Byrne v Mortyn

[2008] TASSC 83

[2008] TASSC 83

CITATION:              Byrne v Mortyn [2008] TASSC 83

PARTIES:  BYRNE, Neville Gordon
  v
  MORTYN, John
  MORTYN, Julie
  MITCHELL, Roderick Neil
  RECORDER OF TITLES

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  BDR 630/2007
DELIVERED ON:  18 December 2008
DELIVERED AT:  Hobart
HEARING DATE:  8, 11 December 2008
JUDGMENT OF:  Blow J

CATCHWORDS:

Equity – Equitable remedies – Injunctions – Interlocutory injunctions – Injunctions to preserve status quo and property pending determination of rights – Other cases – Interim injunction to prevent lapsing of caveat – Pending application for removal of caveat.

Land Titles Act1980 (Tas), s136(1).
Aust Dig Equity [341]

REPRESENTATION:

Counsel:
           Plaintiff:  B R McTaggart
           First & Second Defendants:  No appearance
           Third Defendant:  C J Bartlett
Solicitors:
           Plaintiff:  McGrath & Co
           First & Second Defendants:                   Douglas & Collins
           Third Defendant:  Bartletts

Judgment Number:  [2008] TASSC 83
Number of paragraphs:  20

Serial No 83/2008
File No BDR 630/2007

NEVILLE GORDON BYRNE v JOHN MORTYN,
JULIE MORTYN, RODERICK NEIL MITCHELL and
RECORDER OF TITLES

REASONS FOR JUDGMENT  BLOW J

18 December 2008

1. On 11 December 2008 I made a number of orders in relation to this action, including an interlocutory injunction restraining the Recorder of Titles from registering a transfer of certain land to the third defendant.  These are my reasons for making those orders. 

1. This action concerns a piece of land at Redpa.  In the beginning the first and second defendants, Mr and Mrs Mortyn ("the vendors"), owned a farm property of about 545 acres comprised in several certificates of title.  The third defendant, Mr Mitchell ("the purchaser"), entered into a contract to purchase that property.  Completion of the purchase occurred on 24 August 2007, but the purchaser has been unable to register a transfer in respect of one of the certificates of title because the plaintiff, Mr Byrne, had registered a caveat claiming an interest in part of the land.  Some 32.49 ha of land are comprised in that certificate of title, but the plaintiff claims an interest in only about 0.2 ha of that land – some farming land with a shed on it.  He contends that the vendors promised to transfer that land to him in return for some work that he did for them in or about 2003.  He evidently concedes that he and they did not make a contract that was evidenced in writing, but he has brought this action seeking equitable relief on two bases.  His primary claim is on the basis that there was an oral contract for the transfer of the claimed land, and that there were acts of part performance on his part which make it unconscionable for the vendors to rely on the lack of writing.  In the alternative, he claims to be a beneficiary under a constructive trust in respect of the claimed land, and relies on the doctrine of promissory estoppel.

1. This action was commenced against the vendors and the purchaser by a writ filed on 25 July 2007.  On 29 August 2007, in a separate proceeding, the purchaser applied for an order for the removal of the caveat pursuant to the Land Titles Act 1980, s135. That application was listed for a hearing on 28 February 2008, but the parties arranged for that hearing date to be vacated, apparently with a view to resolving their dispute by mediation. It has not been resolved, and it seems that nothing has ever been done to have that application relisted.

1. On 18 November 2008, the Recorder of Tiles served notice on the plaintiff's solicitors under the Land Titles Act, s136, of her intention to register a transfer by the vendors to the purchaser of the land in the relevant certificate of title at the expiration of 28 days after service. That notice appears to have been received by the plaintiff's solicitors on 19 November 2008. According to s136(1) and the terms of the notice, the Recorder intended to register that transfer unless an order to the contrary was made by this Court or the transfer was withdrawn or ceased to be in order for registration.

