Westpac v Chilver & Ors
[2008] VSC 587
•19 December 2008
| Do Not Send for Reporting | ||
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6793 of 2008
| WESTPAC BANKING CORPORATION | Plaintiff |
| v | |
| PETER ANDREW CHILVER LINDA MARGARET COLLETT REGISTRAR OF TITLES | Defendants |
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JUDGE: | BEACH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 9, 11, 12, 15 December 2008 | |
DATE OF JUDGMENT: | 19 December 2008 | |
CASE MAY BE CITED AS: | Westpac v Chilver & Ors | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 587 | |
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REAL property – Interest necessary to support caveat under s 89(1) of Transfer of Land Act – Constructive trust – Resulting trust – Implied trust – Bankruptcy – Caveator bankrupt – Any caveatable interest vesting in trustee – No caveatable interest - Removal of caveat – Transfer of Land Act 1958, ss 89 and 90.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G. Moffatt | Gadens Lawyers |
| For the First Defendant | No appearance | |
| For the Second Defendant | In person | |
| For the Third Defendant | No appearance |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 2
History and conduct of the proceeding......................................................................................... 2
Background facts................................................................................................................................ 6
The sale by the ANZ Bank............................................................................................................... 7
Dealings with Mr Podger concerning his interest in the two properties............................... 8
Does Ms Collett have the interest or estate in the properties claimed in the caveat?........ 11
Conclusion......................................................................................................................................... 15
HIS HONOUR:
Introduction
This proceeding concerns properties at 25 Moore Street and 27 Moore Street, Traralgon.[1] On 14 April 2008, the Westpac Banking Corporation, the plaintiff, obtained a judgment for possession of the properties against the registered proprietor, Mr Richard Podger. Westpac wishes to sell the properties in order to recover moneys owed to it by Mr Podger. An impediment to the sale is a caveat (“the caveat”) over the properties. The caveators are Mr Peter Andrew Chilver, the first defendant, and Ms Linda Margaret Collett, the second defendant. The estate or interest claimed is “[a]n equitable estate in fee simple”. The grounds of claim are set out in the caveat as:
“The Registered proprietor holds his interest as Trustee for the Caveators pursuant to a constructive, resulting and implied trust.”
Westpac seeks an order under s 90(3) of the Transfer of Land Act removing the caveat. The proceeding has been resolved between Westpac and Mr Chilver. Accordingly, Ms Collett is now the only party resisting Westpac’s application.[2] For the reasons given below, there will be an order requiring the removal of the caveat.
[1]More precisely, properties situate at and known as 25 Moore Street and 27 Moore Street, being all of the land described in Certificates of Title Volume 5452 Folio 399 and Volume 4922 Folio 239.
[2]I was informed by counsel for Westpac that the third defendant, the Registrar of Titles, had written a letter stating that the Registrar would abide by the Court’s order.
History and conduct of the proceeding
Originally, Westpac sought the removal of three caveats: the caveat and two other caveats over the properties lodged on behalf of Mr Chilver. In the caveats lodged on behalf of Mr Chilver, he claimed equitable estates in fee simple in the properties on the basis that the registered proprietor held his interest as trustee for Mr Chilver pursuant to an agreement in writing dated 27 October 2006 between the registered proprietor and Mr Chilver.
On 2 July 2008, the proceeding came on before Ashley JA sitting in the Practice Court. Mr Chilver appeared and orders were made removing his two caveats. In addition, an order was made that any caveatable interest Mr Chilver had in the caveat be removed.[3] Orders were made on 2 July as to the service of affidavits and the matter was referred to the Listing Master for fixing a date for trial. The matter came on again before Hargrave J on 19 August. Further orders were made and the proceeding was again referred to the Listing Master for the fixing of a date for trial. The matter was referred for fixing at as early a date as the Listing Master could accommodate. On both occasions the matter came before the Court, Ms Collett was ordered to “file and serve a note in which she identifies the name, address and occupation of each witness whom she intends to call to give evidence viva voce in opposition to the plaintiff’s claim and, in each instance, state in a single paragraph the gist of the evidence to be adduced from the particular witness”. In purported compliance with these orders, Ms Collett served a document in which, as she described it, she identified 15 to 19 witnesses.[4]
[3]Paragraph 3 of the orders made on 2 July 2008 provided:
“As to any caveatable interest of the first defendant [Mr Chilver] in caveat AE903613A [the caveat], the Registrar of Titles is ordered pursuant to s 90(3) of the Transfer of Land Act 1958, to remove caveat AE903613A from the land in Certificates of Title Volume 4922 Folio 239 and Volume 5452 Folio 399 [the properties]”.
