HARVARD NOMINEES PTY LTD -v- CARATTI [2022] WASC 441 (16 December 2022)

1. On 23 September 2022 the present application was filed.
2. At a directions hearing held on 17 October 2022 Allen's counsel contended that the final hearing of the application should be deferred to enable proceedings, which Allen foreshadowed would be commenced to establish his proprietary interest in Harvard Marvel Loch, to be determined. I listed the final hearing of this application to take place on 30 November 2022 on the basis that Allen could renew his application that the final hearing be vacated once his foreshadowed proceedings had commenced.
3. On 7 November 2022 Allen commenced proceedings (numbered CIV 2172 of 2022) against Harvard, John, Apache and Apache's sole director, Mr Giovanni Nicoletti in which he sought a declaration to the effect that the agreement for the sale of Harvard Marvel Loch was void and an injunction restraining the sale of Harvard Marvel Loch from going ahead.
4. At a directions hearing held on 21 November 2022 Allen's counsel pressed his application that the hearing on 30 November 2022 be vacated and supported that application not only by reference to the proceedings Allen had commenced but also by reference to the fact that he had secured a senior private mediator who was available to mediate the dispute in December 2022. I was not persuaded that the hearing of the present application should be vacated. It was heard on 30 November 2022.

1. In support of their application, the plaintiffs relied on the following affidavits: John's affidavits sworn on 23 September 2022 and 22 November 2022, an affidavit of Peter John Morris, a bank officer employed by National Australia Bank Ltd (NAB), sworn on 21 September 2022, and an affidavit sworn by Mr Giovanni Nicoletti on 22 November 2022. Allen relied on affidavits sworn by him on 16 October 2022, 18 November 2022 and 29 November 2022.

1. The late Mr Sergio Caratti, his widow, Mrs Maddeleine Caratti and their sons, John and Allen, conducted and conduct their business activities through a number of companies and trusts. Many, but not all, of the relevant entities are listed in the deed on which Allen relies to claim a proprietary interest in Harvard Marvel Loch, the 26 September 2002 deed (the 2002 deed).
2. John's unchallenged evidence is that the main activity of the Caratti group is property development, including land subdivisions and the construction of premises for tenants in exchange for long term leases.[2] In addition, John deposed that companies within the Caratti group own farming properties and that these are usually held on a long‑term basis unless a very good offer was made in respect of the properties or there was some other commercial reason for the sale.[3] This evidence was not challenged.

1. Harvard has been the registered proprietor of Harvard Marvel Loch since December 1983.[4] It owns the land in its capacity as the trustee of the S Caratti Family Trust.
2. The current directors of Harvard are John and his son, Mr Aaron Caratti.[5]

1. The S Caratti Family Trust is a unit trust constituted by a deed of trust made on 30 June 1977. The units are held by Venetian Nominees Pty Ltd and Kelena Nominees Pty Ltd. Venetian holds 27 ordinary units and three special units and Kelena holds nine ordinary units and one special unit.[6]
2. The investment powers of the trustee are extensive. They include the power to secure by mortgage or otherwise the payment of money to any person (cl 43(c)), the power to give a guarantee for the payment of money by any person (cl 43(d)), and the power to sell any real or personal property held by the trustee (cl 43(f)).

1. The NAB currently holds three registered mortgages over Harvard Marvel Loch: a first ranking mortgage granted to Macquarie Bank on 23 December 1985 (mortgage D172512),[7] a second ranking mortgage granted to Custom Credit Corporation on 9 May 1990 (mortgage E356608) and a third ranking mortgage granted to the NAB on 8 November 1996 (mortgage G323393). The first ranking mortgage granted to Macquarie Bank was transferred to Custom Credit Corporation. In 1994 the first and second ranking mortgages were transferred to the NAB. I will refer to the provisions of the first ranking mortgage (numbered D172512) later in these reasons.

1. Marvel Loch is leased to Merredin Farms Pty Ltd pursuant to the terms of two leases.[8] The terms of the leases expire on 3 April 2029. The rental income derived from the lease of Harvard Marvel Loch and Bullfinch farm is $191,113.78 plus GST.[9] The leases confer a right of first refusal on Merredin Farms Pty Ltd.

1. There are three Sales Agreements, one between Harvard and Apache in respect of Harvard Marvel Loch and the Bullfinch farm,[10] one between John and Apache in respect of JMC Marvel Loch,[11] and one between Bella Guarda and Apache in respect of Bella Guarda Marvel Loch.[12]
2. In his affidavit sworn on 23 September 2022 John deposed that in 2019 he commenced proceedings against Mr Nicoletti in the Federal Court and that he has not spoken to Mr Nicoletti since then. John deposed that the negotiations which preceded entry into the Sales Agreements were conducted through a real estate agent retained by Apache and whose commission is to be paid by Apache.[13] John deposed that, despite not being friendly with Mr Nicoletti, he accepted the offers made by Apache because the prices offered were above market value. John attached valuations to his affidavit that demonstrated that the sale prices were above market value.[14] None of this evidence was challenged by Allen. I accept that the Sales Agreements were concluded in the circumstances described by John and the combined consideration exceeded the market value of the Marvel Loch and Bullfinch farms.
3. Each Sale Agreement is expressed to be subject to the simultaneous settlement of the purchases which are the subject of the other agreements. As recorded earlier, the Sales Agreements provide that settlement is to take place on 27 January 2023.[15] The Sales Agreements are also expressed to be conditional on Merredin Farms Pty Ltd not exercising its first right of refusal and Apache entering into a deed of covenant with Merredin Farms Pty Ltd. Each of these conditions has been satisfied.[16]
4. The sale agreement in respect of Harvard Marvel Loch and the Bullfinch farm was executed by John on behalf of Harvard and likewise the sale agreement in respect of Bella Guarda Marvel Loch was executed by John on behalf of Bella Guarda.
5. On 25 October 2022 Apache's solicitors pointed out the Harvard Marvel Loch sales agreement and the Bella Guarda sales agreement were required to be signed by both directors of each vendor company. On 26 October 2022 the Harvard Marvel Loch and Bella Guarda sales agreements were each executed by both directors and sent to Apache's solicitors.
6. The NAB has confirmed that it will discharge its registered mortgages upon, and subject to receipt of the entire proceeds of sale payable pursuant to the Sales Agreements.[17] Correspondence from the NAB explaining its position is referred to later.
7. In his affidavit of 16 October 2022, Allen deposed that on 10 October 2022 he spoke to Mr Nicoletti and Mr Nicoletti said words to the effect that the sales were not urgent, and he (Mr Nicoletti) needed to deal with the leases. Allen deposed that he asked Mr Nicoletti if he would agree to extend settlement by six months and he deposed Mr Nicoletti said that he would do so.
8. In his affidavit of 22 November 2022, Mr Nicoletti deposed that Allen had called him in early to mid‑October 2022 and asked him whether he would extend the settlement date for the sale of Marvel Loch and Bullfinch but that he did not agree to do so. Mr Nicoletti deposed he said to Allen words to the effect of 'no, why would I do that?'. Mr Nicoletti deposed that his intention is to cause Apache to proceed to settlement under the Sales Agreements on 27 January 2023.

