Emirge Pty Ltd v De Coppi
[2024] WASC 357
•30 SEPTEMBER 2024
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 to the plaintiff of all moneys that may become payable to the plaintiff under the Contract. By clause 33(b) of the Contract, the first defendant irrevocably authorised the plaintiff to lodge, and consented to the plaintiff lodging, a caveat over the Property to secure the plaintiff's interest under the Contract.
On 6 June 2023, the plaintiff lodged the Caveat over the Property pursuant to the Contract.
On 2 August 2023, the plaintiff commenced proceedings against the first defendant in the District Court of Western Australia claiming an amount of $129,000 being the balance of monies it alleges are due and payable by the first defendant pursuant to the Contract, together with interest and costs (District Court Proceedings). The plaintiff entered the District Court Proceedings for trial on 21 May 2024. On 26 September 2024, the first defendant was refused leave to file a counterclaim in the District Court Proceedings.[2]
[2] Emirge Pty Ltd v De Coppi [2024] WADC 83.
On 29 July 2024, Landgate issued a notice to the plaintiff, on the application of the first defendant pursuant to s 138B of the TLA, stating that the Caveat will lapse at midnight on 20 August 2024 unless an order is obtained from the court extending the Caveat.[3]
[3] Dye Affidavit Annexure 'RD-7'.
On 13 August 2024, the plaintiff filed this application for orders extending the operation of the Caveat pursuant to s 138C(1) of the TLA.
Extension of caveat - legal principles
Section 137 of the TLA provides that any person claiming an interest in land may lodge a caveat. A caveat has the effect of preventing registration of any dealing against the land until the person who lodged the caveat has an opportunity to justify the caveat by pursuing available remedies: Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179 [68].
Section 138C of the TLA provides that the court may an order to extend a caveat:
138C. Supreme Court's powers on application by caveator
(1)A caveator who is served with a notice under section 138B(1) may apply to the Supreme Court, in accordance with rules of the court, for an order extending the operation of the caveat.
(2)On the hearing of an application under subsection (1), the Supreme Court —
(a)if satisfied that the caveator's claim has or may have substance —
(i)may make an order extending the operation of the caveat for such period as is specified in the order; or
(ii)may make an order extending the operation of the caveat until the further order of the court; or
(iii)may make such other orders as it thinks fit concerning the caveat or the land in respect of which the caveat was lodged;
and
(3)if not satisfied that the caveator's claim has or may have substance, shall dismiss the application; and
(4)may make such ancillary orders in relation to the application as it thinks fit.
In determining whether the Caveat should be extended pursuant to s 138C of the TLA, the plaintiff has the onus of satisfying the court that:
1.The plaintiff's claim has or may have substance, that is, there is a serious question to be tried as to the existence of a proprietary interest in the Property[4]; and
2.The balance of convenience favours the maintenance of the Caveat.
[4] Bride v The Registrar of Titles [2015] WASC 11 (Bride) [14].
The principles relevant to an application to extend the operation of a caveat are not in dispute. They were summarised by Beech J (as his Honour then was) in Bashford v Bashford [2008] WASC 138 at [47] to [50]. I apply those principles to this application.
In considering the balance of convenience, the strength or weakness of the plaintiff's claim is a relevant factor. As was said by Pritchard J (as her Honour then was) in Bateson v Jones:[5]
[t]he existence of a serious question to be tried involves showing a sufficient likelihood of success to justify the preservation of the status quo in all of the circumstances. How strong the likelihood of success needs to be depends upon the nature of the rights asserted and the practical consequences likely to flow from the order sought. Consequently, whether there is a serious question to be tried, and the consideration of those factors going to the balance of convenience, are not wholly independent inquiries. (citations omitted)
[5]Bateson v Jones [2013] WASC 8 [19].
It is also important to consider, in assessing the balance of convenience, whether the failure to extend the Caveat will have the effect of defeating the proprietary interest which is claimed.[6]
[6] Bride [16].
In order to extend the Caveat, I must find that:
(1)The plaintiff's claim has, or may have, substance; and
(2)The balance of convenience favours extension of the Caveat.
Does the plaintiff's claim have, or may it have, substance?
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.
Does the balance of convenience favour extension of the caveat?
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].
When weighing up the balance of convenience, the strength of the plaintiff's claim is a relevant consideration. The plaintiff has commenced the District Court Proceedings to recover outstanding monies under the Contract and the Contract contains a charging clause. As I have set out above, the plaintiff has a strongly arguable case.
In my view, removal of the Caveat in this case would undermine the commercial bargain that the parties have struck in the Contract. If the Caveat is not extended, the plaintiff would have no security in relation to the amount it alleges is outstanding under the Contract. The plaintiff has also provided an undertaking as to damages. The lack of security that the plaintiff would have if the Caveat is not extended must be assessed against the backdrop of the first defendant's prior bankruptcy, his lack of any other assets and the garnishee order received by the plaintiff in relation to the first defendant's salary. All of these factors combine to persuade me that the balance of convenience favours the extension of the Caveat.
Orders
I make the following orders:
1.The operation of Caveat No. P575201 lodged by the plaintiff over property located at 52 Saltriver Street, Ellenbrook, in the State of Western Australia, more particularly described as Lot 10481 on Deposited Plan 423236 Volume 4019 Folio 997 be extended until further order of the Court.
2.The first defendant pay the plaintiff's costs of the application, to be taxed if not agreed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RP
Associate to the Honourable Justice Whitby
30 SEPTEMBER 2024
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