Elmant Pty Ltd v Dickson

[2001] VSC 155

SUPREME COURT OF VICTORIA
PRACTICE COURT	Not Restricted

No. 4925 of 2001

ELMANT PTY. LTD.	Plaintiff
v.
MARY DICKSON (FORMERLY KOTEFSKI) AND ANOTHER	Defendants

---

JUDGE:	BEACH, J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	9 MAY 2001
DATE OF JUDGMENT:	11 MAY 2001
CASE MAY BE CITED AS:	ELMANT PTY. LTD. v. DICKSON & ANOR.
MEDIUM NEUTRAL CITATION:	[2001] VSC 155

---

CATCHWORDS:      Removal of caveat – Caveatable interest – Family Court Act 1975 (C'th.) s.79 – Right of spouse to make application to the Family Court of Australia for a redistribution of property owned by parties does not create caveatable interest.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr. I.S. Williams	Henty Jepson & Kelly
For the Defendants	Mr. M. Goldblatt	Issac Brott & Co.

HIS HONOUR:

1. This is the return of an originating motion filed in the court by the plaintiff, Elmant Pty Ltd, whereby the plaintiff seeks an order that the second defendant, the Registrar of Titles, remove caveat No. X270726C lodged by the first defendant, Mary Dickson (formerly Mary Kotefski) on 18 January 2001 over the land contained in Certificate of Title V10389 Folio 181, being the property known as Lot 36, Paringa Road, Portsea.

1. The plaintiff is the registered proprietor of the property.  The property is mortgaged to the Commonwealth Bank of Australia (CBA).  As at 15 March 2001 the amount owing by the plaintiff under the mortgage was $2,043,000. 

1. On 18 February 2001 the plaintiff sold the property at auction to Roger William Johnston and Elizabeth Ann Johnston for the sum of $1,400,000.  Settlement of the sale of the property is scheduled to occur on 18 May 2001. 

1. The first defendant is the former wife of George Kotefski.  The parties were married in 1989 but later separated and were divorced by order of the Family Court of Australia made on 31 July 1999.  There are three children of the marriage who now live with their mother, the first defendant.

1. By order of the Family Court made on 16 September 1998 George Kotefski was restrained from -

(1)selling, encumbering, alienating or otherwise disposing of any real or personal property over the value of $500;

(2)taking any step or exercising any power as a director or shareholder of any company or as trustee, or appointor or other office holder of any trust which may result in:

(a)any such company or trust selling, encumbering, alienating or otherwise disposing of any real or personal property over the value of $500 or;

(b)the alteration in the structure, shareholder or control of any such trust or company without the wife's prior written consent or an order of the Court.

1. It is the case for the first defendant that her former husband is a large and successful property developer. 

1. The subject property is the last remaining lot in a 40-acre development undertaken by Kotefski, or companies on his behalf, at Portsea known as Woniona Estate. 

1. The first defendant alleges that Kotefski has deliberately arranged his affairs to ensure that his assets are protected from any claims made by her in the Family Court proceedings by having the assets in a number of companies in which he does not appear, on the face of it, to have any financial interest.

1. Kotefski's wealth and dealings are said by the first defendant to be adequately demonstrated by the following report which appeared in the property section of the 6 March 1999 edition of the Melbourne Age:

"Former nightclub owner George Kotefski made the headlines in the 1980s when he sold the Underground Nightclub for $10 million.  The businessman, whose other clubs have included Chevron and Dome, had his share of financial woes in the early 1990s, but the ex-clubber has bounced back and is making waves in the property world with a string of multi-million-dollar purchases.

Kotefski has a minor shareholding in the subdivision of the former Brockoff estate at Portsea, which he and partners purchased in 1997 by tender for $3.2 million.

More recently, he paid $2.25 million for the former Shell petrol station site in Ormond Esplanade, Elwood, which he plans to convert into 26 apartments.  In December, he paid $375,000 for the house two doors from the petrol station and now Private Property has learnt Kotefski has paid $4.3 million for the historic Canterbury mansion Frognall, which was sold prior to auction by Fletcher & Parker.  It is set on 1.3 hectares on Mont Albert Road and it is understood Kotefski plans to refurbish the house for his own use and subdivide part of the grounds.

