BETWEEN : WESTERN AUSTRALIAN REAL ESTATE CUSTODIAN PTY LTD (ACN 069 896 966) (RECEIVER AND MANAGER APPOINTED)

COLLECTIVE PROPERTY INVESTMENTS PTY LTD (ACN 075 732 259) (RECEIVER AND MANAGER APPOINTED)

CHEVEZ HOLDINGS PTY LTD (ACN 073 321 007) (RECEIVER AND MANAGER APPOINTED)

DARLEY HOLDINGS PTY LTD (ACN 075 799 558) (RECEIVER AND MANAGER APPOINTED)

MAGENTA NOMINEES PTY LTD (ACN 009 340 158) (RECEIVER AND MANAGER APPOINTED)

TACE PTY LTD (ACN 009 204 915) (RECEIVER AND MANAGER APPOINTED)

AUSTRALIAN REAL ESTATE INVESTMENT LTD (ACN 076 608 681)

WESTERN AUSTRALIAN REAL ESTATE CUSTODIAN PTY LTD (ACN 069 896 966)

COLLECTIVE PROPERTY INVESTMENTS PTY LTD (ACN 075 732 259)

Removal of caveats - Exercise of mortgagee's power of sale - Residual powers of directors where receiver and manager appointed to a company - Injunction to restrain lodging of caveats - Turns on own facts

Transfer of Land Act 1893 (WA), s 138

Commercial Bank of Australia v Schierholter [1981] VicRp 32; [1981] VR 292

Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42

Forsyth v Blundell [1973] HCA 20; (1973) 129 CLR 477

Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222

Lewenberg & Anor v Direct Acceptance Corporation Ltd [1981] VicRp 36; [1981] VR 344

Linter Group Pty Ltd (in Liq) v Goldberg (1992) 7 ACSR 582

Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] QB 814

Patmore v Upton [2004] TASSC 77

Re Geneva Finance Ltd (Receiver and Manager Appointed); Quigley v Cook & Ors (1992) 7 WAR 496

Re Stewart Fitzsimmons Projects Pty Ltd's Caveat [1976] Qd R 187

Sinclair v Hope Investments Pty Ltd [1982] 2 NSWLR 870

Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd & Anor [1994] VicRp 47; [1994] 1 VR 672

Waring (Lord) v London and Manchester Assurance Company Ltd [1935] Ch 310

Butler v Fairclough [1917] HCA 9; (1917) 23 CLR 78

Dunecar Pty Ltd v Colbron [2001] NSWSC 1181; (2001) 40 ACSR 342

J & H Just (Holdings) Pty Ltd v Bank of New South Wales [1971] HCA 57; (1971) 125 CLR 546

Pindan Pty Ltd v Sunny's Redevelopment Pty Ltd & Anor [2001] WASC 104

1 COMMISSIONER SIOPIS SC: This is an application for the removal of a total of nine caveats under s 138 of the Transfer of Land Act and for ancillary relief. By an amended originating summons the plaintiffs apply for the removal by the fourth defendant of caveats from the title of the following properties:

(a) property comprising the whole of the land in Certificate of Title Volume 1740, Folio 426 being otherwise known as the Summerfield Shopping Centre;

(b) land comprising the whole of Certificate of Title Volume 1728, Folio 087 being otherwise known as the Kelmscott Village Shopping Centre;

(c) land comprising the whole of Certificate of Title Volume 85, Folio 110A being the property located at 2841 Albany Highway, Kelmscott;

(d) land comprising the whole of Certificate of Title Volume 1595, Folio 732, 733, 734 and 735 being property collectively known as 2861 Albany Highway, Kelmscott;

(e) land comprising the whole of Certificate of Title Volume 1368, Folio 791 and being the property located at 17 Denny Avenue, Kelmscott.

By the amended originating summons the plaintiffs also seek the following relief:

(a) the second defendant forthwith transfer to the fifth plaintiff the business name known as Kelmscott Shopping Town;

(b) the third defendant forthwith transfer to the sixth plaintiff the business name known as the Summerfield Shopping Centre;

(c) the first, second, third, fifth, sixth, seventh and eighth defendants be enjoined until such time as Brian Keith McMaster retires, or is otherwise removed, as Receiver and Manager of the plaintiffs from lodging any caveat or any other encumbrance on the title in respect of the properties referred to above.

2 Each of the plaintiffs is under the control of a Receiver and Manager, Mr Brian Keith McMaster.

3 The first plaintiff is the registered proprietor of the land comprising the Kelmscott Village Shopping Centre and also the land comprising the Summerfield Shopping Centre. By a mortgage dated 21 December 1995 the first plaintiff mortgaged its interest in the land comprising the Kelmscott Village Shopping Centre and the Summerfield Shopping Centre in favour of the National Mutual Life Association of Australasia Ltd.

4 The second plaintiff is the registered proprietor of the property located at 2841 Albany Highway, Kelmscott. By a mortgage dated 30 January 1997 the second plaintiff mortgaged its interest in the land located at 2841 Albany Highway, Kelmscott, in favour of the National Mutual Life Association of Australasia Ltd.

