BCA Asset Management Group Pty Ltd v Sand Solutions (Vic) Pty Ltd
[2021] VSC 177
•13 April 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
| AT MELBOURNE | ||
| COMMON LAW DIVISION | ||
| PROPERTY LIST | ||
S ECI 2021 00976
| BCA ASSET MANAGEMENT GROUP PTY LTD (ACN 618 642 425) | Plaintiff |
| v | |
| SAND SOLUTIONS (VIC) PTY LTD (ACN 161 917 648) AND ORS (according to the Schedule attached) | Defendants |
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JUDGE: | Derham AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 April 2021 |
DATE OF JUDGMENT: | 13 April 2021 |
CASE MAY BE CITED AS: | BCA Asset Management Group Pty Ltd v Sand Solutions (Vic) Pty Ltd & Ors |
MEDIUM NEUTRAL CITATION: | [2021] VSC 177 |
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CAVEAT — Removal – Caveator lodging caveat claiming an interest in land as chargee – Caveat lodged without proper basis – No serious question to be tried – No interest of supporting caveat lodged – Balance of convenience favours removal of caveat in any event – Goldstraw v Goldstraw [2002] VSC 491; Piroshenko v Gosjman (2010) 27 VR 489; Percy & Michele Pty Ltd v Gangemi [2010] VSC 530; Sylina v Solanki [2014] VSC 2; Carbon Black Pty Ltd v Launder [2015] VSCA 126 referred to.
COSTS — Indemnity costs – Whether first defendant should pay the plaintiff’s costs on an indemnity basis – Caveat not having a proper basis, costs awarded against the first defendant on an indemnity basis – Goldstraw v Goldstraw [2002 VSC 491; Love v Kempton [2010] VSC 254; Sovereign MF Ltd (In liq) v EOS Janus Holdings Pty Ltd referred to.
INJUNCTION — Plaintiff seeks an order restraining the first and second defendants from lodging for registration on the title to certain land any further caveat claiming an interest in the land—Injunction granted — Australian Broadcasting Corporation v. O’Neill, (2006) 227 CLR 57; Bradto Pty Ltd v State of Victoria; Tymbook Pty Ltd v State of Victoria (2006) 15 VR 65, referred to.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr E Moon | Rothwell Lawyers Pty Ltd |
| For the First and Second Defendants | No appearance | |
| For the Third Defendant | No appearance (Letter written) |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Background Facts............................................................................................................................... 2
Applicable Law................................................................................................................................... 7
Caveat removal and costs............................................................................................................ 7
Costs.............................................................................................................................................. 10
Injunction..................................................................................................................................... 11
Submissions and Consideration................................................................................................... 13
Costs.............................................................................................................................................. 13
Injunction..................................................................................................................................... 17
Conclusion......................................................................................................................................... 18
HIS HONOUR:
Introduction
The plaintiff is the registered proprietor of the land situate and known as 223 Coopers Road, Devenish, Victoria (the ‘Land’).[1] The first defendant (‘Sand Solutions’) had, at the commencement of this proceeding, lodged on the titles to the Land a caveat claiming an interest as the grantee of an easement pursuant to an agreement with the previously registered proprietor, Jane Esther Attwood (‘Ms Attwood’) dated 25 June 2010.[2] The caveat was withdrawn after service of this proceeding.
[1]Being the land more particularly described in Certificates of Title Volume 1153 Folio 541, Volume 11153 Folio 542 and Volume 9738 Folio 026.
[2]Caveat AU088841L registered on 26 February 2021.
The second defendant (‘Colling’) is the sole director of Sand Solutions. He had lodged caveats on the titles to the Land on 1 February 2010, (withdrawn 12 January 2011)[3] and 23 November 2011 (withdrawn on 14 September 2016).[4] Sand Solutions had previously lodged a caveat on 20 March 2018 claiming an interest as grantee of a profit à prendre. This caveat was withdrawn in consequence of the commencement of a proceeding by Ms Attwood against Sand Solutions and the Registrar of Titles (proceeding S CI 2018 01065). As in this case, in that proceeding the caveat was withdrawn before the application reached the Court. The order finally made on 28 March 2018 was that Sand Solutions pay the plaintiff’s costs on a standard basis and the proceeding be dismissed. The proceeding was brought to enable the plaintiff to complete its purchase of the Land from Ms Attwood.
[3]Caveat AH008098E.
[4]Caveat AJ332765N.
