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Jackson v Arawak Holdings Pty Ltd[2016] QSC 57

Jackson v Arawak Holdings Pty Ltd[2016] QSC 57

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Jackson v Arawak Holdings Pty Ltd & others [2016] QSC 57

PARTIES:

LIANA RENAE JACKSON

(applicant)

v

ARAWAK HOLDINGS PTY LTD ACN 157 865 195 AS TRUSTEE

(first respondent)

VAULT 8 HOLDINGS PTY LTD ACN 105 339 759 AS TRUSTEE (RECEIVER & MANAGER APPOINTED AND IN LIQUIDATION)

(second respondent)

CRAIG ANDREW PERRY

(third respondent)

REGISTRAR OF TITLES

(fourth respondent)

FILE NO/S:

SC No 7304 of 2015

DIVISION:

Trial Division

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

17 March 2016

DELIVERED AT:

Brisbane

HEARING DATE:

19 and 20 November 2015

JUDGE:

Philip McMurdo JA

ORDER:

The Amended Originating Application will be dismissed. Caveat number 716252673 lodged by Ms Jackson over the property will be ordered to be removed and the cross application otherwise be dismissed.

CATCHWORDS:

MORTGAGES – OTHER MATTERS – where the applicant is the registered owner of freehold property in the Gold Coast hinterland – where the first respondent, as registered mortgagee, claims the applicant is in default under the mortgage and seeks to take possession of the property and exercise a mortgagee’s power of sale – where the mortgage is said to secure a loan made to the applicant by the second respondent – where the purchase of the property was completed on 8 April 2010 and the mortgage, loan agreement and other associated documents bear that date and the applicant’s signature – where the applicant contends that there was no loan because the property was purchased with her own funds that had been paid to her in repayment of advances previously made to the third respondent  – where the applicant further contends that the mortgage should not be given effect because she did not execute the mortgage, loan instrument or other documents and her apparent signature on those documents are forgeries – whether the property was purchased with funds to which the applicant was entitled – whether the applicant executed the mortgage documents

MORTGAGES – MORTGAGE CONTRACT – WHAT AMOUNTS TO A MORTGAGE – INTENTION OF THE PARTIES – where the first respondent, as registered mortgagee, claims the applicant is in default under the mortgage and seeks to take possession of the property and exercise a mortgagee’s power of sale – where the applicant and third respondent were in a de facto relationship and acquired the property to build a house for the couple and their children – where the mortgage was prepared in 2010 but not registered until 2014 – where evidence of backdating documents demonstrated a willingness of the third respondent to deceive – where the applicant could not give evidence of her intended effect of the loan documents – where, in the circumstances, the applicant contends that the mortgage is a sham because neither party intended the mortgage to have its apparent effect – whether the mortgage is a sham

CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – AVOIDANCE OF DISPOSITIONS OF PROPERTY – OTHER CASES – where the first respondent replaced the second respondent as trustee of the relevant trust on 18 April 2012 – where the second respondent entered into voluntary liquidation in 2013 – where the mortgage was transferred to and registered by the first respondent in 2014 – where the applicant contends that the transfer and registration of the mortgage were void because of s 468 of the Corporations Act 2001 (Cth) – whether the transfer is void or otherwise improper

REAL PROPERTY – TORRENS TITLE – CAVEATS AGAINST DEALINGS – REMOVAL – PARTICULAR CASES – where the first respondent, as registered mortgagee, claimed the applicant was in default under her mortgage and sought to take possession of her property and exercise a mortgagee’s power of sale – where the applicant lodged a caveat preventing the first respondent’s exercise of its power of sale over the property – whether the caveat should be removed

Corporations Act 2001 (Cth), s 468, s 499

Evidence Act 1977 (Qld), s 59

Family Law Act 1975 (Cth), s 44

Property Law Act 1974 (Qld), s 84

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55, cited

Raftland Pty Ltd v Federal Commissioner of Taxation (2008) 238 CLR 516; [2008] HCA 21, cited

Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449, cited

Taylor v Johnson (1983) 151 CLR 422; [1983] HCA 5, distinguished

COUNSEL:

P Hackett for the applicant

S Dietz for the first and third respondents

SOLICITORS:

 

Fedorov Lawyers for the applicant

SS Lawyers for the first and third respondents

  1. PHILIP McMURDO JA:  The applicant, Ms Jackson, is the registered owner of a freehold residential property in the Gold Coast hinterland, which she purchased in April 2010.  The first respondent, which I will call Arawak, holds a registered mortgage over the property.  Arawak is a company controlled by the third respondent, Mr Perry.  He and Ms Jackson were once de facto partners.
  2. The mortgage is said to secure a loan to Ms Jackson by the company which was originally the second respondent in this case of $730,000 to enable her to pay the purchase price ($710,000) and other expenses of her purchase of this property.  I will refer to this company as the second respondent although it is no longer a party.  It was also a company controlled by Mr Perry.  According to the mortgage instrument, the second respondent acted as a trustee.  Arawak took a transfer of the second respondent’s title to the mortgage and so became the registered mortgagee.
  3. Arawak claims that Ms Jackson has defaulted under the mortgage with the consequences that she owes Arawak more than $1 million and Arawak is entitled to possession and to exercise a mortgagee’s power of sale.  At an interlocutory hearing, Arawak gave an undertaking not to sell the property until further order.  Ms Jackson is not in possession of the property.  Instead it is Mr Perry who lives there, as he has done since April 2012, not long after the de facto relationship between Ms Jackson and Mr Perry ended.
  4. Ms Jackson says that the mortgage should be given no effect.  She claims that there was no loan at all to her for the acquisition of this property and, more particularly, no loan as apparently recorded by a loan agreement which is dated 8 April 2010, the date of the completion of her purchase.  She claims that she did not execute the mortgage instrument, the loan agreement or any other associated documents and that her apparent signature in each and every case is a forgery.
  5. Alternatively she claims that the mortgage is a sham and should be given no effect and removed from the register.
  6. Each of those claims is disputed by Arawak and Mr Perry.  They also cross apply for equitable relief in the event that Ms Jackson’s claims are upheld.  The basis for that application is that if the mortgage is invalid, it would be unconscionable for Ms Jackson to claim the unencumbered ownership of the property free of any interest of Arawak if the court determines that the funds which were used for the acquisition of the property were those of the trust of which Arawak is now the trustee.
  7. The fourth respondent, the Registrar of Titles, is not an active participant in the case.

The de facto relationship

  1. Ms Jackson and Mr Perry were in a de facto relationship from 2002 until the beginning of 2012.  There are two children of that relationship who have lived with their mother since it ended.
  2. The couple lived together at various places on or near the Gold Coast.  Each had an occupation in the business of real estate.  Ms Jackson was a licensed real estate agent, conducting an agency through a company called Hindsight Realty Pty Ltd.  Mr Perry did not have an agent’s licence but says that he had a real estate salesman’s licence.
  3. Mr Perry had a number of companies, many and perhaps all of them being trustees of trusts which, he says, were settled, upon the advice of a lawyer, for tax purposes.  He says that he employed accountants to manage these trusts and to prepare their taxation returns and financial statements from year to year.  However none of those documents is in evidence.  In his affidavit evidence, Mr Perry said that “the structure of the trusts … was frankly not something that I understood and I relied very heavily on my accountants to manage the financial and taxation affairs of these entities from year to year.”[1]
  4. Ms Jackson’s evidence, which is not contradicted by Mr Perry in this respect, is that the parties kept “separate finances [and] bought and sold [their] own properties separately.”[2]  On the face of things, however, there was an extensive business relationship between the parties although the terms of that relationship are one of the many matters which are strongly in dispute.
  5. In a period commencing April 2004 and ending October 2007, Hindsight Realty Pty Ltd paid to Mr Perry or an entity controlled by him various amounts totalling more than $2 million.  The payments are evidenced by paragraph 9 of Ms Jackson’s first affidavit and the exhibits to an affidavit of Mr B S Dulley.  They were also the subject of paragraphs 2 through 7 of the most recent of Mr Perry’s affidavits, where the fact of the payments does not appear to be disputed.
  6. Ms Jackson’s evidence is that these payments were, for the most part, loans by her or her company to Mr Perry.  His evidence is that they were payments for services rendered to Hindsight Realty, in securing sales by that real estate agency.  On his case, he or his relevant entity was to receive 80 per cent of the commission earned by Hindsight Realty for certain transactions in which his services had been instrumental in effecting a sale.  From the bank records for Hindsight Realty, it can be seen that each of the payments which it made to a Perry entity was in an amount which was 80 per cent of a deposit made to that account.
  7. Ms Jackson’s evidence as to the terms governing these payments was somewhat uncertain.  In her affidavits, she described these payments as advances to Mr Perry or entities controlled by him, being advances repayable upon demand.  She said that she made these payments “to assist [Mr Perry] to improve his financial standing at the time”[3] and that she made it clear to him “that the monies being advanced were dependent upon his agreement to repay me when he was in a financial position to do so”.[4]  According to her oral evidence however, the entirety of these payments were not loans but instead Mr Perry was entitled to keep a part of each payment.  In her evidence-in-chief she was asked whether she wished to “clarify” her affidavit evidence and she answered as follows:[5]

