Height v Bolton - [2025] WASC 31

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   HEIGHT -v- BOLTON [2025] WASC 31
CORAM:   SEAWARD J
HEARD:   31 JANUARY 2025
DELIVERED          :   7 FEBRUARY 2025
FILE NO/S:   CIV 1882 of 2024
BETWEEN:   GEOFFREY DAVID HEIGHT
Plaintiff
AND
PETER JOHN BOLTON
First Defendant
REGISTRAR OF TITLES
Second Defendant

Catchwords:

Real Property - Caveats - Extension of caveat - Serious question to be tried - Balance of convenience - Trusts - Trust property - Trustee indemnity - Constructive trust - Plaintiff to commence substantive action

Legislation:

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

Result:

Caveat extended

Category: B

Representation:

Counsel:

Plaintiff	:	BW Ashdown
First Defendant	:	PJ Hannan
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	McWilliams Davis Lawyers
First Defendant	:	Graeme A Ryan & Associates
Second Defendant	:	No appearance

Cases referred to in decision:

Bashford v Bashford [2008] WASC 138
Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137
Bride v The Registrar of Titles [2015] WASC 11
Cruz v Osborne [1999] WASC 8
Custom Credit Corporation Limited v Ravi Nominees Pty Ltd (1992) 5 WAR 42
Hewett v Court [1983] HCA 7; (1983) 149 CLR 639
Jandric v Jandric [1999] WASC 22; (1999) ANZ ConvR 614
Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407
Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
Naaman v Jaken Properties Australia Pty Ltd [2025] HCA 1
Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360
Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd [2024] FCAFC 17; (2024) 302 FCR 375
Taylor (by next friend Norris) v Taylor Holdings Pty Ltd (as trustee for KC & MA Taylor Family Trust) [2024] WASC 298

SEAWARD J:

Introduction

The plaintiff, Geoffrey Height, filed an originating summons on 25 July 2024 seeking the extension of two caveats numbered P888293 and P888295 over a property in Dane Street, East Victoria Park (the Property) pursuant to s 138C of the Transfer of Land Act 1893 (WA) (TLA).
The first defendant, Peter Bolton, is the registered proprietor of the Property and appears by counsel.
The second defendant, the Registrar of Titles, has indicated by way of letter to Mr Height that he does not intend to participate in the application and will abide by the orders of the court.
The matter came before me on 30 July 2024, where Mr Height and Mr Bolton agreed that orders should be made extending the operation of the caveats until further order of the court to enable Mr Bolton to file affidavit evidence and for an inter partes hearing of the application to take place.
Accordingly, on 30 July 2024 I made orders extending the operation of the caveats until further order of the court. I also made programming orders and ordered the plaintiff to serve copies of the originating summons, associated affidavit evidence and orders of the court on Ms Lew Choi Lan (also known as Mrs Sharon Lew Bolton) and Ms Pauline Lew Bolton. Affidavits of service have been filed by Mr Height, and neither Mrs Sharon Bolton or Ms Pauline Bolton have sought leave to be joined or to be heard in relation to this application.
For the reasons set out below, I am of the view that the operation of the caveats should be extended until further order of the court. However, I consider it to be appropriate to place a condition on that extension, being that Mr Height commence a substantive action to substantiate his claimed interest in the Property within 21 days of the date of these orders.
In order to distinguish between the various individuals involved in this matter, I will refer to Mrs Sharon Bolton by her name of Ms Lan, and Ms Pauline Bolton as Ms Bolton.

