Andara Homes Pty Limited v Hong Thuy Tai
[2014] ACTSC 38
•3 February 2014
ANDARA HOMES PTY LIMITED v HONG THUY TAI
[2014] ACTSC 38 (3 February 2014)
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – Standard home building contract of the Master Builders Association of the Australian Capital Territory – Equitable charge under Contract giving rise to a caveatable interest – Application to extend caveat to further lapsing – Applicant in a proceedings for an application for extension generally required to commence proceedings for the recovery of money as condition of extension – Applicant must give an undertaking as to damaged in an application for extension – Caveat extended by twenty-eight days – Where proceedings seeking payment are commenced in this twenty-eight day period, the caveat is extended until the conclusion of the proceedings so commenced
CONVEYANCING – Land Titles under the Torrens System – Caveats against dealings – Extension of caveat – Need for undertakings as to damages
Corporations Act 2001 (Cth)
Evidence Act 2011 (ACT), s 69
Land Titles Act 1925 (ACT), ss 104A, 106, 108
Real Property Act 1900 (NSW), s 74K(3)
Andrija Pty Ltd v Mohamed [2013] ACTSC 120
Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) NSWLR 459
Danthanarayana v GR8 Constructions Pty Ltd (2012) 201 FLR 347
GR8 Constructions v O’Donnell [2011] ACTSC 925
Kingston Constructions Pty Ltd v Crispel Pty Ltd (1991) 5 BPR 11,987
Matken Constructions Pty Ltd v James [2009] ACTSC 100
EX TEMPORE JUDGMENT
No. SC 42 of 2014
Judge: Refshauge J
Supreme Court of the ACT
Date: 3 February 2014
IN THE SUPREME COURT OF THE )
) No. SC 42 of 2014
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:ANDARA HOMES PTY LIMITED
Applicant
AND:HONG THUY TAI
Respondent
ORDER
Judge: Refshauge J
Date: 3 February 2014
Place: Canberra
UPON the Applicant giving the usual undertaking as to damages.
THE COURT ORDERS THAT:
The caveat lodged on 15 November 2013 and numbered 1891681 and referred to in the lapsing notice of 23 January 2014 as caveat number 1898286 be and the same is extended for twenty-eight days.
If proceedings seeking payment of the amount claimed by the Applicant is filed and served on the Respondent within twenty-eight days, the caveat is extended until the conclusion of the proceedings so commenced.
A copy of this order be served on the Respondent within seven days and either party be at liberty to move the Court to vary this order on giving the other party two days’ notice.
On 17 February 2012, the Applicant, a building company registered as a corporation under the Corporations Act 2001 (Cth), entered into a building agreement with the Respondent, the owner of a certain Crown Lease at Crace, in the Australian Capital Territory, for the construction of a residence on that land.
The Contract was in the form of the standard home building contract of the Master Builders Association of the ACT. Clause 31 of the Contract provided:
The Owner charges the Site with the payment to the Builder of all money payable to the Builder under this Contract or otherwise from the carrying out of the Works.
A clause in very similar terms has been considered in other cases. In Matken Constructions Pty Ltd v James [2009] ACTSC 100 at [5], Master Harper accepted that this was sufficient to support a caveatable interest. I agreed in GR8 Constructions v O’Donnell [2011] ACTSC 925 at [4]. I see no reason to depart from that decision. See also Andrija Pty Ltd v Mohamed [2013] ACTSC 120 at [22]-[25], and the cases there cited. I note in particular that an identical clause to the clause in this Contract was held by Foster J to create an equitable charge in Danthanarayana v GR8 Constructions Pty Ltd (2012) 201 FLR 347 at 355; [45].
The Applicant claimed a progress payment of $13,636.36 on 4 February 2013, being the final payment on practical completion. Under Clause 21 of the Contract, the Respondent was required to pay such a claim within seven days from the date the claim was submitted to the Respondent. The Respondent failed to pay the progress payment claimed, and further payment demands have not resulted in payment.
There are also claimed to be costs of variations that may be payable. I have not any evidence of what these may be or whether any claims have been made for them.
