Australian Wine Industries Pty Ltd v Attilio Imbrogno and Giuseppina Imbrogno Australian Wine Industries Pty Ltd v Attilio Imbrogno and Luigi Imbrogno Australian Wine Industries Pty Ltd v Attilio Imbrogno,

[1994] SASC 4667

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA BURLEY J

CWDS
Real property - caveats - Application for leave to amend caveat and for an extension of time for the removal of the amended caveat - whether power to grant leave to amend caveat - whether caveat, if amended, should be permitted to remain on title - no undertaking as to damages. HELD: no power to amend caveat - application refused. Real Property Act (SA) s191. Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198, applied.

HRNG ADELAIDE, 14 April 1994 #DATE 14:7:1994

Counsel for appellant:        Mr Swan

Solicitors for appellant:     Wallmans

Counsel for respondents:     Mr G Stathopoulos

Solicitors for respondents: Zacharoyannis Luppino and
  Eckermann

ORDER
Applications refused.

JUDGE1 BURLEY J In these three actions the plaintiff seeks an order extending the time for removal of a caveat. The three applications were heard together. With one exception, in each action the defendants are the registered proprietors of the parcels of land the subject of the caveats. The exception is that in Action No. 472 of 1994, not all of the registered proprietors of the land contained in Certificate of Title Register Book Volume 4154 Folio 912 have been joined as defendants in that action.

2. According to the affidavits filed by the plaintiff in each action, on the 10th of June 1993 credit accounts were established whereby the plaintiff would supply goods and services to a company called IMB Liquor Importers Pty Ltd on credit. In addition, on that day the first defendant in each action, Attilio Imbrogno, personally guaranteed the indebtedness between the plaintiff and the company.

3. Paragraph 5 of the guarantee provides:-
    "The guarantor/s charge in favour of Australian Wine
    Industries Pty Ltd all of our right title and interest
    held either solely or together with any other person or
    corporation in common or jointly whether legal or
    equitable in all real estate in which I/we may have such
    interest or interests."

4. The caveats in respect of each of the parcels of land were prepared in the name of Australian Wine Estates Pty Ltd as the caveator and, with the exception already noted, name the caveatees as all of the registered proprietors. The caveats also recite that the "caveator claims an estate or interest as mortgagee under or pursuant to a guarantee made by the caveatee in favour of the caveator in which the caveatee charges his legal or equitable interest in the land in favour of the caveator".

5. There are several acknowledged mistakes in the procedures followed by the plaintiff: first, the charge in the guarantee was given to Australian Wine Industries Pty Ltd and not to Australian Wine Estates Pty Ltd. The mistake is not a misnomer as each named company is a different entity. Second, the charge was only given by the first defendant but the caveat asserts that all of the registered proprietors gave the charge. This is not the case and consequently to the extent that the caveat purports to operate in respect of interests other than those held by Attilio Imbrogno, the caveat is too wide. Third, the nature of the equitable interest claimed is that as mortgagee whereas, at best, the plaintiff has an equitable charge.

6. I also make mention of the fact that all of those caveatees named in the caveat who warned of the caveat have been joined as defendants in the various actions. No point was taken in this regard but it seems to me that it was not necessary for the plaintiff to join all of the persons named as caveatee once the plaintiff accepted, as it did, that it only had a charge over any interest held by the first defendant.

7. The plaintiff has largely recognised the deficiencies in the procedures followed. At the hearing of the applications counsel for the plaintiff sought to amend the application in each action so that the plaintiff might seek an order giving leave to the plaintiff to amend the caveat to correct the defects therein. Leave to amend the application (as opposed to leave to amend the caveat) was not opposed and leave was granted accordingly. The application so amended, in essence, sought an order granting leave to amend the defective caveats by deleting reference to registered proprietors other than the first defendant and by wording the claim in the following manner:
    "The caveator claiming an estate as equitable chargee or
    mortgagee under or pursuant to a guarantee dated 10th
    June 1993 granted by the caveatee in favour of the
    caveator in which the caveatee charges his legal or
    equitable interest in the land in favour of the
    caveator."

8. The defendants accepted that if the words "or mortgagee" were removed from the proposed amendment, and if the caveats had been so worded when originally lodged, they would not have been in a position to warn them. I take the defendants to concede thereby that if there is power to amend the caveats and the discretion to allow an amendment is exercised in favour of the plaintiff, the defendants accept that a triable issue has been established on the affidavits, namely, whether or not the plaintiff has an effective charge over the interest of the first defendant in the various properties. In addition, subject to one matter to which I will refer shortly, I take the defendants to accept that the balance of convenience lies in favour of the plaintiff. In that event all but one of the requirements referred to by Cox J in Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198, would have been made out. The requirement not fulfilled in this case is the requirement to give the usual undertaking as to damages. This was raised with counsel for the plaintiff during the course of submissions and instructions were taken by him in that regard. Although the opportunity was given to the plaintiff to give an undertaking as to damages, that undertaking has not been proffered by the plaintiff.