[4]Page 1 of Exhibit 2. Exhibit 2 is the document filed and served by Ms Collett in purported compliance with the orders of Ashley JA and Hargrave J.
In Goldstraw v Goldstraw,[5] Dodds-Streeton J (as her Honour then was) stated:[6]
“Section 90(3) is in the nature of a summary procedure analogous to the determination of interlocutory injunctions. The Court’s power under s.90(3) is discretionary. In that context, it is recognised that the caveator bears the onus of establishing that there is a serious question to be tried that he or she does have the estate or interest in the land claimed. That is, ‘in order to resist successfully the applications for removal of caveats (the caveator’s) arguments must be directed towards the assertion of an interest in the subject land in the light of relevant principles of property and equity law’. Further, if the caveator does establish the serious question to be tried in relation to the estate or interest claimed, the weight of authority indicates that the caveator must further establish that the balance of convenience favours the maintenance of the caveat until trial.”
At the commencement of the trial, I raised with the parties whether the trial should proceed on the basis that I would determine whether in fact Ms Collett has the interest in the properties she claims, rather than what seemed to me to be the wasteful prospect of having a trial between the parties to determine whether Ms Collett had an arguable case with the prospect of a further trial between the same parties to determine whether or not the interest existed. I did this with the view of perhaps avoiding a multiplicity of proceedings.[7] The parties agreed to this course.[8] Since it is Ms Collett who must establish that she has the interest in the properties that she claims,[9] after the proceeding was opened by counsel for Westpac, I invited Ms Collett to open her case and directed that she go first. During the course of her cross-examination, it appeared that there might be some prospect of resolving the proceeding between the parties. I was told that no mediation had occurred in the proceeding. Accordingly, after further discussion between the parties, I ordered, pursuant to Rule 50.07, that the proceeding be referred to a mediator. Unfortunately, for reasons which do not need to be detailed here, no mediation actually took place.
[5][2002] VSC 491.
[6]At paragraph [30].
[7]Cf s 29 of the Supreme Court Act 1986.
[8]Westpac at T3.1 – 3.9 and Ms Collett at T6.28.
[9]Cf the issue that was presented in Costa & DuppeProperties Pty Ltdv Duppe [1986] VR 90 at 92.
Before turning to the background facts of this matter, I should describe briefly the course of the trial. Notwithstanding that the proceeding involved the relatively limited question of whether or not Ms Collett had the estate or interest in the properties claimed in the caveat, Ms Collett expressed a wish to call a large number of witnesses. The witnesses were Mr Podger and those people identified in Exhibit 2 (which document also contained the gist of what it was proposed those witnesses would say). Mr Podger was to be called to prove that he was a liar. Ms Collett wanted to call Mr Podger not so that I might accept any of his evidence, but so that it might be established that everything he said was a lie.[10] There was no basis for this, and I did not permit Ms Collett to take this step. A large number of the witnesses in Exhibit 2 were to be called as part of Ms Collett’s proof that Mr Podger was a liar[11] or reprehensible person for other reasons. As no party proposed to call Mr Podger on the basis that his evidence was reliable and to be accepted, I did not permit this course.
[10]See for example T4.6 – 6.10, T17.10 - .19 and T47.27 – 48.8.
[11]T47.21 - .25.
