Transfer of Land Act 1893

Kais v Turvey (1994) 11 WAR 357

1 McKECHNIE J: On 14 August 1998 the plaintiffs lodged caveats in respect of property known as 33 Quadrant Street, Pingelly, where they were then living. These caveats were supported by a statutory declaration.

2 On 11 March 1999 the plaintiffs received a notice from the Registrar of Titles requiring action to be taken in this court or the caveats would lapse. On 1 April 1999 Wheeler J made an order extending the caveat until 19 April 1999. The writ was filed the same day. On 19 April 1999 I extended the caveat until today to a special appointment also for today.

3 The plaintiffs are an elderly couple in indifferent health. The defendants are their daughter and son-in-law. In 1995 the property at 33 Quadrant Street, Pingelly, was purchased. The plaintiffs have since lived in it.

4 Although various matters between the parties are in dispute the following appear to be common cause:

(1) The defendants entered into a contract of sale for the purchase of the premises.

(4) A loan of funds totalling $59,500 was advanced by Westpac Banking Corporation to the defendants, secured by way of mortgage. This was the balance of the purchase price. A sum of that was advanced through Challenge Bank.

(5) On 1 December 1995 transfer took place whereupon the defendants were named as the registered proprietors on certificate of title 2118 folio 632.

5 The caveatable interest specified is "equitable interest".

6 The defendants submit that the caveats are defective on their face in that the interest sought to be claimed is not sufficiently detailed. Transfer of Land Act s 137 relevantly provides:

"Any beneficiary or other person claiming any estate or interest in land under the operation of this Act or in any lease mortgage or charge under any unregistered instrument document or writing or under any equitable mortgage or charge by deposit without writing or by devolution in law or otherwise may lodge a caveat with the Registrar in an approved form ..."

7 And it then goes on. The caveat follows the approved form. It is in fact a printed form. Under the heading "Estate or Interest Being Claimed" it says, "See note 5." Note 5 reads: "Specify the estate or interest claimed." The estate or interest claimed is equitable interest. The question which arises is whether the term "equitable interest" is sufficiently explicit: see Kuper & Kuper v Keywest Constructions Pty Ltd (1993) WAR 419 per the Chief Justice at 429.

8 In New South Wales there is a line of authority to the effect that in order to be valid, the caveat has to state the nature and quantum of the estate or interest claimed in the interest, instrument or facts on which the claim was founded. This rule is said to continue despite amendments to the Real Property Act 1900 requiring the caveat to be in an approved form - as does the Transfer of Land Act s 137: see Kerrabee Park Pty Ltd v Daley (1978_)_ 2 NSWLR 222 per Holland J at 230 to 232.

9 That line of authority is highly persuasive and in my view accords with the logic as to why the caveatable interest should be specified. In this case, the amount or value is completely unspecified and on the authority of Kerrabee Park that is sufficient to render the caveat defective. In any event the term "equitable interest" is impossibly wide. Granted that, as the case of Kuper illustrates, that there is considerable latitude in the nature of the specification of an equitable right or interest. Nevertheless, this description is so broad as to be meaningless.

10 An equitable interest can arise in a multitude of ways and give rise to a multitude of remedies. As the bare minimum requirement, the claim should outline the facts which are said to give rise to the equitable interest. I hold that the caveat is defective in that it is not sufficiently explicit or detailed.

The effect of the statutory declaration filed with a caveat

11 The next question is whether regard can be had to the statutory declaration to make good the omission. In Giacci Bros Pty Ltd v Tyrrell, SCt of WA**;** Library No 980106**;** 18 February 1998, Templeman J held that the statutory declaration itself would not cure the defect in the non-specificity of the description within the caveat. With great respect to his Honour, I take a different view.

12 The Transfer of Land Act s 137 in dealing with the statutory declaration goes on to say:

"The person lodging such caveat shall if required by the Registrar support the same by statutory declaration stating the nature of the estate or interest claimed and the title thereto and may withdraw any such caveat."

13 The statutory declaration is available to search by interested parties. By providing that the statutory declaration shall set out the nature of the interest claimed, in my opinion Parliament was envisaging a situation where the statutory declaration would in solemn form set out in more detail the nature of the interest. Therefore, in considering whether the estate or interest being claimed is sufficiently specified, the legislative scheme allows this court to have regard not only to the caveat but also to any statutory declaration lodged in support.

