Martin v Veall
[2013] VSC 78
•28 February 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT
No. 6736 of 2012
| GARY ALBERT MARTIN and JOHN ABBERLEY WOODS | Plaintiffs |
| v | |
| ARTHUR KEITH VEALL and THE REGISTRAR OF TITLES | Defendants |
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JUDGE: | McMillan J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 14 February 2013 | |
DATE OF JUDGMENT: | 28 February 2013 | |
CASE MAY BE CITED AS: | Martin v Veall | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 78 | |
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REAL PROPERTY – Caveat – Application to remove caveat – Transfer of Land Act 1958 s 90(3) – Serious question to be tried – Estate or interest in land – Balance of convenience
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Cook | James Higgins & Co |
| For the Defendant | Mr A Sandbach | Katherine Moorhouse Perks |
HER HONOUR:
Introduction
The plaintiffs are the executors of the estate of Beryl Kathleen Veall, deceased (‘the deceased’). The deceased died on 15 March 2012, leaving a will dated 8 September 2010. Probate of the will of the deceased was granted to her executors on 16 November 2012.
The principal asset of the deceased’s estate is a property situate at and known as Apartment 1, 37 Wallace Avenue, Toorak, being the property described in Certificate of Title Volume 11063 Folio 455 (‘the property’).
On 15 September 2010, the deceased’s late husband, Arthur Keith Veall (‘Mr Veall’) lodged a caveat on the title to the property claiming an ‘[e]quitable Estate in Fee Simple’ on the grounds of ‘[a}n equitable interest as beneficiary under a constructive and/or resulting trust arising in favour of the caveator’.
By originating motion filed 4 December 2012, the executors seek orders that the caveat lodged by Mr Veall be removed pursuant to s 90(3) of the Transfer of Land Act 1958 (‘the Act’).
Factual Background
Mr Veall died on 13 October 2011. On 6 March 2012, the deceased and her daughter, Kim Louise Veall, each lodged a caveat against the making of a grant of representation of the estate of Mr Veall. The caveat lodged by the deceased has lapsed and orders have been made by the Court in respect of the caveat lodged by Kim Veall.
On 13 March 2012, Arthur Rowland Veall, a son of Mr Veall, and his wife, Alexis Jane Roche Veall, made an application for a grant of probate of the will of Mr Veall dated 10 December 2011 but executed on 10 December 2010. Probate is yet to be granted.
The trials of the caveat proceeding lodged by Kim Veall and the application for a grant of probate by Arthur Rowland Veall and Alexis Jane Roche Veall have been set down for hearing in July 2013.
The executors wish to sell the property, distribute the net proceeds of sale and finalise the estate. For this to happen, they require the caveat to be removed.
In support of their application, the executors state in their affidavit sworn 10 December 2012 that they have not ‘seen or come into the possession of any document[,] any other evidence of any constructive trust and/or resulting trust in favour of [Mr Veall] in relation to the Property’ and for this reason they ‘believe that such a trust does not exist and that [Mr Veall] or his estate does not have a caveatable interest in the Property’.[1]
[1]Affidavit of Executors dated 10 December 2012, [8].
The executors also refer to the inventory of assets and liabilities exhibited to the application for a grant of probate of Mr Veall’s will, stating that it does not include any reference to the interest claimed in the property by Mr Veall.[2]
[2]Exhibit H to the affidavit of Executors dated 10 December 2012.
The executors also refer to the provision in the deceased’s will that leaves a life interest in the property to Mr Veall, and submitted that, by reason of this provision, the deceased believed the property to be hers absolutely and that no part of the property was held on trust for Mr Veall.
The Registrar of Titles has notified the executors that he has no objection to their seeking removal of the caveat.
Arthur Rowland Veall, as one of the propounders seeking a grant of probate of Mr Veall’s will, objects to the removal of the caveat. He swore a document headed ‘Affidavit’ on 13 February 2013. With attachments, the document comprises 668 pages. In this form, the document is not admissible for a number of reasons: it does not conform to the requirements of r 43.06 of the Supreme Court (General Civil Procedure) Rules 2005, it contains mostly irrelevant and conclusory and hearsay material. No source of the hearsay has been provided and the basis for the belief contained in the document has not been set out in the document.
The executors did respond to paragraph 88 of the document, otherwise, they did not make any admissions in respect of the contents of the matters contained in the document. Paragraph 88 in the document referred to another paragraph in an affidavit sworn by Mr Veall in December 2010 and filed in the Family Court of Australia. In that paragraph, Mr Veall stated that, before the purchase of the property, he requested that the deceased register it in their joint names. He also stated that he was at pains to point out to her that the new house (meaning the property) must be registered in joint names and this was not done. In response to these statements, one of the executors, Mr Woods, stated that he was with the deceased in early 2007 at the property when it was being built and at no time during that visit did Mr Veall say that he wanted the property to be registered in the joint names of himself and the deceased. He said that the executors had a number of conversations with Mr Veall in relation to his plans and that he was happy that the deceased was to have her own home.
Otherwise, the executors relied on general statements contained in the document signed by Arthur Rowland Veall referring to Mr Veall‘s intense wish in the latter part of his lifetime to divest himself of all of his property in his name.
During the course of submissions, counsel for Arthur Rowland Veall conceded that the deceased did not himself pay for the purchase of the property, as his or the family wealth was invested in corporate and trust structures rather than in Mr Veall’s name.
