Jandric v Jandric
[1999] WASC 22
JANDRIC -v- JANDRIC & ANOR [1999] WASC 22
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 22 | |
| Case No: | CIV:1797/1998 | 19 MARCH 1999 | |
| Coram: | COMMISSIONER BUSS QC | 18/05/99 | |
| 24 | Judgment Part: | 1 of 1 | |
| Result: | Injunction granted and ancillary orders made | ||
| PDF Version |
| Parties: | GOJKO JANDRIC ELENA JANDRIC REGISTRAR OF TITLES |
Catchwords: | Caveat Application under Transfer of Land Act 1893, s138C Caveatable interest Serious question to be tried Constructive Trust Financial and labour contributions in the course of a de facto relationship Balance of convenience Form of caveat defective Injunction granted and ancillary orders made under Transfer of Land Act 1893, s138C(2)(a)(iii) and s138C(2)(c) |
Legislation: | Transfer of Land Act 1893, s137, s138, s138A-138D, s139(1) Family Law Act 1975 (Cth), s44(3) |
Case References: | Baumgartner v Baumgartner (1987) 164 CLR 137 Booth v Beresford (1993) 17 Fam LR 147 Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Cwalinski v Cwalinski [1958] Tas SR 56 Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129 Easton v Ardizzone [1978] 2 NSWLR 233 Eng Mee Yong v Letchumanan [1980] AC 331 Giacci Bros Pty Ltd v Tyrrell, unreported; SCt of WA; Library No 980106; 18 February 1998 Gillies v Keogh [1989] 2 NZLR 327 Halse v Embling, unreported; FCt SCt of WA; Library No 970734; 22 December 1997 J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546 Kais v Turvey (1994) 11 WAR 357 Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 McMahon v McMahon [1979] VR 239 Miller v Sutherland (1990) 14 Fam LR 416 Muschinski v Dodds (1986) 160 CLR 583 Nemeth v Nemeth (1977) 17 ALR 500 Paru v Parij (1998) 72 SASR 153 Porter v McDonald [1984] WAR 271 Taddco v Catalano (1975) 11 SASR 492 Taddco v Taddco and Catalano (1978) 19 SASR 347 Troncone v Aliperti (1994) 6 BPR 13,291 Berdal v Burns [1990] WAR 140 Kralfly Pty Ltd v McVeigh, unreported; Fed C of A; 8 September 1995 KT & T Development v Tay (1995) 13 WAR 363 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
ELENA JANDRIC
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Caveat - Application under Transfer of Land Act 1893, s 138C - Caveatable interest - Serious question to be tried - Constructive Trust - Financial and labour contributions in the course of a de facto relationship - Balance of convenience - Form of caveat defective - Injunction granted and ancillary orders made under Transfer of Land Act 1893, s 138C(2)(a)(iii) and s 138C(2)(c)
Legislation:
Transfer of Land Act 1893, s 137, s 138, s 138A-138D, s 139(1)
Family Law Act 1975(Cth), s 44(3)
- Result:
Injunction granted and ancillary orders made
(Page 2)
Representation:
Counsel:
Plaintiff : Mr T Mijatovic
First Defendant : Ms S P Richardson
Second Defendant : No appearance
Plaintiff : Murie & Edward
First Defendant : E & S Legal Group
Second Defendant : No appearance
Baumgartner v Baumgartner (1987) 164 CLR 137
Booth v Beresford (1993) 17 Fam LR 147
Composite Buyers Ltd v Soong (1995) 38 NSWLR 286
Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Cwalinski v Cwalinski [1958] Tas SR 56
Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129
Easton v Ardizzone [1978] 2 NSWLR 233
Eng Mee Yong v Letchumanan [1980] AC 331
Giacci Bros Pty Ltd v Tyrrell, unreported; SCt of WA; Library No 980106; 18 February 1998
Gillies v Keogh [1989] 2 NZLR 327
Halse v Embling, unreported; FCt SCt of WA; Library No 970734; 22 December 1997
J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546
Kais v Turvey (1994) 11 WAR 357
Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222
Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419
McMahon v McMahon [1979] VR 239
Miller v Sutherland (1990) 14 Fam LR 416
Muschinski v Dodds (1986) 160 CLR 583
(Page 3)
Nemeth v Nemeth (1977) 17 ALR 500
Paru v Parij (1998) 72 SASR 153
Porter v McDonald [1984] WAR 271
Taddco v Catalano (1975) 11 SASR 492
Taddco v Taddco and Catalano (1978) 19 SASR 347
Troncone v Aliperti (1994) 6 BPR 13,291
Case(s) also cited:
Berdal v Burns [1990] WAR 140
Kralfly Pty Ltd v McVeigh, unreported; Fed C of A; 8 September 1995
KT & T Development v Tay (1995) 13 WAR 363
(Page 4)
COMMISSIONER BUSS QC: These proceedings are brought under s 138C of the Transfer of Land Act 1893.
