RNC Nominees Pty Ltd v Trotter [2025] VSC 207

2 The courts have developed a test for deciding such applications. In order for Mrs Trotter to successfully resist RNC Nominees' application, she must satisfy a two‑stage test. Firstly, she must satisfy the Court that there is a prima facie case (previously a 'serious question to be tried') that she has the estate or interest in the property which she claims that she has that interest, or 'a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat'.[1] Secondly, she must satisfy the Court that the balance of convenience falls in favour of the caveat remaining until trial. The discretion under s 90(3) is broad and, strictly speaking, is not restricted by this test.[2] Nevertheless, I propose to follow it here.

3 The first limb of the test will be met if Mrs Trotter establishes that the probability on the evidence of her being found to have the asserted interest is sufficient to justify maintenance of the caveat over the properties.[3] This 'cannot but introduce some consideration of the balance of convenience into the assessment of the serious question to be tried'.[4]

4 In determining whether this test is met, I will consider the following questions:

(a) Is there a prima facie case justifying the caveats? This can be broken down into the following:

(i) Is there sufficient evidence of a prima facie case that a joint endeavour constructive trust has arisen to Mrs Trotter's benefit?

(ii) If yes, is the alleged joint endeavour constructive trust capable of giving rise to a proprietary interest justifying the caveats, or are there factors in this case precluding this outcome?

(b) If there is such a prima facie case, does the balance of convenience favour the maintenance of the caveat? In determining this question, I will consider:

(i) the strength or weakness of the prima facie case;

(ii) issues concerning whether RNC Nominees might have sold the properties at an undervalue compared to their market value, including RNC Nominees' non-disclosure of the sale prices to Mrs Trotter and prejudice to Mrs Trotter;

(iii) a dispute between RNC Nominees and a company and others related to Mrs Trotter about a financing transaction relating to a property called 'Marnoo' and the appointment of receivers and managers to the company's business;

(iv) factors relating to urgency;

(v) steps being taken to refinance the debts owing to RNC Nominees.

5 Gary Trotter, Mrs Trotter's husband, is the sole registered proprietor of 'Hemphills', 'South-East' and 'Woods', names the family has given to three properties in the Wimmera. The three properties lie in the vicinity of the Minyip-Banyena Rd, about 60 km north-east from Horsham and 39 km south-west of Donald.

6 RNC Nominees holds a second registered mortgage over the titles to the three properties, and over a number of other properties that (I understand from submissions) are either owned by Gary Trotter or people or entities associated with him and operated as a farming business.[5] The instrument of mortgage given by Gary Trotter to RNC Nominees, dated 23 May 2023, is in evidence. It was registered on 7 June 2023. It secures money owed under a facility agreement between RNC Nominees and each of Beverly Farming Pty Ltd, Gary Trotter, Mrs Trotter, and their son Andrew Trotter, dated 24 May 2021.

7 The first registered mortgagee over the three properties is the National Australia Bank Ltd. As of 2 April 2025, the payout figure required to discharge the debt to NAB and NAB's prior ranking mortgage was estimated to be $4,762,745.15.

8 On around 4 April 2024, Gary Trotter, Mrs Trotter, RNC Nominees and others entered a deed of forbearance. The debt recorded as owing to RNC Nominees pursuant to this forbearance deed was $7,197,591.97.

9 On 1 May 2024, RNC Nominees issued a default notice to Gary Trotter, Mrs Trotter, and others. The debt owing as stated in this default notice was $7,385,926.38 plus any additional interest accrued up to and including the date of payment.

10 On 6 May 2024, RNC Nominees as mortgagee entered into possession of Hemphills, South-East, and Woods (in addition to other properties the subject of the mortgage), and appointed Mr Benjamin Waters and Mr Ross Blakeley to act as its agents. Mr Blakeley is a registered liquidator and made two affidavits in the proceeding on behalf of RNC Nominees, which were received into evidence. It appears that Mr Waters and Mr Blakeley are also receivers and managers of Beverly Farming Pty Ltd.

11 On 21 February 2025, RNC Nominees entered into three separate contracts of sale of real estate with respect to Hemphills, South-East, and Woods. The date of settlement for each of the contracts was 7 April 2025.

12 On 18 March 2025, Mrs Trotter lodged a caveat on each of the three properties identifying the grounds of claim as 'implied, resulting or constructive trust'.

13 On 31 March 2025, RNC Nominees commenced this proceeding, seeking urgent removal of the caveats.

(a) The total of the valuations of the three properties provided to Andrew Trotter, the plaintiff's son, on 2 April 2025 is $6,525,000.

(b) Upon any sale of the properties, the outstanding debt to NAB (of $4,762,745.15 as of 2 April 2025) must first be applied to discharge the first registered mortgage on the titles of the properties.

