EX GIRLFRIEND LODGED A CAVEAT OVER HER EX BOYFRIENDS PROPERTY, THE LATTER WANTS IT REMOVED

Burghley Pty Ltd v Soames & Anor [2021] VSC 236 (5 May 2021)

This is an application to remove a caveat over the propoerty  of the plaintiff lodged by his ex-girlfriend claiming a trust over said property

Facts:

Burghley Pty Ltd (‘the plaintiff’) is the registered proprietor of a property situated at and known as 164 Arthurs Seat Road, Red Hill (‘the property’).  Jonathan Cecil (‘Mr Cecil’) is the sole director and secretary of the plaintiff.

The plaintiff sold the property pursuant to a contract of sale dated 8 November 2020. Settlement of the sale was due to occur on 8 February 2021. Under the contract, the purchaser is entitled to serve a rescission notice unless an agreement can be reached to extend the settlement date under the contract.

On 14 January 2021, Monique Elizabeth Mary Soames (‘the first defendant’) lodged caveat AT946071N on the title to the property claiming an implied, resulting or constructive trust (‘the caveat’).

The plaintiff directing the Registrar of Titles to remove the caveat against the title of the property.

The first defendant is Mr Cecil’s former girlfriend. The first defendant says she lived at the property with Mr Cecil from the date of settlement on or about 20 December 2016 until 24 December 2018.

The first defendant did not contribute any funds to the purchase price of the property. Payment of stamp duty and other expenses was paid by the plaintiff using funds borrowed from the first defendant pursuant to a written loan agreement.

The first defendant made a number of attempts to establish the basis of the caveat.  The first basis proffered was prior to the commencement of the proceeding, the first defendant’s instructions were that a trust relationship exists between her, Mr Cecil and the plaintiff. The second basis proffered was at the hearing when the first defendant claimed that her interest ‘is in relation to seeking to preserve her claim in the Federal Circuit Court proceeding’ and that the caveat was lodged in recognition of her rights under the domestic relationship between Mr Cecil and her.

The first defendant made a number of subsidiary submissions in relation to the maintenance of the caveat on the property.

The first submission was that the first defendant worked in a restaurant owned by Artnet International Pty Ltd, of which Mr Cecil was the director and shareholder, together with Pace Design Pty Ltd, of which he is the sole shareholder.  The first defendant claims that she received only nominal wages that fell far short of the value of her actual contributions and that she is still owed wages. Working in a restaurant may entitle the first defendant to claim a debt due but it does not entitle her to claim an interest in land and it does not give rise to a caveatable interest in the property.

The second was that she assisted with the renovations to the property, however, there is no reference to a joint endeavor in relation to the purchase of the property, such as a contribution by her.

The third was that the first defendant was removed as a shareholder of the first defendant. The plaintiff is the registered proprietor of the land and the shares in the plaintiff are owned by individuals. It was difficult to discern exactly what was the first defendant’s issue with the shares.

Issue: Should the court grant the removal of the caveat over the property?

Held:

A relationship alone does not create a caveatable interest. It follows that the first defendant’s Federal Circuit Court proceeding does not entitle her to claim an interest in the property.

There is no basis for the first defendant to claim more than two years later that she has an interest. Moreover, the removal of the shares from the name of the first defendant does not give rise to a caveatable interest in the property.

The last claim was in respect of the loan of $120,000 by the first defendant.  The first defendant said that there was $18,000 owing on the loan and it was alleged by counsel that the agreement also contained a charging clause.  The evidence supported that the loan and interest was paid in full.  Even if that were incorrect, the first defendant’s claim does not justify any of the grounds of an implied, resulting or constructive trust as claimed in the caveat.

Conclusion: As there is no basis for the caveat to remain on the title of the property, it is unnecessary to consider the balance of convenience, however, it is clear from the circumstances that the balance of convenience favors the plaintiff  with the removal of the caveat carrying the lower risk of injustice.

#property