With money flying out the door, Kotefski has decided to sell some of his holdings and recently negotiated the sale of two blocks of land on the Portsea subdivision to local excavator Mick Jennings for $1.08 million.  Jennings has already completed one home on the estate, which will be auctioned today with an asking price of $1.1 million-plus.

The sale of the two blocks to Jennings has some of the Portsea set breathing a sigh of relief.  Kotefski, himself, has built two homes in the area, one which will also be auctioned today with an asking price of well over $1 million and another almost completed home which towers over the area.

Questions were raised by concerned local residents about whether Kotefski had tampered with the land's natural height levels.  The Mornington Peninsula Council was also accused by locals of failing to enforce its own planning regulations, but soil tests by enforcement officers found no evidence of extra soil being dumped on the block."

1. Kotefski has sworn two affidavits in support of the plaintiff's application.  In para.5 of his affidavit of 4 May 2001 he has sworn:

"I say that from time to time I have undertaken the management of various business enterprises but otherwise deny that I am a wealthy man."

1. In the light of the other evidentiary material dealing with the activities of Kotefski I find those statements to be totally lacking in credibility.

1. The estate or interest claimed by the defendant is stated in her caveat to be "Estate in Fee Simple". The grounds of her claim read: "Pursuant to Section 79 of the Family Law Act 1975."

1. It was agreed by counsel for the parties during the course of discussion that the fact that the second defendant may have a property claim against her former husband pursuant to s.79 of the Family Law Act does not of itself give the defendant any caveatable interest in real estate owned by her former husband.

1. However, it is said on behalf of the first defendant that the first defendant's claim to a caveatable interest in the property in question is not pursuant to s.79 but pursuant to the injunction granted by the Family Court on 16 September 1998 to which I earlier referred.

1. In my opinion the fact that a person is restrained by order of a court from disposing of real estate owned by him or registered in his name does not of itself give the person obtaining the injunction a caveatable interest in the real estate.

1. In Classic Heights Pty Ltd v. Black Hole Enterprises Pty Ltd (1994) V.Conv.R.54-506, Batt, J. (as he then was) held that a caveator must have a right arising from the transaction giving rise to the alleged caveatable estate or interest to compel the registered proprietor to deliver up an interest which can be registered on the register for the land the subject of the caveat, and which, upon being registered, would register an estate or interest in the land as claimed by the caveat.

1. The order of the Family Court does not give the second defendant that right.

1. Of course the caveat provisions under the Transfer of Land Act 1958 are much wider than as stated by Batt,J. For example a person may acquire an equitable interest in land sufficient to support a caveat, for example, a charge given by a building owner to a builder over the property upon which the building in question is being built, or a charge given by a debtor to a creditor over real estate to secure repayment of the debt.

1. But none of those situations apply in the present case.

1. Had the Family Court made orders giving the defendant a proprietory interest in real estate owned by Kotefski, totally different considerations would apply.

1. It follows from what I have said that even if it could be established that Kotefski is the true owner of the property at Portsea, in my opinion, as things presently stand, the second defendant has no caveatable interest in the property.  There is no basis, therefore, for not making an order that the caveat be removed.

1. Even if I had taken a different view of the matter, nevertheless I would have ordered its removal.

1. CBA has a mortgage over the property and other properties registered in the plaintiff's name.  That much is clear from the mortgage produced to the court by the bank.  The amount that is to be received from the sale of the property is of the order of $1,400,000.  That sum represents a little more than half the sum presently owed by the plaintiff to the bank.

1. The whole of the proceeds of the sale of the property will go to the bank to reduce the plaintiff's outstanding liability. The CBA's entitlement to such payment must take priority over any claim to an interest in real estate which the defendant may have against Kotefski pursuant to s.79 of the Family Court Act.

1. The Registrar of Titles is ordered, pursuant to s.93 of the Transfer of Land Act 1958, to remove caveat No.X270726C from the land in Certificate of Title Volume 10389 Folio 181. In the event that caveat No.X270726C has not been recorded, the Registrar of Titles is ordered not to record caveat No.X270726C, to reject caveat No.X270726C and to return caveat No.X270726C to the lodging party.

1. As I have found that the first defendant had no caveatable interest in the property, it follows that the first defendant must pay the costs of the plaintiff of the application, including any reserved costs.

1. I direct that the order be prepared by the solicitors for the plaintiff and brought to me for authentication.

---