Westpac Banking Corporation v Davey
[2018] WASC 189
•22 JUNE 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WESTPAC BANKING CORPORATION -v- DAVEY [2018] WASC 189
CORAM: CHANEY J
HEARD: 8 JUNE 2018
DELIVERED : 22 JUNE 2018
PUBLISHED : 22 JUNE 2018
FILE NO/S: CIV 1710 of 2018
BETWEEN: WESTPAC BANKING CORPORATION
Plaintiff
AND
JOHN WALTER DAVEY
First Defendant
IAN ROGER AINSWORTH
Second Defendant
THE REGISTRAR OF TITLES
Third Defendant
Catchwords:
Real property - Caveats - Whether caveats may have an interest in land - Caveat lodged by registered proprietor
Legislation:
Transfer of Land Act 1893, s 138(2)
Result:
Orders for removal of caveats
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr B C Smith |
| First Defendant | : | In person |
| Second Defendant | : | In person |
| Third Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Dentons Australia |
| First Defendant | : | In person |
| Second Defendant | : | In person |
| Third Defendant | : | No appearance |
Case(s) referred to in decision(s):
Bashford v Bashford [2008] WASC 138
Bateson v Jones [2013] WASC 8
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Davey v Quigley [2018] WASC 107
Gangemi v Gangemi [2009] WASC 195
Great West Permanent Loan Co v Friesen [1925] AC 208
KWS Capital Pty Ltd v Love [2013] WASC 294
Martin v Official Trustee in Bankruptcy [1990] Tas R 65
McCourt v National Australia Bank Ltd [2010] WASC 121
Sinclair v Hope Investments Pty Ltd [1982] 2 NSWLR 870
Westpac Banking Corporation v Murray Riverside Pty Ltd [2013] WASC 433
Wichniewicz v Registrar of Titles [2014] WASC 18
CHANEY J:
This matter comes before me by way of originating summons seeking an order pursuant to s 138(2) of the Transfer of Land Act 1893 (WA) for the removal of two caveats, being caveat N732466 lodged by the first defendant, Mr Davey, and caveat N815934 lodged by the second defendant, Mr Ainsworth.
Mr Davey and Mr Ainsworth seek an adjournment of the application pending the completion of an appeal in which Mr Davey is one of the appellants. The appeal is against a decision of the Chief Justice delivered on 28 March 2018 in which the Chief Justice dismissed an application by Mr Davey and two others for judicial review (judicial review application).[1] The judicial review application was brought against five defendants and related to what were said to be reviewable decisions by each of the defendants. One of the matters of complaint in the judicial review proceedings was a decision by the acting master of this court in which the plaintiff was granted summary judgment for possession of the properties the subject of the caveats.
[1] Davey v Quigley [2018] WASC 107.
The judicial review application was dismissed on the basis that none of the claims had any reasonable prospect of success. In relation to the summary judgment order of the acting master, the application for judicial review was found to have no reasonable prospects of success because the acting master was exercising the jurisdiction of the Supreme Court, a jurisdiction not amenable to prerogative relief.
The position of the first and second defendants in these proceedings is that, contrary to the decision of the acting master, the mortgages, upon which Westpac's entitlement to possession depended, were obtained by fraud, that that position will be revealed through the appeal which has been instituted, and that the balance of convenience requires that the properties the subject of the summary judgment not be sold before the appeal is complete.
Before turning to the interests asserted in the caveats, it is appropriate to briefly identify the principles which govern applications made pursuant to s 138(2) of the Transfer of Land Act.
Applicable principles
An application under s 138(2) of the Transfer of Land Act involves the question of whether or not the caveator can demonstrate that they may have an interest in land which is capable of supporting a caveat. The caveator must satisfy the court that, on the evidence presented to the court, his claim for an interest in the property raises a serious question to be tried or whether it may have substance.[2] Even if a claim may have substance, the caveat might not be extended having regard to factors including the apparent strength or weakness of the caveator's claim.[3]
[2] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 [20] ‑ [21].
[3] KWS Capital Pty Ltd v Love [2013] WASC 294 [32] ‑ [36] (Edelman J).