(c) If the properties were sold at the valuation relied upon by Mrs Trotter, there would be about $1.7 million left of the proceeds after discharge of NAB's mortgage. This would go toward the debt owed to RNC Nominees, to which Mrs Trotter is a guarantor and an obligor. That debt was quantified in the forbearance deed on 4 April 2024 as $7,197,591.97.

15 Mrs Trotter submitted that she had an interest in the three properties under a constructive trust on the basis of her joint endeavour and/or common intention with her husband, relying on Muschinski v Dodds,[6] Baumgartner v Baumgartner,[7] and Sivritas v Sivritas.[8]

16 In her affidavit, Mrs Trotter deposed to running and contributing work to a farm with her husband which at certain times were expanded to Hemphills, Woods, and South‑East. Mrs Trotter and Andrew Trotter gave evidence that it had been the understanding within the family that Gary Trotter and Mrs Trotter have contributed equally to their marriage, and that properties in Gary Trotter's name are owned by each Gary Trotter and Mrs Trotter equally.

17 There are four issues I must determine. The first question is whether the evidence Mrs Trotter has advanced is sufficient to raise a prima facie case of a constructive trust at all. If it is, there are three additional issues, raised by RNC Nominees, any one of which could preclude a prima facie case. These are as follows:

(a) RNC Nominees pointed to the fact that Mr and Mrs Trotter remain happily married, and questioned whether a joint endeavour constructive trust could be asserted against it in circumstances where the endeavour on which the trust was founded had not come to an end (first additional issue).

(b) Further, RNC Nominees raised the indefeasibility of its title as registered mortgagee over the three properties (second additional issue).

(c) Relatedly, RNC Nominees contended that Mrs Trotter had no equitable interest because she admits that the debt is owing and is secured by the mortgages over the properties in favour of RNC Nominees, and therefore that there is no prospect of a surplus being payable after debts owing to secured creditors are met (third additional issue).

Is there a prima facie case for a constructive trust?

18 Mrs Trotter's evidence about the intention she says she shared with Gary Trotter to conduct a joint farming endeavour, and the evidence of her contributions to that endeavour, was quite general in nature. She deposed that:

(a) When Mrs Trotter married Gary Trotter in 1974, Mr Trotter already owned the Woods property, and he owed $6,000 to the army and some money to his parents.

(b) Mr and Mrs Trotter have run a farm in partnership since their marriage in 1974. This became a formal partnership in 1976. It was conducted with Gary's brother Chris and Chris' wife between about 1992 and 2012. Since then, it has reverted to being a partnership between Mrs Trotter and her husband Gary.

(c) At about the time they married, the couple soon bought a property they call 'House', registered in their joint names.

(d) From the 1990s, Gary Trotter and his brother Chris jointly owned two further properties, Rich Avon and Hemphills. Chris Trotter transferred his interests in those two properties to Gary Trotter in about 2012.

(e) Gary Trotter acquired a further property, Top Paddock, in 1994.

(f) Mr Trotter was given South-East by his mother in 2004.

(g) The farming partnership has been conducted on all the above properties, initially on House and Woods, then expanding to Hemphills, Rich Avon and Top Paddock. In 2004, it was further expanded to Top Paddock.

(h) Mrs Trotter contributed to work for the farming business in various ways.

At all times during our marriage, it has been Gary and my joint understanding that we own everything together and all of the properties comprising the Farm are joint assets of our marriage.

It has at all times been the understanding within the family that Gary and Lorna have contributed equally to their marriage and that properties in Gary's name are owned by Gary and Lorna equally.

21 The mere fact that the farming partnership at all material times involved both Mrs Trotter and Gary Trotter, and that its operations took place on lots of land including the three over which this proceeding has been commenced, does not in itself mean that Mrs Trotter has any interest in all or any of those lots of land. A farming business can be conducted irrespective of ownership of the land on which operations occur.

22 The evidence for a joint endeavour giving rise to a constructive trust boils down to Mrs Trotter's and Andrew Trotter's assertion that there was an understanding within the family that Mrs Trotter and Gary Trotter contributed equally to their marriage and that the properties in Gary's name were owned by them equally, together with Mrs Trotter's practical contributions to work for the business. This is very superficial evidence. Further, there is no evidence from Gary Trotter.

23 However, in my view, Mrs Trotter has done enough to establish a weak prima facie case for a joint endeavour constructive trust.

24 There is question about whether, since the High Court clearly established the criteria for the joint endeavour constructive trust in Muschinski v Dodds,[9] the concept of a common intention constructive trust remains part of the principles of equity in Australia. Some cases have treated the joint endeavour constructive trust doctrine as superseding the common intention constructive trust doctrine.[10] It has also been observed that some cases conflate the two doctrines, citing Muschinski v Dodds[11] as the authority for the common intention constructive trust doctrine.[12] This Court has treated the common intention constructive trust as a distinct doctrine.[13]

25 As I am satisfied that there is an arguable (albeit weak) case for a joint endeavour constructive trust, it is strictly unnecessary for me to form a view as to whether the requisite criteria for a common intention constructive trust are met here. Suffice it for me to say: if a common intention constructive trust arises, its prospects of success are certainly no stronger than Mrs Trotter's prospects of establishing a joint endeavour constructive trust.

