Emirge Pty Ltd v De Coppi - [2024] WASC 357

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   EMIRGE PTY LTD -v- DE COPPI [2024] WASC 357
CORAM:   WHITBY J
HEARD:   18 SEPTEMBER 2024
DELIVERED          :   30 SEPTEMBER 2024
FILE NO/S:   CIV 1952 of 2024
BETWEEN:   EMIRGE PTY LTD
Plaintiff
AND
TONY DE COPPI
First Defendant
REGISTRAR OF TITLES
Second Defendant

Catchwords:

Real property - Caveats - Application to extend operation of caveat - Building contract - Charging clause - Proprietary interest - Caveator's claim has substance - Balance of convenience favours extension of caveat

Legislation:

Transfer of Land Act 1893 (WA)

Result:

Caveat extended

Category: B

Representation:

Counsel:

Plaintiff	:	AP Hershowitz
First Defendant	:	In Person
Second Defendant	:	No Appearance

Solicitors:

Plaintiff	:	Paiker And Overmeire
First Defendant	:	In Person
Second Defendant	:	No Appearance

Cases referred to in decision(s):

Bashford v Bashford [2008] WASC 138
Bateson v Jones [2013] WASC 8
Bride v The Registrar of Titles [2015] WASC 11
Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179
Emirge Pty Ltd v De Coppi [2024] WADC 83
Southern Wine Corporation Pty Ltd (in liq) v Frankland River Olive Co Ltd [2005] WASCA 236

WHITBY J:

Emirge Pty Ltd, the plaintiff, makes an application by originating summons for an order, pursuant to a s 138C of the Transfer of Land Act 1893 (WA) (TLA), extending the operation of Caveat P575201 (Caveat) registered by the plaintiff against land at 52 Saltriver Street, Ellenbrook, Western Australia (Property).
The application is supported by the affidavit of Robert Dye sworn on 12 August 2024 (Dye Affidavit), a certificate of urgency filed on 14 August 2024 and an undertaking as to damages filed on 13 August 2024.
Mr Tony Lino De Coppi, the first defendant, is the registered proprietor of the property and opposes the application. The first defendant is self‑represented. He relies upon his affidavits sworn on 17 September 2024 and dated 20 September 2024 (First Coppi Affidavit and Second Coppi Affidavit respectively).
Both parties made oral submissions at the hearing of the application on 18 September 2024. I reserved my decision and made orders extending the operation of the Caveat until further order of the court.
For the reasons that follow, I find that the plaintiff's case that it has a proprietary interest in the Property is strong, and that the balance of convenience favours the extension of the Caveat. I, therefore, make an order extending the operation of the Caveat.

Background

The plaintiff carries on the business of residential building works. The first defendant was employed by the plaintiff until June 2023.
On 20 June 2022, the plaintiff and the first defendant entered into a Residential Building Works Contract (Contract) pursuant to which the plaintiff agreed to construct a residence on the Property for the amount of $450,000.[1]
[1] Dye Affidavit Annexure 'RD-2'.
Pursuant to clause 33(a) of the Contract, the first defendant charged the Property with the due payment…

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.

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Details

Case: [2024] WASC 357
Decision Date: 30 SEPTEMBER 2024

CaseChat Overview and Summary

In Emirge Pty Ltd v De Coppi, the plaintiff, Emirge Pty Ltd, sought an extension of a caveat lodged over a property owned by the defendant, De Coppi. The dispute arose from a building contract between Emirge Pty Ltd and De Coppi, under which De Coppi had engaged Emirge Pty Ltd to construct a residence on a property. Emirge Pty Ltd lodged a caveat over the property to secure its claim for an outstanding debt from De Coppi under the building contract. De Coppi sought to have the caveat removed, arguing that the balance of convenience favoured his position.

