Margaret Alexandra Taylor by next friend Wendy Anne Norris v Taylor Holdings Pty Ltd as trustee for the KC & MA Taylor Family Trust - [2024] WASC 298

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   MARGARET ALEXANDRA TAYLOR by next friend WENDY ANNE NORRIS -v- TAYLOR HOLDINGS PTY LTD as trustee for THE KC & MA TAYLOR FAMILY TRUST [2024] WASC 298
CORAM:   WHITBY J
HEARD:   9 AUGUST 2024
DELIVERED          :   20 AUGUST 2024
FILE NO/S:   CIV 1788 of 2024
BETWEEN:   MARGARET ALEXANDRA TAYLOR by next friend WENDY ANNE NORRIS
Plaintiff
AND
TAYLOR HOLDINGS PTY LTD as trustee for THE KC & MA TAYLOR FAMILY TRUST
First Defendant
REGISTRAR OF TITLES
Second Defendant

Catchwords:

Caveat extension - Equitable lien - Balance of convenience favours extension of caveat - Turns on own facts

Legislation:

Transfer of Land Act 1893 (WA)

Result:

Caveat extended

Category: B

Representation:

Counsel:

Plaintiff	:	L N Firios
First Defendant	:	K Zhang
Second Defendant	:	No appearance

Solicitors:

Plaintiff	:	Steedman Stagg Lawyers
First Defendant	:	Larina Piesse Barrister & Solicitor
Second Defendant	:	No appearance

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

Bashford v Bashford [2008] WASC 138
Bateson v Jones [2013] WASC 8
Bride v The Registrar of Titles [2015] WASC 11
Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179
Castlemaine Tooheys Ltd v State of South Australia (1986) 161 CLR 148
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Hewett v Court [1983] HCA 7; (1983) 149 CLR 639
King v Barrett [2023] WASC 234
Kingstone Constructions Pty Ltd v Crispel Pty Ltd (1991) 5 BPR 11987

WHITBY J:

Margaret Alexander Taylor, the plaintiff, has made an application for an order that a caveat lodged against farming land near Darkan, referred to as Avonlea, be extended pursuant to s 138C of the Transfer of Land Act1893 (WA) (TLA). These are my reasons for extending the caveat.

Evidence

The plaintiff relies upon the affidavit of Wendy Anne Norris sworn on 2 July 2024 (Wendy Affidavit), her own affidavit sworn on 30 July 2024 (Plaintiff's Affidavit) and an undertaking as to damages filed on 2 July 2024 in support of the application.
The first defendant opposes the application, relying upon the affidavits of Dale Geoffrey Abbott sworn on 19 July 2024, James Robert Lawton Hall sworn on 22 July 2024 and Kenneth Bruce Taylor sworn on 19 July 2024 (Abbott Affidavit, Hall Affidavit and Bruce Affidavit respectively).
I read each of the affidavits, save for [7] of the Abbott Affidavit and the first two sentences of [7], the last sentence of [14] and [17] of the Hall Affidavit.

