Choi v Kim

[2013] NSWSC 1774

Supreme Court

New South Wales

Medium Neutral Citation:	Choi v Kim [2013] NSWSC 1774
Hearing dates:	15 November 2013
Decision date:	15 November 2013
Jurisdiction:	Equity Division - Duty List
Before:	White J
Decision:	Summons dismissed.
Catchwords:	REAL PROPERTY - Torrens system - caveats - caveatable interest - where wife claims equitable interest in land held by husband - where no remedial constructive trust over land ordered - whether defect in caveat could be cured - whether caveatable interest disclosed - Real Property Act 1900, ss 74K, 74L, 74O - Real Property Regulation 2008, Sch 3
Legislation Cited:	Real Property Act 1900 Family Law Act 1975 (Cth)
Cases Cited:	Wu v Dardaneliotou [2008] NSWSC 1319 Song v Shi [2011] NSWSC 1207 Baumgartner v Baumgartner (1987) 164 CLR 137 Green v Green (1989) 17 NSWLR 343 Deabel v V'Landys [2002] NSWSC 43 Jones v Baker [2002] NSWSC 89; (2002) 10 BPR 19,115 Hanson Construction Materials Pty Limited v Vimwise Civil Engineering Pty Limited [2005] NSWSC 880; (2005) 12 BPR 23,355 Warden v Mortgage House (No. 1) Pty Limited [2006] NSWSC 1462; (2006) 13 BPR 24,375 Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27
Category:	Principal judgment
Parties:	Soo Jin Choi (Plaintiff) Hyoung Jung Kim (Defendant)
Representation:	Counsel: L Smith (Plaintiff) Solicitors: Yoon Twining Lawyers
File Number(s):	2013/344062

Judgment

1. HIS HONOUR: This is an application for an order pursuant to s 74K(2) of the Real Property Act 1900 to extend the operation of a caveat. The plaintiff is the defendant's wife. They have separated. The caveat is lodged in respect of land registered in the name of the defendant. The caveat describes the particulars of the estate or interest claimed by the plaintiff in the land as being an "Equitable Interest in the Land pursuant to the Facts Stated Below". The facts that are said to give rise to that interest are that:

"The Caveator is the wife of the registered proprietor. The parties have separated. As the registered proprietor's wife, the caveator claims an equitable interest in the land. The land is subject to Family Court property settlement orders."

1. In fact, the land is not the subject of Family Court property orders. Rather, the plaintiff proposes to bring proceedings in the Family Court or the Federal Circuit Court for property settlement and maintenance orders.

1. A claim for such orders pursuant to s 79 of the Family Law Act 1975 (Cth) is not itself a basis for the existence of an estate or interest in land that would be the subject of the orders. See, for example, Wu v Dardaneliotou [2008] NSWSC 1319 at [7], where Brereton J said that:

"Such a beneficial interest on the part of the husband would fall into the pool of the property divisible under Family Law Act, s 79, but it does not give the plaintiff any caveatable interest in the property. If she wanted to protect any claim that she might have against the property on that basis, then it would have to be by obtaining an injunction, rather than claiming any caveatable interest."

(See also Song v Shi [2011] NSWSC 1207 at [8] and [9].)

1. Counsel for the plaintiff submitted that the plaintiff's evidence established that she has, or would have, a beneficial interest in the land by reason of the imposition of a constructive trust on the principles in Baumgartner v Baumgartner (1987) 164 CLR 137. The plaintiff's evidence is that in about July 2007, she opened a joint savings account with her husband, that all of their wages went into the joint account, and all of their living expenses and mortgage repayments were paid out of this account. Counsel for the plaintiff said that this was a case in which the parties had pooled their earnings for the purposes of their joint relationship; that one of the purposes of that relationship was to secure accommodation for themselves and their child; their contributions in respect of the acquisition of the land and the making of their home, and the discharge of the defendant's obligations under the mortgage were on the basis of, and for the purposes of, their joint relationship. She submitted that after the relationship had failed, an assertion by the defendant that the property was his sole property beneficially to the exclusion of any interest at all on the part of the plaintiff would amount to unconscionable conduct, which attracts the intervention of equity and the imposition of a constructive trust at the suit of the respondent (Baumgartner v Baumgartner at 149).

1. That may be so, but the constructive trust that would be imposed on that basis would be a remedial constructive trust arising as a result of the court's orders. It would not mean that the plaintiff has a present caveatable interest in the land.

1. Counsel for the plaintiff advanced another basis for maintaining the caveat, namely, that the plaintiff may be able to establish a constructive trust on the basis of an inferred common intention on the part of both parties that she should have some beneficial interest in the land by reason of her contributions and her acting to her detriment on the basis of that common intention. (See, for example, Green v Green (1989) 17 NSWLR 343.) One difficulty with that argument is that according to the plaintiff's evidence, there were frequent arguments during the marriage at which time the defendant always referred to the house as his house and asked the plaintiff to leave. In the light of that evidence, I do not think that on the present material there is a seriously arguable case for the existence of a trust relationship on the basis of the parties' inferred common intentions.