A caveatable interest must exist at the time a caveat is lodged. A caveat cannot be lodged to protect an interest in the future.[4]
[4] Martin v Official Trustee in Bankruptcy [1990] Tas R 65, 69; Gangemi v Gangemi [2009] WASC 195 [38] ‑ [45].
The principles applicable to an enquiry under s 138(2) are the same as are applicable to an application to extend the operation of a caveat under s 138C(2). In either case, there is limited power for the court to allow the terms of the caveat to be amended. Amendment may be permitted so as to enable the caveat to better and more fully express the interest that is claimed. Amendment is not permitted to alter the interest claimed so as to claim a different interest.[5]
[5] Bashford v Bashford [2008] WASC 138 [51] and the cases there referred to.
Mr Davey is the registered proprietor of the land over which his caveat is lodged. Although there are conflicting authorities, it has been held that a registered proprietor may in limited circumstances lodge a caveat to enjoin the registration of a particular dealing or particular kind of dealing.[6] Sinclair Investments Pty Ltd concerned a caveat to forbid registration of a transfer executed by a mortgagee pursuant to a voidable transaction. The equity was said to arise from the charge created by the registered proprietor by entering into the mortgage and the action of the mortgagee in entering into the voidable contract. Great West Permanent Loan Co v Friesen held that the lien of an unpaid vendor could support a caveat forbidding dealings with the land by the purchaser. In Wichniewicz v Registrar of Titles,[7] Edelman J noted that it has been observed on several occasions in this court that there is a conflict in authority concerning whether a registered proprietor's equity of rescission can support a caveat.[8]
[6] Sinclair v Hope Investments Pty Ltd [1982] 2 NSWLR 870, 872; Great West Permanent Loan Co v Friesen [1925] AC 208, 216.
[7] Wichniewicz v Registrar of Titles [2014] WASC 18.
[8] McCourt v National Australia Bank Ltd [2010] WASC 121 [8] ‑ [12] (Murphy J); Westpac Banking Corporation v Murray Riverside Pty Ltd [2013] WASC 433 [21] (Beech J).
In Wichniewicz, the second defendant, which was the Australia and New Zealand Banking Group Ltd, made submissions, for the purpose of the application being considered by the court, on the basis that the plaintiff had a claim which had or may have substance, and accordingly the court proceeded on the assumption that the plaintiff has, or may have, an estate or interest in the land which was capable of protection by caveat. In McCourt v National Australia Bank Ltd[9] and Westpac Banking Corporation v Murray Riverside Pty Ltd, the court noted the differing views expressed in the cases as to whether a registered proprietor could lodge a caveat, but did not find it necessary to resolve that question.
Mr Davey's caveat
[9] McCourt v National Australia Bank [8] ‑ [12].
The caveat lodged by Mr Davey nominates the estate or interest being claimed as 'registered proprietor'. The estate or interest claimed is said to exist by virtue of 'registered proprietor - for the legal grounds and reasons set out in additional page'.
The additional page reads as follows:
THE SUPPORTING FACTS
The Principal Registrar of the Supreme Court of Western Australia or his or her delegate acting under instruction, did unlawfully Breach Section 173 of the Criminal Code Act (which is quoted, below) by refusing to accept and duly File in the Supreme Court Registry and list for Hearing, the Caveator/Registered Proprietor's Judicial Review process naming the said Supreme Court Principal Registrar acting as a Master of the Supreme Court as the Respondent for making an order for possession of the land subject to this caveat, in favour of a Mortgagee, Contrary to Law.
Said refusal to file and duly list for hearing before a judicial officer of said Application constitutes a clear Breach of the Criminal Code and until judicially determined, there is at Law no effluxion of time to file; the matter cannot be out of time.
This Criminal Refusal to comply with the Law of Western Australia was witnessed by three persons, one of whom was a Member of State Parliament and the Evidence of those witnesses will be available as may be required.
The matter was also formally advised to the then Attorney General, which advice will be on record.
CRIMINAL CODE ACT COMPILATION ACT 1913
173. Public officer refusing to perform duty
Any person who, being employed in the Public Service, or as an officer of any court or tribunal, perversely and without lawful excuse omits or refuses to do any act which it is his duty to do by virtue of his employment, is guilty of a crime, and is liable to imprisonment for 2 years.