26 My view expressed in paragraph 23 above is a preliminary view, based only on the limited evidence Mrs Trotter has placed before the Court, and without Gary Trotter having corroborated Mrs Trotter's role. Mrs Trotter's case for a joint endeavour constructive trust, though arguable, is only outlined in the broadest imaginable terms. It is also a view formed without RNC Nominees having a meaningful opportunity to respond. Nevertheless, there is a prima facie case that there is a constructive trust in Mrs Trotter's favour.

27 As mentioned in paragraph 3 above, there is some interdependence between the two limbs of the applicable test: some consideration of the balance of convenience is involved in the assessment of the asserted prima facie case. However, rather than addressing the implications of the weakness of the prima facie case at this point in my reasoning, I will address them in my consideration of the balance of convenience.

Is the alleged constructive trust capable of giving rise to a proprietary interest?

28 It is settled law that the requisite interest to support a caveat is any proprietary interest in the land.[14] This flows from the terms of s 89(1) of the Transfer of Land Act 1958, which relevantly permits a person to lodge a caveat if they are 'claiming any estate or interest in land under any unregistered instrument or dealing or by devolution in law or otherwise ...'.

29 An unregistered interest in land asserted by a beneficiary claiming a constructive trust has been recognised as a proprietary interest in the land capable of being protected by a caveat.[15] Here, however, three additional issues have been raised in response by RNC Nominees.

30 Taking the first additional issue,[16] does it matter that the relationship - and the farming endeavour - between Mr and Mrs Trotter, has not come to an end or been 'removed'? In Muschinski v Dodds, Deane J said:[17]

[T]he 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.

31 Here, although of course Mr and Mrs Trotter's marriage continues, it may be debatable whether the farming endeavour does so, at least in its intended form. Receivers and managers have been appointed to the farming business, and agents of a mortgagee in possession have taken control of the relevant land. That has arguably 'removed' the 'substratum'.

32 Putting the issue a bit differently, in terms that draw more directly on Deane J's description of the doctrine in Muschinski above, can the constructive trust in question be asserted against someone other than the 'other party' to the endeavour, in circumstances where that 'other party' is not the one retaining the benefit of the property? And in those circumstances can it be said to be 'unconscionable' for a third party mortgagee to 'assert or retain the benefit of the relevant property'?

33 Although these issues were raised by me at the hearing, there was no opportunity for detailed submissions and consideration about them.

34 My preliminary view is that none of these questions preclude Mrs Trotter from relying on the doctrine of the joint endeavour constructive trust in support of her caveats. In saying this, I acknowledge the following:

(a) Mrs Trotter's asserted equitable interest arises because of the operation of the doctrine on Mr Trotter's conscience, and Mr Trotter is the sole registered proprietor of the properties.

(b) The position of RNC Nominees as registered mortgagee under the mortgage granted by Mr Trotter, is different. RNC Nominees can obtain rights from registration that are not bound by the equities arising from the constructive trust in favour of Mrs Trotter. Registration confers indefeasibility on RNC Nominees' rights under the mortgage, subject to fraud or Mrs Trotter having a relevant in personam claim against RNC Nominees.[18] No such claim has been asserted.

(c) Ultimately, RNC Nominees' interests probably will therefore take priority over Mrs Trotter's asserted equitable interests.

35 Nevertheless, Mrs Trotter currently has a proprietary interest which will support a caveat. The other considerations raised by RNC Nominees do not preclude that interest from being recognised, but must be addressed in assessing balance of convenience.

36 Turning to RNC Nominees' second additional issue,[19] there is no suggestion that RNC Nominees was on notice of Mrs Trotter's alleged equitable interests in the properties as beneficiary of a constructive trust, or any other basis for thinking that RNC Nominees' registered interests could be subordinated to Mrs Trotter's alleged interests. However, that does not mean she does not have an interest in the properties sufficient to support a caveat. As discussed in the next few paragraphs, the question of whether Mrs Trotter might receive any return from a sale of the properties should not be conflated with the threshold question of whether she has such an interest.

37 Taking the third additional issue raised by RNC Nominees,[20] the amount owing to NAB (first mortgagee) and to RNC Nominees (second mortgagee) and secured by the three properties exceeds the market valuation relied upon by Mrs Trotter. That valuation is a total of $6.525 million for all three properties. The amount owing to NAB and RNC Nominees appears to be about $12 million. RNC Nominees points out that there will be no surplus from the sales of these three properties, even at the valuation submitted by Mrs Trotter, so nothing would flow to Mrs Trotter from the sales.