Factual background

Mr Height's evidence

Mr Height relies on his affidavits sworn 25 July 2024 (First Height Affidavit) and 11 September 2024 (Second Height Affidavit). By way of summary, Mr Height's evidence is as follows.
Mr Height is the registered proprietor of a property at Wyndham Street in St James and purchased the property in 1981 (the Wyndham Street Property). This is the property in which Mr Height resides. At all material times, Mr Height has also owned an investment property in Leake Street, Belmont (the Leake Street Property).
Mr Height deposes that he met Ms Lan in or around early 2008 at a massage business where Mr Height paid for sexual services from Ms Lan. Approximately three months after they met, Mr Height commenced a sexual relationship with Ms Lan.
Mr Height deposes that at the time their relationship commenced, Ms Lan was married to Mr Bolton. Ms Lan lived with Mr Bolton and their daughter Ms Bolton, who was around 11 years of age in 2008. Mr Height's evidence is that Ms Lan advised him at the time their relationship commenced that whilst she was still legally married to Mr Bolton, they no longer had a marriage like relationship. Mr Height deposes that he met both Mr Bolton and Ms Bolton at some time shortly after the relationship commenced.
Mr Height deposes that at all material times during their relationship Ms Lan continued to live with Mr Bolton and Ms Bolton in rental accommodation, and Mr Height lived in the Wyndham Street Property. Mr Height's evidence is that for approximately the first year of their relationship Ms Lan, Mr Bolton and Ms Bolton lived in rental accommodation in Mount Lawley. However, in late 2008 Ms Lan asked if she, Mr Bolton and Ms Bolton could move into the Leake Street Property. Mr Height agreed.
Mr Height deposes that in or around early 2009, Ms Lan told him that she did not wish to continue renting, and wanted to purchase a property for herself, Mr Bolton and Ms Bolton to live in. Mr Height's evidence is that Ms Lan told him that she had $40,000 for a deposit but did not think this would be enough, and asked him to contribute to the deposit. Mr Height deposes that he refused to contribute.
Mr Height's evidence is that Mr Bolton was not interested in purchasing property at that time and was content to pay rent.
Mr Height deposes that he and Ms Lan inspected various properties together, including the Property. Mr Height's evidence is that Ms Lan said words to the effect that the Property was the best they had looked at and she wanted to buy it. Mr Height's evidence is that he and Ms Lan then went back to inspect the property with Mr Bolton.
Mr Height then deposes that some time after Ms Lan indicated she wanted to purchase the Property, she told Mr Height that she and Mr Bolton could not obtain finance to purchase a property because Mr Bolton was retiring and Ms Lan did not have a record of employment. Mr Height's evidence is that in this conversation Ms Lan asked him if he would obtain finance for her and Mr Bolton to purchase the Property. Mr Height deposes that:
35I was reluctant to do this. However, I told [Ms Lan] that I would finance the balance of the purchase price on behalf of [Ms Lan] and [Mr Bolton] provided that [Ms Lan] and [Mr Bolton] paid the loan repayments, and I would not be left with the debt.
36.[Ms Lan] said words to the effect that she and [Mr Bolton] would make the repayments.
37.Prior to obtaining the loan for the purchase of Dane Street, [Ms Lan] told me that the loan repayments would be paid using [Mr Bolton's] pension. I do not recall whether this was part of the conversation referred to in paragraph 33 - 36 above, or a separate conversation.
38.I do not recall when this occurred, but I also had a conversation with [Mr Bolton] in which I said to [Mr Bolton] words to the effect that 'as long as you put repayments into my account monthly to cover the Loan, all should be good'. [Mr Bolton] replied with words to the effect that he would make the repayments.
A contract for sale in relation to the Property was entered into by Mr Height (Contract for Sale). The contract is dated 7 April 2009, and records the name of the buyer as Mr Height 'as trustee for and on behalf of Pauline Lew Bolton'. The purchase price was $390,000 and deposit of $5,000 was paid. The contract was subject to finance. When the purchase settled, Mr Height became the registered proprietor of the Property (2009 Purchase).
Mr Height also obtained a loan for the purchase of the Property from Perpetual Ltd (which was later transferred to ME Bank). The loan was drawn down on 21 May 2009 and disbursed as follows:
(a)$364,790.00 paid to ANZ Bank; and
(b)$210.00 paid to Landgate.
A mortgage was registered not over the Property, but rather over the Wyndham Street Property on the same day.
On 7 April 2009 (the same date as the Contract for Sale was entered into), Mr Height entered into a Trust Deed with Ms Bolton, who was represented by Mr Bolton (the Trust Deed). The Trust Deed was stamped by the Commissioner of State Revenue, and relevantly provided that:
(a)Mr Height would be recorded as the registered proprietor of the Property;
(b)Mr Height would hold the whole of the beneficial interest in the Property upon trust for Ms Bolton;
(c)Ms Bolton may terminate the appointment of Mr Height as the trustee and may appoint any person to be the new trustee; and
(d)Ms Bolton agreed to indemnify Mr Height as follows:
The Beneficiary shall indemnify and keep indemnified the Trustee and each of them against any action claim cost liability or demand of any nature whatsoever and howsoever arising in relation to the property or this Trust whether past present or future.
In relation to the Trust Deed, Mr Height deposes that:
50At the time of purchasing Dane Street, [Mr Bolton] said to me words to the effect that he wanted Dane Street to be in his or [Ms Bolton's] name so that [Ms Bolton] would be guaranteed to receive Dane Street and he was worried that if my relationship with [Ms Lan] ended, I would repossess Dane Street.
...
54In or around 2009 or 2010, [Mr Bolton] said to me words to the effect that he was worried that if he and [Ms Lan] separated, [Ms Lan] would take Dane Street, or half of it, and then he and [Ms Bolton] would be left without a home.
Mr Height deposes that in around 2011, Mr Bolton asked Mr Height to transfer the Property to Mr Bolton, to hold on trust for Ms Bolton. On 11 April 2011, Mr Height entered into a Deed of Variation of Trust Retirement and Appointment of Trustee with Mr Bolton, on behalf of Ms Bolton (Deed of Variation).The Deed of Variation was prepared by lawyers, and relevantly provides:
(a)for the removal of Mr Height as trustee, and the appointment of Mr Bolton as the new trustee; and
(b)an indemnity for Mr Height as the retiring trustee as follows:
The beneficiary shall fully indemnify the Retiring Trustee from all losses, damages and claims arising as a result of being the trustee of the Property except for those losses, damages and claims arising as a result of the Retiring Trustee's dishonesty or as a result of a breach of trust by the Retiring Trustee.
On 30 September 2011, the Property was transferred to Mr Bolton (the 2011 Transfer). The consideration recorded on the transfer (which is dated 11 April 2011) is:
Pursuant to the terms of the Deed of Variation dated
Mr Height deposes that after the purchase of the Property, Mr Bolton deposited $1,500 per month into the relevant bank account established by Mr Height for the purposes of meeting the monthly mortgage repayments. However, this amount was insufficient to cover the monthly mortgage repayments which varied between $1,900 ‑ $2,200 per month depending on the interest rate applicable at the time.
Mr Height's evidence is that, at first, he did not appreciate that there was a shortfall, and that upon reviewing his bank statements he realised that he had been paying the shortfall. Mr Height deposes that he discussed the shortfall with Ms Lan and Mr Bolton, but the shortfall was never repaid. Mr Height's evidence was that Mr Bolton told him that $1,500 per month was the maximum he could afford as he was on a pension. Mr Height's evidence is that Ms Lan told him that he should cover the shortfall. Mr Height deposes that Ms Lan also told him that when Ms Bolton became of working age, she could cover the rest of the loan repayments. Mr Bolton continued to make the $1,500 monthly repayments after the 2011 Transfer.
Mr Height deposes that in or around 2018, when Ms Bolton became of working age, he asked Ms Lan for Ms Bolton to contribute to the shortfall in the loan repayments, but that did not occur.
In or around April 2023, Mr Bolton suffered a stroke.
In or around July or August 2023, Mr Height deposes that he looked at his bank statement and identified that Mr Bolton had stopped depositing the $1,500 per month - or any amount - since 26 June 2023. Mr Height deposes that he asked Mr Bolton why he had stopped making the payments, and Mr Bolton told him that he would look into this when he got out of hospital. When Mr Bolton did not recommence the repayments once he was out of hospital, Mr Height deposes that he asked Mr Bolton again:
85.[Mr Bolton] did not recommence making payments to me after he got out of hospital so I again asked [Mr Bolton] why he was not making the payments. [Mr Bolton] told me that [Ms Lan] had instigated divorce proceedings against him in August 2023.
86.[Mr Bolton] told me he could not afford to pay any portion of the Loan repayments because he needed money to pay legal fees for his divorce proceedings with [Ms Lan] and [Ms Lan] was making a claim on Dane Street.
87.I asked [Mr Bolton] when he thought he could make repayments against and he told me that he didn't know because [Ms Lan] was likely to get a portion of Dane Street in the divorce and he did not want to make any further repayments if it was going to be sold in the divorce.
88.Since then, I have paid the whole of the Loan repayments, in the sum of $2,208.12 per month.
Mr Height deposes that in or around June 2023, Ms Bolton and Mr Bolton told him that Ms Lan was in Malaysia with a boyfriend. Mr Height has not seen or spoken to Ms Lan since that time, and he considers that their relationship ended at that time.
Mr Height deposes that in January 2024, he asked Ms Bolton to take over paying the loan repayments, and Ms Bolton said that she would get a job. On or around January 2024, Mr Height asked Mr Bolton about the loan repayments, and Mr Bolton told him that his lawyer had advised him not to speak to Mr Height.
Mr Height has attached to his affidavits various banks statements and documents, which he relies upon to calculate the amount of the loan owing as at 24 July 2024, the amount paid by Mr Bolton as at 24 July 2024 and the amount paid by Mr Height as at 24 July 2024.
Mr Height deposes that Mr Bolton has never made any other payment in exchange for Mr Bolton's occupancy at the Property other than the $1,500 monthly payment which ceased when he had his stroke. Mr Height deposes that neither Ms Lan nor Ms Bolton have ever made payment to him regarding their respective occupancy on the Property.
Mr Height deposes that during his relationship with Ms Lan, she resided with Mr Bolton and Ms Bolton, first at the rental accommodation in Mount Lawley, then at the Leake Street Property and finally at the Property. Mr Height denies that Ms Lan moved into the Wyndham Street Property on any permanent or formal basis. Rather, Mr Height's evidence is that whilst Ms Lan had a key to the Wyndham Street Property, she would stay with him approximately five nights a week when he was home from his fly in and fly out job, and for approximately one month when he was between jobs.