1 The plaintiff, Gojko Jandric, claims against the first defendant, Elena Jandric, and the second defendant, the Registrar of Titles, the following orders:
"1. A declaration that the Plaintiff holds an equitable interest in land the subject of Caveat number G797221 ('the Caveat') namely all that land being Lot 277 on Plan 16096 and being the whole of the land comprised in Certificate of Title Volume 1788 Folio 791 ('the Land') by virtue of monetary and labour contributions to purchase and improve the Land.
2. An order directing that the operation of the Caveat be extended until further order.
3. An order that the Caveat remain registered over the Land.
4. Such other declaration or orders as the Court shall deem appropriate in the circumstances.
…"
2 On 20 July 1998 Walsh J ordered, relevantly, that until 10 August 1998 the Registrar be restrained by injunction from removing the plaintiff’s caveat. On 10 August 1998 Walsh J extended the injunction until 14 September 1998 and on that date Templeman J, by consent, extended the injunction until further order.
3 On 19 March 1999 the originating summons was heard before me. At the hearing the plaintiff relied upon affidavits sworn by him on 15 July 1998 and 8 October 1998. The first defendant relied upon affidavits sworn by her on 4 September 1998 and 20 October 1998, and sought leave to rely upon a further affidavit sworn by her on 19 March 1999. After hearing and considering submissions from Mr Mijatovic (who appeared for the plaintiff) and Ms Richardson (who appeared for the first defendant) I granted the first defendant leave to rely upon the further affidavit. My grant of leave was subject to two conditions, namely, that the plaintiff be at liberty to file and serve a further affidavit in reply within 14 days and that either party be at liberty to file and serve supplementary written submissions in relation to any further affidavit within 21 days. Pursuant to those orders, the plaintiff filed and served an affidavit in reply
(Page 5)
- sworn 31 March 1999 and each party filed and served brief supplementary written submissions.
The nature and purpose of a caveat
4 Section 137 of the Act enables the holder of an estate or interest in Torrens system land to lodge a caveat for the purpose of preventing the registration of a dealing affecting the estate or interest claimed. A caveat is a form of statutory injunction of an interlocutory character which prevents registration until the caveator has been given a reasonable opportunity to justify the caveat under s 138 or s 138C. See J & H Just (Holdings) Pty Ltd v Bank of New South Wales(1971) 125 CLR 546 at 552, 558; Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 at 44-5.
5 The onus is upon a caveator in an application under s 138 of the Act to demonstrate that there is a serious question to be tried as to whether a caveatable interest exists. See Eng Mee Yong v Letchumanan [1980] AC 331 at 337; Custom Credit (supra) at 48. Although the balance of convenience is a factor to be considered in such an application, interlocutory removal of a caveat where a reasonably arguable case as to the existence of a caveatable interest has been demonstrated, will be unusual. See Eng Mee Yong (supra) at 335, 341; Custom Credit (supra) at 48 - 50.
The nature of a caveatable interest
6 Plainly, a person who claims a legal estate or interest in land will be entitled to lodge a caveat against the land. But where a person does not have a legal estate or interest, he will be entitled to lodge a caveat only if he has an interest in respect of which equity will give specific relief against the land itself. This relief may be by requiring the provision of a registrable instrument. Alternatively, the relief may be by way of an order that the interest claimed by the caveator be satisfied out of the land itself; for example, by an order for the sale of the land and the payment out of the proceeds of an amount in respect of which the caveator has a charge. See the observations of Hodgson J in Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 at 288. Also see Troncone v Aliperti (1994) 6 BPR 13,291 at 13,292-3. If a person has an interest in respect of which equity will give specific relief against the land itself, then the interest is caveatable and it is appropriate to describe it as an equitable proprietary interest in land.
(Page 6)
The terms of the plaintiff’s caveat
7 On 17 June 1998 the plaintiff lodged his caveat against the first defendant’s land known as 1 Nabberu Way, Cooloongup and being Lot 277 on Plan 16096 and being the whole of the land in Certificate of Title Volume 1788 Folio 791 ("the Land").
8 In the caveat the estate or interest being claimed is stated as follows:
"Gojko Jandric claims an equitable interest."
9 The plaintiff states that he claims that estate or interest by virtue of:
"Monetary and labour contributions to purchase of subject land and improvements erected thereon and the facts stated in the statutory declaration … by me, Gojko Jandric dated 20 May 1998."