5 The third plaintiff is the registered proprietor of the land located at 17 Denny Avenue, Kelmscott. By a registered mortgage dated 29 January 1997 the third plaintiff mortgaged its interest in the land in favour of the National Mutual Life Association of Australasia Ltd.

6 The fourth plaintiff is the registered proprietor of the property collectively known as 2841 Albany Highway, Kelmscott. By a registered mortgage dated 30 January 1997 the fourth plaintiff also mortgaged its interest as registered proprietor in the land in favour of the National Mutual Life Association of Australasia Ltd.

7 The properties located in Kelmscott are in the vicinity of the Kelmscott Shopping Centre. The land comprising the Summerfield Shopping Centre is located in Girrawheen.

8 Each of the second to sixth plaintiffs, respectively, executed a deed of fixed charge dated 13 August 2003 in favour of the National Mutual Life Association of Australasia Ltd over each "chargor's right, title and interest in any chattel, contract or other property which is situated on or related to the properties listed in the Schedule". The Schedule lists the following properties: the Kelmscott Village Shopping Centre, the Summerfield Shopping Centre, 17 Denny Avenue, Kelmscott, 2841 Albany Highway, Kelmscott, and Lots 2, 3, 4 and 5 of 2861 Albany Highway, Kelmscott. On that same date each of the second to sixth plaintiffs also executed a cross deed of covenant and negative pledge in favour of National Mutual Life Association of Australasia Ltd.

9 Each of the mortgages and securities mentioned above was executed to secure the repayment of monies advanced by National Mutual Life Association of Australasia Ltd to the second to sixth plaintiffs. The monies were advanced pursuant to a facility agreement and a further agreement made on 13 August 2003 whereby the term of that facility was extended. Each of the agreement for the extension of the term of the facility agreement, the cross deed of covenant and negative pledge and the fixed charge was executed by the second to sixth plaintiffs. In each of those documents, the second to sixth plaintiffs are named and described as follows:

"Magenta Nominees Pty Ltd (ACN 009 340 158) in its own right and as trustee for The Kelmscott Village (1988) Unit Trust, Tace Pty Ltd (ACN 009 204 915) as trustee for The Summerfield (1987) Unit Trust, Chevez Holdings Pty Ltd (ACN 073 321 007) in its own right and as trustee for The Chevez Family Trust, Collective Property Investments Pty Ltd (ACN 075 732 259) in its own right and as trustee for The Pard Investment Trust and Darley Holdings Pty Ltd (ACN 075 799 558) in its own right and as trustee for The Darley Family Trust."

Each of those documents was executed by Mr Chesson as one of the directors acting on behalf of each of the second to sixth plaintiffs.

10 On 6 February 2004 a notice of demand under the cross deed of covenant and the extended facility agreement was issued by the National Mutual Life Association of Australasia Ltd which demanded the repayment of $11,513,645.71. The notice of demand records that the total sum claimed is comprised of the following amounts:

Loan No 3244 $10,036,641.00

Loan No 2824 $320,549.10

Loan No 2825 $856,077.53

Loan No 2881 $300,378.08

The notice of demand was not met. On 19 July 2004 Mr McMaster was appointed as Receiver and Manager to each of the plaintiffs. Mr McMaster was appointed Receiver and Manager to the first plaintiff pursuant to powers contained in the mortgage dated 21 December 1995. He was appointed as Receiver and Manager to the second, third and fourth plaintiffs respectively, pursuant to powers contained in each of the mortgages executed by each of those plaintiffs respectively, and pursuant to powers contained in the fixed charge referred to above. Mr McMaster was appointed as Receiver and Manager of the fifth and sixth plaintiffs, pursuant to the powers contained in the fixed charge dated 13 August 2003.

11 Mr Sydney James Chesson is the first defendant and is also a director of each of the plaintiffs, the second and third defendants as well as the fifth to eighth defendants.

12 The relationship between the directors of the plaintiffs and the Receiver has been punctuated by litigation.

13 On 21 July 2004, the plaintiffs under their directors brought an application in the Supreme Court challenging the validity of the Receiver's appointment and an injunction precluding the Receiver from continuing to act in that capacity. The injunction application was unsuccessful.

14 In late October 2004 the plaintiffs again, by their directors using their residual powers, brought an application in the Federal Court under s 423, s 434A and s 1321 of the Corporations Act. In the course of those proceedings the plaintiffs sought injunctive relief preventing the Receiver from dealing with the properties over which he had been appointed. The application for the injunction was dismissed.

15 Both the Supreme Court proceedings and the Federal Court proceedings have subsequently been discontinued.

16 The nine caveats the subject of this application have been lodged variously by the second and the fifth to eighth defendants. The fifth, sixth, seventh and eighth defendants are also the first, second, third and fourth plaintiffs but are joined as defendants because the directors of each of these companies acting pursuant to their residual powers, have caused each of those companies to lodge caveats.

17 Mr Chesson has, in his capacity as the principal of Master Settlements, a settlement agency, personally executed each of the caveat forms, annexed to his affidavits, on behalf of each of the caveators and has also made the statutory declarations in his capacity as a director on behalf of each of the caveators apparently in support of each of the caveats.

