Bisognin v Hera Project Pty Ltd - [2017] VSC 783

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
PROPERTY LIST

S CI 2017 04336

GINO ANDREW BISOGNIN	First Plaintiff
LEAH JOAN BISOGNIN	Second Plaintiff
v
HERA PROJECT PTY LTD (ACN 163 685 041)	First Defendant
REGISTRAR OF TITLES	Second Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	11 December 2017
DATE OF RULING:	15 December 2017
CASE MAY BE CITED AS:	Bisognin & Anor v Hera Project Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2017] VSC 783

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CAVEATS - Application for removal of caveat – Caveat lodged pursuant to claim of estate in fee simple over whole of land prior to subdivision - Sale of portion of land - Whether any caveatable interest maintained over portion of land not subject to contract of sale following subdivision - Whether caveat has effect of securing performance of obligations under contract of sale extending beyond transfer of legal interest in land - Serious question to be tried not established – No equitable interest in land outside scope of contract of sale following subdivision - Order for removal of caveat made - Costs reserved - Transfer of Land Act (1958) s 90(3) - Lintel Pty Ltd v Nixon [1991] 1 VR 287, 291, applied

CONSTRUCTIVE TRUST - Plaintiffs contractually obliged to undertake works required by third parties on property - Payment of bonds by first defendant to third parties - Whether payments to third parties for purpose of securing performance of contractual obligations for benefit of a property give rise to a resulting or constructive trust in respect of that property – No resulting or constructive trust

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr W G Stark with Mr A Fronis	Ace Solicitors
For the First Defendant	Mr N Pane QC	Russell Kennedy Pty Ltd

HER HONOUR:

This proceeding, being an application by the plaintiffs to remove a caveat lodged by the first defendant over the title to the plaintiffs’ property at 1A Adrian Street, Cranbourne East (‘caveat’), was commenced on 27 October 2017. The plaintiffs were vendors of a part of their land pursuant to a contract of sale dated 13 March 2015 (‘contract of sale’). The first defendant purchased the southern portion of the plaintiffs’ land (‘southern lot’) and the plaintiffs retained the northern portion of the land (‘northern lot’). The contract of sale referred to a then unregistered plan of subdivision, which was subsequently registered on 15 September 2017 (‘plan of subdivision’). Settlement of the sale of the southern lot (now on a separate title as of 15 September 2017) to the first defendant was completed on 2 October 2017.

The caveat was lodged on 3 June 2016, whereby the first defendant claimed an estate in fee simple over the whole of the plaintiffs’ land as ‘purchaser under a contract of sale dated 13 March 2015 with the registered proprietors of the [l]and as the vendor’. There was no dispute that the first defendant was entitled to lodge the caveat…

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: [2017] VSC 783
Decision Date: 15 December 2017

CaseChat Overview and Summary

The plaintiffs, Bisognin, brought an application for the removal of a caveat lodged by the defendants, Hera Project Pty Ltd, over a parcel of land. The caveat was based on a claim of an estate in fee simple over the whole of the land, which had not been subdivided at the time the caveat was lodged. After the land was subdivided, the defendants sold one portion of the land, and the plaintiffs sought the removal of the caveat over the portion not subject to the contract of sale. The court had to determine whether the caveat maintained any caveatable interest over the portion of land not subject to the contract of sale and whether the caveat served to secure the performance of obligations under the contract of sale.

The court examined whether the caveat had the effect of securing performance of obligations under the contract of sale extending beyond the transfer of the legal interest in the land. It was held that a serious question to be tried was not established, as there was no equitable interest in the land outside the scope of the contract of sale following the subdivision. The court found that the caveat did not maintain any caveatable interest over the portion of land not subject to the contract of sale, and the plaintiffs' obligation to undertake works required by third parties on the property did not give rise to a resulting or constructive trust in respect of the property. The court ordered the removal of the caveat over the portion of land not subject to the contract of sale and reserved costs.

No resulting or constructive trust was found in respect of the property, as the plaintiffs were contractually obliged to undertake works required by third parties, and the payments made by the first defendant to the third parties were for the purpose of securing the performance of contractual obligations for the benefit of the property. The court referred to the Transfer of Land Act (1958) s 90(3) and the case of Lintel Pty Ltd v Nixon [1991] 1 VR 287, 291, in making its decision. The final orders were that the caveat over the portion of land not subject to the contract of sale be removed, and costs were reserved.

Orders