Diamond Valley Holdings Pty Ltd v Thompson
[2014] WASC 447
•26 NOVEMBER 2014
DIAMOND VALLEY HOLDINGS PTY LTD -v- THOMPSON [2014] WASC 447
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2014] WASC 447 | |
| Case No: | CIV:2617/2014 | 26 NOVEMBER 2014 | |
| Coram: | EDELMAN J | 26/11/14 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Caveat extended subject to condition subsequent of commencing proceedings within 14 days | ||
| B | |||
| PDF Version |
| Parties: | DIAMOND VALLEY HOLDINGS PTY LTD LINDA KRISTIE THOMPSON REGISTRAR OF TITLES |
Catchwords: | Real property Caveats Application to extend operation of caveat Balance of convenience Whether extension of caveat should be subject to a condition subsequent and terms of that condition |
Legislation: | Transfer of Land Act 1893 (WA) |
Case References: | Bashford v Bashford [2008] WASC 138 Cardinal Constructions Pty Ltd v Ghersinich [2009] WASC 239 KWS Capital Pty Ltd v Love [2013] WASC 294 Spunter Pty Ltd v Hall [2006] WASC 6 Thorpe v Siezer Developments Pty Ltd [2006] WASC 151 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
LINDA KRISTIE THOMPSON
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Real property - Caveats - Application to extend operation of caveat - Balance of convenience - Whether extension of caveat should be subject to a condition subsequent and terms of that condition
Legislation:
Transfer of Land Act 1893 (WA)
Result:
Caveat extended subject to condition subsequent of commencing proceedings within 14 days
Category: B
Representation:
Counsel:
Plaintiff : Mr A M Prime
First Defendant : Ms S E Bavich
Second Defendant : No appearance
Solicitors:
Plaintiff : MDS Legal
First Defendant : Gadens Lawyers
Second Defendant : No appearance
Cases referred to in judgment:
Bashford v Bashford [2008] WASC 138
Cardinal Constructions Pty Ltd v Ghersinich [2009] WASC 239
KWS Capital Pty Ltd v Love [2013] WASC 294
Spunter Pty Ltd v Hall [2006] WASC 6
Thorpe v Siezer Developments Pty Ltd [2006] WASC 151
- EDELMAN J:
These reasons were delivered orally immediately after the hearing and they have been edited for grammar and syntax.
Introduction
1 This is an application by Diamond Valley for an extension of a caveat over the property of Ms Thompson. Diamond Valley relies on s 138C of the Transfer of Land Act 1893 (WA).
2 The principles concerning an extension of a caveat are well known. I stated the principles in KWS Capital Pty Ltd v Love.1 In summary, the interdependent issues to be considered in an application for extension of a caveat are as follows:
(1) whether the caveator's claim in respect of the estate or interest in land 'has or may have substance'; and
(2) whether the balance of convenience favours the retention of the caveat and, if so, the appropriate orders to be made.
3 As I will explain, (1) is plainly satisfied. There is no real dispute about this. There is a disputed debt and Diamond Valley relies upon a charge in a contract with Ms Thompson securing that debt. As to (2), the only issue concerns whether Diamond Valley will commence proceedings to recover the debt and when those proceedings should be commenced. It is appropriate that the orders for extension of the caveat be made subject to a condition subsequent that proceedings be commenced within 14 days as Diamond Valley has indicated.
Whether the claim has or may have substance
4 The first issue is whether the caveator's claim in respect of the estate or interest in land 'has or may have substance'. This is sometimes expressed as whether the caveator can show that there is a serious question to be tried, or whether the caveator can prove a prima facie case. The requirement that the caveator's claim of substance be in respect of the estate or interest in land has been held to mean that the claim must concern a 'proprietary interest' in land.
5 There is no real dispute in this case that Diamond Valley's claim has or may have substance. The evidence on this application from Mr Italiano, a director of Diamond Valley, is as follows.
6 On 23 October 2007, Diamond Valley entered into a cost plus building contract with Ms Thompson for the construction of a residence at 8 Alcaston Road, Harrisdale.2 Invoices were sent to Ms Thompson at regular intervals during construction. Twice during the course of construction, Ms Thompson requested Diamond Valley to cease works for a period of time due to financial difficulties.3
7 Clause 4 of the building contract was as follows:
The Owner hereby charges the land constituting the Site with the due payments to the Builder of all the monies that will and/or may become payable hereunder.
