McGiveron v Stanton-bovis

[2007] WASC 240

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   McGIVERON -v- STANTON­BOVIS [2007] WASC 240

CORAM:   ACTING MASTER CHAPMAN

HEARD:   28 AUGUST 2007

DELIVERED          :   26 OCTOBER 2007

FILE NO/S:   CIV 1228 of 2007

BETWEEN:   JAMES LAWRENCE McGIVERON

CAROL SUSAN McGIVERON
Plaintiffs

AND

NIGEL JOHN STANTON­BOVIS
NATASHA JANE STANTON­BOVIS
First Defendants

REGISTRAR OF TITLES
Second Defendant

Catchwords:

Conveyancing - Land titles under Torrens system - Application to maintain or extend caveats

Legislation:

Transfer of Land Act 1893 (WA), s 48, s 48A, s 138

Result:

Leave granted to plaintiffs to file a further caveat

Category:    B

Representation:

Counsel:

Plaintiffs:     Ms S T Burke

First Defendants            :     Mr B W Ashdown

Second Defendant         :     No appearance

Solicitors:

Plaintiffs:     Fiocco's Lawyers

First Defendants            :     Chris Baker & Associates

Second Defendant         :     No appearance

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

Mazzuchelli v Mazzuchelli [2006] WASC 124

Milne Feeds Pty Ltd v Bride (1993) 10 WAR 542

Professional Services of Australia Pty Ltd v Mila Properties Pty Ltd [2004] WASC 30

ACTING MASTER CHAPMAN: 

The application

1. The plaintiffs, by originating summons filed on 8 March 2007, seek an order that the operation of caveat registration number J759170 be extended and not be removed until further order of the court.  At the special appointment leave was given to the parties to file and serve further written submissions which were filed on 13 and 17 September respectively.

Background

1. As a matter of history, a public access way existed between the property owned by the plaintiffs being lot 292 and that of the first defendants being lot 291.  Some time prior to the first defendants purchasing lot 291, the then owners of lots 291 and 292 were given an opportunity to purchase part of this access way.  It is alleged that by agreement with the previous registered proprietors of lot 291 the plaintiffs purchased the whole of the access way.

2. Regrettably, the plaintiffs did not finalise that transaction in that there was no registration of a transfer reflecting the purchase by the plaintiffs of the portion of the public access way from the previous owners nor at that time did the plaintiffs lodge a caveat protecting their interest.

Issues

1. The plaintiffs contend they have an arguable case that they have a caveatable interest in the land on two grounds:  (1) the notice the first defendants had in respect of the proposed subdivision prior to the purchase of lot 291; (2) the conduct of the first defendants shortly following their purchase of lot 291 which would stop the first defendants from asserting what they consider to be their legal entitlement to the disputed land.  It is said that the estoppel arises both in the form of an equitable estoppel and in the form of estoppel by acquiescence, or a proprietary estoppel in respect of an easement that can be seen to have been created over the disputed land in favour of the plaintiffs.

2. The plaintiffs concede that no transfer was registered transferring the whole of the access way to them.  However, it is contended that a search of the title prior to the first defendants purchasing lot 291 would have revealed a handwritten note DP 25655 appearing on its face.  It is further said the existence of that note would give rise to an enquiry as to the nature of the deposited plan and the survey that was pending in respect of that notation.

3. Counsel for the first defendants acknowledges there is a note on the title regarding deposited plan 25655 and correctly points out that it is not noted as an encumbrance on the title.  He submitted that a deposited plan having been lodged requires a transfer signed by the two owners and an application for the issue of new titles to be lodged.  No such documents were lodged.  He concedes the notation may give some notice, but what is relevant to the Transfer of Land Act 1893 (WA) is what is noted as an encumbrance.

4. It was argued that it is expressed in the Transfer of Land Act that a person is the registered proprietor of that piece of land contained in the certificate of title and the certificate of title is conclusive.  The first defendants' title refers to lot 291 and it includes the disputed land.  The plaintiffs' certificate of title is likewise conclusive of what the plaintiffs own and it does not include the disputed land.

5. It is said the first defendants purchased lot 291 in its entirety, obtained a transfer of lot 291 in its entirety and became the registered proprietors of lot 291 in its entirety.  It is argued that the issue here is a competition between a registered legal interest and an unregistered equitable interest and the legal interest the first defendants obtained extinguished all previous equitable rights.

