MEINERS -v- GUNN [2018] WASC 123 (23 April 2018)

1. The caveat was supported by a statutory declaration by the plaintiff dated 28 September 2017 which read as follows:
   1. My daughter, Debra Gunn, is the proprietor of the property situated at Unit 3, 79 Spencer Avenue otherwise described as Lot 3 on Strata Plan 29435 on Certificate of Title Volume 2052 Folio 833 (the Property), the subject of the Caveat which this Statutory Declaration supports.
   2. On 17 February 2015 I appointed Debra Gunn as my Enduring Power of Attorney.
   3. In or around June 2015, Debra Gunn and I entered into an agreement whereby, inter alia, I agreed to give Debra Gunn $130,000 towards the purchase of a property which I would be entitled to live in should I so choose (First Agreement).
   4. On or about 14 July 2015, I gave Debra Gunn the sum of $130,000 pursuant to the First Agreement (First Instalment).
   5. In our around June to August 2015, without my knowledge, Debra Gunn used the First Instalment to her own purpose, namely to purchase the Property in her own name.
   6. In around October 2015, after I became aware that Debra Gunn had used the First Instalment to purchase the Property to live there herself, Debra Gunn and I entered into an agreement whereby Debra Gunn would continue to live in the Property if, inter alia, she agreed to purchase an alternative property which I would be able to live in. To enable her to make the purchase, I would give Debra Gunn the sum of 242,334.38 in addition to the First Instalment. It was also agreed that the Debtor would purchase the property which the Claimant would be able to live in by March 2016 (Second Agreement).
   7. In or around November 2015, I paid Debra Gunn the sum of $242,334.38 pursuant to the Second Agreement (Second Instalment).
   8. In April 2016 it became clear to me that Debra Gunn was not going to purchase a property which I would be able to live in.
   9. I say that at all material times the First Instalment and Second Instalment were held by Debra Gunn for my benefit (Entrusted Monies).
   10. In April 2016 and May 2016 I requested in writing that Debra Gunn either buy a property which I could live in in accordance with either the First Agreement or the Second Agreement or account for and return to me the Entrusted Monies.
   11. Debra Gunn has refused to buy a property which I could live in pursuant to either the First Agreement or the Second agreement and has refused to return the Entrusted Monies to me.
   12. Debra Gunn had made three monthly payments of $1,500.00 to me being in the months of January to April 2016 inclusive of one payment of $1,000.00 in the month of May 2016.
   13. Debra Gunn has made no other payments towards the Entrusted Monies other than the sum acknowledged in paragraph 12.
   14. The balance of the Entrusted Monies owed to me is $368,334.00 (Outstanding Amount).
   15. I claim an equitable interest in the Property as I have given the sum of $368,334.00 to Debra Gunn for the purpose of purchasing a property for me to live in which I truly believe Debra Gunn has instead paid to her own purpose being the Property registered in her sole name.
2. A requisition was issued in relation to the caveat, on the basis that the expression 'equitable interest' was too vague and the precise nature of the interest required clarification. The requisition also advised that it was not open in the caveat to claim two alternative interests in the land. As a result, it appears that, at the request of the plaintiff's solicitors, the caveat was amended so as to claim an interest as 'equitable coowner' and a further statutory declaration dated 10 October 2017 was lodged. Note 6 of the caveat was amended to read:

The CAVEATOR claims an interest as specified herein of the estate or interest of the REGISTERED PROPRIETOR in the land above described BY VIRTUE of (Note 6):

The nature of the interest claimed by the caveator is as equitable coowner or equitable charge, to the extent of her contribution in the sum of $372,334.58 (comprising two payments of $130,000 and $242,334.58) to the purchase of the land above described, as detailed in her statutory declaration dated 10 October 2017.

1. The caveat was accepted for registration in that form. The statutory declaration dated 10 October 2017 was in identical terms to the original statutory declaration dated 28 September 2017, save for the final paragraph which was amended to read as follows:

The nature of my claimed interest in the Property is as equitable coowner as I have given the sum of $368,334.00 to Debra Gunn for the purpose of purchasing a property for me to live in which I truly believe Debra Gunn has instead paid to her own purpose being the Property registered in her sole name.

