Gang v You (No 2)
[2023] ACTSC 32
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Gang v You (No 2) |
Citation: | [2023] ACTSC 32 |
Hearing Date: | 20 February 2023; 21 February 2023 |
DecisionDate: | 21 February 2023 |
Before: | McCallum CJ |
Decision: | (1) Note order (1) made by Elkaim J on 23 August 2022 extending until further order the operation of [an identified caveat on the title to identified land]. (2) Vacate order (1) of Elkaim J made on 23 August 2022. (3) Note that, that order having been vacated, there is no order of the Court preventing the Registrar-General from removing the caveat from the title as requested by the registered proprietor. (4) Plaintiff to pay the first defendant’s cost of today’s application. |
Catchwords: | CIVIL LAW – CIVIL PRACTICE AND PROCEDURE – Where plaintiff lodged caveat on real property owned by defendant ostensibly in connection with interest claimed in the proceedings – Where plaintiff unsuccessful in proceedings at first instance – where appeal commenced – whether any caveatable interest pending the determination of the appeal |
Legislation Cited: | Land Titles Act 1925 (ACT), s 107 |
Cases Cited: | Gang v You (No 3) [2021] ACTSC 318 Gang v You [2022] ACTSC 214 Jones (Trustee in Bankruptcy of the estate of Tony Daniel) v Daniel [2004] NSWSC 517 |
Parties: | Yeong Suk Gang ( Plaintiff) Jin Ho You ( Defendant) |
Representation: | Counsel T Crispin ( Plaintiff) B Buckland ( Defendant) |
| Solicitors Maxwell & Co ( Plaintiff) Mills Oakley ( Defendant) | |
File Number: | SC 368 of 2018 |
McCALLUM CJ:
Yeong Suk Gang commenced proceedings in this Court against Jin Ho You seeking contractual and equitable remedies arising from a dispute concerning real estate property originally owned by Mr Gang which he had sold to Mr You. There was a second defendant to those proceedings, namely, the firm of solicitors that had acted on the conveyance.
The proceedings were heard by Crowe AJ over several days in October 2021 and determined by his Honour in favour of the defendants on 15 December 2021: see Gang v You (No 3) [2021] ACTSC 318. On 22 December 2021, Mr Gang commenced an appeal against his Honour’s judgment.
Prior to instituting those proceedings, Mr Gang brought the present proceedings against Mr You seeking to restrain him from excluding Mr Gang from occupancy of the property.
On 23 August 2022, the present proceedings came before Elkaim J to determine an application concerning a caveat lodged by Mr Gang over the property the subject of the dispute. The caveat had been lodged by Mr Gang in 2019 but did not come to Mr You’s attention until the middle of 2022. At that time, Mr You wrote to the Registrar-General seeking to have the caveat removed pursuant to s 107 of the Land Titles Act 1925 (ACT), whereupon Mr Gang moved the Court to extend the caveat. That application was determined by Elkaim J in Gang v You [2022] ACTSC 214. The order made by his Honour was to extend the caveat “until further order”.
In circumstances I will explain, Mr You now seeks an order requiring the Registrar-General to remove the caveat from the title of the land. I have determined that the caveat should be removed from the title. I have indicated to the parties that I will hear them at the conclusion of this oral judgment as to the precise form of relief the Court should grant.
It is trite that a caveat must be supported by an interest in land. Mr Buckland, who appears for Mr You, cited authority to that effect in the decision of Dodds-Streeton J in Goldstraw v Goldstraw [2002] VSC 491. In that case, her Honour said at [23]:
It is a fundamental feature of a caveat under [the Victorian equivalent of the Land Titles Act 1925 (ACT)] that it must be supported by an estate or interest in land. The interest to be protected by the lodging of a caveat is a proprietary interest. This is enshrined in the terms of the legislation.
The interest in land claimed by Mr Gang in the proceedings determined by Crowe AJ was said to derive from an agreement he said was reached between him and Mr You in which, as he contended, he was to be granted an option, upon his sale of the land to Mr You, to repurchase it within three years. By paragraph 24 of the further amended statement of claim filed by Mr Gang on 9 July 2020 in those proceedings, he contended:
The Contract provided for the Plaintiff’s house to be sold to the First Defendant for $750,000.00 but, contrary to the First Defendant’s representation to the Plaintiff, the Contract did not include provision for the Plaintiff to buy back the house in three years from the date of the sale for $750,000.00.
It may be seen that the interest in land claimed by Mr Gang related to an option which would expire three years after the date of sale, which was 1 November 2017. The further amended statement of claim was filed on 9 July 2020, several months before the expiration of that period. That period has now expired. Still, by paragraph 59(f) of the further amended statement of claim setting out the relief sought by Mr Gang, he sought:
[A]n order that the First Defendant re-convey the title to [the property] for the sum of $750,000.00 (to be then paid by the Plaintiff to the First Defendant) on a date nominated by the Plaintiff being on or before 1 November 2020.
As events transpired, the hearing before Crowe AJ did not commence until October 2021. So far as I have been informed, Mr Gang does not appear to have taken any step to have the matter of the rectification of the contract, or whatever relief was sought to include the option he says was wrongly excluded from the contract, determined prior to the resolution of the overall proceedings.