10 In his caveat the plaintiff forbids absolutely the registration of any instrument affecting the estate or interest claimed.
11 The statutory declaration dated 20 May 1998 provides, relevantly, as follows:
"1. On the 30th day of November 1988 Elena Jandric purchased Lot 277 on Plan 16096 in fee simple in portion of Cockburn Sound.
2. A house was subsequently constructed on the land.
3. To enable the purchase of the land and construction of the house and improvements I contributed money and labour to the value of some one hundred thousand dollars ($100,000). I believe that this contribution is in excess of half the value of the property.
4. Accordingly, because of my contributions I claim an estate or interest in the subject property …
5. Elena Jandric and I were married, and then divorced and then commenced a de facto relationship during which time the subject land was purchased and improvements erected."
(Page 7)
Sections 138A to 138D of the Transfer of Land Act
12 The plaintiff’s caveat is a "section 138A caveat" for the purposes of s 138B to s 138D.
13 After receiving notice of the plaintiff’s caveat the first defendant made application for the Registrar to serve the plaintiff with a notice under s 138B(1). Thereafter, the Registrar served the plaintiff with such a notice. The effect of the notice was that unless the plaintiff took the action referred to in s 138B(2) on or before 22 July 1998, his caveat would lapse. As I have mentioned previously, on 20 July 1998 Walsh J ordered that until 10 August 1998 the Registrar be restrained by injunction from removing the plaintiff’s caveat. Subsequently, this order was extended until 14 September 1998 and on that date it was extended until further order.
14 Section 138C(2) provides that on the hearing of an application for an order extending the operation of a caveat the 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;
(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;
(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."
15 I note that s 138C(2) refers to the Court being satisfied (see para (a)) or not satisfied (see para (b)) that the caveator’s claim "has or may have substance". In my opinion, the concepts of "a serious question to be tried" and "the balance of convenience", as developed in the context of applications under s 138 and, indeed, applications for interlocutory equitable relief generally, are applicable in applications under s 138C. The Court should not be satisfied that a caveator’s claim "has or may have
(Page 8)
- substance" unless it finds that there is, at least, a serious question to be tried as to whether a caveatable interest exists. In my opinion, the notion of the balance of convenience is a matter to be taken into consideration in determining whether to make an order "extending the operation of the caveat" (within s 138C(2)(a)(i) or (ii)) or whether to make "other orders" (within s 138C(2)(a)(iii)).
16 Section 138D(1) provides that if a s 138 caveat:
"(a) is withdrawn after a notice under section 138B(1) is served on the caveator but before the caveat could lapse under section 138B(2);
(b) has lapsed under section 138B(2); or
(c) no longer has effect because of the operation of an order made, or a dismissal, under section 138C by the Supreme Court,
then the caveator cannot lodge with the Registrar any further section 138A caveat in respect of the same land unless -
(d) the proprietor’s consent to do so is endorsed on the further caveat; or
(e) the Supreme Court has made an order giving leave for the lodgment of the further caveat and a copy of that order has been served on the Registrar."
The evidence
17 I have previously referred to the terms of the plaintiff’s statutory declaration which he made to support the lodgment of his caveat.
18 In his affidavit sworn 15 July 1998 the plaintiff swears, relevantly, as follows:
(a) The Plaintiff and the First Defendant were married in Melbourne on 20 November 1974. In 1981 they were divorced and in 1984 they again began living together and were in a de facto relationship between 1984 and August 1997. See paragraph 6.
(b) In January 1988 the First Defendant purchased the Land. Title to the Land was registered in the First Defendant’s
(Page 9)
- name "at which point a house was built on the Land by myself". See paragraph 7.
- (c) Since about 1985 the Plaintiff had been making the repayments under a mortgage registered against a property in Melbourne owned by the First Defendant. See paragraph 8.
(d) The Plaintiff obtained a worker’s compensation payment of $46,000 which he "invested into the purchase of the Land by the First Defendant and its renovation and improvement". See paragraph 8.
(e) The Plaintiff contributed money and labour towards the purchase and improvement of the Land to a total value of $100,000, this amount being in excess of half of the current market value of the Land. See paragraph 10.
(f) The Plaintiff and the First Defendant jointly borrowed $5,085.19 from the Commonwealth Bank of Australia in connection with improvements made to the Land. See paragraphs 15 and 16 and annexure "GJ4".
19 The plaintiff, in his affidavit sworn 8 October 1998, asserts the following:
(a) He reiterates that he contributed money and labour to the value of $100,000 to enable the First Defendant to purchase the Land and construct a house and improvements on it. See paragraph 5.