At 2.15 p.m. on the second day of trial (Thursday 11 December), Ms Collett had no witnesses to go on with. She said that she hoped to have witnesses “next week”. In order not to waste any additional time, the deponents of the affidavits tendered by the plaintiff (Ms Maureen Gale, Ms Jennifer McKay and Ms Sonia Apikian) were interposed for cross-examination by Ms Collett. On the Monday morning, Ms Collett called Mr Chilver. Mr Chilver gave no evidence of any assistance to Ms Collett. When it was apparent that Ms Collett wished to cross-examine Mr Chilver about matters that were not relevant to this proceeding, I terminated the cross-examination.[12] On the central issue as to whether there was an agreement between Ms Collett and Mr Podger concerning the ownership of or who was to live at the properties, Mr Chilver said that he was not present when any such agreement was made. This was in contrast to the evidence Ms Collett said Mr Chilver would give.
[12]T201 – 204.
When Mr Chilver left the witness box, Ms Collett told me that she had no more witnesses until one o’clock[13] when her daughter was expected to arrive. The substance of Ms Collett’s daughter’s evidence (and that of her unnamed friend) was set out in Exhibit 2 as “[t]hat the fax I have exhibited was sent to Jenny McKay”. This was a reference to the fax of 23 January 2007 (about which I will say more below). Whatever dispute there may have been about the sending of this fax at an earlier point in time, by the time Westpac’s witnesses had given evidence, there was no dispute that it was sent and that it contained the documents Ms Collett alleged were sent with it. As there was no other relevant evidence that was foreshadowed in respect of Ms Collett’s daughter and her friend, I declined to wait the two hours and 19 minutes for them to attend Court. No other witnesses attended. Most had not been subpoenaed. In respect of those that had been subpoenaed, Ms Collett’s evidence disclosed that either they had not been served personally or insufficient conduct money had been tendered and, accordingly, I declined her application to issue warrants of apprehension pursuant to s 150 of the Evidence Act 1958.[14] Ultimately, I directed that Ms Collett’s case be closed.[15] Addresses then followed (about which I will say more below).
[13]It was 10.41 a.m. when Mr Chilver left the Court.
[14]For the sake of completeness, I should say that whilst Exhibit 2 disclosed that Ms Collett wished to call (amongst others) the Chief Executive Officer of the Magistrates’ Court of Victoria, the Proper Officer of Vodafone, Gail Kelly (the Chief Executive Officer of Westpac), Mark Woods (solicitor), David Morris (ANZ Manager), Virginia Wray (solicitor), Ashwin Pardji (pharmacist), Mark Dobson and Jim Demetrios (Managing Director, Stockdale and Leggo), none of these witnesses were subpoenaed and their attendance was not secured by Ms Collett.
[15]Whilst it can be accepted that an unrepresented litigant’s matter may require more time than a matter in which all parties are represented (see Luck v Renton & Ors [2005] VSCA 210 per Maxwell P and Harper AJA at paragraph [68]), the following points should be noted:
Background facts
The background facts of this matter may be briefly stated as follows:
(a) On 13 February 1991, Ms Collett and her husband, Mr David Collett, were registered as joint proprietors of 25 Moore Street. On the same day, the Australia and New Zealand Savings Bank Limited registered a mortgage on the title. On 10 July 2000, Ms Collett and Mr Collett were registered as joint proprietors of number 27 Moore Street. On the same day, the ANZ registered a mortgage over the title of that property. After a series of personal and financial difficulties that appear to have commenced in 2001,[16] the properties were sold by the ANZ as vendor to Mr Podger (the contract of sale between the ANZ and Mr Podger in relation to 25 Moore Street was dated 30 June 2006 and the contract of sale between the ANZ as vendor and Mr Podger as purchaser of 27 Moore Street was dated 7 September 2006). I will deal with the circumstances surrounding these sales below.
[16]See T20.9 – 29.24.
(b) In August 2006, Mr Podger borrowed $213,000 from Westpac which was used to purchase 25 Moore Street. In October 2006, Mr Podger borrowed $460,000 from Westpac to purchase 27 Moore Street. The $460,000 was used to repay the $213,000 loan, as well as to purchase 27 Moore Street and was secured by mortgages over the two properties. The $460,000 loan was increased by an amount of $10,000 in December 2006 and by a further $10,000 in January 2007, making a total of $480,000.