In any event, it is beyond dispute that the option had expired before Crowe AJ determined the proceedings. During the hearing of the proceedings, in order to address that obvious difficulty, the plaintiff sought leave to amend the pleading so as to seek the following alternative relief at paragraph 59(f) of the further amended statement of claim (noted at [359] of his Honour’s judgment in Gang v You (No 3)):
“…alternatively, that the Plaintiff be entitled to elect to re-purchase the said property for $750,000.00 within 3 months of the Defendants herein (or either of them) complying with such Orders as this Honourable Court may make herein awarding equitable compensation or equitable damages and/or damages for breach of contract in favour of the Plaintiff in the sum of at least $335,434.27 and with interest thereon at the Supreme Court interest rate; and upon the Plaintiff electing to re-purchase the said property for $750,000.00 the First Defendant shall, without any delay, execute all necessary documents and do all other acts and things necessary to enable the re-conveyance of the title of [the Giralang property] in the Australian Capital Territory to the Plaintiff.”
That application was refused by his Honour for the reasons explained at [355]-[363] of the judgment. In those circumstances, it is difficult to see how there was ever a caveatable interest in the property. Certainly, following the determination of Mr Gang’s claim by Crowe AJ, in which Mr Gang was unsuccessful, I think it can be accepted that there is presently no caveatable interest in the property.
To an extent, so much was accepted by Mr Crispin, who appears for Mr Gang. I say, “to an extent” in deference to an ingenious argument expanded upon by Mr Crispin to the effect (if I understood it correctly) that the Court, in determining whether there is a caveatable interest under s 107 of the Land Titles Act, should in effect embark upon an assessment of the strength of the claim made by the person lodging the caveat, much in the way in which the Court might consider the potential strength of an argument yet to be determined on a final basis when considering an interlocutory application for injunctive or like relief.
Mr Crispin submitted that, whilst technically there is no caveatable interest over the property today, the view might be taken by the Court that, pending the determination of Mr Gang’s appeal, there is an arguable caveatable interest which remains to be determined and that the balance of convenience would favour maintaining the caveat.
Whilst the argument was, as I have indicated, one involving a measure of ingenuity, I do not think it can be accepted. Mr Buckland drew my attention in this context to the decision of Barrett J in Jones (Trustee in Bankruptcy of the estate of Tony Daniel) v Daniel [2004] NSWSC 517. As submitted by Mr Crispin, that was a case based on slightly different circumstances in that the question before Barrett J was whether proceedings in another court (the Federal Court) which were amenable to appeal might sustain a caveatable interest on the basis that the appeal had yet to be determined.
Nonetheless, I think, having considered his Honour’s judgment carefully and noting the authorities referred to therein, the decision stands as clear authority for the proposition articulated in Mr Buckland’s submissions, in short, that a right of appeal is not a caveatable interest. Mr Buckland relied on Barrett J’s decision at [12] where his Honour said:
The case before me is, in any event, summed up in the words of Windeyer J in Public Trustee v Theissl [1999] NSWSC 708:
“[O]n the evidence presently available, the interest which is claimed has not been shown to exist, but merely ‘might’, if subsequent proceedings succeed, be shown to exist.”
His Honour considered a case such as that to be one in which the element of discretion existing within s 74K should be exercised against the applicant. I take the same view of this case. The plaintiff has no more than a right of action (in the form of a right to appeal) which, if successfully pursued, may result in a court order conferring an interest in the properties. But unless and until that position is reached, there is no interest: see, for example, Elmant Pty Ltd v Dickson (2001) V ConvR 54-647.
Leaving aside the force of the authorities referred to by Barrett J, that approach accords with the conventional understanding as a principle of law that, once a superior court of record has determined a cause, that determination is binding on the parties unless and until it is set aside by an appellate court. The nature of any right existing in the intervening period between the final determination at first instance and the determination of any appeal might be elusive but I do not think, on any view, it can be characterised as one giving rise to an interest in land such as to support the extension of a caveat.
One further submission put by Mr Crispin should be noted. He submitted that the application to have the caveat removed is futile because the first respondent to the appeal, who was the first defendant in the Supreme Court proceedings, has given an undertaking to the Court not to deal with his interest in the land.
The response to that submission is that the question of futility does not arise until it is first established that there is some caveatable interest. That said, the undertaking gives me some comfort in the sense that, in case I am wrong as to whether there is a caveatable interest, the plaintiff’s position is protected by its existence. In short, Mr You is not permitted, at pain of being punished for contempt of Court, to deal with the land until the determination of the appeal or further order of the Court.
To that end, Mr Buckland submitted that the caveat is indeed otiose so long as the undertaking stands. He accordingly submitted that the balance of convenience in fact favours the removal of the caveat while the undertaking survives during the extant appeal, as Mr Gang’s interests are wholly protected by the undertaking which, as he submitted, carries a harsher penalty for breach and provides greater protection than the caveat.
For the reasons I have explained, however, the question of balance of convenience is not really the test either way. Ultimately, in light of the concession that there is no caveatable interest, the matter having been finally determined by Crowe AJ, it follows inexorably in my view that the caveat should be removed from the title.
I make the following orders:
(1)Note order (1) made by Elkaim J on 23 August 2022 extending until further order the operation of [an identified caveat on the title to identified land].
(2) Vacate order (1) of Elkaim J made on 23 August 2022.
(3) Note that, that order having been vacated, there is no order of the Court preventing the Registrar-General from removing the caveat from the title as requested by the registered proprietor.
(4) Plaintiff to pay the first defendant’s cost of today’s application.
| I certify that the preceding twenty-one [21] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice McCallum Associate: L Ireland Date: 12 April 2023 |
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