(b) On 20 June 1989 the Plaintiff and a friend, Zdravko Marko Markovic jointly borrowed $10,006.56 from the Commonwealth Bank of Australia and this amount was applied towards the construction of the house. See paragraphs 6 and 7 and annexure "GJ1".
(c) The Plaintiff reiterates that he and the First Defendant had a de facto relationship between 1984 and August 1997. According the Plaintiff, during this period:
"The First Defendant and I lived together, slept in the same bed, resided in the same property, went to church together, went out together, visited Yugoslavia for which
(Page 10)
- I paid all the expenses of the First Defendant and myself, visited relatives and had a relationship as if the First Defendant and I were husband and wife."
See paragraphs 9 and 10.
- (d) The Plaintiff reiterates that he made repayments under the mortgage registered against the First Defendant’s property in Melbourne. In particular, he asserts that:
"… I was paying for the mortgage and finance for the First Defendant’s Melbourne property and was continually paying for the mortgage payments for the Melbourne property in the name of the First Defendant."
See paragraph 12.
(e) Further, the Plaintiff says that:
"When the First Defendant and I left for overseas for Europe, I paid one year of the mortgage, $3,600, on the Melbourne property owned by the First Defendant in advance and ended up spending approximately $26,000 for the visit of the First Defendant and myself to Europe for one whole year."
(f) The First Defendant purchased the Land with proceeds from the sale of her Melbourne property. See paragraph 15.
(g) In September 1993 the Plaintiff purchased carpet and paint and arranged for the carpet to be fitted to the house on the Land and for the house to be painted. The labour was undertaken by the Plaintiff and some of his friends. See paragraph 16.
(h) The Plaintiff became a full-time renovator and home improver at the request of the First Defendant which assisted in the improvement of the market value of the Land and the house by $100,000. See paragraph 18.
(i) The Plaintiff’s worker’s compensation payment (stated, without explanation, in this affidavit to be $36,000 compared with $46,000 in paragraph 8 of his affidavit sworn 15 July 1998) was used "to pay for the First
(Page 11)
- Defendant’s mortgage on her property in Melbourne and for the purchase of, renovation and improvement of the Land". See paragraph 32.
20 In his affidavit sworn 31 March 1999 the plaintiff states, relevantly, as follows:
(a) The Plaintiff sets out what he describes as "particulars" of the work he carried out to construct the home on the Land, as follows:
"5.1 I paid for and arranged through my own contributions and labour and that of my friends for carpeting and paintwork to be carried out on the house.
5.2 The foundation slab and concrete work were assisted by me and friends of mine who did such work on discount for cash.
5.3 I was involved in brick laying including delivery of the bricks, their purchase, assisting with movement of the bricks, and … laying the bricks …
5.4 I arranged for the tradesmen and assisted with manual labour with all tradesmen including plasterers, plumbers, builders, electricians and provided labour and assistance to all tradesmen working … to build the matrimonial home.
5.5 The ceiling, roof and bathroom were parts of the matrimonial home on the Land which I was directly involved in arranging with my friends, paying for the expenses and providing manual labour for the construction of these parts of the home on the Land.
5.6 The construction project took approximately 3-4 months."
See paragraph 5.
(b) The Plaintiff says that he withdrew approximately $12,000 from his bank accounts for the construction of the home, in addition to the personal loans referred to in his earlier affidavits. See paragraphs 6 and 7.
(Page 12)
- (c) The Plaintiff and the First Defendant had various bank accounts when the home was being constructed on the Land. According to the Plaintiff:
"… I did not bother to specifically examine which funds went from which account as we were working jointly like a married couple to build the matrimonial home on the land so that we could live there with our child. I cannot recall the exact amount which I paid [from my accounts] so that the land could be purchased … as I considered all our accounts [to be] joint and were being used for the same purpose, that is, to purchase the Land and build a matrimonial home on the Land."
See paragraph 8.
(d) The First Defendant requested and insisted that the Plaintiff contribute to developing and constructing the matrimonial home on the Land and he would not have done so if he was not in a de facto relationship with her. See paragraph 10.
(e) In February 1989, the Plaintiff sold a unit in West Footscray for $25,000. Part of the sale proceeds, namely $12,000, was used by him to "renovate and construct the house on the Land". See paragraph 15.
21 The first defendant disputed many of the assertions made by the plaintiff. In her affidavit sworn 4 September 1998, she said, relevantly:
(a) The Plaintiff and the First Defendant were married in 1974, separated in 1980 and divorced in 1983. Since 1983 they have been friends only. The First Defendant denies that there was a de facto relationship between 1984 and August 1997. See paragraph 4.