Background

This summary of the background to the action is taken from the affidavits. It is a summary for the purposes of outlining the context in which these proceedings have been commenced, and does not give rise to any findings of fact.
From 1960, Margaret Alexandra Taylor, the plaintiff, and her husband Kenneth Charles Taylor (Ken) operated a farming business on land near the town of Darkan known as Avonlea. The plaintiff contributed to the success of the farming business on Avonlea by working on the farm and she was also the primary caretaker for Bruce, Wendy and Margaret.
The land upon which the farming business was conducted, collectively known as Avonlea, comprises of:
(1)Lot 3427 on Deposited Plan 141406, Certificate of Title Volume 1119 Folio 165;
(2)Lot 4225 on Deposited Plan 232941, Certificate of Title Volume 1155 Folio 106; and
(3)Lot 3482 on Deposited Plan 145435 and Lot 1541 on Deposited Plan 232941, Certificate of Title Volume 1245 Folio 415.
The first two of these parcels of land are referred to as the 'Home Farm'.
The plaintiff and Ken have three children, Kenneth Bruce Taylor (Bruce), Margaret Ballarin (Margaret) and Wendy Anne Norris (Wendy). I will refer to individuals by their first names in these reasons with no disrespect intended.
From 1980, the farming business on Avonlea was controlled by the KC & MA Taylor Family Trust (Trust). Taylor Holdings Pty Ltd, as the trustee of the Trust, is the first defendant. Taylor Holdings was registered on 18 December 1979. The plaintiff, Ken and Bruce were appointed as directors of Taylor Holdings on 14 April 1980. The Trust was established on 15 April 1980. The plaintiff, Ken and Bruce were the appointors, guardians and primary beneficiaries of the Trust. At around this time, Bruce started living and working full time on the family farm at Avonlea with the plaintiff and Ken.
Until his death in 2017, Ken was the registered proprietor of the Home Farm. The third parcel of land comprising Avonlea was purchased in the name of the Trust in 1983.
In January 1990, Bruce married his wife, Jenine. Bruce says that there was some discord with his parents as they became worried that Jenine would make a claim on Avonlea if he and Jenine ever separated. As a result, Bruce resigned as a director of Taylor Holdings on 8 March 1991 and was removed as a primary beneficiary, appointor and guardian of the Trust on 3 September 1991. However, Bruce continued to work on and derive an income from the family business on Avonlea.
On 8 July 1994, Bruce was added back as a primary beneficiary of the Trust for tax reasons.
The plaintiff alleges that, in 1997, she, Ken and Bruce entered into an agreement (Farming Succession Agreement) pursuant to which she and Bruce agreed to relinquish their control of the farming business to Bruce in exchange for a right to receive regular payments for the rest of their lives. The plaintiff refers to these payments as the 'Deferred Purchase Price'.
The plaintiff says that, pursuant to the Farming Succession Agreement:
(1)on 31 March 1998, Bruce was reinstated as a director of Taylor Holdings;
(2)on 15 April 1998, Bruce was added back as an appointor and guardian of the Trust;
(3)Bruce, through the first defendant, made partial payments of the Deferred Purchase Price to her and Ken from time to time totalling approximately $1,023,244.28.
The plaintiff says that Bruce has not paid her and Ken (during his lifetime) the totality of their entitlement to the Deferred Purchase Price in accordance with the Farming Succession Agreement.
Bruce says that there was never any agreement reached between the parties in relation to succession. Bruce says that the plaintiff and Ken did agree, in March 1998, to reinstate him as a director of Taylor Holdings and as a joint appointor and guardian of the Trust. Bruce says that the plaintiff and Ken continued to draw money from the farming business.
On 16 November 2001, the plaintiff and Ken resigned as directors of Taylor Holdings.
Ken died on 22 December 2017. By his will, he bequeathed the Home Farm to the Trust. The titles to the Home Farm were transferred to the Trust in 2018.
The first defendant has entered into a contract for the sale of Avonlea to a third party for $13,000,000. The settlement date for the sale is 15 February 2025.
On 8 May 2024, the plaintiff lodged caveat P983041 over Avonlea (Caveat) claiming a proprietary interest in the form of an equitable lien.
On 13 June 2024, the first defendant caused the Registrar of Titles to issue a lapsing notice under s 138B of the TLA. The effect of this notice was that the caveat would lapse, unless within 21 days of service of the notice, the plaintiff obtained from the Supreme Court an order extending the operation of the caveat and lodged a copy of the order with the Registrar of Titles.
On 2 July 2024, the plaintiff commenced these proceedings against the first defendant and the Registrar of Titles claiming the following relief:
(a)a declaration that she holds an equitable lien over Avonlea to secure the Deferred Purchase Price;
(b)further or alternatively, a declaration that she holds an equitable estate or interest in Avonlea as the beneficiary of a resulting trust;
(c)further or alternatively, a declaration that she holds an equitable estate or interest in Avonlea as a beneficiary of the Trust.
…
By chamber summons dated 2 July 2024, the plaintiff applied for orders extending the operation of the Caveat pursuant to s 138C(1) of the TLA (application).
The application came before before Tottle J on 3 July 2024 and orders were made programming the application through to a substantive hearing and extending the Caveat until the day after the substantive hearing. I heard the substantive hearing on 9 August 2024 and made orders extending the Caveat until 21 August 2024.

