(This judgment was delivered extemporaneously on 16 June 2023 and has been edited from the transcript.)
[2]
On 23 May 2023 the applicant, Mr Domenic Casella, whom I shall refer to as Mr Casella, filed an application under s 138B of the Transfer of Land Act 1893 (WA) (the TLA). That application sought orders under s 138C of the TLA extending the operation of caveat P478068 lodged by Mr Casella over various lots of land that were created or subdivided from a larger parcel of land purchased by a company by the name of Eaton Developments Pty Ltd (Eaton Developments).
The evidence demonstrates that Eaton Developments purchased the original parcel of land for $4,250,000 pursuant to a contract dated 6 August 1993 and stamped on 18 November 1993. The Landgate records show that Eaton Developments became the registered proprietor of the original parcel of land on 19 November 1993. The estate and interest claimed by Mr Casella is as beneficial owner of the land.
I pause to observe that the copy of the caveat provided with the affidavit in support of the application, that is the affidavit of Mr Casella sworn on 22 May 2023, was difficult to read and appeared to be incomplete. At the request of the court, the plaintiff's solicitors provided a full and legible copy of the caveat by email. It was unsupported by an affidavit, but I accept that this appears to be a caveat in the usual form. It is an absolute caveat, and the estate and interest claimed in that caveat is 'as beneficial owner', that is a claim that Mr Casella is the beneficial owner of the land the subject of the caveat.
I should observe that the matter came before me on an urgent basis on 24 May 2023 and on that occasion, I made an interim order extending the caveat to today to give the first defendant the opportunity to provide to the court materials in opposition to the extension of the caveat.
The caveat states that the ground for the claim in the caveat is pursuant to a statutory declaration dated 13 March 2023. That is a statutory declaration of Mr Casella himself. In that statutory declaration, Mr Casella declared the following matters to be true.
Mr Casella was a director of Eaton Developments as trustee for the Eaton Developments Unit Trust. He was appointed a director on 29 June 1993, joining a Mr Thurston Saulsman as the only other director at the time.
At the time of the purchase, there were three shares in Eaton Developments. Mr Casella and Mr Saulsman held one each, and the third share was held by Mr Casella's private company, Selec Pty Ltd, which Mr Casella declared held its share on trust for a Mr Owen Blackburne. Mr Casella ceased to be a director of Eaton Developments in February 1997 and became a bankrupt in 2000. He was discharged from bankruptcy in 2003.
In 2001, while Mr Casella remained a bankrupt, the lots then remaining from the original parcel were transferred from Eaton Developments to a new registered proprietor, the first defendant, Parkridge Group Pty Ltd (Parkridge Group). Mr Casella declared that he was unaware of the transfer and only found out about it in January 2023, almost 22 years later. Mr Saulsman was at all times a director and shareholder of Parkridge Group.
Mr Casella maintains that his shareholding in Eaton Developments was removed from his ownership without his consent and against his will. In his statutory declaration, Mr Casella went on to declare that he had never renounced ownership of his shareholding in Eaton Developments, and that he was the underlying beneficial owner of one‑third of the land that was transferred to Parkridge Group in 2001. On that basis, Mr Casella maintained in his statutory declaration that he retained an underlying beneficial interest in the land by virtue of a resulting trust or alternatively a constructive trust, and he therefore had what he characterised as an underlying beneficial equitable interest in the land.
Mr Casella swore an affidavit in support of this application under the TLA on 22 May 2023. In that affidavit, Mr Casella gave sworn evidence traversing many of the same facts as his statutory declaration. However, in his affidavit Mr Casella swore that his statutory declaration was wrong insofar as it declared that Eaton Developments was a trustee of the Eaton Developments Unit Trust. In his affidavit, Mr Casella swore that he had 'never seen a trust deed for the Eaton Developments Unit Trust, and I am not certain that such a trust ever existed'. He went on to give sworn evidence that 'there was no trust involved in purchasing' the original parcel of land.