1. The parties to the 2002 deed are John, Allen and their mother, Maddeleine.
2. Under the heading 'Background' the deed recites the parties either jointly or severally control various entities. The entities are listed and numbered 1 to 17. They include: Caratti Holdings Co Pty Ltd, Harvard, Navarac Pty Ltd, Tosman Pty Ltd and Venetian.
3. The operative terms of the deed are as follows.
   1. In any trust where Maddeleine Caratti acts as appointor she will by deed appoint John Caratti and Allen Caratti jointly to be the joint appointors on her death.
   2. Maddeleine Caratti will make a will whereby any interest she holds in any assets, save for her personal effects, will on her death be bequeathed to John Caratti and Allen Caratti in equal shares. By that will John Caratti and Allen Caratti will be appointed her joint executors and trustees.
   3. Maddeleine Caratti will exercise any powers she has as a director or shareholder of any of the corporations of which she is a director or shareholder or could so act to further terms of this agreement.
   4. The shareholdings in all corporations 1 - 13 above will be adjusted so that Allen Caratti and John Caratti will hold equal beneficial interests.
   5. Allen Caratti will be entitled to nominate a person to act as a director of each of:

5.1 Caratti Holdings

5.2 Jamesway

5.3 Navarac

5.4 Mammoth

5.5 Harvard

5.6 Venetian

1. In corporations 14 - 17 above, John Caratti will have a beneficial interest equal to that of Allen Caratti. Allen Caratti will act as trustee of that beneficial interest and as the director representing the interests of Allen Caratti and John Caratti.
2. Maddeleine Caratti's interests in the corporations 1‑13 shall by her will pass to John Caratti and Allen Caratti jointly.
3. In corporations 1 ‑ 9 above, there shall be 2 directors only, 1 appointed by Allen Caratti and 1 by the other shareholders. There will be no other directors to those corporations without the unanimous approval of John Caratti and Allen Caratti. In corporations 10, 11 and 12 Allen Caratti presently acts as sole director and he shall continue as sole director. No chairman of directors or members meetings shall have a casting vote. There will be no coram without 2 directors. Subject to National Australia Bank approval on appointment.[18]
4. There will be no further share allotments or transfers of shares other than as contemplated by this agreement without unanimous approval of parties.
5. On John Caratti attaining the age of 60 years all beneficial interests of John Caratti and Allen Caratti will be divided equally between them in specie with cash adjustment as necessary.
6. In the event of Allen Caratti and John Caratti not agreeing on the distribution of assets as required by clause 10 above within 60 days then any unresolved issues shall be resolved by an independent barrister to be appointed by the President for the time being of the Law Society of WA. That person shall be appointed within 7 days of a request by either John Caratti or Allen Caratti.

11.1 act at the joint cost of Allen Caratti and John Caratti;

11.2 decide all issues within 60 days of his appointment;

The decision of the person so appointed shall be final and binding on Allen Caratti and John Caratti.

1. All powers of corporations named above and parties as trustees or appointors of any trusts will be used so that beneficial entitlements are equalised between Allen Caratti and John Caratti or the children of Allen Caratti and the children of John Caratti as the case may be.
2. All powers to acts [sic] as trustees or appointors will if exercisable by Allen Caratti or John Caratti alone be amended so as to be exercisable by them or their nominees jointly.
3. No new entities shall be incorporated by the parties without them incorporating equality of beneficial interests.
4. [Rural Bank] will be advised that Allen Caratti is chief executive of:

15.1 Mammoth

15.2 Navarac

1. Allen Caratti will be the only authorised account signatory with [Rural Bank]. Maddeleine Caratti and John Caratti will each be authorised signatories to National Australia Bank accounts of the corporations.
2. This agreement is binding notwithstanding that parties contemplate there may be further documents to implement its terms.
3. Supreme Court action CIV 2188 of 2002 will be discontinued with no order as to cost.

1. In 2008 John commenced proceedings numbered CIV 2006 of 2008 in respect of the 2002 deed. Within those proceedings, in 2014 John obtained an injunction restraining Allen from invoking the dispute resolution provision in cl 11 of the 2002 deed. In his reasons for decision for granting the injunction Allanson J described the background to the application in the following terms:[19]

John turned 60 on 21 January 2010. On 20 January 2010 Allen's solicitors wrote to John, referring to the terms of the 2002 Deed, and requesting 'an account of your relevant beneficial interests' and inviting a proposal for distribution of the parties' interests.

On 2 February 2010, solicitors for John responded suggesting a 'structured mediation'. The parties participated in a private mediation but could not resolve their disputes. From 2011, they have been actively litigating both this action and a related action between Moondancer Holdings Pty Ltd and others (as plaintiffs), and Navarac Pty Ltd and others (as defendants): CIV 1061 of 2008. John and Allen are parties to that action.

The pleadings are now complete.

By letter dated 20 November 2013, the solicitor for Allen requested the President of the Law Society to appoint an independent barrister to resolve matters in accordance with cl 10 and 11 of the 2002 Deed. The letter stated:

'In 2002 my client and his brother John Caratti were in dispute concerning their respective rights to various family assets including their respective rights to take part in the management of various family companies. Allen Caratti and John Caratti settled that litigation by entering into a deed.'

The letter set out cl 10 and 11 of the 2002 Deed and requested the appointment of an independent barrister 'to undertake the division of beneficial interests as contemplated by the deed'. The President has not, to date, appointed a barrister.

On 29 November 2013, John brought this application by chamber summons for an injunction restraining Allen by requiring him to withdraw the request, and restraining him from making any further request or otherwise invoking the procedure under cl 11 of the 2002 Deed.