Mr Bolton's evidence

Mr Bolton relies on his affidavit affirmed on 20 August 2024. By way of summary, Mr Bolton's evidence is as follows.
Mr Bolton confirms that he is the father of Ms Bolton, and the former husband of Ms Lan. Mr Bolton confirms that he is also the current trustee of the Property on behalf of Ms Bolton.
Mr Bolton deposes that he and Ms Lan were married in 1989 and adopted Ms Bolton in 1997. Mr Bolton's evidence is that in 2006 he and Ms Lan ceased acting like a married couple. Mr Bolton deposes that from 2007 or 2008, Ms Lan commenced a de facto relationship with Mr Height.
Mr Bolton deposes that he was not a party to any discussion regarding the purchase of the Property prior to its purchase. Mr Bolton deposes that he was approached by Ms Lan after a decision was apparently made between Mr Height and Ms Lan to purchase a property. Mr Bolton deposes that:[1]
[Ms Lan] occasionally made mention that [Mr Height] was eager to support her in raising a loan to purchase a property and she requested by co-operation in contributing financially to offset the mortgage payments. I had no discussion with [Mr Height] regarding buying a property except to make it very clear to him that I had no interest in buying a house or property.
[1] The Affidavit of Peter John Bolton affirmed on 20 August 2024 [14] (Bolton Affidavit).
Mr Bolton deposes that he told Mr Height that he had limited capital and would not be able to make mortgage repayments.
Mr Bolton deposes that the Property was chosen by Mr Height and Ms Lan. Mr Bolton's evidence is that he was asked to view the Property, but had no input in relation to the choice of property to purchase.
Mr Bolton deposes that the issue of trust was initially recommended by Mr Height's lawyer. Mr Bolton's evidence is that the Trust Deed was drawn up Mr Height's lawyers, and he had no input into the stamping of the Trust Deed.
Mr Bolton deposes that Ms Lan told him that she did not trust Mr Height and asked him to be Ms Bolton's guardian. Mr Bolton deposes that he only agreed to be Ms Bolton's guardian for the purposes of the Trust.
Mr Bolton's evidence is that he was not aware that Mr Height mortgaged his own house as security for a loan to pay the balance of the purchase price of the Property.
Mr Bolton deposes that Ms Lan told him that she had put $30,000 towards the deposit for the purchase of the Property, and that Mr Height was funding the balance.
Mr Bolton's evidence is that he did not enter into any loan agreement with Mr Height.
Mr Bolton's evidence regarding the Deed of Variation is inconsistent. At one point Mr Bolton deposes that he approached Ms Lan and Mr Height requesting that the Trust Deed be amended:[2]
I visited Landgate two years later in relation to the Variation Deed of Trust and found that there was no mortgage on the title to the property. I just assumed that whatever agreement between [Mr Height] and [Ms Lan] was to their mutual satisfaction. There were no discussions with [Mr Height] and myself about this matter however I did not trust [Mr Height], I approached them regarding the changing the deed to me being the Trustee. They both agreed without dissent and without argument.
[2] Bolton Affidavit [17].
However, later in his affidavit, Mr Bolton deposes that it was Mr Height who asked him to take over the position of trustee:[3]
Following settlement of the purchase, [Mr Height] asked me to take over the position as Trustee as he was finding it difficult to associate with his family members and at the same time deal with [Ms Lan] running her business from his house.
[3] Bolton Affidavit [39].
Mr Bolton deposes that he engaged lawyers to prepare the Deed of Variation and the resulting transfer of the Property into his name, on trust for Ms Bolton.
In relation to Mr Bolton living in the Property, and the monthly payments of $1,500 per month, Mr Bolton's evidence is as follows:
33.I was approached by [Ms Lan] in relation to living in the Dane Street property before it was purchased. [Ms Lan] evidently had an agreement with Geoffrey about the purchase, and again, I was not a party to that.
34.I had discussed and agreed with [Ms Lan] only, to contribute to her cost via my pensions, on the condition that the house was to be [Ms Bolton's]. I agreed to make a contribution on behalf of [Ms Lan]. [Ms Lan] directed me to make the payments to [Mr Height]. I understood this to be my contributing to [Ms Lan's] investment in the property which I assumed she must have, and I agreed to this commitment due to my responsibility as [Ms Bolton's] father and being totally confident in my existing retirement strategy.
35.No financial commitments towards payment of the Dane Street property from me were ever discussed with [Mr Height]. It was [Ms Lan] who directed me to make payments to [Mr Height], and I believed that I was doing so effectively on [Ms Lan's] behalf as she had made the arrangement for [Ms Bolton] and me to reside in the Property.

Mr Bolton's evidence is that Ms Lan moved in with Mr Height at his Wyndham Street Property from 2009 and occasionally stayed in the Property.

Legal Principles

Under s 137 of the TLA, a person claiming any estate or interest in land under the operation of the TLA may lodge a caveat with the Registrar. The purpose of a caveat against dealings is to operate as an injunction to the Registrar to prevent registration of dealings forbidden by the caveat until notice is given to the caveator so that he or she has an opportunity to oppose such registration.[4]
[4] Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407, 419.
Section 138C (2) of the TLA provides for the Supreme Court's powers when a caveator applies to the Supreme Court for an order extending the operation of a caveat. The terms of s 138C of the TLA are as follows:
(1)A caveator who is served with a notice under section 138B(1) may apply to the Supreme Court, in accordance with rules of the court, for an order extending the operation of the caveat.
(2)On the hearing of an application under subsection (1), the Supreme Court -
(a)if satisfied that the caveator's claim has or may have substance -
(i)may make an order extending the operation of the caveat for such period as is specified in the order; or
(ii)may make an order extending the operation of the caveat until the further order of the court; or
(iii)may make such other orders as it thinks fit concerning the caveat or the land in respect of which the caveat was lodged;
and
(b)if not satisfied that the caveator's claim has or may have substance, shall dismiss the application; and
(c)may make such ancillary orders in relation to the application as it thinks fit.
(3)An interim order under this section may be made ex parte unless the court orders otherwise.
(4)The applicant shall ensure that the Registrar is served with a copy of each order made by the court on an application under subsection (1).
The principles applicable to an application to extend a caveat are well settled and were summarised in Bashford v Bashford,[5] and in Bride v Registrar of Titles[6] and have been applied in numerous decisions of this court. There is no need to restate these principles in full here.
[5] Bashford v Bashford [2008] WASC 138 [42] ‑ [50].
[6] Bride v The Registrar of Titles [2015] WASC 11 [12] - [16].
Essentially, there are two questions for determination:
(a)First, has the caveator demonstrated that their claim has or may have substance or, as it is sometimes put, has the caveator established that there is a serious question to be tried in respect of the estate or interest in the land claimed?
(b)Second, does the balance of convenience favour the extension of the operation of the caveat?
The two questions are interrelated. The court must balance the injustice that might be suffered by the proprietor if the caveat were to remain against the injustice that might be suffered by the caveator if the caveat is removed.
The application proceeds on the basis of affidavit evidence. As is usual in matters of this kind, cross examination of deponents did not occur. In these circumstances, it is not appropriate to resolve conflicts of evidence on affidavit.[7] Any disputed questions of fact should be left for resolution in a fresh action commenced by writ of summons to substantiate the claimed interest.
[7] Bashford v Bashford [2008] WASC 138 [48].
As two separate caveats have been lodged over the property by Mr Height, I have applied the above principles to each.