[Section 173 amended by No. 73 of 1994 s. 4; No. 70 of 2004 s. 34(1).][174, 175. Deleted by No. 4 of 2004 s. 15.]
Vitiating Deprivation of Procedural Fairness
The above Criminal impropriety occasioned upon Caveator/Registered Proprietor is a clear deprivation of Procedural Fairness which at Law is vitiating and this caveat must be sustained until due process ‑ Procedural Fairness is accorded to Caveator in the form of a hearing of the matters of substance he wishes to bring before a Judicial Officer of the Supreme Court proceeds to res judicata - legal finality.
There is Fraud afoot
It is confirmed by the relevant Local Government body (although no record of same is discoverable on the Landgate record) that said Mortgagee purports to have utilised an Order for Possession to enter into a Contract to imminently sell Caveator's land, notwithstanding that no Power of Sale has been sought at Law or granted.
The above being so, it is statutorily provided that the transaction of a land title in which vitiating fraud is involved, is a reversible transfer and accordingly it is merely appropriate that such not proceed until litigation resolves the legal matters in issue.
Propriety required
If the Registrar of Land Titles denies the protection at Law properly sought by this caveat or obstructs or impedes the requisite propriety in this matter, a referral for prosecution for Breach of Section 173 of the Criminal Code of Western Australia will be made and legal suit sounding in substantial Damages against the State will additionally be brought.
A statutory declaration filed in support of the caveat simply repeats the contents of the additional page set out above and annexes various documents. It can immediately be noted that the estate or interest claimed in Mr Davey's caveat is not some equity to restrain registration of any identified voidable transaction. The proposed sale of the Broomehill properties is the only transaction in relation to Mr Davey's land into which the defendant has entered subsequently to obtaining summary judgment. Mr Davey's caveat has lapsed in relation to the Broomehill properties. The caveat cannot be used to support some future interest that may or may not arise in relation to future dealings by the plaintiff with the properties over whether the caveat is registered.
In substance, it is clear that the caveat is simply designed to operate as a stay of execution of the order for possession made by the acting master. There is no appeal against that order. It is apparent from the affidavit filed by Mr Davey in opposition to the application that he holds the view that the appeal against the order of the Chief Justice dismissing the judicial review proceedings will involve a challenge to the summary judgment granted by the acting master as if it were an appeal against that decision. That misconception was also illustrated by Mr Davey's oral submissions in opposition to this application. Mr Davey referred to a number of authorities for the proposition that the power to order summary judgment is one that should be exercised with great care and only where it is clear that there is no real question to be tried. As the cases referred to by Mr Davey reveal, that principle is well‑established. But it is not a principle that will arise for consideration in the appeal against the dismissal of the judicial review application. The decision of the Chief Justice in rejecting the judicial review application in relation to the acting master was not based on any question of the merits of the acting master's decision, but rather rested on the proposition that judicial review is not available in relation to a judicial officer exercising the jurisdiction of the Supreme Court. The authorities referred to by Mr Davey may have been relevant to an appeal against the acting master's decision, but no appeal was lodged. The appeal in relation to the judicial review proceedings simply will not be concerned with whether or not any appellable error was made by the acting master. In those circumstances, there is nothing to be gained by adjourning this application until after the appeal is dealt with.
It follows that Mr Davey's caveat does not identify an interest in the land to which the caveats relate which is capable of being supported by caveat. The first defendant having failed to demonstrate that he may have an interest in the land capable of supporting the caveat, there should be an order that Mr Davey's caveat should be removed from the titles in respect of which it is registered.
Mr Ainsworth's caveat
Mr Ainsworth's caveat expresses the estate or interest being claimed as:
Attempted fraud by the mortgagee.
Supreme Court refusal to file due process and permitted the unlawful granting of an order for possession and abuse of process by the Supreme Court maintaining same.
That interest is said to arise by virtue of:
Monies owed, right to caveat, unlawful denial of due process, unlawfully denying caveator his security over the subject land.
The caveat forbids the registration of any instrument affecting the estate or interest absolutely.
Mr Ainsworth's statutory declaration lodged with his caveat refers to his being present when counter staff at the Supreme Court registry refused to accept Mr Davey's judicial review application which 'if heard, would have undoubtedly have rendered the arbitrary Orders of Summary Dismissal of Registrar Strk which purported to both deny Mr Davey access to justice, quite improperly, and also saw the grossly improper imposition of Orders affecting his rights as Registered Proprietor of the four titles subject of my caveat lodged this day'.