1. Allanson J summarised John's position in relation to the purpose of the 2002 deed. His Honour recorded John contended the purpose of the 2002 deed was that it was to govern the assets of an existing partnership between John and Allen. His Honour noted that John alleged that by reason of the nature of the 2002 deed and its terms Allen owed him fiduciary duties. His Honour summarised the relief that was sought by John in the substantive proceedings as follows:[20]

John claims that an account should now be taken of the Partnership, and the partnership assets should be allocated so that the net value of the assets and interests held by John and his children, and Allen and his children, would be equal. Alternatively, if the Partnership has come to an end by Allen's repudiation of it, an account of the Partnership should be taken and partnership assets allocated on the same basis of equality between the two brothers and their children. Alternatively, if no Partnership existed, there should be an account taken of the 2002 Arrangement and equal allocation of the assets.

John further claims that the net value of any assets that do not form part of the Partnership or the 2002 Arrangement, because they were acquired in breach of fiduciary duties, should be taken into account.

1. In a subsequent decision,[21] Allanson J referred to an allegation made by John in proceedings CIV 2006 of 2008 to the effect that the assets and property of companies listed in the 2002 deed were held on constructive trust.[22]
2. The issues in Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd,[23] were complex. One issue concerned whether Allen had been validly removed as a director of Harvard by means of circular resolutions executed by the shareholders of Harvard (John and Mrs Caratti) on 14 May 2002 and whether Allen was precluded from challenging the validity of his removal as a director. Martin CJ held that proceedings commenced by Allen in 2002 (CIV 2188 of 2002) to challenge his removal as a director of Harvard and other companies had been compromised by the 2002 deed and that the rights Allen acquired under the 2002 deed were in substitution for the rights asserted by him in the proceedings.[24]
3. In proceedings numbered CIV 1923 of 2016 brought by Rural Bank against Navarac, Bella Guarda Farm Pty Ltd, Mammoth Investments Pty Ltd, Moondancer Holdings Pty Ltd and Allen Caratti, senior counsel for Navarac, Bella Guarda and Mammoth (companies who Kenneth Martin J held were controlled by John),[25] made submissions in relation to the 2002 deed and, in particular to cl 8, to the effect that the clause was a 'perfect deadlock' provision and the companies to which the provision applied:[26]

[Could not] do anything without the approval of Mr Allen Caratti, on one side, and the other members of the family on the other. And it - as everybody knows - and, your Honour, this deed was drafted by a most experienced practitioner. It was doubtless calculated to - to give rise to a perfect deadlock.

1. On 10 February 2020 Rural Bank obtained judgment for $29,672,847 against Navarac, Mammoth Investments Pty Ltd and Bella Guarda Farm Pty Ltd.[27]
2. Both before and after Rural Bank obtained the judgment there were discussions and communications between Allen, Mrs Caratti and John about obtaining finance to discharge the liability to Rural Bank. Allen pressed John and Mrs Caratti to obtain the necessary finance from the NAB and, in order to reduce the loan to valuation ratio and thereby obtain a better interest rate, proposed that they should offer Marvel Loch and Bullfinch as security.[28]

1. The NAB is the principal financier of the Caratti companies.[29] Finance is provided by the NAB pursuant to the terms of a 'Master Loan Agreement' entered into on 10 February 2016 and amended thereafter from time to time (the NAB Facility Agreement).[30] The most recent amendment is recorded in an instrument entitled 'Amendment Deed - Master Loan Agreement' made on 7 July 2022.[31]
2. The parties to the NAB Facility Agreement are the NAB, various Caratti companies as borrowers, and various Caratti companies and John as security providers.
3. The borrowers are listed in schedule 1 and include Navarac Pty Ltd in its capacity as trustee for the Carchild Unit Trust.[32] The Other Security Providers are listed in schedule 2 and include Harvard as well as John. John has provided a personal guarantee and indemnity to the NAB guaranteeing the amount of $124 million secured by the existing securities granted by John to the NAB including the mortgage over JMC Marvel Loch.[33] The securities are listed in schedule 3 and included the mortgages over Harvard Marvel Loch referred to at [16]. The NAB Facility Agreement governs a number of separate facilities listed in schedule 5 in which each facility is described and allocated a number.
4. The NAB Facility Agreement provides that the loan to valuation ratio, that is, the ratio calculated by dividing the aggregate amount of all of the facilities of the Caratti group in respect of which a first ranking mortgage has been granted by the market value of all mortgaged properties, must be less than 50% at all times.[34]
5. One of the facilities governed by the NAB Facility Agreement is a $27 million loan to Navarac (the Navarac loan), originally numbered 34 and now numbered 34.1. The purpose of the facility was to enable Navarac to meet the judgment in favour of the Rural Bank.[35] Facility 34.1 is fully drawn and the facility expiry date is 31 May 2027.
6. The effect of the security arrangements under the NAB Facility Agreement is that the Navarac loan is secured by the NAB's existing mortgage over Harvard Marvel Loch and JMC Marvel Loch. In addition, the Navarac loan is secured by a registered mortgage over land owned by Navarac.
7. The interest payable in respect of the Navarac loan in the period between 31 October 2022 and 30 January 2023 is $281,801 and the fees payable in respect of the Navarac loan for the same period are $134,780 making a total of $416,581.[36] On the assumption that there are no changes in interest rates and fees and no reduction in the loan, John calculated that the total interest fees and charges payable annually on the Navarac loan would be $1,670,301. John calculated that if the loan was reduced by the application of the proceeds of Harvard Marvel Loch and the Bullfinch farm the total interest, fees and charges would be reduced to $1,246,848.77. John's evidence was to the effect that currently Navarac's sole source of income is rental income from farms owned by it and the current net rental income is $314,482 per quarter.[37]
8. On 3 September 2021 the NAB Facility was amended. One amendment recorded the establishment of a new facility for $5,640,000 in favour of Newsonic Pty Ltd to fund the purchase of 'Bullsbrook properties' (identified in a subsequent amendment to the NAB Facility as 22 Savy Close, Bullsbrook).[38] 22 Savy Close, Bullsbrook was purchased on 8 September 2021 for $5,463,252 by R101 Property Pty Ltd. Mr Aaron Caratti is the sole director of R101 Property Pty Ltd. 22 Savy Close is unencumbered. John's evidence is to the effect that a mortgage will be granted to the NAB over 22 Savy Close once a new agreement on the 'Master Terms' is reached with the Bank.[39]
9. On 21 November 2022 Navarac's indebtedness to the NAB was $27 million and the total indebtedness to the NAB under the NAB Facility Agreement was $118,118,409.[40]

1. By letter dated 21 September 2022 from Mr Peter Morris of the NAB to Harvard and John, the NAB confirmed that its mortgages over Harvard Marvel Loch and Bullfinch farm would be discharged on settlement of the sales 'upon and subject to receipt by NAB of the full proceeds of sale', that is, $6,845,000. Mr Morris went on to record:

Under clause 14.3 of the Master Loan Agreement, NAB may apply any amounts received by it in the manner it determines in its absolute discretion. NAB will apply the proceeds of sale to reduce the Balance Owing in respect of Facility 34.1 as detailed in Schedule 5 of the Master Loan Agreement.