38 It may also be relevant to note that Mrs Trotter is expressly made jointly and severally liable for Mr Trotter's debts to RNC Nominees.

39 I accept that neither Mr nor Mrs Trotter would receive any distribution of proceeds from the mortgagee's sales of the three properties, Woods, North-East and Hemphills.

40 RNC Nominees then submitted that because no surplus would flow onto Mrs Trotter from the sale of the three properties, Mrs Trotter therefore has no proprietary interest in these three properties. I reject this submission. That conflates the existence of the asserted equitable interest with its market value, and its market value comparative to debts owed to the financiers. In my view, these matters are to be kept separate.

41 Mrs Trotter's alleged proprietary interest is not contingent on whether or not she would receive any proceeds from the sale of the properties in question. All that she requires is an interest 'in respect of which equity would give specific relief against the land itself, either by way of requiring the provision of a registrable instrument or in some other way, for example, ordering a sale to enable a charge to be satisfied out of the proceeds'.[21]

42 I find that Mrs Trotter has established a prima facie case of a caveatable interest arising from a constructive trust of the kind recognised in Muschinski v Dodds.[22]

i. Strength / weakness of the prima facie case

43 As already noted, Mrs Trotter's prima facie case is not strong. The evidence she relies upon is very superficial. It is arguable that Mrs Trotter and her husband had a joint endeavour to which she contributed, and that this leads to her husband holding title to at least some of the properties on which the farming partnership has been conducted on a constructive trust to which she is a part beneficiary, but this is not well substantiated by evidence.

ii. Sale of properties at potential undervalue

Mrs Trotter's application for disclosure of sale prices

44 At the hearing of the application, RNC Nominees did not tender any evidence disclosing the sale prices of the properties the subject of Mrs Trotter's caveats.

45 Before the hearing, RNC Nominees provided a confidential exhibit and sought to apply ex parte for it to be kept confidential. The Court responded by indicating that a formal application on summons and supported by material would be required. No such application was made. The confidential exhibit was not filed on RedCrest. A redacted version of the documents in the confidential exhibit was filed in a subsequent affidavit. The redacted exhibit did not disclose the purchasers or the purchase prices for the three properties.

46 Counsel for Mrs Trotter made an oral application at the hearing for the disclosure of the purchasers and sale prices redacted from exhibit 'RAB-3', which she later confined to disclosure of the sale prices. This application was opposed. I asked counsel what my power was to make such an order and whether she was invoking the power of the Court to order discovery. She relied on s 90(3) of the Transfer of Land Act 1958, and only on that provision.

47 Section 90(3) provides that any person who is adversely affected by a caveat 'may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit'.

48 Counsel contended that s 90(3) empowered me to make any order I thought fit, and that could include an order for production of the sale price information she sought, if I thought fit. I was not persuaded that s 90(3) empowers the Court to make such an order. In referring to any orders the court thinks fit, it is not clear that s 90(3) extends to procedural, interlocutory orders of that kind. It may be limited to dispositive orders relating to the caveat or dealings with the land in question. I was not taken to any applicable authorities on these issues.

49 The Court may, however, have power to order disclosure of documents (in unredacted form) relevant to issues in dispute in the nature of discovery orders under the Supreme Court (General Civil Procedure) Rules 2015, or under the Civil Procedure Act 2010. Perhaps the Court might have been able to order discovery here, but that power was not invoked.

50 Counsel for RNC Nominees submitted that the identities of the purchasers and the value for which the properties were sold were market-sensitive information that might depress the sale prices that could be achieved upon sale of the remaining seven properties. Presumably, it would have been open to RNC Nominees to explore with Mrs Trotter her willingness to agreeing to keeping any deployed evidence of those details confidential. That issue was not addressed by the parties. In the absence of such safeguards, even assuming I had power to order disclosure of the sale prices of the properties, I was disinclined to exercise that power. For these reasons, I declined to grant the application.

51 In so ruling, I noted that the failure of RNC Nominees to disclose the sale prices was material to my consideration of the balance of convenience.

52 Further, as I indicated at the hearing, in light of RNC's non-disclosure of the sale prices, for the purposes of this proceeding I will assume in Mrs Trotter's favour that the three properties have been sold at values that are substantially below the market valuations relied upon by Mrs Trotter.

53 On behalf of Mrs Trotter, her son Andrew Trotter gave evidence that a record land sale occurred on 14 February 2025 of a property rich in prized 'black soil'. This sale was of Lot 5, Banyena Silo Road, Banyena. He suggested that this record sale price would have a positive effect on the valuations of the three properties. He gave evidence that a week after that sale, the receivers and managers told him that they were going to enter into contracts if he did not have unconditional refinancing offers presented to them that day.

