Lu v Wong
[2019] WASC 169
•21 MAY 2019
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: LU -v- WONG [2019] WASC 169
CORAM: VAUGHAN J
HEARD: 10 MAY 2019
DELIVERED : Ex tempore
PUBLISHED : 21 MAY 2019
FILE NO/S: CIV 1739 of 2019
BETWEEN: LISA YE SAN LU
Plaintiff
AND
YAN LUNG TIM WONG
First Defendant
THE REGISTRAR OF TITLES, LANDGATE
Second Defendant
Catchwords:
Application for extension of caveat - Whether the plaintiff's claim has or may have substance - Whether the plaintiff intends to commence and prosecute proceedings to establish the interest claimed in the caveat - Turns on own facts
Legislation:
Transfer of Land Act 1893 (WA), 138C
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | G Hoe |
| First Defendant | : | In person |
| Second Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Hoe Lawyers |
| First Defendant | : | In person |
| Second Defendant | : | No appearance |
Case(s) referred to in decision(s):
Baumgartner v Baumgartner [1987] HCA 59, [1987] 164 CLR 137
Bride v The Registrar of Titles [2015] WASC 11
Muschinski v Dodds (1985) HCA 78; (1985) 160 CLR 583
Palazzo Homes Proprietary Limited v Goh [2010] WASC 407
VAUGHAN J:
(These reasons were delivered orally at the conclusion of the hearing. They have been edited to correct matters of grammar and infelicity of expression. Authorities and other references have also been footnoted rather than appearing in the body of the reasons.)
Introduction
The plaintiff, Lisa Lu, is seeking orders pursuant to s 138C of the Transfer of Land Act 1893 (WA) (TLA) for the extension of a Caveat.
The application is made by an originating summons dated 26 April 2019. It is supported by three affidavits of Ms Lu, namely, affidavits sworn 26 and 30 April 2019 and an affidavit sworn 8 May 2019. Ms Lu has proffered an undertaking as to damages.
The orders sought today are set out in a minute of proposed orders dated 9 May 2019. That minute reads:
(1)The operation of the Caveat No 931561 be extended until further order of the court.
(2)The costs of this application be in the cause.
(3)The application to otherwise be adjourned sine die with liberty to apply.
Two things should be noted about the orders as proposed. First, the orders sought are not said to be conditional on an undertaking as to damages. I would not extend the operation of the Caveat absent an undertaking as to damages. However, an undertaking has been proffered. Second, the orders sought are not said to be conditional on Ms Lu commencing and prosecuting in a timely way proceedings to establish the interest she has claimed in the Caveat. I would not extend the operation of the caveat absent a condition to this effect.
The second matter is problematic for the application. Nowhere in Ms Lu's affidavit material does she foreshadow an intention to commence proceedings to establish the claimed interest. Rather, it appears that Ms Lu's real object is to effect monetary recovery from the first defendant.
The first defendant, Tim Wong, is Ms Lu's former husband.
Mr Wong is self-represented. Nevertheless, Mr Wong has filed a minute of proposed orders. Mr Wong seeks that the application to extend the Caveat be dismissed. In support of his position Mr Wong has filed an affidavit sworn 8 May 2019.
Today's hearing follows an interim extension to the operation of the Caveat. Orders to that effect were made on 30 April 2019 in circumstances where the Caveat would otherwise have lapsed on 1 May 2019. At that time orders were made programming the matter to a final hearing this afternoon.
Unless the operation of the Caveat is further extended it will lapse after 11.59 pm on Monday, 13 May 2019.
Factual background
It is necessary that I begin by summarising the factual position as it appears from the parties' affidavits.
Two cautions must be noted. First, the parties' affidavits raise a number of matters that are irrelevant to the proper disposition of the issue of whether the operation of the Caveat is to be extended. I do not intend to address those matters. Second, there is a dispute on the evidence as to whether Ms Lu made certain payments on her own behalf or whether they were made by her as a mere conduit for a gift by Mr Wong's father. This application is not the time to resolve such disputed questions of fact.