“Craig Perry and myself, we actually had a set percentage agreement whereby I … maintained 20 per cent of the company’s - my company’s commission, and I paid him 80 per cent as far as he retaining 20 per cent as a consultancy fee, and when he was in a better financial position he was going to repay me back 60 per cent.  When I say me, pay back the company, 60 per cent, because he was trying to establish his own businesses, because he had about eight companies.” 

She added that the payments detailed in her affidavit evidence represented 80 per cent of her company’s commission so that, according to what she says was the agreement, three‑quarters of each of those payments was repayable.  Ms Jackson gave similar evidence in cross-examination.[6]   She said that the agreement described by her was made at least partly in writing but that all of the relevant documents had been given by her “to the accountant”.[7]   Consequently, she said, she has no documentary evidence to support her case in this respect.

  1. There is documentary evidence supporting Mr Perry’s version about these payments.  There is a document entitled “Referral Agreement”, made between Hindsight Realty Pty Ltd and one of Mr Perry’s companies and dated 25 August 2004, under which Hindsight Realty agreed to pay $685,000 plus GST in the event that a certain property was sold.  Mr Perry explained that this sale was that for which Hindsight Realty eventually paid an amount of $675,260 which Ms Jackson listed as one of the relevant payments made by her company.  The amount was less than that payable under the Referral Agreement because, Mr Perry said in evidence which was unchallenged in this respect, after the Referral Agreement was made, Hindsight Realty had to settle for a lower rate of commission with the consequential reduction in the amount of that commission which was passed on to Mr Perry’s entity.  The Referral Agreement made no reference to any repayment to Hindsight Realty Pty Ltd. 
  2. Mr Perry also produced an invoice to Hindsight Realty Pty Ltd from one of his entities which claimed the amount originally payable under the Referral Agreement.  And he produced further invoices from his entities to Hindsight Realty for other sales.
  3. The documentary evidence, such as it is, thereby supports Mr Perry’s case.  There is no document supporting Ms Jackson’s claim that three‑quarters of the amounts which Hindsight Realty was paying represented unsecured loans to the payee, repayable on demand.  For example, she produced no accounts which recorded any such indebtedness.
  4. If any part of any of these payments had to be repaid to Hindsight Realty Pty Ltd, Ms Jackson did not suggest that there was any such repayment prior to her purchase of the subject property in April 2010.  By that time, some of the suggested loans would have been made some six years earlier.  There was no evidence from Ms Jackson which indicated that Mr Perry’s affairs were such that he had been unable to make any repayment over that period. 
  5. Ms Jackson did not claim to have made any demand for any repayment.  But the suggested inference from her evidence would be that she had not considered that any of these monies was able to be repaid, at least consistently with Mr Perry’s business objectives, until some monies were repaid in order for her to buy this property.  Her case is that the entirety of the funds used to purchase the subject property were her funds, which Mr Perry had caused to be paid for her benefit as part repayments of the alleged advances.
  6. Ms Jackson’s evidence about these suggested loans would give the impression that she was considerably better off than Mr Perry and that she had considerable wealth in her own right.  But there is evidence which indicates otherwise.  When the dispute about this mortgage arose in late 2014, she was living in rented accommodation under a lease soon to expire and for that reason needed to move to the subject property.  The only other property of hers which is disclosed by the evidence is an apartment at the Gold Coast, which she said was too small to accommodate her and the children.  Her apparent lack of substantial assets makes more curious her version that she had been willing and able to lend Mr Perry millions of dollars upon an unsecured and interest free basis.  The more likely position would appear to be that related by Mr Perry, which was that her payments to him or his entities were in no respect a loan.

The money for the purchase

  1. The source or sources of the funds which were used in Ms Jackson’s purchase (as distinct from the ownership of those funds) are not in dispute.  They were as represented diagrammatically in a document which was tendered by Ms Jackson’s counsel.  From this document, it appears that the relevant flow of funds was as follows:
  • On 23 September 2009 Mr Perry paid $250,000 to an account in the name of Vault 8 Enterprises Pty Ltd.
  • On the same date, the second respondent, as trustee for the Equitygear Investment Trust No 2, paid $1,116,756.21 to the same account.
  • On the following day (24 September 2009) Vault 8 Enterprises Pty Ltd transferred $1.35 million to the trust account of Wockners Solicitors, to the credit of “Carolyn Sowley”.
  • An amount of $730,000 from those funds held by Wockners Solicitors was used to purchase the subject property, the purchase being completed on 8 April 2010.

In that last respect the diagram was not precisely correct.  The relevant application of the funds held by Wockners Solicitors, according to their trust account records, was as follows:[8]

  • On 23 February 2010, $160,000 was paid in favour of Macquarie Leasing Pty Ltd (for a purpose apparently unrelated to the subject transaction).
  • On 2 March 2010, the balance of the funds which had been received for “Carolyn Sowley” were paid elsewhere as “an investment”.
  • On 11 March 2010 an amount of $71,000 was returned from that investment to the trust account.
  • On the same date, that amount of $71,000 was paid from the trust account as the deposit for the purchase of the subject property.
  • On 6 April 2010, an amount of $665,000 from the same investment was returned to the trust account.
  • On 8 April 2010, the date of settlement of the purchase, the following payments were made:
 Vendor $635,401.73
 Vendor’s solicitors $ 801.57
 Gold Coast City Council $ 3,061.94
 Wockner Partners for costs and outlays $ 2,154.26
 Stamp duty $ 17,800.00
 Wockner Partners “General Account No 2” $ 880.00

That payment of $880 was apparently reversed on 20 April 2010 and there was instead another payment made to the same account on that date in an amount of $2,249.50.