54 In the market valuations relied upon by Mrs Trotter, the valuers (Preston Rowe Paterson) referred to various sales of land in the district going back about 24 months. The valuers did not refer to the sale of Lot 5, Banyena Silo Road on 14 February 2025. However, one of the sales they mentioned, described as 'Sale 2', occurred on 27 February 2025 and was a sale of a property rich in 'black clays'. It fetched $19,920 per hectare. Two of the three properties in this proceeding consist virtually entirely of black clays and the substantial majority of the third consists of black clays. Due to a somewhat inferior location, the valuers did not ascribe the figure of $19,920 per hectare to the properties, but they did ascribe relatively high values to the three properties, resulting in an overall estimate of $6.525 million.

55 Even assuming the sales of the properties fell well short of $6.525 million, Mrs Trotter has not articulated a clear claim against RNC Nominees or its agents relating to the sale of the properties. What are the principles applicable to such a claim?

56 A mortgagee like RNC Nominees exercising a power of sale under s 77 of the Transfer of Land Act 1958 does owe duties, at least to the registered proprietor. By extension, they may also be owed to a person who has an equitable interest through the registered proprietor. The Court of Appeal described the duties in these terms in 2011:[23]

A mortgagee owes certain duties to a mortgagor when it seeks to exercise its rights over its security. Common law and equity alike have set bounds to the extent to which the mortgagee can look after itself and ignore the mortgagor's interests. In the exercise of its rights over its security, the mortgagee must act fairly towards the mortgagor. The mortgagee's interest in the property has priority over the interest of the mortgagor so that it can protect its own interest. But it is not entitled to conduct itself in a way which unfairly prejudices the mortgagor. Two settled examples of where the law imposes a duty on a mortgagee are where it lets the property and must claim a proper market rent, and where it sells and must take appropriate steps to obtain a proper market price. The issue which here falls for consideration is the ambit of the mortgagee's duty in the exercise of its powers of sale.

57 Counsel for RNC Nominees submitted that it was inappropriate to entertain any suggestion that the agents, who are officers of the Court, might have breached any such duty. One reason for this was that there had been insufficient notice given of any such suggestion being made. Another was that there was no evidence of any such breach. There is much force in these two points. I address them in the paragraphs that follow.

58 Further to the first point, RNC Nominees submitted that it had not fairly been able to respond to the allegations that the properties were being sold below market value. Andrew Trotter, in his affidavit sworn 2 April 2025, expressed concerns about the sales process that the receivers and managers have engaged in to sell Woods, South-East and Hemphills, including with respect to the quality of the marketing campaign and the less favourable state of the market at the time of the campaign. This affidavit was filed the evening before the hearing. He expressed further concerns during oral evidence at the hearing. Counsel for RNC Nominees did not object to Andrew Trotter giving evidence nor did she cross-examine Mr Andrew Trotter.

59 I accept that RNC Nominees was not given a significant opportunity to respond to these allegations. It would be imperative that RNC Nominees be given such an opportunity before any findings are made on those allegations. However, it does not follow that I must give no weight to Andrew Trotter's evidence on behalf of Mrs Trotter about the sale process, and his concerns that the properties have been sold at an undervalue.

60 This was an urgent Practice Court application akin to a hearing concerning an interlocutory or interim injunction. It is permissible for the Court to consider and weigh such evidence, provided it gives due weight also to the fact that it has not been tested.

61 As to the second point, RNC Nominees submitted that the Court should be slow to draw any inferences about the misconduct of the plaintiff's agent, Mr Blakeley, as an officer of the Court, in the absence of evidence.

62 I am certainly not drawing any such inference. My task is akin to that of a judge hearing an application for an interlocutory injunction. I am making no findings of fact. In a proceeding of this kind, assessment of the balance of convenience involves contrasting the potential injury to RNC Nominees should the caveats remain with the potential injury to Mrs Trotter should the caveats be removed, or (in other words) taking whichever course appears to carry the 'lower risk of injustice' should the course chosen turn out to have been 'wrong'.[24]

63 In performing this function here, I have considered the weakness of Mrs Trotter's prima facie case and all the other circumstances of the case, including the indefeasibility of RNC's registered mortgage and the subordination of Mrs Trotter's asserted equitable interests to repayment of the debt owing to RNC Nominees.

64 I make no finding that anyone has breached their duties under s 77. However, I do not ignore Mrs Trotter's concerns about the sales process altogether. I treat them as unproved but relevant to assessment of the balance of convenience.

65 In this regard, it is of concern that RNC Nominees has not disclosed the sale prices of the three properties. This is an important factor in my consideration of the balance of convenience. It weighs in support of an outcome that would provide Mrs Trotter with more time to consider whether she can properly bring a proceeding against RNC Nominees and the agents in relation to any breach of their duties.