Extension of caveat - legal principles

Section 137 of the TLA provides that any person claiming an interest in land may lodge a caveat. A caveat has the effect of preventing registration of any dealing against the land until the person who lodged the caveat has an opportunity to justify the caveat by pursuing available remedies: Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179 [68].
Section 138C of the TLA provides that the court may an order to extend a caveat:
138C.Supreme Court's powers on application by caveator
(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
(3)if not satisfied that the caveator's claim has or may have substance, shall dismiss the application; and
(4)may make such ancillary orders in relation to the application as it thinks fit.
In determining whether the Caveat should be extended pursuant to s 138C of the TLA, the plaintiff has the onus of satisfying me that:
(1)the plaintiff's claim in respect of Avonlea has or may have substance, that is, there is a serious question to be tried as to the existence of a proprietary interest in Avonlea;[1] and
(2)the balance of convenience favours the maintenance of the Caveat.
[1] Bride v The Registrar of Titles [2015] WASC 11 [14].
The principles relevant to an application to extend the operation of a caveat are not in dispute. They were summarised by Beech J (as his Honour then was) in Bashford v Bashford [2008] WASC 138 [47] to [50]. I apply those principles to this application.
In assessing whether the plaintiff has proved that her claim has or may have substance, the court does not resolve conflicts of evidence on affidavit or undertake a preliminary trial of the action.[2]
[2] Bashford [49].
In considering the balance of convenience, the strength or weakness of the plaintiff's claim is a relevant factor. As was said by Pritchard J (as her Honour then was) in Bateson v Jones (citations omitted):[3]
[t]he existence of a serious question to be tried involves showing a sufficient likelihood of success to justify the preservation of the status quo in all of the circumstances. How strong the likelihood of success needs to be depends upon the nature of the rights asserted and the practical consequences likely to flow from the order sought. Consequently, whether there is a serious question to be tried, and the consideration of those factors going to the balance of convenience, are not wholly independent inquiries.
[3] Bateson v Jones [2013] WASC 8 [19].
It is also important to consider, in assessing the balance of convenience, whether the failure to extend the caveat will have the effect of defeating the proprietary interest which is claimed.[4]
[4] Bride [16].

Does the plaintiff's claim have, or may it have, substance?