  1. The next disbursement from this trust account was an amount of $1,518.10 to the Department of Natural Resources and Mines when the transfer to Ms Jackson was lodged for registration.  After then, the only transaction upon this account was an apparent payment to Ms Jackson on 1 July 2011 in the sum of $62,100.  Ms Jackson denied receiving any such payment.  On no view was it associated with the subject property.
  2. Who was “Carolyn Sowley”?  That was the unmarried name of Mr Perry’s mother, Carolyn Claire Perry, who gave affidavit and oral evidence as follows.  In about September 2009, Mr Perry asked if she would agree to some of his money being deposited into a solicitor’s trust account to be held in her unmarried name.  He said he would arrange for a Power of Attorney to be prepared, by which she would appoint him as her attorney so that he could deal with the funds without having to involve her.  After he assured her that there was nothing “illegal or unlawful about what he was asking [her] to do”,[9] she agreed.  Subsequently she received the same assurance from Mr Perry’s solicitor, Mr Wockner, after which she had no further contact with the solicitors.  Her son provided her with a form of Power of Attorney which she signed.  She deposited no money to the account and has no knowledge of how much money was deposited to that account by anyone else.  She considered that it was all her son’s money.  The signature of Mrs Perry upon the Power of Attorney is shown as having been witnessed by Ms Jackson.  Ms Jackson denied that that was her signature but Mrs Perry was adamant that she would “never have signed a document that required a witness without the witness being present”.[10]  Apart from that question, Mrs Perry’s evidence is unchallenged and I accept it.
  3. Mr Perry did not explain why he saw fit to use his mother’s name, and moreover his mother’s former name, in this way.  I infer that he did so in order to disguise his connection with funds which were paid to and from this account.  There may have been many reasons for his doing so but they must have involved an element of deception.
  4. Importantly, Ms Jackson claimed no involvement in causing any of these funds to be paid to the trust account.  In particular she did not claim to have demanded the repayment of some of what she said were the advances made to Mr Perry over the years.
  5. Notably the sum of $1.35 million was deposited to the trust account in September 2009, nearly six months prior to Ms Jackson’s contracting to purchase the property and the deposit being paid.  Ms Jackson did not say that she had demanded the repayment of $1.35 million.  Her evidence[11] was that at the end of August 2009, Mr Perry told her that he was “in a financial position to repay a partial amount of those funds advanced” and that in September 2009, he told her that he had transferred “a total sum of $1,350,000 into his then lawyer’s trust account … and he stated to me that it would provide me with sufficient funds to allow me to purchase a property in my own name.”  Mr Perry disputes that evidence.
  6. Ms Jackson said that with the confidence that funds were in Mr Wockner’s trust account, she sought to purchase a residential property in this locality so as to be close to the children’s then school because “at that time, we were in rental accommodation and we needed a stable and secure residence for our children.”[12]  She said that she found the subject property in December 2009 and then set about negotiating its purchase, culminating in a contract being signed on 9 March 2010.  She described the course of those negotiations as not involving the participation of Mr Perry.  In that her evidence is supported by the vendor’s agent who gave unchallenged affidavit evidence that “all negotiations and dealings in relation to the purchase of the Property were between Ms Liana Jackson and myself”,[13] although Mr Perry accompanied Ms Jackson to inspect the property and attended at the agent’s office when Ms Jackson signed the contract.
  7. According to Ms Jackson’s version then, the entirety of the $1.35 million which was deposited to Wockner’s trust account was her money.  But only a little more than $730,000 was spent in the purchase of the property.  Ms Jackson’s evidence did not suggest that she made use of any of the balance of about $600,000 or that she ever complained that she had been wrongfully deprived of those funds.  As I have already noted, there is an entry in the records of Mr Wockner’s firm recording a distribution to Ms Jackson of $62,100 in July 2011.  But Ms Jackson denied receiving those funds.  The absence of an explanation by Ms Jackson as to what became of the balance of the funds in the trust account fortifies my view that the funds in the trust account, most importantly those expended in the purchase of the property, were not funds belonging to Ms Jackson.
  8. If, as Ms Jackson testified, Mr Perry had volunteered the “repayment” of $1.35 million so that Ms Jackson could go into the housing market as a purchaser, there was no reason for Mr Perry to have used the disguise of his mother’s former name.  There was no intention by Ms Jackson to disguise her identity as a purchaser.  She signed the subject contract in her name and the property was transferred to her.
  9. Further, as I have discussed, there is the absence of any documentary evidence of any agreement or understanding that Mr Perry would repay any part of the payments made to him by Hindsight Realty Pty Ltd.  Similarly there is no documentary evidence recording the repayment of most of the debt, as this $1.35 million payment would have been.  It is difficult to accept that Ms Jackson or her company Hindsight Realty Pty Ltd, which on her version was the true creditor, would have no record of the state of the indebtedness from Mr Perry and his entities.
  10. It is curious that Ms Jackson, as an independent businesswoman, was prepared to accept that an amount of $1.35 million would be simply paid to a solicitor’s trust account and kept there, apparently without interest being earned from that sum, rather than the funds being invested by her or her company or employed in its business.  And it is curious that this was to happen, on her version, without any dealing between Ms Jackson and Mr Wockner.
  11. The variations in the evidence of Ms Jackson on this subject make her evidence even less persuasive.  In her affidavits, she said there that the whole of the funds which her company paid was to be repaid.  On her affidavit evidence, there was no reference to any of these payments being connected with services provided by Mr Perry.  Her oral evidence was then different, by acknowledging that there was at least some entitlement of the Perry interests to be paid for services.  But that was only after Mr Perry filed affidavits which referred to those entitlements and which exhibited documents evidencing an agreement for the payment of a share of the agency’s commissions to him or his entities.
  12. A further factor is that Ms Jackson’s evidence does not explain why, consistently with her case that an amount of more than $1.5 million of the sums paid to Mr Perry was to be repaid, she has not attempted to recover not only the funds remaining in the Wockner trust account after the purchase of the property, but also what would be that part of the debt which had not been paid to the trust account.
  13. The parties ended their relationship at the beginning of 2012.  Neither brought any proceeding in relation to the other’s property.  But it is unlikely that Ms Jackson then simply chose to forgive the balance which she said was this debt.
  14. For these reasons I conclude that none of the amounts which were paid to Mr Perry or his entities included any advance and that none of the $1.35 million which was deposited to the Wockner trust account was the repayment of any advance or was otherwise money to which Ms Jackson or her company was entitled.

