Provident Capital Ltd v Agusta Pty Ltd; Agusta Pty Ltd v Provident Capital Ltd

Evidence of Mr Angelo Ferella 19Agusta and Riva rely on the affidavit of Mr Angelo Ferella ( "Mr Ferella" ) of 29 March 2010. 20Mr Ferella is not a director of Agusta or Riva but he says he is a manager of both companies. He does not say how long he has been manager. No director of Agusta (or Riva) gave evidence. 21Mr Ferella annexed the deed of 9 February 2006 appointing Agusta (see pages 53-54 of the Court Book), but whilst he said (at paragraph 11 of his affidavit of 29 March 2010 at pages 8-9 of the Court Book) that Agusta "purportedly became the trustee", he offered no evidence as to why what is contained in the deed was not correct. He was a witness to Ms Ferella's signature on behalf of both Agusta and Riva. He made reference to the letter of offer (pages 59-64 of the Court Book) to Agusta from Provident but did not positively assert that Agusta was not acting as trustee or assert that it was not entitled to so act. 22Whilst it appears that Mr Ferella seeks to assert that the deed of 9 February 2006 appointing Agusta was invalid, the basis is quite unclear. Mr O'Sullivan submitted that the word "purportedly" was used because as at 9 February 2006, the Ferellas were bankrupt (see T51.19-20). This is not of itself a reason why a properly constituted meeting of unit holders could not appoint a new trustee. To the extent that there is any reliance on the judgment of Nicholas J in Proceedings 4820/06, as I have indicated, whether Riva or Agusta was the trustee was not an issue determined by his Honour. Mr Ferella offers no direct evidence as to why the appointment of Agusta was invalid or ineffective. Although he refers to the letter of offer to Agusta from Provident and the consequences (see paragraphs 18-21 of his affidavit of 29 March 2010 at pages 8-10 of the Court Book), he does not assert that (other than implicitly by reason of the decision of Nicholas J) that Agusta was not acting or entitled to act as trustee. 23In my opinion, if it was Agusta's case that it was never validly appointed, it was incumbent on it to bring evidence forward to support that contention and a concession made by it in other proceedings that Riva was the trustee is not evidence. No evidence was given by unit holders in the Trust as to the process or lack of process by which Agusta (or Riva for that matter) was appointed as trustee. 24On the rights and liabilities of trustees in dealing with third parties, there are some basic principles, which I take from the restatement by Brereton J in Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344; (2008) 74 NSWLR 550 at [14]-[22] , that need to be borne in mind to understand the parameters of the present dispute: "14 First, as against a third party, a trustee is personally liable for debts and liabilities incurred in its capacity as trustee: Vacuum Oil Co Pty Ltd v Wiltshire (1945) 72 CLR 319; Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 367. 15 Second, however, the trustee has a right of indemnity out of the trust assets for expenses or liabilities incurred by the trustee, by recoupment of expenditure and exoneration from liability: Octavo Investments v Knight (at 367); Chief Commissioner of Stamp Duties for New South Wales v Buckle (1998) 192 CLR 226 at 245. 16 Third, this right of indemnity, recoupment and exoneration is secured by an equitable lien over the trust assets, which arises by operation of law and confers a proprietary interest, in the nature of a security interest, in the trust assets, and takes priority over the claims of beneficiaries: Octavo Investments v Knight (at 367, 370); Chief Commissioner of Stamp Duties for New South Wales v Buckle (at 246). 17 Fourth, this equitable lien extends to all of the trust assets, save only those that are specifically excluded by the trust instrument: Dowse v Gorton [1891] AC 190; Octavo Investments v Knight (at 367). 18 Fifth, being an equitable lien, the security is enforceable by the trustee only by judicial sale or appointment of a receiver, and not by foreclosure or by sale out of Court: Tennant v Trenchard (1869) LR 4 Ch App 537; ANZ Banking Group Ltd v Intagro Projects Pty Ltd [2004] NSWSC 1054 at [14]; Melbourne Tramways Trust v Melbourne Tramway & Omnibus Company Ltd (1887) 13 VLR 487 at 490; Re Pumfrey (1882) 22 Ch D 255 at 265; Re Stucley [1906] 1 Ch 67; Davies v Littlejohn (1923) 34 CLR 174 at 184; Hewett v Court (1983) 149 CLR 639 at 663; EISykes and SWalker, The Law of Securities: an account of the law pertaining to securities over real and personal property under the laws of Australian jurisdictions , 5th ed (1993) Sydney, Lawbook Co Ltd a t 198. 