The caveator’s shares in the mortgagor were allegedly forfeited as a result of non-payment of a call contribution. She claimed her shares were invalidly forfeited and an interest in property pursuant to a resulting, implied or constructive trust and lodged a caveat. The company which owned the property sought removal of the caveat under section 90(3) of the Transfer of Land Act to permit settlement of presales to occur.
A share in a company does not confer any legal or equitable interest in the company’s assets, a share being a separate piece of property.
The court found the caveator’s claim doomed to fail because the caveator had no prima facie case, no likelihood of success and ordered removal of the caveat. Even though it was unnecessary to consider the balance of convenience, the court found that it favoured removal of the caveat because it acted as an absolute fetter on settlement and none of the development costs had been borne by the caveator. The court said:
The lodging of the caveat has all the attributes of a ‘bargaining chip’. The submission that the settlement proceeds of the development should be held pending the resolution of the disputes is flawed.