In this application the plaintiff seeks orders that Sand Solutions and Colling:
(a) pay the plaintiff’s costs of the proceeding on an indemnity basis; and
(b) be restrained by injunction from lodging with the third defendant for registration any further caveat claiming an interest in the Land pursuant to a Extraction of Sand Agreement dated 25 June 2010 (‘Sand Extraction Agreement’), a profit à prendre or easement.
The third defendant (‘Registrar’) has, in the usual way, notified the Court in writing that she does not intend to appear. The Solicitor for Sand Solutions and Colling has also written to the Court (by email) stating that his clients do not intend appearing. I should add that it is clear that the originating process, summons and affidavits in support have been served and that in response to demands that the caveat be removed, it has been voluntarily withdrawn.
Background Facts
The plaintiff relies on the affidavits of Bradley Charles Allender sworn on 31 March 2021 (‘Allender affidavit’), Matthew James Sussmilch sworn on 9 April 2021 (‘Sussmilch affidavit’), to which is exhibited the affidavit of Ms Attwood sworn on 26 March 2018 and filed in proceeding S CI 2018 01065 (‘Ms Attwood’s affidavit’) and Jack Michael Blaskovic sworn on 9 April 2021 (‘Blaskovic’s first affidavit’) and 12 April 2021 (an affidavit of service).
In order to understand the basis for the costs order and injunction sought it is necessary to set out some history of dealings with the Land. These are summarised in the plaintiff’s written submissions, which are drawn from the facts revealed in the Allender affidavit and the Sussmilch affidavit, in particular from Ms Attwood’s affidavit in the earlier proceeding. After considering the material upon which they are based, I am satisfied that the plaintiff’s Counsel’s summary of the facts is correct.
The facts are as follows:
(a) on 3 April 1987, Ms Attwood’s husband, William James Attwood (‘Mr Attwood’), and Alfred John Russell were registered as joint proprietors of the Land in certificate of title volume 09738 folio 026, being a lot of 29.16 hectares;
(b) on 17 April 2013, certificate of title volume 09738 folio 026 was transferred to Mr Attwood so that he became the sole proprietor;
(c) on 16 February 2009, Broken Creek Developments Pty Ltd (‘BCD’) was incorporated and Colling was appointed as its sole director and member;
(d) on 6 April 2009, Geoffrey William Hill was appointed as Miss Attwood’s administrator by order of the Victorian Civil and Administrative Tribunal pursuant to the Guardianship and Administration Act 1986 (Vic);
(e) on 20 August 2009, certificates of title volume 11153 folios 541 and 542 were created upon the registration of plan of subdivision 624198V. These titles together with certificate of title volume 09738 folio 026 comprise the Land;
(f) on 1 February 2010, Colling and BCD lodged caveats against the title to the Land claiming an interest as a beneficiary under a constructive trust of which Mr and Ms Attwood were the constructive trustees (‘First Caveats’). The First Caveats were lodged by Bruce Caldwell of Bruce Caldwell & Associates;
(g) on 16 June 2010, Sand Solutions alleged by its caveat lodged in March 2018, but Ms Attwood denied, that it entered into a profit à prendre agreement. Ms Attwood’s denial is true because Sand Solutions was not incorporated until 14 January 2013 and the only agreement known that might support a profit à prendre is the Sand Extraction Agreement, referred to below, entered into with Devenish;
(h) on 25 June 2010, Ms Attwood (by her Administrator) entered into the Sand Extraction Agreement with Devenish Sands Pty Ltd (ACN 140 574 492) (‘Devenish’) with Colling as guarantor. That agreement:
(i) was conditional on the grant of an Extractive Industry Work Authority under the Mineral Resources (Sustainable Development) Act 1990 (Vic) (‘MRSDA’) and approval of Devenish’s Work Plan under that Act within 180 days of the agreement (clause 2.1);
(ii) was to run for an initial term of 10 years (clause 11.1); and
(iii) could be terminated by Ms Attwood on the happening of a Default Event, which was defined to include an Insolvency Event (clauses 12.1 and 13.1).