19 Sixth, the right of indemnity accrues at the time the obligation is incurred: Xebec Pty Ltd (In Liq) v Enthe Pty Ltd (1987) 18 ATR 893; Southern Wine Corporation Pty Ltd (In Liq) v Frankland River Olive Co Ltd (2005) 31 WAR 162 at [30]; and is not subsequently lost by cessation of office, whether by retirement or removal: Xebec v Enthe (at 898); Coates v McInerney (1992) 7 WAR 537; Southern Wine Corporation (at [30]); Dimos v Dikeakos Nominees Pty Ltd (1996) 68 FCR 39 at 43. 20 Seventh, upon bankruptcy or liquidation of a trustee, its right of indemnity vests in its trustee in bankruptcy or liquidator: Official Assignee of O'Neill v O'Neill (1898) 16 NZLR 628; Jennings v Mather [1901] 1 KB 108 at 117; Savage v Union Bank of Australia Ltd (1906) 3 CLR 1170 at 1188, 1196; Octavo Investments v Knight ; Re Suco Gold Pty Ltd (In Liq) (1983) 33 SASR 99. 21 Eighth, if the trust property is transferred to a new trustee, the lien survives and the new trustee takes subject to the lien of the old trustee - except perhaps in the exceptional case of a bona fide purchaser for value without notice: Belar Pty Ltd (In Liq) v Mahaffey [2000] 1 Qd R 477 at [20]; Octavo Investments v Knight (at 370); Chief Commissioner of Stamp Duties for New South Wales v Buckle (at 246); Re Exhall Coal Co Ltd (1866) 55 ER 970. 22 Ninth, a trustee is entitled to retain possession of trust property against a beneficiary until its indemnity is exercised: Octavo Investments v Knight (at 369-370); Chief Commissioner of Stamp Duties for New South Wales v Buckle (at 246); Re Exhall Coal Co Ltd (at 972); Re Enhill Pty Ltd [1983] 1 VR 561." 25To this has to be added the fact that the Torrens system of land in New South Wales does not permit trust interests to be recorded in the Register: see s 82 of the Real Property Act 1900 (NSW) . The Real Property Act does permit trust instruments to be lodged and if lodged, the Registrar-General is required to record in the Register a caveat. In the absence of the trust instrument being lodged, the fact that the registered proprietor holds the land as trustee is relevant only as between himself and the trust but not as between himself and third parties. In the High Court's decision of Black v Garnock [2007] HCA 31; (2007) 230 CLR 438, Hayne, Gummow and Callinan JJ emphasised the significance of the Register and rejected the claim of a third party purchaser for value who had no notice of a writ of execution on land lodged by the Sheriff two hours before settlement. 26It follows from the principles set out at [24] and [25] above that: (1)Agusta was liable to Provident on the contract made on 16 March 2006; (2)Agusta's registration as owner of the Property did not require any notation as "trustee", and it was, as trustee, entitled to be registered as the owner of the Property without lodging the trust instrument; and (3)if Agusta was validly appointed as trustee, it was entitled to an indemnity out of Trust assets for the Judgment Debt owed to Provident. I shall deal separately with Agusta's entitlement to indemnity even if it was not validly appointed. 27For a transfer of an interest in land to be voidable under s 37A of the Act, there are four elements which need to be established: (1)that there has been an alienation; (2)of property; (3)with intent to defraud creditors; and (4)that the person seeking to set aside the transfer has been prejudiced. 28Mr O'Sullivan conceded that the transfer constituted an alienation of property, thereby accepting implicitly the correctness of the following cases: Green v Schneller [2002] NSWSC 671; (2002) 29 Fam LR 346; Re Cummins; Richardson v Cummins (1951) 15 ABC 185; and Silvera v Savic [1999] NSWSC 83; (1999) 46 NSWLR 124 . 29The contest between the parties centred upon: (1) whether an intent to defraud creditors, a requirement of s 37A of the Act, was established; (2) whether Provident had established that it was prejudiced by the alienation; and (3) the nature of the relief to be granted, as Mr O'Sullivan contended that even if the transaction was avoided, it would not assist Provident because Agusta is not the trustee and has no right to be recorded as registered proprietor of the Property, so the Registrar-General would not have the power to place Agusta on the Register. The Court, Mr O'Sullivan submitted, would not order the Registrar-General to do what he has no power to do.

