 BPR 11,761.
The test which must be satisfied if a caveat is to be extended requires the caveator to establish a prima facie case justifying the extension.[5] The caveator has not satisfied the test, for the reasons set out above. Neither of the arguments advanced by the defendant establish a present entitlement to caveat the land.
[5] Pua Hor Ong & Ors v Wu You Yang Pty Ltd & Ors [2008] SASC 365.
I will hear the parties as to the form of the order to be made.