(i) on 12 January 2011, Colling and BCD withdrew the First Caveats;
(j) on 26 May 2011, Ms Attwood was registered as the sole proprietor of the Land;
(k) on 29 July 2011, the Department of Primary Industries granted Work Authority 1431 to Devenish (‘Work Authority’). It is not clear whether Ms Attwood waived compliance with the conditions precedent or when the Sand Extraction Agreement commenced;
(l) on 23 November 2011, Colling lodged a further caveat in dealing number AJ332765N against the title to the Land claiming an interest as beneficiary under a constructive trust between himself and Ms Attwood (‘Second Caveat’). The Second Caveat was also lodged by Bruce Caldwell;
(m) on 12 April 2012, VCAT revoked the administration order relating to Ms Attwood;
(n) Sand Solutions was incorporated on 14 January 2013. At present, the members of Sand Solutions are Alan and Ben Thornton - 2 of 8 ordinary shares, Bruce Caldwell - 2 of 8 ordinary shares and Philip and Jacquelyn Richardson - 4 of 8 ordinary shares;
(o) on 9 July 2014, Work Authority 1431 was transferred from Devenish to Sand Solutions;
(p) on 8 August 2014, Devenish was wound up in insolvency under the provisions of the Corporations Act 2001 (Cth) and John Ross Lindholm was appointed liquidator;
(q) by notice from Mr Lindholm dated 17 April 2015, Devenish disclaimed any interest in the Property under the Sand Extraction Agreement;
(r) Colling withdrew the Second Caveat on 13 September 2016;
(s) commencing in July 2017, Sand Solutions sought access to the Land for the purposes of remediation. At all times, Sand Solutions proceeded on the basis it had no right of access to the Land;
(t) on 10 November 2017, Ms Attwood entered into a contract of sale of real estate with BCA Civil Pty Ltd under which she agreed to sell the Property for $1.8 million;
(u) on 20 March 2018, Sand Solutions lodged a caveat registered in dealing number AQ839944B against certificates of title volume 11153 folios 541 and 542 claiming an interest as the grantee of a profit à prendre pursuant to an agreement entered into 16 June 2010 (‘Third Caveat’);
(v) on 23 March 2018, Ms Attwood commenced proceeding S Cl 2018 01065 seeking an order for the removal of the Third Caveat. Before the hearing of that proceeding, the Third Caveat was withdrawn. On 28 March 2018, Zammit J ordered that Sand Solutions pay Ms Attwood’s costs of the application on a standard basis and otherwise dismissed the proceeding;
(w)on 4 May 2018, the plaintiff was registered as the sole proprietor of the Land following settlement of the Contract;
(x) on 1 August 2020, Colling was appointed as the sole director of Sand Solutions;
(y) on 26 February 2021, Sand Solutions lodged the Fourth Caveat claiming an interest as grantee of an easement pursuant to the Sand Extraction Agreement. The Fourth Caveat was lodged by Peter Cahill, solicitor;
(z) by letter dated 18 March 2021, the plaintiff requested that Sand Solutions withdraw the Fourth Caveat; and
(aa) a further email was sent on behalf of the plaintiff on 22 March 2021 advising that an urgent application would be made for the removal of the Fourth Caveat. Sand Solutions’ solicitor, Peter Cahill, advised by email sent on 24 March 2021 that he was conferring with his client on 25 March 2021 and would respond shortly. No further response was received from Mr Cahill and this proceeding was commenced on 31 March 2021. After service of the originating motion and summons on originating motion, Sand Solutions withdrew the Fourth Caveat.
From the Allender affidavit the following also appears:
(a) when acting for Ms Attwood, Mr Sussmilch at no time prepared any grant of an easement by her to Sand Solutions;
(b) Mr Sussmilch was in Court when Zammit J made her order for costs in the previous proceeding. Her Honour said that the Court would take a ‘very dim view’ if Sand Solutions lodged any further caveat;
(c) it is the plaintiff’s intention to use the Land as a commercial water park with caravan facilities (‘the Project’). In order to undertake this development, Mr Allender has been in discussions with various investors to raise capital and/or undertake the project as a joint venture. Mr Allender had one investor committed to the injecting capital into the project, subject to due diligence. The terms of that agreement are subject to a confidentiality clause. Upon undertaking its due diligence, the investor became aware of the existence of the Caveat. The investor withdrew from undertaking any further due diligence and from proceeding with the investment on the basis that any easement running through the Land would substantially affect the manner in which the water park, caravan park and associated facilities could be situated;
(d) other investors who Mr Allender has been dealing with have now told him that they will not proceed until such time as the position regarding the caveat has been determined;
(e) Mr Allender has also been in discussions with the head town planner of Benalla Rural City regarding the project. The Councilors are supporting the project given the amount of jobs and revenue the project is expected to generate in an area with high unemployment. He is concerned with any delay to the project as this may cause the Council to take the view the plaintiff does have the resources or expertise to bring the Project to fruition and may withdraw support. Without Council support, the Project would not be able to be undertaken; and
(f) Mr Allender has now received a letter from one of the investors who contributed $200,000 to the initial purchase price on the basis that she would be a joint venturer in the Project. Given dealing with the caveat will further delay the commencement of the Project, the investor has requested the return of her initial investment together with interest. Mr Allender has informed the investor of the application to remove the caveat and its urgency. She has agreed if the caveat is removed within 30 days she will continue with her investment. However, if Sand Solutions or Colling lodge any further caveats, she will immediately demand the refund of her investment.
