19 Mr Schneider denies that Ms Elleray provided him with financial assistance as she claims. He exhibits cheque butts and company accounts and bank statements as evidence of payments made by Riverview in relation to the improvements of the property. He also refers to a payment of $5000 for electrical works made by Ms Woods and a Mr Mario Muscat.
20 It is clear that there are significant disputes between the parties as to matters of fact.
The County Court proceeding
21 Ms Elleray lodged the caveat on 6 December 2006. On 28 December 2006 Riverview made an application to the Registrar under s 89A(1) of the Act for its removal. The upshot of that application was that, on 5 February 2007, Ms Elleray issued a proceeding in the County Court: initially against Mr Schneider alone. In the endorsement on the writ, she claimed relief under Part IX of the Act, as well as a declaration that she had an interest in the property by way of a resulting or constructive trust. The Registrar was subsequently notified that proceedings had been commenced to substantiate Ms Elleray's claimed interest.
22 Only subsequently did Ms Elleray file an amended pleading with a statement of claim seeking orders under Part IX of the Property Law Act 1958 against both Mr Schneider and Riverview, based on an alleged "domestic relationship" between her and Mr Schneider between 19 December 1997 and 24 November 2006. Ms Elleray purported to serve that amended writ on Riverview under cover of a letter to its solicitors dated 18 April 2007. The letter requested that Riverview discontinue or at least agree to adjourn this application and for the parties to start negotiations. A conference at which financial information could be exchanged was also proposed.
23 The amended statement of claim annexed to the County Court writ pleads that Ms Elleray and Mr Schneider made an agreement to jointly purchase a property and that Mr Schneider made the alleged statements relating to the purchase of the property in the name of a company. Ms Elleray claims to have made contributions to the relationship and the property. She alleges that she did domestic work, provided care and made financial contributions to household expenses and the improvement of the property.
24 Ms Elleray also alleges that she and Mr Schneider had a "joint relationship" and pooled resources which were used in part for the purchase and conservation of the property. She claims an interest in the assets of Mr Schneider and Riverview, including the property, by way of a "constructive, implied or resulting trust" which would reflect her contributions to their value. Alternatively, she pleads an estoppel preventing the defendants from denying the alleged trusts, as well as an interest under a joint venture with regard to the purchase of the property. Ms Elleray also claims that Mr Schneider breached the agreement by purchasing the property in Riverview's name. She seeks declaratory and other relief recognising her alleged interest in the property.
Submissions
25 Counsel for each of the parties made written and oral submissions to the Court.
26 Counsel for Riverview acknowledges that the Court must decide whether Ms Elleray arguably has an interest in the property or merely the right as against Mr Schneider, her former domestic partner, to a financial adjustment under Part IX of the Act. He argues that such an interest under Part IX would not support a caveat[5].
27 Counsel for Riverview submits that Ms Elleray has not adduced any evidence to substantiate her allegations in the amended County Court pleading as to the existence of a joint venture.
28 Counsel for Riverview's written submissions set out passages from the 6th edition of Jacobs Law of Trusts in Australia relating to the creation of express, implied and constructive trusts. Counsel does not contest the proposition that any such trust could support a caveat.
29 Counsel for Riverview does argue that there is evidence that Ms Elleray attempted to use the caveat as a bargaining tool and, therefore, for a collateral purpose, misusing the relevant statutory provisions[6]. He cites her solicitors' letter to Riverview's solicitors of 18 April 2007.
30 Counsel for Riverview also contends that the Court should take into account, in relation to the balance of convenience, that the original County Court proceeding was only issued against Mr Schneider and did not therefore seek to substantiate the interest claimed by Ms Elleray in relation to Riverview. He refers to Darnel Pty Ltd v Bigic[7] in which Balmford J took it into account in relation to the balance of convenience that the proceedings issued by the caveator did not contain any claim substantiating the claimed interest.
31 Riverview submits that the caveat should be removed on the basis of its proffered undertakings to the Court that it would preserve at least $200,000 of the proceeds of any sale of the property and that it would not draw down more than $300,000 under the line of credit secured by the property.