14 A defect in the actual caveat may be remedied by the statutory declaration.

15 I now refer to the statutory declaration jointly declared by each of the plaintiffs on 25 August 1998. Paragraph 1 says:

"The nature of the estate or interest claimed is an equitable interest."

"2. The title to the estate or interest claimed arises by virtue of:

a) We are the natural parents of Jessica Osborne of 32 Pitt Street, Pingelly in the said State.

b) Jessica Osborne is married to Peter John Osborne of 32 Pitt Street, Pingelly in the said State.

c) Jessica Osborne and Peter John Osborne ("the Osbornes") are the registered proprietors of portion of Pingelly Lot 479 being the whole of the land comprised in certificate of title Volume 1441 folio 889 and Pingelly Lots 477 and 478 being the whole of the land comprised in certificate of title Volume 2118 Folio 632 ("the property").

d) When the property was purchased by the Osbornes in December 1995 they orally agreed with us that the property was to be owned in equal shares ("the agreement").

e) In accordance with the agreement, we have been paying since January 1996 the sum of one hundred and thirty five dollars ($135.00) per fortnight to Challenge Bank account number 036 170 10 5213 in reduction of a loan for the property in the name of the Osbornes.

f) In accordance with the agreement we have paid all land and water rates, including excess water rates for the property.

g) In accordance with the agreement we have carried out and paid for improvements to the dwelling on the property as follows:

And we make this solemn declaration by virtue of Section 106 of the Evidence Act 1906."

16 And there is listed a series of improvements. The claim therein specified is a claim for an equitable interest arising from an oral agreement which would expressly create a trust in the defendants in favour of the plaintiffs in respect of the land. To that extent when regard is had to the statutory declaration read with the caveat, a sufficient estate or interest is therefore identified. Consequently, the caveat is not defective by reason of its failure to specify the interest claimed.

The Transfer of Land Act s 138C(2) provides:

"On the hearing of an application under subsection (1), the Supreme Court -

(a) if satisfied that the caveator's claim has or may have substance -"

"(b) if not satisfied that the caveator's claim has or may have substance, shall dismiss the application; and ..."

17 It is necessary, therefore, to make inquiry as to the substance of the plaintiffs' claim as caveators.

18 The plaintiffs' claim as to the trust arising under the oral agreement is reflected in the statement of claim. Paragraph 5 of the statement of claim reads as follows:

"Prior to such registration the parties had agreed that the properties would be held owned equally by the plaintiffs and the first defendants as tenants in common.

The agreement was made orally between the parties at Pingelly during or about November 1995."

19 Paragraph 6 then sets out what is said to have occurred pursuant to the agreement.

"In the premises the plaintiffs have a beneficial interest in the properties and the first defendants are holding the plaintiffs interest in the properties in trust for the benefit of the plaintiffs."

"(a) a declaration that the plaintiffs half-share in the property situate at 33 Quadrant Street, Pingelly in the State of Western Australia and more fully described as portion of Pingelly Lot 479 being the whole of the land comprised in certificate of title Volume 1441 Folio 889 and Pingelly Lots 477 and 478 being the whole of the land comprised in certificate of title Volume 2118 Folio 632 are held by the first defendants on trust for the benefit plaintiffs;

(b) An order that the first defendants do transfer to the plaintiffs their half share in the properties as tenants in common."

20 However, Mr Camp who appeared for the plaintiffs today disclaimed reliance upon the oral agreement as the basis of an express trust. He conceded that the facts do not support a sufficient intention to establish an express trust. Instead he urged me to find that the facts deposed to within the affidavits were sufficient to give rise to a claim for an equitable interest of a different kind.

21 He submitted that the facts showed a case of joint endeavour. He relied upon the principles established in Baumgartner v Baumgartner [1987] HCA 59; (1987-88) 164 CLR 137, and Muschinski v Dodds [1985] HCA 78; (1984-85) 160 CLR 583. The consequence of the joint endeavour which has prematurely failed, he submitted, was that a constructive trust was created in the defendants on behalf of the plaintiffs.