18 The matter was first mentioned on Monday 17 January 2005 on an urgent basis. It was common cause that, acting pursuant to the mortgagee's power of sale under the registered mortgage executed by the first plaintiff dated 21 December 1995, the Receiver had entered into a contract for the sale of the land comprising Kelmscott Village Shopping Centre to a company, Fabcot Pty Ltd, a company associated with Woolworths Ltd. The contract was to settle on 31 January 2005. However, the second defendant had registered a caveat over that land and the urgency of the plaintiffs' application was founded on the basis that it was necessary for that caveat to be removed before 31 January 2005.

19 By the first mention date the defendants had not had a reasonable opportunity to file an affidavit in response to the affidavit of Mr Gough filed on behalf of the plaintiffs dated 7 January 2005. The matter was adjourned for hearing on 20 January 2005 and at that hearing, the defendants relied upon an affidavit from Mr Chesson dated 17 January 2005 and an unsworn affidavit by Mr Chesson dated 19 January 2005. That affidavit has now been sworn. At a hearing on 20 January 2005 I made further directions for the filing of further affidavits and submissions on the question of the relief being claimed against Mr Chesson personally.

20 The plaintiffs rely upon three affidavits of Mr Craig Stewart Gough sworn on 7 January 2005, 17 January 2005 and 24 January 2005, respectively, as well as an affidavit of Richard Michael Johnson, sworn on 17 January 2005. The defendants (other than the fourth defendant) rely upon the affidavits of Mr Sydney James Chesson dated 17, 19 and 25 January respectively.

21 In view of the urgency arising from the obligation on the Receiver to settle under the contract for the sale of land with Fabcot Pty Ltd in respect of the Kelmscott Village Shopping Centre, I considered separately the question of whether the caveat in respect of that land should be removed. On 27 January 2005, I made orders requiring that the caveat lodged by the second defendant in respect of the Kelmscott Village Shopping Centre land be removed forthwith and that the second defendant forthwith transfer to the first defendant the business name known as Kelmscott Shopping Town. I delivered oral reasons for those orders and reserved my decision in respect of the remainder of the relief sought in the amended originated summons.

22 I now turn to deal with the application to remove the remaining eight caveats.

23 There are two elements to the test to be applied in relation to the removal of a caveat. The onus of establishing both of these elements is on the caveator. The first element is whether there is a serious question to be tried as to whether there is a caveatable interest which, if the caveator was given an opportunity to establish at trial before the court, would be effective in restraining the dealing in the land sought to be effected. The second element to the test is whether the balance of convenience favours the retaining of the caveat. However, the second element should be applied in accordance with the approach of the Full Court in Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, namely, that in the event that the caveator was to establish a serious question to be tried, the caveat should remain unless the balance of convenience favours the removal.

24 It is common cause that the Receiver and Manager has taken and is taking steps to sell the remaining properties. The Receiver had prior to 17 January 2005 entered into an option agreement for the sale of the Summerfield Shopping Centre, but I was advised at the hearing on 20 January 2005 that the option agreement had terminated. The Receiver has advertised the other properties for sale.

25 The caveats lodged by the defendants fall into two distinct categories. The first category comprises caveats lodged by the second defendant. The second category comprises the caveats lodged by each of the fifth to eighth defendants (being the first to fourth plaintiffs by their respective directors exercising their residual powers).

26 The first category of caveats have a common theme in that each caveat is founded on a claim by the caveator that it is entitled to be the registered proprietor of the land, because, so it is said, in each case the registered proprietor of the land held the land as a trustee, that it has resigned as the trustee in favour of the caveator and has agreed to transfer the land to the caveator. The caveats which fall into the first category of caveats are noted by reference to the following numbers on the following respective records of Certificate of Title of the property in question, J 128489 (in respect of the Summerfield Shopping Centre), J 068869 (in respect of 2841 Albany Highway, Kelmscott), J 068874 (in respect of 2861 Albany Highway, Kelmscott) and J 068881 (in respect of 17 Denny Avenue, Kelmscott). Save for caveat J 128489, each of the caveats is recorded as having been lodged on 29 October 2004.

27 I will now deal with the evidence adduced by each caveator in support of each of the caveats.

28 I deal firstly with the caveat, J 128489, which has been lodged over the land comprising the Summerfield Shopping Centre. In support of this caveat, Mr Chesson has annexed to his affidavit a caveat signed by him dated 17 December 2004. The caveat describes the registered proprietor of the land as the first plaintiff. The caveat which has been lodged by the second defendant claims a "right to be registered as the proprietor of the land" as the estate or interest being claimed.

29 The caveator then claims an interest by virtue of :

"Deed of Retirement and Appointment of Trustee dated 1 July 2001 and Deed of Retirement of Custodian dated 1 July 2002 retiring the registered proprietor and appointing the caveator as trustee of the Summerfield Unit Trust."

The caveat forbids "absolutely" the registration of any instrument affecting the estate or interest.