1. Sales of real properties owned by companies listed in the 2002 deed and other Caratti companies have taken place since the deed was entered into. These include:[41]

(a) The sale of a farm known as Yuna owned by Harvard in April 2011 for $8,800,000.
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> (b) The sale of a farm known as Beacon by Caratti Holding Co Pty Ltd in March 2012 for $1,500,000.
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> (c) The sales of farmland owned by Tosman Pty Ltd in 2008 and 2009 for a total consideration of $6,355,000. These sales were effected by Allen.
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> (d) The sales of farms neighbouring the farmland sold by Tosman Pty Ltd by two other companies, Junana Pty Ltd and Gibate Pty Ltd in 2008 and 2009. These sales were effected by Allen.

2. John deposed that since the 2002 deed was entered into Allen has sold properties (in addition to those mentioned in the preceding paragraph) worth over $461 million.[42] John attached a schedule of properties he deposed had been sold by Allen identifying each vendor company.[43]
3. Allen contended that he was not aware of the sales of Yuna and Beacon until after the sales had taken place.

1. In the proceedings numbered CIV 2172 of 2022 Allen pleads that Harvard is the trustee of the S Caratti Family Trust and the unit holders in that trust are Venetian and Kelena Nominees Pty Ltd. He pleads the effect of the terms of the 2002 deed (as I have recited them earlier) in paragraphs 9 to 20 of the statement of claim and alleges:
   1. Upon a proper construction of clause 12 of the 2002 Deed, John and Allen were to exercise their powers so as to preserve the beneficial entitlements that each had in the assets owned by each of the corporations referred to in paragraphs 12 and 13 above, including Harvard and Venetian.
   2. By reason of the [the terms of the 2002 deed]:

(a) Allen and John each held a beneficial interest in the assets of the companies pleaded in paragraphs 12 and 13, including Harvard and Venetian;
>
> (b) to the extent that each of Allen and John exercised control over any of the companies pleaded in paragraphs 12 and 13, each owed a fiduciary duty to the other to act in a manner that preserved the assets of each of the companies for their benefit as beneficiaries in relation thereto, and to not allow their own personal interests to conflict with the interests of the other;
>
> (c) any sale of the assets of any of the companies was to be by mutual consent of Allen and John.

2. Following his pleading of the terms of the Sales Agreements Allen pleads:
   1. At all material times and by reason of the matters pleaded at paragraphs 9 to 22 above, John, both in his personal capacity and as a director of Harvard, owed fiduciary duties to Allen, Harvard and to the unit holders of the Trust, including duties to preserve the property of the Trust and the assets of the companies referred to in paragraph 12 above, not to act in a position of conflict and not to profit from his positions.
   2. At all material times and by reason of the matters pleaded at paragraphs 9 and 10 above, Harvard was bound by the 2002 Deed.
   3. As trustee of the Trust, Harvard at all material times owed fiduciary duties to the unit holders of the Trust, including duties to preserve the property of the Trust, not to act in a position of conflict and not to profit from the Trust.
3. Allen pleads that John breached the duties owed by him. The relevant paragraphs are as follows:
   1. John caused Harvard to execute the contract for sale [the Harvard Marvel Loch sale agreement], in the circumstances pleaded at paragraph 30 above, in order that John would profit to the maximum extent possible from the sale of the land the subject of the contract pleaded at paragraph 27(b) above and so that Bella Guarda would profit to the maximum extent possible from the sale of the land the subject of the contract pleaded at paragraph 27(c) above.
   2. Further, at no material time prior to the transactions pleaded in paragraphs 27 and 29 above did John inform Allen or make Allen aware of the sale of any of the properties referred to therein, and accordingly at no time prior thereto was Allen aware that the transactions referred to therein had taken place.
   3. John's conduct as pleaded in paragraphs 34 and 35 above was in breach of his fiduciary duties to Harvard, Allen and the unit holders of the Trust, and caused Harvard to be in breach of its fiduciary duties to the unit holders of the Trust, as pleaded above.
   4. Further, John's conduct as pleaded in paragraphs 27(a) and 28(b) above constituted a breach of the 2002 Deed.
4. Allen pleads that Mr Nicoletti knew of the terms of the 2002 deed, that he had actual or constructive knowledge of John's breaches of fiduciary duty and that if the Sales Agreements are settled then Apache will knowingly receive property of the S Caratti Family Trust in breach of that trust and in breach of the fiduciary obligations owed by John and Harvard to Allen and to the unit holders of the Trust.
5. The only declaratory relief claimed in the statement of claim was a declaration that the agreement for the sale of Harvard Marvel Loch was void but I was informed by Allen's counsel that a claim for a declaration that Allen had a beneficial interest in Harvard Marvel Loch should have been included in the prayer for relief.

1. The plaintiffs have provided an undertaking as to damages. Allen maintained he was not required to provide an undertaking as to damages but filed such an undertaking in any event.
2. The plaintiffs question whether Allen has sufficient means to honour his undertaking. John's evidence was to the following effect:

(a) Allen's only interest in land in Western Australia is a 50% interest in a farm, the Howick farm, in which the other 50% interest is owned by John. The approximate value of the Howick farm is $29,000,000.
>
> (b) There is one caveat lodged against the title of the Howick farm and three caveats lodged against Allen's 50% interest.
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> (c) In a judgment of the Federal Court of Australia Colvin J found (on the basis that the Howick farm was valued at $20,365,000 and making no allowance for having to deal with a 50% interest) that 'at best, the unencumbered value of the interest of [Allen] in the Howick properties was $7,682,500'.[44]
>
> (d) There are proceedings in this court in which Allen is being sued for amounts of over $10 million.
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> (e) On 2 November 2022 judgment was entered against Allen for $1,513,909 in proceedings numbered CIV 1390 of 2014.
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> (f) Allen is the subject of two bankruptcy notices (BN255784 and BN256989).