8 In September 2011, practical completion under the building contract occurred.
9 On 26 September 2011, the final invoice was issued to Ms Thompson for $109,188.86. Although the final invoice had not been paid, Ms Thompson was permitted to take possession of the Harrisdale property.
10 Ms Thompson made a number of subsequent payments towards the final amount, in small denominations. Diamond Valley says that the current balance outstanding is $92,000.4 This amount is disputed.
11 On 21 February 2013, Diamond Valley lodged an absolute caveat over the Property. The absolute caveat was withdrawn in 2014. In February 2014, Diamond Valley lodged caveat M564338, which is the subject of this application.
12 The caveat is due to lapse at midnight on 27 November 2014 (tomorrow night).
The balance of convenience
13 If the caveator's claim in respect of the estate or interest in land 'has or may have substance' then the caveat may be extended. The exercise of the discretion to extend has sometimes been described as the 'balance of convenience'.
14 The issues of (1) whether the claim 'has or may have substance' and (2) whether the balance of convenience favours the extension of the caveat are not independent. Even if a claim has or may have substance, the caveat might not be extended having regard to factors including the apparent strength or weakness of the claim.
15 As to the balance of convenience, the caveat is a 'subject to claim' caveat. It is not absolute. Further, as Diamond Valley explains, Ms Thompson has not indicated any present intention to sell the Harrisdale property.5
16 The only issue that arises in relation to the balance of convenience in circumstances where there is a dispute about underlying debt which is the subject of the charge is the period over which any condition for that extension should operate concerning Diamond Valley's enforcement of its claim to the disputed debt and rights in relation to the Harrisdale property.
17 In an affidavit filed this morning, Mr Italiano says that if, after conferral and within 14 days, there remains a genuine dispute about the money owing to Diamond Valley under the contract, then he has instructed Diamond Valley's solicitors to issue proceedings against Ms Thompson in relation to the outstanding money.
18 There was no dispute on this application that this Court has power, as an 'ancillary order' under s 138C(2)(c) of the Transfer of Land Act, to extend the operation of the caveat until further order, but to make that extension subject to a condition subsequent that the plaintiff commence proceedings within a specified period of time. This is effectively the order that has been made in a number of cases.6
19 Subject to a condition subsequent of this nature, it is appropriate to grant the extension sought. In oral submissions, counsel for Ms Thompson accepted that such orders were appropriate but she said that since 11 March 2014, (i) there has been dispute about the debt and (ii) Diamond Valley has been aware of Ms Thompson's desire to see the underlying documents concerning the alleged debt. Counsel said that the appropriate condition subsequent should be to require Diamond Valley to file a writ to enforce its claims within 24 hours.
20 I do not accept that an abbreviated period of 24 hours is appropriate. In weighing all the matters described above in the balance of convenience, I consider that a 14-day period is entirely reasonable. I note that other authorities have imposed a similar condition subsequent. More importantly, this Court should not discourage conferral between parties prior to the issue of a writ. But even apart from the importance of conferral, a 14-day period for the condition subsequent is appropriate.
Conclusion
21 The appropriate orders are as follows:
1. The operation of caveat number M564338 registered by the plaintiff on the land situated at 8 Alcaston Road, Harrisdale and more particularly described as Lot 378 Deposited Plan 54867 being the whole of the land contained in Certificate of Title Volume 2651 Folio 727 (the Property), be extended until further order of the Supreme Court.
2. It is a condition subsequent to the continuation of the order in paragraph 1 that, within 14 days of the date of these reasons, the plaintiff commence proceedings by writ of summons for purposes including determining the plaintiff's claims in relation to an interest in the Property.
3. The matter be listed for directions in my CMC list on 17 December 2014 at 9:15 am.
22 Both counsel sought an order that costs of today be reserved. That order was also made.
1KWS Capital Pty Ltd v Love [2013] WASC 294 [32] - [36].
2 Affidavit of Mr Italiano, sworn 24 November 2014 [4].
3 Affidavit of Mr Italiano, sworn 24 November [6] - [9].
4 Affidavit of Mr Italiano, sworn 24 November [14].
5 Affidavit of Mr Italiano, sworn 24 November [29].
6Cardinal Constructions Pty Ltd v Ghersinich [2009] WASC 239 (Jenkins J); Bashford v Bashford [2008] WASC 138 (Beech J); Thorpe v Siezer Developments Pty Ltd [2006] WASC 151 (Jenkins J); Spunter Pty Ltd v Hall [2006] WASC 6 (Jenkins J).
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