In his affidavit, Mr Casella addressed the issue of why he had lodged a caveat in 2023, when the land had been purchased by Parkridge Group almost 22 years ago. His sworn evidence was that a conversation with a former solicitor occurred a few months ago, which then prompted his recollection of the multimillion‑dollar transaction of the land in the early 1990s. He then began making searches and says that he discovered the transfer of 11 January 2001 on 26 January 2023. Mr Casella explained that since 2001, he had undergone a range of difficulties including bankruptcy, marital breakdown, imprisonment, and drug addiction.
That background circumstance of course raises the issue of whether any claim advanced by Mr Casella, or entities related to Mr Casella, will be statute barred under the Limitation Act 2005 (WA). That is a matter that I am not able to determine on the present application, however I would observe that it appears to me on the evidence that there may be considerable difficulties overcoming limitation issues.
Be that as it may, Eaton Developments was deregistered in 2012, and Selec was deregistered on 20 November 2005. Mr Casella has indicated that he intends to apply to reregister both Eaton Developments and Selec.
Following my interim orders for the extension of the caveat, affidavit evidence was provided on behalf of the first defendant, including affidavit evidence by Mr Saulsman. Mr Saulsman's sworn evidence was that he had been a director of Eaton Developments since January 1990, and that Mr Casella was appointed as a director in June 1993 in preparation for Eaton Developments to assume the role of trustee of the Eaton Developments Unit Trust.
Mr Saulsman annexed a copy of the trust deed for the Eaton Developments Unit Trust which was dated 1 July 1993. It provides for three original unit holders, including Selec. Mr Saulsman's sworn evidence was that the three unit holders were the three trustee companies of the family trusts relating to Mr Saulsman himself, being Penman Holdings Pty Ltd, Selec for Mr Casella's family trust, and Stefo Nominees for the family trust associated with Mr Owen Blackburne. Looking at the signature to the trust deed on behalf of Selec, it appears to me to be the signature of Mr Casella that has been used by Mr Casella in his more recent documents filed in respect of this application. Mr Saulsman's sworn evidence is that it is Mr Casella's signature on the original trust deed. That is the trust deed that in his affidavit, Mr Casella swore he had never seen.
Mr Saulsman explained that the land was purchased by Eaton Developments in its capacity as trustee for the Eaton Developments Unit Trust. Mr Saulsman also annexed a deed of variation for the Eaton Developments Unit Trust dated 30 October 1996 relating to the trustee's indemnity, or entitlement to indemnity, out of the trust fund. That instrument too appears to be signed by Mr Casella on behalf of Selec. Mr Saulsman's sworn evidence was that the property was at all times held by Eaton Developments as part of the Eaton Developments Unit Trust. That is, that it was at all times purchased and held by Eaton Developments in its capacity as trustee.
Mr Saulsman's evidence in his affidavit was that he has made attempts to find financial documents relating to the trust, but given the passage of time, most of them have not been retained or he has been unable to locate them. He managed to contact a former accountant for the trust to obtain some financial documents. Mr Saulsman annexed some limited financial documents going back to the years 1999 and 2000, which reflect commercial activity from the development of land and sale of lots within the Eaton Developments Unit Trust. The accountant himself, Mr Norman O'Flaherty, swore an affidavit stating that until 2004, he did the accounting and tax compliance work for Eaton Developments, and his sworn evidence was that that was in Eaton Development's capacity as trustee for the Eaton Developments Unit Trust.
Both Mr Saulsman's and Mr O'Flaherty's evidence was to the effect that Eaton Developments acted solely as trustee for the Eaton Developments Unit Trust. The evidence of Mr Saulsman and Mr O'Flaherty was that in 2001, Eaton Developments was replaced by Parkridge Group as the trustee of the trust. Mr Saulsman annexed to his affidavit the deed of appointment of Parkridge Group as trustee dated 25 April 2001. A recital to that deed states that Selec was no longer a unit holder. The transfer of the land from Eaton Developments to Parkridge Group was annexed to Mr Casella's affidavit in support of the application. It is apparent from that transfer that it was stamped with nominal duty of $20. That is plainly consistent with the Stamp's Office having proceeded on the basis that only the legal title, and not the beneficial interest in the land, was being assigned.