1. The principles to be applied when considering applications under s 138C of the Transfer of Land Act 1893 for the extension of a caveat were stated by Beech J (as his Honour then was) in Bashford v Bashford.[45] That statement of principles has been cited with approval on many occasions in relation to both applications to remove caveats made under s 138(2) and applications to extend them.
2. In summary when an application is made pursuant to s 138 of the Transfer of Land Act 1893 the onus is on the applicant to demonstrate that there is a serious question to be tried as to whether a caveatable interest exists and that the balance of convenience favours the retention of the caveat on the title.[46] The existence of a serious question to be tried involves showing 'a sufficient likelihood of success to justify in the circumstances the preservation of the status quo' pending trial. How strong the likelihood of success needs to be depends on the nature of the rights asserted and the practical consequences likely to flow from the order sought.[47]
3. In Navarac Pty Ltd v Moondancer Holdings Pty Ltd, Pullin JA (with whom Miller and Newnes JJA agreed) made the following observations about s 138 of the Transfer of Land Act 1893:[48]

The section confers a statutory discretion on the court. In Custom Credit Corporation v Ravi Nominees Pty Ltd (1992) 8 WAR 42 at 48, Owen J (Malcolm CJ and Walsh J agreeing) referred to and quoted Lord Diplock's judgment in Eng Mee Yong v Letchumanan [1979] UKPC 13; [1980] AC 331 to the effect that the caveator (at 337):

'[M]ust first satisfy the court that on the evidence presented to it, his claim for an interest in the property does raise a serious question to be tried and having done so, he must go on to show that on the balance of convenience, it would be better to maintain the status quo until the trial of the action by preventing the caveatee from disposing of his land to some third party.'

Owen J stated that the pronouncement in the Eng Mee Yong case was clearly correct, insofar as it dealt with the onus of demonstrating the existence of a caveatable interest, but that the reference to the balance of convenience required further comment. As to this, after some discussion, Owen J at 50, concluded that the balance of convenience was a factor to be considered in an application under s 138, but that the interlocutory removal of a caveat where an arguable case as to the existence of a caveatable interest has been demonstrated 'will be unusual'.

It is true that experience shows that parties are most commonly in dispute about the existence of a caveatable interest. Balance of convenience issues are usually of little or no significance where the caveator claims an estate in fee simple or a leasehold estate. In those fairly common cases, it is 'unusual', as Owen J states, that once an arguable case is made out by the caveator that there is such a caveatable interest, that balance of convenience issues will result in removal. However, if for example the interest claimed by the caveator is a security interest or an interest in competition with another claimant against the registered proprietor, then balance of convenience issues may become decisive. Owen J, at 49 in Custom Credit, gave an example where he referred to Lewenberg v Direct Acceptance Corporation Ltd [1981] VicRp 36; [1981] VR 344. In that case, the contest was between a registered mortgagee and the holder of an unregistered mortgage. The unregistered mortgagee had lodged a caveat. The registered mortgagee was being prevented by the caveat from passing title under a power of sale which appeared to have been validly exercised. There, the validity of the interest which both contestants had in the land was not in dispute and therefore the holder of the registered mortgage had an unquestionably superior interest in the land. As Owen J said 'but the case was, and could only have been, about the balance of convenience' (49).

Outline of opposing submissions Plaintiffs' submissions

1. In their written submissions the plaintiffs did not dispute that there was a serious question to be tried as to whether Allen had a caveatable interest but contended that his case was weak. In oral submissions, senior counsel for the plaintiffs put their position more strongly and described the merits of the claim as very weak and 'something slightly better than nil'. The plaintiffs contend Allen's claim suffers from the following weaknesses:

(a) Harvard whose asset is claimed to be the subject of a constructive trust arising under the 2002 deed was not a party to the deed.
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> (b) Allen has not explained how cl 12 of the 2002 deed is to be construed as he contends, as imposing an obligation on him and John to preserve the assets of each company, especially when regard is had to cl 10 and the requirement that all the beneficial interests would be divided equally between them on John attaining the age of 60 years.
>
> (c) The argument that cl 8 of the 2002 deed established 'the perfect deadlock provision' thereby strengthening the constructive trust claim, suffers from the factual difficulty that Allen has not been a director of Harvard for over 10 years and, in any event, the right of either John or Allen to appoint directors to the Caratti companies listed in the deed was contingent on the NAB's approval.
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> (d) Allen's conduct in causing the sale of the farmland owned by Tosman and the sale of the neighbouring farms and his failure to raise any objection to the sale of farms by Harvard is inconsistent with the claim that he and John have a beneficial interest in all of the assets owned by the companies listed in the recital to the 2002 deed.

(a) The plaintiffs emphasise that Allen's interest is a 50% interest in Harvard Marvel Loch subject to the NAB's mortgages, that is, at best a 50% interest of the net proceeds of sale of the Harvard land assuming that there are any proceeds remaining after the NAB exercised its rights in respect of the proceeds. Against that background damages would be an adequate remedy and the plaintiffs have provided an undertaking and its worth has not been questioned.
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> (b) The plaintiffs characterised the issue on this application as one of priorities and contend that the NAB's interest as the holder of the first‑in‑time legal interest in the form of its registered mortgage must take priority over Allen's later equitable interest.
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> (c) If the caveat against the title of the Harvard Marvel Loch is not removed and, as a consequence, the Sales Agreements do not settle, the plaintiffs will be exposed to a claim for penalty interest accumulating at a daily rate of $2,866.44 and to a possible claim for damages. In addition, Bella Guarda will be exposed to a claim for damages.
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> (d) The plaintiffs and Bella Guarda had no reason to suspect that Allen would lodge caveats having taken steps himself to sell the assets of companies named in the 2002 deed (the Tosman farm) and having not sought to prevent the sale of the Yuna and Beacon farms in 2011 and 2012 respectively.
>
> (e) Navarac will be prejudiced if the Sales Agreements do not proceed because the proceeds of the sale of Harvard Marvel Loch and JMC Marvel Loch ($6.845 million) will not be applied to reduce the balance owing on the Navarac facility.
>
> (f) Reducing the balance of the Navarac loan by $6.845 million will reduce the interest and fees payable to the NAB by $423,000 per annum. A reduction in the balance due and the interest payable reduces the risk to Harvard and John as security providers in respect of the Navarac loan.
>
> (g) Allen's claim is weak and this tilts the balance of convenience in favour of removing the caveat.
>
> (h) Allen does not have sufficient means to honour his undertaking as to damages.

