Green and Wall
[2019] FamCA 76
•22 February 2019
FAMILY COURT OF AUSTRALIA
| GREEN & WALL | [2019] FamCA 76 |
| FAMILT LAW – CAVEAT – caveat lodged by husband before final property orders which resolved issues on ownership – husband does not participate – order for removal of caveat directed to Registrar of Titles – where that order can be made either by reference to the definition of “court” as a “court of competent jurisdiction” or alternatively using the powers conferred by the accrued jurisdiction. |
| Family Law Act 1975 (Cth) Transfer of Land Act 1958 (Vic) |
| ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 F Firm & Ruane and Ors [2014] FamCAFC 189 Piroshenko v Grojsman & Ors [2010] VSC 240 Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36 |
| APPLICANT: | Ms Green |
| RESPONDENT: | Mr Wall |
| FILE NUMBER: | MLC | 9764 | of | 2014 |
| DATE DELIVERED: | 22 February 2019 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 20 February 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Green in person with Mr Puckey of Counsel as Amicus Curiae |
| THE RESPONDENT: | No Appearance |
Orders
Pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic), the Registrar of Titles for Victoria is directed to remove caveat … lodged on 10 December 2014 on Certificate of Title Vol … Folio … by P Lawyers on behalf of Mr Wall, the basis of the order being that as a result of the court’s order on 27 April 2016, the said Mr Wall no longer has a caveatable interest in the said property.
That a copy of the reasons and orders this day shall be served by email upon the said Mr Wall and provided in due course to the Registrar of Titles.
That the service upon the husband be at his last known email address.
That the application in a case filed 8 January 2019 be otherwise dismissed.
That the reasons be published as soon as possible.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Green & Wall has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 9764 of 2014
| Ms Green |
Applicant
And
| Mr Wall |
Respondent
REASONS FOR JUDGMENT
Final property orders were made on 27 April 2016 by Macmillan J in proceedings between Ms Green (“the wife”) and Mr Wall (“the husband”). It is significant that with the assistance of their respective counsel, those orders were made by their consent.
The present proceedings arise out of those orders which, on any view, have not been finalised.
The immediate application was filed on 8 January 2019 by the wife. She sought orders that a caveat “be lifted” or alternatively, a registrar of this court, sign the necessary withdrawal of that caveat. The caveat had been lodged by the husband.
The husband, who was served by electronic means, did not participate at all in the proceedings. From the evidence provided by the wife, I am satisfied that he was aware of the proceedings and must have had a clear understanding of the nature of the problem. At no stage did he indicate that he disputed the orders she sought nor, in my view, could he. That is because he has no interest in the property which is the subject of the caveat as a result of the 2016 orders. Accordingly, his absence becomes irrelevant and I am satisfied there is no prejudice to him by the orders that I propose to make.
The immediate dilemma however was that the wife was without legal representation. The legal principles involved are complex. I was assisted on an amicus curiae basis by Mr Puckey of counsel. The court is indebted for his assistance.
The final property orders provided that the husband pay to the wife $400,000. Additionally, the wife was required to “discharge and refinance” a mortgage over a property at S Street, Suburb R. Upon the wife obtaining the release of the husband from the mortgage, the order would be completed because the Certificate of Title shows the wife as the sole registered proprietor. Just what interest the husband had in the S Street property remains unknown but some indication can be gleaned from the way the caveat was drawn and to which I return in a moment.
The 2016 orders went further to provide a default provision in the event that the wife did not obtain the release of the husband from the mortgage. In essence, she had to sell the property. All of that can be seen in the orders which I now set out. They provided:
6.Contemporaneously with the [Suburb R] refinance the Husband do all such acts and things and sign all such documents as are required to withdraw caveat number … lodged by or on behalf of the Husband and registered against the [Suburb R] property, at the sole expense of the Husband.
7.In the event the Wife is unable to refinance the [Suburb R] mortgage into her sole name within the time specified in paragraph 6 herein, the Wife do all such acts and things and sign all such documents as may be required to forthwith sell the [Suburb R] property (“the default sale”).
8.The proceeds from the default sale be applied at settlement as follows:-
a)first, to pay all costs, commissions and expenses of the sale, including any CGT as a consequence of the default sale;
b)secondly, to discharge the registered mortgage and any other encumbrance affecting the title to the [Suburb R] property; and
c) thirdly, the balance then remaining to the Wife.
Paragraph 6 is the focus because through his solicitors, the husband had lodged the caveat in December 2014. Obviously, that preceded the orders. The husband claimed an interest in S Street on the basis of an “implied, resulting or constructive trust”.
Paragraphs 6 to 8 must be seen as determining permanently any interest of the nature pleaded by the husband in the grounds of claim set out in the caveat. To be abundantly clear about that, the court (with the parties’ consent) ordered that all proceedings be otherwise dismissed. There was no order indicating that the parties held any property upon trust for the purposes of the completion of their obligations under the orders.
The wife’s unchallenged evidence is that the husband did not pay $300,000 of the $400,000 referred to in the orders and since February 2017, has not communicated his intentions. In addition, he failed to attend court on three occasions. He is therefore in default of his obligations under the orders.
The wife has now had to sell S Street and the caveat needs to be removed to enable her to meet obligations as the sole registered proprietor. Paragraph 7 of the orders of April 2016 require her to effectively give the husband his entitlement notwithstanding he has not provided what she is entitled to. I accept the wife has no confidence that the husband will withdraw the caveat if she manages to sell the property notwithstanding he ultimately benefits from it.
To remove the caveat is not simple as the Registrar of Titles has statutory obligations under the Transfer of Land Act 1958 (Vic). The Transfer of Land Act is an enactment of the parliament of the State of Victoria and it may be that the registrar only recognises of the State courts because s 4 of the Act defines a court as one of competent jurisdiction.