66 On the assumption that the prices at which the three properties are sold are below market value, the removal of the caveats and the subsequent sales of these properties at those prices could be said to prejudice Mrs Trotter. Mrs Trotter is jointly and severally indebted to RNC Nominees in an amount well exceeding the proceeds of sale of the three properties available to be applied towards discharge of RNC's second registered mortgage, even if sale prices totalling $6.525 million were achieved. However, any undervalue in the sale prices of the three properties affects the size of the remaining debt that Mr and Mrs Trotter will owe to RNC Nominees. The lower the sale price, the higher the remaining debt. Further, the higher the remaining debt, the lower the value of Mrs Trotter's asserted equitable interests in the unsold properties that remain mortgaged to RNC Nominees.

67 As already noted, a proceeding for removal of a caveat is akin to a proceeding relating to an interlocutory injunction.[25] In deciding such applications, the courts will consider whether the applicant has shown that damages would be an inadequate remedy if the injunction were not granted.[26] Counsel for RNC Nominees submitted that this principle should apply here. In Piroshenko v Grojsman, Warren CJ noted that there is uncertainty whether the test for deciding applications for interlocutory injunctive relief, and caveat removals, involves the consideration of adequacy of damages on a free-standing basis or as part of the assessment of the balance of convenience.[27] RNC Nominees contended that any claim that Mrs Trotter might bring against the agents or RNC Nominees for breach of their duties would sound in damages, and so the potential for any such claim should not weigh in favour of the maintenance of the caveats.

68 That submission was met by counsel for Mrs Trotter relying on the principle that where rights to land are concerned, damages are not an adequate remedy. In this regard, I was told by counsel that Mr and Mrs Trotter's debt to RNC Nominees is secured by mortgages over about 10 properties in all, and this appeared to be an uncontroversial fact. I will therefore assume that there are about seven other titles over which Mrs Trotter may assert a proprietary interest. That means that, even though it may be inevitable that a mortgagee's sale of South-East, Woods and Hemphills would provide no return to Mrs Trotter, the prejudice to her from a sale at undervalue of those properties could impact her ability to enjoy her asserted equitable interests in the other properties. Counsel for Mrs Trotter submitted that selling the three properties has ramifications for the viability of the balance of the 10 properties that are operated as a farm. As all the titles are to land on which Mrs Trotter and her family operate their farming business, and given the presumption of the special nature of an interest in land,[28] counsel is correct to point out that damages are inadequate. At the very least, it is arguable that damages may be inadequate.

69 This is relevant to my assessment of the balance of convenience. Because of the flow‑on impact to the level of the Trotters' indebtedness to RNC Nominees of any sale at an undervalue as a result of a breach of mortgagee's duty, and because the remaining farming land mortgaged to RNC Nominees must be presumed to have a unique character, such that damages would not be an adequate remedy for breach of that duty, Mrs Trotter's asserted proprietary interests in the land currently justifies the maintenance of the caveats, at least for a limited time.[29]

iii. Related dispute between RNC Nominees and Beverly Farming Pty Ltd

70 Mrs Trotter relied on a letter sent by Madgwicks Lawyers, acting for Andrew Trotter, Gary Trotter and the farming company (Beverly Farming Pty Ltd) to Mills Oakley, lawyers for RNC Nominees, dated 2 April 2025. The letter was exhibited to Andrew Trotter's affidavit in this proceeding.

71 The letter disputes the contracts for sale of South-East, Hemphills and Woods, entered into by receivers and managers appointed by RNC Nominees (defined in the letter as 'the Contracts').

72 The letter refers to an agreement for financing in May 2023 from RNC Nominees for Beverly Farming Pty Ltd to obtain a property on three titles described as the Marnoo Property and for working capital. The letter contends that RNC Nominees provided inadequate financing leading to financial difficulties and RNC Nominees ultimately alleging a breach of the financing agreement. On this basis, the letter contends that all actions taken by RNC Nominees, 'including the appointment of the Receivers and Managers, is completely invalid.' The letter includes the following (emphasis in original):

26. As advised in Our Previous Letter, our firm instructions remain to issue proceedings seeking an urgent injunction against the Receivers and Managers in relation to:

(a) the very serious issues in relation to the Loan itself, particularly the conduct of Roadnight in relation to the same;

(b) the process undertaken by the Receivers and Managers in relation to the Contracts, and the validity of those Contracts; and

(c) the actions of the Receivers and Managers in taking possession of our clients' machinery despite the operation of the Agreement.

73 The letter draws attention to Special Condition 18 of each of the Contracts, which relevantly enables RNC Nominees to extend the date for settlement unilaterally in certain circumstances. The letter seeks an exercise of the receivers and managers' power to delay the settlement pursuant to this clause and RNC Nominees' undertaking not to pursue further enforcement of the securities.

74 In assessing the balance of convenience, I place no weight on the letter or the dispute described in it. The letter describes one perspective on events of some complexity, and is clearly highly contentious. Its probative weight is effectively nil for present purposes.