(b) The First Defendant had a property in Melbourne which she sold in 1988. After discharging a mortgage over the property she received net sale proceeds of $34,236. Shortly thereafter she left Melbourne and commenced residing in Western Australia. In 1989 she purchased the Land for approximately $21,500 from the net sale proceeds of the Melbourne property. See paragraph 5.
(Page 13)
- (c) The First Defendant constructed the house on the Land with $20,000 which she borrowed from Town & Country Building Society and the balance of the net proceeds of sale from the Melbourne property. See paragraph 6.
(d) During the construction of the home the Plaintiff offered to assist in its construction as a labourer. At the time he was unemployed and the First Defendant permitted him to assist the builders as they thought fit. According to the First Defendant:
"His labour contribution was very little [and] … he was simply there as an observer from time to time."
See paragraph 7.
(e) The Plaintiff did not assist in any way by contributing sums of money for the construction of the home as he has claimed. See paragraph 8.
(f) The only financial contribution made by the Plaintiff towards the construction or furnishing of the home was to assist the First Defendant in making repayments under an agreement by which the First Defendant borrowed $5,000 to pay for some furnishings. See paragraph 9.
(g) Between 1993 and 1995 the parties agreed to live together on a de facto basis. See paragraph 10.
(h) In 1994 the First Defendant received $20,000 damages in consequence of injuries she suffered in a motor vehicle accident. This amount was used by her to discharge the mortgage over the Land. See paragraph 11.
22 The First Defendant, in her affidavit sworn 20 October 1998, asserts, relevantly:
(a) The Plaintiff has never contributed money towards the acquisition of the Land or for the construction of the house and improvements on the Land as he has claimed. He merely contributed by way of labour to a small degree whilst the home was being constructed. See paragraph 4.
(b) The market value of the Land is approximately $113,000. This is supported by a market appraisal dated 14 April
(Page 14)
- 1998 from Summit Realty Rockingham. See paragraph 5 and annexure "A".
- (c) The loan which the Plaintiff jointly obtained with Mr Markovic was not used to assist the First Defendant in constructing the house on the Land. See paragraph 6.
(d) The parties did not live together, sleep together and reside on the land together as claimed by the Plaintiff, except between 1995 and 1997. See paragraph 8.
(e) The First Defendant agrees that the parties travelled to Yugoslavia together, but says:
"… that was simply because he wanted to take the children on a holiday and he was unable to do so without my consent. I covered my own expenses on the trip."
See paragraph 9.
(f) The Plaintiff’s statement that he made repayments under the mortgage registered against the First Defendant’s Melbourne property and was "continually paying for the mortgage" is false. The First Defendant made the payments solely from a sole parent pension she was receiving. See paragraph 11.
(g) The Plaintiff never made any repayments on the mortgage registered over the Land. See paragraph 12.
(h) The First Defendant purchased the Melbourne property with the assistance of an amount of approximately $28,000 advanced by the Housing Commission. The Plaintiff did not contribute in any way towards the repayments under the mortgage. See paragraph 15.
(i) The parties applied for and obtained a loan of $5,085.19 for the purpose of carpeting and painting the house on the Land, but the First Defendant made all repayments under the loan agreement. See paragraph 16.
(j) The First Defendant denies that the Plaintiff became a full-time painter and renovator and home improver as he claims, and denies that he has made contributions having a value of $100,000. See paragraph 17.
(Page 15)
- (k) In summary, the First Defendant asserts that:
"The Plaintiff’s only contribution was that when he had nothing to do he would go down to the Land where the home was being constructed simply as a bystander. He was an unskilled labourer and could not contribute in any way towards the construction of the home. If he did contribute to a small degree it was without my consent or authority."
See paragraph 18.
(l) The First Defendant has no intention of selling the Land. See paragraph 20.
(m) The Plaintiff’s assertion that he contributed his worker’s compensation payment of $36,000 towards repayments under the mortgage over the Land is untrue. See paragraph 21.
23 In her affidavit sworn 19 March 1999 the first defendant annexes various documents which support several of her contentions. In particular, the documents include:
(a) A letter dated 24 November 1988 from Wong Lai Karr & Kiatos, Barristers and Solicitors of Melbourne, which encloses cheques totalling $43,239.29, being the net proceeds payable to the First Defendant upon settlement of the sale of her Melbourne property.
(b) A letter dated 26 October 1998 and a settlement statement from Combined Property Settlements Agency Pty Ltd which states that the purchase price of the Land was $22,000 and that the balance due from the First Defendant at settlement is $22,829.70.
(c) A letter dated 8 March 1989 from Town & Country WA Building Society which confirms that the Society has approved a loan to the First Defendant of $18,000.
