Hayes v O'Sullivan

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: HAYES -v- O'SULLIVAN & ANOR [2001] WASC 55

CORAM: ROBERTS-SMITH J

HEARD: 16 FEBRUARY 2001

DELIVERED : 8 MARCH 2001

FILE NO/S: CIV 2465 of 2000

BETWEEN: MELISSA GAY HAYES
Plaintiff
AND
JOHN LAWRENCE SCOTT O'SULLIVAN
First Defendant
REGISTRAR OF TITLES
Second Defendant

Catchwords:

Real property - Torrens system land - Caveat - Lodged to protect interest claimed under s 79 Family Law Act 1975 (Cth) - Whether caveatable interest

Courts and Judges - Torrens system land - Caveat - Husband and wife - Proceedings in Family Court - Whether constructive trust can ground caveat - Jurisdiction

Legislation:

Transfer of Land Act 1893 (WA), s 137, s 138

Family Law Act 1975 (Cth), s 8, s 40(3), s 79

Result:

Application to extend caveat dismissed

Representation:

Counsel:

Plaintiff:     Ms P J Keeley
First Defendant             :     Mr I Weldon
Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Clairs Keeley
First Defendant             :     Bruce Havilah & Associates
Second Defendant         :     No appearance

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

Australian Eagle Insurance Co Ltd v Parry [1992] ANZ ConvR 166
Baumgartner v Baumgartner (1987) 164 CLR 137
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Dembitzer v Mills [1980] 2 NSWLR 697
Eng Mee Yong v Letchumanan [1980] AC 331
Hillman v Hillman [1977] 2 NSWLR 739
In the Marriage of Stevens (1991) 15 Fam LR 51
Ioppolo v Ioppolo, unreported; FCt SCt of WA; Library No 2469; 13 November 1978
Lansell v Lansell (1964) 110 CLR 353
Lightfoot v Lightfoot, unreported; SCt of WA (Owen J); Library No 8731; 27 February 1991
McMahon v McMahon [1979] VR 239
Re Sabri; ex parte Brien, RC (1997) FLC 92-732
Taddeo v Taddeo & Catalano (1977) 19 SASR 347
Williams v Williams [1979] 1 NSWLR 376

Case(s) also cited:

Bethian Pty Ltd v Green (1977) 3 Fam LR 11,579
Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129
Embling v Halse as Trustee in Bankruptcy & Registrar of Titles, unreported; SCt of WA; Library No 960632; 31 October 1996
Kidner v Secretary, Dept of Social Security (1993) 31 ALD 63
Re an Application by a Liquidator of Haupiri Courts Limited (1969) NZLR 348
Stowe v Stowe (1993) 15 WAR 363
Vandyke v Vandyke (1976) 12 ALR 621
Vedejs v Public Trustee [1985] VR 569