22 He avoided the difficulty of particularising the extent of the interest by submitting that that would be worked out at trial. The question, however, is not so easily avoided. The equitable interest claimed may be for the return of moneys expended, for a recognition of labour, for the loss of expectation of accommodation for life, for ownership as tenants in common pursuant to a constructive trust on several bases including charge or unconscionable conduct. The very lack of detail renders the claim, cast in this way, subject to the vice of inexactitude.

23 However, these arguments put forward by Mr Camp may or may not have substance. They may enable the plaintiffs to succeed at trial although not, I suggest, on the present statement of claim. They are not, however, the basis of the caveatable interest claimed which I have to consider.

24 The onus is on the plaintiffs to establish that there is a serious question to be tried or in the words of Transfer of Land Act s 138C that the claim has substance: see Eng Mee Yong v Letchumanan [1980] AC 331 per Lord Diplock at 337. This decision was followed in Custom Credit Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 per Owen J at 48.

25 Mr Camp's concession is in fact a concession that there is no serious question to be tried in respect of the express trust claimed in the statutory declaration and caveat. I shall briefly examine the facts to determine if the concession is rightly made. In undertaking this examination I shall confine myself to the plaintiffs' evidence except where matters are not in dispute.

26 The statutory declaration in the paragraph to which I have referred states that it was orally agreed that the property was to be owned in equal shares. This agreement is further said to be evidenced by the plaintiffs paying $135 per fortnight to Challenge Bank off one of the loans. They have paid land and water rates, including the excess water rates and carried out some improvements.

27 This is particularised in par 6(1) of the statement of claim as the following:

"Pursuant to the said agreements the plaintiffs contributed an amount of $2500 towards the deposit paid in respect of the properties by forgiving a loan previously made by the plaintiffs to the first defendants for the same amount."

28 I note that the deposit actually paid was only $500. The plaintiffs have filed two affidavits in support of their claim. The first was filed by an articled clerk, Miss Cena, because of the urgency of the matter and she was unable to get hold of the plaintiffs prior to 1 April 1999 when application was made. Paragraph 17 of her affidavit deposes as follows:

"In addition to the particulars set out in the Statutory Declaration, the Plaintiffs have also instructed me that they have paid a deposit on the property of approximately $2500. This deposit was paid by the First Defendants as a repayment of a loan owed by the First Defendants to the Plaintiffs."

29 The daughter of the plaintiffs, the second-named first defendant, swore an affidavit on 15 April 1999. By par 44 she deposed as follows:

"The allegation that $2500 deposit was paid by the Plaintiffs is untrue. No moneys were paid, however in 1987 my sister and I started a shop and my mother offered us $2500 to purchase stock. It was a loan and we both agreed to pay half each however. We closed the shop on 14 February 1988 and mentioned to my mother that I would repay it. My mother said it was a gift and not to mention it again."

30 That statement was responded to by the first-named plaintiff Mrs Cruz in her affidavit filed on 23 April 1999. By par 39 she says:

"In relation to paragraph 44 of the First Defendant's Affidavit the Second-Named First Defendant rang me in tears regarding the repayment of the $2500 I had previously lent to her. I told her at this time not to worry about the money that I had lent her. As part of the agreement for the purchase of the property she said to me that she would pay the deposit on the property and that this would repay the debt of $2500 that she owed to me."

31 From my reading of these various statements it does not appear to me that the $2500 if in fact included was any form of consideration under an oral agreement. The loan appears to have been forgiven earlier by the plaintiff and any unilateral declaration by the first defendant in these circumstances is insufficient to reconvert it into consideration in the sum of $2500 by way of a partial contribution and, as I further note again, the actual deposit paid was only $500.

32 It is asserted by the plaintiff that these were made pursuant to the agreement. By themselves the payments are equivocal. The fact that they are paid by the plaintiffs directly off the mortgage is by no means determinative of an agreement for joint purchase. Mrs Cruz in her affidavit deposes in par 23:

"We all agreed that the mortgage from the Westpac Bank would be divided into two loans and it was agreed that I would have one repayment book and the first defendants would have the other. I refer to annexure KMC-5 in the Affidavit of Katarzyna Maria Cena and specifically to copies of the Challenge Bank deposit book for the special options home loans which I used as a means of paying the Mortgage in cash each fortnight to the Challenge Bank."

33 On the other hand the first-named second defendant Mrs Osborne deposes that the rent was paid in cash from 12 January 1996 until late March 1997. As a result of her going to work she asked the plaintiff to pay money direct into the account and that was then done.