The mortgage documents

  1. The purchase was completed on 8 April 2010.  The mortgage, the loan agreement and other documents associated with them bear that date.  However the evidence of Mr Wockner and (ultimately) Mr Perry is that they were signed by Ms Jackson at Mr Wockner’s office on 19 April 2010.  And from the documents themselves, each of which has a printed notation of the date of the preparation of the document within Mr Wockner’s office, it can be seen that they were prepared after 8 April 2010.
  2. The mortgage instrument, as ultimately registered, consists of 20 pages, the first being in Form 2 of the Land Title Practice Manual and the balance consisting of an attached schedule.  The document has a note recording its preparation on 9 April 2010.  What is said to be Ms Jackson’s signature appears on the first page, the Form 2.  Mr Perry signed as the sole director of the second respondent and Mr Wockner’s signature appears as the witness of each of their signatures.  In its original form, the mortgage described the mortgagee as “Vault 8 Holdings Pty Ltd ACN 105 339 759 ATF Equitygear Holdings Trust”, but this was amended, after the date upon which it is said that Ms Jackson signed the instrument, to delete “ATF Equitygear Holdings Trust” and substitute the words, in handwriting, “As trustee.  Trust documents deposited herewith”.  The document described the land by its then title reference.  That was subsequently amended, again after the date on which it is said Ms Jackson signed the instrument, to substitute the title description as it became after the addition of some land to this parcel upon a road closure effected by Mr Perry.
  3. Against item 6 in the Form 2, some of the words of the standard form were deleted such that the document, as said to have been executed by Ms Jackson, contained only the words “The Mortgagor covenants with the Mortgagee in terms of … the attached schedule” and contained no words by which the property was actually charged in favour of the mortgagee.  Later these words were added, in handwriting, to item 6:  “and charges the estate or interest described in item 1 with the repayment/payment to the mortgagee of all sums of money referred to in item 5”.  In item 5 the “debt or liability secured” was described as “$730,000.00”
  4. There is no argument from Ms Jackson about the effect of these various changes to the mortgage instrument after the date of her execution of the document, should it be found that she did so.
  5. Clause 3 of the schedule to the mortgage instrument required the mortgagor, unless otherwise agreed by the mortgagee, to do various things which relevantly included the payment of any rates and other outgoings payable on or in respect of the property.  Clause 4 required the mortgagor to keep the property insured.  By clause 11, the mortgagor would be in default if it did not do something required by the mortgage for any “secured agreement”.  In the event of a default, by clause 11(b) the mortgagee was to be entitled to make the whole of the mortgagor’s debt to the mortgagee immediately due and payable, to take possession of the property and to sell the property.
  6. What is said to be the loan agreement was also prepared on 9 April 2010.  It consists of 12 pages and contains what is said to be Ms Jackson’s signature on the last page.  Again Mr Wockner signed as the witness for each party’s signature.  The document recited that Ms Jackson wished to borrow an amount of $730,000 on the terms set out in the document from the second respondent, to be secured by a registered mortgage over the property.  Of course by the time of preparation of this document, funds in the Wockner trust account had already been paid for the completion of the purchase.
  7. By clause 3 of the loan agreement the borrower was to repay the debt on 7 April 2020.  The loan was to carry interest at 6.5 per cent per annum, capitalised annually in arrears, so that absent any default by the borrower no interest would be payable during the term of the loan.  By clause 4.2, the lender was entitled to interest at a default rate of 11.5 per cent per annum “upon the occurrence of an event or events of default or for any period in respect of which any interest due has not been paid upon the due date for payment.”  By clause 5.1 a default in the performance of the mortgage would constitute an event of default under the loan agreement.  By clause 6, at any time after default the lender was empowered to require immediate payment of the debt.
  8. Another of the documents which is said to have been signed by Ms Jackson at this time was headed “Certificate as to Independent Legal Advice”.  It was in a form by which a solicitor acting for the borrower would certify that he or she had received advice as to the nature and effect of the documents and had signed them in the solicitor’s presence.  Mr Wockner said that he was not Ms Jackson’s solicitor in respect of this transaction, which appears to be correct.  She had no independent legal advice about these documents if she did sign them.  What appears on this draft certificate is the handwritten word “waived”, below which is what is said to be Ms Jackson’s signature.  It appears from the document that it was prepared by Mr Wockner’s firm on 13 April 2010.
  9. Next there is a document, also prepared on 13 April 2010, in the form of an acknowledgement that Mr Wockner’s firm had not acted for Ms Jackson “in respect of the … advance” and that his firm had given her the opportunity to obtain independent legal advice about the documents.  That bears what is said to be her signature but no signature of a witness.
  10. A further document, also prepared on 13 April 2010, is in the form of an authority by Ms Jackson to Mr Wockner’s firm to complete the loan agreement and any ancillary or collateral documents by inserting the appropriate date or any other details which are incomplete, amending documents as might be necessary “for the purpose of completing the same in order to give effect to the agreed terms and conditions of this advance” and to paying “the proceeds of the advance as my/our Solicitors direct”.  The document also contained an undertaking by the borrower to “pay any additional legal costs and outlays of the Mortgagee associated with the preparation, stamping or registration of the Loan Document, Mortgage and/or any ancillary or collateral document.”
  11. A further document bearing what is said to be Ms Jackson’s signature, as witnessed by Mr Wockner, was headed “Consumer Credit Code Declaration”.  The content of this document, prepared on 13 April 2010, seems to have derived from another transaction.  Not only did Ms Jackson apparently declare that the loan was to be “applied wholly or predominantly for business or investment purposes” (which was wrong because this was to be her home) but the document described the loan as “that provided to me/us by [a] Ted Walters.”[14]
  12. Mr Wockner gave evidence by reference to these documents and others from his files.  There was a file in the name of Ms Jackson for the purchase of the property.  He agreed that Ms Jackson was the client for the purchase transaction, although he took all of the instructions from Mr Perry.  In particular he took instructions from Mr Perry as to the application of the monies in his trust account.
  13. The purchase contract was subject to the buyer’s obtaining a satisfactory geotechnical report.  It was Mr Perry who obtained that report and who, on 24 March 2010 as diarised by Mr Wockner, instructed Mr Wockner that a satisfactory report was to hand and that the contract had become unconditional.  In that diary note, Mr Wockner recorded Mr Perry’s instructions that the purchase was to be completed in the name of Ms Jackson (rather than a nominee).  And Mr Wockner also there wrote:

“Security

- 5 yo daughter

- 3 yo daughter

- cohabited 6-7 years

- do mge/ loan docs”.

Mr Wockner could not say why he made those notes.[15]

  1. On 8 April 2010, Mr Wockner wrote to one of his staff an instruction to open a new file for a mortgage to be given by Ms Jackson, saying that “[Mr Perry] wants us to do a Loan Document and Mortgage in respect of funds provided by his mother, via his Trust, and we need therefore to do those documents” and that Mr Wockner needed the trust account ledger sheet so that he could “trace the amount of monies required to be included in the mortgage”.  He there referred to an attached email from Mr Perry in which the lender was described as “Equitygear Holdings Trust”.[16]  Mr Wockner referred to the interest rate of 6.5 per cent per annum, to be capitalised annually in arrears.  He also recorded that the term of the loan was to be not ten but five years.
  2. On 16 April 2010, that staff member wrote a file note, recording telephone instructions from Mr Perry that he had just read “his Loan/Mortgage documents” and that there was a mistake in that the term of the loan was to be 10 and not 5 years.  The note, which appears to have been addressed to Mr Wockner, recorded that Mr Perry was “going to ring on Monday morning … to make an appointment to have the documents signed - or collect them - and then have them witnessed, I am assuming by you.”  The following Monday was 19 April 2010, the date upon which Mr Wockner and Mr Perry said that the documents were signed by Ms Jackson at Mr Wockner’s office.
  3. Mr Wockner’s evidence was that Mr Perry and Ms Jackson came to his office on 19 April 2010 when, after he had explained the documents to Ms Jackson whilst Mr Perry waited in another office, Ms Jackson signed them in his presence. 
  4. Mr Perry’s evidence at first was that he believed that the documents were signed prior to the completion of the purchase but he was later inclined to agree with Mr Wockner. 
  5. Ms Jackson denied signing the documents or indeed being at Mr Wockner’s office on any occasion after 10 March 2010, when she said that she went there with Mr Perry to deliver the contract document to Mr Wockner.  There is some reason to doubt whether she ever gave the form of contract to Mr Wockner because there is evidence that the original was sent to Mr Wockner by the real estate agent.  Possibly a copy was handed by Ms Jackson to Mr Wockner.  If Ms Jackson is wrong about how the contract came to be in Mr Wockner’s hands, that point is not critical to the assessment of her credibility or reliability.
  6. In her second affidavit, Ms Jackson said that when she handed the contract document to Mr Wockner, he handed her a single page document and asked her to sign it.  Her evidence was that Mr Wockner did not explain anything to her about the document and that when she asked him “What is this for?”, he replied “Don’t worry, it’s just in case there is an audit from the Taxation Office; it’s just a shelf document not to be exercised.”  She said that she then asked Mr Wockner “But I am purchasing this property without any mortgage?” to which both Mr Wockner and Mr Perry responded by saying words to the effect that “It is just a shelf document and not to worry.  Of course there is no mortgage.  It is only if there is an audit from the taxation office.”[17]  She said that she then had a closer look at the document, which was largely left blank and contained no monetary amount.  She recalled that it contained the words “fee simple”.  She signed the document on the basis that it was never to be used except in the event of an audit from the taxation office.  In cross-examination she was asked whether this one page document “was … in the form of a titles-office-type form?” to which he answered “No”.[18]  She agreed with the cross examiner’s suggestion that the document was not the mortgage document.  She said that only one document was signed with this assurance and was adamant that she had signed no other documents.
  7. On 20 April 2010 there was a typed memorandum sent by Mr Wockner to one of his staff as follows:

“Taryn,

  1. Craig Perry and Liana Jackson came in on Monday 19 April;
  2. After explaining the mechanics of the Mortgage Liana signed all the documents in the DERM;
  3. I need to know whether the transfer to Jackson is already registered;
  4. Registration fees will be $122.00?? for the mortgage;
  5. What is left in the Trust Account then, if any?  Under the ledger sheet of Jackson - 01003515 (I believe nothing is in there);
  6. Also check the Sawley ledger sheet and see if there are funds in there to pay the registration fees;
  7. Craig Perry signed a Trust Account authority allowing us to pay our costs - please advise Linda of that;
  8. Please also hand to Linda this Trust Account Authority for the $880.00 tax invoice for Sawley then put that into the appropriate file;
  9. End result is to be as follows:
    1. Transfer registered to Liana Jackson
    2. Mortgage registered after the above
    3. Our costs paid
    4. The registration fees on the Mortgage paid
    5. The Jackson ledger sheet should show a nil balance
    6. The Sawley ledger sheet will still show some sort of balance - not sure how much.