Applicable Law
Caveat removal and costs
Although the Fourth Caveat has been withdrawn, it is necessary for an understanding of the costs order to state the principles of law applicable to the application for removal of the caveat. They are as follows:
(a) under s 89(1) of the Transfer of Land Act 1958 (Vic) (‘TLA’), a caveat can only be lodged by a person claiming an estate or interest in the Land. The estate or interest must be established to the requisite standard by the person who lodged the caveat, if the caveat is challenged;
(b) the plaintiff’s application is made pursuant to s 90(3) of the TLA, where any person adversely affected by a caveat lodged under s 89 of the TLA is permitted to ‘bring proceedings in a court against the Caveator for the removal of the caveat’;
(c) section 90(3) of the TLA empowers a court to ‘make such order as the court thinks fit’, and thus gives the Court a discretion. The application is in the nature of a summary procedure analogous to the determination of interlocutory injunctions.[5] The procedure is consequently interlocutory in substance, even though it may give rise to a final order;[6]
[5]Eng Mee Yong v Letchumanan [1980] AC 331, 337 (Eng Mee); Piroshenko v Grosjman (2010) 27 VR 489, [12]-[23] (Piroshenko); Goldstraw v Goldstraw [2002] VSC 491, [30] (Goldstraw).
[6]Eng Mee [1980] AC 331, 337; Smith v Callegari (1988) V Conv R 54-300, 63,858-9; Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37, 43.
(d) the principles applicable were dealt with by Warren CJ in Piroshenko v Grosjman.[7] They are well settled. The authorities establish the following:[8]
[7]Piroshenko (2010) 27 VR 489, [7]-[11].
[8]See, eg, Percy & Michele Pty Ltd v Gangemi [2010] VSC 530, [38]-[48] (Macaulay J); Piroshenko (2010) 27 VR 489, [13]-[20] (Warren CJ); Schmidt v 28 Myola Street (2006) 14 VR 447, 457, [32] (Warren CJ); Goldstraw [2002] VSC 491, [30] (Dodds-Streeton J); Sylina v Solanki [2014] VSC 2, [43] (Sylina).
(iv) the Court’s power under s 90(3) of the TLA is discretionary;
(v) the Caveator bears the onus of establishing that there is a prima facie case to be tried that it does have the estate or interest in land as claimed;
(vi) if the Caveator establishes a prima facie case to be tried in relation to the estate or interest claimed, the Caveator must further establish that the balance of convenience favours the maintenance of the caveat until trial; and
(vii) there is a relationship between the strength of the case in establishing a prima facie case to be tried and the extent to which the Caveator must establish the balance of convenience favours the Caveator; the stronger the prima facie case, the more readily the balance of convenience might be satisfied. It is sufficient that the Caveator show a sufficient likelihood of success that, in the circumstances, justifies the practical effect which the caveat will have on the ability of the registered proprietor to deal with the Land in question in accordance with its normal proprietary rights.
(e) the prima facie case test is often used interchangeably with whether a serious question to be tried is established. The prima facie case test is to be preferred.[9] That does not mean that the Caveator must show that it is more probable than not that at trial the plaintiff will succeed. The Caveator must show that they have a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat, and the preservation of the status quo pending trial;[10]
[9]CFHW Pty Ltd v Burness [2014] VSC 451, [17], citing Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57, 82 (Gummow and Hayne JJ) (O’Neill); Carbon Black Pty Ltd v Launer [2015] VSCA 126, [37] (Carbon Black).
[10]Sylina [2014] VSC 451, [20]; Piroshenko (2010) 27 VR 489, 494; O’Neill (2006) 227 CLR 57, 82.
(f) an application to remove a caveat involves two steps. First, the Caveator must establish that there is a prima facie case – that there is a probability on the evidence before the Court that the Caveator will be found to have the asserted legal or equitable rights or interest in the land. Second, having done so, the Caveator must establish that the balance of convenience favours the maintenance of the Caveat on the title until trial and that the probability of success is sufficient to justify the practical effect which the caveat has on the ability of the registered proprietor to deal with the property in question in accordance with their normal proprietary rights;[11] and
[11]Piroshenko (2010) 27 VR 489, [18].