(c) On 16 October 2006, Ms Collett was made bankrupt as a result of a creditors’ petition. She is still a bankrupt.[17]
[17]T33.28.
(d) On 23 January 2007, Ms Collett sent a fax to Ms Jennifer McKay, who was the bank officer who processed the application for the $460,000 loan. To that fax was attached a copy of a schedule to a residential tenancy agreement in respect of 27 Moore Street, a Deed of Agreement between Mr Podger and Ms Collett dated 23 May 2006 and a Deed of Agreement between Mr Chilver and Mr Podger dated 27 October 2006.
(e) On 19 February 2007, the two caveats which have been removed and the caveat were lodged.
(f) On 3 March 2007, Westpac increased the amount of the loan by a further $55,000, thereby increasing the balance to $535,000.
(g) On 14 August 2007, the loan between Westpac and Mr Podger went into default. On 29 February 2008, Westpac issued proceedings for possession against Mr Podger. On 14 April, judgment was entered for possession and a warrant of possession was issued. That warrant is in abeyance pending the outcome of this proceeding.
The sale by the ANZ Bank
Ms Collett gave evidence that in selling to Mr Podger, the ANZ permitted her to choose who the two properties would be sold to and that this permitted her to impose conditions on the purchaser concerning matters of occupancy, further borrowings and any subsequent reselling. She said[18]:
[18]T36.12 - .29.
“But it was always that they [the ANZ Bank] said that they would do a deal where I could choose who I sold them to and they would sell them at far less than they were worth, provided I was satisfied with the arrangement. It was only them that lost money. The extra equity in the properties could only have been - and Mr Podger did not understand, he thought I was somehow cheating the other creditors but in actual fact I was trying to pay them because it was my only way of finding a way to get some money, as I had made agreements with them all at so many cents in the dollar. What he did was he then made sure that - he said to Gadens that first of all he didn't even know that the contracts of sale indicated that I was to be in possession of the properties and live in them with my family, which is a total lie, and the ANZ Bank manager will tell you that he told him consistently that that was the case.”
According to Ms Collett, this evidence was consistent with the contracts of sale to Mr Podger which provided:
“16.00 Purchaser buys subject to existing occupancy.
16.01 The purchaser acknowledges that he shall not be entitled to vacant possession of the property on the Settlement Date and that he purchases the property subject to the existing occupancy of a Linda Margaret Collett and her family.”
Clause 16.01 is also said to be consistent with the agreement or understanding between Ms Collett and Mr Podger. I turn now to consider this aspect of the case.
Dealings with Mr Podger concerning his interest in the two properties
As I noted above, on 23 January 2007, Ms Collett sent a fax enclosing three documents to the bank officer who processed the application for the $460,000 loan. The first of these was a document headed “Deed of Agreement” between Mr Podger and Ms Collett dated 23 May 2006. It was signed by Mr Podger and provided as follows:
“I Richard Podger agree that if Linda Collett approves me as the purchaser, to the ANZ Bank Manager David Morris, for the properties 25 and 27 Moore Street Traralgon Victoria:
I agree that I will never use the equity in the properties, for my own purposes and will not take out any greater mortgage against the properties than the original purchase prices as agreed between Linda Collett and David Morris. I purchase the properties and hold them in trust only as I know Linda has been unfairly treated by her husband and cannot borrow money at this time.
I will never sell the properties unless Linda Collett or any other party that she has given power of attorney, or who inherits her interest in the properties agrees, in writing, to me so doing.
I agree that Linda will be renting the properties from me for 5 years from the date of purchase and that I will not live in the properties unless I pay the costs of so doing as a sub leasee (sic) and Linda agrees to me so doing.
I agree that Linda Collett can sub-lease or use the properties as a B&B or furnished or unfurnished rental properties to others. That is Linda Collett can on rent or sub lease the properties.