Please see me with file when the above is completed.”

  1. Notwithstanding what Mr Wockner there wrote about the intended registration of the mortgage, it was not lodged for registration until 2014.  The transfer to Ms Jackson was lodged in May 2010 but, according to Mr Wockner, Mr Perry instructed him “not to register the Mortgage for the time being.”[19]  Mr Perry’s evidence was that he gave this instruction because he intended to change the boundaries of the property by acquiring a small part of a road to be closed and that “if a mortgage was registered on the title, that would unnecessarily complicate that transaction.”[20]
  2. That explanation by Mr Perry is unconvincing.  There was a road closure which resulted in a small area of land being added to the property and which resulted in a new real property description for it.  But the application for the road closure was not lodged until June 2011.  It was approved in 2012.  The form of agreement with the Department of Environment and Resource Management was apparently signed by Ms Jackson on 14 April 2012.  Ms Jackson denies that she signed the document.  The apparent witness to her signature, Ms Maguire, was a Justice of the Peace employed at a law firm on the Gold Coast (not Mr Wockner’s firm).  Ms Maguire is Mr Perry’s niece.  There was also a form of transfer which had to be signed by Ms Jackson to effect this transaction.  Again that is dated 14 April 2012 and Ms Jackson’s apparent (but disputed) signature is shown as witnessed by Ms Maguire.  A sum of $3,046.50 had to be paid to the Queensland government for the transaction, which Mr Perry caused to be paid.  On 8 November 2012, the Registrar of Titles directed that a title for the reconfigured lot be created and on that date Ms Jackson became the registered proprietor of the new lot.  Yet the mortgage was not lodged for registration until 28 April 2014.  This strongly suggests that Mr Perry’s explanation for the delay in the registration of the mortgage is untrue.
  3. In his affidavit, Mr Wockner said that shortly prior to 28 April 2014, Mr Perry instructed him to register the mortgage by which time, Mr Wockner added, a road closure application “had been finalised”.  That is literally true, although it is somewhat misleading because the road closure had been finalised almost 18 months earlier.
  4. Also in his affidavit, Mr Wockner described how he made “the necessary amendment to the mortgage” to reflect that new title description.  Such an amendment appears on the face of the document.  That was done, Mr Wockner said, pursuant to the terms of the Authority/Undertaking which I have discussed above at [45].  At the same time as the mortgage was lodged for registration, Mr Wockner lodged what he described as a “General Request for the purpose of changing the name of the Mortgagee trustee from Vault 8 Holdings Pty Ltd to Arawak Holdings Pty Ltd.”[21]  But the mortgagee was not Arawak but the second respondent and the second respondent had not changed its name.  Rather, there had been a (purported) change in the trusteeship of the relevant trust, by which Arawak had become the new trustee and entitled to be registered, as such, as the mortgagee.  That appeared from a declaration signed by Mr Perry which was lodged with the Registrar of Titles at the same time.  He there declared that, as the principal under the relevant Trust Deed, by documents signed in April 2012 he had caused the second respondent to be replaced by Arawak.
  5. The Registrar of Titles requisitioned this instrument by a notice dated 9 May 2014.  In response, on 29 May 2014 Mr Wockner lodged a different instrument for registration, namely a transfer or purported transfer of the mortgage.
  6. The transfer was executed for Arawak by Mr Perry as its sole director.  He also purported to sign for the second respondent as its sole director.  The difficulty there was that by this point in time, the second respondent was in liquidation.  Liquidators had been appointed under a creditors’ voluntary winding up on 26 August 2013.  That followed the appointment of an administrator in July 2013.  A receiver had been appointed to the company in December 2011.  The transfer to Arawak was not signed by or with the concurrence of the liquidators.  By s 499(4) of the Corporations Act 2001 (Cth), upon the appointment of a liquidator in a creditors’ voluntary winding up, the powers of the directors cease except as approved by the creditors or a committee of inspection.
  7. Mr Perry made no claim to ignorance of the fact that his company was in liquidation.  Mr Wockner, who prepared this transfer document for execution in all respects by Mr Perry, seemed to suggest that he was ignorant of that fact although, as he accepted, on his file there were searches of the ASIC records, made on 9 and 11 April 2014, which demonstrated that fact.[22]  Mr Wockner accepted that Mr Perry had no authority to sign on behalf of the second respondent and could offer no explanation as to why he was allowed to do so and the document was lodged for registration.

The dispute arises

  1. After the property was purchased, the then couple and their children continued to live elsewhere on the Gold Coast.  In 2011, a Mr Dimopoulos, a friend of Mr Perry, took up residence at the property upon the basis, agreed with Mr Perry, that he would pay no rent but maintain the house and land.  During this time, Mr Perry said, Mr Perry paid the council rates and kept the premises insured.  Mr Perry said that the property was never redeveloped because the parties separated in or around April 2012.  He said that with Ms Jackson’s agreement he then moved to the property.  Ms Jackson’s evidence agreed that he then moved to the property but disputed that this was with her agreement.  Mr Perry has lived there ever since, resisting an attempt by Ms Jackson to retake possession of the property last year.
  2. He said that since moving to the house he has paid all rates, insurance premiums and other expenses associated with it.[23]  As already noted, neither party applied for an order under the Family Law Act for the alteration of their property interests.  If, as Mr Perry said, the relationship ended in April 2012, the limitation period for such a claim under the Family Law Act would have expired in April 2014,[24] just when Mr Perry took steps to have the mortgage registered.
  3. According to Ms Jackson, she learnt of the mortgage only in December 2014, when Mr Perry told her that there was a mortgage and that “he was now the mortgagee in possession.”  Mr Perry told her that she had 28 days “to raise the funds demanded to repay the mortgage or he would sell the property.”[25]  That suggests that there was by then a notice of exercise of power of sale given under s 84 of the Property Law Act 1974 (Qld),[26] although no such document is in evidence.  She says that she then contacted Mr Wockner who confirmed that there was a registered mortgage.  As she had never received any copies of the relevant documents for the mortgage (as Mr Wockner agreed was the case), she arranged for a lawyer to inspect the documents at Mr Wockner’s office, who was provided with a copy of a letter dated 26 November 2014 from Wockner Partners to Ms Jackson, enclosing a notice of default and a notice of demand.  The former alleged that she had defaulted under the mortgage by neglecting or refusing to pay rates (in the period from 1 June 2010 to 31 December 2014) and keep the property insured.  It contained a calculation of what was said to be the indebtedness secured by the mortgage as at 31 December 2014, totalling $1,160,529.05.  This was derived by capitalising interest at 6.5 per cent on the amount of $730,000 until 31 December 2011 and thereafter capitalising interest at the default rate of 11.5 per cent.  It also included a total for council rates in a period from 1 July 2012 to 31 December 2014, in an amount of $4,882.16.  The Notice of Demand asserted that all money secured by the mortgage had become due and payable and that the immediate payment of that sum was required.
  4. Ms Jackson said that at this point she undertook a title search and discovered the registered mortgage.  On 12 January 2015 she lodged a caveat against dealings with the property.
  5. On 11 July 2015 she became aware that Mr Perry had caused a real estate agent to advertise the property for sale by auction.  She filed the originating application in this proceeding on 27 July 2015 and then sought an interlocutory injunction to restrain a sale by Arawak or the completion of any sale.  On 7 August 2015 Arawak gave an undertaking not to sell or complete any sale until further order.

Forgeries?

