Caruana v Power
[2000] VSC 129
•30 March 2000
| SUPREME COURT OF VICTORIA | |
| PRACTICE COURT | Not Restricted |
No. 4788 of 2000
| CHARLIE CARUANA AND ANOTHER | Plaintiffs |
| v. | |
| KEVIN JOSEPH POWER (AS THE RECEIVER OF THE TRUST PROPERTY OF ROMUALD JOSEPH MARTIN) | Defendants |
---
JUDGE: | BEACH, J. | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 30 MARCH 2000 | |
DATE OF JUDGMENT: | 30 MARCH 2000 | |
CASE MAY BE CITED AS: | CARUANA & ANOR. v. POWER | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 129 | |
---
CATCHWORDS: Interlocutory injunction – Delay in making application – Balance of convenience not such as to justify injunctive relief – Damages adequate remedy.
---
APPEARANCES: | Counsel | Solicitors |
For the Plaintiffs | Mr. I.R. Jones | McIntosh Solicitors |
| For the Defendants | Mr. P.J. Riordan | Victorian Lawyers R.P.A. Ltd. |
HIS HONOUR:
This is the return of a summons filed in the court by the plaintiffs on 24 March last whereby the plaintiffs seek to restrain the defendant, in his capacity as Receiver of the Trust Property of Romuald Joseph Martin, a solicitor of this court, from offering for sale by auction on Saturday next, 1 April, two properties owned by the plaintiffs, one at 69 John Paul Drive, Sydenham and the other at Cranberry Park, Elaine.
Martin acted for the plaintiffs as their solicitor at the time they purchased the properties. The Sydenham property was purchased on 16 November 1993; the Elaine property was purchased on 12 March 1991.
Gerard Peter Glennon was appointed receiver of the trust property of Martin on 20 September 1994. On 28 February 1997 he was replaced as receiver by the defendant, who is the General Manager of the Professional Standards Victorian Lawyers RPA.
Upon examining the files of Martin, Mr Glennon ascertained that during the course of their dealings with Martin the plaintiffs had paid to his practice for investment sums totalling $841,826.98 but had received or had had applied for their benefit funds totalling $1,266,508.59. The plaintiffs dispute the receipt by them of $240,861 of that sum.
Among Martin's papers were the counterparts of registered mortgages which the plaintiffs had given Martin over the Sydenham and Elaine properties.
The mortgage over the Sydenham property was to secure a sum of $50,000; the mortgage over the Elaine property was to secure a sum of $275,605.
By letter of 24 September 1994 the plaintiffs were informed of Mr Glennon's appointment and of their indebtedness to Martin's practice in respect of the advances recorded in the mortgages.
In a lengthy letter of 6 October 1994 written by the plaintiff's solicitors to the Professional Standards Department of the then Law Institute, the plaintiffs' solicitor said (inter alia):
"As to my client's signature appearing on the 2 mortgages I am instructed once again that my client was often induced by Mr Martin to sign various pieces of paper on the understanding that he was required to sign these pieces of paper for Mr Martin to be able to produce to him 'in about 2 weeks' his Titles. My client therefore is instructing me that Mr Martin obtained both his and his wife's signature on the Mortgages by deception and I am further instructed that Mr Martin's secretary Elizabeth Daffy would often appear in the office for a short time, thrust the mortgage document face down in front of my client, ask him to sign the document on the back quickly without even giving him or his wife the opportunity to read the back or indeed the face of the document and as soon as the document was signed she would then leave the office. My client believes now that these were the mortgage documents that allowed these mortgages to be lodged and were not the 'release documents' represented to him by Mr Martin.
This was clearly a planned, premeditated and calculated form of deception and defalcation by Mr Martin with the assistance of his secretary and is made all the more despicable by the fact that Mr Martin was fully aware of my client's difficulty with reading and writing English and the lack of experience that either he or Mrs Caruana had with legal documents."
The plaintiffs maintain that position at the present time.
Over the years that followed there were many discussions and negotiations between the parties in relation to the plaintiffs' dealings with Martin.
By letter of 15 May 1998 from the defendant to the plaintiffs' solicitors the plaintiffs were informed that unless the defendant received a proposal from them within 14 days he would institute proceedings against them for the full amount of the mortgages including arrears of interest.