The plaintiff asserts that she has a proprietary interest in Avonlea in the form of an equitable lien. It is not in dispute that an equitable lien is a proprietary interest capable of supporting a caveat.[5]
[5] King v Barrett [2023] WASC 234 [21].
An equitable lien is a form of equitable charge over property which arises automatically, by implication of equity, to secure the payment of a current or future indebtedness.[6] The party claiming an equitable lien does not need to be in possession of the property or have a contractual relationship with the owner of the property.[7]
[6] Hewett v Court [1983] HCA 7; (1983) 149 CLR 639, 663.
[7] Hewett, 646.
In Hewett, Deane J identified the following circumstances as being sufficient, but not essential, to give rise to an equitable lien between parties to a contract:[8]
(1)an actual or potential indebtedness by the owner of the property to the other party arising from a payment or promise of payment either of consideration in relation to the acquisition of the property or of an expense incurred in relation to it;
(2)the property is specifically identified and appropriated to the performance of the contract; and
(3)the relationship between the indebtedness and the property means that the owner of the property would be acting unconscientiously or unfairly if they were to dispose of the property (or, if it be appropriate, more than a particular portion thereof) to a stranger without the consent of the other party or without the actual or potential indebtedness being paid.
[8] Hewett, 668.
However, the circumstances which may give rise to an equitable lien are diverse and not closed. As Gibbs CJ said in Hewett:
The rules of equity are not so rigid and inflexible that it is necessary to discover precise authority in favour of the existence of a lien before one can be held to have been created. I do not of course intend to suggest that the courts may proceed on general notions of justice without regard to settled principles (649).
In support of the Caveat, the plaintiff signed a statutory declaration in the following terms:[9]
[9] Wendy Affidavit [55]; annexure 'WAN-36'.
1.I am the enduring attorney for my mother, MARGARET ALEXANDRA TAYLOR ("Margaret"), pursuant to an Enduring Power of Attorney dated 9 October 2017.
2.In or around 1998, a farm succession agreement ("Agreement") was reached between my mother Margaret, my father Kenneth Charles Taylor ("Ken"), who is now deceased, and my brother Kenneth Bruce Taylor ("Bruce").
3.Pursuant to the Agreement:
(a)Margaret and Ken agreed to pass control of the farming enterprise to Bruce by passing control of the KC & MA Taylor Family Trust ("Trust") and the trustee of that Trust, Taylor Holdings Pty Ltd, to Bruce and leaving farmland known as "Avonlea" in Ken's name to the Trust by Ken's Will; and
(b)Bruce agreed that he would pay to Ken and Margaret for their lifetime the sum of $5,000 per month, indexed to CPI, together with a wool bonus, through the Trust.
4.At the time of the Agreement, the Trust operated the farming business and held farmland described as Lot 3427 on Deposited Plan 14106 and being the whole of the land comprised on Certificate of Title Volume 1119 Folio 165.
5.Steps were taken to pass control of the Trust and Taylor Holdings Pty Ltd to Bruce from 1998 and in 1998, the Trust commenced paying the sum of $5,000 per month to Margaret and Ken.
6.In 2018, pursuant to Ken's Will, land known as "Avonlea", was transferred to the Trust, controlled by Bruce.
7.Taylor Holdings Pty Ltd, in its capacity as trustee of the Trust, is the sole registered proprietor of the following property the subject of the Agreement (Property):
(a)the land described as Lot 3427 on Deposited Plan 14106 and being the whole of the land comprised on Certificate of Title Volume 1119 Folio 165;
(b)the land described as Lot 4225 on Deposited Plan 232941 and being the whole of the land comprised on Certificate of Title Volume 1155 Folio 106; and
(c)the land located at 487 Taylor Road, Dardadine being more particularly described as Lot 1541 on Deposited Plan 232941 and being the whole of the land comprised on Certificate of Title Volume 1245 Folio 415.
8.In breach of the Agreement, Bruce has failed to procure that Taylor Holdings Pty Ltd index the payments it has made to Ken and Margaret to CPI, has failed to pay the wool bonus and has not made a payment of $5,000 every month.
9.I have seen an advertisement for the sale of the Property and verily believe Taylor Holdings Pty Ltd has advertised the Property for sale by auction on 10 May 2024.
10.My mother has an equitable interest in the Property pursuant to the Agreement to secure payment of the amounts payable to her by the Trust .
11.I make this statutory declaration as Margaret's enduring attorney in support of Margaret's application for a caveat over the Property.
The foundation of the plaintiff's claim is that there was a succession agreement between the plaintiff and Ken on one hand and Bruce on the other hand pursuant to which Bruce would receive Avonlea in return for making payments to the plaintiff and Ken for the rest of their lives.
The plaintiff relies upon various contemporaneous documents created in 1997 and 1998[10] in support of her claim for an equitable lien over Avonlea.
[10] Wendy Affidavit [21] - [25]; annexure 'WAN-14'.
The first document prepared by Mr Hall, an agricultural consultant, is entitled 'Taylor Family Problems' dated January 1997. The first heading of the document is 'The Security Situation' - which appears to be a reference to the security of the plaintiff and Ken in the future. There is also a reference to Avonlea being valued at 'at least $1.5 million' and the stamp duty issues associated with transfer of Avonlea.
The second document is a statement of assets and liabilities for Taylor Holdings as at 31 March 1997 - the document is dated April 1997. It records the total assets of Taylor Holdings as $4,487,414.
The third document prepared by Mr Hall is entitled 'Taylor Holdings Pty Ltd Business Plan' dated May 1997. This document sets out the history, success, assets and management of Avonlea. The document appears to have been prepared as a basis for discussions of what Mr Hall describes as 'the intergenerational transfer of not only assets but of power, direction and decision making'.[11] Mr Hall states that the corporate plan includes ensuring a 'smooth transition between generations of assets and power' and in the long term 'retirement comfort' for the plaintiff and Ken.[12]
[11] Wendy Affidavit; annexure 'WAN-14', page 120.
[12] Wendy Affidavit; annexure 'WAN-14', pages 139 - 140.
The fourth document prepared by Mr Hall is entitled 'Proposition for sort out of [f]amily assets' dated September 1997. This document provides particulars of a proposal for the transfer of Avonlea to Bruce. This proposal includes Bruce being appointed as joint appointor and guardian of the Trust, that Bruce and Jenine be transferred the shares of, and become the directors and secretaries of, Taylor Holdings and that there would be security for the plaintiff and Ken. It concludes by stating '[t]he above statement is for everyone to understand and for any further negotiation prior to instructing solicitors to set the whole thing in motion.'[13]
[13] Wendy Affidavit; annexure 'WAN-14', page 171.
The fifth document prepared by Mr Hall is entitled 'Taylor Family Package' dated October 1997. This document outlines details of a proposed suite of things to occur as part of the transfer of Avonlea. It includes a reference to payments to the plaintiff and Ken on a monthly basis and to an adjustment for 'indexation and wool bonus'.[14] The document concludes with '[m]echanics are to be sorted out especially regarding Avonlea. … It has been agreed that Bruce would be brought back as joint appointor guardian and for Taylor Holdings, the trustee company, shares and offices to be transferred to Bruce and Jenine, his wife'.[15]
[14] Wendy Affidavit; annexure 'WAN-14', page 175.
[15] Wendy Affidavit; annexure 'WAN-14', page 177.