30 In the statutory declaration made by Mr Chesson and annexed to his affidavit appearing in support of the caveat, Mr Chesson says that he is a director of the second defendant. Mr Chesson goes on to say:

"The land is held by the Registered Proprietor in trust for the beneficiaries of the Summerfield (1987) Unit Trust ('the Trust') pursuant to a Deed of Trust dated 9 July 1987.

The Caveator is entitled to be the Registered Proprietor of the land by virtue of a Deed of Retirement and Appointment of Trustee dated 1 July 2001 and a Deed of Retirement of Custodian dated 1 July 2002 in which the Registered Proprietor agreed to transfer or hand over all the assets of the Trust to the Caveator."

31 The second defendant has not produced the Deed of Retirement and Appointment of Trustee, nor Deed of Retirement of Custodian referred to in the statutory declaration, nor any other document purporting to be, or evidencing, an agreement by the registered proprietor of the land, namely the first plaintiff, to transfer the title in the land to the second defendant. The only evidence which is produced in support of the claim in the caveat is a deed dated 12 December 1995 evidencing an agreement to transfer title in the land from the sixth plaintiff as the trustee of the Summerfield (1987) Unit Trust to the first plaintiff. There is no explanation given for the failure to produce the deeds containing the alleged agreement by first plaintiff to transfer the land to the second defendant.

32 In support of the second defendant's claim in respect of the caveat J 068869 in respect of the property described as Lot 1 on Diagram 11215 Volume 85, Folio 110A which is otherwise known as the property located at 2841 Albany Highway, Kelmscott, Mr Chesson has produced as an annexure to his affidavit a caveat form dated 29 October 2004 signed by him. The caveat described the registered proprietor of that property as the second plaintiff. The estate or interest claimed in that caveat is recorded as "right to be registered as the proprietor of the land". The estate or interest is claimed by virtue of "Deed of Retirement and Appointment undated but stamped 7 February 2002 retiring the registered proprietor and appointing the Caveator as trustee of the Pard Investment Trust". The caveat forbids the registration of any instrument affecting the interest or estate "absolutely".

33 Annexed to Mr Chesson's affidavit of 19 January 2005 is an undated Deed but stamped 7 February 2002, executed by the second plaintiff, as the retiring trustee, and the second defendant, as the new trustee, purporting to evidence the retirement of the second plaintiff as trustee of the Pard Investment Trust and the appointment of the second defendant as the new trustee. The Deed provides as follows:

"The Retiring Trustee will hand over all documents, bank accounts and assets of the Trust to the New Trustee and will do all things necessary to assist the New Trustee to commence and continue in its appointment as Trustee of the Trust."

Contrary to the statement in Mr Chesson's statutory declaration this clause does not contain an agreement to "transfer" all the assets of the Trust. The Deed contains an agreement only to "hand over all documents, bank accounts and assets of the Trust". In my view the use of the expression "hand over" confines the agreement to being an agreement to "hand over" control of the moveable assets of the trustee. The language of the clause does not purport to affect immoveable property, namely, the land.

34 In my view, this clause does not constitute an agreement by the second plaintiff to transfer title in the land the subject of trust to the new Trustee, namely, the second defendant.

35 In support of the second defendant's claim in respect of a caveat J 068881, against the title described as Lot 6 on Diagram 18324, Volume 1368, Folio 791, being the land located at 17 Denny Avenue, Kelmscott, Mr Chesson has annexed a caveat dated 29 October 2004. That caveat describes the third plaintiff as "the registered proprietor" and claims the estate or interest as "the right to be registered as the proprietor of the land". That interest is claimed by virtue of "deed of retirement and appointment undated but stamped 7 February 2002 retiring the registered proprietor and appointing the caveator as trustee of the Chevez Family Trust". The caveat forbids the registration of any instrument affecting the interest "absolutely". Mr Chesson has also annexed two statutory declarations to his affidavit In the first statutory declaration dated 29 October 2004 Mr Chesson has described the registered proprietor as being Western Australian Real Estate Custodian Ltd and has also described the land as being held on trust for the beneficiaries of the Kelmscott Central Development Trust, pursuant to a Deed dated 30 March 2001.

36 In a second statutory declaration dated 13 December 2004 Mr Chesson has described the third plaintiff as the registered proprietor of the land and says that the land is held by the registered proprietor in trust for the beneficiaries of the Chevez Family Trust. He says that "the Caveator is entitled to be the registered proprietor of the land by virtue of a Deed of Retirement and Appointment of Trustee undated but stamped 7 February 2002 in which the registered proprietor agreed to transfer or hand over all the assets of the Trust to the Caveator". Mr Chesson has also annexed to his affidavit a retirement and appointment of trustee deed executed by the third plaintiff as the retiring trustee of the Chevez Family Trust and the second defendant as the new trustee. This deed contains a clause in identical terms in relation to the hand over of all documents, bank accounts and assets to that referred to above in relation to the second plaintiff and the Pard Investment Trust. My comments as to the inadequacy of this clause to constitute an agreement to transfer title in the land apply also to this clause. Further, no explanation is proffered in the affidavit of why there are two statutory declarations and there is no attempt at explaining the discrepancies in the two statutory declarations. Nor is it said whether any or both of the declarations were lodged with the Registrar of Titles.