  1. In his evidence Mr Wockner was adamant that Ms Jackson signed the relevant documents in his presence.  For a practising solicitor to sign as the witness of a mortgagor’s signature, without in truth being a witness, would be very serious misconduct.  Conceivably a solicitor who had done so could see fit to perjure himself by claiming that he had witnessed the signature.  But fortunately, such misconduct is not common and it is inherently unlikely that a practising solicitor would do those things.  Mr Perry seems to have been an established client of Mr Wockner.  But it is another thing to conclude that he was such a valuable client that Mr Wockner would assist Mr Perry to commit a fraud.
  2. It must be said that Mr Wockner’s conduct was not impeccable throughout the relevant events.  I have discussed the steps taken by Mr Wockner to have Arawak registered as the mortgagee.  The fact that searches of the ASIC records of the second respondent were then undertaken makes it likely that Mr Wockner knew of the impediment to the proposed registration that came from the fact that the second respondent was in liquidation.  But if Mr Wockner did know of this impediment, he may have thought that it was not such a serious matter to proceed as he did, when the mortgage was property held by the second respondent as a trustee.
  3. On Mr Wockner’s account of the events of April 2010, he explained the documents to Ms Jackson.  She did not have independent legal advice.  Ultimately there is no argument for Ms Jackson to the effect that she was under a particular disadvantage which affected her ability to protect her interests in this transaction, and which Mr Perry unconscientiously exploited.  Had such a case been advanced, no doubt the respondents would have urged that Ms Jackson was an experienced businesswoman particularly in matters of real estate, and was well able to understand the nature and effect of what she was being asked to sign.  As to that, it is far from clear that Ms Jackson had such a degree of commercial sophistication.
  4. A further concern is that Mr Wockner saw fit to backdate the documents to 8 April 2010.  Ultimately this did not affect the validity of the documents.
  5. But there are many reasons to doubt the testimony of Ms Jackson.  As I have concluded, her evidence as to the ownership of the funds used to purchase the property must be rejected.  More generally, her evidence to the effect that this property was purchased for her own purposes and not for any purpose of Mr Perry must also be rejected.  She and Mr Perry were then in a de facto relationship from which they had two young children and there is nothing in the evidence to suggest that she had the means to pay for the construction of a new house upon the land. 
  6. Clearly the disputed documents were prepared in April 2010.  They were not prepared only in 2014 when Mr Perry sought to register the mortgage.  They were prepared the week or so prior to the date on which Mr Wockner and Mr Perry say that they were executed.  And there are other documents in Mr Wockner’s file which evidence steps being taken towards the execution of these documents.  In particular there is the memorandum from Mr Wockner to a staff member of 20 April 2010 to which I have referred at [55].  There is therefore a substantial body of documentary evidence that the documents were prepared by Mr Wockner with the intention that they then be executed by Ms Jackson.  If Ms Jackson did not execute the documents, what could have intervened to put paid to that intention?  Neither the evidence nor Ms Jackson’s argument suggested anything in that respect.
  7. The fact that the mortgage was not then lodged for registration is relevant to another argument in the case, which was that the mortgage was a sham in that it was not intended to have its apparent effect.  But it is of no particular relevance to the question of whether the mortgage was signed by Ms Jackson.  It was not suggested to Mr Wockner or Mr Perry that the mortgage and other documents which were prepared in April 2010 were in truth signed (by someone else as Ms Jackson) much later, perhaps shortly before the mortgage was lodged for registration in 2014.
  8. In theory, these signatures could have been forged by somebody, Mr Perry in particular, away from Mr Wockner’s office, and later purportedly witnessed by Mr Wockner.  But that possibility was not put to Mr Wockner or Mr Perry.
  9. One curious feature of the evidence was the lack of any reference by Mr Perry to any conversation with Ms Jackson about a proposed mortgage.  He gave no purported recollection of any preceding discussion as to why and upon what terms the property would be mortgaged.  The absence of that evidence is concerning because it adds to my impression that Ms Jackson may have had an imperfect understanding of the effect of these documents.  But it does not strongly indicate that they are forgeries.
  10. Once Ms Jackson’s contention as to the ownership of the funds used to purchase the property is rejected, the basis of her case that these documents were forgeries is substantially lost.  It would be highly unlikely that she would have signed a mortgage to secure a non-existent loan.  But that unlikelihood does not exist where in fact, she purchased the property with someone else’s money.
  11. Section 59 of the Evidence Act 1977 (Qld) provides as follows:

“59Comparison of disputed writing

  1. Comparison of a disputed writing with any writing proved to the satisfaction of the judge to be genuine shall be permitted to be made by witnesses and such writings and the evidence of witnesses respecting the same may be submitted as evidence of the genuineness or otherwise of the writing in dispute.
  2. A court may compare a disputed writing with any writing that is genuine and act upon its own conclusions in relation thereto.”

It is thereby open to the court to compare the disputed signatures with signatures of Ms Jackson which are genuine and to form its own conclusions from that comparison.  There are many genuine signatures of Ms Jackson upon her affidavits as well as upon the contract for the purchase of the property.  I have compared those signatures with the disputed signatures.  I am mindful of the field of expertise from which a court is often assisted by experts in this exercise.  But as s 59 provides, that assistance is not essential.  To my eye, there is no difference between the disputed signatures and those which on any view are genuine.  That comparison does not determine the outcome on this critical issue.  But it fortifies the conclusion which I have reached, which is that the disputed signatures are in truth those of Ms Jackson.  I would include within the disputed signatures those upon the Power of Attorney granted by Mr Perry’s mother and the signatures upon the documents signed for the road closure.

Was the mortgage a sham?

  1. In Sharrment Pty Ltd v Official Trustee in Bankruptcy,[27] Lockhart J said: 

“A ‘sham’ is therefore, for the purposes of Australian law, something that is intended to be mistaken for something else or that is not really what it purports to be.  It is a spurious imitation, a counterfeit, a disguise or a false front.  It is not genuine or true, but something made in imitation of something else or made to appear to be something which it is not.  It is something which is false or deceptive.”

Citing Sharrment, Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd said:[28]

“‘Sham’ is an expression which has a well-understood legal meaning.  It refers to steps which take the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences.”

  1. The question here then is whether both parties intended the mortgage and loan agreement to have their apparent legal consequences.  The court’s task in this context was described by Kirby J in Raftland Pty Ltd v Federal Commissioner of Taxation[29] as the testing of “the intentions of the parties, as expressed in the documentation, against their own testimony on the subject (if any) and the available objective evidence tending to show what that intention really was.”
  2. The argument for Ms Jackson that the mortgage was a sham is summarised in this way in the written submissions of her counsel:

“Summary

  1. There are a number of matters which objectively cast doubt on the suggestion that the funds advanced to the Applicant to acquire the Property were a loan:
  1. Mr Wockner is recorded as the Applicant’s solicitor on the Contract yet concedes all of his dealings were with the Third Respondent. 
  2. The Property was acquired and completed in the name of the Applicant on the instructions of the Third Respondent notwithstanding a nominee provision in the Contract that would have permitted him to complete the Contract in the name of the Trust if he wished to do so and was in fact controlling the acquisition.
  3. The Property was acquired and completed in the name of the Applicant without a mortgage having been prepared, let alone executed.
  4. Settlement of the Property occurred on 8 April 2010.
  5. The Loan Document, Mortgage and related documents were prepared after settlement of the Property (9 or 13 April 2010).
  6. Mr Wockner received instructions from the Third Respondent to prepare the Mortgage.  In so doing, Mr Wockner was then acting for the purchaser/mortgagor and the mortgagee and had a clear conflict.
  7. The Mortgage and related documents were allegedly signed on 19 April 2010, 11 days after completion of the Contract.
  8. Those documents contain a number of features (in the face of the Applicant’s denial that she ever agreed to mortgage the Property or discussed doing so with any person) that suggest the Applicant was misled into signing the documents, if it is found that she did so:
    1. Two of the documents, one being and Acknowledgement of the opportunity to get independent legal advice and the other being a waiver by the Applicant of independent legal advice must be false if the Third Respondent and Mr Wockner are believed, as the Applicant was never given the opportunity to obtain such advice, rather they merely attended Mr Wockner’s office to sign the documents.
    2. The content of the Consumer Credit Code Declaration that the purpose of the loan was for a business purpose is clearly false.
  1. The circumstances surrounding these documents is indicative of a sham.”
  1. At this point it should be noted that Ms Jackson’s case is that neither party intended the mortgage to have its apparent effect.  That requires proof that it was not Mr Perry’s intention that it should have effect.
  2. There were no pleadings in this case, but it is clear that the applicant’s case is confined to an argument that the mortgage is a sham.  It is not her argued case, for example, that if she executed the mortgage, she did so under a mistake about its contents of which the other party was aware, such that it would be unconscionable for the other party to enforce it.[30]  Nor is it her argued case that she executed the mortgage upon a representation of Mr Perry or Mr Wockner that the mortgage would not be enforced.[31]
  3. Because Ms Jackson’s evidence was that she did not execute these documents, she could have given no evidence of her intention about the effect of the documents.  Strictly speaking, the absence of that evidence is not fatal to her argument, because her intention might be inferred from other evidence.  But once it is accepted, as I have found, that she did execute the documents, the absence of evidence from her as to her intention in doing so is a substantial difficulty in her case.
  4. As I have discussed at [54], Ms Jackson did give evidence that she signed a document upon the assurance of Mr Wockner that it was “just a shelf document not to be exercised” and was being signed only against the prospect of an audit from the Australian Taxation Office.  But as I have noted, Ms Jackson also said that this document was not the mortgage instrument.  Further, this evidence was not relied upon in the ultimate submissions for Ms Jackson.
  5. Mr Perry controlled the second respondent and it was his intention which was the mortgagee’s intention.  If, when the mortgage was executed, it was not his intention that it should have its apparent legal effect, then it could be more readily inferred that Ms Jackson was of a like mind.  As Mr Perry has attempted to enforce the mortgage, Ms Jackson’s case must be that at some stage after the execution of the mortgage, Mr Perry became minded to give the instrument an effect which he had not originally intended.
  6. Mr Perry has demonstrated a preparedness to deceive by the use of his mother’s former name to disguise the ownership of the funds in Mr Wockner’s trust account.  Further, as was argued for Ms Jackson, the funds in the trust account were derived from the second respondent but as a trustee for a different trust from that of which the second respondent was the trustee under the loan agreement and the mortgage.  That tension has some relevance but it does not prove that Mr Perry intended other than that second respondent, as trustee for the Equitygear Holdings Trust, should be the lender and mortgagee.  It is quite possible that the respective positions of the entities controlled by Mr Perry were structured such that, in truth, it was the second respondent as trustee for the Equitygear Holdings Trust which was the lender to Ms Jackson.  Ms Jackson must prove otherwise, because of the terms of the document which she executed.
  7. It is relevant that Mr Perry and Ms Jackson were in a de facto relationship and that this property was being acquired, as Mr Perry said and which I accept, for the purposes of building a new house for the then couple and their children.  An agreement that Ms Jackson would pay all the rates and other outgoings in default of which she could be deprived of possession and the property could be sold, is not easily reconciled with the objective of the parties in the purchase of this property.
  8. The fact that the mortgage was not immediately registered is relevant here.  But it is not a strong indication that Mr Perry did not intend the mortgage to be enforceable.  Rather, it could well indicate that Mr Perry intended to have an enforceable and registrable mortgage but did not intend to enforce the mortgage whilst his domestic and financial circumstances remained as they were in 2010.
  9. The fact that the documents were backdated to the date of the settlement of the purchase is relevant, at least because it too shows a preparedness by Mr Perry to deceive.  It was not necessary to backdate the documents in order to make them legally effective.  The loan agreement was signed as a deed so that it was not the case that it required a consideration moving from the second respondent which would have been provided by the payment of the funds to, or for the benefit of, Ms Jackson.  Mr Wockner was unable to explain satisfactorily why the documents were backdated.  These circumstances suggest the possibility that on Mr Perry’s side at least, there was a concern about how the effect of the documents would appear to third parties.  They suggest the possibility that the documents were backdated to fortify the appearance of the documents as having effect according to their terms.  But Ms Jackson’s case must go further and establish that Mr Perry was not only concerned about the apparent effect of the documents but also that he intended that the documents not have that apparent effect.
  10. Whilst Mr Perry’s domestic and financial circumstances remained as they were in 2010, he may have had no intention of enforcing the mortgage.  But it is not unlikely that he intended the mortgage to be enforceable in the event that those circumstances changed, particularly in the event of the cessation of the de facto relationship.  It may not be merely coincidental that Mr Perry took steps to register the mortgage just at the time that the limitation period for any claim by Ms Jackson under the Family Law Act had expired.  Be that as it may, the possibility of a cessation of the de facto relationship may have caused Mr Perry to provide instructions to Mr Wockner to protect his interests by the security of a mortgage. 
  11. Ultimately I am not persuaded that Mr Perry intended these documents to be a mere artifice and that it was only later that he formed an intention that they should have their apparent effect.  In my conclusion it is more probable that he always intended the documents to be effective according to their terms, in case his circumstances, particularly that of his relationship with Ms Jackson, changed.  It follows that the documents were and are not shams.
  12. Much of the evidence suggested to me that whilst Ms Jackson did execute the documents, she may have done so in the belief, perhaps induced by Mr Perry or Mr Wockner, that they would not be enforced.  But as I have discussed, that was not her argument.

The transfer of the mortgage

  1. The arguments for Ms Jackson do not challenge the existence of the so-called Equitygear Holdings Trust or the authenticity or effect of the relevant trust instrument.[32]  By clause 9 of that instrument, the Principal, who according to the instrument is Mr Perry, has the power to remove the trustee and appoint a new trustee, in which event the property “shall not vest in the [new] Trustee until that Trustee requests the former Trustee or other person in whom the property is currently vested to transfer the property”.  Until that happens, clause 9 provides, the former trustee is to be “Custodian Trustee”.  By clause 17 the trust instrument provides that it shall not be necessary for the title to any property forming any part of the trust fund to be registered or otherwise held in the name of the trustee, but the title may be registered or held in any other name as custodian trustee.  The trust deed refers to the second respondent by its former name but there is no issue about the identity of the trustee as being the second respondent.
  2. Exhibited to Mr Perry’s first affidavit was a document entitled “Notice of Change of Trustee”.  It was signed by Mr Perry under clause 9 of the trust deed and he signed also for Arawak.  It records the replacement of the second respondent by Arawak as trustee of the relevant trust and it is dated 18 April 2012.  With the benefit of evidence as to the notations on documents prepared by Mr Wockner’s firm which show the date of preparation of a draft document, it can be seen that the draft of this document was prepared on 17 May 2012.  It does evidence a change in the trusteeship.  The second respondent was not then in liquidation.
  3. Although Ms Jackson sought a declaration that the transfer of the mortgage is a sham, ultimately her case did not seem to impugn the replacement of the second respondent by Arawak as the trustee at some time in 2012.  Thereafter Arawak was entitled to the mortgage and to have it registered in its name.
  4. But for Ms Jackson it was submitted that there was no evidence of a request by the second respondent for a transfer of the mortgage to Arawak prior to the liquidation of the second respondent.  That submission misunderstood the terms of clause 9 of the trust deed.  It provides that on the appointment of a new trustee, the property of the trust does not vest in the new trustee until that new trustee requests the former trustee to transfer the property.  So the relevant request is to come from the new trustee.
  5. As I have discussed, Mr Perry had no authority to execute the transfer of the mortgage, as he did in 2014, because the company was then in liquidation.  But it does not follow that Ms Jackson should have some relief which prevents Arawak as the new trustee from enforcing its mortgage.  As I accept that it has been appointed as the new trustee, it is entitled, vis a vis the second respondent to the ownership of the mortgage and to exercise the trustee’s powers over that property.  Importantly, the second respondent was a party to this proceeding but made no claim to the mortgage.  There would be no utility in disturbing the present registration of the mortgage in the name of Arawak when the second respondent has made and could make no claim to be entitled to it.
  6. It was submitted for Ms Jackson that the “lodgement for registration of the Mortgage and Transfer” are void as a result of s 468 of the Corporations Act 2001 (Cth), which relevantly provides that:

“(1)Any disposition of property of the company, other than an exempt disposition, made after the commencement of the winding up by the Court is, unless the Court otherwise orders, void.”