ROBERTS-SMITH J: On 1 September 1998, the plaintiff lodged a caveat pursuant to s 137 of the Transfer of Land Act 1893 (WA) over the land described as Nelson Location 12834, together with a right of carriageway over portion of Nelson Location 11250 and being the whole of the land in Certificate of Title Volume 1857 Folio 938 and the registered proprietor of which was Bruce Dowell Carlson.
The caveat describes the estate or interest being claimed as "a 60 per cent beneficial interest pursuant to s 79 of the Family Law Act 1975…" and further that the caveator was claiming an estate or interest by virtue of "being cestui qui trust pursuant to the statutory declaration dated this first day of September 1998". Omitting formal parts, the plaintiff's statutory declaration recited that:
"1.I am the wife of BRUCE DOWELL CARLSON (hereinafter called 'the husband'), the registered proprietor of the property situate at and known as Lot 12834, Westbourne Road, Boyup Brook in the State of Western Australia, and being more particularly described as Nelson Location 12834 together with a right of carriageway over the portion of Nelson Location 11250 marked 'A' on the map as set out in Transfer E257390 and being the whole of the land comprised in Certificate of Title Volume 1857 Folio 983 (hereinafter called 'the property').
2.I separated from the husband on 14 October 1997 and intend to apply for property settlement under the provisions of Section 79 of the Family Law Act 1975 (as amended).
3.The husband and I lived on the propoerty (sic) from July 1995 and I assisted the husband by working on improvements to the property, including digging trenches, building fences, establishing and maintaining gardens and fruit trees, renovating the transportable home placed on the property and maintaining the home.
4.I have contributed extensively towards the maintenance, conservation and improvement of the property and towards the increase in value of the property.
5.I have been told and I verily believe that the husband has indicated that he will sell the property and keep the proceeds for himself. I am fearful that he will do so and defeat my interest in the property.
6.The nature of the estate or interest claimed is a 60 percent beneficial interest in the property pursuant to section 79 of the Family Law Act 1975 (as amended)."
On 30 October 2000 the plaintiff filed a notice of originating motion seeking an order that the operation of the caveat be extended until further order of the court and also giving notice that:
"… the grounds of this application are that the plaintiff has a beneficial interest as cestui qui trust (pursuant to s 79 of the Family Law Act) …."
On 31 October 2000, Scott J extended the operation of the caveat to 4 pm on 21 November 2000, ordered that the documents be served on the first and second defendants and otherwise adjourned the matter to 20 November.
On 20 November 2000, Miller J made orders by consent, including that the operation of the caveat be extended until further order and the matter be adjourned for further hearing before a Judge in chambers on 4 December 2000.
On 1 December the solicitors for the first defendant filed a minute of proposed orders, indicating at the further hearing they would be seeking orders that the originating summons be dismissed and that the plaintiff forthwith remove the caveat and pay the first defendant's costs.
At the hearing before Hasluck J on 4 December 2000, Ms Chape appeared for the plaintiff and Mr Weldon appeared for the first defendant.
In an outline of submissions filed 30 November, the first defendant advanced the submission that because the plaintiff's claim in support of the caveat was a claim under the Family Law Act 1975 (WA) and she was a party to matrimonial proceedings on foot in the Family Court of Western Australia and the caveat was lodged against her then (now former) husband as registered proprietor of the land, there was no basis upon which the caveat could properly have been lodged. Counsel for the first defendant referred to a decision of the Full Court of the Supreme Court of Western Australia: Ioppolo v Ioppolo, unreported; FCt SCt of WA; Library No 2469; 13 November 1978 and to Lightfoot v Lightfoot, unreported; SCt of WA (Owen J); Library No 8731; 27 February 1991. Hasluck J adjourned the application sine die to be listed for a special appointment and extended the caveat in the meantime.
The application accordingly came before me and was heard on 16 February 2001, although by then because of developments elsewhere, the nature of the matter in dispute had changed somewhat. To put that in context it is necessary to return to the plaintiff's affidavit sworn on 30 October 2000 in support of her original application for extension of the caveat. From that affidavit, it appears that about 4 December 1992 the plaintiff commenced co‑habitation with Bruce Dowell Carlson ("the husband") and they married on 20 March 1994. They separated about 16 October 1997. The husband commenced Family Court proceedings in July 1998 in relation to the son of their marriage and the plaintiff initiated property settlement proceedings pursuant to the Family Law Act on 25 November 1998.
In the meantime her then solicitors had lodged the caveat on 4 September 1998 to protect the plaintiff's interest in the property.
At the time of the swearing of the plaintiff's affidavit, the Family Court proceedings were still on foot. The child welfare issues had been finalised on 19 October 2000 but the property settlement was awaiting a defended hearing before a Judge of the Family Court in mid‑2001.
In June or July 2000 the plaintiff received copies of various documents forwarded by the husband to the Child Support Review Office. These included a letter from the husband stating that he owed legal fees to the first defendant (who had been his solicitor in the Family Court proceedings) and that he had entered into an agreement with the first defendant to pay $300 per month. A statement of account from the first defendant to the husband dated 6 June 2000 showed outstanding legal fees of $17,543.20 owed by the husband to the first defendant.
