Western Australian Real Estate Custodian Pty Ltd (Receiver and Manager Appointed) v Chesson

Western Australian Real Estate Custodian Pty Ltd (Receiver and Manager Appointed) v Chesson concerned the removal of caveats lodged over certain properties held by the company, following the appointment of a receiver and manager to the company. The court was required to determine whether the caveats should be removed to allow the sale of the properties to proceed. The legal issues centered on the criteria for removing a caveat under the relevant property legislation and the balance of convenience test. Specifically, the court had to consider whether there was a serious question to be tried regarding the caveators' interests and whether the balance of convenience favoured retaining the caveats.

The court found that the onus was on the caveators to establish both elements of the test for removing a caveat. The first element required the caveators to show that there was a serious question to be tried regarding their caveatable interest, which would be effective in restraining the proposed dealing if established at trial. The second element required the caveators to demonstrate that the balance of convenience favoured retaining the caveat. The court applied the Full Court's approach in Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd, holding that the caveat should remain unless the balance of convenience clearly favoured removal. The court found that the caveats lodged by the second defendant and the directors of the other defendants did not meet the criteria for removal. The second defendant's caveats were based on a claim of entitlement to be the registered proprietor due to an alleged trust arrangement, while the other defendants' caveats were lodged by the directors exercising their residual powers. The court held that the caveators had not established a serious question to be tried regarding their interests, and the balance of convenience did not favour removing the caveats.

The court ruled that the caveats should not be removed, thus allowing the receiver and manager to proceed with the sale of the properties. The final orders were that the application for the removal of the caveats be dismissed.