Prior notice

1. In his affidavit sworn 17 July 2007, Mr McGiveron deposes to the fact that an auction was held by the Bradstreets, the then owners of lot 291, prior to the first defendants purchasing that lot and leaflets or pamphlets were handed out denoting the boundaries of the properties which reflected the purchase by the plaintiffs of the disputed land.  Even if that were true, it does not assist the plaintiffs' case as there is no evidence that the first defendants had access to those documents prior to their purchase.

2. In Mazzuchelli v Mazzuchelli [2006] WASC 124, Hasluck J said:

   In essence, a person who acquires land under the Torrens system, bona fide and for consideration, will be subject only to those interests he or she can discover from a search of the register.  The principal exception to this concept of indefeasibility is fraud.  In addition, the caveat system is a means of warning persons proposing to deal with the subject land of the presence of an unregistered equitable interest and of enabling the equitable claimant to protect his claim by bringing an action if his claim be disputed.  Failure to lodge a caveat in circumstances which induces a claimant later in time to act to his prejudice may result in the claimant first in time losing priority:  Butler v Fairclough (1917) 23 CLR 78; J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546. [38]

3. With respect, I agree.  In this matter should the first defendants have been alerted to the plaintiff's interest on a search of the register?

4. The first defendants became the registered proprietors of lot 291 on 7 October 2003.  Annexure 'JM11' to the affidavit of the first‑named plaintiff sworn on 7 March 2007 is a copy of a certificate of title search dated 1 August 2003.  Towards the top right‑hand corner of that document, there is a notation in handwriting 'DP25655'.  Under the heading 'Second Schedule' is a typed notation 'NIL'.  There is no suggestion the first defendants were other than bona fide purchasers for consideration.  The question remains whether the handwritten notation is sufficient to have put the first defendants on notice which would now warrant the extension of the caveat.

5. Pursuant to s 48 of the Transfer of Land Act, the Register is to include all registered certificates of title. Section 48A(1a)(a) reads:

   The following may, with the approval of the Registrar, be endorsed on, annexed to, referred to in or otherwise linked or connected to, a certificate of title, but do not form part of the certificate of title-

   (a)information about the land that is the subject of the certificate, not being information about the title of the land or particulars that are required to be endorsed on the certificate under subsection (2);

6. I am not told whether the endorsement such as the handwritten note has been approved by the registrar. Although it may not, by virtue of s 48A(1a)(a), form part of the certificate of title, that note is endorsed upon the certificate of title. I consider it is arguable that the handwritten endorsement on the certificate of title may constitute notice of an interest which could be discovered by a search of the Register and thus it is arguable that the acquisition of lot 291 by the first defendants is subject to that interest: Mazzuchelli v Mazzuchelli, [38].

Conduct of the first defendants since the purchase of lot 291

1. Following the purchase of lot 291 by the first defendants, the plaintiffs constructed a continuation of a retaining wall along the rear building line which included the disputed property.  A gate was installed and brick paving was carried out.  Both prior to and subsequent to the purchase of lot 291, the plaintiffs had used the disputed land.

2. Whilst I accept that the first defendants made enquiries with the City of Joondalup to ascertain whether or not the driveway, gates and retaining wall had been approved, I have no evidence as to the outcome of that enquiry.  Further, Mrs Stanton‑Bovis deposes to the fact that she contacted the settlement agent twice regarding ownership of the disputed land and on both occasions she was told it was owned by the first defendants.  There is no suggestion in her affidavit that the first defendants took up this issue with the plaintiffs.

3. The plaintiffs' argued that their actions are consistent with their belief that they were the legal owners of the disputed land.

4. In Milne Feeds Pty Ltd v Bride (1993) 10 WAR 542, Malcolm CJ said:

   Apart from actual fraud ss 68 and 134 may not protect a registered proprietor who has obtained his title by means of equitable fraud.  After referring to Gibbs v Messer [1891] AC 248 at 254, Frazer v Walker [1967] 1 AC 569 at 585; and Breskvar v Wall (1971) 126 CLR 376 at 384‑385, per Barwick CJ, Wilson and Toohey J said (at 638):

   'The point being made by the Privy Council is that the indefeasibility provisions of the Act may not be circumvented.  But, equally, they do not protect a registered proprietor from the consequences of his own actions where those actions give rise to a personal equity in another.  Such an equity may arise from conduct of the registered proprietor after registration:  Barry v Heider (1914) 19 CLR 197 and we agree with Mahoney JA in Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 563 that it may arise from the conduct of the registered proprietor before registration.' (552 ‑ 553)

5. In the case before me there was, prior to the purchase of lot 291, an endorsement on the certificate of title referring to the deposited plan which one could argue should have caused the first defendants to have made further enquiries.  Shortly after the purchase of lot 291, the question of ownership of the disputed land was raised.  On at least two occasions the first defendants made enquiries which confirmed to them that the ownership vested in them.  At no time did the first defendants challenge the plaintiffs on the question of ownership notwithstanding they were aware of the works being carried out by the plaintiffs on and/or near the disputed land.