As will be seen, the test of whether to extend the operation of a caveat - as provided for in s 138C of the TLA ‑ is whether the plaintiff's claim 'has or may have substance.' Accordingly, on an application to extend the operation of a caveat the court does not ordinarily evaluate the plaintiff's evidence or undertake a preliminary trial.
There are a number of factual matters that are common ground:
(1)Ms Lu and Mr Wong were married on 9 September 2010.
(2)A daughter was born to them on 3 March 2011.
(3)Ms Lu and Mr Wong separated in June 2011.
(4)On 3 October 2011 the Family Court of Western Australia made consent orders dealing with parenting and financial issues as between Ms Lu and Mr Wong.
On 28 May 2015 Mr Wong became the registered proprietor of land known as 131 Monticello Parkway, Piara Waters (the Property). The Property is legally described as Lot 301 on Deposited Plan 77014. It is the whole of the land in Certificate of Title Volume 2845 Folio 918.
The Certificate of Title to the Property shows that a mortgage was registered on 28 May 2015 in favour of HSBC Bank Australia Limited. Accordingly, I infer that Mr Wong purchased the Property with finance obtained from HSBC Australia Limited.
At some stage there was a reconciliation between Ms Lu and Mr Wong. The precise period of reconciliation is in dispute. Ms Lu says it was in 2016. Mr Wong puts it as commencing in 2015. The difference is unimportant. During the period of reconciliation another daughter was born to Ms Lu and Mr Wong. However, shortly after the birth of that second daughter, Ms Lu and Mr Wong re‑separated.
Ms Lu says that:
(1)During the reconciliation Ms Lu and Mr Wong began construction of a residence on the Property.
(2)To enable completion of the construction of the residence and improvements to the Property Ms Lu made financial contributions totalling $45,188.42. Ms Lu annexes to her first affidavit various bank statements, receipts and invoices.
(3)Ms Lu and Mr Wong moved into the residence after its completion.
(4)Ms Lu also made various non-financial contributions to the Property (what these may be remain unspecified in the affidavit evidence).
(5)Mr Wong promised that he would add Ms Lu's name to the Certificate of Title to the Property.
Mr Wong says that Ms Lu only moved into the Property very briefly before giving birth to their second daughter. Mr Wong also says that his father transferred funds to Ms Lu for the sole purpose of assisting him (Mr Wong) to construct the residence. It is said that Mr Wong's father transferred the funds to Ms Lu's account discreetly so that Mr Wong could not refuse the assistance. Mr Wong accepts that Ms Lu contributed by purchasing things like furniture: a washing machine, a vacuum cleaner, a fridge, a television, a dining table and a coffee table. But Mr Wong says that Ms Lu re‑took possession of all these items after the re-separation.
Ms Lu disputes that she was holding the funds from Mr Wong's father as a gift for Mr Wong. Ms Lu says that it was a gift to her to use as she saw fit. In any case, as I understand her evidence, Ms Lu says that none of the funds used to make the contributions to the residence on the Property were derived from the funds sourced from Mr Wong's father.
I cannot resolve this dispute on the affidavits. For the purpose of today's hearing I must accept Ms Lu's account.
Ms Lu has sought relief in the Family Court of Western Australia in relation to the $45,188.42. Ms Lu's affidavit sworn 26 April 2019 discloses:
17.My matter before the Family Court is ongoing following an application by [Mr Wong] seeking parenting orders in relation to our children.
18.I have filed my response to [Mr Wong's] application opposing the orders sought by him and have also sought financial orders requiring him to repay an amount of $45,188.42 being the amount that I contributed towards the Property.
In addition, on 28 June 2018, Ms Lu lodged a caveat in relation to the Property. The caveat is Caveat N931561 (Caveat). A copy of the Caveat is attachment 'A' to Mr Wong's affidavit sworn 8 May 2019.