Intent to defraud creditors 30At the hearing, it was accepted that the Court of Appeal's decision in Chen v Marcolongo [2009] NSWCA 326; (2009) 260 ALR 353 was binding authority on the issue of what is required to make out a case based on s 37A of the Act. 31A few days later however, the High Court handed down its decision in Marcolongo v Chen [2011] HCA 3 and unanimously overturned the Court of Appeal's decision. Counsel agreed on a regime for an exchange of written submissions so that they could deal with the High Court's decision and I received detailed written submissions. 32The plurality in Marcolongo (French CJ, Gummow, Crennan and Bell JJ) examined the history of s 37A of the Act and its analogues and held that the statute should be given a liberal construction and that "defraud" should be read as "delay, hinder or [otherwise] defraud": see [19], [32], [56] and [58]. It was not necessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss, rather, "it was necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly." (emphasis added): see [32]. 33In Marcolongo, Mr Chen had encouraged or procured Ms Yang to sell the property to him in haste and at a relatively low price ($15 million), telling her that there were outstanding claims against her company Lym International Pty Ltd ( "Lym" ), and that if she did not do that Lym would suffer a big loss and have its assets frozen. 34Mrs Marcolongo was a next door neighbour who had a claim against Lym in respect of the building works carried out on Lym's property, which at the time of the sale by Lym to Mr Chen, had not yet been the subject of adjudication in the District Court. Mrs Marcolongo did subsequently obtain judgment for $388,000 plus costs against Lym. French CJ, Gummow, Crennan and Bell JJ observed at [56]-[58]: "56 ...But the provision in special condition 33(b) for application of the balance of the proceeds to debts owed by Lym and related entities of Lym, and the evidence as to the lack of arrangements for Mr Chen to pay that balance, shows the deterioration to the position of Mrs Marcolongo that inevitably ensued. It is no answer, as it was no answer in In re Fasey; Ex parte Trustees, that there had been no delay and hindrance occasioned by the transaction because eventually she might have had some recovery for any judgment she recovered and costs. 57 The second point is that s 37A requires a finding, which Hamilton J made, of intent to achieve the proscribed prejudice. The section does not postulate a mixture of motives from which there must be extracted what is identified as a predominant intent to defraud. Further, as Stephen J indicated in his discussion in Barton v Deputy Federal Commissioner of Taxation , a provision such as the Elizabethan Statute does not require for its operation that the proscribed intent to defraud be the sole intent. Nor is it an answer to an application under the section that the transferor formed the intent of which it speaks by reason of the misconduct of another or, as here, of the transferee; the transferor, as in this case, will have remedies against that party but that does not deny success on the application made under the section by the person prejudiced. Counsel for Lym was unable to point to any line of authority in the extensive case law upon the Elizabethan Statute which would confine s 37A in this fashion. 58 The final point is that the limiting effect which Lym sought to place upon s 37A would be to deny it the liberal construction which the Elizabethan Statute has long been held to require." 35Heydon J, in his judgment, made reference to the fact that Mr Chen had told Ms Yang that she could go to gaol if Lym had liabilities that could not be met. His Honour noted at [78] the trial judge's finding that Ms Yang's reason for signing the contract of sale on behalf of Lym was "to get the property away from those who might claim against that company and to avoid the company suffering a "big loss" in the form of the $600,000 claim." After noting the haste with which the transaction was conducted, Heydon J said at [87]-[88]: "87 Whatever the precise test called for by s 37A, the intent underlying the conduct of Lym International Pty Ltd through Ms Yang was enough to satisfy it. It was as "actual" and "dishonest" an intent as it is possible to have. The intent was to delay or hinder a creditor, Mrs Marcolongo, by forestalling any attempt by her to obtain an injunction ensuring that assets in the hands of Lym International Pty Ltd would remain available to satisfy any judgment which she obtained in the District Court proceedings. It was an intention that was primary and not "merely incidental" to other intentions. The intent was not merely a minor element amidst a range of mental states. Lym International Pty Ltd submitted that Ms Yang's reasons for entering the transaction were many and varied. On examination each of them boils down either to an element of or factor in the intent found by the trial judge, or to a worry Ms Yang was experiencing but which the transfer could not overcome. In the Court of Appeal it was said that she was very worried about "a great number of factors, including the incarceration of her husband in China, the stalled building project, the claims from the first project and her inability to fund the project." The first cannot have been a reason for the transfer, and the remainder are all related to the intent found by the trial judge. Lym International Pty Ltd submitted that Ms Yang was unwell, but that did not go to her intent. In evidence she identified as other reasons for the transaction the following: the indebtedness of Lym International Pty Ltd; the need for another $3.4 million to complete the project; the need for that money to be invested within two months, when the construction licence would expire; and the need to repay a debt to avoid going to gaol. Of