9. In Whallin Cox J said, as to the significance of an undertaking as to damages:-
    "I do not stay to consider whether, having regard to the
compensation provisions of paragraph IX of s.191, the
    caveator could be required to give such an undertaking,
    because there can be no doubt that he would be entitled
    to offer the undertaking voluntarily, and one may expect
    that he would ordinarily be willing to do that. If for
    some reason he were not, he would have to seek a
    different remedy."

10. It seems to me that his Honour considered that if an applicant for an extension of time for the removal of a caveat seeks an extension of time until trial or until further order, the applicant needs to proffer the usual undertaking as to damages in order to be successful. So much is apparent not only from the passage cited above but from the contents of his Honour's judgment generally. In such circumstances, there being no reason why the undertaking as to damages should be dispensed with, the absence of the undertaking seems to me to be a fatal defect which must necessarily lead to a refusal of an extension of time for the removal of the caveat even if the caveat were to be amended in terms sought by the plaintiff.

11. In case I am wrong on that view, it is necessary to determine whether or not the court has power to amend the caveat. My researches and those of counsel have not been able to find a South Australian authority dealing with the question of whether or not caveats may be amended by leave of the court. There is some interstate authority on the topic and counsel referred to cases in Victoria and Queensland which are to the effect that the court may have a limited power to allow amendments. The legislative schemes in the other jurisdictions are not precisely the same as the provisions of Part XVI of the Real Property Act 1886 as amended. Although Paragraph VII of s.191 of the Act allows the court to "make such order in the premises... as shall seem just" it is significant that Paragraph XI of s.191 provides that it "shall not be lawful for any caveator... to lodge a further caveat relating to the same matter without the leave of the court".

12. In my view, the latter provision provides for the situation where mistakes are made in the lodging of the original caveat and empowers the court to grant leave to lodge a further caveat which is correct both as to form and substance. This was the course taken by Cox J in Whallin. In that case he found that there were defects in the caveat as originally lodged but he granted leave to the caveator to lodge a further caveat. It seems to me that the inclusion of Paragraph XI provides a practical solution to the case where, among other things, mistakes are made in the wording of a caveat. It provides for the filing of an additional caveat with the leave of the court. At the very least it enables the court to deal with a situation where a caveat as originally lodged is defective and to give a determination as to whether a further, differently worded, caveat may be lodged. In those circumstances there is no need to proceed to an interpretation of Paragraph VII that gives rise to a power to amend.

13. Further, an examination of the facts of these cases leads to the conclusion that, even if there is a power to grant leave to amend, the plaintiff does not need to apply for leave. Australian Wine Estates Pty Ltd lodged caveats which were obviously defective in a number of material ways. Once it was recognised by the plaintiff that the caveats were defective it has always been open to the plaintiff to lodge its own caveats. No leave of the court would be required in that regard because it is equally obvious that the new caveats do not relate to the same "matter". The caveats originally lodged disclosed a caveator who never at any time had the relevant interest. When this was pointed out to counsel for the plaintiff, the reply was given that the Registrar-General had some doubts as to whether the further caveat could be lodged on the relevant titles without the leave of the court. In my view such a reservation on the part of the Registrar-General was mistaken. As such, any difficulty that the plaintiff may have had in lodging a further caveat does not seem to me to be a factor in support of the plaintiff's contention that the court had power to permit the original caveats to be amended. Consequently, if, as a matter of law, the plaintiff was able to lodge a caveat (and I refrain from saying "a further caveat" because the original caveat was lodged by a different company), no necessity to amend the original caveat arises. Indeed it might be said that the original caveat, if a power to amend exists, could only be amended at the request of one or more of the parties named therein.

14. In any event, even if I am wrong in my conclusion that the provisions of s.191 of the Real Property Act do not confer upon the court a power to permit amendments to caveats lodged at the Lands Titles Office, I would not permit the amendments sought to be made by the plaintiff because the defects in the original caveat go to matters of substance and not of form.

15. For the above reasons, the amended application in each action will be refused. Given that the plaintiff is unable to amend the defective caveat, there is no basis for extending the time for the removal of the caveats as originally lodged. Because, by agreement, the time for removal of the caveats has been extended until further order it will be necessary to make an order for the removal of the caveats. I will hear counsel as to costs.