Whether Mr Height's claim to an interest in the property has or may have substance

Equitable charge - caveat P888295

Caveat P888295 was lodged on 15 February 2024. The caveat is a 'subject to claim' caveat. The estate or interest being claimed is described as:
As equitable chargee.
The grounds for the claim are:
The title of the estate and interest claimed in the Land is as equitable chargee, which arises by virtue of the matters described in the Statutory Declaration of Geoffrey David Height dated 12 February 2024 lodged herewith.
The statutory declaration recites facts which are generally consistent with the First Height Affidavit.
The onus lies on Mr Height to establish that there is a serious question to be tried as to whether a caveatable interest exists. The claim must concern a proprietary interest in land.
Mr Height claims he has an interest as an equitable charge or lien on two separate bases:
(a)First, as a trustee who has a right to be indemnified for costs incurred by him personally in his position as trustee; and
(b)Secondly, pursuant to the principles derived from the decision of Deane J in Hewett v Court.[8]

Trustee indemnity

[8] Hewett v Court [1983] HCA 7; (1983) 149 CLR 639.

The legal principles regarding the circumstances in which a trustee may have an equitable charge or lien over the trust property may be summarised as follows:
(a)A trustee is personally liable for the debts it incurs as trustee. However, where it incurs expenses or becomes subject to a liability in the course of executing the trust, it has a right of indemnity out of the assets of the trust in respect of those expenses or that liability.
(b)The right of indemnity arises when the liability is incurred.
(c)A trustee may exercise its right of indemnity either by paying expenses directly out of trust property (right of exoneration) or by reimbursing itself for expenses which it paid directly (right of recoupment).
(d)The right of indemnity is secured by an equitable lien or equitable charge over the trust assets. The right of indemnity so secured confers upon the trustee a proprietary interest in the trust property to the extent of the indemnity.
(e)The trustee's equitable interest in the trust property to the extent of the right of indemnity takes priority over the beneficial interest of the beneficiaries. Accordingly, the beneficiaries' interest in the trust property is confined to so much of the property of the trust as is available after the liability to the trustee has been discharged.
(f)A trustee may have recourse to a trust fund to satisfy its right of indemnity without curial intervention. However, an equitable lien or charge does not grant title to the property that is subject to the lien. Accordingly, it does not carry with it a power of sale and may only be enforced by judicial sale or the appointment of a receiver in order to deal with the property to create a fund from which the trustee may be indemnified.
(g)A trustee's interest in the trust assets survives the transfer of the assets to a successor trustee.
See the decisions of Naaman v Jaken Properties Australia Pty Ltd,[9] Octavo Investments Pty Ltd v Knight;[10] Custom Credit Corporation Limited v Ravi Nominees Pty Ltd;[11] Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd.[12]
[9] Naaman v Jaken Properties Australia Pty Ltd [2025] HCA 1 [1].
[10] Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360, 369 ‑ 370.
[11] Custom Credit Corporation Limited v Ravi Nominees Pty Ltd (1992) 5 WAR 42, 52.
[12] Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd [2024] FCAFC 17; (2024) 302 FCR 375 [55] ‑ [63].
Mr Height submits that if the Property was purchased by Mr Height in his capacity as trustee of the trust, as the trust had no other capital or money, the money required to effect the purchase by the trust was obtained from Mr Height personally.
Mr Height submits that the evidence establishes a serious question to be tried that the advancement of funds in the present circumstances was not a gift. Therefore, Mr Height submits that there is a serious question to be tried that he is entitled to be indemnified by the trust for all trust debts and expenses incurred by him in his capacity as trustee. Mr Height submits that this includes the balance required to discharge the loan and associated mortgage, plus all moneys paid by Mr Height towards the monthly loan repayments. Mr Height calculates this figure, as at June 2024, as follows:
(a)Total amount of repayments made to the loan account to 16 June 2024: $360,125.42.
(b)Total amount paid by Mr Bolton: $253,500.
(c)Total amount paid by Mr Height to 16 June 2024: $106,625.42.
(d)Balance owing on the loan as at 16 June 2024: $269,365.79.
(e)Total amount of indemnity sought by Mr Height is $375,991.21 (plus interest).
Mr Height submits that even if the interest on the loan is not included, the capital of the loan is an expense incurred by Mr Height as trustee.
Mr Height also submits that a question exists as to the validity of the Deed of Variation. Mr Height submits that a power of variation only exists if provided for in the terms of the Trust Deed, and cl 4 of the Trust Deed vests that power in Ms Bolton only, and Mr Bolton had no right or power to act on Ms Bolton's behalf. Mr Height therefore submits that Mr Height has not been validly removed from the office of trustee.
Mr Bolton makes a number of submissions in opposition to this aspect of Mr Height's application:
(a)Mr Bolton submits that the affidavit evidence establishes that Mr Height incurred the loan liability, and the resulting payments, as the settlor of the Trust and not the trustee. Mr Bolton submits that the evidence establishes that Mr Height obtained a loan for the purposes of a gift ultimately to Ms Bolton, to ensure that she was not required to reside in a property where Ms Lan undertook her massage work. Mr Bolton further submits that as loan was secured against Wyndham Street, rather than the Property, the expenses cannot be categorised as a trust expense. Therefore, Mr Bolton submits that Mr Height is not entitled to be indemnified for the repayment of the loan.
(b)Mr Bolton also submits that the 2011 Deed of Variation, and the associated transfer of the Property to Mr Bolton, altered whatever arrangement existed prior to 2011. Mr Bolton submits that the transfer is inconsistent with the existence of a right to an indemnity.