Mr Puckey submitted that one course would be to rely upon s 89A of the Transfer of Land Act and give notice to the Registrar of Titles that the husband has no caveatable interest whereupon the husband would be advised that if he did not bring proceedings in a court, the caveat would be removed. However, that provision requires a solicitor to sign a certificate upon which the Registrar of Titles relies. Mr Puckey pointed out that the solicitors have read the 2016 orders as not permitting them to give that advice because of the entitlements of the husband. In addition to that, there would undoubtedly be the relevant delays while correspondence takes place.
Section 90 of the Transfer of Land Act provides that a caveat shall lapse in certain set circumstances. Section 90(3) permits a court, upon application against the caveator to make such order as it considers fit. As earlier observed, such an application might normally be expected to be made to the State courts but in my view, as the orders of this court are still executory, the court is still seized of the matter. I have adopted the view that this court does have the power to direct the removal of the caveat and I set out my reasons just in case there is an argument about the definition of a court of competent jurisdiction.
The power to direct the removal of the caveat is a power arising from the accrued jurisdiction of the court. What I now set out is the approach I consider appropriate.
In Piroshenko v Grojsman & Ors [2010] VSC 240 Warren CJ observed:
[7]Caveats under the Torrens system are treated by the courts as analogous to applications for interlocutory injunctive relief. Insofar as their registration is an administrative act, it is when application is made for their removal that the onus falls on the caveator to satisfy the two stage test used by the court when deciding whether to exercise its discretion to Green interlocutory injunctive relief. This approach has been established law in Australia since the decision of Lord Diplock in Eng Mee Yong v. Letchumanan was approved by the Full Court of the Queensland Supreme Court of Appeal in Re Jorss’ Caveat This two stage approach requires the caveator to establish that there is a serious question to be tried that they have the estate or interest which they claim in the land in question, and having done so, to establish that the balance of convenience favours the maintenance of the caveat on the Register of Titles until trial. This is still the approach taken by the courts in Victoria when deciding applications under s 90(3) of the Act (citations omitted).
As to the width of the discretion, the Chief Justice said:
[11]…(A)lthough the courts have adopted a two-stage test as an aid to the consistent exercise of the discretion conferred by s 90(3) of the Act, the section is drafted broadly, and enjoins the court to make such order as it thinks ‘fit’. Any test utilised by the court cannot subsume or restrict the power conferred by the statute. All it can do is ‘inform the ultimate consideration’, that is, whether the court should exercise the discretion conferred in any particular case, and if it chooses to do so, what form that exercise should take.
Respectfully, I adopt the view taken by the Chief Justice.
In respect of the first step, there is no longer any possibility of the caveator asserting there is a serious issue to be tried over his claimed interest because that question was determined absolutely by the 2016 orders of this court.
In respect of the second step, the husband cannot now maintain that the balance of convenience favours the maintenance of the caveat as, apart from his own default, the wife desires to meet her obligations under the 2016 orders by a sale which, if it occurred, would satisfy the discharge of the husband’s exposure to the mortgage debt.
Subject to the power being available, an order directing the Registrar of Titles to remove the caveat is an appropriate exercise of the court’s discretion.
In F Firm & Ruane and Ors [2014] FamCAFC 189, the Full Court of this court dealt with the extent of the court’s jurisdiction. As Thackray J observed at [45], the question that should be posed is whether the claim (in this case for the removal of the caveat) came within the “scope of the controversy” which is “identifiable independent of the proceedings…brought for its determination” (citing Fencott v Muller (1983) 152 CLR 570 at 603). Thackray J went on to refer to ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 in which it was held that the focus should be on the substance of the dispute and the substantial subject matter of the controversy. The scope is not limited to matters “incidental” to that which attracted federal jurisdiction in the first place but in this case, it is clearly incidental to the completion of the obligations under the 2016 orders.
The authorities generally refer to the fact that what needs to be identified is whether or not the claim which might otherwise appear to be outside of this court’s usual jurisdiction was essential for the determination of the federal claim. Here, the federal claim was determined in 2016 but the efficacy of the order as an exercise of the power of the Commonwealth depends upon the caveat issue being determined.
Concluding as I do that the husband no longer has an interest in the property by virtue of the determination of his claim in the caveat, there is no basis for it to continue to stand. In circumstances where the wife could go down the path of s 89A of the Transfer of Land Act, in my view it would be artificial to reject her application, and make her do so when she is simply asking the court to enforce its own orders. It appears to me that the court has power either as a court of competent jurisdiction or as part of its determination of the federal claim. Whilst the power in s 79 of the Family Law Act may be exhausted, preventing alteration of the substantive part of the orders, that order is still executory and the issue under consideration is a machinery order.
The husband’s non-compliance with court orders, his absence and his refusal to engage with the court’s process, not to mention the need for the wife to have the caveat removed to enable her to complete her own obligations under the order, all point to the fact that the matter should be dealt with expeditiously rather than under the administrative process as set out in s 89A of the Transfer of Land Act.
Without contemplating whether this dispute is also part of a matrimonial cause and therefore potentially only within the exclusive jurisdiction of this court anyway, I am satisfied that the use of the State law is essential, or an integral element of the controversy between the husband and the wife about the alteration of property interests. That means the exercise of power in s 90 of the Transfer of Land Act is within the jurisdiction of the court (see Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36).
Accordingly, I direct the Registrar of Titles upon production of the orders and if necessary, these reasons, to remove the caveat. I direct the wife to advise the husband electronically accordingly.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 20 February 2019.
Associate:
Date: 20 February 2019
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