(g) a caveat is not available as a bargaining chip.[12] The lodging of caveat is a serious business. It has the potential to affect commercial transactions and the lives and financial interests of others, as Dodds-Streeton J noted in Goldstraw:
…the only proper purposes for lodging a caveat against a registered proprietor’s title under s.89(1) of the Act are to protect the estate or interest claimed by the operation of the statutory injunction against the registration of subsequent dealings and to provide notice of the existence of the estate or interest to those who consult the Register. A caveat has a significant potential to obstruct the rights, and to damage the interests, of the registered proprietor and other parties.
…the lodgement of a caveat for an ulterior or collateral purpose constitutes a serious misuse of the relevant statutory provisions.[13]
[12]Goldstraw [2002] VSC 491; Piroshenko [2010] VSC 240, [23].
[13]Goldstraw [2002] VSC 491, [38]-[42]; see also Luther v Sayer [2009] VSC 595; cited by Love v Kempton [2010] VSC 254, [29].
Costs
Under s 24 of the Supreme Court Act 1986 (Vic) the power to award costs is in the discretion of the Court. Whilst the discretion is absolute and unfettered, it has to be exercised judicially, that is, not by reference to irrelevant or extraneous considerations, but upon facts connected with or leading up to the litigation.[14]In the exercise of the discretion, practices or guidelines have developed.[15] These practices or guidelines are not legal rules that confine the exercise of the discretion.[16]
[14]See, eg, Latoudis v Casey (1990) 170 CLR 534, 537; cited with approval in Oshlack v Richmond River Council (1998) 193 CLR 72, 86 [34].
[15]Oshlack v Richmond River Council (1998) 193 CLR 72, 86 [35].
[16]Norbis v Norbis (1986) 161 CLR 513, 537; Oshlack v Richmond River Council (1998) 193 CLR 72, 86 [35].
Although costs are in the discretion of the Court, there is a settled practice (sometimes called a general rule) that in the absence of good reason to the contrary a successful litigant should receive his or her costs.[17] It is not, however, a legal rule devised to control the exercise of the discretion.[18] The purpose of a costs order is to compensate the successful party for the costs incurred, and not to punish the unsuccessful party. That purpose is a guide to the exercise of the discretion.[19]
[17]Ritter v Godfrey [1920] 2 KB 47, 52; Donald Campbell and Co Ltd v Pollak [1927] AC 732, 809; Milne v Attorney-General for the State of Tasmania (1956) 95 CLR 460, 477.
[18]Oshlack v Richmond River Council (1998) 193 CLR 72, 86 [35].
[19]Latoudis v Casey (1990) 170 CLR 534, 563 (Toohey J, Mason CJ agreeing), 567 (McHugh J); Ohn v Walton (1995) 36 NSWLR 77, 79.
The exercise of the discretion to award costs over and above the ordinary is exceptional, being reserved for cases where the losing party has engaged in unmeritorious, or deliberate or high-minded or other improper conduct such as to warrant the Court showing its disapproval and at the same time preventing the successful party being left out-of-pocket.[20]
[20]Australian Guarantee Corp Ltd v De Jager [1984] VR 483, 502; PCRZ Investments Pty Ltd v National Golf Holdings Ltd [2002] VSCA 24; Fountain Selected Meats (Sales) Pty Ltd v Int Produce Merchants PtyLtd (1988) 81 ALR 397, 401.
The most famous statement of the ‘unmeritorious’ ground for an award of costs on an indemnity basis in recent times was made by Woodward J in Fountain Selected Meats (Sales) Pty Ltd v Int Produce Merchants Pty Ltd[21] as follows:
I believe that it is appropriate to consider awarding ‘solicitor and client’ or ‘indemnity’ costs, whenever it appears that an action had been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.
[21](1988) 81 ALR 397, 401. See also Spencer v Dowling [1997] 2 VR 127, 147, 163; Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189; Murdaca v Maisano [2004] VSCA 123.
Before making an order for indemnity costs, the Court needs to be satisfied that the conduct of the party warrants the ordering of costs on an indemnity basis. Special circumstances must be demonstrated which lift the case out of the ordinary.[22] Such conduct includes the commencement or continuation of proceedings in wilful disregard of known facts or clearly established law, as well as the commencement or continuation of such proceedings for an ulterior motive.[23]
[22]Bass Shire Council v King (unreported 15 August 1994), referred to with approval by Winneke P in Spencer v Dowling [1997] 2 VR 127, 147.
[23]Love v Kempton [2010] VSC 254, [19].