37 A perusal of the record for Certificate of Title of the land comprising the whole of Certificate of Title Volume 1595, Folio 732, 733, 734 and 735 being the property collectively known as 2861 Albany Highway, Kelmscott, shows the lodging of a caveat by the second defendant on 29 October 2004. However, that caveat is not produced as an annexure to Mr Chesson's affidavit and is not in evidence. Mr Chesson has, however, annexed to his affidavit two statutory declarations which are dated 9 December 2004 and 13 December 2004 respectively. Each of the statutory declarations records a different state of affairs

38 No explanation is proffered as to the failure to produce the caveat into evidence, nor is there any explanation given in relation to the two statutory declarations declaring two different states of affairs.

39 In the statutory declaration dated 9 December 2004 Mr Chesson says that the land is held by the fourth plaintiff as registered proprietor in trust for the beneficiaries of the Kelmscott Central Development Trust and that the caveator is entitled to be the registered proprietor by virtue of a deed of retirement and appointment of trustee undated but stamped 7 February 2002 in which the registered proprietor agreed to transfer or hand over all of the assets of the trust to the caveator.

40 However, in the statutory declaration dated 13 February 2004 Mr Chesson says that the land is held by the fourth plaintiff as the registered proprietor in trust for the beneficiaries of the Darley Family Trust pursuant to a deed of trust dated 30 March 2001 and says that the caveator is entitled to be the registered proprietor of the land by virtue of a deed of retirement and appointment of trustee undated but stamped 7 February 2002 in which the registered proprietor agreed to transfer or hand over all of the assets of the trust to the caveator.

41 There is annexed to Mr Chesson's affidavit a retirement and appointment of trustee deed for the Darley Family Trust executed by the fourth plaintiff as retiring trustee and the second defendant as the new trustee. This deed contains a clause in identical terms in relation to the hand over of all documents, bank accounts and assets by the retiring trustee to the new trustee as was contained in relation to the Pard Investment Trust and the Chevez Family Trust. My comments as to the inadequacy of this clause to constitute an agreement to transfer title in the land apply also in this case.

42 I therefore find that on the evidence adduced the claim made in each of the caveats that the second defendant is entitled to be registered as the proprietor of each of the properties has not been made out. Therefore, the caveators have not discharged the onus of showing that there is a serious question to be tried as to the existence of a caveatable interest in respect of the first category of caveats.

43 However, even if I was to treat the evidence as sufficient to support the claims made in each of the caveats that the second defendant was entitled to be registered as the registered proprietor of the land by virtue of the retirement of the respective plaintiffs as trustees and its appointment as the new replacement trustee in each case, this would still not, in my view, avail the second defendant in establishing that there was a serious question to be tried. This is because the Receiver on behalf of the plaintiffs has brought this application in order to facilitate the exercise by the mortgagee of its power of sale under a registered mortgage. Each of the mortgages pursuant to which the Receiver was appointed was executed and registered prior to the retirements of any of the trustees which are referred to in the caveats. Further, any right in the second defendant to be registered as proprietor of all the properties would be subject to each of the mortgages. It is accepted by Mr Galic on behalf of the second defendant that any interest claimed by the second defendant in relation to each of the respective properties is inferior to the interest which is held by the registered mortgagee. In my view, the circumstances fall within the principle which was applied by Holland J in the case of Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 at 228, where he said:

"A caveator should have no right to prohibit registration of a dealing to which his alleged interest in land would not entitle him to object, if he were to invoke the assistance of the court. A subsequent encumbrancer, registered or unregistered, has no right whatever to interfere in, or object to, a proper exercise by a mortgagee of the mortgagee's powers of sale, and would have no ground on which to seek the intervention of the court, notwithstanding the fact that registration of the transfer to the purchaser would discharge or defeat all mortgage interests in the land whether registered or not."

44 This principle has also been applied in the cases of Lewenberg & Anor v Direct Acceptance Corporation Ltd [1981] VicRp 36; [1981] VR 344 and Commercial Bank of Australia v Schierholter [1981] VicRp 32; [1981] VR 292.

45 The principle applies even if by the time of the hearing the mortgagee had not entered into a binding contract of sale. In the Lewenberg case, the mortgaged property had not sold at auction, and at the time of the hearing, negotiations with potential purchasers were continuing. Further, in the case of Re Stewart Fitzsimmons Projects Pty Ltd's Caveat [1976] Qd R 187 at 189. Dunn J rejected the argument that there must be material before the court showing that there is a dealing which the caveat will directly impede, before the court will order the removal of a caveat on the application of a registered mortgagee in furtherance of the exercise of a power of sale.

47 Accordingly, in my view, each of the caveats numbered J128489, JO68874, JO68881 and JO68869 should be removed by the fourth defendant from the title of each of the properties against which each caveat is registered.