75 RNC Nominees' initial submissions indicated that the settlement date was 7 April 2025, and that 'the Properties have been sold under a binding and unconditional contract in an arm's length transaction and settlement is imminent'. They went on to submit that 'the plaintiff will suffer serious and significant prejudice if the caveats are not removed because the plaintiff will not be able to complete its contractual obligation to proceed to settlement of the sale of the Properties to the third-party purchasers'.

76 RNC Nominees' submissions did not refer to Special Condition 18. Special Condition 18 of the sales contracts provided that in the event that the vendor is restrained, delayed or prevented from completing the contract by caveat, the vendor may at its option extend the due date for up to six months to enable it to remove the caveat or take any other steps necessary for it to transfer title to the purchaser under the terms of the contract. Special Condition 18 shows that RNC Nominees has the right to delay settlement for up to six months in the circumstances that have arisen without prejudice to its right to enforce settlement of the sale with the current purchasers at the sale prices obtained on 21 February 2025.

77 RNC Nominees did not lead convincing evidence that it would suffer prejudice if the settlement failed to occur on 7 April 2025. I am satisfied that any impression of urgency created by RNC Nominees' submissions was inaccurate. In truth, there was and is no real urgency. This was because, once Mrs Trotter lodged her caveats, RNC Nominees was clearly entitled to extend the settlement date under Special Condition 18. I have given this provision very significant weight in my assessment of the balance of convenience.

78 It is also noteworthy that RNC Nominees has not given any evidence of a pressing need to obtain repayment of its loan secured by the properties. No doubt continuing delay is of some prejudice to RNC Nominees, but there is no suggestion that any particular or irreparable consequential losses may result.

79 I also note that about nine months passed between RNC Nominees entering into possession of the Hemphills, South-East, and Woods properties on 6 May 2024, and RNC Nominees entering into contracts of sales for these properties on 21 February 2025. That may be because of market conditions, but along with the other points I have mentioned it could be suggestive of a lack of any pressing need for a sale and settlement to take place imminently.

80 At the hearing, Andrew Trotter gave evidence of the steps taken to refinance the debts to NAB and RNC Nominees. He stated that he was in the final stages of getting all the valuations of the land, including expedited valuations of the three properties the subject of this proceeding. He gave evidence that he was entering into a syndicate with three different financiers, and that given the steps that still need to be undertaken, he should have binding offers for three financiers within three weeks.

81 I am unwilling to place much weight on this evidence, for three reasons. First, the evidence was superficial and unsupported by any documentation from the proposed financiers. Second, there have been many months since RNC Nominees appointed agents to exercise a mortgagee's power of sale in respect of the properties; it seems unlikely that there might be success in obtaining refinancing in the next few weeks given that no such success had occurred over these months. Third, the Court would not have looked favourably on the lodging of a caveat simply based on the need to obtain additional time for a refinancing to occur. This might have been perilously close to an attempt to use a caveat as a 'bargaining chip'.

82 Counsel for RNC Nominees contended that the caveats were lodged as bargaining chips. In this regard, counsel relied on a decision of John Dixon J.[30] However, that case is distinguishable. In that case, his Honour found that the caveator 'was not able to show a serious question for trial that the registered proprietors were trustees for the freehold interest under an implied, resulting, or constructive trust'.[31] His Honour found that the caveator had lodged the caveat in an attempt to recover a $20,000 expenditure shortly prior to a sale, and in this sense had been lodged as a 'bargaining chip'.[32] His Honour noted that 'the Court does not permit negotiations or bargaining to occur between parties by lodging caveats with the Registrar of Titles that communicate to all of the world a claim against a particular piece of property, unless that claim has a proper basis and is to be appropriately established'.[33]

83 As I have already noted, here there is a (weak) prima facie case that the caveator has a proprietary interest. In those circumstances, strictly speaking, perhaps the principles against the use of caveats as 'bargaining chips' do not apply. Nevertheless, I do not give the Trotter family's wish for more time to arrange a refinancing much weight.

84 Having regard to the potential prejudice to Mrs Trotter in removing the caveats forthwith, and the lack of any imminent prejudice to RNC Nominees in maintaining them for a time, the appropriate balance is best struck by providing Mrs Trotter with a reasonable time to commence an appropriate proceeding relating to any alleged breach by the agents or RNC Nominees to obtain an appropriate sale price. There is insufficient urgency to lead me to remove the caveats forthwith, even though Mrs Trotter's prima facie case is weak and her concerns about the sale process for the properties somewhat speculative.

85 I now turn to the appropriate timing of the next steps in the proceeding. At this stage, I am not inclined to grant the removal of the caveats as sought by the plaintiff. I will hear the parties on the precise terms of the orders I should make, and how long Mrs Trotter should be permitted to make up her mind on commencing a proceeding seeking recognition of her asserted equitable interest in the properties and alleging breach of s 77 of the Transfer of Land Act 1958.