1. Allen submits that his claim cannot be characterised as being without foundation when John has relied on a claim that the 2002 deed imposed fiduciary duties on Allen, and John has claimed that the assets and property held by the companies listed in the 2002 deed were held on constructive trust in the CIV 2006 of 2008 proceedings.
2. In oral submissions, Mr Mendelow on behalf of Allen, submitted that the effect of the 2002 deed was that the constructive trust on which Allen relied to establish his claim to an interest in Harvard Marvel Loch superseded the trust arrangements that had existed when the 2002 deed was executed.[49] Allen's counsel submitted that the purport of the 2002 deed was to achieve 'parity of equity in the underlying trust assets, and parity of control in the underlying trust assets'.[50]
3. As to the balance of convenience:

(a) Allen submitted that the caveat should not be removed until the dispute in proceedings CIV 2172 of 2022 was mediated and, if a mediated outcome could not be achieved, for the claim to be determined. Implicitly, it was contended that this could occur within six months.
>
> (b) Mr Nicoletti's willingness to extend the settlement date mitigated the adverse consequences that might otherwise flow from the non‑removal of the caveat.
>
> (c) The property is a farming property that has been owned by Harvard Nominees for almost 40 years and provides a rental income of $191,113.78 plus GST per year.
>
> (d) When executed on behalf of Harvard the Sales Agreement in relation to Harvard Marvel Loch was executed by one director only and Harvard was not bound by the agreement. By executing a further version of the agreement by two directors in October 2022 Harvard lost the opportunity to resile from the agreement and Harvard and John should be regarded as the 'authors of their own misfortune'.[51]
>
> (e) In submissions Allen maintained that he was not bound to provide an undertaking as to damages because the application was not an application by him to extend the caveat but an application by John to remove the caveat. Allen contested the contention that his means were insufficient to support his undertaking. He calculated he had a 50% interest in real property assets valued at approximately $241,000,000 which had been provided to the NAB as security. He arrived at this figure on the basis that the loan to valuation ratio under the NAB Facility Agreement had to be maintained at less than 50% and the limits of the facilities under that agreement were in aggregate $120,866,983. In effect, Allen contended that his 50% interest was valued at approximately $60 million after taking into account the secured debt due to the NAB. Allen referred to decisions in earlier disputes between him and John where undertakings as to damages had not been required.[52]
>
> (f) Allen contended that the financial position of Navarac was irrelevant.

4. In addition to the points summarised in the preceding paragraphs Allen argued that the NAB Facility Agreement does not entitle the NAB to demand that it be paid the proceeds of sale of Harvard Marvel Loch and Bullfinch. The contention appears to be that Harvard and John have not established that the sale of Harvard Marvel Loch and the collection of the proceeds of sale by the NAB is necessary to ensure that the loan to valuation ratio under the NAB Facility Agreement is maintained. The submission was expressed as follows in Allen's written submissions:

The borrowers do not include Harvard, the schedule of facilities provides for facility limits, not balances, in an aggregate of $120,866,983. The only evidence of the balance of the accounts is an estimate from John Caratti of approximately $120,000,000. Where the loan documents show that there is no debt owing by Harvard to the NAB. As Harvard is a trustee under the trust deed, it would arguably be in breach of trust paying the NAB in respect of a party not a beneficiary to the trust, under the terms of its trust deed, in addition to the constructive trust in favour of Allen Caratti.

The facility requires that a loan to value ratio (LVR) be maintained at less than 50%, and that a minimum interest cover of 1.00 is maintained in order to determine if the NAB were entitled under the facility agreement to request payment of the proceeds of sale, the evidence to determine the LVR and the minimum Caratti Group Interest Cover would need to be before the Court. The plaintiffs have not provided any such evidence, although calculations are required to be confirmed by the KPMG half yearly reports to the NAB provided for in clauses 8 and 9 of the facility agreement, as well as current valuation of the securities.

Without the evidence to establish that the LVR and interest cover obligations under the facility agreement entitle the NAB to request the reduction in the balance outstanding, the request cannot create an entitlement to demand payment by the NAB.

1. Further, Allen submitted that an additional reason why there was no necessity to sell Harvard Marvel Loch in order to maintain the required loan to valuation ratio was because 22 Savy Close, Bullsbrook is available as security.

Consideration and disposition Serious question to be tried

1. The following matters bear on my assessment of the strength of Allen's claim that Harvard Marvel Loch is held by Harvard on constructive trust for him and John in equal proportions.
2. First, there is a degree of ambiguity about the foundation of Allen's claim. In CIV 2172 of 2022 Allen pleads that Harvard is the trustee of the S Caratti Family Trust (the Trust) and that Harvard and John owe duties to the unit holders of the Trust as well as duties to Allen.[53] In the course of oral argument, however, and as I have noted earlier, Allen's counsel argued that the constructive trust that Allen contends arises from the terms of the 2002 deed superseded the Trust with effect from its execution or, at least, from the date on which John attained 60 years of age. It is difficult to understand how the duties owed by Harvard and John to the holders of units in the Trust are to be reconciled with the duties alleged to be owed to Allen. On Allen's case as to the effect of the 2002 deed, the unit holders' proprietary interests in the assets of the Trust have been assumed by Allen and John so no question of duties being owed to the unit holders of the Trust could arise. Separately, but adding to the uncertainty as to whether trusts in existence at the time the 2002 deed was executed continued to exist thereafter, and, if so on what basis, I note that reference in cl 12 to the equalisation of beneficial interests between Allen and John 'or the children of Allen Caratti and the children of John Caratti as the case may be' suggests that some provisions of the earlier trusts were to continue at least in so far as they related to the children of John and Allen.
3. Secondly, if it is to be assumed that the terms of the Trust remain applicable to any extent, it is within Harvard's power as trustee of the Trust to sell Harvard Marvel Loch.
4. Thirdly, assuming in Allen's favour that Harvard no longer holds Harvard Marvel Loch on trust for the unit holders in the Trust but for Allen and John, it does not appear to me that the 2002 deed contains any provision which would entitle Allen to prevent the sale of Harvard Marvel Loch. The 2002 deed does not contain a provision restricting the operation of the businesses conducted by the companies and trusts to which it refers nor preventing those companies from selling assets in the ordinary course of their businesses. Indeed, the existence of such a restriction would be surprising given the Caratti companies are involved in property development. John's evidence was to the effect that the sale of Marvel Loch and Bullfinch is a sale concluded in the ordinary course of business. I accept that evidence - it was not challenged. Thus, even if by reason of the 2002 deed Allen has a 50% interest in Harvard Marvel Loch, having regard to the terms of the 2002 deed and the nature of the businesses conducted by the companies to which it relates, I have difficulty in accepting that Allen is entitled to prevent the sale.
5. Fourthly, it may be accepted that the 2002 deed creates contractual rights between Allen and John that may be fiduciary in nature but it is difficult to understand how those personal rights are transformed into proprietary rights in land held by third parties, such as Harvard, which are not parties to the deed and which hold the land as trustees.
6. Fifthly, the references to equalising 'beneficial interests' in various clauses in the 2002 deed are ambiguous. They could be understood to refer to equalising the shareholdings in the named companies or the units in unit trusts rather than to creating equal proprietary interests in the property held by the named companies.
7. Having regard to the matters to which I have referred I have concluded that the strength of the serious question to be tried raised by Allen is weak. In reaching the conclusion that the strength of the serious question to be tried is weak I have not attached any weight to John's contention that Allen has sold real property owned by companies named in the 2002 deed nor to Allen's contention that in earlier proceedings John has argued the 2002 deed gives rise to fiduciary duties and constructive trusts in his favour of assets held by various companies. In effect the parties are inviting the court to use post‑contractual conduct to assist in the interpretation of the 2002 deed. Post‑contractual conduct may be relied on to determine whether an agreement has been made but not as an aid to interpretation.[54]