32 Counsel for Ms Elleray responds that she has made out an arguable case that she has an interest of the type claimed in the property. He goes on to argue that the balance of convenience favours the maintenance of the caveat.
33 Counsel argues that Ms Elleray has adduced evidence of facts which could result in a court recognising that she has an interest in the property under a constructive trust. He refers to her alleged contributions to the improvement of the property and contends that, in all the circumstances of their conversations and their agreement as to its purchase in the company's name, it would arguably be unconscionable for Riverview to deny that she had the claimed interest.
34 Counsel for Ms Elleray submits that the caveat should be retained to protect Ms Elleray's interest vis a vis third parties. He advised the Court that she would co-operate in any proposed sale of the property and would permit drawings up to $300,000 under the line of credit.
Conclusion
35 I am persuaded that there is evidence in paragraph 8 of Ms Elleray's affidavit which might be regarded as evidence of an agreement between her and Mr Schneider, on behalf of Riverview to the effect that Riverview would purchase the property upon trust for the two domestic partners. It might also evidence a representation or an agreement that she would have an interest in the property, which she later acted upon to her detriment in making her contributions to its improvement and to the relationship between herself and Mr Schneider, in circumstances in which it would be a fraud for Riverview to deny that she held that interest, giving rise to an implied or constructive trust in her favour; see Muschinski v Dodds[8]. I note in this regard that Mr Schneider is one of Riverview's two directors and the holder of 9 of its 10 issued shares. His sister, who has supported him in this application, only holds one share in the company.
36 Ms Elleray's claimed interest does not appear to be based solely on any alleged interest in the property under Part IX of the Property Law Act 1958.
37 Ms Elleray's account of events is strongly disputed. Notwithstanding the relevant terms of the agreement, which might be thought to militate against the likelihood of her version of events being accepted as true, there is an issue between the parties as to the existence of relevant facts which, in my view, should properly be ventilated in the County Court proceedings. There, oral evidence can be given and tested by cross-examination.
38 Further, I consider that the balance of convenience favours the caveat being allowed to stand.
39 Any beneficial interest of Ms Elleray might well be deleteriously affected by the reduction of her equity, if the property were to be used to secure further advances to Riverview under its existing line of credit. However, in his 26 April 2007 affidavit, Mr Schneider cites, as a reason for its removal, the inhibiting effect of the caveat upon Riverview's ability to utilise the line of credit secured by the bank's interest in the property. He asserts that Riverview uses the line of credit "for the purpose of its general business". I note in this regard that there is no evidence that Riverview carries on any business other than that of being the owner of the property. Nor is there any evidence of any need for works to be carried out at the property or improvements made to it, requiring funding under the line of credit. There is no material indicating any other prejudice to Riverview resulting from the maintenance of the caveat. Indeed, Mr Schneider only deposes as to his concern that the company's access to the line of credit is impeded by the caveat. He does not allege the existence of any additional facts giving rise to his concern.
40 I have borne in mind as a relevant consideration that the original version of the County Court pleading did not include a claim against Riverview. Nevertheless, the statement of claim did contain allegations by Ms Elleray relating to financial and non-financial contributions to Mr Schneider's welfare and that of their respective children which might be said to partially underpin her claim against Riverview in the amended pleading. Further, the amended County Court pleadings claim an interest of the type asserted in the caveat. This is not a case, such as that confronting Balmford J in Darnel, in which there was no reference to the facts giving rise to the alleged interest in the proceedings about which the Registrar was advised.
41 Further, in the circumstances in which she has issued proceedings to defend her position, I am not persuaded that Ms Elleray's suggestion that the parties negotiate amounted to an attempt to use the caveat for any improper purpose. I also take into account her stated willingness to co-operate with either a sale of the property or the utilisation of the line of credit by Riverview.
42 Notwithstanding Riverview's proffered undertakings, I am not persuaded that I should order the removal of the caveat. The application should be dismissed.