(c)Mr Bolton submits that this particular basis for the equitable charge or lien is not referred to in the caveat, or the associated statutory declaration.
On the basis of the affidavit evidence before me, I am satisfied that Mr Height has demonstrated a serious question to be tried such that his claim of having an equitable charge or lien in his position as a trustee has or may have substance. Specifically, I am satisfied that there is an arguable case that:
(a)Mr Height purchased and held the Property as trustee for Ms Bolton. This is consistent with the wording of the Contract for Sale and the Trust Deed.
(b)In the course of being the trustee, he incurred a liability, being the loan for the purchase of the Property. That liability was incurred in 2009. Mr Height also incurred liabilities in making monthly loan repayments, or at least for the shortfall.
(c)Mr Height has incurred the liability as the trustee and that he is entitled to reimbursement for that liability. This is particularly the case in relation to the interest on the loan.
(d)The Deed of Variation does not alter the above. The legal position is that a trustee's right to be indemnified survives a change of trustee. Further, the Deed of Variation expressly refers to a continuing right of reimbursement for the former trustee.
(e)Mr Height's liability is therefore secured by way of an equitable charge or lien, which grants Mr Height a proprietary interest in the Property.
In reaching my conclusion, I observe that a key element of Mr Bolton's case is that the obtaining of the loan by Mr Height was done for the purposes of a gift to (ultimately) Ms Bolton. The result being that Mr Bolton, in obtaining the loan, did so as the settlor of the Trust and not the trustee.
The question of the purpose Mr Height obtained the loan is ultimately a question of fact to be resolved on the evidence. There is a dispute on the affidavit evidence as to the nature of some of the conversations referred to by Mr Height in his affidavit. Mr Height deposes as to conversations he says he had with Ms Lan and Mr Bolton, before both the 2009 Purchase and the 2011 Transfer. Mr Bolton deposes that no such conversations with him took place, or the conversations were different, and then gives his version of the conversations. For the purposes of a caveat extension, it is not appropriate to resolve disputes of fact on affidavit evidence.
I also have before me the Contract for Sale, the Trust Deed and Deed of Variation. I do not consider that Mr Height's affidavit evidence as to the circumstances surrounding him obtaining the loan and his purchase of the Property, or the 2011 Transfer to be inherently incredible or unbelievable, especially when regard is had to the existence and text of these documents.
I am therefore satisfied on the basis of both Mr Height's affidavits, in combination with the wording of the Contract for Sale, the Trust Deed and the Deed of Variation, that Mr Height has established that his claim has or may have substance.
I also observe that Mr Height has raised a legal argument that the Deed of Variation is invalid, on the basis that Mr Bolton was not entitled to enter into it. It is not necessary for present purposes to form any view on as to whether the Deed of Variation is valid because, assuming for now that Mr Height incurred the loan liability as a trustee, as outlined in the authorities referred to above, his right to be indemnified and his associated interest in the trust assets survives the transfer of the assets to Mr Bolton as the successor trustee. Counsel for Mr Height accepted that it was not necessary to resolve this question for the purposes of this aspect of Mr Height's application.
Mr Bolton proceeded on the basis that the Deed of Variation is valid. Mr Bolton submitted that the 2011 Transfer, the consideration for which was the terms of the Deed of Variation, is inconsistent with Mr Height's claim of an ongoing right to be indemnified for any costs incurred as trustee. In light of the express reference in the Deed of Variation to the right of the former trustee to continue to be indemnified; Mr Bolton continuing to make monthly repayments after the 2011 Transfer; and Mr Bolton accepting that he held the Property on trust for Ms Bolton, I do not consider that the fact of the 2011 Transfer, or the Deed of Variation, displace my above conclusion that Mr Height has established a serious question to be tried.
I am also satisfied, for the purposes of this application, that the basis for submitting that Mr Height has a proprietary interest in the Property falls within the scope of the caveat. The wording of the caveat is that the estate and interest being claimed is 'as equitable chargee'. This is the nature of the proprietary interest claimed by Mr Height.
The caveat goes on to state the grounds of the claim being that the equitable charge arises 'by virtue of the matters described' in the attached statutory declaration.
The statutory declaration does not expressly state the type of equitable charge asserted by Mr Height and makes only limited references to the existence of a trust. However, it does detail the essential facts which form the basis of the claim advanced. It details the purchase of the Property; the purchase price; that Mr Height obtained the loan; that Ms Lan also contributed a sum of money; that Mr Bolton paid $1,500 per month; that Mr Bolton ceased paying the amount of $1,500 per month; and that Mr Height has been paying the shortfall in the monthly repayments.
There are conflicting authorities on whether regard may be had to the statutory declaration in determining whether the caveat specifies the estate or interest claimed. Compare, for example, Jandric v Jandric[13] and Cruz v Osborne.[14] In all the circumstances, I am satisfied that whilst the caveat form and statutory declaration could have been more clearly and fulsomely worded, the caveat contains sufficient facts for the purposes identifying the nature of the interest claimed by Mr Height.
[13] Jandric v Jandric [1999] WASC 22; (1999) ANZ ConvR 614 [40].
[14] Cruz v Osborne [1999] WASC 8 [11] - [14].
For the avoidance of doubt, my conclusions in regard to Mr Height's claim as an equitable charge are preliminary conclusions only, reached only for the purposes of considering the caveat extension application and do not represent final findings.