In October 2000 the first defendant caused the Registrar to issue a notice under s 138 of the Transfer of Land Act, the effect of which was that in the absence of a court order the caveat was to lapse at midnight on 1 November 2000. The notice had been issued as a consequence of the first defendant attempting to lodge a mortgage over the subject land, granted to him by the husband to secure the first defendant's legal fees owing by the husband.
The plaintiff deposed that if the caveat were to lapse and the first defendant's mortgage registered against the property, that would have the effect of defeating her property settlement claim against the husband. She stated there was approximately $30,000 equity in the property which the husband was then attempting to place on the market, although she and the husband were negotiating terms for the withdrawal of the caveat upon sale of the property. Her claim against the husband was $35,000, of which she expected to receive the major part from the sale of the property.
There is an affidavit from the first defendant sworn 13 February 2001 in which he deposes to the nature of his claim for fees secured by the mortgage. As Mr Weldon explained at the hearing, the only purpose for the filing of that affidavit was to demonstrate that the first defendant had a legitimate and bona fide claim and that his desire to register the mortgage was not simply a device to effect the removal of the caveat. I accept that to be so.
At the outset of the hearing on 16 February, I was informed by counsel for both parties that the application for extension of the caveat (or on the first defendant's part, the removal of it) was no longer a live issue; it appears that the Family Court property proceedings have been settled and a minute of consent orders has been filed (but the sealed orders have not been extracted) by which the plaintiff is to receive a sum of money from the husband, withdraw her caveat and (as I am told) "assign her interest in the property" to the husband. Precisely what form the proposed assignment would take was not explained to me. I assume it would require no more than an acknowledgment that she has no further interest in, nor claim upon the property.
Unfortunately the parties have been unable to agree on the issue of costs. The plaintiff contends that she was entitled to lodge the caveat and so should have her costs of the proceedings to extend it; the first defendant contends on the other hand that although it may have been reasonable for her to have lodged the caveat and sought to extend it from time to time, at least up until 4 December 2000, once the lack of any legal basis for it had been raised on behalf of the first defendant on 4 December, the caveat should have been withdrawn - and accordingly the first defendant should be entitled to his costs from that date.
To enable me to resolve this ancillary issue it is, ironically in the circumstances of this case, nonetheless necessary for me in fact to resolve the substantive issue, even though the caveat is to be withdrawn by agreement in due course.
Although Ms Keeley for the plaintiff does not concede the argument that a claim under s 79 of the Family Law Act does not give rise to a caveatable interest under the Transfer of Land Act, she sought to support the caveat (and hence the plaintiff's right to lodge it) on the basis that the relevant interest was that of beneficiary under a constructive trust arising by virtue of the plaintiff's contribution towards the maintenance, conservation and improvement of the property. Ms Keeley argues that the right of the plaintiff to claim under the Family Law Act does not preclude her rights in equity as beneficiary under a constructive trust and hence does not preclude her entitlement to protect those rights by caveat under the Transfer of Land Act. She argues that by virtue of the first defendant's attempt to register the mortgage, the plaintiff has been compelled to apply to this Court for an order that the caveat be extended. She says it would have been more appropriate for the first defendant to lodge a caveat to protect his interests until such time as the Family Court proceedings between the plaintiff and the husband were resolved. The first defendant was in what Ms Keeley described as a privileged position, having been solicitor for the husband in the Family Court proceedings and so intimately aware of the interest and nature of the claim being made by the plaintiff against the husband. He must have known as a solicitor that by forcing the removal of the caveat, he would be prejudicing the plaintiff's position by enabling the husband to deal with the land; on the other hand he could have protected his own interest sufficiently by lodging his own caveat which would have ranked after hers. In that circumstance, she would have suffered no prejudice and neither would the first defendant.
In Ioppolo (supra) the Full Court held that a claim for settlement of property under the Family Law Act is not an interest in land within the meaning of s 137 of the Transfer of Land Act and accordingly is not a caveatable interest. I am of course bound by that decision: see also Lightfoot v Lightfoot (supra) in which Owen J relevantly held:
"There is clear authority for the proposition that the mere possibility of a court exercising jurisdiction to make an order for the settlement of matrimonial property is not an estate or interest in land necessary to support a caveat: Re Weeks' Caveat (1971) QWN 4; Vandyke v Vandyke (1976) 12 ALR 621 per Hutley JA at 639; Bethian Pty Ltd v Green (1977) 3 Fam LR 11,579; Ioppolo v Ioppolo".
Ms Keeley argues that the caveat on its face discloses that the plaintiff's claim is at least in part, as beneficiary of a constructive trust. The statutory declaration she says, is no more than an administrative requirement of the Department of Land Administration, but in any event it does contain enough information to sustain the argument that the plaintiff has a sufficient interest at common law to sustain the caveat.