I observe that on the documentary evidence before me, there appears to be some anomaly in the change of share ownership in Eaton Developments around that time, that is around 2001. That may or may not be an issue for another time, but on the evidence before me it has no bearing on the outcome of this application.
[3]
The legal principles applicable on an application under s 138B of the TLA were summarised in Bashford v Bashford [2008] WASC 138 and do not need to be repeated. It is trite that in order to extend the caveat, the plaintiff must first demonstrate that the caveator's claim has or may have substance. In other words, the caveator must demonstrate that there is a prima facie case or a serious question to be tried as to whether a caveatable interest exists. A caveatable interest, it is well established, must be a proprietary interest in the land. The essence of Mr Casella's claim of a caveatable interest in this application, and his statutory declaration, is based on his assertion that he remained a shareholder in a now deregistered company which held both the legal and equitable interest in the land, of which that company was unlawfully deprived.
The evidence before me does not support an inference that Eaton Developments held the beneficial interest in the land. Indeed the evidence, including Mr Casella's own statutory declaration which he has subsequently disavowed, is overwhelmingly to the contrary. Even if that were not the case, Mr Casella's shareholding in a company plainly does not give him any proprietary interest in the land held by the company.
In respect of his contention that Eaton Developments held not only the legal title but the beneficial interest in the land, Mr Casella directs attention to a number of matters. One of those is the fact that the trust is not referred to in the contract or the transfer instruments. In my view that is of little consequence, if any consequence at all. Section 55 of the TLA provides that the Registrar shall not enter on the Certificate of Title notice of any trusts other than those set out in the body of the original Crown grant or Certificate of Title. There are various other exceptions that are not material to this matter.
Mr Casella also contended that the borrower or a borrower for the original purchase of the land in 1993 was Eaton Developments and Mr Casella produced in evidence a 1993 letter to Eaton Developments concerning finance. There is no reference in that letter to the trust. Again in my view, that is of little relevance of itself.
In further support of his argument that Eaton Developments held the beneficial interest in the original parcel of land and therefore the lots subdivided from it, counsel for the plaintiff placed some reliance on s 34 of the Property Law Act 1969 (WA). That section deals with the creation of interests in land and the declaration of trusts in respect of land. In the broadest of terms, it provides that such matters need to be created or proven by written instruments duly signed. The plaintiff says that no such documentation has been provided in the evidence. This contention was advanced by the plaintiff for the first time in written submissions filed yesterday, the day before the hearing of the matter. Whether or not such documentation exists is in any event not material to the outcome of this application in my view, but I would observe that the first defendant is hardly likely to have had an opportunity to locate such documentation in the circumstances.
The evidence before me points to the establishment of the trust immediately prior to the entry into the contract for the purchase of the land in 1993. The evidence such as it is strongly suggests that on entering into the contract for the purchase of land, Eaton Developments was acting in its capacity as trustee. Further, such financial statements as have been able to be produced suggest that the land has always been treated as an asset of the trust. In those circumstances it does not appear to me that we are dealing with a situation where the beneficial interest in the land was said to have been assigned from Eaton Developments to the trust. Rather, the evidence suggests that from the outset, Eaton Developments acquired the land solely in its capacity as trustee. If that is so, then the legislative requirements for the declaration of the trust or relating to the conveyance of a beneficial interest do not seem to me to arise in the same way. Indeed, that appears to be the first defendant's position; not that the beneficial interest was conveyed to the trust, but that Eaton Developments purchased the land, and at all times held the land, solely in its capacity as trustee.