48 I now turn to consider the second class of caveats which was lodged by each of the fifth to eighth defendants (which as already mentioned are also the first to fourth plaintiffs), relying upon an asserted "right of equity of redemption". Each of the caveats was lodged on 21 December 2004.

49 Each of these caveats has been lodged in respect of the properties of which each is the registered proprietor. The caveats are numbered J128502, J128501, J128500, J128499 respectively.

50 Mr Chesson has annexed to his affidavit the statutory declaration which he has made apparently in support of each of these caveats. Mr Chesson has made each of the statutory declarations in his capacity as a director of each of the registered proprietors of the properties in question. Presumably, in making the statutory declarations and causing the caveats to be lodged at a time after which Mr McMaster was appointed as Receiver and Manager of each of the plaintiffs in question, the directors of the caveators were acting pursuant to their residual powers.

51 Mr Chesson has annexed to his affidavit the caveat which was lodged on behalf of the fifth defendant (first plaintiff) in respect of Lot 4 on Diagram 52358 Volume 174, Folio 426 known as the Summerfield Shopping Centre in Girrawheen. In the caveat, the fifth defendant is described as the registered proprietor.

52 The fifth defendant claims an estate or interest being "right to remain registered as the proprietor of the land".

53 The estate or interest is claimed by virtue of "right to equity of redemption of the land the subject of Mortgage Number G064465". The caveat seeks to forbid any dealing with the land "absolutely".

54 In the relevant statutory declaration, Mr Chesson declares as follows:

"The Caveator has offered a Bank Cheque in discharge of the full amount of the on [sic] debt on mortgage number G064465, which the Receiver has refused to accept.

The Caveator remains ready willing and able to discharge the full amount of the mortgage debt."

55 Each of the sixth, seventh and eighth defendants had also lodged a caveat claiming a right to remain registered as the proprietor of the land on the grounds of "the right to the equity of redemption of the land" the subject of the respective mortgage which each of the plaintiff executed.

56 Each of those caveats also seeks to forbid the registration of any instrument effecting the estate or interest "absolutely".

57 Each of the caveats for the sixth, seventh and eighth defendants is also supported by a statutory declaration made by Mr Chesson which declares that each of the respective defendants "has offered a Bank Cheque in discharge of the full amount of the debt" on each of the respective mortgages, which the Receiver has refused to accept and that each of the said defendants remains "ready, willing and able to discharge the full amount of the mortgage debt".

58 A mortgagor has a right to redeem the mortgaged property on the tender to the mortgagee of the principal, interest and costs (see Waring (Lord) v London and Manchester Assurance Company Ltd [1935] Ch 310). Further, the mortgagee has a duty to the mortgagor not to sacrifice interests of the mortgagor and to act in good faith in the exercise of the power of sale (Forsyth v Blundell [1973] HCA 20; (1973) 129 CLR 477).

59 It is another matter however whether the existence of these rights in the mortgagor will afford an aggrieved mortgagor a caveatable interest or whether the protection for these rights lies exclusively in seeking an injunction to restrain the mortgagee from entering into a contract for the sale of the mortgaged premises in breach of those duties or from giving effect to a contract already entered into in breach of those duties. There is a debate as to the extent to which a registered propritor of land is able to protect its position by way of a caveat.

60 In the case of Swanston Mortgage Pty Ltd v Trepan Investments Pty Ltd & Anor [1994] VicRp 47; [1994] 1 VR 672 the Full Court of Victoria held, in circumstances where it was alleged that the mortgagee had entered into a contract for the sale of the mortgaged property in breach of its duty to exercise the power of sale in good faith, that the right which the registered proprietor/mortgagor had to impugn the exercise of the power of sale in those circumstances, did not give rise to a caveatable interest.

61 However, in coming to this view, the Full Court of Victoria declined to follow the decision of Sinclair v Hope Investments Pty Ltd [1982] 2 NSWLR 870, which held to the opposite effect. The Swanston Mortgage decision has been criticised in several quarters. The debate is well set out in the judgment of Underwood J in the case of Patmore v Upton [2004] TASSC 77 where his Honour declined to follow the Swanston Mortgage decision.

62 However, it is not necessary for me to say anything more on this issue in order to determine whether the caveats should be removed. This is because each of the caveators has not adduced evidence to sustain the position that each of the caveators was either, at the date of the caveat or the date of the hearing, in a position to exercise the right of redemption. There is simply no evidence supporting the position that each of the caveators tendered to the Receiver, nor was in a position to tender to, a bank cheque in an amount comprising the outstanding principal, interest and mortgagees' costs. This is so whether the position is viewed from the point of view of the mortgagor being required to tender an amount for the whole of the debt due, being in the vicinity of $12 million, or whether each mortgagor was required to tender a lesser amount comprising only the sum referred to by Mr Chesson as being the amount of the debt due in respect of each of the mortgages.