As I understand his argument, however, Mr Weldon on the other hand says that even if the caveat on its face and the statutory declaration in support of it are capable of the construction that the plaintiff's claim is, in part at least, as beneficiary of a constructive trust in equity rather than a claim under the Family Law Act, that does not matter. His submission is that property rights as between spouses are now within the exclusive jurisdiction of the Family Court. Putting it another way, he submits the plaintiff can have no interest in the subject land arising out of her contributions to it during the marriage, other than one arising under the Family Law Act.
It is perfectly clear, I think, that until the jurisdictional point was taken by the first defendant, the plaintiff had sought to support her caveat on the basis of her claim under s 79 of the Family Law Act. That is clear from the caveat itself and from the statutory declaration lodged in support of it. That position was maintained by the plaintiff in the notice of originating motion filed on 30 October 2000.
As I have already observed, a claim under s 79 of the Family Law Act is not a caveatable interest: see also Dembitzer v Mills [1980 2 NSWLR 697; In the Marriage of Stevens (1991) 15 Fam LR 51; Australian Eagle Insurance Co Ltd v Parry [1992] ANZ ConvR 166.
In Dembitzer v Mills the question was whether the proceedings were in relation to proceedings for principal relief in the Family Court and whether the Supreme Court of New South Wales was prevented from dealing with the matter by virtue of s 8 of the Family Law Act and of s 40(3) together with the proclamation of the Governor General made on 27 May 1976. It was not disputed that the Supreme Court could not deal with proceedings which constituted a "matrimonial cause" within that definition.
In that case the plaintiff and defendant had been married. They were divorced in 1978. There were proceedings in the Family Court whereby the defendant sought maintenance and property settlement. The plaintiff (his wife) owned real property. In March 1978 the defendant lodged a caveat against the property, claiming an interest under the application for property settlement he had made to the Family Court.
The plaintiff wife brought proceedings under the Real Property Act 1900 (NSW) for an order that the defendant withdraw his caveat. The defendant applied for an order that the proceedings be struck out on the ground the Supreme Court had no jurisdiction because they were a "matrimonial cause" in respect of which the Family Court of Australia had exclusive jurisdiction. Master Cohen held that the application to remove the caveat was not incidental to proceedings for principal relief in the Family Court. There was no order of the Family Court in respect of the property and no interest in the land was claimed to have been created (ibid 702). The Supreme Court therefore had jurisdiction to deal with the plaintiff's application to remove the defendant's caveat. If the defendant were apprehensive that the plaintiff would dispose of the land, his remedy was not a caveat under the Real Property Act based on an existing estate or interest, but an injunction by the Family Court restraining the plaintiff from dealing with the land and so preserving the property which might in the end be the subject of an order of the Family Court.
The situation in the case of In the Marriage of Stevens was unusual. The husband was the registered owner of the former matrimonial home. The wife lodged a caveat under the Real Property Act 1900 (NSW), specifying her interest in the property as "an equitable interest by reason of contributions made to the property and pursuant to the Family Law Act 1975". She had commenced proceedings in the Family Court under s 79 but no orders had been made. She applied to the Family Court for an order extending the operation of the caveat. Notwithstanding the interest actually claimed, at the hearing of the application in the Family Court the wife sought to extend the operation of the caveat on the basis that she had a legal interest in the property. This was because she had been a registered owner jointly with her husband and alleged that he had obtained registration as sole owner by lodging a memorandum of transfer on which her signature was either forged or obtained by duress.
In his judgment Cohen J began with the observation that (at 52):
"There is longstanding authority that the Family Law Act, in itself, does not give a party to a marriage a caveatable interest in land, although an order under the Act can have this effect. Section 79 of the Family Law Act gives a right of action in respect of land, but there is no interest raised by it until an order under it is made."
His Honour then turned to the provisions of the Real Property Act 1900 (NSW) and took the view that recent amendments had the effect that a caveat could be extended not only in time, but also by amendment to permit it to claim any caveatable interest which the court may be satisfied the caveator holds (at 53). This conclusion was to be drawn from s 74K which provided that a caveator served with a notice issued at the request of the registered proprietor may apply to the Supreme Court of New South Wales for an order extending the operation of the caveat. His Honour considered the words "extend the operation" in that section should be given a wide interpretation and had to be considered in light of s 74L which provided that the court was to disregard any failure by the caveator to comply strictly with the formal requirements imposed by the other sections and the regulations if there is any issue over the validity of the form of the caveat. His Honour regarded the reference to the form of the caveat as including issue as to whether the caveatable interest claimed in the document is a caveatable interest. The primary purpose of the recent amendments appeared to be to provide for a caveat to give notice of an adverse claim and enable the extent of that claim to be determined by the court. Against that statutory background, his Honour was prepared to construe the interest claimed "by reason of contributions made to the property" as referrable to a claim of an estate in fee simple even though that was not expressly stated.

