New South Wales Supreme Court CITATION : Wakelam v Boardman [2007] NSWSC 135 HEARING DATE(S) : 22 February 2007 JUDGMENT DATE : 22 February 2007 JURISDICTION : Equity JUDGMENT OF : Hamilton J DECISION : Caveat extended until further order. CATCHWORDS : CONVEYANCING [187] - Land titles under the Torrens system - Caveats against dealings - Lapse, removal and withdrawal - Generally - Extension - Application for - Discretion of Court – Balance of convenience - Subsisting contract of sale entered into hastily and able to be rescinded without penalty. CASES CITED : Lieschke v Lieschke [2003] NSWSC 743 Smith v Taylor [2006] NSWSC 162 PARTIES : Geoffrey Wakelam (P) David William Boardman (D) FILE NUMBER(S) : SC 1537/07 COUNSEL : E Cox (P) T J Morahan (D) SOLICITORS : Adrian Holmes Solicitor (P) Hozack Clisdell Lawyers (D) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J THURSDAY, 22 FEBRUARY 2007 1537/07 GEOFFREY WAKELAM v DAVID WILLIAM BOARDMAN JUDGMENT - Re Application for Extension of Caveat 1 HIS HONOUR: There is an opposed application for extension of caveat before me. The interest claimed in the caveat is an interest by way of a constructive trust arising pursuant to a proprietary estoppel. 2 In general terms, the allegation is that the plaintiff acted to his detriment by spending money and effort on a property of the deceased ("the property") in reliance upon representations by the deceased that the property would be devised to the plaintiff on the deceased's death. This did not occur. It is a claim of the nature dealt with by Austin J in Lieschke v Lieschke [2003] NSWSC 743 and by myself in Smith v Taylor [2006] NSWSC 162. 3 On the plaintiff's evidence in this regard, there is a seriously arguable case to be determined as to whether a trust interest arose. The deceased died on 6 November 2006. The plaintiff warned of a claim in respect of the property of the estate by a letter dated 6 December 2006, but in the most general terms. 4 The defendant is the executor of the will which the deceased in fact left. Before he was granted probate of the will, by a contract dated 21 December 2006 he sold the property for $320,000. The contract is a curious one. Not only was it entered into by the defendant as executor before he was granted probate, but it contains a special condition providing as a condition precedent to completion that there should have been registered a transmission application of the property, not to him as executor, but to his wife Joy Anne Boardman as beneficiary. This has not yet occurred, and if it does not occur by 28 February 2007, the contract is able to be rescinded without penalty. 5 The contest is in fact a narrow one. The day before selling the property the defendant and his wife bought another property ("the new property") with the intention of using the proceeds of the property towards the purchase of the new property. The plaintiff desires the property retained until his proceedings to establish the constructive trust are tried. The defendant wishes the sale of the property to proceed, but is prepared to give an undertaking to the Court that the net proceeds will be held in trust until the determination of those proceedings. There is, therefore, no question of the defendant's new purchase being foiled by an extension of the caveat, although he and his wife may incur expenses by way of bridging finance until the substantive proceedings can be determined. 6 It does not seem, on the material available, that the sale of the property was at an undervalue, and the plaintiff does not advance substantial reasons as to why he wants the property retained. On the other hand, the defendant's course of conduct in disposing of the property so quickly, entering into a contract for its sale before the grant of probate and in the face of at least a general warning of a claim upon the estate, seems, to me, to say the least, both curious and incautious. Furthermore, because of the peculiar provisions of the contract, it is far from certain that it will, in any event, ever be completed, nor will the defendant be greatly disadvantaged if the contract goes off. 7 In those circumstances, the conclusion that I have come to is that, provided the plaintiff gives the usual undertaking as to damages, the operation of the caveat should be extended until the further order of the court. [Discussion ensued as to costs.] 8 The orders of the Court will be: (1) Upon the plaintiff by his counsel giving to the Court the usual undertaking as to damages I order that the operation of caveat AC828898 be extended until the further order of the Court. (2) I order that the defendant pay the plaintiff's costs of these proceedings. (3) I direct that order (1) be entered forthwith. 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