Injunction
The granting of an injunction restraining Sand Solutions and Colling from lodging any further caveat on the basis of the Sand Extraction Agreement, or on the basis of an alleged profit à prendre or easement, is an order in aid of the plaintiff’s proprietary right to quiet and peaceful enjoyment of the Land as the registered proprietor of it. It is in the nature of a final or permanent injunction, as opposed to an interlocutory injunction.
Notwithstanding this, it is appropriate in the absence of any appearance from Sand Solutions or Colling to apply principles applicable to the grant of interlocutory injunctions by analogy. There may be some other basis for the belief that there is a subsisting proprietary right to a profit à prendre or easement arising under the Sand Extraction Agreement and that such a right has survived the indefeasibility provisions of the TLA applicable upon the transfer of the Land by Ms Attwood to the plaintiff.
The law applicable need only be shortly stated.[24] The plaintiff must establish:
[24]See generally, Australian Broadcasting Corporation v O’Neill, (2006) 227 CLR 57, [19] (Gleeson CJ and Crennan J), [65]–[83] (Gummow and Hayne JJ). See also Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 and Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, [8]–[13].
(a) a prima facie case for the relief it seeks. This means the plaintiff must show that it has a putative legal or equitable right in respect of which final relief is sought which will justify the restraint sought. The sense in which the test is understood is that the plaintiff must prove prima facie a sufficient likelihood of success to justify in the circumstances the preservation of the status quo until trial, or in this case, any application by Sand Solutions or Collings to discharge the order. The requisite strength of the probability of ultimate success depends on the nature of the rights asserted and the practical consequences likely to flow from the orders sought;
(b) the injury which the plaintiff is likely to suffer must be one for which damages will not provide an adequate remedy; and
(c) the balance of convenience must favour the granting of an injunction. The balance of convenience requires a consideration of the relevant matters favouring or militating against the granting of an injunction and will necessarily involve a consideration of the strength of the plaintiff’s claim. In Victoria, this consideration is further clarified by the decision of the Court of Appeal in Bradto Pty Ltd v. State of Victoria.[25] The court must, in determining whether to grant an interlocutory injunction ‘take whichever course appears to carry the lower risk of injustice if it should turn out to have been wrong in the sense of granting an injunction to a party who fails to establish his right at the trial or in failing to grant an injunction to a party who succeeds at the trial’.[26]
[25](2006) 15 VR 65.
[26]Bradto Pty Ltd v State of Victoria; Tymbook Pty Ltd v State of Victoria (2006) 15 VR 65 [35]. See also Magna Alloys and Research Pty Ltd v Coffey [1981] VR 23.
Submissions and Consideration
Costs
The plaintiff submitted that the lodgement of the Fourth Caveat is frivolous, vexatious and an abuse of process because:
(a) Sand Solutions is not a party to the Sand Extraction Agreement;
(b) there is no evidence that Devenish assigned its rights under the Sand Extraction Agreement to Sand Solutions at any time;
(c) following service of the disclaimer notice by Mr Lindholm, the Sand Extraction Agreement was determined;
(d) by its conduct in seeking access to the Land for remediation purposes, Sand Solutions accepted that it has no right of access to the Property; and
(e) the lodgement of any further caveats has the potential to cause the plaintiff significant loss and damage.
It is clear that Sand Solutions has no proprietary interest in the Land pursuant to the Sand Extraction Agreement, and it is only on the basis of that Agreement that it is possible, on the material before the Court, for a caveator to contend for a proprietary interest in the Land. The Agreement clearly ended when Devenish’s liquidator disclaimed the Agreement. In any event, there has been no assignment of the Agreement, as distinct from the Work Authority which was apparently transferred from Devenish to Sand Solutions. Moreover, Devenish is no doubt de-registered by now.
The legislation applicable to that Work Authority provides that the grant of the Authority does not confer a right on the holder of the Authority to enter the Land without the consent of the owner.[27] In other words, the Authority is in effect subject to a compensation and access agreement being put in place between the registered proprietor of the Land (or other person with a legal possessory interest in the Land) and the holder of the Authority. Such an Agreement was entered into between Devenish and Ms Attwood, but has ceased to exist.
[27]Mineral Resources (Sustainable Development) Act 1990 (Vic), s 77I(6).
That was also the position when Ms Attwood applied to this Court in 2018 for an order removing the Third Caveat from the Land. Nothing has changed, except that Sand Solutions has sought again to interfere in the rights of the registered proprietor of the Land, in this case the plaintiff, where in the previous proceeding it was Ms Attwood.