Stevens is accordingly no authority for the proposition that a constructive trust claimed as between husband and wife can support a caveat under the Transfer of Land Act. There is no provision in the Transfer of Land Act similar to that in s 74L of the Real Property Act 1900 (NSW). On the other hand, s 138C(2) of the Transfer of Land Act clearly contemplates the Court extending the operation of a caveat in ways other than merely by extending time. The latter is expressly authorised by s 138C(2)(a)(i) and so s 138C(2)(a)(ii) must necessarily have some further and different operation. In my view, notwithstanding the absence of a provision equivalent to s 74L of the Real Property Act 1900 (NSW), the ambit of s 138C(2) is sufficiently wide to enable the Court to extend a caveat on the basis of an arguable interest which is raised on the materials even though the particular interest is not expressly claimed in terms. Furthermore, despite the express reliance upon s 79 of the Family Law Act in the caveat, the statutory declaration and the originating motion, I accept Ms Keeley's submission that those materials on their face are capable of the construction that the plaintiff's claim was in reality founded on a constructive trust.
The question whether a spouse has an interest pursuant to a constructive trust must be decided in accordance with the same general principles that apply in the case of persons who are not spouses: Taddeo v Taddeo & Catalano (1977) 19 SASR 347, 365, per Bray CJ; McMahon v McMahon [1979] VR 239 at 243‑244 per Marks J, the principles being those expressed eg in Baumgartner v Baumgartner (1987) 164 CLR 137. So too must other disputes concerning the property of spouses be resolved by the application of ordinary principles. This, I think, is illustrated by Re Sabri; ex parte Brien, RC (1997) FLC 92-732, a case upon which Ms Keeley relied in support of her argument that the first defendant's attempt to have the plaintiff's caveat removed should be rejected as a matter of public interest. In Sabri the husband was the sole registered owner of certain real property. An application for property settlement was filed in the Family Court on 16 April 1993. On 1 June 1993 Terms of Settlement were filed in the Family Court and on 16 June 1993 the Court made consent orders accordingly. The orders provided that (inter alia) the wife should pay the husband $80,000 within two months whereupon he would transfer to her all his estate and interest in the subject property. On 9 July 1993 the wife paid the $80,000 and the husband transferred all his interest in the property to her.
On 14 October 1993 a Creditor's Petition was served on the husband and on 19 November 1993 a sequestration order was made on that Petition by the Federal Court, based on an act of bankruptcy (failure to comply with a Bankruptcy Notice) on 1 September 1992. The Trustee subsequently lodged a caveat against the property and later applied to the Federal Court for a declaration that he was the owner of the property to the exclusion of the wife and the bank to which she had mortgaged it as security for an $80,000 loan which she had used to pay the husband. The Federal Court ordered that the matter be transferred to the Family Court and so it came before Chisolm J in that Court.
The Trustee's primary argument was that the husband's interest in the property vested in the Trustee by the operation of the doctrine of "relation back" under the provisions of the Bankruptcy Act 1966 (Cth). The wife advanced several arguments against this but the one relevant for present purposes was based on a constructive trust.
By virtue of the "relation back" provisions of the Bankruptcy Act the husband's bankruptcy was deemed to have commenced on 1 September 1992.
Chisolm J held first there was no inconsistency between those provisions and the Family Court order because the latter required the husband to transfer to the wife "all his right, title and interest in the property" and that is exactly what he did - it just so happened that the extent of that interest was affected (to the point of disappearance) by the deeming provisions of the Bankruptcy Act.
As to the constructive trust argument, his Honour noted (ibid, page 83,861) it to be well established that the title of a trustee in bankruptcy is no higher nor better than that of the bankrupt and the trustee takes it subject to the liabilities and equities which affect it in the bankrupt's hands. Thus, as his Honour perceived it, the argument had to be that the wife had an equitable interest as at the time of the act of bankruptcy, namely 1 September 1992.
On the evidence, his Honour found (ibid, page 83,866):