34 Significantly, the copies of the payments receipts at Challenge Bank, some of which are illegible, only seem to relate to a period from 17 April 1998. There is not exhibited to the affidavits any loan repayments for the period for 1996 until late March 1997. Two other matters arise in relation to the rent. The plaintiff was provided with a receipt for $200 at the time the defendants came into possession of the house on 1 December 1995. This was for her to apply for rent assistance.

35 I am unable to draw any conclusion from this fact. Nor, on the other hand, can I draw any conclusion from the fact that the first defendants have declared rent receipts as part of their assessable income, especially where that entitled them to deductions in excess of the rent claimed. In my view the whole question as to whether or not payments were made is equivocal.

36 There is a dispute as to the nature and extent of improvements paid for or contributed to by each party so I shall draw no conclusions in respect of that.

37 Finally, I turn to the agreement itself said to give rise to an estate in the land as equal tenants in common, and I refer to the affidavit of Mrs Cruz from par 12:

"12. On the following Monday I called the First named First Defendant who told me that the land in question was 33 Quadrant Street and at this time he said to me words to the effect:

'You come down to look at this property because, if you think it is liveable then we will buy it.'

13. The following day I went and saw the property with my husband and the First Defendants. The First named First Defendant entered the property through a broken window and we examined the property inside and out.

14. My husband is a retired painter and is experienced at minor renovations. We had both helped the First Defendants in the past with renovating their own house and business and we had been renovating at Popanyinning for the past three years.

15. After some consideration I decided that the property could be renovated to a condition that it was liveable and we decided at this time, being on or about the 16 October 1995, that we would purchase the property together equally.

16. During our discussions relating to ownership the Second named First Defendant said to me in effect:

'Mum you have worked all your life, you have given everything away, you have nothing in return, its time you and dad had something for the two of you.'

17. We did not become registered proprietors because as pensioners we did not think that the bank would provide us with a loan.

18. We agreed the First Defendants would be the registered proprietors of the property. My husband and I trusted the First Defendants."

38 It is not evidenced in writing. There are self-serving statements in letters. It does not specify what is to happen at death. If the agreement was for a tenancy in common then the parties could bequeath their interest. The letters suggest that in the plaintiffs' mind it was for life only. For instance, as part of the letters annexed there is this passage:

"I will tell you now, Peter, Jessica, Dad and me, we are trying to buy this house on 6 and a half acres of land it is on the front of Jessica's house the house needs quite a bit of tender loving care and a few alterations but at least if we get it would be our house until dad and I kick the bucket."

"I no (sic) that up in the farm it was free but it made me feel I owe everyone so this is ours yes we have to pay half the mortgage with Jessica and Peter we only pay $126 each fortnight and I have to pay my electricity and my phone and I will pay the rates because I will live here for the rest of our lives."

39 The defendants are legally responsible under the mortgage for any default. In all the circumstances, taken at its highest and without regard to the defendants' denial of any agreement, the plaintiffs' evidence establishes no more than an agreement that the plaintiffs may live out their lives in the house subject to making payments equivalent to one of the loan repayments each fortnight

40 The evidence falls well short of establishing an agreement for a tenancy in common in equal shares such as to give rise to an express trust. Consequently, in my view Mr Camp's concession is rightly made and should be accepted.

41 I would make the observation - because this Court now is concerned at mediating disputes where possible and I note the parties are not present - that this dispute seems to me to be eminently capable of resolution in some form if the parties are vaguely reasonable. It seems to me that the parties are likely to beggar themselves with legal costs without either party ending up very satisfied. The plaintiffs are elderly and up to this point there does not appear in the papers to be enormous matters of dispute between the plaintiffs and the defendants. So I would urge the parties to do what they can to see if they can reach some form of useful accommodation. It would appear that the uppermost question is in fact living in the house for the rest of their life.

42 I will leave that to counsel, because I know counsel always approach these questions with faith and sincerity that mediation can be tried, but if the matter came back before me I think I would be inclined to order mediation before taking other steps. However, for today it is sufficient to order that the plaintiffs' claim be dismissed and that the plaintiffs pay the defendants' costs, including reserved costs.

43 As a result, there being no substance in the claim of the caveators as specified in the caveat read with the statutory declaration, this application is dismissed.