86 My preliminary view is that I should simply adjourn the application for removal of Mrs Trotter's caveats for two months and make the matter returnable to the Practice Court provided Mrs Trotter gives undertakings to decide whether to commence a proceeding relating to her claims of a joint endeavour constructive trust and the sale by the receivers and managers of the three properties, and (if she so decides) to commence any such proceeding before the return date in the Practice Court. I would reserve liberty to apply.

87 When the matter returns, depending on the decisions taken by Mrs Trotter, her commencement of such a proceeding and an assessment of the apparent strength or weakness of her claims, the Court may then consider the application for removal afresh in light of all the circumstances and material then available.

88 One of the objections RNC Nominees raised was that the caveats prohibit any dealings absolutely and without qualification. Caveats should be proportionate and properly adapted to the interests they protect. If these caveats are to be maintained, it may be appropriate for the parties to give consideration to whether they should only continue in effect in an appropriately amended form.

[1] Piroshenko v Grojsman [2010] VSC 240; (2010) 27 VR 489, 491 [7], 494 [22] (Warren CJ); [2010] VSC 240 ('Piroshenko'); CFHW Pty Ltd v Burness [2014] VSC 451 [17], [20] (Warren CJ); approved in Carbon Black Lab Pty Ltd v Launer [2015] VSCA 126, [35], [37] (Santamaria, Ferguson and McLeish JJA).

[2] Carbon Black Lab Pty Ltd v Launer [2015] VSCA 126, [36] (Santamaria, Ferguson and McLeish JJA).

[3] Piroshenko 493 [18], 494 [22].

[5] These are identified in the instrument of mortgage reference AA3411 as 9947/100, 10934/962, 10191/537, 7425/968, 6553/542, 6779/681, and 3711/049.

[6] (1985) 160 CLR 583; [1985] HCA 78.

[7] (1987) 164 CLR 137; [1987] HCA 59.

[8] (2008) 23 VR 349; [2008] VSC 374.

[9] [1985] HCA 78; (1985) 160 CLR 583.

[10] See, eg, Ying Khai Liew, 'The 'Joint Endeavour Constructive Trust' Doctrine in Australia: Deconstructing Unconscionability' [2021] AdelLawRw 3; (2021) 42(1) Adelaide Law Review 73, 97-99.

[11] [1985] HCA 78; (1985) 160 CLR 583.

[12] Clayton v Clayton [2023] NSWSC 399 [530] (Meek J) citing Ying Khai Liew, 'Constructive Trusts and Discretion in Australia: Taking Stock' [2021] MelbULawRw 6; (2021) 44(3) Melbourne University Law Review 963, 973.

[13] Imam Ali Islamic Centre v Imam Ali Islamic Centre Inc [2018] VSC 413 [402]-[405] (McMillan J); Dolan v Dolan [2023] VSCA 136 [94]-[95] (Niall, Osborn and Kaye JJA).

[14] Crampton v French (1995) V ConvR 54-529 (Harper J).

[15] See, eg, McMahon v McMahon [1979] VicRp 23; [1979] VR 239 (Marks J); Piroshenko.

[16] See paragraph 17(a) above.

[17] [1985] HCA 78; (1985) 160 CLR 583, 620 (emphasis added) (citations omitted).

[18] Transfer of Land Act 1958 ss 40, 42, 43.

[19] See paragraph 17(b) above.

[20] See paragraph 17(c) above.

[21] Hermiz v Yousif [2019] VSC 160, [31] (Derham AsJ).

[22] [1985] HCA 78; (1985) 160 CLR 583.

[23] MBF Investments Pty Ltd v Nolan [2011] VSCA 114; (2011) 37 VR 116, 131 [47]; [2011] VSCA 114 (Neave, Redlich and Weinberg JJA) (citations omitted).

[24] See, eg, Waikato (Pty) Ltd v Kaplan [2002] VSC 310 [45] (Gillard J); Bradto Pty Ltd v State of Victoria [2006] VSCA 89; (2006) 15 VR 65, 73 [35]; [2006] VSCA 89 (Maxwell P and Charles JA).

[26] See, eg, Tambakis v Ferluga [2010] SASC 122 [38] (Gray J); Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57, 68 [19] (Gleeson CJ and Crennan J); [2006] HCA 46.

[27] Piroshenko [20]. As in that case, in the end that issue has proved immaterial to the conclusions I have reached in this matter.

[28] See, eg, Dougan v Ley [1946] HCA 3; (1946) 71 CLR 142, 150 (Dixon J).

[29] See Ritz Bitz Pty Ltd v Cumming [2023] VSC 418 [80] (M Osborne J).

[30] Sandich v Fascoulis [2023] VSC 65.