The sixth document prepared by Mr Hall is entitled 'Taylor Family Background notes for discussion with solicitor' dated October 1997. This document notes the stamp duty issue with transfer of Avonlea and discusses security over Avonlea for the plaintiff and Ken.[16]
[16] Wendy Affidavit; annexure 'WAN-14', page 178.
The final document prepared by Mr Hall is entitled 'Taylor Family Plan of Campaign' dated March 1998 and refers to the need for an 'urgent choice' by the end of April in relation to Bruce being appointed as appointor and guardian of the Trust and passing directorship of Taylor Holdings to Bruce.[17]
[17] Wendy Affidavit; annexure 'WAN-14', page 184 - 185.
Counsel for the plaintiff did not suggest that these documents are evidence of a concluded agreement on their face. The plaintiff does submit however, that these documents are evidence of what the parties were looking to achieve as they navigated the difficult issue of intergenerational wealth transfer, the tax implications of that transfer and the provision of security to the plaintiff and Ken for the rest of their lives.
The plaintiff says that what actually occurred, being that Bruce was appointed as a director of Taylor Holdings in March 1998 and as a beneficiary of the Trust in April 1998, that the plaintiff and Ken resigned as directors of Taylor Holdings in November 2001 and that the plaintiff and Ken were paid on a monthly basis, are facts which are consistent with the parties entering into the Farming Succession Agreement.
The plaintiff submits that there is sufficient evidence for the court to be satisfied that the plaintiff's claim that the parties entered into the Farming Succession Agreement has or may have substance.
The first defendant submits that the parties did not enter into the Farming Succession Agreement. Bruce deposes that he did not sign a document indicating his agreement to the Farming Succession Agreement or any agreement in relation to succession of Avonlea.[18]
[18] Bruce Affidavit [30].
Bruce deposes that he wanted to achieve the following things from a succession:[19]
(1)Ken transferring the Home Farm to Bruce;
(2)Bruce being reinstated as appointor and guardian of the Trust and director of Taylor Holdings;
(3)the plaintiff and Ken resigning as appointors and guardians of the Trust and directors of Taylor Holdings; and
(4)the plaintiff and Ken drawing an amount of money from the business that would provide them with a comfortable retirement and would be affordable for the business.
[19] Bruce Affidavit [24].
Bruce deposes that the financial records of the first defendant indicate that, in about 2005, the plaintiff and Ken started receiving a regular monthly payment of $4,000 per month. Bruce deposed that he believed that he did discuss these payments with his parents, and they settled on that amount.[20] That amount increased to $5,000 per month in 2013.[21] Bruce says that he sometimes ran behind in the monthly payments and that the plaintiff would sometimes remind him to pay the monthly sum.[22] Bruce says that when Ken died in 2017 he reduced the payments to $4,500 per month but did not discuss it with the plaintiff. In 2020, Bruce says he accepted that this was not right and agreed to pay the plaintiff back $500 per month since Ken had died.[23] The first defendant is currently paying the plaintiff $5,400 per month.[24] Bruce says that he intends to pay the plaintiff her monthly drawing for the rest of her life.[25]
[20] Bruce Affidavit [39].
[21] Bruce Affidavit [41].
[22] Bruce Affidavit [46].
[23] Bruce Affidavit [43].
[24] Bruce Affidavit [44].
[25] Bruce Affidavit [71].
Mr Hall deposes that, '[t]o the best of his knowledge no agreement, written or otherwise, was ever reached between these parties about an overall business succession.' He does however, depose:[26]
I recall that I was told by Ken, [the plaintiff] and Bruce that they had agreed that Ken and [the plaintiff] should continue to draw an income from the business as they moved to semi-retirement. At some stage I recall that they agreed in principle on a specific sum of money that Ken and [the plaintiff] should draw. I cannot recall precisely what that amount of money was and when that agreement in principle was reached. (emphasis added)
[26] Hall Affidavit [8].
Mr Abbott, an accountant at McWhirter & Leong and the accountant engaged by the plaintiff, Ken and Bruce since 2000, deposed that he reviewed McWhirter & Leong's records and that there is no record of an agreement having been reached between the plaintiff, Ken and Bruce as to a succession of the farming business.[27]