1. The application was supported by an affidavit of the plaintiff dated 11 January 2018 in which she deposed to the following facts. The plaintiff is 81 years old. Ms Gunn is the second of the plaintiff's four children of her first marriage. The plaintiff's second husband passed away in 2014. Ms Gunn, who was living in Cookernup near Harvey was then commuting to her work place in Osborne Park. Shortly after the plaintiff's husband's death, Ms Gunn moved in with the plaintiff at the plaintiff's property at 41 Amethyst Crescent, Mt Richon (Armadale property). The plaintiff and her second husband had lived in the Armadale property for approximately 22 years. Ms Gunn continued to stay with her mother at the Armadale property until it was sold in July 2015.
2. The plaintiff said that in early 2015, she had a series of discussions with Ms Gunn, and Ms Gunn's daughter, Briana, about selling the Armadale property and moving closer to Osborne Park where Ms Gunn was employed. She said that she and Ms Gunn talked about buying a house together and looked at properties together. They put in an offer together on a unit in Yokine in respect of which the plaintiff paid a deposit of $10,000, but that transaction did not proceed because the plaintiff was unable at that time to sell the Armadale property. The plaintiff said that the house hunting continued, but that she began to change her mind about living with Ms Gunn as she was 'beginning to feel that we would not be able to live together'. She said that Briana located a one bedroom unit at the Masonic Retirement Village (village unit) and Ms Gunn and Briana then tried to persuade the plaintiff to move into the village unit. The plaintiff said that, in the course of those discussions, Ms Gunn told her that if she moved into the retirement village unit, she would have money left over which could affect her pension, but that if she gave that money to Ms Gunn to buy a property then it would not be taken into account for her pension purposes.
3. The plaintiff said that, in June 2015, she and Ms Gunn made an agreement that:

(a) I would sell the Armadale Property;

(b) I would buy a unit in the Masonic Retirement Village;

(c) I would transfer the balance from the sale of the Armadale Property of $130,000 directly to Debra so that she could use it to buy a two bedroom unit in Yokine which would be my back up plan if I did not like the Masonic Retirement Village;

(d) Once Debra had found a suitable unit, she would get a mortgage to pay the balance required for the unit in Yokine;

(e) I would give living in the Masonic Retirement Village a chance for a while at least;

(f) I would be able to move into the unit in Yokine that Debra had bought for me if I did not enjoy living in the Masonic Retirement Village and I would pay out her mortgage with the money I would get back from the Masonic Retirement Village (The First Agreement).[1]

1. Objection was taken to the admissibility of that paragraph of the plaintiff's affidavit on the basis that it amounted to be a conclusion the foundation for which no evidence was given. That objection is well founded. The paragraph is not in admissible form and I do not rely on it.
2. The plaintiff then proceeded to purchase a lease of the village unit, having sold the Armadale property for $400,000 from which she received a net $384,000. On settlement of the sale of the Armadale property in June 2015, the plaintiff authorised a direct payment of $130,000 to Ms Gunn, relying, she said, on Ms Gunn's advice that that cash would not affect her pension and in the belief that the purchase of the Yokine property would secure her a backup plan if she did not like living in the village unit. The plaintiff said that she trusted her daughter, who explained that Ms Gunn's name 'would need to be on the property she bought' so that Ms Gunn could arrange a mortgage to pay the balance.
3. The plaintiff moved to the village unit on 15 July 2015 but quickly regretted that move. She told Ms Gunn that she did not wish to live in the village unit and inquired about Ms Gunn's progress in locating a unit for her. She was taken to the Yokine property which she saw only from the outside. In August 2015, Ms Gunn told the plaintiff that she had purchased the property. She said that Ms Gunn refused to provide her with any documents relating to the purchase but she has subsequently ascertained that the purchase was made in Ms Gunn's sole name. When she inquired whether, upon moving out of the village unit, she could move into the Yokine property, Ms Gunn answered 'no' saying that the Yokine property was hers and she is living there. The plaintiff said that Ms Gunn told her that she should not worry, that she had the Cookernup property up for sale, and that when the Cookernup property was sold they would have the money for the plaintiff to buy a second unit nearby. The plaintiff said that she agreed to that proposal.
4. The plaintiff said that she then reached a second agreement with Ms Gunn. She described it in the following terms:

In around October 2015, after I became aware that Debra had used the First Instalment to purchase the Property to live there herself, Debra and I entered into an agreement whereby Debra would continue to live in the Property, if, inter alia, she agreed to purchase an alternative property which I would be able to live in. Debra said that she would be able to do this when she sold the Cookernup property. To enable her to make the purchase of the alternative property, I would give Debra the sum of $242,334.38 in addition to the First Instalment. It was also agreed that Debra would purchase the alternative property which I would be able to live in by March 2016 (Second Agreement).[2]

1. The same objection was made by Ms Gunn to this paragraph as was made in relation to the paragraph asserting the first agreement, and should be upheld for the same reason.
2. The plaintiff then said that she moved out of the village unit in November 2015 and moved to temporary accommodation in Nedlands (Nedlands unit) while the plaintiff and Ms Gunn waited for the Cookernup property to sell. The plaintiff sold her interest in the village unit for a net price of $242,334.48. That amount was directly deposited into Ms Gunn's bank account so that Ms Gunn could hold onto it to contribute to the purchase of the second unit she was going to buy under the second agreement. The plaintiff then found herself in financial difficulty and Ms Gunn agreed to provide her with $1,500 per month to assist her financially. Ms Gunn subsequently made only four payments of $1,500 and one payment of $1,000 between December 2015 and May 2016. The relationship between the plaintiff and Ms Gunn then deteriorated. Steps were taken by the plaintiff to recover the funds which had been provided by her to Ms Gunn, but those steps were unsuccessful.

1. Ms Gunn made an affidavit opposing the application. It is not necessary to set out the contents of that affidavit, nor of a responsive affidavit of the plaintiff because it is not appropriate to attempt to resolve conflicts of evidence on affidavit in proceedings of this kind.[3] It is sufficient to say that Ms Gunn denies the making of either of the agreements said by the plaintiff to have been made, and says that the funds which were advanced by the plaintiff to her were advanced by way of gift.
2. In assessing whether the plaintiff has established a serious question to be tried as to the existence of her interest in the Yokine property, it is appropriate to have regard to the position if her evidence is accepted at trial.

1. A caveat may be lodged by a person claiming an estate or interest in land.[4] By its nature, a caveatable interest must be a proprietary interest in land.[5]
2. A registered proprietor may require the registrar of titles (registrar) to serve a caveator with notice to the effect that unless the caveator obtains an order of the Supreme Court extending the caveat within 21 days of service of the notice, the caveat will lapse.[6] A notice under s 138B of the Act was served by the registrar on the plaintiff who then brought this application.
3. Section 138C(1) and (2) of the Act provide:

(1) A caveator who is served with a notice under section 138B(1) may apply to the Supreme Court, in accordance with rules of the court, for an order extending the operation of the caveat.

(2) 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 -

(i) may make an order extending the operation of the caveat for such period as is specified in the order; or

(ii) may make an order extending the operation of the caveat until the further order of the court; or

(iii) may make such other orders as it thinks fit concerning the caveat or the land in respect of which the caveat was lodged;

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

(c) may make such ancillary orders in relation to the application as it thinks fit.