The plaintiff is of course entitled to contest that proposition and bring further evidence that may alter the landscape and the conclusions that might be drawn, but at this stage the weight of the evidence before the court suggests that the position advanced by the first defendant is likely to be correct.
The short point is that the plaintiff contends in its written submissions filed on 15 June 2023 that without the relevant documentary evidence, the beneficial title never left the company. However that, with respect, misapprehends the circumstances as explained by the first defendant, that is that the beneficial interest was never held by Eaton Developments. Moreover, from my brief consideration of the authorities and especially the decision of Lee J in Secretary, Department of Social Security v James [1990] FCA 213 and the more recent decision of the Supreme Court of NSW in Plummer v Attorney General of NSW [2018] NSWSC 869, it appears that documentation that arose after the purchase that establishes that the land was held by the company in its capacity as trustee will suffice to meet the statutory requirements of s 34 of the Property Law Act. The 1993 documentation on its own is therefore of limited relevance.
Be that as it may, it is plain in my view that this plaintiff has no arguable caveatable interest in the land on any version of the events. The essence of Mr Casella's claim of a caveatable interest is based on his assertion that he remained a shareholder in a now deregistered company which held both the legal and equitable interest in the land. The evidence before me does not support an inference that Eaton Developments held the beneficial interest in the land. I have already said that even if that were not the case, that would not give Mr Casella an interest in the land.
In his submissions filed on 15 June 2023 counsel for the plaintiff, properly in my view, accepted that there was no arguable caveatable interest, a position that counsel confirmed before me at the hearing today. The plaintiff's position was therefore advanced in the alternative, that is an application for what I might call an ordinary interlocutory injunction.
Such an application requires consideration of the principles relating to the grant of an interlocutory injunction. Those principles were helpfully summarised in Twinside v Venetian Nominees [2008] WASC 110. Those principles too do not need to be repeated.
This is an application under s 138B of the TLA. The originating process makes that plain. Counsel for the plaintiff drew my attention to the fact that the relief sought in that originating process sought in the alternative such orders for injunction made as seen fit by the court. Plainly however, my powers on this application are shaped by the TLA, not by the form of relief sought by the originating process. Under s 138C, the court has express powers set out in that section. They include under s 138C(2)(a)(iii) that on the hearing of an application under subsection (1), if satisfied that the caveator's claim has or may have substance, the court may make such other orders as it thinks fit concerning the caveat or the land over which the caveat was lodged.
In the decision of Lee v Mavaddat, Hasluck J said:[1]
[4]
The court also has power in appropriate circumstances to order removal of a caveat, but at the same time impose an injunction maintaining the status quo between the parties until their dispute can be resolved. This might be the appropriate course where there is an arguable case as to the interest claimed but that interest is not in reality of a proprietary kind (eg where it is a 'mere equity').
[5]
His Honour did not make express reference to s 138C(2)(a)(iii), but it seems to me that his Honour was referring to the power granted by that subsection, because otherwise there would have been no need to refer to an interest that fell short of a caveatable interest such as a mere equity.
Counsel for the plaintiff submitted that I have a general equitable power to give injunctive relief independent of s 138C. I have some doubt as to whether that is so on an application that is made expressly under s 138B of the TLA, as distinct from an interlocutory application in a broader claim brought under a writ in the usual course. If the powers of the court on this application are constrained by the requirements of s 138C, then it seems to me that having decided that the caveator's claim has no substance whatsoever, I am not empowered to make such other orders under s 138C(2) as the plaintiff seeks.
This is not a case of a claim in respect of land that does not rise to the level of proprietary interest or a caveatable interest but might be properly characterised as a mere equity. Here, there is no sustainable claim at all in respect of the land. In those circumstances, I do not think that alternative relief such as that sought by the plaintiff is available under s 138C(2). However if I am wrong about that, I will now give consideration to whether injunctive relief should be granted on the application of the usual principles of an interlocutory injunction.