1. On 5 December 2008 the plaintiff's solicitors filed an interlocutory application seeking an injunction prohibiting the registration of the transfer.  That application came before me in Burnie during a busy criminal sittings.  Counsel for the plaintiff submitted that I should grant an interim injunction so as to preserve the status quo until the application for the removal of the caveat could be heard.  He pointed out that, if the transfer were to be registered, the Land Titles Act, s40, would give the purchaser an indefeasible title to the land claimed by his client. Counsel for the purchaser made a submission to the effect that I should fully consider all the issues relevant to the granting of an interlocutory injunction intended to operate until the determination of the action. I took the view that it was more appropriate for me only to consider making a very temporary interim order given that (a) there was unlikely to be sufficient time for unhurried decision-making before the expiry of the Recorder's notice; (b) the purchaser had been in a position for several months to get his application for the removal of the caveat relisted for a hearing, but had apparently not done so; and (c) there appeared to be reasonable prospects of that application being heard in February 2009, or sooner if there was real urgency.

1. An interlocutory injunction should not be granted unless the applicant shows a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial, and establishes that the inconvenience that he would be likely to suffer if an injunction were refused outweighs the inconvenience that the respondent would suffer if an injunction were granted: Beecham Group Limited v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622 – 623; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at 81.

1. There is a strong body of authority supporting the proposition that a statutory discretion to order the removal of a caveat should be exercised in accordance with the "balance of convenience" test that is applied in relation to interlocutory injunctions: Eng Mee Yong v Letchumanan [1980] AC 331; Re Burman's Caveat [1994] 1 Qd R 123; Four Oaks Enterprises Pty Ltd v Clark [2002] TASSC 39 at par8; Lindsay Caveats Against Dealings in Australia and New Zealand at 203 – 207; Colbran and Jackson Caveats at 346 – 354. 

The plaintiff's case

1. There is no separate certificate of title for the claimed land.  For the plaintiff ever to take title to it, the Circular Head Council would first need to grant a subdivision permit under the Land Use Planning and Approvals Act 1993: Local Government (Building and Miscellaneous Provisions) Act 1993, s81(1). In this action, he is seeking an order for the defendants to transfer the claimed land to him, but the Court will certainly not make such an order in the absence of the required permit. At best, the Court could order the registered proprietors of the land to seek the necessary permit, and grant liberty to apply in the event that it could not be obtained: Giumelli v Giumelli (1996) 17 WAR 159; Giumelli v Giumelli (1999) 196 CLR 101 at 125, 127; Rhodes v Badenach [2000] TASSC 160 at par48.

1. The Conveyancing and Law of Property Act 1884, s36(1), provides as follows:

"36     (1)      No action may be brought upon any contract for the sale or other disposition of land, or any interest in land, unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged or by some other person thereunto by him lawfully authorized."

1. The plaintiff acknowledges that there is no memorandum or note that satisfies s36(1), but relies on the doctrine of part performance. The basis upon which that doctrine operates has been explained by the learned authors of Meagher, Gummow and Lehane's Equity Doctrines and Remedies, 4th ed, at par12-100 as follows:

"The doctrine of part performance enables a court of equity to decree specific performance of a contract for sale of land which at law is rendered unenforceable (but not of course illegal) by s 4 of the Statute of Frauds and its modern counterparts.  The justification for equity's intervention in these cases was seen in the acts of the plaintiff which, being unequivocally referable to the contract pleaded and known or permitted by the defendant, rendered it fraudulent for the defendant to rely upon the statute.  The defendant having the benefit of the plaintiff's part performance was not permitted to resist the performance of his obligations to the plaintiff."

1. The acts of part performance alleged and relied upon by the plaintiff in his amended statement of claim comprise (a) the fencing of the claimed land at his expense; (b) the building of a second shed on the claimed land; (c) taking possession of the claimed land; and (d) engaging surveyors and making an application to the Circular Head Council in the names of the vendors.  There is evidence that that application was not proceeded with.  It is implicit that the plaintiff incurred expense as a result of engaging the surveyors.  Surprisingly, nothing was pleaded along the lines that the plaintiff had a right to remuneration for work that he did for the vendors, and partly performed the oral contract by waiving that right. 

1. It is doubtful that the plaintiff will be able to establish that there was any contractual obligation on him to build a small second shed.  In the absence of such an obligation, I cannot see how the building of a second shed would constitute an act of part performance. 

1. I doubt that taking possession of the claimed land could be successfully relied upon as an act of part performance.  I expect that having possession of that land benefited the plaintiff.  The very nature of the doctrine of part performance is that it operates when part performance benefits a defendant, not a plaintiff, so as to make it unconscionable for the defendant to rely upon the statutory requirement of writing after receiving the benefit of the part performance. 