I agree to sell the properties back to Linda Collett or a nominee at the time she requests me so doing and that Linda Collett can pay her creditors with any equity remaining after interest, rates, insurance, any other costs have been paid.”
The second document was a document headed “Deed of Agreement” between Mr Chilver and Mr Podger dated 27 October 2006. This document provided:
“I Richard Podger, … make the following commitment and Agreement with regard to the two adjacent properties 25 and 27 Moore Street Traralgon Victoria 3844.
1. I shall only sell the properties if Linda Chilver [Ms Collett] or Peter Chilver give written approval for me to do so.
2. In the event that either or both properties are sold before 15 December 2009 any profit shall be paid to Peter Chilver.
3. I agree that I will not secure loans, other than the first mortgages ($213,000 for 25 Moore Street and $235,000 for 27 Moore Street), held by Westpac Cairns branch, against either or both properties unless Linda Chilver or Peter Chilver provide written permission for me to do so.”
It is to be remembered that this is the document relied upon by Mr Chilver to support the caveats that were removed on 2 July 2008. Whilst Ms Collett placed some reliance upon this document in her fax to Westpac of 23 January 2007 and in her evidence,[19] in her final address emphasis was placed on what “happened in May”[20] (which I take to be at least a reference to the Deed of Agreement dated 23 May 2006).
[19]At T85-86.
[20]T244.2.
The third document was the schedule to a residential tenancy agreement signed by Mr Podger and Ms Collett. According to the schedule, the date of this agreement was 5 December 2006, the landlord was Mr Podger and the tenant was Ms Collett. The term of the lease was 48 months and the monthly rental was $1,575 commencing on 5 March 2007. The schedule provided that the termination date of the lease was 4 December 2010. To some extent, the existence of the third document (the residential tenancy agreement) was inconsistent with the first document (the Deed of Agreement dated 23 May 2006).
In addition to these documents, Ms Collett gave evidence that there was an arrangement with Mr Podger in the following terms:[21]
[21]T30.20 and following.
(a) All the equity in the properties belonged to Ms Collett.
(b) Mr Podger was never to borrow any more against it (than that which was borrowed to fund the purchases).
(c) Ms Collett would pay insurance and when number 27 was up and running (as a bed and breakfast), Ms Collett would determine which one she would sell.
(d) Mr Podger was given $10,000 in cash.
(e) Mr Podger was never to have “full” nor “registered proprietorship” – “there was always an implied trust and there was always the situation where the equity was mine or my family’s”.[22]
When asked about the number of different agreements that appeared to be on foot, Ms Collett said:[23]
“There were many arrangements we made verbally and one day I went up to Cairns and finally I said – I was getting very doubtful about his intentions and I said, ‘We have got to put something I writing’ and that’s the one that came up in writing [referring to the document dated 23 May 2006]”.
[22]Evidence which, at the very least, suggests a deal of uncertainty as to what the true arrangement or agreement was.
[23]At T31.19 - .23.
A little further on in her evidence, Ms Collett was asked and answered the following question:[24]
“Is it part of your case that I should find that there was an agreement that you would be permitted to live as a tenant, in effect, in the house for five years after the purchase or do you say, "That was an agreement that we thought about and we discarded"? --- No, that was always one of the options and then there was a one month proviso, that if both of us agreed, which was always supposed to be the case, that if I wanted it then we would cease the tenancy agreement and that we would actually go into selling it. But there was an extra complication because I thought I could just pay out my creditors.”[25]
In the course of giving evidence on this topic, Ms Collett disclosed that she became bankrupt in 2006. She is still a bankrupt, a sequestration order having been made on 16 October 2006.
[24]T32.14 - .25.
[25]In fact the answer went on for a further 29 lines – but this part of the answer was non-responsive.
Ms Collett gave a further description of the agreement or arrangement between her and Mr Podger at T34.12 - .20. She was asked and answered the following questions:
“If I can put it back to you, it was effectively, "I can continue to occupy these properties for five years and if you want to sell you have got to sell to me first"; is that what you say the arrangement was? --- Yes, or someone that I choose, yes, your Honour.