63 The evidence adduced by Mr Chesson in support of these caveats is to the effect that attempts were made by Mr Chesson to secure the co-operation of the Receiver in raising finance to pay to the mortgagee the lesser sums said by Mr Chesson to be secured by each of the mortgages in question, on the basis that the mortgagee and the Receiver would then release the mortgage over the specific property. Mr Chesson deposes to his unsuccessful attempts to secure the co-operation of the Receiver in his attempts to raise finance from HR Finance in order to secure the release of the mortgage of the Summerfield Shopping Centre. He also refers to attempts to secure finance from the National Australia Bank Ltd, in order to secure the release of the mortgage over 2841 Albany Highway, Kelmscott and also the other properties in Kelmscott. Mr Chesson says on each occasion that the Receiver had not co-operated. Mr Chesson says that it is the Receiver's non co-operation which resulted in him not being able to secure finance and, therefore, not being in a position to discharge the mortgages.

64 That evidence falls a long way short of establishing that each of the four caveators tendered, or was in a position to tender, to the Receiver a bank cheque for the amount sufficient to discharge each of the four mortgages in question, and the Receiver had refused to accept the tender of the bank cheque.

65 In the circumstances I find that there is no serious issue to be tried that each of the fifth to eighth defendants has a caveatable interest arising from each caveator's claim that the Receiver has refused to permit each of the registered proprietors/mortgagors to exercise a right of redemption. The balance of convenience does not arise.

66 I would therefore order that each of the caveats lodged by each of the fifth to eighth defendants be removed.

The claim for the return of the business name

67 I now turn to the claim that the third defendant forthwith transfer to the sixth plaintiff the business name Summerfield Shopping Centre. The evidence discloses that prior to 18 October 2004 the name Summerfield Shopping Centre was registered in the name of the sixth plaintiff, but on 18 October 2004 the business name was transferred into the name of the third defendant.

68 By 18 October 2004 Mr McMaster had been appointed Receiver and Manager of the sixth plaintiff pursuant to the fixed charge dated 13 August 2003. The Receiver and Manager's powers are referred to in cls 10 and 11 of the fixed charge and these include the power to take possession of, and sell the charged property. One of the directors who executed that charge on behalf of the sixth plaintiff was Mr Sydney Chesson, the first defendant. The deed contains a definition of "charged property" to mean "each of the Chargor's right, title and interest in any chattel, contract or other property which is situate on or related to the properties listed in the Schedule".

69 The properties which are listed in the Schedule include "the Summerfield Shopping Centre, Girrawheen Avenue, Girrawheen, Western Australia being the whole of the land comprised in Certificate of Title Volume 1740, Folio 426". In my view, the business name Summerfield Shopping Centre comprised "other property" which "related to" the Summerfield Shopping Centre property and so was a part of the "charged property".

70 The Receiver was not the party who transferred the business name from the sixth plaintiff to the third defendant. I am prepared to infer that the action of transferring the business name was undertaken by the directors of the sixth plaintiff, one of whom was Mr Chesson, presumably purporting to act under the residual powers of the directors. In the case of Re Geneva Finance Ltd (Receiver and Manager Appointed); Quigley v Cook & Ors (1992) 7 WAR 496 Owen J considered the question of the ambit of the residual powers of a director of a company to which a receiver and manager had been appointed. After referring to, with approval, the dictum from Shaw LJ in the case of Newhart Developments Ltd v Co-operative Commercial Bank Ltd [1978] QB 814, Owen J said at 511:

"In my opinion, the reasoning implicit in Newhart (supra) indicates the direction which the inquiry should take. The task is to look at the effect which the exercise of the [directors'] power will have on the Receiver's functions rather to concentrate on the identification and delineation of the residual duties reposed in the directors."

71 In the Re Geneva Finance Ltd (supra) case Owen J was required to deal with the matter in the context of whether the Receiver and Manager was under an obligation to provide inspection of books and records of the company to the directors. At 513 of the Geneva Finance Ltd judgment, Owen J says further in this context:

"The subject of the inquiry should be the role and function of the Receiver rather than the identity of the residual duties which remain with the directors. The Receiver would be justified in refusing to grant access to the documents where to do so would impede the Receiver in the proper exercise of his functions or would impinge prejudicially upon the position of the debenture holder by threatening or imperilling the assets which are the subject to the charge."

73 In my view, any transfer of the business name by the directors of the sixth plaintiff to the third defendant would constitute an impediment to the proper discharge and exercise of the Receiver and Manager's powers and functions to deal with the charged property. Accordingly, the power to transfer the business name was not within the residual powers of the directors and was an unauthorised exercise of the powers of the directors of the sixth plaintiff. I am prepared to infer that Mr Chesson, as a director of the third defendant, was aware of the circumstances surrounding the transfer of the business name from the sixth plaintiff to the third defendant, namely, that it was not being transferred by or with the authority of the Receiver and Manager.

74 The inference of Mr Chesson's knowledge is based on the evidence before the court which shows that Mr Chesson had a very active interest and continuing involvement in the conduct of the receivership by Mr McMaster of each of the plaintiffs.

75 Accordingly, I hold that the third defendant holds the business name on constructive trust for the sixth plaintiff (Linter Group Pty Ltd (in Liq) v Goldberg (1992) 7 ACSR 582). I would therefore order that the third defendant forthwith take all necessary steps to transfer forthwith the business name "Summerfield Shopping Centre" to the sixth plaintiff.