1. In any event, the caveat does not claim an interest as the beneficiary of a constructive trust either on the principles in Baumgartner v Baumgartner or on the basis of the parties' inferred common intention and the plaintiff's having acted to her detriment on the basis of that common intention.

1. It was submitted that this was a defect in the caveat that could be overlooked pursuant to s 74L of the Real Property Act. Reference was made to the decision of Austin J in Deabel v V'Landys [2002] NSWSC 438 where his Honour referred to cases dealing with the question whether there is power for the court to amend the caveat, or to disregard deficiencies, pursuant to s 74L. His Honour referred in that context to the decision of Young CJ in Eq in Jones v Baker [2002] NSWSC 89; (2002) 10 BPR 19,115 at 19,119 [32] as to the scope of the power in s 74L. Austin J reached no conclusion about that question, as his Honour did not consider that the plaintiff had an arguable case that she had any caveatable interest at all (at [7]-[9]).

1. In Hanson Construction Materials Pty Limited v Vimwise Civil Engineering Pty Limited [2005] NSWSC 880; (2005) 12 BPR 23,355 Campbell J (as his Honour then was) referred to the scope of the dispensing power in s 74L. There the caveat simply claimed an equitable interest in much the same way as in this case. His Honour said (at 23,360 [34]-[38]):

"[34] The dispensing power which is contained in s 74L is one which merely excuses defects of form. The failure to specify the nature of the interest, in as fundamental a way as has happened in the present case, is more than a defect of form.

[35] In In the Marriage of Stevens (1991) 15 Fam LR 51 at 53 Cohen J expressed the view that:

'... it is no longer the case that a caveat will be struck down for technical fault if the caveator has any caveatable interest. The Court has power to extend the operation of any caveat lodged, and this extension can be in relation to both time and substance.'

[36] If by that view, his Honour intended to hold that the existence of a caveatable interest which is not disclosed on the face of the document can support the validity of the caveat, that view is not one with which I agree.

[37] In Multi-Span Constructions No 1 Pty Ltd v 14 Portland St Pty Ltd (2001) 10 BPR 19,253; [2001] NSWSC 696 Barrett J came to a similar view. His Honour went on to say (at [130]):

'It is true that, in proceedings for the extension of a caveat's operation, any defect in the form of the caveat will be disregarded under s 74L. But that does not mean that some wholly new substratum can be substituted by reference to some estate or interest simply not contemplated by the caveat, whatever its deficiency of form may be.'

[38] I respectfully agree with that view, and would add that I would not regard an expression of enormous generality, like 'equitable interest' as one which 'contemplates' some specific type of interest, such as an equitable charge, which is claimed."

1. This decision was followed by Brereton J in Warden v Mortgage House (No. 1) Pty Limited [2006] NSWSC 1462; (2006) 13 BPR 24,375, particularly at 24,377 [15].

1. In short, the caveat does not give particulars of the nature of the estate or interest in the land claimed by the caveator as required by s 74F(5) and Schedule 3 to the Real Property Regulation 2008.

1. The facts, stated in the caveat as giving rise to an equitable interest, on their face do not disclose any such interest. The defect is not one that can be overlooked pursuant to s 74L. If the plaintiff can establish a present equitable interest by reason of being a beneficiary of a constructive trust, then it may well be that she would be entitled to lodge a caveat claiming such an interest. As presently advised, I would not think that such a caveat would be deprived of effect pursuant to s 74O(2) because such a caveat would not be in respect to the same estate, interest or right that is the subject of the present caveat. Indeed, for the reasons I have given, the present caveat does not claim any particular estate or interest in land. It is, however, unnecessary for me to decide that question.

1. For these reasons, I refuse the application for interim relief in the summons.

1. The summons seeks, by way of final relief, a declaration that the plaintiff has an equitable interest in the property and an order for division or settlement of property owned by the parties under s 79 of the Family Law Act. I am prepared to assume that this Court could have cross-vested jurisdiction to deal with the claim for relief under the Family Law Act (Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27 at 35-40 [32]-[50]). However, as Brereton J said in Song v Shi, the Family Court of Australia and the Federal Circuit Court are ordinarily the courts in which matrimonial causes should be instituted and, thus, any application for an injunction should be brought in such court. However, the claim for final relief is not presently before me.

[Counsel addressed.]

1. The plaintiff accepts now that the summons should be dismissed, and I assume that she will bring her claim for relief in the Federal Circuit Court or the Family Court.

1. I order the summons be dismissed.

1. There will be no order as to costs, as the defendant did not appear.

Decision last updated: 02 December 2013