Was there any other aspect of the arrangement or is that it? --- Other than the fact that it was like a peppercorn rental agreement where he incurred no cost himself and was to borrow no extra money against the equity.”
Ms Collett then gave evidence that she paid rent pursuant to this arrangement “because I had to pay all costs the rent was to go up in accordance with what the interest rate did. So I was basically paying all costs and outgoings” and “that constituted the rent”.
Does Ms Collett have the interest or estate in the properties claimed in the caveat?
The question of whether Ms Collett has the interest or estate in the properties that she claims in the caveat depends in large part upon her evidence. Ms Collett’s evidence (and her case) was not assisted by her inability from time to time to confine herself to the relevant issues raised by this proceeding.[26] I also had cause to question the accuracy of some of her evidence. I do not say that she sought to intentionally mislead me. However, there were things that she said during the course of the trial that caused me to doubt her accuracy. For example:
[26]Notwithstanding repeated attempts to explain to Ms Collett (who is clearly well read and not unintelligent) the relevant issues in this proceeding (see for example T7.25 – 8.14, T9.13 - .16, T16.28 – 17.9 and T105.4 – .14), her final address contained references to (amongst others) Afghanistan, the heroin trade, Osama bin Laden, 9/11, Mumbai, mafia rings, American borrowings from China, Germans, the Great Depression, Zimbabwe, Nobel Prizes, Stephen Hawking, Barack Obama, squirrels, Neville Chamberlain, Hitler, vestal virgins in Ancient Rome, the Pope, an experiment taking place in Switzerland or France, Mother Theresa, the Second World War, Einstein and people who wear “moccasins and trackies”. Again, notwithstanding attempts to explain to Ms Collett what the relevant issues of the proceeding were, her final address consisted largely of asserting that “everything doesn’t boil down to dollars and cents and there is an emotional cost” (T239.30 – 240.1) and there was a “great benefit” from being in the properties and she thought that “the caveat is something that should be listened to …” (T243.29 – 244.3).
(a) In answer to a question as to whether Ms Collett was in a position to buy the properties now, she said “Yes … I have people that would buy them …”.[27]
(b) The different statements made by Ms Collett from the Bar table and in the witness box concerning the amounts she had given subpoenaed witnesses for conduct money.[28]
(c) Ms Collett’s statement as to what evidence Mr Chilver could give, which was not borne out when Mr Chilver gave evidence. I should say for the sake of completeness that Mr Chilver impressed me as a careful man, doing his best to give an honest and accurate account of matters as he knew them. I accept his evidence (and in particular his evidence[29] that he was not present when any agreement was made between Ms Collett and Mr Podger concerning ownership or who was to live at the two properties).
[27]T32.2 - .11. This answer is also an example of Ms Collett’s tendency to include irrelevant material (in this case references to additional borrowings and a drug addiction).
[28]See T98.19 and T100.18. But cf T153.23 - .25.
[29]At T203.27 - .30.
There are a number of impediments to Ms Collett’s claim:
(a) First, Ms Collett claims an equitable estate in fee simple. For all practical purposes, she is claiming the beneficial ownership of the properties.[30] Whilst some of her evidence might support a leasehold interest, the circumstances of this case do not justify a conclusion that she is the beneficial owner of the properties. I reject Ms Collett’s evidence insofar as she said that the arrangement with Mr Podger involved all of the equity in the two properties belonging to her.[31] Such evidence is inconsistent with the various different written agreements and Ms Collett’s other evidence concerning arrangements permitting her to reside in or use the properties. It is also inconsistent with the fact that Mr Podger paid the whole of the purchase price in respect of each property.
[30]See generally Commonwealth v New South Wales (1923) 33 CLR 1.
[31]T30.20.
(b) Secondly, if there was any lesser or other interest created in the properties at the time of their respective sales to Mr Podger, then (assuming that interest or those interests were caveatable) that or those interests are the ones that should have been caveated. Notwithstanding the breadth of the discretion in s 90(3) of the Transfer of Land Act, it is not appropriate to order any amendment of the caveat, even if such a power exists.[32] In any event, no application was made to me to amend the caveat.