[27] Abbott Affidavit [6].
Counsel for the first defendant submits that there is no evidence to support the existence of a concluded Farming Succession Agreement. Instead, counsel submits there is compelling evidence that no such agreement was ever reached. The first defendant submits that Bruce was reappointed as appointor of the Trust and as director of Taylor Holdings because his parent's concerns about Jenine had resolved by that time.
Counsel for the first defendant submits that the plaintiff remains an appointor of the Trust - a position which is inconsistent with a concluded Faming Succession Agreement as control of the Trust has not passed exclusively to Bruce.
Counsel for the first defendant submits that there is no link between the monthly payments to the plaintiff and Avonlea. That is for two reasons. Firstly, the first defendant says that there is a temporal disconnect between when the payments started in 2005 to the plaintiff and Ken and when the Home Farm was transferred to the Trust in 2018. Secondly, the first defendant says that Avonlea has never been transferred to Bruce. Rather, Avonlea is owned by the Trust and the plaintiff is a joint appointor, together with Bruce, of the Trust.
In the absence of such a link between the payments and Avonlea, the first defendant says that any arrangement or agreement between the parties is not capable of giving rise to an equitable lien and therefore, cannot sustain the Caveat.
While the plaintiff does assert that there is a concluded Farming Succession Agreement, counsel for the plaintiff referred to the principle that an equitable lien is not confined to contractual or quasi-contractual relationships and that an equitable lien may arise as part of a scheme of equitable adjustment of mutual rights and obligations.
In my view, there is sufficient evidence upon which I can be satisfied that there is a serious question to be tried in relation to the existence of an agreement between the plaintiff, Ken and Bruce, to which the first defendant as owner of Avonlea is a party, for the transfer of Avonlea to the first defendant in return for payments to be made on a periodic basis to the plaintiff and Ken over the balance of their lifetimes. The following conduct by the parties is supportive, although not conclusive, of such an agreement having been reached:
(1)Bruce was reappointed as appointor and guardian and beneficiary of the Trust in 1998;
(2)Bruce was appointed as a director of Taylor Holdings in March 1998 and the plaintiff and Ken resigned as directors in November 2001;
(3)At some time (2001 says the plaintiff, 2005 says Bruce), the plaintiff and Ken started receiving monthly payments and the plaintiff continues to receive monthly payments; and
(4)The Home Farm was transferred to the Trust in 2018, after Ken's death, by his will.
Further, the evidence of Mr Hall is consistent with the plaintiff's assertion that there was an agreement of some sort between the parties in relation to succession - even though it may not have been a written agreement.
In my view, the evidence establishes that there is substance to the plaintiff's claim that:
(1)The first defendant is indebted to the plaintiff arising from a promise of monthly payments to the plaintiff for the rest of her life as consideration for the transfer of Avonlea to the first defendant;
(2)Avonlea is specifically identified and appropriated to the performance of that promise; and
(3)The relationship between the indebtedness and Avonlea means that the first defendant would be acting unconscientiously or unfairly if it were to sell Avonlea to a stranger without the consent of the plaintiff or without the indebtedness being paid.
Therefore, I find that the plaintiff's claim that she has an equitable lien over Avonlea has or may have substance. As to the strength or weakness of that claim there are factors that impact upon each. The conduct consistent with an agreement to which I have referred, together with the contemporaneous documents which go to the discussions and considerations of the parties in relation to succession, give strength to the plaintiff's claim. On the other hand, the passage of time, the age of the plaintiff, the passing of Ken and the fact that the plaintiff has not yet been able to locate a written succession agreement make the plaintiff's claim weaker. I am presently not able to characterise the plaintiff's claim as either strong or weak.
I now turn to consider the balance of convenience.