In their affidavit sworn 13 February 2013, the executors said that the deceased paid the purchase price for the property. No document was produced by the executors to support this statement.
Issue for Determination
The issue for determination is whether the Court should exercise its discretion under s 90(3) of the Transfer of Land Act 1958 (‘the Act’) to remove the caveat.
Section 90(3) of the Act provides:
Any person who is adversely affected by any such caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit.
Applicable Principles
The relevant principles with respect to an application under s 90(3) of the Act were summarised by Warren CJ in Piroshenko v Grojsman:
Caveats under the Torrens system are treated by the courts as analogous to applications for interlocutory injunctive relief. In so far as their registration is an administrative act, it is when application is made for their removal that the onus falls on the caveator to satisfy the two-stage test used by the court when deciding whether to exercise its discretion to grant interlocutory injunctive relief. … This two-stage approach requires the caveator to establish that there is a serious question to be tried that they have the estate or interest which they claim in the land in question, and having done so, to establish that the balance of convenience favours the maintenance of the caveat on the Register of Titles until trial.[3]
[3] (2010) 27 VR 489, 491 (citations omitted).
Serious Question to Be Tried
In order to establish that there is a serious question to be tried, the caveator must, in respect of the interest in the property claimed in the caveat, establish ‘a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat’.[4]
[4] Ibid 494.
For the purposes of this proceeding, the onus falls on Arthur Rowland Veall, as one of the persons seeking to propound Mr Veall’s will, to establish that Mr Veall in his lifetime had, or his estate after his death has, an interest in the property by reason of either a constructive trust or a resulting trust. As stated by Warren CJ:
Caveats are not ‘bargaining chips’. It is not sufficient for the caveator to establish a prima facie case that they have contractual, equitable or statutory rights against the caveatee; their interest or rights must attach to the property with respect to which the caveat has been lodged.[5]
[5] Ibid 495.
A caveatable interest may arise through the imposition of a constructive trust by reason of contributions of money to the purchase price of a property.[6] The principles for imposing a constructive trust were set out in Muschinski v Dodds[7] by Deane J and adopted by the majority in Baumgartner v Baumgartner.[8]
[6]Goldstraw v Goldstraw [2002] VSC 491 (14 November 2002) [26]–[27] (Dodds Streeton J).
[7](1985) 160 CLR 583.
[8](1987) 164 CLR 137.
A resulting trust may arise in circumstances where two people decide to purchase a property and only one party supplies the purchase money and the property is registered in the name of the other person. In the absence of a relationship giving rise to a presumption of advancement, the property is presumed to be held on resulting trust in favour of the unregistered party in the proportion of his or her contribution.[9]
[9] J D Heydon and M J Leeming (eds), Jacobs’ Law of Trusts in Australia (Butterworths, 7th ed, 2006) [1215]; Calverley v Green (1984) 155 CLR 242. See also Piroshenko v Grojsman (2010) 27 VR 489, 496; Jeffrey-Potts v Garel [2012] VSC 237 (22 June 2012).
In this case, the statement that Mr Veall made in his affidavit filed in the Family Court does not establish a constructive or resulting trust. If the statement as to his intention of joint ownership of the property were true, an intention cannot support the claimed interest in the property. In any event, his stated intention was not acted on by him at all as the property remained registered in the name of the deceased after the purchase was completed.
If he had acted on that professed intention and the property was registered in the joint names of the deceased and Mr Veall, then that circumstance also does not support the claimed interest. On the contrary, it supports that he wanted the deceased to have the property, as the right of survivorship in jointly owned property results in the surviving registered proprietor of the property becoming the owner. In the circumstances of this case, if the intention had been acted upon by Mr Veall, then the deceased would have come to own the property by survivorship, as Mr Veall predeceased the deceased.
Further, there is no evidence that Mr Veall paid for the property. There is actually no conclusive evidence as to how the purchase price for the property was paid. At best, it may have been a corporate entity, but again, that does not support the claimed interest in the property by the caveator.
In my view, there is no evidence to substantiate a constructive or a resulting trust. The likelihood of success of the interest claimed is not sufficient to justify the caveat remaining on the property.
Balance of Convenience
When considering the balance of convenience, ‘the court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been “wrong”, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial‘.[10]
[10]Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, 73.
As I have concluded that there is there is no interest sufficient to justify the caveat remaining on the property, it is unnecessary to consider the balance of convenience.
If it were necessary to do so, I consider that the balance of convenience favours the executors. First, without the removal of the caveat, the executors are unable to finalise the estate of the deceased, which they wish to do. Secondly, the caveat constitutes an absolute fetter on the executor’s ability to sell the property and maintaining the caveat is a comprehensive restriction on the executor’s duties to bring in the estate property. Thirdly, maintenance of the caveat prejudices good faith purchasers of the property because a prospective purchaser is on notice that there is a dispute on foot. Fourthly, any claim issued by the caveator would be compensable in damages, if it were brought. Finally, given that the executors obtained probate on 16 November 2012, the removal of the caveat would not prejudice any proceeding that might be brought against the deceased’s estate by the propounders of Mr Veall’s will, since there is still some time before the estate can be distributed.
Conclusion
Accordingly, I order that the Registrar of Titles remove Caveat AH497041C, pursuant to s 90(3) of the Transfer of Land Act 1958, from the land in Certificate of Title Volume 11063 Folio 455.
I will hear the parties as to the form of the final order and costs.
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