(c) Thirdly, insofar as Ms Collett relies upon the 27 October 2006 Deed of Agreement as supporting a caveatable interest, it is to be noted that she was not a party to that Deed.
(d) Fourthly, there is a real difficulty in Ms Collett asserting a caveatable interest at a time when her property has vested in a registered trustee in bankruptcy.[33] If Ms Collett at one time possessed the estate or interest in the two properties that she claims, then that estate or interest was “the property of the bankrupt” within the meaning of s 58 of the Bankruptcy Act 1966 which vested in a trustee when the sequestration order was made.[34] If there was a caveatable interest, it was one vested in the trustee, not Ms Collett.[35]
[32]See Midwarren Estates Pty Ltd v Retek & Stivic [1975] VR 575. See also Lewenberg & Pryles v Direct Acceptance Corporation Limited [1981] VR 344 and Schmidt v 28 Myola Street Pty Ltd (2006) 14 VR 447 at 457.
[33]Cf s 58 of the Bankruptcy Act 1966.
[34]See also the definition of “the property of the bankrupt” in s 5, which includes “any rights and powers in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt”. See also s 116.
[35]See Toumazou v Grenadier Towers Pty Ltd [2007] VSC 53. But cf In Re Finn [1942] VLR 125. Finn involved the lodging of a caveat against a grant of probate by an undischarged bankrupt. Lowe J held that the interest of the caveator was a “mere naked right to litigate” and therefore not of such a character to pass to the Official Receiver. That case is distinguishable from Toumazou and the present case. Toumazou and the present case (to use the words of Lowe J) far more resemble the cases where there is a proprietary interest. See also Citicorp Australia Limited v Cirillo [2003] SASC 59.
What is apparent from the evidence is that there were a number of different agreements and understandings entered into between Ms Collett and Mr Podger during 2006. Some of them predated the sales, others arose after the sales. What is clear is that, whilst it might be possible to construe some arrangement as a lease or an agreement to lease, no equitable estate in fee simple was created as is alleged in the caveat. No document identified by Ms Collett supports the existence of any such interest.[36] Further, insofar as Ms Collett gave evidence supporting the claim of an equitable estate in fee simple, I have rejected that evidence for reasons already given.[37] The money used by Mr Podger to purchase the properties was raised by him and he is the person who is solely responsible for its repayment. His debt to Westpac now exceeds the purchase prices and, as at 14 April 2008, he was liable to repay[38] in excess of $560,000. In the circumstances, there is no constructive, resulting or implied trust in favour of Ms Collett in respect of an estate in fee simple. Whether or not Ms Collett has some leasehold or other interest which is caveatable[39] or the benefit of s 42(2)(e) of the Transfer of Land Act on the basis that she is a tenant in possession within the meaning of that section[40] are matters which do not arise in this proceeding.[41]
[36]I will deal with the 23 May 2006 Deed of Agreement below.
[37]So far as the assertion that this estate was created pursuant to a constructive trust, the evidence did not bear out this claim. Whatever work Ms Collett did on or in respect of the properties prior to their sale to Mr Podger could not have justified the creation of a constructive trust giving Ms Collett beneficial ownership of both properties notwithstanding the fact that Mr Podger had paid the purchase price in respect of each property in full.
[38]Pursuant to the judgment Westpac obtained against him.
[39]Assuming that Bankruptcy Act issues could be overcome.
[40]See generally Burke v Daws (1938) 59 CLR 1 at pp.17-18 and Barba v Gas & Fuel Corporation (1976) 136 CLR 120.
[41]Subject to bankruptcy considerations, any proceeding that might be commenced for the purpose of establishing that Ms Collett is a tenant in possession within the meaning of s 42(2)(e) would almost certainly require Mr Podger to be joined as a necessary party.
