Apartment Developments Pty Ltd v Johnson - [2013] VSC 136

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
PRACTICE COURT

No. 519 of 2013

APARTMENT DEVELOPMENTS PTY LTD (ACN 131 583 705)	Plaintiff
v
ANNE MY JOHNSON	First Defendant
- and -
THE REGISTRAR OF TITLES for Victoria	Second Defendant

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JUDGE:	McMillan J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 February 2013
DATE OF JUDGMENT:	26 March 2013
CASE MAY BE CITED AS:	Apartment Developments Pty Ltd v Johnson
MEDIUM NEUTRAL CITATION:	[2013] VSC 136

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REAL PROPERTY – Caveat – Application to remove caveat – Transfer of Land Act 1958 s 90(3) – Serious question to be tried – Estate or interest in land – Balance of convenience

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Burgess, solicitor of Henderson and Ball Lawyers
For the First Defendant	Mr J Searle	John Dunne and Associates Lawyers

HER HONOUR:

Issue for Determination

The issue for determination is whether the Court should exercise its discretion under s 90(3) of the Transfer of Land Act 1958 (‘the Act’) to remove a caveat lodged by the first defendant claiming an interest in the property pursuant to a resulting, implied or constructive trust.

Factual Background

The plaintiff company is the registered proprietor of the property known as 199–201 Rouse Street, Port Melbourne (‘the property’). On 8 August 2011, Mr Ross Johnson, the husband of the first defendant, Mrs Anne Johnson, lodged a caveat on her behalf, claiming an estate in fee simple in the property.

The grounds of claim in the caveat stated: ‘The registered proprietor holds the property as trustee for itself and the caveator pursuant to a resulting implied or constrcutive [sic] trust’.[1]
[1]Exhibit D to the affidavit of Leslie Francis Sandy sworn 1 February 2013.

The background to the claim by Mrs Johnson arises from the development of the property. At that time, Mr Johnson was the sole director and shareholder of the plaintiff company. Mr Johnson told Mr Leslie Sandy that the plaintiff had secured an option to purchase the property. Mr Johnson needed funding to develop the project and he offered Mr Sandy a half share in the project and in the plaintiff company if Mr Sandy advanced the necessary funding to the plaintiff. Mr Sandy agreed with the proposal and, on 20 October 2009, Mr Johnson transferred half of the shares to a company controlled by Mr Sandy, known as Les Sandy & Associates Pty Ltd (‘LSA’). At the same time, Mr Johnson transferred the remaining 50 per cent of the shares in the plaintiff to Mrs Johnson and she was appointed a director of the plaintiff.

Subsequently, negotiations took place between the plaintiff and the owners of land adjoining the property and it was agreed to undertake a joint development on both properties. It was also agreed to offer a share of the project to the nominated builder, Mr Fred McKenzie. The result of these negotiations and agreements was that the shareholding of the plaintiff was then held by Mr Sandy through another…

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: [2013] VSC 136
Decision Date: 26 March 2013

CaseChat Overview and Summary

The case of Apartment Developments Pty Ltd v Johnson was heard in the Supreme Court of Victoria. The dispute centred on the validity of a caveat lodged by the defendant, Johnson, over a property owned by Apartment Developments Pty Ltd. The plaintiff sought to remove the caveat to proceed with the sale of the property, arguing that the caveat was unjust and should not impede the transaction. The legal issues before the court involved the interpretation of the Transfer of Land Act 1958 s 90(3) and the criteria for determining a serious question to be tried. Specifically, the court had to assess whether the defendant's claim had sufficient merit to justify the maintenance of the caveat, and if the balance of convenience favoured the plaintiff's application to remove it.

The court examined the evidence provided by both parties to determine if the defendant had a serious question to be tried concerning an estate or interest in the land. It considered the merits of Johnson's claim and whether it was likely to succeed. Additionally, the court weighed the balance of convenience, which required an assessment of the relative hardship that would result from either maintaining or removing the caveat. In doing so, the court was required to consider the potential impact on both parties if the caveat was not removed and if the defendant's claim ultimately failed.

The Supreme Court found that the defendant's claim did not constitute a serious question to be tried and that the balance of convenience favoured the removal of the caveat. The court held that Johnson's assertions did not present a plausible or substantial argument that could lead to a successful outcome. Consequently, the court ordered the caveat to be removed, enabling Apartment Developments Pty Ltd to proceed with the sale of the property. The decision underscored the importance of the criteria set out in the Transfer of Land Act 1958 s 90(3) in determining the validity of caveats and the appropriate course of action in such disputes.

Orders