(d) An "Owner-Builder’s Statutory Declaration" dated 7 February 1989 under the Builders’ Registration Act 1939 in relation to the proposed construction of the home on the Land.
(Page 16)
- (e) A letter dated 11 August 1994 and enclosures from Rattigan Kearney & Bochat, Barristers and Solicitors of Rockingham which indicates that in or about August 1994 the First Defendant received approximately $14,819.90 damages upon settlement of a claim arising out of injuries she sustained in a motor vehicle accident.
(f) Sundry receipts for the purchase of building materials, apparently purchased in relation to the construction of the house on the Land.
Is There a Serious Question to be Tried?
24 As I have mentioned previously, the plaintiff must demonstrate on the evidence that his claim to a caveatable interest in the Land raises a serious question to be tried. If there is a serious question to be tried, the question will not, except in the most exceptional circumstances, be determined on originating summons. See Porter v McDonald [1984] WAR 271 at 276; Halse v Embling, unreported; FCt SCt of WA; Library No 970734; 22 December 1997. It is not appropriate to attempt to resolve conflicts of evidence on affidavit. See Eng Mee Yong (supra) at 341; Halse (supra) per Parker J at page 4. As Brinsden J observed in Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129 at 141:
"… the jurisdiction granted by section 138 should not be exercised so as to remove a caveat unless the case is one in which it is patently clear that the estate or interest sought to be protected cannot be made out and that degree of clarity will not emerge if there are disputed questions of fact, when the respondent should be left to proceed by way of action to establish the claimed interest or estate."
25 Accordingly, if a caveator is able to demonstrate a reasonably arguable case as to the existence of a caveatable interest, the ordinary course is for the caveat to remain and the disputed question to be left for trial by writ of summons with pleadings. However, a caveator’s claim must, in fact and law, be more than merely frivolous or vexatious, and it must appear from the evidence on the originating summons that the caveator might ultimately succeed in establishing his caveatable interest. See Halse (supra) per Parker J at page 14.
(Page 17)
26 In my opinion, these principles, which have been developed in the context of applications under s 138 of the Act, apply to an application under s 138C.
27 It was argued on behalf of the plaintiff that he has an equitable charge over the first defendant’s fee simple estate to secure the value of his contribution towards the acquisition of the Land and the construction of the home; alternatively, that he has an equitable interest in the Land by virtue of a constructive trust which arises from the circumstances of his contribution towards the acquisition of the Land and the construction of the home. The plaintiff’s contribution is said to arise partly by way of direct contribution (that is, by the expenditure of money, labour and materials towards construction of the home) and partly by way of indirect contribution (that is, by making repayments under the mortgage registered against the first defendant’s Melbourne property).
28 As Deane J (with whom Mason J agreed) observed in Muschinski v Dodds (1986) 160 CLR 583 at 614:
"Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle."
29 A constructive trust is not, however, imposed whenever fairness or justice and good conscience require it. In Muschinski (supra) Deane J said at 616:
"Such equitable relief by way of constructive trust will only properly be available if applicable principles of the law of equity require that the person in whom the ownership of property is vested should hold it to the use or for the benefit of another. That is not to say that general notions of fairness and justice have become irrelevant to the content and application of equity. They remain relevant to the traditional equitable notion of unconscionable conduct which persists as an operative component of some fundamental rules or principles of modern equity: cf, eg. Legione v Hateley (1983) 152 CLR 406 at 444; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461-464, 474-475."
(Page 18)
30 Accordingly, despite the absence of a common intention, equity will impose a constructive trust to preclude the retention or assertion of beneficial ownership of property to the extent that such a retention or assertion would be unconscionable.
31 The underlying basis of a constructive trust founded upon unconscionable conduct (as opposed to common intention) was explained by Deane J in Muschinski (supra) at 619, as follows:
"Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct. … the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically contended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do …"
Also see Baumgartner v Baumgartner (1987) 164 CLR 137 at 148; Kais v Turvey (1994) 11 WAR 357 at 361-2, 363-4.