1. The following matters bear on my assessment of the balance of convenience.
2. First, having regard to the history of litigation between John and Allen, in my assessment the possibility that the issues raised in CIV 2172 of 2022 will be resolved, whether by mediation or judicial determination, within six months is very speculative.
3. Secondly, I accept that when the Sales Agreements were concluded, there was no reason for John, and thus Harvard, to anticipate that Allen would lodge a caveat against Harvard's title on the basis that he had a 50% interest in Harvard Marvel Loch.
4. Thirdly, on the basis of Mr Nicoletti's evidence, I find that Apache will not waive its right to insist on settlement of the Sales Agreements on 27 January 2023.
5. Fourthly, and related to the third matter, if settlement does not occur within three business days of 27 January 2023 Harvard, John and Bella Guarda will each be exposed to claims by Apache for compensation for delayed settlement in the form of interest at the prescribed rate on the purchase price and possibly a claim for damages for breach of the Sales Agreements.
6. Fifthly, Harvard was not able to resile from the Harvard and Bullfinch sales agreement on the ground that the sale agreement had been signed by one director only. A failure to comply with the requirements of s 127 of the Corporations Act 2001 (Cth) does not cause the execution of an instrument to be ineffective in law.[55] Thus, I do not accept that because John and Mr Aaron Caratti executed a further version of the Harvard Marvel Loch sale agreement, Harvard is to be regarded as the '[author] of [its] own misfortune'.
7. Sixthly, if Allen has an equitable interest in Harvard Marvel Loch it is an interest that ranks second to NAB's legal interest as mortgagee. I do not accept the submissions made on Allen's behalf in relation to the NAB's right to insist on receipt of the proceeds of the sale of Harvard Marvel Loch. Those submissions propose an unusual restriction on the rights of a real property mortgagee - that the mortgagee is bound to release its security on a sale of the secured property without receipt of the proceeds of sale in discharge or reduction of the indebtedness for which the security was provided - which is not supported by the terms of the mortgage or the NAB Facility Agreement.
8. Although in the common course of ordinary business, on the sale of the secured property, mortgagees of real property are entitled to be paid the proceeds of sale in discharge of the indebtedness secured by the mortgage, it is possible to contemplate commercial financing arrangements which might require a financier to discharge a mortgage over real property without receipt of the net proceeds of sale even though the indebtedness for which the security was provided remains outstanding. In my assessment, however, the financing arrangements between the NAB and the Caratti group do not provide Harvard with such flexibility and the NAB is entitled to insist that the proceeds of sale of Harvard Marvel Loch and Bullfinch are paid to it and applied by it in such manner as it determines in its absolute discretion.
9. It is convenient to begin by referring to the terms of the mortgage D172512. The mortgage was originally granted to secure borrowing by Robinswood Pty Ltd.[56] The mortgage secures payment of the 'Moneys Hereby Secured'. This term is defined expansively and relevantly includes:[57]

The amount specified on the front page next to the heading "Principal Sum" (if any is so specified) AND any Advance AND all moneys comprised by or in or forming part of the moneys the payment of which forms part of the Obligations.

1. 'Obligations' is a term also defined expansively and relevantly includes:[58]

[T]he totality of all the obligations and liabilities of the Borrower and each Guarantor to the Lender (whether liquidated or not and whether contingent or presently accrued due and whether relating to the payment of moneys.

1. Harvard, John and Allen are Guarantors.[59]
2. The mortgage provides that references to 'Lender' and 'Mortgagee' include references to their successors, transferees and assigns.[60]
3. Clause 20 of the mortgage governs the release of securities and sets out the conditions that must be satisfied before the Lender is required to release its security. One such condition is, relevantly, that the Lender receives payment in full of the proceeds of sale of the 'Security Property less any amount which it in its discretion may from time to time determine in permanent reduction of the Facility'.
4. Clause 20 of the mortgage read with the expansive definitions of 'Moneys Hereby Secured' and 'Obligations' make it plain that the NAB is entitled to demand payment of the proceeds of sale of Harvard Marvel Loch and Bullfinch on settlement.
5. Turning next to the NAB Facility Agreement. I have referred earlier to the identity of the Borrowers, the Security Providers and the Securities. Reference to definitions is required. The term 'Obligor' is defined as 'the Borrower and each Security Provider'. 'Balance Owing' is defined expansively and includes the balance outstanding on any facility made available under the NAB Facility Agreement. The expression 'Total Amount Owing' is defined as:

[A]t any time, the total of every Balance Owing and any other amounts which are then due for payment, or which will or may become due for payment, in connection with the Finance Document, which, for the avoidance of doubt, includes the Amount Owing (as defined In Schedule 10).

1. Clause 14.3 governs how amounts received by it may be applied. It is in the following terms:[61]

14.3 Securities for other money

The Bank may apply any amounts received by it or recovered under any:

(a) Security; or

(b) other document or agreement,

which is a security for any of the Total Amount Owing and any other money in the manner it determines in its absolute discretion.