Should the defendants be restrained from lodging any further caveats?

76 I now turn to the third item of relief claimed, namely, that each of the first, second, third defendants and fifth to eighth defendants be enjoined until such time as Mr Brian Keith McMaster retires or is otherwise removed as Receiver and Manager of the plaintiffs from lodging any caveat or other encumbrances on the title of the four properties referred to above.

77 As a preliminary point, Mr Chesson argued he ought not to have been made a party to the originating summons in his personal capacity, as the injunctions being sought against the defendants, if granted, would afford the plaintiffs sufficient protection. There were no special circumstances, he argued, which warranted joining him as a defendant personally. Mr Gough on behalf of the plaintiffs argued that the plaintiffs were justified in seeking to enjoin Mr Chesson in his personal capacity from lodging any further caveats because the caveats were lodged without a reasonable foundation in an effort to frustrate the mortgagee from exercising its power of sale. Further, he argued that some of the caveats had been lodged by the directors of the plaintiffs exercising their residual powers, and Mr Chesson was in the forefront of that exercise. He argued that Mr Chesson was directly and personally involved in the lodging of all of the caveats, and was much more directly involved than any of the other directors of the plaintiffs.

78 I accept the argument of Mr Gough that there are sufficient grounds for the plaintiffs in seeking orders against Mr Chesson personally. The evidence shows a very strong personal involvement by Mr Chesson in the lodging of the caveats and the purported exercise of the residual powers of the directors of the plaintiffs.

79 I now turn to consider whether an order should be made enjoining Mr Chesson personally and the other defendants from lodging any further caveats during the period that Mr McMaster is Receiver and Manager of the six plaintiffs.

80 In considering whether to grant the injunction I take into account the fact that I have found that there was no proper basis for the lodging of the caveats in question. I also take into account that the defendants, and Mr Chesson in particular, have been engaged in a series of actions of dubious legal merit which have been directed at impeding the Receiver and Manager in exercising his powers, particularly the mortgagee's power of sale.

81 However, there are other matters which I must also take into account.

82 Mr Chesson has deposed to the fact that the contract for the sale of the Kelmscott Village Shopping Centre site provides for a sale price of $12.5 million. Mr Chesson also says that in November 2004 the Receiver provided an estimate of the overall financial position and costs following settlement of the sale of Kelmscott Village Shopping Centre on 31 January 2005. This demonstrates an expectation that there will be a shortfall of a payout of the total amount owed to National Mutual Life Association of Australasia Ltd (originally in the vicinity of $12 million) of approximately $130,000.

83 Mr Chesson says that he has made his own calculations that show the total debt due to the National Mutual Life Association of Australasia Ltd, even after allowing for the costs of the receivership, will be paid from the proceeds of the sale of the Kelmscott Village Shopping Centre and that there will be a small surplus.

84 However, whatever may be the correct position, it is the case that the sale of the Kelmscott Village Shopping Centre will provide the mortgagee with $12.5 million which, if it does not exceed the amount needed to pay the whole of the mortgage debt plus interest and costs associated with the enforcement of the security, will go a very substantial way to meeting those costs. On the face of it, therefore, it should preclude the Receiver from having to sell all of the remaining properties.

85 Mr Chesson also deposes in his affidavit that the Receiver has told Mr Chesson that he regards himself as being entitled to "build a war chest to fight you or defend myself" and that he would do so.

86 In considering whether to grant the injunction restraining the lodging of caveats, I am mindful of the fact that it would in any event be open to the defendants to seek an injunction to restrain any threatened breach of duty by the mortgagee. However, I am also mindful of the uncertainty in the law as to whether an aggrieved mortgagor has an entitlement to lodge a caveat in respect of the breach of duty by a mortgagee. It appears to me that it is at least arguable in light of the reasoning by Underwood J in the case of Patmore v Upton (supra) that such an aggrieved mortgagor may in those circumstances have an entitlement to lodge a caveat.

87 A court will not lightly grant a permanent injunction in vacuo precluding a party from exercising rights which might otherwise be available.

88 In view of the fact that the Receiver will, after the sale of the Kelmscott Village Shopping Centre, be in receipt of a sum which will go a long way to discharging the whole of the debt due to National Mutual Life Association of Australasia Ltd and the evidence of the past turbulence in the relationship that exists between the parties, one cannot entirely discount the fact that circumstances of disputation may arise in the future when the defendants, particularly the fifth to eighth defendants, may seek to protect their position by the lodging of caveats in circumstances where, on the current uncertain state of the law, they may be entitled to do so. I am of the view, therefore, that it would not be appropriate to enjoin prospectively any one or more of the named defendants from lodging a caveat during the period that Mr McMaster is the Receiver and Manager of the plaintiffs, and thereby to leave them only with their remedies in equity.

89 Accordingly, I decline to make the order sought enjoining the defendants, other than the fourth defendant, from lodging any further caveat during the period when Mr McMaster is acting as Receiver and Manager of the plaintiffs.

90 I will hear the parties as to the question of costs.