Crane Distribution Ltd v Gordon - [2010] WASC 202

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CRANE DISTRIBUTION LTD -v- GORDON [2010] WASC 202

CORAM: HALL J

HEARD: 22 JULY 2010

DELIVERED : 22 JULY 2010

FILE NO/S: CIV 2113 of 2010

MATTER :A Notice Pursuant to Section 138B of the Transfer of Land Act 1893

BETWEEN: CRANE DISTRIBUTION LTD
Plaintiff
AND
JOHN CHARLES GORDON
First Defendant
THE REGISTRAR OF TITLES
Second Defendant

Catchwords:

Real property - Caveat - Application to extend operation of caveat - Ex parte application - Serious question to be tried - Balance of convenience

Legislation:

Transfer of Land Act 1893 (WA), s 138B

Result:

Caveat extended

Category: B

Representation:

Counsel:

Plaintiff:     Mr P N Poliwka
First Defendant              :     No appearance
Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Q Legal
First Defendant              :     No appearance
Second Defendant         :     No appearance

Case(s) referred to in judgment(s):

Bashford v Bashford [2008] WASC 138
City of Fremantle v Moltoni (No 1) Pty Ltd [2009] WASC 261
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Jandric v Jandric [1999] WASC 22
Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95
Parola v Parola [2009] WASC 190
Porter v McDonald [1984] WAR 271
Stacey v Stacey [2010] WASC 85

HALL J: (This judgment was delivered extemporaneously on 22 July 2010 and is edited from the transcript).

The plaintiff, Crane Distribution Ltd, which I will hereinafter refer to as Crane, has applied for an order extending the operation of a caveat over property jointly owned by the first defendant, John Charles Gordon.
In support of the application, an affidavit of Lewis Raymond Haigh has been filed by the plaintiff. On the basis of that affidavit the following facts can be drawn. Crane entered into a credit agreement with J & D Gordon Plumbing Pty Ltd on 11 October 2006. That agreement provided that Crane would extend credit to J & D Gordon Plumbing for goods delivered in any calendar month. Unless otherwise agreed, the amount owing for the goods was to be paid on or before the last trading day of the following month.
The first defendant, Mr Gordon, provided a guarantee and indemnity to Crane. That guarantee does not nominate the guarantor in the space provided but it is signed by Mr Gordon in the place for the guarantor to sign. In those circumstances, the purport and effect of the guarantee appears clear; that is, Mr Gordon was agreeing to be liable for the moneys owing by J & D Gordon Plumbing to Crane under the credit agreement.
Clause 15 of the guarantee provides that the guarantor charges all his interest in real property with the amount of any indebtedness to the supplier, Crane, owing at any particular time. In particular the clause provides that the guarantor consents to the registration of caveats to give effect to the charge created.
On 8 September 2009, Crane lodged a caveat over the land contained in Certificate of Title Volume 2191…

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.

Continue reading Crane Distribution Ltd v Gordon

Details

AGLC: Crane Distribution Ltd v Gordon [2010] WASC 202
Case: [2010] WASC 202
Decision Date: 22 JULY 2010

CaseChat Overview and Summary

The parties to the proceedings were Crane Distribution Ltd and Gordon. The nature of the dispute was an application to extend the operation of a caveat over a property. The matter was heard in the Supreme Court of Western Australia. The legal issues before the court were whether the caveator had demonstrated a serious question to be tried as to whether a caveatable interest existed, and whether the balance of convenience favoured the extension of the caveat.

The court held that the caveator had demonstrated a serious question to be tried as to whether the caveator had the interest in the land as claimed in the caveat. The interest claimed was of a security nature rather than a proprietary interest, but the amount said to be owing was reasonably large and it could be inferred that recovery would be prejudiced if the caveat were to expire. The court noted that the balance of convenience was a factor that must be considered where there was an application to extend a caveat. The court was satisfied that the balance of convenience favoured extension, but it intended to include in the orders a requirement that the plaintiff provide an undertaking as to damages within seven days of the making of these orders. Failing the giving of such an undertaking, the orders would lapse.

In light of the above, the court made orders extending the operation of the caveat for a period of 28 days from the date of the orders, subject to the caveator providing an undertaking as to damages within seven days of the making of these orders. The orders also included a provision that if the caveator failed to provide such an undertaking, the orders would lapse.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Having said that, it is nonetheless necessary to take into account the merits of the application and the effect that denial of it may have on the plaintiff. Section 138C(2) provides that the court may make an order extending a caveat if satisfied that the caveator's claim 'has or may have substance'. The onus is on the caveator to demonstrate that there is a serious question to be tried as to whether a caveatable interest exists: see Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50 and Jandric v Jandric [1999] WASC 22 [5]. The caveat should not be removed unless the claim to an estate or interest in the land appears to be without foundation: Porter v McDonald [1984] WAR 271, 276 and Custom Credit (48). The balance of convenience is a factor that must be considered where there is an application to extend a caveat. Nevertheless, interlocutory removal of a caveat is unusual where an arguable case as to the existence of a caveatable interest has been demonstrated: Custom Credit (50) and Bashford v Bashford [2008] WASC 138. In my view, the evidence before me does demonstrate that there is a serious question to be tried as to whether Crane has the interest in the land as claimed in the caveat filed on 8 September 2009, being caveat L067707. As to the balance of convenience, I note that the interest claimed is of a security nature rather than a proprietary interest. I refer in that regard to Navarac and the judgment of Pullin J at [22]. Nonetheless, the amount said to be owing is reasonably large and it can be inferred that recovery would be prejudiced if the caveat were to expire. In those circumstances, with some reservations, I am satisfied that the balance of convenience favours extension. That conclusion can be more reasonably reached by taking into account that it is my intention to include in the orders a requirement that the plaintiff provide an undertaking as to damages within seven days of the making of these orders. That will be a condition subsequent to the making of the orders. Failing the giving of such an undertaking, the orders will lapse.