"The bankrupt here purported to deal with the property as sole owner: the transfer to the wife, on payment of $80,000, is consistent with this. The transfer was part of a settlement which, as a result of the court orders, ended the wife's rights (subject to s 79A) to seek orders under s 79. If as a result of the relation back doctrine the transfer was valueless to the wife, the settlement would not have been just and equitable to the wife."
and at page 83,867:
"In the present case, the husband had only a qualified right to deal with the property. His title to it, from 1 September 1992, had become subject to a statutory regime under which if certain events happened he would be deemed retrospectively to have had no title. In those circumstances, he negotiated with his wife and entered into consent orders, and executed the documents of transfer, without advising her of the true position. This was a clear breach of his obligation to make disclosure to the Court. His behaviour was part of a transaction in which the wife, assuming she was getting title to the property, entered into a transaction which left her owing $80,000 to a bank. It is obvious, in my view, that in these circumstances it was unconscionable for the husband to behave in this way."
The circumstances giving rise to the constructive trust occurred prior to the act of bankruptcy, but it was only after that date that the husband actually behaved in a way that involved an unconscionable denial of her interest in the property. Chisolm J could not see that as fatal to the application of the doctrine of the constructive trust. As he said (ibid):
"It would be arbitrary and absurd if the wife's interest in the property depended on whether the husband's claim to deal with the property as his own was made before the commencement of the bankruptcy. The important thing is that by that time, 1 September 1992, the circumstances were already such that it would have been unconscionable for the husband to assert sole title to the property."
and his Honour concluded:
"While the Trustee has not acted improperly in a personal sense, in my view it would be unconscionable for the Trustee in effect now to take a better title than the husband had at the date of the act of bankruptcy. Justice and equity now require that the Trustee hold the title subject to an equitable interest in the wife arising by way of constructive trust."
Ms Keeley relied upon these remarks of his Honour and those of a similar vein at page 83,871, where he said:
"In my opinion it offends the sense of justice that where the non‑bankrupt spouse (in this case a wife) has a claim to the bankrupt spouse's property arising from contributions made during their cohabitation, her interest can be completely destroyed notwithstanding a transfer made to her, in good faith as far as she is concerned, being part of an overall settlement of their financial affairs, and being approved by the court as an acceptable settlement, and such orders not thereafter having been challenged."
Ms Keeley's argument is by analogy that the plaintiff's interest as beneficiary of a constructive trust is prior in time to the equitable interest created by the unregistered mortgage in favour of the first defendant and so the latter must be subject to it.
If it be the law (as I consider it to be) that the question whether a spouse has an interest pursuant to a constructive trust is to be determined on the same principles that apply to persons who are not spouses, the next question that arises is whether, where a spouse claims an interest in land by way of constructive trust that must be capable of supporting a caveat under the Transfer of Land Act.
In this case I did not understand the first defendant to dispute that absent the marriage relationship of the plaintiff and Carlson, there would be a serious question to be tried as to whether the plaintiff had an interest by way of a constructive trust. In any event, I consider there would be. Mr Weldon's submission was, rather that there is no scope here for a concurrent application of any general principles of constructive trust, unjust enrichment, proprietary estoppel, nor any other equitable principles applicable to the determination of the property rights of parties not related by marriage, but who embark on the joint acquisition of property. Section 79 of the Family Law Act is much wider than the operation of such equitable principles and gives the Family Court greater scope for the determination and adjustment of property interests. He argued that the plaintiff's remedy here to protect any potential interest in Carlson's property was that identified in Dembitzer v Mills - namely an injunction from the Family Court under s 114 Family Law Act restraining Carlson from dealing with the land pending determination of the proceedings in the Family Court.