32 Since the judgments of the High Court in Muschinski (supra) and Baumgartner (supra) , there have been several decisions in which Courts have held, in the context of de facto relationships which have broken down, that a constructive trust should be imposed to prevent one party (the holder of the legal title to property) unconscionably denying a claim to an interest in the property by the other party. For example, in Miller v Sutherland (1990) 14 Fam LR 416 the parties lived in a de facto relationship for more than two years. A property was acquired in the name of the de facto husband. When the property was purchased it was not in a habitable condition and a substantial amount of time and labour was expended by both parties, and also by the father of the de facto wife, in renovating the property. The Court imposed a constructive trust for the benefit of the de facto wife on the basis that there had been a "pooling of labour by or on behalf of both parties": per Cohen J at 424. Similarly, in Booth v Beresford (1993) 17 Fam LR 147, a de facto husband purchased
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- a property and contributed the whole of the purchase price. The parties renovated the property extensively. When they separated after 11 years the de facto wife claimed a beneficial interest in the property. The Court held that it would be unconscionable to deny the de facto wife an interest in the property having regard to the financial and labour contributions she had made to the renovations and, in consequence, the Court imposed a constructive trust for her benefit. It appears, therefore, that labour contributions to the renovation of a home occupied by parties in a de facto relationship may be sufficient to require the imposition of a constructive trust in favour of one of the parties. No doubt, such contributions would have to be significant in all the circumstances to give rise to a finding that it would be unconscionable to deny that the claimant had an interest. Also see, Paru v Parij(1998) 72 SASR 153.
33 Constructive trusts have often given rise to caveatable interests in land. See Cwalinski v Cwalinski [1958] Tas SR 56, Taddco v Catalano (1975) 11 SASR 492, Taddco v Taddco and Catalano (1978) 19 SASR 347, McMahon v McMahon [1979] VR 239. Also, in the context of a de facto relationship which has broken down, see Gillies v Keogh [1989] 2 NZLR 327; compare Nemeth v Nemeth(1977) 17 ALR 500.
34 The affidavits which have been filed on behalf of the plaintiff and the first defendant reveal a substantial dispute between them in relation to the material facts. It is true that the first defendant was able to produce numerous contemporaneous documents which suggest that, at least in several respects, her version of events may be more reliable. Also, the plaintiff’s affidavits contained a number of general assertions (to which objection was not made) in relation to matters of importance and, on some material issues, did not contain detailed particulars. However, I am not in a position, on the hearing of this originating summons, to make findings of fact. There must be a trial upon pleadings and cross-examination of the parties and other witnesses. I am not convinced, on the basis of the untested affidavit evidence, that the plaintiff’s claim is merely frivolous or vexatious. If the plaintiff’s evidence is accepted at a trial, in particular, his evidence in relation to the duration of the de facto relationship, his financial contribution to the repayment of the mortgage registered against the first defendant’s Melbourne property, and his contribution of labour and materials to the construction of the home on the Land, then a Court may well be persuaded that it would be unconscionable, in all the circumstances, for the first defendant to deny that he has acquired an equitable interest, to some extent, in her fee simple estate in the Land. Accordingly, I am of the opinion that the plaintiff has demonstrated that
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- his claim to a caveatable interest in the Land raises a serious question to be tried.
The balance of convenience
35 The first defendant said in para 20 of her affidavit sworn 20 October 1998:
"At the present time I have no intentions of selling the land even though at sometime in the past I had made a discussion (sic) to do that. I have discussed the sale of home (sic) with my son Risto and we have decided to keep the home. It is now off the market."
36 The evidence did not disclose that the first defendant would be prejudiced in any material respect by the maintenance of the existing caveat, the lodgment of a new caveat in substitution for the existing caveat or the granting of an injunction to preserve the status quo until the serious question has been tried. The balance of convenience favours the plaintiff.
The form of the plaintiff’s caveat
37 Section 137 of the Act provides, relevantly, that any person claiming an estate or interest in land under the operation of the Act "may lodge a caveat with the Registrar in an approved form". The section further provides, relevantly, that the person lodging the caveat "shall if required by the Registrar support the same by statutory declaration stating the nature of the estate or interest claimed and the title thereto".
38 The form which has been approved by the Registrar is reproduced as document 14 in appendix B of "Land Titles Registration Practice in Western Australia" (5th edition). Also see para 4.100 of that publication. The approved form requires the caveator to state, amongst other things, the estate or interest being claimed and the facts or circumstances by virtue of which the caveator claims the estate or interest.
39 The Registrar’s function is merely to ensure that a caveat is in the proper form. This is an administrative function only, and upon being satisfied that the caveat is in the proper form the Registrar must accept the lodgment of the caveat and comply with s 139(1). See Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 at 433.
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40 In my opinion, the plaintiff’s caveat is defective. It merely states that the plaintiff claims "an equitable interest" and does not specify the nature or extent of the interest, as required by the approved form. Compare Kerabee Park Pty Ltd v Daley[1978] 2 NSWLR 222 at 226, 230-2; Easton v Ardizzone [1978] 2 NSWLR 233(n). The better view is that a statutory declaration which supports the lodgment of a caveat cannot cure defects in the form of the caveat. See Giacci Bros Pty Ltd v Tyrrell, unreported; SCt of WA; Library No 980106; 18 February 1998 per Templeman J at pages 4-5. In any event, the plaintiff’s statutory declaration dated 20 May 1998 does not specify the nature or extent of the caveatable interest he claims.