The balance of convenience

The size or extent of the caveator's claim is relevant to the balance of convenience.[28] The plaintiff's claim is for approximately $1.25 million relating to a shortfall in past payments, together with an amount for future indexed monthly payments for the plaintiff's lifetime. The contract for sale of the land is $13 million. Although the plaintiff's claim is not yet quantified, it may be less than 20% of the value of Avonlea.
[28] Kingstone Constructions Pty Ltd v Crispel Pty Ltd (1991) 5 BPR 11987, 11991 referred to in Bashford [101].
The apparent strength or weakness of the plaintiff's claim is also relevant to the balance of convenience.[29] As I have outlined, in my view the plaintiff's case is neither strong nor weak.
[29] Castlemaine Tooheys Ltd v State of South Australia (1986) 161 CLR 148, 155.
I must also have regard to the consequences of extending the Caveat. The first defendant says if the Caveat is extended the sale of Avonlea may not proceed on the settlement date which would expose the first defendant to a claim for penalty interest of approximately $3,000 per day. The first defendant also says that, given the plaintiff is still a guardian and appointor of the Trust, no funds can be distributed from the Trust without her approval.
On the other hand, the plaintiff points to the fact that Bruce intends to buy properties for himself and Jenine and each of their four children with the proceeds of the sale of Avonlea.[30] The plaintiff says Bruce's stated intention is not consistent with his assertion that the plaintiff must approve any distribution from the Trust of the sale proceeds of Avonlea.
[30] Bruce Affidavit [66].
These factors must be considered against the backdrop of the fact that interlocutory removal of a caveat will be unusual where an arguable case as to the existence of a caveatable interest has been demonstrated. That is because the purpose of a caveat is the protection of a proprietary interest and the effect of removal of a caveat may be the destruction of that proprietary interest.[31]
[31] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50.
In my opinion, the balance of convenience is in favour of extending the caveat for the following reasons:
(1)the settlement date for the sale of Avonlea (5 February 2025) is sufficiently far in the future such that an extension of the Caveat will not immediately prejudice the first defendant. An extension of the Caveat will preserve the status quo and allow the parties to consider their positions;
(2)the terms of the Trust deed in relation to approval of distributions was not a matter before the court. Therefore, I am not in a position to determine whether the plaintiff's position would be secured by a requirement for her to approve distributions from the Trust;
(3)even if the quantum of the alleged indebtedness is less than 20% of the value of Avonlea, at this stage of the proceedings that is yet to be determined and, in any event, it is still a significant sum; and
(4)finally, given the age of the plaintiff and her asserted dependence on future payments from the first defendant for her security, the consequences of destruction of any proprietary interest that she has in Avonlea is a factor that weighs heavily in favour of extending the Caveat.

Conclusions and final orders

For the reasons given, I propose to make the following orders:
(1)The operation of Caveat P983041 registered against the land described as:
(a)Lot 3427 on Deposited Plan 141406 and comprised in Certificate of Title Volume 1119 Folio 165;
(b)Lot 4225 on Deposited Plan 232941 and comprised in Certificate of Title Volume 1155 Folio 106; and
(c)Lot 3482 on Deposited Plan 145435 and Lot 1541 on Deposited Plan 232941, both comprised in Certificate of Title Volume 1245 Folio 415 and known as 487 Taylor Road, Dardadine,
be extended until further order of the court.
(2)The first defendant has liberty to apply on 3 days' notice to the plaintiff to vary order 1.
(3)The costs of the application be in the cause.
Counsel for the plaintiff sought the usual mediation orders. Subject to hearing from the first defendant, I consider that it is appropriate to make those orders.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RP
Associate to the Honourable Justice Whitby
20 AUGUST 2024