In my view the answer to this submission is that as Sabri shows, s 79 of the Family Law Act does not exclude consideration of general equitable principles such as those applicable to constructive trusts - indeed, proper determination and adjustment of the property rights of spouses under s 79 may well require the application of such principles. Nor (again as Sabri shows) does the operation of s 79 deprive a spouse of rights or interests arising under a constructive trust in property owned by the other spouse, as against third parties.
That brings me to the question of jurisdiction, given that the plaintiff and Carlson were married and there are extant property settlement proceedings between them in the Family Court.
Sabri of course did not involve a caveat lodged by a spouse and the proceedings were (ultimately) in the Family Court.
I accept Mr Weldon's submissions that the proceedings now on foot in the Family Court are plainly a matrimonial cause as defined in s 4(1) of the Family Law Act because they are:
"… proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings -
(i)arising out of the marital relationship;
(ii)in relation to concurrent … proceedings between those parties for principal relief."
I note also that the definition of "matrimonial cause" in s 4(1) includes:
"(f) any other proceedings … in relation to concurrent, pending or completed proceedings of a kind referred to in any of paragraphs (a) to (eb), including proceedings of such a kind pending at, or completed before, the commencement of this Act."
Section 8(1)(a) of the Family Law Act stipulates that proceedings by way of a matrimonial cause shall not be instituted except under that Act. Under Part V of that Act, and specifically s 39(1) and (5) a matrimonial cause may be instituted in the Family Court or the Supreme Court of a State or Territory. However the jurisdiction of a Supreme Court may be constrained or excluded by Proclamation of the Governor General (s 40(4) and 5.4(2) and (3) of the Family Law Act). By Proclamation made 4 November 1991 the matrimonial causes jurisdiction was invested in the Family Court of Western Australia, which also had the effect of divesting the Supreme Court of Western Australia of that jurisdiction (s 41(2) and (3) of the Family Law Act).
Mr Weldon argues that the Family Court now has exclusive jurisdiction to deal with property disputes between spouses.
On the face of it, the present proceedings are not a "matrimonial cause" because they are not proceedings between the parties to a marriage.
I turn at this point to consider the nature and purpose of a caveat. In Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Malcolm CJ explained (at 44‑45):
"… the concept of a caveat as a form of statutory injunction was clearly stated by Barwick CJ (with whom McTiernan and Owen JJ agreed) in J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546 at 552. The then Chief Justice said of a caveat:
'Its purpose is to act as an injunction to the Registrar‑General to prevent registration of dealings with the land until notice has been given to the caveator. This enables the caveator to pursue such remedies as he may have against the person lodging the dealing for registration. The purpose of the caveat is not to give notice to the world or to persons who may consider dealing with the registered proprietor of the caveator's estate or interest though if noted on the certificate of title, it may operate to give such notice.'
Windeyer J said (at 558):
'… the primary purpose of a caveat against dealings is not to give notice to the world of an interest. It is to warn the Registrar‑General of a claim. The word caveat has long been used in law to describe a notice given to an official not to take some step without giving the caveator an opportunity to oppose it.'
It is in the sense stated by Barwick CJ and Windeyer J that a caveat is a form of statutory injunction of an interlocutory character."
In Eng Mee Yong v Letchumanan [1980] AC 331 the Privy Council said (at 335):
"The caveat under the Torrens System has often been believed to be a statutory injunction of an interlocutory nature restraining the caveatee from dealing with the land pending the determination by the court of the caveator's claim to title to the land in an ordinary action brought by the caveator against the caveatee for that purpose. Their Lordships accept this as an apt analogy with its corollary that caveats are available in appropriate cases for the interim protection of rights to title to or registrable interest in land that are alleged by the caveator but not proved."