1. It can be seen that the court's power to make an order extending the operation of the caveat arises where the court is satisfied that the caveator's claim 'has or may have substance'. Because that threshold test does not require a caveator to finally establish the existence of its claim on the hearing of an application for an extension of time, it is not necessary or appropriate to resolve conflicts of evidence on affidavits filed in the application.
2. On an application for an extension of caveat, the onus lies on the caveator to demonstrate that there is a serious question to be tried as to the existence of a caveatable interest.[7] Where an arguable case as to the existence of a caveatable interest has been demonstrated, it will be unusual to order removal of the caveat.[8]
3. On an application for an extension of caveat, there is limited power to allow the terms of the caveat to be amended. An amendment is not permitted to alter the interest which is claimed and to claim a different interest.[9] An amendment may be permitted so as to enable the caveat to express better and more fully the interest which is claimed in the caveat.[10]
4. In the context of an application to extend a caveat, the court may decline to extend its operation, but instead impose an injunction maintaining the status quo between the parties.[11]

1. In written submissions filed in advance of the hearing, the plaintiff submitted that 'the manner in which the payments made by the plaintiff to the first defendant are to be characterised, including the legal and equitable relationship between the parties and the equitable principles to be applied, are all issues to be determined at trial'.[12] While the final determination of the nature and extent of any interest of the plaintiff in the Yokine property are matters to be finally determined at the trial of the proceedings which have now been commenced in this court for substantial relief, it is incumbent upon the plaintiff to demonstrate that there is a serious question to be tried as to the existence of a caveatable interest. In order to meet that requirement, it is necessary for the plaintiff to identify, with precision, the particular interest which she claims to have.
2. When pressed on that question, counsel for the plaintiff submitted that the interest claimed is as equitable coowner arising by virtue of the principles identified by Deane J in Muschinski v Dodds.[13] Deane J described the applicable principles as follows:

Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct (cf Story: Commentaries on Equity Jurisprudence, 12th ed (1877: Perry), vol 2, para 1316; Legione v Hateley, 152 CLR at p 444). The circumstances giving rise to the operation of the principle were broadly identified by Lord Cairns LC, speaking for the Court of Appeal in Chancery, in Atwood v Maude, supra, at p 375 where "the case is one in which, using the words of Lord Cottenham in Hirst v Tolson (1850) 2 Mac and G 134; [1850] EngR 313; 42 ER 52 , a payment has been made by anticipation of something afterwards to be enjoyed [and] where ... circumstances arise so that future enjoyment is denied". Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do (cf Atwood v Maude at pp 374-5 and per Jessel MR, Lyon v Tweddell (1881) 17 Ch D 529 at 531).

1. The plaintiff observes that in Bashford v Bashford, the plaintiff in that case asserted an interest by way of a constructive trust arising by operation of the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. Beech J noted that the existence of the general equitable principle was not in doubt. His Honour continued:

Thus the nature and extent of the plaintiff's claimed beneficial interest is such that, in substance, the plaintiff's claim is to a share of the proceeds of sale of the Property, the claim being secured against the Property. The claim may lead to a conclusion that the plaintiff is a beneficial coowner of the Property, or that he has an equitable charge.[14]

1. Ms Gunn contends that the caveat ought not be extended on two bases. First, it is contended that the affidavit of the plaintiff does not disclose an arguable claim to an equitable interest as coowner of the Yokine property. Second, it is said that the caveat is irregular on its face in that it is an absolute caveat in circumstances where it should have been framed to protect the limited interest claimed by the plaintiff. Ms Gunn contends that the caveat should not be extended without amendment, and that amendment to the caveat should not be allowed.

Serious question to be tried as to caveatable interest

1. Putting aside the evidence describing what are said to be the first and second agreements, of which no admissible evidence was presented, the plaintiff's evidence reveals the following facts.

(i) in early 2015, the plaintiff and Ms Gunn discussed purchasing a property together;

(ii) on settlement of the Armadale property, the plaintiff directed a payment of $130,000 to Ms Gunn for the purpose of facilitating a 'back up plan' if the plaintiff did not like living at the village unit and on the understanding that Ms Gunn was to buy a property in which the plaintiff could live if she did not like living in the village unit;

(iii) Ms Gunn took the plaintiff to view the Yokine property from the outside prior to its purchase, and the plaintiff said to Ms Gunn that she liked it and that it would do her well;

(iv) Ms Gunn then purchased the Yokine property in her sole name; and

(v) when the plaintiff attempted to implement her 'back up plan' Ms Gunn refused to permit her to live in the Yokine property as promised.