The closest Ms Collett came to establishing the existence of a trust was in the Deed of Agreement dated 23 May 2006. In that document, Mr Podger records:
“I purchased the properties and hold them in trust only as I know Linda has been unfairly treated by her husband and cannot borrow money at this time.”
However, the balance of the document does not support the creation of the trust for which Ms Collett contends: it provides merely for a prohibition on sale, a rental and use arrangement and an agreement to sell the properties back to Ms Collett. In any event, even if I was of the view that this document created the interest which Ms Collett claims,[42] the subsequent agreements of which Ms Collett gave evidence and my doubt as to the accuracy of her evidence would have prevented me from concluding that the 23 May 2006 Deed was a document which was intended to create legal relations and to convey the beneficial interest in the properties. It is to be remembered that Mr Podger was in a relationship with Ms Collett and the statement in the document that Mr Podger held the properties “in trust only”[43] was stated to be because Ms Collett had “been unfairly treated by her husband and … [could not] borrow money at … [that] time”.
[42]As a matter of construction.
[43]Without specifying expressly for whom.
Conclusion
Ms Collett has not made out the interest in the properties that she claims in the caveat. Accordingly, the caveat must be removed.
During the course of the trial, Ms Collett made it plain that, should the caveat be removed, she would lodge further caveats in respect of the properties.[44] It was apparent that these caveats would claim the same interest that Ms Collett currently claims, although perhaps worded differently. At the conclusion of the proceeding, Westpac sought an order that the Registrar be ordered not to register any caveat by Ms Collett in respect of the properties without her first obtaining the leave of the Court. It is clear that some order needs to be made to prevent Ms Collett from carrying out her threat to lodge further caveats claiming the interest she has already claimed.[45] Initially, I gave consideration to limiting any such order to caveats claiming the interest already claimed.[46] However, in the unusual circumstances of this case,[47] it is appropriate to order the Registrar not to register any caveat in respect of the properties without the leave of the Court until further order.
[44]See for example T86.15 - .25 and T215.13 - .19.
[45]Cf Lettieri v Gagic [2008] VSC 378 at paragraph [14].
[46]Cf s 91(4) of the Transfer of Land Act and R & L Bell Pty Ltd v Casboult (2003) 6 VR 271 at [11].
[47]Which includes the fact that Ms Collett is an undischarged bankrupt who is likely to attempt to caveat an interest which (if it exists) has vested in her trustee.
Accordingly, the orders of the Court will be:
(1) The Registrar of Titles is ordered, pursuant to s 90(3) of the Transfer of Land Act 1958 to remove caveat AE903613A from the land in Certificates of Title Volume 4922 Folio 239 and Volume 5452 Folio 399.
(2) Until further order, the Registrar of Titles is ordered not to register any caveat by the second defendant on the land in Certificates of Title Volume 4922 Folio 239 and Volume 5452 Folio 399 without the leave of the Court.
I will hear the parties on the question of costs.
(a) Notwithstanding that the issues in this case were relatively narrow (that is, whether Ms Collett had the interest that she claimed in the caveat), the proceeding took four days.
(b) Apart from Ms Collett’s daughter (and possibly Ms Collett’s daughter’s friend), none of Ms Collett’s witnesses were prepared to come voluntarily to Court.
(c) Whilst subpoenas had been issued to members of Ms Collett’s family (Brenda, Michelle, Peter and Hedely Chilver), none had been served personally and given sufficient conduct money and none were prepared to come to Court voluntarily (Mr Peter Chilver only came to Court on 15 December after my Senior Associate spoke to him on the telephone on 12 December telling him that I had said in open Court that I would give further consideration to Ms Collett’s application for a warrant in respect of him on 15 December).
(d) Court resources are not unlimited. The rights of an unrepresented litigant cannot prevail wholly to the exclusion of other litigants (either in the current proceeding or more generally).
(e) Significant indulgences had already been given to Ms Collett concerning her inability to proceed with the case in a timely fashion.
(f) Whilst complaint was made by Ms Collett that I had not allowed her to subpoena witnesses (T209.14 - .19), the true position is set out at T102.2 - .31.
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