Former Perth gelding Disposition was the horse many expected to win the Victoria Handicap but it was another horse from the west who took the honours at Caulfield.

Watermans Bay was coming off a Newmarket Handicap failure but bounced back to form with a short-neck victory in Saturday's Group Three 1400m race as the favourite Disposition ($2.35) missed a place.

The Dan Morton-trained Watermans Bay ($16) was fifth of sixth in the Group One Lightning Stakes at Flemington before failing to beat a runner home in the Newmarket.

"We came into today after a disappointing effort last start, things went a bit pear shaped in that run but he was working super going into the Newmarket and we just had to put him back together for this," Morton said.

Morton said there were issues out of the Newmarket but he didn't overtax Watermans Bay leading into Saturday's race and was counting on residual fitness from a Perth summer campaign.

Watermans Bay was second in the Group One Winterbottom Stakes in his first start for Morton in November before winning the Group Three AJ Scahill Stakes.

"I think we'll be keen to put him in the paddock now," Morton said.

Watermans Bay settled midfield with cover under Steven Arnold and was presented at the right time to chase down his rivals.

The front-running Sistine Demon was aiming for his second Victoria Handicap and went close but was collared late as Watermans Bay defeated The Peak by a short neck.

Sistine Demon another nose away third.

"From about the 600-metre mark he started to tow me into it and I was pretty confident from there," Arnold said.

Disposition was coming off a setback which ruled him out of the Australian Guineas and jockey William Pike was disappointed with the gelding's performance for fourth.

It was the latest stakes win for Morton and Arnold who combined for Group One success with Scenic Blast winning the Lightning Stakes, Newmarket Handicap and King's Stand Stakes in 2009.

Arnold was suspended for seven meetings for careless riding in an earlier race on Sir Berus.

His ban starts straight away and he is free to return next Saturday at Randwick where he is booked to ride Griante in the Sapphire Stakes.