these reasons, only two were not related to the intent found by the trial judge. One was the need to invest the $3.4 million. The other was the need to repay a debt to avoid going to gaol. The transaction with Mr Chen did not meet either need. 88 The evidence accepted by the trial judge, and his findings, reveal that the proscribed intention was probably the sole one, but at all events it was a predominant and primary one." 36It was accepted that no consideration was paid to Agusta for the transfer of the Property to Riva and it is clear that as soon as the writ lapsed, Agusta and Riva moved rapidly to effect the transfer. There is no doubt that the transfer removed the prospect of Provident being able to lodge a further writ on the title of the Property at least without the intervention of this Court. Although the registration of the writ does not create any interest in land under the Real Property Act (see s 105(1)), the recording of the writ prevents any registration of dealing which does not recognise the writ as if it were a prior encumbrance: see s 105A(2). 37At first glance it appears obvious that the transfer by Agusta was designed to impede Provident from issuing a fresh writ to enforce its Judgment Debt. The following arguments were advanced by Mr O'Sullivan in his written submissions as to why the requisite intent in s 37A of the Act has not been established: (1) Provident was hindered or delayed in enforcing its Judgment Debt against Agusta because the writ lapsed before it was executed. (2) Agusta was not the proper trustee of the Trust "so that it was mistakenly recorded as the proprietor of the Kings Park Property". (3) Provident failed to take advantage of the mistake before Riva and Agusta or the Court were able to rectify it. (4) Provident was unable to obtain a fresh writ because Riva was not a debtor of Provident. 38The argument in 37 focuses on the writ which had undoubtedly lapsed and as I have noted, not directly by reason of any conduct on the part of Agusta. I think however that the focus is too narrow - Provident would in the normal course have been entitled to the issue of a fresh writ and it was the transfer out of Agusta's name which precluded a fresh writ from being issued. 39The arguments in 37 and (3) refer to Agusta being "mistakenly recorded" as the registered proprietor of the Property. If this is intended to assert that Agusta should never have been recorded as proprietor, I do not think that has been established. If it is intended merely to assert that since Riva had been appointed as trustee in 2008, the transfer should have been effected earlier than 2010, I do not think that the phrase "mistakenly recorded" is apt. However, I accept, subject to one important matter, that it was not inappropriate for Agusta to transfer the Property to Riva as the newly appointed trustee and to do so without any consideration as such being paid for the Property. 40The qualification to which I have referred in [39] is this. Agusta, when it incurred the Judgment Debt, had been appointed as trustee and it was conceded by Mr O'Sullivan that it appears that the loan it sought from Provident was for the benefit of the Trust: see T7.5-T7.27. In the absence of any evidence that Agusta was not acting on behalf of the Trust, I infer that it was acting on behalf of the Trust when it entered into the loan contract with Provident. When Agusta transferred the Trust property, it had a judgment against it and was well aware that Provident was seeking to enforce that Judgment Debt. There is no evidence that Agusta made any arrangement with Riva, as incoming trustee, for indemnification out of Trust assets of the Judgment Debt, or for payment of the Judgment Debt by Riva directly to Provident. It is obvious that Riva had no intention of accepting that the Judgment Debt owed by Agusta should be paid by it out of Trust assets or otherwise. There is no evidence before the Court as to why Agusta (or Ms Ferella for that matter) has never paid the Judgment Debt and I infer it is because Agusta does not have the means out of its own assets to pay the Judgment Debt. 41The fact that as at the time Agusta incurred the liability to Provident it was not the registered proprietor of the Property but only became registered at a later time is relied on by Agusta to demonstrate that Provident received a benefit by a fortuitous transfer and the removal of the benefit is in the same category. This has, it is submitted, two aspects. The first is that it is said that there is nothing unfair about the transfer and secondly that the transfer into Agusta's name after it has incurred a liability demonstrates the absence of bad faith. 42There are a number of answers to this point: (1) If Agusta was validly appointed as trustee (and as I have said it has not been demonstrated that it was not), then it was appropriate that the assets of the Trust, including the Property, be transferred to it prior to and at least as at 16 March 2006. If that had occurred, Agusta would have been entitled to be registered as the proprietor. When Agusta incurred the liabilities to Provident (see [19] of Lemery as set out at [24] above), Agusta had a right of indemnity. (2) The first point links to the second. Had the transfer in February 2006 been effected, as it ought to have been, then Agusta would have had protection for debts incurred by it acting as trustee. When Riva was subsequently appointed as trustee and a transfer was arranged from Agusta to it, the matters to which I have referred in (1) above became pertinent. (3) Although the judgment of Nicholas J in Proceeding 4820/06 was handed down on 8 July 2008, no steps were taken by Agusta or Riva to transfer title until 2010. Whilst it is true that from 18 June 2009, the writ of execution had been lodged, there was a period of almost a year before that in which no steps were taken. 