The Caveat forbids the registration of any instrument affecting the claimed interest or estate absolutely, ie it is an absolute caveat. In oral submissions counsel for Ms Lu suggested that the Caveat should be amended to be a subject to claim caveat. That, in my view, presents no difficulties. If I were prepared to extend the operation of the Caveat, I would be prepared to grant leave to so amend the Caveat.
Originally, as lodged by Ms Lu through her solicitor, the Caveat provided as follows:
Estate or interest being claimed – an Equitable Interest as Equitable mortgagee (note 5).
The Caveator claims an interest by virtue of financial contributions given by her and by virtue of the Statutory Declaration provided to support this Caveat (note 6).
However, the Caveat as originally lodged was requisitioned. That resulted in Ms Lu, by her solicitors, amending the Caveat as follows:
(2)Note 5 of the Caveat should be amended to show 'an interest as beneficial owner'; and
(3)Note 6 of the Caveat should be amended to show 'the Caveator claims an interest as beneficial owner by virtue of a Statutory Declarations (sic) dated 28 June 2018 and 19 July 2018 provided to support this caveat'.
Accordingly, Ms Lu claims an interest in the Property as a beneficial owner.
The 28 June 2018 statutory declaration provides:
I contributed financially towards the construction, renovation, mortgage, payments to the Property - 131 Monticello Parkway, Piara Waters, WA, 6112.
Accounts for payments are as follows:
13/5/2016
Carpet
$2,000
Barossa furniture
$843.20
18/5/2016
Bank transfer mortgage
$1,800
Sunrise furniture
$8,700
27/5/2016
Construction loan
$7,000
Brick Paving Labour
Brick material cost
$3,000
$3,192.22
10/6/2016
Bamboo Flooring
$3,000
Harvey Norman purchase
$4,853
24/6/2016
Construction loan
$3,000
Kitchenware purchase
$400
27/6/2016
Furniture
$1,000
Beacon Lightings
$150
28/6/2016
Mortgage
$3,000
21/7/2016
Furniture
$2,000
15/8/2016
Fencing
$1,650
$45,588.42
Three discrete categories of 'contributions' may be discerned. First, mortgage payments - some $14,800. Second, improvements to the Property - some $12,842.22. Third, furniture and household effects - some $17,946.20.
The 19 July 2018 statutory declaration provides:
(1)I was married to Mr Yan Lung Tim Wong on 9 September 2010.
(2)On 18 January 2013, Mr Yan Lung Tim Wong and I were divorced and separated. However, in late 2013, we resumed cohabitation as de facto partners.
(3)Mr Yan Lung Tim Wong is the Registered Proprietor of the Land being Lot 301 on Plan 77014 being the whole of the Land contained in the Certificate of Title Volume 2845, Folio 918 ('Property').
(4)During our marriage and cohabitation, I have made significant contributions towards the building, construction, renovation and mortgage of the Property, totalling the amount of forty five thousand one hundred and eighty eight dollars and forty two cents ($45,188.42) ('Contribution').
(5)I have also contributed financially and as a homekeeper during our relationship.
(6)As I have contributed towards this Property directly, I am a beneficial owner of this Property.
(7)I hereby claim an interest as a beneficial owner over the whole Property being Lot 301 on Plan 77014 contained in the Certificate of Title Volume 2845, Folio 918.
Some observations should be made as to the evidence in support of the Caveat. These observations apply both to the statutory declarations and also to the affidavits relied on in this application.
First, so far as it is asserted that Ms Lu made contributions by way of improvements to the Property, there is no evidence that these improvements enhanced the value of the Property. Nor is there evidence as to by how much they enhanced the value of the Property.
Second, there is no evidence as to the value of the Property.
Third, there is no evidence as to the nature of the mortgage payments. Were they of interest only? Were they of principal? To what extent, if any, did they improve the net equity (in a monetary sense) held by Mr Wong in the Property? While I infer that the payments did so, it is impossible to be certain as to the exact amount by which there was an enhancement of the equity held by Mr Wong in the Property.
On 10 April 2019, following application by Mr Wong, the Registrar of Titles issued a 21 day lapse notice in relation to the Caveat.