1. The other acts of part performance relied upon involve the incurring of expense for fencing materials and surveyor's fees, as well as physical labour by the plaintiff in fencing the boundaries of the claimed land.  According to his affidavit material, he spent $554 on fencing materials.  I have no evidence as to how much the surveyors charged him.

1. The amended statement of claim is not a fine example of the pleader's art.  Although the primary claim, based upon part performance, has been pleaded so as to exclude reliance on the foregoing of any claim to remuneration for labouring work, the alternative claim involving a constructive trust and proprietary estoppel is not so confined.  If some entitlement to relief were established based upon the making of an oral contract and the pleaded acts of part performance, the Court would be likely to hold that the payment of equitable compensation would be sufficient for equity to be done.  However I think there is a significant likelihood that the promissory estoppel claim would succeed, and that the plaintiff would obtain a Giumelli order, requiring the vendors to apply for a subdivision permit and, if successful, to subdivide off the claimed land and transfer it to the plaintiff.  It is likely that there would be conflicting evidence as to what was said in conversations between the plaintiff and the vendors as to the claimed land, and in conversations with the purchaser as to the plaintiff's position in relation to the claimed land.  The plaintiff probably could not succeed without questions of credibility being decided in his favour, nor without questions as to priorities between competing equities being decided in his favour.  However I think there is a strong enough chance of the plaintiff succeeding in relation to those issues for an injunction to be granted to preserve the status quo, at least until the application for the removal of the caveat can be heard, if not until the action can be tried and determined.

The balance of convenience

1. The purchaser completed his contract for the purchase of the whole of the vendors' farming property in August 2007 with finance from a bank.  The bank took a mortgage over every part of that farming property except that comprised in the relevant certificate of title.  Loan debts of about $1.7 million, as well as an overdraft debt whose size I do not know, are secured by the mortgage.  According to the purchaser's affidavit, he was told in early October 2008 that his bank will not allow him to continue his overdraft facility, and he now needs to refinance.  The plaintiff's caveat is preventing him from mortgaging or dealing with the 32.49 ha of land when only about 0.2 ha is claimed by the plaintiff.  However the plaintiff lives on a small property adjacent to the claimed land.  It therefore has a special value to him.  If the transfer of the 32.49 ha to the purchaser were registered, the purchaser would get an indefeasible title to the claimed land, and the plaintiff would be able to pursue his action only in relation to an alternative claim for equitable compensation or damages.  Given the history of this litigation and the possibility of an early hearing of the application for the removal of the caveat, I think it would be more convenient for the status quo to be preserved in the very short term, with a view to more thorough assessments being made upon the hearing of that application as to the strength of the plaintiff's claims, and the balance of convenience.

Conclusion

1. Counsel for the purchaser sought to cross-examine the plaintiff during the hearing of the interlocutory application, but I did not permit him to do so because I concluded that nothing said by the plaintiff would be likely to make a difference to the outcome of that application. 

1. On the hearing of the interlocutory application, counsel for the purchaser sought to rely upon a letter from the purchaser's solicitors to the plaintiff's solicitors marked "without prejudice save as to costs".  Counsel for the plaintiff objected to my receiving that letter as evidence.  I concluded that I did not need to decide whether that letter was admissible, since it would not make any difference to the outcome of the interlocutory application.

1. Some years ago, after I made an order for the removal of a caveat, counsel for the successful party told me that the Recorder of Titles would not remove the caveat because she had not been made a respondent to the application.  I did not ever hear what, if anything, the Recorder had to say about that assertion.  Having had that experience, and because there was a degree of urgency, I decided to make the Recorder a party to this action in order to avoid any possible difficulty as to compliance with an interim injunction.

1. Accordingly, the orders that I made on 11 December were as follows:

1        That the Recorder of Titles be added as a defendant to the action.

2That until judgment or earlier further order, and only so long as caveat M136037 is not removed or withdrawn, the Recorder of Titles be restrained from registering transfer M141898.

3        That all parties have liberty to apply.

4        That the costs of the interlocutory application be reserved to the trial judge.