43Mr O'Sullivan also relied on the failure of Ms Nolan to cross-examine Mr Ferella on his affidavit and he argued that there were potential reasons for the failure to transfer the Property prior to 23 June 2010, particularly the mortgage that were not explored with Mr Ferella. Mr O'Sullivan submitted that it would be unfair to infer fraudulent conduct on the part of Agusta or Riva in the absence of cross-examination. Ms Nolan replied to this (at T69), pointing out that it was not necessary to bring evidence of the state of mind of the alienor and that the Court could infer the necessary intention for the purposes of s 37A of the Act. Ms Nolan's second point was that Mr Ferella was not the directing mind of either Agusta or Riva and rather significantly, in any event, his affidavit is dated March 2010, ie three months before the impugned transaction. Whether Mr Ferella could have provided evidence on behalf of Agusta and Riva as to the intentions behind the transfer, the fact is that he did not do so. Nor did he explain the delay from July 2008 to June 2010. He gave no evidence about the mortgage which is recorded on the title of the Property: see the second page of Exhibit B. If Mr Ferella had the ability to deal with matters to rebut Provident's case based on his knowledge of the facts, his failure to do so points to the conclusion that the evidence he could give would not assist the case of Agusta and Riva: see Commercial Union Assurance Co. of Australia v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418. The matters were very much in the province of Agusta (and Riva) and evidence on this topic should be weighed in accordance with the power of the defendant to adduce it: see Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 , approved in Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371. In the circumstances, I do not think that Ms Nolan's failure to cross-examine Mr Ferella precludes the conclusion that the transfer of the Property without adequate protection of Agusta's rights to indemnity from the Trust was not a breach of s 37A of the Act. The conclusion that Agusta and Riva had the required intent under s 37A of the Act does not, in my view, require a finding that Mr Ferella had that intent, but if it does then I would make that finding. 44In response to Ms Nolan's submissions that Agusta had acted in secrecy in lodging the transfer of the Property, Mr O'Sullivan submitted that his clients had acted openly because they had commenced proceedings in this Court to obtain relief and had notified Provident's solicitors on two occasions after the transfer was lodged. I think the latter notifications do not assist because by then the transfer had been effected. So far as the commencement of proceedings is concerned, I do not think that this rebuts the claim of secrecy since the action taken by Agusta (and Riva) was taken outside of the proceedings. 45The position then in essence is that: (1) Agusta had acted as trustee of the Trust and incurred a debt to Provident in the course of so acting. (2) Provident obtained judgement against Agusta. (3) Agusta did not meet that Judgment Debt. (4) Agusta had assets of the Trust transferred to it after the contract with Provident was entered into but which it was entitled to have transferred upon execution of the deed of 9 February 2006. (5) After Provident had obtained judgment, but before a writ was issued, Riva was reappointed as trustee. (6) A writ was issued at the request of Provident as judgment creditor. (7) Efforts were made by Agusta and Riva to block the Sheriff's attempts to sell the Property (see for example page 73 of the Court Book). (8) After the writ was issued and three days after the writ had expired, Agusta transferred the Trust property to Riva without any arrangement being made for Agusta to be indemnified or Riva to pay Provident the Judgment Debt out of the Trust assets. (9) Provident could not obtain a writ on the Property (without this Court's intervention) and was thereby prejudiced because it could not execute the writ and obtain an order for the sale of the Property to satisfy the Judgment Debt. Provident was also exposed to the risk that the new trustee could sell the Property to a third party for valuable consideration and then distribute the net proceeds of sale to the beneficiaries of the Trust. 46Agusta, as trustee, had the right to be indemnified out of Trust assets and thus protect itself and Provident, as a judgment creditor (with or without a writ), and what Agusta did was to transfer the Property without any arrangement being made in its or Provident's favour. In my view, this at the least hindered or delayed Provident's claims, as a judgment creditor, against Agusta. If it is said that Agusta still has the right to be indemnified out of Trust assets, then its path to recovery of the Judgment Debt will be far slower than it would have been had Agusta obtained indemnity from the Trust when it had the opportunity to do so: see [52] and [56] of the High Court's decision in Marcolongo in this connection. 47Ms Nolan submitted that even if Agusta was not validly appointed as trustee, but was acting as trustee in good faith believing itself to have been duly appointed, it was entitled to indemnity as if it were a duly appointed trustee: see Travis v Illingworth [1868] WN 206 and Mowbray et al, Lewin on Trusts, 18 th ed (2008), Thomson/Sweet & Maxwell at [21-28], and nothing was said by Mr O'Sullivan to challenge that proposition which I accept. 48Mr O'Sullivan submitted that Provident's right to obtain funds from Agusta on a winding up or from Ms Ferella meant that it was not prejudiced by the transfer of the Property. The High Court's judgment in Marcolongo at [56] and its approval of In re Fasey; Ex parte Trustees [1923] 2 Ch 1 at 13, 15, 17 require the rejection of that contention.