The court had to determine whether Emirge Pty Ltd’s claim for a proprietary interest in the property had substance and, if so, whether the balance of convenience favoured extending the caveat. The court found that the claim related to a proprietary interest in the property, as the building contract provided for the property to be appropriated for the discharge of an outstanding debt. Emirge Pty Ltd had commenced proceedings in the District Court seeking judgment for the amount it claimed was outstanding. De Coppi had been refused leave to file a counterclaim in those proceedings. The court concluded that Emirge Pty Ltd’s claim had substance and was strong.

The court also considered the balance of convenience. Emirge Pty Ltd submitted that there was a high likelihood that its proprietary interest would be defeated if the caveat was not extended, as De Coppi could borrow funds using the property as security. Emirge Pty Ltd had provided an undertaking as to damages, which protected De Coppi if the claim turned out not to have substance. De Coppi argued that the balance of convenience was in his favour, as the caveat had prevented him from obtaining funds from his financial institution to make payments to another builder engaged to complete the construction of the residence. The court found that the balance of convenience favoured extending the caveat.

The court ordered that the caveat be extended for a period of 28 days from the date of the judgment.

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

The claim made by plaintiff clearly relates to a proprietary interest in the Property. The plaintiff and the first defendant, as parties to the Contract, have expressly provided for the Property to be appropriated for the discharge of an outstanding debt under the Contract. This gives rise to a proprietary interest in the Property capable of protection by caveat.[7][7] Southern Wine Corporation Pty Ltd (in liq) v Frankland River Olive Co Ltd [2005] WASCA 236 [40]. The plaintiff has commenced the District Court Proceedings seeking judgment against the first defendant for the amount it asserts is outstanding under the Contract. The first defendant asserts that the Contract was terminated on 16 July 2023. He relies upon a document entitled Termination of Contract by which he purports to terminate the Contract.[8] The plaintiff disputes that the first defendant had a right to terminate the Contract. [8] First Coppi Affidavit Annexure TD-1. In my view, given the terms of the Contract, the fact that the plaintiff has commenced the District Court Proceedings and that the first defendant has been refused leave to file a counterclaim in the District Court Proceedings, the plaintiff's claim for a proprietary interest in the Property is a strong one that clearly has, or may have, substance. The plaintiff submitted that the balance of convenience favoured the extension of the Caveat. The plaintiff refers to the fact that the first defendant, to the plaintiff's knowledge, has no other assets registered in his name.[9] The first defendant was declared bankrupt on 9 September 2014 and discharged from bankruptcy on 29 September 2021.[10] During the first defendant's employment with the plaintiff, the plaintiff received a notice of a garnishee order relating to the first defendant with a requirement to deduct part of the first defendant's salary.[11] [9] Dye Affidavit [28].[10] Dye Affidavit Annexure 'RD-8'.[11] Dye Affidavit Annexure 'RD-9'. The plaintiff submits that if the Caveat is not extended, there is a high likelihood that its proprietary interest in the Property will be defeated as the first defendant would be able to borrow funds using the Property as security. Further, the plaintiff has provided an undertaking as to damages which it says protects the first defendant if the plaintiff's claim turns out not to have substance. The first defendant submits that the balance of convenience is not in favour of extending the Caveat. The first defendant says that he has paid another builder to complete the construction of the residence on the Property. The first defendant seeks to counterclaim $142,594.42 from the plaintiff in the District Court Proceedings as damages arising as a result of the completion of the construction of the residence on the Property with the new builder.[12] The first defendant deposes that, because the Caveat has been lodged on the Property by the plaintiff, he has been unable to obtain funds from his financial institution to make payments to the new builder.[13] The first defendant says that this has caused him and his wife, who both live at the Property, extreme financial distress as they have had to use all their savings, income and borrow money from family to make those payments.[14] The first defendant deposes that there are still amounts outstanding to third parties for the work he has completed on the Property.[15] [12] First Coppi Affidavit Annexure TD-2.[13] Second Coppi Affidavit Annexure TD-3.[14] Second Coppi Affidavit [6].[15] Second Coppi Affidavit [7].