The appropriate orders
41 In summary, I find that the plaintiff has demonstrated that his claim to a caveatable interest in the Land raises a serious question to be tried and that he is favoured by the balance of convenience. However, the form of his caveat is defective.
42 As I have mentioned previously, on the hearing of an application under s 138C of the Act, this Court, 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;
(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."
43 See s 138C(2)(a).
44 Although the plaintiff lodged his caveat on 17 June 1998 and commenced these proceedings on 15 July 1998, he has not commenced proceedings by writ of summons for the purpose of determining whether in fact and in law he has an equitable interest in the Land. I raised this issue with the plaintiff’s counsel at the hearing on 19 March 1999. In para 11 of his affidavit sworn 31 March 1999 the plaintiff deposes:
"I have stated to my solicitors that I am prepared to do anything to assist the Court and undertake to commence Family Court
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- proceedings expeditiously and diligently, but considering my financial circumstances and that my current home is caveated I am in no position to proceed with Family Court proceedings considering the financial cost and expense involved and that Legal Aid have only provided my solicitors with a disbursement only grant, if this Court is unwilling to protect the land the subject of any dispute in the Family Court. (sic)"
45 In para 14 of this affidavit the plaintiff states:
"I have no resources or financial assistance with which to continue to fight the action of the First Defendant if the caveat on the land that I have lodged is not protected. (sic)"
46 When I raised with the plaintiff’s counsel the necessity for the underlying issues of fact and law to be determined, and the plaintiff’s failure to commence proceedings by writ of summons for that purpose, counsel said:
"… if an order is made to diligently proceed (sic) with further proceedings in this Court or the Family Court for property settlement, we would undertake to do so … We want to have the matter resolved as expeditiously as possible."
47 I have decided that I should make orders which will ensure, first, that the interest claimed by the plaintiff is protected pending a judicial determination of the serious question which I have found exists, and secondly, that the plaintiff promptly commences proceedings for that purpose.
48 In my opinion, the plaintiff’s caveat, being defective in form, should not be extended. Also, I do not think it is appropriate to grant the plaintiff leave to lodge a further caveat (in proper form) under s 138D(1).
49 I will make orders under s 138C(2)(a)(iii) and s 138C(2)(c) to the following effect:
(a) I will grant an injunction until further order restraining the first defendant from creating, disposing of or dealing with any estate or interest in the Land, unless the creation, disposition or dealing is expressly subject to any proprietary estate or interest which the plaintiff may have in the Land.
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- (b) It will be a condition of the grant of the injunction that:
(i) the plaintiff file an undertaking as to damages in the usual form; and
(ii) the plaintiff commence promptly proceedings in this Court by writ of summons for the purpose of determining the serious question to be tried which I have found exists.
(c) Each party is to have liberty to apply on 7 days' notice in relation to the discharge or variation of the injunction.
(d) The injunction granted by Walsh J on 20 July 1998, as extended on 10 August 1998 and 14 September 1998, will be discharged.
50 If the plaintiff fails promptly to commence or, indeed, prosecute the proceedings by writ of summons, then the first defendant will be able to apply to discharge the injunction. If, in the events which happen, the first defendant wishes to deal with her fee simple estate in the Land otherwise than in accordance with the injunction or the balance of convenience ceases to favour the plaintiff, then the first defendant may apply to vary the injunction.
51 It will be apparent that I have decided that the injunctive relief should not be conditional upon the plaintiff commencing any proceedings in the Family Court. In my opinion, as a matter of general principle, it is not appropriate for this Court to grant injunctive relief in aid of proposed property proceedings in the Family Court. It is plainly undesirable for the substantive merits of a dispute to be litigated in one court and for injunctive relief in aid of those proceedings to be granted by another court, especially where, as in the present case, both courts have ample jurisdiction and power to grant injunctive relief.
52 As I have mentioned previously, the parties were divorced in 1983. If the plaintiff were to make application under s 44(3) of the Family Law Act 1975 for leave to institute property proceedings and the Family Court were to grant leave then, no doubt, the plaintiff could make application to that Court for any injunctive relief which may be appropriate. However, the plaintiff has decided to commence proceedings in this Court for relief under s 138C of the Transfer of Land Act based on the existence of an alleged equitable interest in the Land (which, of course, was acquired by the first defendant some five years after the parties were divorced). In the
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- circumstances, the plaintiff should be required to litigate the serious question to be tried by proceedings in this Court.
53 I will hear counsel in relation to the precise form of the orders and also in relation to costs.
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