The Precise Form of Relief 49Section 37A of the Act renders the transfer of the Property voidable but Mr O'Sullivan raised the point that even if the transfer is voidable, the Court should not order the Register to be "rectified" because it would, in effect, reinstate Agusta as the registered proprietor when it is not and could not be so described. To the extent that it was suggested that Agusta's debt should be treated as Riva's debt, I agree with Mr O'Sullivan's submission that Riva has not itself incurred any debt and it would be inappropriate to order Riva to pay any money itself. 50Ms Nolan accepted that there are difficulties with ordering the Registrar-General to record Agusta as the registered proprietor of the Property and sought a different form of relief, which I understood to be that Provident should be entitled to stand in Agusta's shoes in relation to Agusta's right to be indemnified out of the Trust property. 51In this connection, Ms Nolan submitted that: (1) either as trustee in fact or as someone acting as trustee in good faith, Agusta was entitled to be indemnified out of the Trust assets for its liabilities to Provident; (2) in Silvera v Savic (1999) 46 NSWLR 124, a s 37A case, Hodgson CJ in Equity (as his Honour then was) said at [72]: "What s 37A says is that the "alienation" is "voidable". In my opinion, when an application is made under s 37A to the Supreme Court, that Court can achieve the effect of avoiding the alienation by such measures as seem appropriate in the particular case. For example, the Court could declare that the effect of the Local Court order is spent by reason of its being carried out by the subsequent transfers, and then order appropriate re-transfers of the property. Such orders would not be inconsistent with the Local Court orders, nor could they give rise to any possible embarrassment by reason of the existence of conflicting court orders." and that this case and Houvardas v Zaravinos [2003] NSWSC 387 support the conclusion that the Court has power to grant relief other than avoidance of the relevant contract to protect the plaintiff's equity; (3) in Houvardas , Bergin J (as her Honour then was) referred to Silvera when considering relief in respect of an impugned transaction (see [125]-[128]). Also see [47]-[51] in the Court of Appeal's decision in Zaravinos v Houvardas [2004] NSWCA 421 . 52I accept the submissions set out in 51 and (2). 53Given that the vice in this case was the failure to ensure that Agusta was able to meet its liability on the Judgment Debt to Provident, I think it is appropriate to fashion relief which deals with the specific problem. There are several possibilities, including declaring that Agusta has a lien over the Property, and ordering Agusta to lodge a caveat to protect that interest (see Custom Credit Corp Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 and the other cases cited at [14.270] of H A J Ford & W A Lee, Principles of the Law of Trusts, 4 th ed (2010), Thomson Reuters on the right of a trustee to protect its right to indemnity). However, this introduces a degree of complication that can be avoided by a practical solution which is to declare that Provident has an equitable charge over the Property, which it can enforce by sale of the Property if the Judgment Debt and associated enforcement expenses are not paid to it within a short period, and that is the relief I propose to grant, but I will hear the parties on this. I have in mind one month as the appropriate period, but will hear the parties further on that point as well. The notation which is currently on title should remain until an alternative regime is put into effect.

Costs 54Agusta and Riva should pay Provident's costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 April 2011