Solicitors for Ms Lu wrote to Mr Wong on 16 April 2019. In that letter the following was stated:
we make an offer for settlement of this issue in terms of the following:
(a)our client will withdraw the Caveat subject to the parties' agreeing, by consent, for the Family Court to pass an order of injunction restraining you from selling, encumbering, or in any way dealing with the Property pending conclusion of the family proceedings; or
(b)pay our Client the sum of $45,188.42 being the amount contributed by her toward the Property.
Accordingly, Ms Lu's primary objective does not appear to be to assert title as a beneficial owner of the Property. Rather, it is to obtain repayment of the $45,188.42. This is manifest from two things. First, the financial orders as have been sought in the Family Court of Western Australia proceedings. Second, the terms of Ms Lu's solicitor's letter.
That said, by commencing these proceedings, Ms Lu wishes to retain the Caveat. But nothing has been said suggesting an intention to seek to establish ‑ by claim in this court ‑ the alleged interest as beneficial owner of the Property. To the contrary, as I will come to, Ms Lu has expressly disavowed any such present intention.
Applicable legal principles
Broadly, there are two interdependent issues to consider in an application to extend the operation of a caveat under s 138C of the TLA. They are:
(1)whether the caveator's claim in respect of an estate or interest in the land 'has or may have substance'; and
(2)whether the balance of convenience favours the retention of the caveat; and, if so, the appropriate orders to be made.
In that respect the general principles relating to the extension of a caveat under s 138C of the TLA are well established. They were summarised by Edelman J in Bride v The Registrar of Titles in terms that I adopt and will apply:
Section 137 of the Transfer of Land Act 1893 (WA) enables a beneficiary or other person claiming an estate or interest in land to lodge a caveat. Section 138C(2) provides for the Supreme Court's powers when a caveator applies to the Supreme Court for an order extending the operation of caveat, as follows:
(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.
In assessing whether to grant the extension of the caveat the two broad issues are (1) whether the caveator's claim in respect of the estate or interest in land 'has or may have substance' and (2), whether the balance of convenience favours the retention of the caveat and the appropriate orders to be made.
The first issue is whether the caveator's claim in respect of the estate or interest in land 'has or may have substance.' This is sometimes expressed as whether the caveator can show that there is a serious question to be tried, or whether the caveator can prove a prima facie case. In assessing whether the caveator has proved that the claim has, or may have substance, the court does not ordinarily evaluate the applicant's evidence or undertake a preliminary trial.
The requirement that the caveator's claim of substance be in respect of a claim of an 'estate or interest in land' has been held to mean that the claim must concern a proprietary interest in land.
The second issue is the balance of convenience in extending the caveat. The court considers the balance of convenience when it decides whether to exercise its discretion to extend the caveat. The balance of convenience is not independent of the strength or weakness of the caveator's claim. Rather, the apparent strength or weakness of the case for relief at trial is a relevant consideration on the balance of convenience.
An important factor in considering the balance of convenience is if the failure to extend a caveat will have the effect of destroying, or substantially impairing, the benefit of the proprietary interest which is claimed.[1]
[1] Bride v The Registrar of Titles [2015] WASC 11 [11] – [16].
The onus is on the plaintiff to demonstrate that the caveatable interest it claims has or may have substance.
A prima facie case?
It is necessary for Ms Lu to establish that her claimed estate or interest in the Property has or may have substance. In that regard is there a prima facie case - or a serious question to be tried - that in terms of the estate or interest claimed by the Caveat, Ms Lu has 'an interest as a beneficial owner' in the Property?
The claimed estate or interest does not admit of a partial beneficial interest. It is not suggested that Mr Wong holds the legal title as registered proprietor on trust for himself as to some proportion and for Ms Lu as to some other proportion. What is claimed is an interest as beneficial owner, that is, as owner beneficially to the exclusion of all others including Mr Wong.