The statutory declaration annexes Mr Davey's statutory declaration lodged in support of Mr Davey's caveat and an affidavit made by Mr Davey in opposition to the summary judgment application. There is no reference in Mr Ainsworth's statutory declaration to money owed by Mr Davey to Mr Ainsworth, or to anyone else.
Mr Ainsworth relied upon an affidavit in opposition to this application. He deposes to having known Mr Davey for many years and having undertaken certain business ventures with him, including through a company known as Semro Pty Ltd (ACN 125 722 125) which had three shareholders, namely Mr Davey, a Mr Charlie Burton and Mr Ainsworth. Mr Ainsworth said that as shareholders they voted to assist Mr Davey by advancing to him funds belonging to Semro. He said that that was 'done upon and subject to an agreement that those funds were to be repaid when possible and secured with a caveatable interest in any property Mr Davey owned'. Mr Ainsworth does not identify when those advances were made or the amount of the advances.
Mr Ainsworth then refers to the summary judgment application and the dismissal of the judicial review application suggesting that those decisions were inconsistent with authority. He then makes reference to what he describes as predatory lending to which Mr Davey was subjected. That, he says, resulted in Mr Davey encountering financial difficulties and that as 'Semro has outstanding debts to the ATO … as a Director of Semro I took out a caveat to protect my own and Semro's interests'.
Mr Ainsworth's affidavit then deals with various assertions of fraud, matters concerning securitisation of debts by Westpac and certain matters concerning an assault on Mr Bell, who was one of the appellants in the appeal against the judicial review decision. The matters referred to by Mr Ainsworth concerning the plaintiff's conduct or the conduct of the previous proceedings against Mr Davey, and questions of assault on Dr Bell, are all clearly irrelevant to the question of whether or not Mr Ainsworth enjoys a caveatable interest in the properties owned by Mr Davey.
There are several reasons why Mr Ainsworth has failed to demonstrate any estate or interest in the land against which the caveat is registered. The first is that the description of the estate claimed is not capable of amounting to an estate or interest enjoyed by Mr Ainsworth in the land. As noted above, it is not permissible on an application under s 138(2) for the court to amend the caveat so as to refer to a different estate or interest than that claimed in the caveat. Secondly, even if the reference to 'monies owed' were to be very generously construed as a reference to an equitable charge, Mr Ainsworth's affidavit does not provide a basis to conclude that Mr Ainsworth may have such a claim. That is because, putting aside the absence of any writing necessary to create an interest in land, Mr Ainsworth's evidence is that money was advanced by Semro, and not by him. Although Mr Ainsworth says in his affidavit that he lodged the caveat as a director of Semro, Semro is not identified as the caveator. Thirdly, even if Mr Ainsworth were to hold some form of proprietary interest arising out of money owed by Mr Davey, any such interest would not permit him to maintain an absolute caveat which would have the effect of denying the plaintiff's rights as first registered mortgagee.[10]
[10] Bateson v Jones [2013] WASC 8 [44] ‑ [47].
Mr Ainsworth has failed to demonstrate that he may have a claim to the estate or interest identified in his caveat, and the caveat should be removed.
For those reasons, the orders that should be made are:
(i)The application to adjourn this application is dismissed.
(ii)Caveat N732466 registered over:
•lot 123 on plan 14812 being the whole of the land in certificate of title volume 1681 folio 183;
•lot 44 on plan 7657 being the whole of the land in certificate of title volume 1306 folio 352;
be removed.
(iii)Caveat N815934 registered over:
•lot 123 on plan 14812 being the whole of the land in certificate of title volume 1681 folio 183;
•lot 44 on plan 7657 being the whole of the land in certificate of title volume 1306 folio 352;
•lot 22 on plan 2850 being the whole of the land in certificate of title volume 2094 folio 749;
•lot 23 on plan 2850 being the whole of the land in certificate of title volume 2087 folio 782;
be removed.
I will hear the parties as to orders for costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TS
ASSOCIATE TO THE HONOURABLE JUSTICE CHANEY29 JUNE 2018
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