Burnett v 3 Property Group 10 Pty Ltd

[2023] ACTSC 197

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Burnett v 3 Property Group 10 Pty Ltd

Citation: 

[2023] ACTSC 197

Hearing Date: 

27 July 2023

Decision Date: 

27 July 2023

Before:

Mossop J

Decision: 

See [10].

Catchwords: 

REAL PROPERTY – CAVEATS – Application to extend caveat – where caveat applies to whole development – where caveat supported by asserted claim for specific performance of contract for sale of single unit – where defects in pleadings and evidence affect the proper constitution of proceedings – caveat extended – caveat to be narrowed to single unit upon registration of units plan – plaintiff granted time to address defects in proceedings

Cases Cited: 

Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419

Parties: 

Sheridan Burnett ( Plaintiff)

3 Property Group 10 Pty Ltd ( Defendant)

Representation: 

Counsel

R Markham and A Bulusu ( Plaintiff)

D Robens ( Defendant)

Solicitors

Adero Law ( Plaintiff)

Hall and Harrington ( Defendant)

File Number:

SC 223 of 2023

MOSSOP J:  

1․These proceedings relate to a dispute arising out of a housing development, a unit of which (Unit 30) was sold to the plaintiff by the defendant. On 8 September 2021, the defendant sent a letter purporting to rescind the contract for sale pursuant to a contractual power to do so. The plaintiff has disputed the availability of the contractual power to rescind the contract and has sought specific performance of the contract or, alternatively, damages as well as some other relief.

2․The proceedings were commenced by Originating Application. That Originating Application sought the continuation of a caveat or, alternatively, an injunction. The proceedings have then been ordered to proceed on the basis of a Statement of Claim. There is a timetable in place leading up to a hearing listed in December. The defendant has not yet filed a defence in the proceedings. The plaintiff seeks to maintain the caveat in the face of a lapsing notice. The terms of the caveat are such that it applies to the whole of the property.

3․The interest which it seeks to protect is an equitable interest arising out of the capacity to obtain specific performance of the contract for sale. The plaintiff has referred to and relied upon the decision in Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419, in which the equitable interest was sufficient to maintain a caveat in circumstances where a unit had been sold off the plan. Where a claimant is in that position, it is necessary to lodge a caveat relating to the whole of the property, because the interest ultimately proposed to be created as a result of strata or unit titling does not exist at the time when the caveat is required to be lodged.

4․The position of the defendant is that, first, no interest has been established on the basis of the material before the court and, in any event, the caveat should not be continued because of questions of where the balance of convenience lies. In the alternative, the directors of the defendant company have indicated that they would offer undertakings to not sell or transfer Unit 30. The reasons for the defendant adopting the position that it has is that there are some 56 units in the development, and it has financial facilities totalling approximately $32 million which it wishes to have discharged through the completion of the sale of the other units. The defendant obviously does not wish to have the reduction of its financial liabilities held up by a claim which ultimately relates to only a single unit.

5․The contention that the plaintiff has not established an interest sufficient to support a caveat does not directly challenge the authority in Kuper v Keywest Constructions Pty Ltd. Rather, it focuses on the inadequacies of the pleaded claim and some aspects of the history of the dealings between the parties since the dispute arose, which are said to inform the pleading point, or alternatively affect the balance of convenience. So far as the pleading is concerned, the defendant points to the fact that the pleading indicates a claim of damages for breach of contract in the relevant part of the claim, but does not expressly claim specific performance. It is only at the very end of the claim that a claim for specific performance is maintained, and some facts that might be expected to be pleaded in relation to a claim for specific performance are not pleaded.

6․The other point is that the relevant contract was for the purchase of the property by the plaintiff and a Mr John Gabriel Griffiths, yet the claim is not made as a joint claim for specific performance. Rather, it is brought only by the plaintiff. This was explained by the plaintiff on the basis that the claim originally commenced as an endeavour to get preliminary discovery and it was not necessary at that stage to join both potential purchasers. However, the position remains that, insofar as a claim for specific performance is made, the proceedings do not appear to be properly constituted. Having said that, this is not an issue which has been previously identified by the defendant as a basis for resisting the claim for the continuation of the caveat and it is one which, along with the pleading point, I think the plaintiff should be given an opportunity to address.

7․The final point made, which reflected on the pleading point but also went to the balance of convenience, is the fact that, subsequent to the dispute having arisen, the plaintiff has in fact purchased a different property, and correspondence from the solicitors at an earlier time was consistent with the proposition that she did not intend to pursue a claim for specific performance but rather was seeking damages. Once again, the significance of this issue has only arisen at this point, and I think it is reasonable that the plaintiff have an opportunity to address that issue before finally determining whether or not the caveat should continue. These circumstances have led to a position where I consider it appropriate that any impediment to the registration of a units plan be removed so that any caveat only relates to Unit 30 which would be created by such a units plan, and that the issue of whether or not the caveat continue over Unit 30 be adjourned for a short period in case the plaintiff wishes to seek to remedy the defects which have been properly pointed out.

8․It is for those reasons that I have indicated to the parties that I will make orders permitting the Registrar General to register a units plan over the property and once that is done allow the substitution of a narrower caveat covering only Unit 30. I will also direct that the plaintiff has an opportunity within a short period to remedy the defects that have been identified both in the pleadings and the evidence if she wishes to maintain the position that specific performance is sought. That will also give the defendant an opportunity to provide me with authorities relevant to whether an undertaking as to damages should be required in the circumstances of this case as a continuation of the narrower caveat limited to Unit 30.

9․Some submissions were made about the wording of the orders that I will make. In case there is any difficulty with the orders as formulated achieving my intended results, I have allowed the parties liberty to apply on short notice. If the Registrar General does not consider that the orders are effectively worded so as to permit the outcomes that I intend, then the parties can bring the matter back and I will make amendments so as to ensure that effect is given to the court's intention.

Orders

10․For those reasons, the orders that I make are:

1.Direct that, subject to the following orders, caveat 3248911 (the Caveat) is not to lapse and is to continue for 14 days or until further order, whichever is the earlier.

2.Despite the Caveat, the Registrar General may register a units plan for the property at Block 1 Section 28, Division of Throsby.

3.Direct that, upon registration of the units plan pursuant to order 2, the plaintiff is to lodge forthwith a further caveat in relation to unit 30 in the units plan only and, upon doing so, the Caveat lapses.

4.Direct that by 3 August 2022, the plaintiff must:

(a)File and serve any application for leave to amend the originating application and statement of claim, including any application to join John Gabriel Griffiths as a plaintiff in the proceedings;

(b)File and serve an affidavit of the plaintiff as to whether she still wishes to and is able to purchase the property the subject of the proceedings.

5.List the proceedings before Mossop J on 8 August 2023 at 9:30am in order to determine whether the Caveat or the caveat lodged pursuant to order 3 should continue.

6.Grant liberty to apply to the parties to relist the matter before Mossop J on 24 hours' notice in relation to the implementation of these orders.

7.Costs are reserved.

I certify that the preceding ten [10] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: 18 August 2023