Hewett v Court

In his written submissions, Mr Height says that an equitable charge or lien arises in a second way in the present case. Mr Height relies on the decision of Deane J in Hewett v Court, as considered recently by Whitby J in Taylor v Taylor Holdings Pty Ltd.[15] In his oral submissions, counsel for Mr Height submitted that this was a secondary basis for submitting that Mr Height had an arguable case for an equitable charge or lien.
[15] Taylor (by next friend Norris) v Taylor Holdings Pty Ltd (as trustee for KC & MA Taylor Family Trust) [2024] WASC 298.
Mr Bolton raises a number of reasons why, in his submission, the facts do not establish an arguable case in relation to an equitable charge or lien of the type referred to in these authorities.
In light of my conclusion as to the first basis upon which Mr Height submits that an equitable charge or lien arises - it is not necessary for the purposes of the present application, to consider this secondary basis.

Resulting trust or constructive trust - Caveat P888293

Caveat P888293 was lodged on 15 February 2024. The caveat is an absolute caveat. The estate or interest being claimed is described as:
Equitable estate or interest as beneficiary of a constructive or resulting trust.
The grounds for the claim are:
The title of the estate and interest claimed in the Land is as beneficiary of a constructive trust, alternatively as beneficiary of a resulting trust, which arises by virtue of the matters described in the Statutory Declaration of Geoffrey David Height dated 12 February 2024 lodged herewith.
The statutory declaration is the same statutory declaration as filed with the equitable charge caveat and recites facts which are generally consistent with the First Height Affidavit.
In oral submissions, counsel for Mr Height did not press, for the purposes of the caveat extension only, the resulting trust claim. Mr Height reserved the right to rely on that claim in future proceedings to substantiate the claim.
These reasons therefore only address the claim based on a constructive trust. That constructive trust is said to arise by operation of the general equitable principle which restores to a party, contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them and it would be unconscionable for that party to retain the legal interest in the property in these circumstances: Baumgartner v Baumgartner;[16] Muschinski v Dodds.[17] The existence of the general equitable principle is not in doubt.
[16] Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 148.
[17] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 620.
Mr Height relies on his affidavit evidence outlining the nature of the joint endeavour between Mr Height, Ms Lan and Mr Bolton. Mr Height submits that it is uncontentious that these arrangements have broken down. Mr Height further submitted that the breakdown of the joint endeavour would, without the intervention of a constructive trust, result in the benefit of the financial contributions made and liabilities incurred by Mr Height in connection with the Property being retained and enjoyed by others in circumstances in which it was not intended that those others should enjoy them. Mr Height submitted that the only thing which could defeat the claim of it being unconscionable for Mr Bolton to retain the legal interest in the Property and Ms Bolton the entirety of the beneficial interest, would be if the evidence established that the purchase or transfer of the Property was as a gift. Mr Height submits that the evidence is inconsistent with the purchase being a gift.