Pausing at this point - no criticism was made of the plaintiffs by the defendant for their failure to that time to have instituted an appropriate proceeding seeking to set aside the two mortgages on the ground of the fraud of Martin - assuming, that is, that he had acted fraudulently in the matter.
In my opinion the defendant's attitude in that regard was appropriate. The complexity of the problems Martin had caused to his clients, including the plaintiffs, was such that it was not unreasonable for the parties to have spent up to that time endeavouring to work through them and arrive at a compromise of them.
The plaintiffs put no further proposal to the defendant at that time and although the parties remained in contact with each other thereafter, nothing was resolved between them.
On 27 July 1999 the defendant caused a notice to pay to be served on the plaintiffs in respect of the Sydenham property and on 10 August 1999 a notice to pay in respect of the Elaine property. Copies of the notices were duly sent to the plaintiffs' solicitors.
By letter of 7 September 1999 the defendant informed the plaintiffs' solicitors that he intended to take possession of the properties.
By letter of 15 November 1999 the defendant informed the plaintiffs' solicitors of his proposal to auction the two properties in late January 2000.
There was then further correspondence between the defendant and the plaintiffs' solicitors relating to a sale of the properties - it is unnecessary to set it out in these reasons for judgment.
On 6 January 2000 the defendant wrote to the plaintiffs' solicitors informing them that he proposed to fix an auction date in respect of the two properties.
On 31 January 2000 there was a meeting between the plaintiffs' solicitor and the defendant at which the defendant gave the plaintiffs' solicitor final amended schedules showing all of the plaintiffs' investments through Martin on a year-by-year basis.
At that meeting the plaintiffs' solicitor sought and received an assurance that "For Sale" boards would not be put up on the properties for 14 days so as to give the plaintiffs' solicitor a reasonable amount of time to discuss the new financial schedules with the plaintiffs.
On 16 February, in a telephone conversation with the solicitor for the plaintiffs, an officer of the defendant told the plaintiffs' solicitor that the defendant was proceeding with the sale and the marketing plan for the properties.
On 25 February the plaintiffs' solicitor telephoned the defendant and told him that the plaintiffs had instructed him to brief counsel and to institute proceedings in this court to stop the sales and to seek a return of the properties.
No such step was taken at that time and on 29 February an officer of the defendant telephoned the plaintiffs' solicitor and told him that the auctions were fixed for 1 April.
On 24 March the plaintiffs filed their writ and summons in the court.
When the summons came before me yesterday, counsel for the plaintiffs informed me that he wished to prepare further affidavits to submit to the court in relation to the plaintiffs' application and I stood the matter over until today.
Where a party, for reasons best known to itself, chooses not to pursue the rights available to it to seek injunctive relief until the very last moment, thereby allowing the party against whom it belatedly seeks the relief to act to its disadvantage, in the sense that if it is now restrained it will be put to unnecessary expense and inconvenience, it cannot expect the court to look upon its application favourably.
The plaintiffs and their solicitors have known since at least 29 February that the defendant was arranging and had arranged for the auction of these two properties to take place on 1 April, and yet they deliberately chose not to approach the court until yesterday. On that basis alone I would not grant the injunctive relief sought by the plaintiffs.
But that is not the only basis upon which I would refuse their application. Whilst there may be a serious issue to be tried concerning the actions of Martin, I do not consider that the balance of convenience is such as to justify the grant of injunctive relief.
The plaintiffs do not live on the properties in question. As I understand the situation, the property at Sydenham consists of two units both of which are let. I do not accept therefore that the plaintiffs have any sentimental attachment to the property.
As to the Elaine property - it would appear that the plaintiffs make no use of it but purchased it intending to retire to it when their two school-aged children have finished their schooling and are independent. It is clear therefore that the plaintiffs would not make any significant use of that property for many years.
Finally in this connection it is my opinion that if the plaintiffs are ultimately successful in their proceeding they will be adequately compensated by an appropriate award of damages.
The plaintiffs' summons filed in the court is dismissed with costs to be taxed, including the costs reserved yesterday, and paid by the plaintiffs.
---
0
0
0