(This judgment was delivered extemporaneously on 16 February 2026 and has been lightly edited from the transcript)
[2]
On about 11 December 2025, the plaintiff (Tec Services) lodged caveats respectively over a property in East Perth and a property in Beeliar.[1]
The registered proprietors of the property at East Perth are the first defendant and his brother.[2]
The first defendant is the registered proprietor of the property at Beeliar in his own name.[3]
Since the lodging of the caveats, I note that the plaintiff has also commenced proceedings in this Court in CIV 2472 of 2024 against Mr Parrello as the first defendant and against Maxwell Nicholas Sneddon as the second defendant.
By application made and filed on 12 February 2026, the plaintiff seeks the extension of the two caveats.
The plaintiff relies on an affidavit of its solicitor, William Russell Chesnutt, made and filed on 12 February 2026 (Chesnutt affidavit), which was read without objection. The plaintiff also filed submissions dated 13 February 2026.
The first defendant read, without objection, his affidavit made and filed 13 February 2026 (Parello affidavit). The first defendant also relied on his written submissions filed on 16 February 2026.
The facts, for the purposes of this application, are largely not in dispute.
The first defendant is a director of Divergent Industries Pty Ltd (Divergent). The plaintiff provided Divergent, on or about 17 November 2023, with a tender to provide services for the update of the lubrication lines system for a BHP workshop.
For present purposes, it appears to be accepted that services were subsequently provided by the plaintiff to Divergent. For purposes of the hearing before me, the first defendant accepted that he signed a guarantee on about 8 January 2024 (Guarantee).[4]
I understand it not to be in dispute that at the time of execution of the Guarantee:
Mr Parrello was a director of Divergent;
Mr Parello was a trustee of two trusts which are identified below; and
the property at East Perth had already been acquired and registered in Mr Parello's and his brother's names.
There may be issues in dispute, ultimately, between the parties as to whether the plaintiff is owed money by Divergent.
However, the first defendant did not seek to persuade me today that there may be no substance to that part of the claim, and I have proceeded on the basis that the plaintiff is, or may be, owed money such that the plaintiff's action on the Guarantee has, or may have, substance.
The plaintiff's application is based on clause 1 of the Guarantee.[5]
The first defendant's position is that he is the registered proprietor of the two pieces of land, albeit he is the registered proprietor of the East Perth property as a joint tenant with his brother.
The first defendant says that the East Perth property is owned by him and his brother, subject to the Parrello Brothers Family Trust.[6]
The first defendant also says that the Beeliar property is owned by him and is subject to the Michael H Parrello Family Trust.[7]
As I understand it, the plaintiff does not seek to put in issue that those properties are owned subject to those trusts respectively.
The first defendant says that, as a result of a proper construction of clause 1 of the Guarantee, neither of those properties is caught by the charging clause. Obviously enough for present purposes, I am not determining, finally, the construction of the Guarantee.
The principles to be applied are well known and were not in dispute, and appear in the judgment of Beech J, as he then was, in Bashford v Bashford [2018] WASC 138, particularly at [42] - [56].
I consider that if I were to find that a construction favourable to the plaintiff is sufficiently open then, in the ordinary course, I would conclude that the plaintiff's claim has or may have substance. I note that the onus is on the plaintiff here but, again, that I am not determining the matter finally.
The plaintiff's submissions are, with respect, well captured in its written submissions:
Properly construed, the operation of the guarantee is not limited to property that Mr Parrello owns beneficially. This is for the following reasons:
First, the object of the guarantee, read as a whole, was to secure for the benefit of TEC Services the comfort of as much security as existed, in return for the provision of credit. The charge was not given in respect of identified property. The charge is cast in wide terms.
Second, the charge is in respect of 'all...right, title and interest...in any land.' There are no words of limitation. The words 'owned by the Guarantor now or in the future' (on which Mr Parrello places some reliance) expand the operation of the charge to rights, title and interests that come to be owned by the Guarantor after the date of the guarantee. The word 'owned' does not carry a meaning that would exclude trust property from the scope of the guarantee. Irrespective of the existence of any trust, Mr Parrello has title to the land the subject of the Caveats (Chesnutt, WRC-16 p 77, WRC-17 p 78).