That alleged interest is claimed based on:
•paying for improvements - which may or may not have enhanced value ‑ in amounts totalling $12,842.22; and
•making mortgage payments ‑ in circumstances which are not explained, ie as to whether a payment of principal or interest or both - in amounts totalling $14,800.
The furniture payments must, I consider, be put to one side. Counsel for Ms Lu appeared to concede as much in the course of oral submissions. Those payments were not and cannot be treated as financial contributions to the Property or the construction of the residence on the Property.
I asked counsel for Ms Lu to explain how, on the facts, there was a prima facie case or serious question to be tried that Ms Lu was a beneficial owner of the Property. As I understood counsel's submission, it was this:
(1)Ms Lu has contributed to an increase in the value of the Property. (I note, however, that there was no express evidence to support this contention.)
(2)Ms Lu held an equitable interest in the Property under the principles of constructive trusts - the interest was to the extent of $40,000 after allowing a discount for the furniture.
(3)Ms Lu held that equitable interest because of the improvements to the residence.
(4)The interest was to the extent of 10 per cent of the value of the Property or the $40,000. This was based on a notional value of the Property (although there was no actual evidence as to its value). While it could not be said by how much the contributions had increased the value of the Property, there was, in counsel's submission, necessarily some increase.
In substance, as I understood the contention put on behalf of Ms Lu by her counsel, it was submitted that the Property was subject to a constructive trust in favour of Ms Lu following the failure of a joint endeavour between Ms Lu and Mr Wong.
The paradigm case in which such a trust has been recognised is Baumgartner v Baumgartner.[2]
[2] Baumgartner v Baumgartner [1987] HCA 59, (1987) 164 CLR 137.
In that case a de facto couple pooled their income for living expenses and fixed commitments. They lived in a property owned by the man. This was sold and a house was bought in the man's name with the aid of a mortgage and the net proceeds of sale of the first property. The parties pooled their aggregate earnings in the proportions of roughly 45 per cent for the woman and 55 per cent for the man. Post‑separation the man asserted that the land was his sole property. However, it was held that the man held the house on trust for himself and his former partner in the portions in which they contributed their earnings to its acquisition (subject to a charge in the man's favour for the net proceeds of sale of the first property).
The plurality, Mason CJ and Wilson and Deane JJ, referred with approval to what had been said by Deane J in Muschinski v Dodds:
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 intended 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 to do so. [3] (citations omitted)
[3] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 620 (see Baumgartner v Baumgartner (14)).
Earlier the plurality had referred to applying 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.[4]
[4] See Baumgartner v Baumgartner (148).
I accept that, based on the failed joint endeavour constructive trust doctrine, the facts asserted by Ms Lu establish that she has a prima facie case ‑ and there is a serious question to be tried ‑ to the effect that Ms Lu has some beneficial interest in the Property. It is arguable that Mr Wong holds the Property on trust for himself and Ms Lu in proportions to take account of their relative contributions to the acquisition of the Property and the construction of the residence. Whether the household effects and furniture payments ought to be taken into account is, however, more problematic. On a provisional basis it seems to me that - as indeed is consistent with counsel for the plaintiff's acceptance in the course of oral submissions - the furniture payments are not a contribution that ought to be taken into account for this purpose.
It is not arguable, however, that Ms Lu is the beneficial owner of the Property to the exclusion of Mr Wong. Yet that is the interest claimed in the Caveat. Ms Lu claims an interest as a beneficial owner as to the whole of the Property and on that basis seeks to forbid the registration of any instrument affecting her claimed estate or interest absolutely (or, subject to amendment, unless subject to her claim).
The claimed interest as beneficial owner of the Property, as made in the Caveat, is not a claim that has or may have substance. At best Ms Lu might claim a beneficial entitlement to the extent of her contributions - or perhaps her proportionate contributions relative to those of Mr Wong. The claim in the Caveat plainly overreaches.
Amendment of the Caveat
In the circumstances I would not extend the operation of the Caveat unless it was amended to reflect a claim in relation to the Property that has or may have substance.
There are two difficulties with this:
(1)While, belatedly, Ms Lu has proposed an amendment, I am not satisfied that it is an appropriate amendment.