1. Despite the gaps in the plaintiff's evidence, I am satisfied that those facts are sufficient to conclude that, on the basis of the principles explained in Muschinski v Dodds as set out above, the plaintiff's claim to an interest as equitable coowner to the extent of her contribution of $130,000 may have substance. That is because those facts are capable of leading to the conclusion that the substratum of the joint arrangement in relation to the provision of accommodation for the plaintiff has been removed, it was that substratum which provided the basis of the contribution to the purchase price of the Yokine property, and it would be unconscionable for Ms Gunn to retain the benefit of that payment in those circumstances.
2. The position in relation to the second payment of $242,334.38 is different. The plaintiff's evidence is that payment was made to Ms Gunn for the express purpose of purchasing a different property. There is no evidence as to whether, and if so how, those funds were dispersed by Ms Gunn. It cannot be said, on the state of the evidence as it stands, whether those funds were applied to pay down the mortgage on the Yokine property or otherwise applied in relation to the Yokine property. In those circumstances, I am not satisfied that the evidence discloses a serious question to be tried as to the existence of an interest in the Yokine property arising by reason of the second advance of funds by the plaintiff to Ms Gunn.

1. The conclusions reached above require that the caveat be amended if it is to properly reflect the extent of the interest in respect of which I have found that the evidence discloses a serious question to be tried. That amendment can be achieved by amending Note 6 of the caveat to read:

The nature of the interest claimed by the caveator is as equitable coowner, to the extent of her contribution in the sum of $130,000 to the purchase of the above land described, as detailed in her statutory declaration of 10 October 2017.

1. I also accept Ms Gunn's submission that the caveat requires amendment in respect to Note 7 so that it forbids registration of any instrument affecting the estate or interest of the plaintiff unless subject to the plaintiff's interest, rather than absolutely.
2. There is no issue that it is open to the court to direct that the caveat be amended in those respects.
3. Ms Gunn submitted that there were factors weighing against the exercise of the court's discretion to permit amendment of the caveat. Those factors generally relate to what is said to be the weakness and uncertainty of the plaintiff's claim and the absence of any specific contractual entitlement to lodge a caveat. In my view those factors should not prevent amendment of the caveat. The substantive rights and obligations between the plaintiff and Ms Gunn are now the subject of proceedings in this court. Ms Gunn deposed in her affidavit in opposition that she continues to live in the Yokine property and has no intention of selling it. There would not appear to be any particular prejudice to Ms Gunn in the caveat being amended and remaining pending the resolution of the substantive proceedings.
4. In those circumstances, I consider that the amendment of the caveat should be permitted in the terms I have indicated, and the caveat should be extended until further order.

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

[1] Affidavit of Hildegard Inge Meiners, 11 January 2018 [29].

[2] Affidavit of Hildegard Inge Meiners, 11 January 2018 [41].

[3] Porter v McDonald [1984] WAR 271, 276.

[4] Transfer of Land Act 1893 (WA) s 137(1).

[5] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50.

[6] Transfer of Land Act 1893 (WA) s 138B(1).

[7] Custom Credit v Ravi Nominees, 48; Bashford v Bashford [2008] WASC 138 [47].

[9] Benson v Benson [2008] WASC 13 [31] [33]; Midland Brick Company Pty Ltd v Welsh [2006] WASC 122; (2006) 32 WAR 287 [397] [399]; Bashford v Bashford [51].

[11] Lydon v Ryding [2002] WASC 308 [22]; Lee v Mavaddat [2007] WASC 18 [37]; Powell v In de Braekt [2006] WASC 264 [10]; Bashford v Bashford [52].

[12] Plaintiff's submissions, 16 February 2018 [19].

[13] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 619 620.