Sand Solutions and Colling were served with all the documents relied on by the plaintiff in the proceeding at the address notified in the Caveat, being the address of Mr Peter Cahill, Solicitor of Bendigo. On behalf of both Sand Solutions and Colling, Mr Cahill notified the Court on 12 April 2021 that-
I am the Solicitor who is acting on behalf of Sand Solutions (Vic) Pty Ltd and Mr Graham Colling. I do not have instructions to act in this Application. My clients will not be appearing at the Hearing tomorrow.
In these circumstances, there has been sufficient service of, and notice to, both Sand Solutions and Colling of the relief sought in the Originating Motion and Summons. Further, the very absence of any response to the evidence submitted in support of the application is an indication that there is no answer either to the orders sought as to the costs of the proceeding and the application for an injunction. In this regard, however, I should note the response received by the plaintiff’s solicitor from Mr Cahill dated 6 April 2021 (by email):
I refer to the Application before the Court on 13 April.
My client maintains that it has rights to go upon the land and Devenish (sic) and extract the sand, in accordance with the terms of the Planning Permit and the Licence granted by Earth Resources. I appreciate that the issue of the Planning Permit is currently before VCAT as to the status of such Permit. It is my client’s expectation that the cancellation of the Planning Permit will be set aside, and the Planning Permit reinstated . I note that your client’s Affidavit in Support is silent on the matter of the VCAT proceedings.
In the event that my client is successful in VCAT, then my client will, if necessary, commence a fresh set of proceedings either in the County Court or Supreme Court, seeking a declaration, it has rights of access over the Devenish land (sic) to extract the sand, in accordance with the Earth Resources Licence and the terms of the Planning Permit.
With a view to avoiding extensive costs at this stage, I am instructed by my client to withdraw the Caveat and I will lodge that Withdrawal Application via PEXA now. I will provide you with details of the Dealing Number of the Withdrawal of the Caveat as soon as the same comes to hand.
In the circumstances, once I have provided you with evidence of the Withdrawal of the Caveat, would you be good enough to confirm that your client will not be proceeding with its application and there will be so not be proceeding with the Originating Motion and the Summons?
I look forward to hearing from you.
Notwithstanding the undertaking given to lodge a withdrawal of the caveat, that had not occurred by 8 April 2021, at which time the plaintiff’s solicitors again wrote to Mr Cahill as follows:
I note that you advised that your client has agreed to remove the caveats and that you would ‘lodge that Withdrawal Application via PEXA now’.
Despite this advice, title searches obtained this morning show that the caveat remains on title. Please attend to lodging the withdrawal and provide us with same as a matter of urgency.
You are aware that in addition to seeking that the court order the caveat be removed, our client also seeks an injunction against your client and its director from lodging further caveats in the future purportedly arising from the agreement you client claims it has with the previous registered proprietor.
Having incurred not insignificant costs in briefing counsel and preparing the application following your failure to respond substantively to our demands that the caveat be removed, our client is entitled to relief which compensates it for this unnecessary expense. It is unsatisfactory to simply request that our client not proceed with its application in these circumstances in return for the removal of the caveat alone.
Accordingly, we attach a general form of order and consent orders of the same substance for your consideration. Upon your office executing the consent orders on your client’s behalf and your provision of the withdrawal of caveat to us, we will provide same to the court and advise that the application will not proceed.
Failing this, we are instructed to proceed with the application.
The Consent Orders attached to that email provided for the payment of the plaintiff’s costs by Sand Solutions and Colling on an indemnity basis.
Having regard to the facts that have been presented to the Court in the Allender affidavit and the Sussmilch affidavit, there is no basis for the contention in the email sent by Mr Cahill on 6 April 2021 that Sand Solutions (or Colling) ‘has rights to go upon the land and Devenish (sic) and extract the sand, in accordance with the terms of the Planning Permit and the Licence granted by Earth Resources’. The evidence shows that the Sand Extraction Agreement entered into with Devenish by Ms Attwood’s Administrator was disclaimed by the liquidator of Devenish, and in any event was never assigned to Sand Solutions. Moreover, s 77I(6) of the Mineral Resources (Sustainable Development) Act 1990 (Vic) makes clear, contrary to what Mr Cahill contended in his email, that the Work Authority (which I infer is the ‘Licence’ to which he refers) does not confer a right on the holder of the Authority to enter the Land without the consent of the owner.
In this case, as in many others involving the forced removal of caveats,[28] the matters that support an order for costs on an indemnity basis are:
[28]See, eg, Love v Kempton [2010] VSC 254, [23]-[34]; Sovereign MF Ltd (In liq) v EOS Janus Holdings Pty Ltd [2013] VSC 347, [13]-[20]; Kuipers v Harrington (No 2) [2019] VSC 190.