In that respect, the plaintiff's counsel explained that the serious question to be tried was the plaintiff's asserted interest in a company in circumstances where that company's principal asset had been unlawfully stripped from the company. On the evidence before me, as I have already observed, the more likely outcome in my view is that Eaton Developments at all times acted in its capacity as trustee. I have also already referred to potential problems in relation to the Limitation Act. In my view therefore, the plaintiff may have a claim but on the materials before me it would appear to be weak. In addition, the claim is in substance a claim that belongs to a company, Eaton Developments, that is deregistered, and to the extent that the land was held in a unit trust, the claim would seem to belong to Selec. Both those companies have been deregistered. The plaintiff has given evidence that he intends to reregister those companies, but the evidence does not rise above an explanation that he has given instructions for that to happen. As yet, nothing of substance has happened. That is notwithstanding that the plaintiff has been aware of the circumstances, on his own evidence, since January this year. That unexplained delay in seeking to reregister either company militates against the grant of relief in any event.
In addition, a number of other factors militate against the grant of interlocutory relief even on the broader principles relating to the grant of an interlocutory injunction. There is no evidence that the plaintiff could not be adequately compensated in damages, and there is evidence that the first defendant will be prejudiced by any delay occasioned to settlement. In the course of submissions, counsel for the plaintiff withdrew any suggestion that the plaintiff sought to restrain dealings with the land. Counsel for the plaintiff explained that it would be sufficient if the injunction were granted merely restraining the first defendant from dealing with the proceeds of the sale, and in that way, dealings would not be held up in a manner that might prejudice the first defendant. That of itself does not address the question that damages would be an adequate remedy. In addition, the first defendant has in reality had no opportunity to put on evidence of what prejudice it might suffer from such a restraint.
Let me then summarise where that leaves me. There is not, and in my view never has been, a caveatable interest that could justify extension of the caveat. There is no claim that approximates any claim in respect of the land. Accordingly in my view, the claim in the caveat has no substance whatsoever. No order in favour of the plaintiff ought to be made under s 138C of the TLA. In respect of an interlocutory injunction of the broader variety in the court's equitable jurisdiction, my view is that to the extent that there is a serious question to be tried it is weak, damages are an adequate remedy, there has been unexplained delay in seeking to reregister either of the relevant companies, and there is prejudice to the first defendant. For those reasons, I would not be prepared to grant any injunctive relief to the plaintiff on ordinary principles.
In the course of submissions, I asked counsel for the first defendant whether I was correct in my apprehension of the evidence that there was no evidence of actual loss occasioned by this caveat. Counsel for the first defendant confirmed that the evidence did not demonstrate that the caveat has caused actual loss to the first defendant. I asked that because the plaintiff had given an undertaking in respect of any damages that might have arisen by reason of the interim order that I made, and as I am sure the parties are aware, the TLA in any event provides for compensation to be paid under s 140 for a caveat lodged without reasonable cause.
For all those reasons, I dismiss the plaintiff's application, including its alternative application.
[6]
I turn now to the question of costs.
For the reasons I have outlined, in my view, properly advised the application ought never to have been made. Counsel for the plaintiff submitted that there was always an alternative application for an interlocutory injunction, and that that was contained in the original application. In my view, that alternative was really only advanced when yesterday, counsel for the plaintiff properly conceded that the caveat could not be sustained and therefore advanced and relied upon the alternative of an interlocutory injunction. The initial submissions, no doubt hastily and under some pressure drafted by the plaintiff's counsel for the hearing on 24 May 2023 were directed, in my view, to seeking to persuade the court to extend the caveat; they were not directed to the grant of an interlocutory injunction.
In the circumstances, I will now invite counsel to comment, but my provisional view is that costs up until the filing of submissions by the plaintiff should be paid on an indemnity basis, and thereafter on a party party basis.
[7]
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.