On 14 November 2013, the Applicant lodged a caveat with the Registrar-General, seeking to protect the charge on the land created by Clause 31 of the Contract. I assume, for the purposes of this hearing, that the caveat has been registered. The form of the caveat seems to me to comply on its face with the requirements of the Land Titles Act 1925 (ACT), and so s 104A would require the Registrar-General to enter it on the Register. The caveat is said to be supported by the following caveatable interest set out in the form of caveat lodged with the Registrar-General:
An equitable interest in the land due to the breach of the MBA contract with respect to building work in relation to the land by the registered proprietor herein
The Applicant asserts that a notice under s 106 of the Land Titles Act was served on it on or about 23 January 2014. That section provides, that unless a court otherwise orders, a caveat shall lapse fourteen days after the date of such a notice. Application has now been made to me for an order that the caveat not lapse and that the Registrar-General be restrained from removing the caveat. I am not sure that that is the precise terms of an appropriate order.
The relevant date is, of course, the date of the notice: see GR8 Constructions Pty Ltd v O’Donnell at [9]. Neither the notice nor a copy of the notice was annexed to an affidavit. A copy was tendered, however. It seems to me that it is admissible under s 69 of the Evidence Act 2011 (ACT) and so I admitted it. It is dated 23 January 2014 and so the caveat will lapse unless extended before 6 February 2014. Of course, that requires a sealed copy of the court order to be lodged with the Registrar-General, making the time limits somewhat short.
In GR8 Constructions Pty Ltd v O’Donnell, at [24]-[30], I noted that the decision whether to extend a caveat so to avoid it lapsing is akin to the decision whether to grant an interim injunction, though, of course, the Court is exercising a statutory jurisdiction and not an equitable one: see Kingston Constructions Pty Ltd v Crispel Pty Ltd (1991) 5 BPR 11,987. Indeed, it is generally required that the Applicant for an extension, as a condition of the extension, commence appropriate proceedings for the relief to which he, she or it claims, whether registration of an interest, a declaration of an interest in the land or, as here, the recovery of money.
I note that in New South Wales the practice is to require the registered proprietor to be served with the application, but that is required by the legislation, s 74K(3) of the Real Property Act 1900 (NSW), a provision not included in the Land Titles Act. Nevertheless, the application has been served. Service was effected, however, only on a person who agreed to provide a copy of the document to the Respondent. It was not personal service. Informal service, however, was effected by email as early as 29 January 2014, when an unsealed copy of the originating application and supporting affidavit was served on the Respondent. The Respondent did not appear at these hearings.
The usual price for obtaining an extension of a caveat is also the giving of an undertaking as to damages, as pointed out by Waddell AJA in Beca Developments Pty Ltd v Idameneo (No 92) Pty Ltd (1990) NSWLR 459 at 478. That provision may be supported by legislation in New South Wales and my attention was drawn to s 108 of the Land Titles Act. That, however, provides for compensation should the caveat have been originally lodged without reasonable cause. It does not seem to me it necessarily deals with the issue of damages by the extension of the caveat should that cause such damages.
Given that this is an interim application, however, and can be varied, I consider that the Applicant has made out its case for an extension of the caveat. The interest of the Respondent can be protected by service of the order and liberty to apply. Accordingly, upon the Applicant by its counsel giving the usual undertaking as to damages, I will order:
1. I order that the caveat lodged on 15 November 2013 and numbered 1891681 and referred to in the lapsing notice of 23 January 2014 as caveat number 1898286 be and the same is extended for twenty-eight days.
2. If, within the twenty-eight days proceedings seeking payment of the amount claimed by the Applicant is filed and served on the Respondent, the caveat be and is hereby extended until the conclusion of the proceedings so commenced.
3. A copy of this order is to be served on the Respondent within seven days and either party is to be at liberty to move the Court to vary this order on giving the other party two days’ notice.
I reserve the question of costs.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Refshauge.
Associate:
Date: 31 March 2014
Counsel for the Applicant: Mr C Painter
Solicitor for the Applicant: Elringtons
Counsel for the Respondent: No appearance
Solicitor for the Respondent: No appearance
Date of hearing: 3 February 2014
Date of judgment: 3 February 2014
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