I would not read the words "in an ordinary action" as being intended to be prescriptive, but merely to be a reference to legal proceedings to determine the claim to title in contradistinction to the proceedings for extension of removal of the caveat itself. On this basis there would seem no reason in principle why a claim by a spouse to an existing interest in matrimonial property (as opposed to a potential interest arising out of an application under s 79 of the Family Law Act) could not ground a caveat under the Transfer of Land Act, in the expectation that in due course the validity of the claim would be determined in the Family Court. In substance, that is what happened in Sabri although the application eventually dealt with by the Family Court in that case was for a declaration, not the extension or removal of the caveat.
It is apposite now to return to the definition of "matrimonial cause" in s 4(1) of the Family Law Act and in particular the concept of "any other proceedings … in relation to …." proceedings for eg property settlement.
In Dembitzer (supra) Master Cohen discussed two possible tests for determining whether an application to remove a caveat lodged in respect of land the subject of property settlement proceedings in the Family Court, was a "matrimonial cause" so that the Supreme Court was deprived of jurisdiction to deal with it.
The first turned on the fact that an application under s 97 of the Real Property Act 1900 (NSW) was not one that could be made to the Family Court. The Master thought that on one view that could be a sufficient test of whether the proceedings were a matrimonial cause. He referred to the judgment of Helsham CJ in Equity in Hillman v Hillman [1977] 2 NSWLR 739. His Honour had said there (at 747) that the Family Court:
"… would, of course, only have such jurisdiction to hear proceedings as is conferred upon it by the Family Law Act. It has none to hear an application of the kind sought. It is a reason for holding that the definition of 'matrimonial cause' was not intended to reach out to the present proceedings. … To reach a conclusion that a proceeding is a matrimonial cause capable only of being dealt with by the one court that can deal with matrimonial causes, when the court has no jurisdiction to deal with it, does not make good sense, or good law, to me."
Master Cohen considered that on that basis alone it would seem he had jurisdiction to deal with the application to remove the caveat. Even so, he went on to recognise that this test was not followed by Roth J in Williams v Williams [1979] 1 NSWLR 376 at 380 et seq, who considered that the proper test is based upon the definition of matrimonial cause that the proceedings be in relation to proceedings for principal relief. That phrase was also referred to by Taylor J in Lansell v Lansell (1964) 110 CLR 353 concerning the provisions of the Matrimonial Causes Act 1959 (Cth), who regarded the jurisdiction (ie the family law jurisdiction) as arising only where the application can fairly be said to be incidental to the relief obtained or obtainable in the substantive proceedings.
With respect, I am unable to agree with the proposition that the (or a) relevant test is whether or not the Family Court would have jurisdiction to extend or remove a caveat lodged by a spouse in respect of matrimonial property, under the Transfer of Land Act so that if it does not the Supreme Court could still exercise that discretion. The Family Court has extensive injunctive powers under s 114 of the Family Law Act which could be brought to bear in those circumstances. I respectfully agree that the proper test is by the application of that limb of the definition of "matrimonial cause" which concerns related proceedings.
Applying that test it seems to me that in the circumstances of this case the present proceedings to extend the caveat to protect a claimed interest by way of constructive trust, in respect of spousal property the subject of proceedings in the Family Court on an application under s 79 of the Family Law Act, are necessarily incidental to and relate to the property settlement proceedings and so constitute a matrimonial cause in respect of which the Family Court has exclusive jurisdiction.
That being so, the application to extend the caveat must be dismissed.
I will hear counsel on the form of the orders.

[2001] WASC 55

8 MARCH 2001

Key Legal Topics

Areas of Law

Property Law

Legal Concepts

Caveat

Adverse Possession

Equitable Estoppel