1. Clause 14.10 of the NAB Facility Agreement provides that cl 14 is enforceable against any Obligor whether or not, amongst other things, any total amount owing is then due and payable or any demand has been made on any Obligor.[62]
2. The NAB Facility Agreement does not limit the NAB's right to apply the proceeds of sale of secured property in any manner it determines to the circumstance that the proceeds are necessary to maintain the loan to valuation ratio under 50%.
3. Seventhly, and related to the sixth matter, it was Allen who pressed John and Mrs Caratti to offer Harvard Marvel Loch and Bullfinch as security for the Navarac loan to secure the advantage of a lower interest rate. There is a degree of inconsistency between Allen's willingness for the land to be offered as security and his objection to the NAB exercising its rights as the secured creditor.
4. Eighthly, the basal proposition on which Allen's claim rests is that he has a 50% interest in all property owned by the Caratti companies subject only to the interests of financiers, principally the NAB. If the sale of Harvard Marvel Loch is viewed from that perspective, it is difficult to understand how the sale prejudices Allen. Real property held as a long‑term investment is being sold on favourable terms to realise cash which is being used to pay down debt at a time of rising interest rates. Assuming in Allen's favour that his claim to a 50% interest is sound, from the wider perspective of the Caratti group the effect on his net equity is neutral. His share of the proceeds of sale of the land owned by Harvard is being used to reduce the Navarac loan thus increasing the value of his equity in the assets held in Navarac's name.
5. Ninthly, for the reasons I have given in the preceding section, on the materials before me on this application, in my assessment Allen's claim is weak.
6. Tenthly, in the event that Allen succeeds in establishing his claim, given the nature of the interest, a 50% interest in an investment property that ranks behind that of the secured creditor, damages would be an adequate remedy. In this respect, the plaintiffs have provided an undertaking as to damages and there is no suggestion that the undertaking is inadequate.
7. Each of the matters to which I have referred supports the conclusion that the balance of convenience favours the removal of the caveat.
8. For the sake of completeness, I record my view that Allen was required to provide an undertaking as to damages as the purpose of his opposition to the removal of the caveat was to restrain the sale of Harvard Marvel Loch, in effect the equivalent of an injunction. While I consider that there is force in the contentions advanced by Harvard about the value of Allen's undertaking, in the light of the other matters to which I have referred, that issue is not of determinative significance.

1. My conclusions in relation to the serious question to be tried and the balance of convenience lead me to hold that the caveat lodged against the titles of Harvard Marvel Loch should be removed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 44.

[2] Affidavit of John Michael Caratti sworn 23 September 2022, 10 - 11.

[3] Affidavit of John Michael Caratti sworn 23 September 2022, 9.

[4] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 2.

[5] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 1.

[6] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 3.

[7] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 24.

[8] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 17 and JMC 18.

[9] Affidavit of John Michael Caratti sworn 23 September 2022, 8.

[10] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 7.

[11] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 8.

[12] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 9.

[13] Affidavit of John Michael Caratti sworn 23 September 2022, 7.

[14] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 12 and JMC 13.

[15] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 7, JMC 8 and JMC 9.

[16] Affidavit of John Michael Caratti sworn 22 November 2022, 6 - 7.

[17] Affidavit of Peter John Morris sworn 21 September 2022, PM 1.

[18] The words 'Subject to National Australia Bank approval on appointment' were added in handwriting and initialled. The last word is difficult to decipher but having regard to the context it appears to be 'appointment'.

[19] Caratti v Caratti [No 2] [2014] WASC 65 [6] - [11].

[20] Caratti v Caratti [No 2] [42] - [43].

[21] Caratti v Caratti [No 3] [2014] WASC 246.

[22] Caratti v Caratti [No 3] [31].

[23] Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd [2014] WASC 279; (2014) 47 WAR 318.

[24] Esperance Cattle Company Pty Ltd v Granite Hill Pty Ltd [363] ‑ [369] and [370] ‑ [381].

[25] Rural Bank v Mammoth Investments Pty Ltd [2019] WASC 409 [40].

[26] Second affidavit of Allen Bruce Caratti sworn 18 November 2022, 71.

[27] Affidavit of John Michael Caratti sworn 23 September 2022 [51], [54]; JMC 38 p 1058 ‑ 1060.

[28] Affidavit of John Michael Caratti sworn 23 September 2022 [51], [53], [54]; JMC 40 p 1141 ‑ 1145.

[29] Affidavit of John Michael Caratti sworn 23 September 2022 [38].

[30] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 30 p 783.

[31] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 36 p 1042.

[32] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 30 p 852.

[33] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 31 p 977.

[34] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 30 p 821.

[35] Affidavit of John Michael Caratti sworn 23 September 2022 [54].

[36] Further affidavit of John Michael Caratti sworn 22 November 2022, JMC 66 p 59.

[37] Further affidavit of John Michael Caratti sworn 22 November 2022 [43].

[38] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 34 and JMC 35.

[39] Further affidavit of John Michael Caratti sworn 22 November 2022 [34].

[40] Further affidavit of John Michael Caratti sworn 22 November 2022 [13] ‑ [14].

[41] Affidavit of John Michael Caratti sworn 23 September 2022 [33] ‑ [35], JMC19 ‑ JMC22.

[42] Affidavit of John Michael Caratti sworn 23 September 2022 [37].

[43] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 23.

[44] Caratti v Commissioner of Taxation [2018] FCA 1691 [94].

[45] Bashford v Bashford [2008] WASC 138 [47] - [52].

[46] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50; Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95; (2009) 40 WAR 150 [20] ‑ [22] and [29]; Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171 [41] ‑ [44].

[47] Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [42] applying the principles stated in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 [82]; see also National Australia Bank v McCourt [2010] WASC 237 [39].

[48] Navarac Pty Ltd v Moondancer Holdings Pty Ltd [20] - [22].

[52] First defendant's reply submissions filed 30 November 2022 [34] ‑ [42].

[53] Writ of summons filed 7 November 2022 in CIV 2172 of 2022 [36].

[54] Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547.

[55] Boz One Pty Ltd v McLellan [2015] VSCA 68; (2015) 105 ACSR 325 [209].

[56] Affidavit of John Michael Caratti sworn 23 September 2022, 604.

[57] Affidavit of John Michael Caratti sworn 23 September 2022, 582.

[58] Affidavit of John Michael Caratti sworn 23 September 2022, 606.

[59] Affidavit of John Michael Caratti sworn 23 September 2022, 605.

[60] Affidavit of John Michael Caratti sworn 23 September 2022, 616.

[61] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 30 p 832.

[62] Affidavit of John Michael Caratti sworn 23 September 2022, JMC 30 p 834.