  1. Section 468 applies to a court ordered winding up and not to a creditor’s voluntary winding up, as here.  And “property of the company” in this provision does not include property held by the company as a trustee.[33]
  2. There is no utility in granting any declaration in favour of Ms Jackson to the effect that the registration of the transfer of the mortgage was obtained irregularly.  The ultimate entitlement to the mortgage is that of Arawak which corresponds with the position on the register.

The cross application

  1. Most of the relief that was sought by the cross application was sought only against the event that Ms Jackson succeeded in her challenge to the mortgage.
  2. But Arawak also seeks an order for the removal of Ms Jackson’s caveat.  As the registered owner Ms Jackson is a competent caveator.[34]  At least if Arawak is entitled to exercise a power of sale as mortgagee, Ms Jackson’s caveat should be removed.
  3. But the question of whether Arawak is presently entitled to exercise a mortgagee’s power of sale was not litigated in this proceeding.  There was no admission on behalf of Ms Jackson that if her challenge to the mortgage failed, Arawak was presently entitled to sell.
  4. The question of whether Ms Jackson has defaulted under the mortgage would be far from straightforward.  The alleged defaults, according to the notice which was given to Ms Jackson in December 2014, consisted of a failure to pay the rates and to keep the property insured.  Ms Jackson admits that she did not do so.  Mr Perry’s evidence is that he paid the rates and insured the property.  But his evidence is not that Arawak did so.  As between Ms Jackson and Arawak, the rates have been paid and the property has been insured.  How then could Arawak claim that its mortgagor was in default?
  5. That might seem an unrealistic analysis given the connection between Mr Perry and Arawak.  With a proper factual enquiry, it might emerge that it was indeed Arawak which paid the rates and the insurer.  But one reason for an uncertainty about that would come from the fact that after the parties separated, Mr Perry resided in what is Ms Jackson’s house, without paying any rent.  If, as Mr Perry asserted, he did so with the agreement of Ms Jackson, it is not unlikely that their agreement or understanding was that he could do so if he met the outgoings such as rates and insurance.  In that case, it is unlikely that Mr Perry’s payments would be characterised as payments by Arawak to make good the default of its mortgagor.
  6. Given this uncertainty, should the caveat be removed?  I conclude that it should be, because the arguments which were made in this case for its retention have been rejected.  It would be unfair to refuse Arawak an order for the removal of the caveat on a point which was not litigated.

Orders

  1. The amended originating application be will be dismissed.  The caveat lodged by Ms Jackson over the property will be ordered to be removed and the cross application otherwise be dismissed.  I will hear the parties as to costs.

Footnotes

[1] Affidavit of Craig Perry sworn 16 November 2015, para 10.

[2] Affidavit of Liana Jackson sworn 27 July 2015, para 8a.

[3] Ibid, para 9.

[4] Affidavit of Liana Jackson sworn 28 September 2015, para 4.

[5] Transcript 1-16.

[6] Transcript 1-33, 34.

[7] Transcript 1-16.

[8] Exhibit CP2 to the affidavit of Craig Perry sworn 6 August 2015.

[9] Affidavit of Carolyn Perry sworn 17 November 2015, para 4.

[10] Transcript 1-44.

[11] Affidavit of Liana Jackson sworn 28 September 2015, paras 8-9.

[12] Ibid, para 7.

[13] Affidavit of Leanne Burkhardt sworn 2 October 2015, para 2.

[14] By this stage also the Consumer Credit Code had been replaced by the National Credit Code from 1 April 2010:  National Consumer Credit Protection Act 2009 (Cth) s 2.

[15] Transcript 1-77.

[16] This email, which is exhibit 16, contained no other instructions as to the mortgage.

[17] Affidavit of Liana Jackson sworn 28 September 2015, paras 28-31.

[18] Transcript 1-25.

[19] Affidavit of Geoffrey Wockner sworn 27 August 2015, para 15.

[20] Affidavit of Craig Perry sworn 16 November 2015, para 49.

[21] Affidavit of Geoffrey Wockner sworn 27 August 2015, para 18.

[22] Transcript 1-97.

[23] Affidavit of Craig Perry sworn 16 November 2015, para 31.

[24] Family Law Act 1975 (Cth), s 44(5).

[25] Affidavit of Liana Jackson sworn 27 July 2015, para 24.

[26] Although the period of notice which it requires is 30 days: s 84(1)(a).

[27] (1988) 18 FCR 449 at 454.

[28] (2004) 218 CLR 471, 486; [2004] HCA 55, [46].

[29] (2008) 238 CLR 516, 553; [2008] HCA 21, [112].

[30] cf Taylor v Johnson (1983) 151 CLR 422; [1983] HCA 5.

[31] cf Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7.

[32] Exhibit CP1 to the affidavit of Craig Perry sworn 6 August 2015.

[33] Wily v Commonwealth (1996) 66 FCR 206.

[34] Land Title Act 1994 (Qld), s 122(1)(c).

Close

Editorial Notes

  • Published Case Name:

    Jackson v Arawak Holdings Pty Ltd & Ors

  • Shortened Case Name:

    Jackson v Arawak Holdings Pty Ltd

  • MNC:

    [2016] QSC 57

  • Court:

    QSC

  • Judge(s):

    McMurdo JA

  • Date:

    17 Mar 2016

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Equuscorp & Anor v Glengallan Investments Pty Ltd [2004] HCA 55
2 citations
Jump To
Cite 1 - [2004] HCA 55
Cite 2 - [2004] HCA 55
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471
2 citations
Jump To
Cite 1 - (2004) 218 CLR 471
Cite 2 - (2004) 218 CLR 471
Raftland Pty Ltd as Trustee of the Raftland Trust v Commissioner of Taxation [2008] HCA 21
2 citations
Jump To
Cite 1 - [2008] HCA 21
Cite 2 - [2008] HCA 21
Raftland Pty Ltd v Commissioner of Taxation (2008) 238 CLR 516
2 citations
Jump To
Cite 1 - (2008) 238 CLR 516
Cite 2 - (2008) 238 CLR 516
Sharrment Pty Ltd & Ors v Official Trustee in Bankruptcy (1988) 18 FCR 449
2 citations
Jump To
Cite 1 - (1988) 18 FCR 449
Cite 2 - (1988) 18 FCR 449
Taylor v Johnson (1983) 151 CLR 422
2 citations
Jump To
Cite 1 - (1983) 151 CLR 422
Cite 2 - (1983) 151 CLR 422
Taylor v Johnson [1983] HCA 5
2 citations
Jump To
Cite 1 - [1983] HCA 5
Cite 2 - [1983] HCA 5
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
1 citation
Jump To
Cite 1 - (1988) 164 CLR 387
Waltons Stores (Interstate) Ltd v Maher (1988) HCA 7
1 citation
Jump To
Cite 1 - (1988) HCA 7
Wily v Commonwealth of Australia (1996) 66 FCR 206
1 citation
Jump To
Cite 1 - (1996) 66 FCR 206

Cases Citing

Case NameFull CitationFrequency
Arawak Holdings Pty Ltd v Jackson [2021] QCA 622 citations
JAB v Executors of MST(2022) 12 QR 213; [2022] QSC 2262 citations
Jackson v Arawak Holdings Pty Ltd [2016] QSC 1334 citations
Queensland Nickel Pty Ltd (in liq) v Queensland Nickel Sales Pty Ltd[2018] 3 Qd R 133; [2017] QSC 3051 citation
1

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