(2)There are difficulties in permitting amendment in any case.
The belated application to propose amendment in relation to the Caveat comes in circumstances in which the possible overreach in the interest claimed in the Caveat was raised by me with counsel for Ms Lu at the hearing on 30 April 2019. Then counsel for Ms Lu suggested that the claim may be as beneficial owner to a one tenth undivided share in the Property. I suggested that counsel give consideration to potential amendment. No proposed amendment was formulated or proposed as part of the minute of proposed orders filed yesterday. Indeed, no proposed amendment was formulated or proposed until counsel for Ms Lu did so orally in the course of submissions when asked whether it was intended to seek amendment.
The suggestion was that the estate or interest claimed by the Caveat should be amended to be that of:
Beneficial co-owner of the Property to the extent of a sum of $40,000 so far as Ms Lu's contributions had increased the value of the Property.
Amendment should, in my view, take into account either Ms Lu's and Mr Wong's respective contributions or the proportionate share of Ms Lu's contributions to the value of the Property. In that regard formulation of an amendment which is appropriate ‑ meaning that the claim made by the Caveat has or may have substance ‑ required further evidence. No consideration has been given to Mr Wong's respective contributions as against those of Ms Lu. Nor has there been any consideration or evidence as to the value of the Property.
It is insufficient, in my view, to simply pluck a figure from the air - which, with respect, appeared to be the approach of counsel for Ms Lu when suggesting a one tenth undivided interest in the Property was held on trust for Ms Lu.
This is not to say that the concept could not be reflected entirely in words rather than figures. It may be that this would be sufficient. But Ms Lu has not sought to do this. The suggested amendment is as to a particular monetary amount and is based on an unknown parameter as to value.
There is, in addition, a question of whether Ms Lu ought to be allowed to amend the Caveat so that the claimed estate or interest is specified and the grounds upon which it is claimed are properly described.
In Palazzo Homes Pty Ltd v Goh Le Miere J stated:
On an application to extend the operation of a caveat s 138C(2)(a)(iii) confers on the court a limited power to allow the terms of the caveat to be amended. Amendment may be permitted so as to enable the caveat to express better and more fully the interest which is claimed in the caveat. However, amendment is not permitted so as to alter the interest which is claimed and therefore a different interest.[5] (citations omitted)
[5] Palazzo Homes Pty Ltd v Goh [2010] WASC 407 [14].
His Honour held that the reference in s 138C(2) to 'the caveator's claim' was to the estate or interest claimed so that amendments were permitted to better describe the estate or interest but not to alter the estate or interest.
The power to permit amendment is discretionary. In Palazzo Homes Pty Ltd v Goh Le Miere J observed:
The court should not readily act in a way which might encourage the belief that caveats can be imprecisely formulated and then fixed up later. Caveats act as a form of interlocutory injunction, albeit by an administrative act, and can have powerful and serious consequences. Wrongly formulated caveats should not easily be tolerated.[6] (citations omitted)
[6] Palazzo Homes Pty Ltd v Goh [24].
It might have been possible for Ms Lu to have proposed an amendment that met the strictures outlined in Palazzo Homes Pty Ltd v Goh. It is at least arguable that there is no 'new' caveat, and no alteration in the interest claimed, where a caveat is amended to claim a lesser interest within the boundary of the interest originally claimed. That might be seen as expressing better or more fully ‑ with more precision - the interest which is claimed in the caveat. That is all the more so when, in the present case, the Caveat is to be read with the statutory declaration and it is plain that the statutory declarations relied on by Ms Lu refer to the contributions.
The proposed amendment is, however, one which is unclear. It does not establish any obvious claim as to a proportionate and definite interest in the land. Nor, in my view, is the $40,000 figure justifiable. At the most the mortgage repayments and improvements amount to less than $28,000. And what increase, if any, the improvements caused to the value of the Property, is indeterminate.
