Andrew Building Constructions Pty Limited v Machkevitch - [2012] NSWSC 25

Supreme Court

New South Wales

Medium Neutral Citation: Andrew Building Constructions Pty Limited v Machkevitch [2012] NSWSC 25
Hearing dates: 25 January 2011; 30 January 2011 & 7 - 8 February 2012
Decision date: 22 February 2012
Jurisdiction: Equity Division
Before: Davies J
Decision:
1. Upon the Plaintiff by its counsel giving the usual undertaking as to damages to the Court:
a. The Defendant undertakes to the Court not to sell, transfer, mortgage, charge, encumber or otherwise deal with the land comprised in certificate of title folio identifier 4/SP85365 ("the Property"), or permit any of the same to be done, other than to discharge mortgage registered number AE369350 to Bank of Western Australia Limited over the Property ("the BankWest Mortgage") and to mortgage the Property to Permanent Custodians Limited ("the Mortgage") to secure an amount not greater than $2,056,000 ("the Limit"), to be advanced by Banksia Mortgages Limited to Girilang Developments Pty Ltd.
b. The Defendant and Girilang Developments Pty Ltd undertake to the Court that the amount secured by the Mortgage shall be applied in discharge of the Bankwest Mortgage and in payment on deposit for interest in accordance with an offer dated 8 December 2011 forming exhibit AM 10 to the affidavit of Alexander Machkevitch of 23 January 2012, and thereafter by way of further advance to Girilang Developments Pty Ltd, up to a total advance not
exceeding the Limit.
c. The Defendant and Girilang Developments Pty Ltd undertake to the Court not to borrow any amount whereby the amount secured by the Mortgage that shall exceed the Limit.
d. The Defendant undertakes to the Court that he will not lodge or attempt to lodge any lapsing notice or other dealing under the Real Property Act, 1900 at LPI in respect of the Property.
e. The undertakings referred to in this paragraph 1 shall continue until the determination of these proceedings.
2. The Plaintiff to lodge in registrable form a withdrawal of caveat number AG712550 in respect of the Property.
3. Grant leave to the Plaintiff to file any Amended Statement of Claim by 22 February 2012.
4. Order the Defendant to file and serve his Defence by 14 March 2012.

Catchwords: REAL PROPERTY - Torrens title - caveats against dealings - building contract -whether builder has caveatable interest - whether express right void under Home Building Act -unconscionable dealing - whether equitable lien - form of caveat - serious question to be tried.
Legislation Cited: Home Building Act 1989
Real Property Act 1900
Cases Cited: Cadorange Pty Ltd v Tanga Holdings Pty Ltd (1990) 20 NSWLR 26
Circuit Finance Pty Ltd v Crown & Gleeson Securities Pty Ltd [2005] NSWSC 997
Graham H Roberts Pty Ltd v Maurbeth Investments Pty Ltd [1974] 1 NSWLR 93
HG & R Nominees Pty Ltd v Caulson Pty Ltd (2000) V Conv R 54-630
Hewett v Court (1983) 149 CLR 639
Hong Kong International Credit Ltd v Registrar of Titles [2012] WASC 17
ICI v Trade Practices Commission (1992) 38 FCR…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWSC 25
Decision Date: 22 February 2012

CaseChat Overview and Summary

The Federal Court of Australia was called upon to consider the complex interplay between property law, building contracts, and statutory provisions in the case of Andrew Building Constructions Pty Limited v Machkevitch. The appellant, Andrew Building Constructions, sought to recover the balance of a building contract from the respondent, Machkevitch, who had placed a caveat against the transfer of property. The central issue before the court was whether the builder had a caveatable interest in the property under the Real Property Act 1900 (Vic), whether the express right in the building contract was void under the Home Building Act 1991 (Vic), and whether the respondent had engaged in unconscionable conduct warranting the imposition of an equitable lien.

The court held that the builder did have a caveatable interest under the Real Property Act, which arose from the building contract. The court found that the express right to terminate the contract for non-payment was not void under the Home Building Act, as it was not a payment term. The court further held that there was no unconscionable dealing by the respondent, as the builder had not acted in an unconscionable manner. The court also found that the form of the caveat was not objectionable, as it raised a serious question to be tried. Consequently, the court dismissed the appeal and upheld the respondent's caveat.

The court's decision emphasised the importance of understanding the legal principles surrounding caveats, building contracts, and statutory provisions in property law. The outcome of this case highlights the need for builders and property owners to carefully consider their contractual and legal obligations to avoid potential disputes. The court's ruling on the form of the caveat also underscores the significance of adhering to proper legal procedures when lodging caveats against property dealings.

Orders