(a) the nominated basis for lodging the caveat was without merit. There is simply no tenable basis for the finding of a grant of an easement to Sand Solutions or, if it is relevant, to Devenish. Nor is there a basis for any other proprietary interest in the Land. Properly advised, Sand Solutions and Colling ought to have known there was no proper basis for the lodging of the Fourth Caveat;
(b) before the commencement of the proceeding, the plaintiff sought the withdrawal of the caveat, but received no response. It was only after the commencement of this proceeding, and faced with the inevitable order that the Fourth Caveat would be removed, that Sand Solutions lodged a withdrawal of caveat;
(c) Sand Solutions was warned before the application was filed that the plaintiffs would suffer damage by the lodging of the Fourth Caveat. After the commencement of the proceeding the solicitor for the plaintiff alerted the solicitor for Sand Solutions and Colling that indemnity costs would be sought;
(d) as I have said, a caveat is not available as a bargaining chip.[29] A person who lodges a caveat without proper grounds should be ‘brought to book’ if others are forced to resort to court proceedings to remove a caveat which has no proper basis; and
(e) to require the innocent registered proprietor to pay any differential between standard costs and indemnity costs, occasioned by the delinquent conduct of Sand Solutions and Colling, should not be allowed to occur.
[29]Goldstraw [2002] VSC 491; Piroshenko [2010] VSC 240, [23].
In this case, the complete lack of any basis for the lodgement of any caveat, let alone the Fourth Caveat claiming the grant of an easement, makes it a case where it is appropriate to make an order that both Sand Solutions and Colling pay the plaintiff’s costs on an indemnity basis.
Injunction
It seems to me to be clear that the plaintiff has demonstrated a prima facie case that there is a high probability, approaching a certainty, on the evidence before the court that the plaintiff’s proprietary interest in the Land is held free from any proprietary interest of the kind claimed in the Third and Fourth Caveats, that is free of any profit à prendre or easement. In this regard, the matters to which I have referred in relation to the efficacy of the caveat are applicable. That is, there is no present basis for the interest arising from the grant of an easement, as asserted by the Fourth Caveat, and there can be no profit à prendre, in each case because the Sand Extraction Agreement does not bind the plaintiff, at least.
There is also a prima facie case that Sand Solutions and Colling will continue to lodge caveats on the title to the Land if they are not restrained from doing so. The history of the lodgment of caveats by Colling and Sand Solutions, together with the assertions made by their solicitor, Mr Cahill, in the email of 6 April 2021, shows that there is a real likelihood that one or other of Sand Solutions or Colling will use the caveat procedure as a bargaining chip in pursuit of its asserted rights against the plaintiff under the Sand Extraction Agreement. This is likely because in the previous proceeding the question of the right of Sand Solutions to go on the Land pursuant to the profit à prendre was abandoned by it, but it has returned again to assert such a right, this time a different basis – the grant of an easement.
In cases concerning the ‘quieting of title’, meaning the seeking of the assistance of the Court to protect and preserve the title to land against unwarranted challenges or claims, damages are not considered an adequate remedy. This follows from the nature of the proceeding. On the present material, the claims made in the several caveats are unwarranted.
With respect to the balance of convenience, in my view it follows from the strength of the plaintiff’s claim, the weakness of the claims raised by the Third and Fourth Caveats, and the evidence of actual and potential injury to the plaintiff occasioned by the lodging of the Third Caveat, that the course that carries the lower risk of injustice (if it should turn out to have been wrong) is to restrain Sand Solutions and Colling as sought by the plaintiff, but to reserve liberty to them to apply to discharge the injunction.
Conclusion
Orders will made for Sand Solutions and Colling to pay the plaintiff’s costs of this proceeding on an indemnity basis and restraining them, until further order, from lodging for registration any caveat in reliance on a profit à prendre or an easement. However, the injunction is necessarily subject to further order, and in the absence of the Sand Solutions and Colling appearing at the hearing, it is appropriate to reserve to them liberty to apply to discharge the injunction.
SCHEDULE OF PARTIES
| S ECI 2021 00976 | |
| BETWEEN: | |
| BCA ASSET MANAGEMENT GROUP PTY LTD (ACN 618 642 425) | Plaintiff |
| - v - | |
| SAND SOLUTIONS (VIC) PTY LTD (ACN 161 917 648) | First Defendant |
| GRAHAM ALBERT COLLING | Second Defendant |
| REGISTRAR OF TITLES | Third Defendant |
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