In the exercise of discretion I would not allow the suggested amendment. First, the proposed amendment lacks clarity and precision as to the nature and extent of the claimed estate or interest. Second, the figure of $40,000 is demonstrably wrong.
In its terms the Caveat claims an interest as beneficial owner of the Property. That is not, for the reasons I have given, a claim that has or may have substance. Ms Lu may have some lesser interest in the Property. But that is not sufficient for an order extending the operation of this Caveat.
For that reason the operation of the Caveat will not be further extended.
Balance of convenience
Had Ms Lu established a prima facie case that she has or may have an estate or interest in the Property as claimed in the Caveat I would have concluded that the balance of convenience favoured the extension of the operation of the Caveat.
Primarily that is for the reason that, if there is a dealing by Mr Wong, the failure to extend the Caveat will have the effect of destroying or substantially impairing the benefit of the proprietary interest which is claimed. That said, there are two countervailing factors. First, there is no suggestion that Mr Wong has any present intention of effecting any dealing in relation to the Property. Accordingly ‑ as has indeed been foreshadowed by Ms Lu in her present proceedings in the Family Court of Western Australia ‑ she may seek injunctive relief in more tailored terms than the restraint provided by the Caveat. Second, for the reasons given, Ms Lu's real concern appears to be to effect a monetary recovery rather than to establish a proprietary entitlement to the Property.
Nevertheless, in circumstances where an undertaking as to damages was proffered ‑ and there being no suggestion that the undertaking was inadequate ‑ I would have concluded that the balance of convenience favoured an extension had it been that the interest claimed in the Caveat had or may have substance.
I would, however, have imposed conditions on any order extending the operation of the Caveat. I would have required Ms Lu to immediately commence proceedings to establish her claim to the Property. I would also have required that Ms Lu proceed with those proceedings with expedition.
There is, I would suggest, doubt as to whether such conditions would be acceptable to Ms Lu. The costs of such substantive proceedings would plainly be disproportionate to the amount involved. The more obvious course would have been to continue with the relief sought in the Family Court of Western Australia. In the absence of what I am about to refer to, I would have inferred that the reason there has not been any statement of willingness on Ms Lu's behalf to the effect that she is prepared to commence and prosecute in a timely way proceedings to establish the interest claimed in the Caveat, is that there is not a present intention on her part to do so.
I raised this issue with counsel for Ms Lu in the course of his oral address. I mentioned, expressly, that I would only be prepared to extend the operation of the Caveat were Ms Lu to commence and prosecute proceedings to establish her claim in relation to the Property on a final and substantive basis. I questioned whether, in the absence of any evidence of this intention, there was a present intention on Ms Lu's part to prosecute such a claim. I suggested that such proceedings might be disproportionate given the size of the claim.
Counsel for Ms Lu took instructions. I was informed that the position was:
•It was accepted that the commencement of proceedings to establish the claim made as to an interest in the Property would be disproportionate having regard to the size of the claim.
•There was no present intention to commence such substantive proceedings.
•Ms Lu's intention was to pursue her claim for monetary relief in the Family Court of Western Australian.
In short, Ms Lu has no present intention to seek to vindicate her claimed proprietary right as propounded in the Caveat. Rather, the protection of the Caveat is sought as ancillary security with regard to the monetary claim in the Family Court of Western Australia. That, in my view, is not the proper purpose of a caveat. In this respect the proper purpose of a caveat is to act as an interlocutory injunction and provide breathing space in which proceedings can be taken to vindicate and establish the substantive claim to a proprietary right as claimed in the caveat.
I would only extend the operation of the Caveat on the condition that Ms Lu commences and prosecutes in a timely way proceedings to establish the interest as claimed in the Caveat. As, based on her instructions to counsel as relayed to me, Ms Lu is not willing to accept such a condition, the Caveat must inevitably lapse in any event.
This provides a further basis for the dismissal of the application.
Conclusion
The application to extend the operation of the Caveat will be dismissed. I will hear from the parties as to costs. My provisional view is that there should be no order as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
EP
Research Associate to Justice Vaughan21 MAY 2019
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