6. Despite the indefeasibility provisions of the Act, I consider that if the plaintiffs can establish the facts which they assert, the first defendants may not be protected by those provisions.  I accept that the law in this area is not entirely settled and that some of the relevant facts are in dispute.  In those circumstances, I do not consider this matter should be determined at this interlocutory stage.  Having said that, should the caveat be extended?

The caveat

1. A copy of the caveat and supporting statutory declaration is to be found at pages 55 ‑ 60 of the affidavit of the first‑named plaintiff being part of annexure 'JM10'.  The caveat claims an estate or interest on the following basis:

   An agreement contained in Stamped Offer and Acceptance Contract dated 23 September 2000 between the previous registered proprietors of Lot 291, HARLEY WILLIAM BRADSTREET and EILEEN MAY BRADSTREET, and the Caveator.

2. I agree with the submissions by counsel for the first defendants that a claim on that basis cannot be maintained.  I note that the statutory declaration filed would support a claim in wider terms.  As this issue was not raised in the written submissions, I gave leave to the parties to file written submissions on that point and will now consider them.

3. In Professional Services of Australia Pty Ltd v Mila Properties Pty Ltd [2004] WASC 30, Le Miere J said:

   The power conferred by s 138C(1)(a)(iii) is conditioned by the requirement that the Court be satisfied that the caveator's claim has or may have substance. In my view 'the caveator's claim' refers to the estate or interest claimed in the caveat. If the caveator's claim in the caveat has no substance then the Court does not have power under s 138C(1)(a)(iii) to amend the caveat to claim a different estate. The plaintiff's claim in the caveat has no substance. The interest that justified the lodging of the caveat no longer exists.

   In my opinion, the Court does not have power under s 138C to amend the caveat in the manner sought by the plaintiff.  [17] ‑ [18]

4. With respect, I agree with his Honour.  His Honour went on to say:

   Section 138D of the Act provides that if a s 138A caveat, which the caveat in question is, has lapsed under s 138B(2), which the caveat in question will if the Court does not make an order extending its operation, then the caveator cannot lodge with the Registrar any further s 138A caveat in respect of the same land unless, amongst other things, the Court has made an order giving leave for the lodgement of a further caveat.

   The first defendant concedes that the Court has power under s 138D(1)(e) to make an order giving the plaintiff leave to lodge a further caveat in respect of the Mindarie land.  However, the first defendant says that the Court should not exercise its discretion to grant leave.

   In my opinion the Court should refuse leave to lodge a new caveat if upon a subsequent application being made to remove the caveat the Court would remove the caveat, or if upon a subsequent application being made by the plaintiff to extend the operation of the new caveat the Court would dismiss that application.  [20] ‑ [22]

5. And:

   In recent cases involving applications to extend a caveat, the Court has held that the caveator must show a serious question to be tried or an arguable case for maintaining the caveat.  Usually this means that the caveat must show a serious question to be tried, or an arguable case that as at the date of the application for extension the caveator has a caveatable interest.  Section 138C(2) requires the Court to consider whether it is satisfied that the caveator's claim has or may have substance.  By the second alternative, it seems to me that the Court considers whether the evidence satisfies it that there is an arguable case that at the final hearing of the relevant proceedings the caveator may succeed in convincing the Court that the claim made in the caveat is established.  Where the caveator's claim is based on matters of fact, the Court will apply the same rules as it does in interlocutory injunction proceedings when considering whether there is an arguable case.  In cases where the claim depends on questions of law, the Court will normally decide the question of law, but it may consider it appropriate not to do so where the question of law may depend on the factual matrix and facts have not yet been established, or where there is insufficient time to be able to properly consider the point of law which arises.  [26]

6. Again I find myself in agreement with his Honour and consider I do have power pursuant to s 138D(1)(e) to make an order granting the plaintiffs leave to lodge a further caveat in respect of the disputed land.  I have formed the view that there are serious matters to be tried and consider the plaintiffs' claims are based on questions of law which are intertwined by disputed facts which should await a final hearing.

Conclusion

1. I do not consider the claim made in the caveat could be maintained and thus I would not make an order extending this caveat.  However, I consider the caveator's claim is such that if a caveat was lodged in proper terms, there would be serious matters to be tried and thus I would grant the plaintiffs leave under s 138D(1)(e) to file a further caveat regarding the disputed land.