Mr Bolton submits that the only applicable legal relationship between Mr Bolton and Mr Height (along with Ms Bolton as beneficiary under the Trust Deed) is the 2011 Transfer. That being Mr Bolton asked Mr Height to transfer the Property to Mr Bolton, to hold on trust for Ms Bolton, and the Deed of Variation to give effect to the above. Mr Bolton submits that Mr Height's case of a joint endeavour constructive trust is entirely inconsistent with the 2011 Transfer.
Mr Bolton submitted that the joint endeavour constructive trust cannot have arisen when Mr Height becoming the registered proprietor of the Property, because at this point Mr Height held the legal estate in Property. Further that the joint endeavour constructive trust cannot have arisen upon Mr Height transferring the legal estate to Mr Bolton on 30 September 2011, because the terms of the 2011 Transfer exclude such intention.
On the basis of the affidavit evidence before me, I am satisfied that Mr Height has demonstrated that his claim as to the existence of a constructive trust may have substance. I am satisfied that the evidence establishes a serious question to be tried that:
(a)Mr Height entered into a joint endeavour with Ms Lan and Mr Bolton to purchase the Property;
(b)Initially, the nature of that joint endeavour was that Ms Lan would contribute a sum to the purchase price; Mr Height would obtain a loan for the remainder of the purchase price; Ms Lan and/or Mr Bolton would pay all loan repayments; and Mr Height would be the registered proprietor of the Property and hold it on trust for Ms Bolton;
(c)The purchase of the Property by Mr Height, and the 2011 Transfer, were not for the purposes of gift;
(d)The joint endeavour altered in 2011 in so far as (at least) Mr Height and Mr Bolton agreed that Mr Height be removed as the trustee and the Property was transferred to Mr Bolton as the new trustee. However, the loan was not assigned and the agreement that Ms Land and/or Mr Bolton pay the monthly loan repayments remained and continued;
(e)The joint endeavour failed when Ms Lan and/or Mr Bolton failed to pay the monthly loan repayments and Mr Height was left to make, first, part of the monthly repayments and, secondly, by 2023 all of the monthly loan repayments; and
(f)The circumstances are such that it was not intended that Mr Bolton would have full legal ownership of the Property in these circumstances and it would be unconscionable for Mr Bolton to retain the full legal interest in the Property in these circumstances.
I do not consider that the fact that Mr Height initially held the legal interest in the Property necessarily excludes a conclusion that the joint endeavour as asserted by Mr Height existed. Further, the terms of the Deed of Variation, and the fact that the legal ownership in the Property was transferred to Mr Bolton, also does not necessarily exclude a conclusion that joint endeavour as asserted by Mr Height existed. Mr Bolton accepts that he holds the Property on trust for Ms Bolton. Further, after the 2011 Transfer, Mr Bolton continued to make monthly repayments to Mr Height until 2023. What changed as a result of the 2011 Transfer was who held the legal interest in the Property and, if a constructive trust is declared, who holds that interest on trust for another person or persons. I therefore do not consider that the fact that there was a change in the legal ownership of the Property in 2011 displaces my above conclusion that Mr Height has established a serious question to be tried.
I am also satisfied on the evidence, and in particular the wording of the Contract for Sale; the Trust Deed; the Deed of Variation; Mr Bolton's monthly payments (both before and after the 2011 Transfer); and Mr Bolton accepting that he holds the Property on trust for Ms Bolton, that Mr Height has established a serious question to be tried that the purchase of the Property, and the subsequent 2011 Transfer, were not a gift.
Again, for the avoidance of doubt, my conclusions in this regard are preliminary conclusions only, reached only for the purposes of considering the caveat extension application and do not represent final findings.

Balance of convenience

Whilst I am satisfied that Mr Height has established a serious question to be tried in relation to each caveat, it is also necessary to consider the balance of convenience. I am satisfied that the balance of convenience favours an extension of both caveats for the following reasons.
First, on the basis of the evidence before me, at this preliminary stage, I consider that Mr Height's claims of an equitable charge and a constructive trust, whilst not without issues, cannot be described as tenuous or weak. They are arguable.
Secondly, interlocutory removal of a caveat will be unusual where an arguable case as to the existence of a caveatable interest has been demonstrated, as is the case here. That is because the purpose of a caveat is the protection of a proprietary interest and removal of the caveat will, in many cases, have the effect of destroying the benefit of the proprietary interest claimed in the caveat.
Thirdly, there is significant prejudice to Mr Height if the caveats are not extended. In relation to caveat P888295, if the caveat is not extended Mr Height will lose his security over the Property. On the basis of the evidence before me, it does not appear that Mr Bolton has sufficient financial resources to repay the loan, or a sufficient ability to refinance the loan. In relation to caveat P888293, Mr Height claims an interest in the Property on the basis of a constructive trust. If the caveat is not extended Mr Height's claimed interest in the Property is not protected. Whilst there is no evidence before me of any present intention by Mr Bolton to, for example, sell the Property or transfer it to Ms Bolton, these are matters which could occur at any time.
Fourthly, Mr Height has offered an undertaking as to damages in the usual form.
Fifthly, there is no evidence before me of any specific prejudice to Mr Bolton or Ms Bolton by an extension of the caveats until Mr Height's underlying claims are resolved.
Sixthly, I observe that Mr Height has not yet commenced any substantive action in relation to his claim of an indemnity or an interest as a consequence of a resulting or constructive trust. This matter first came before the court in July 2024. Mr Height has therefore had a significant period of time within which to commence his substantive action. This is a factor weighed against the extension of the caveat, however, I do not consider it outweighs the factors I have identified above. Whilst Mr Height could have commenced his underlying substantive proceedings at some point after July 2024, the need to determine the caveat extension application would still remain. I do, however, consider it to be appropriate to condition the extension of the caveats on Mr Height commencing an action to substantiate his claimed interests in the Property within a period of 21 days.

Orders

I will hear further from the parties as to the appropriate wording of the orders, but I propose to make orders extending the operation of the caveats until further order of the court. Those orders will be subject to the condition that Mr Height commence an action to substantiate his claimed interests in the Property within 21 days. I will also make an order that caveat P888293 be amended to become a subject to claim caveat, and not an absolute caveat, and to remove the reference to the resulting trust.[18]
[18] Such an order falling within the scope of s 138C(2)(a)(iii) of the TLA - see Palazzo Homes Pty Ltd v Goh [2010] WASC 407 [14].

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MA
Associate to the Hon Justice Seaward
7 FEBRUARY 2025