Third, the guarantee contains the following words:
[3]
'where the Guarantor is acting in the capacity as trustee for a trust, then the Guarantor agrees to charge all its right title and interest in any land realty, or other assets capable of being charged on its own capacity and in its capacity as trustee...'
[4]
These words address a circumstance where a guarantor is also a trustee. The words apply in any case where a guarantor is, in fact, a trustee (there are no words in the guarantee to suggest that a guarantor must disclose the existence of a trust). (emphasis in the original)
In short, the principal position taken by the plaintiff is that the Guarantee applies to all property owned by the first defendant in whatever capacity; i.e. whether beneficially or as trustee.
The application necessarily turns on the construction of clause 1, which states:
[5]
I/WE (also referred to as the 'Guarantor/s') UNCONDITIONALLY AND IRREVOCABLY:
[6]
GUARANTEE the due and punctual payment to Tec Services of all monies which are now owing to Tec Services by the Customer and all further sums of money from time to time owing to Tec Services by the Customer in respect of materials and works supplied or to be supplied by Tec Services to the Customer or any other liability of the Customer to Tec Services, and the due observance and performance by the Customer of all its obligations contained or implied in any contract with Tec Services, including but not limited to the Terms & Conditions of Trade signed by the Customer and annexed to this Guarantee and Indemnity. If for any reason the Customer does not pay any amount owing to Tec Services the Guarantor will immediately on demand pay the relevant amount to Tec Services. In consideration of Tec Services agreeing to supply the materials to the Customer, the Guarantor charges all of its right, title and interest (joint or several) in any land, realty or other assets capable of being charged, owned by the guarantor now or in the future, to secure the performance by the Guarantor of its obligations under these terms and conditions (including, but not limited to, the payment of any money) and the Guarantor acknowledges that this personal guarantee and indemnity constitutes a security agreement for the purposes of the Personal Property Securities Act 2009 ('PPSA') and unequivocally consents to Tec Services registering any interest so charged. Furthermore, it is agreed by both parties that where the Guarantor is acting in the capacity as a trustee for a trust, then the Guarantor agrees to charge all its right title and interest in any land realty, or other assets capable of being charged in its own capacity and in its capacity as trustee and shall be subject to the PPSA Registration as stated above. The Guarantor irrevocably appoints Tec Services and each director of Tec Services as the Guarantor's true and lawful attorney/s to perform all necessary acts to give effect to this clause including, but not limited to, signing any document on the Guarantor's behalf which Tec Services may reasonably require to:
[7]
(a) register a financing statement or financing change statement in relation to a security interest on the Personal Property Securities Register;
(b) register any other document required to be registered by the PPSA or any other law; or
(c) correct a defect in a statement referred to in clause 1(a) or 1(b).
[8]
For present purposes I have proceeded on the basis that the Guarantee falls into three parts. The arguments advanced by counsel were done so by reference to these three parts.
The first part, as I see it, is the first sentence of clause 1, which finishes 'annexed to this guarantee and indemnity'.
The second part starts at the end of line 6[8] with 'in consideration of Tec Services' and goes down to the end of line 11, which finishes with 'Tec Services registering any interest so charged'.
The third part starts at the beginning of line 12, with 'Furthermore, it is agreed', and finishes on line 14 at the end of the sentence that concludes, 'Registration as stated above'.
For the purposes of argument before me, counsel accepted that the first part had been satisfied. That is, that I could proceed on the basis that there were moneys owing by Divergent to Tec Services, and there was no dispute that 'customer' in the Guarantee referred to Divergent.
The second part does not state expressly in what capacity the guarantor, here, the first defendant, owns the land charged.
The plaintiff seeks to give the second part a wide construction which it says follows from the ordinary meaning of the words used.
The plaintiff says that there are no words of limitation as to the capacity in which the land is owned in the second part. So much may be accepted. However, in my view, the presence of the third part suggests that the second part is not to be given that broad construction. Rather, to my mind, the presence of part 3 strongly suggests that part 2 is to be limited to the guarantor acting personally.
If that were not the case then, in my view, part 3 would be redundant.
Taking a construction which gives effect to the words used but also construes them in the context of the whole of the clause to give a harmonious construction, to the extent that is possible, and to give all parts an operation, to the extent that is possible, favours, in my view, a reading that would limit part 2 to the guarantor acting personally and his personal property.
I would not find that part 2 was addressed to property owned by Mr Parrello as a trustee, principally because of the presence of part 3 (and reading parts 2 and 3 together).
The first defendant also argues that part 2, on a proper construction, could only objectively be intended to apply to property owned beneficially by the guarantor, and relies on the principles stated in [28] of Borg Manufacturing Pty Ltd v Van't Sant [2021] TASSC 24 (Borg Manufacturing).
I am attracted to that construction, but do not need to decide that for present purposes. The reading which I prefer of part 2 leads me to conclude that the plaintiff's case based on it does not have sufficient prospects of being accepted, and I consider that the plaintiff cannot satisfy s 138C(2)(b) of the Transfer of Land Act 1893 (WA) in that respect.
That leaves, however, a second question of interpretation on part 3.
The plaintiff contends that if the guarantor is a trustee, then the trust assets in respect of which he or she is the trustee fall within part 3.[9]
The first defendant says, to the contrary, that part 3 only applies where the guarantor, in giving the Guarantee, was acting in the capacity as a trustee for a trust.
The first defendant denies that he did so, and submits that there is no material before the Court to suggest that he was so acting when he gave the Guarantee.
The first defendant points to the credit account application,[10] where the first defendant signed as a director of Divergent, as being the only evidence of the capacity in which he was dealing with Tec Services, and says that does not support him acting as a trustee in the giving of the Guarantee.
In this respect, it is relevant, although not determinative, to also note that on that credit account application, Divergent stated that it was acting as the trustee for the Divergent Industries Trust, and that has a consequence when one considers clause 11 in the terms and conditions.[11] That is the only mention of a trust relationship in the papers before the Court, and I accept that there is nothing in the material before the Court to suggest that Mr Parrello was acting as a trustee of either of the trusts, or indeed any other trust, when he gave the Guarantee.
I accept that there was no need for him to so disclose at the time, and I would accept that his acting in the capacity as a trustee could be established either from surrounding circumstances or by evidence subsequently to the giving of the Guarantee. In that respect, I would accept the principles that are set out in [20] and [21] of Borg Manufacturing and, in particular, the citation of the decision of Mitchell J, as he then was, in Duckworth v Water Corporation [No 2] [2015] WASC 411 to the effect that there is no presumption that Mr Parrello was acting other than in his personal capacity.
The plaintiff submits that any property that was held on trust in respect of which Mr Parrello was a trustee was charged by part 3. In my view, that construction does not give sufficient weight to the words 'is acting in the capacity as a trustee for a trust' and would give that part of the clause a wide and surprising operation that I do not think, with respect, the words bear.
In my view, the plaintiff's reading of part 3 is clearly unlikely to be accepted, and the first defendant's reading is to be preferred on the plain words.
Further, as was noted in the course of argument on the material, there is no connection established between the two trusts and the business of Divergent, nor the underlying commercial arrangements with the plaintiff. There is nothing, as I have said, to suggest that Mr Parrello was acting in the capacity of the trustee.
For those reasons, I do not consider, relevantly, that the plaintiff's case on part 3 has substance or sufficient substance, and I am not satisfied within s 138C(2)(b) of the Transfer of Land Act.
[9]
For those reasons, I would dismiss the application brought by the plaintiff to extend the caveats.
[10]
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[11]
[2] 'WRC-17' to the Chesnutt affidavit at page 78.
[12]
[3] 'WRC-16' to the Chesnutt affidavit at page 77.
[13]
[4] The Guarantee appears at 'WRC-3' to the Chesnutt affidavit.