Grego v D Club Pty Ltd - [2011] WASC 55

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: GREGO -v- D CLUB PTY LTD [2011] WASC 55

CORAM: CORBOY J

HEARD: 27 AUGUST 2010

DELIVERED : 2 MARCH 2011

FILE NO/S: CIV 1857 of 2010

BETWEEN: TONY GREGO
Plaintiff
AND
D CLUB PTY LTD
Defendant

Catchwords:

Caveat - Whether plaintiff has established prima facie case that it has an estate or interest in land - Right of subrogation to mortgage - Whether possible claim for indemnity from principal debtor time barred - Turns on own facts

Legislation:

Limitation Act 1935 (WA)
Transfer of Land Act 1893 (WA)

Result:

Application to extend caveat refused

Category: B

Representation:

Counsel:

Plaintiff: Mr C S Williams
Defendant: Mr J D MacLaurin

Solicitors:

Plaintiff: Solomon Brothers
Defendant: Holborn Lenhoff Massey

Case(s) referred to in judgment(s):

Australian Broadcasting Commission v O'Neill [2006] HCA 46; (2006) 227 CLR 57
Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221
Cochrane v Cochrane (1985) 3 NSWLR 403
D Club Pty Ltd v Grego [2009] WASC 24
National Australia Bank v McCourt [2010] WASC 237
Re Diplock; Diplock v Wintle [1948] Ch 465
Sardon Pty Ltd v The Registrar of Titles [2004] WASC 56
Sisic v Krpo [2008] NSWSC 1086
Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514

CORBOY J:

Introduction

The first defendant is the registered proprietor of the land comprised in certificate of title vol 1588 folio 708 and being and located in Milligan Street, Northbridge (the Land). On 10 January 2001, Orix Australia Corporation Limited (Orix) registered a mortgage over the Land (the Mortgage) to secure a loan made to the first defendant pursuant to a 'mortgage loan agreement'. The plaintiff, who at the time was the managing director of the first defendant, gave a guarantee to Orix to further secure the loan (the Guarantee).
On 22 February 2010, the plaintiff lodged a caveat with the second defendant claiming an estate or interest in the Land as an equitable mortgagee. The caveat forbade registration of any instrument affecting the plaintiff's estate or interest unless the instrument was expressed to be subject to his 'claim'.
The first defendant caused the second defendant to issue a notice under s 138B of the Transfer of Land Act 1893 (WA) (TLA). The plaintiff has applied to extend the operation of the caveat in response to that notice.
The plaintiff claims that he is entitled to be subrogated to the rights of Orix under the Mortgage as he paid part of the debt due by the first defendant to Orix in partial discharge of his obligations as guarantor (the Payment). The Payment is alleged to have been made on 19 November 2001, following service of a notice of demand on the plaintiff.
The first defendant denies that the plaintiff made the Payment and says further that, if the Payment was made:
(a)it was not made by the plaintiff as guarantor but was arranged by him as a payment by…

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: [2011] WASC 55
Decision Date: 2 MARCH 2011

CaseChat Overview and Summary

The case of Grego v D Club Pty Ltd involved a dispute regarding a caveat lodged by the plaintiff, Grego, over a parcel of land owned by D Club Pty Ltd. Grego, a former director of D Club, had lodged a caveat to protect his interest in the land, claiming that he had made a payment to Orix, the mortgagee, in partial discharge of his obligations as a guarantor of a loan. D Club sought to have the caveat removed, arguing that Grego had not established a prima facie case for an interest in the land and that any claim for indemnity or unjust enrichment was time-barred.

The primary legal issue before the court was whether Grego had established a prima facie case that he had an estate or interest in the land, thereby justifying the extension of the caveat. Additionally, the court needed to determine whether any claim Grego might have against D Club for indemnity or unjust enrichment was time-barred, as no such proceedings had been initiated by Grego.

In ruling on the matter, the court found that Grego had not demonstrated a prima facie case that he had made the payment in question or that it was made in partial discharge of his obligations as a guarantor. The court also concluded that any potential claim for indemnity or unjust enrichment against D Club would be time-barred. The substantial delay in Grego lodging the caveat, coupled with his inaction to pursue any claims against D Club, further undermined the justification for maintaining the caveat. Consequently, the court decided that the caveat should not be extended.

As a result of the court's decision, the caveat was not extended, effectively dismissing Grego's claim to an interest in the land owned by D Club Pty Ltd.

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

I have concluded that the caveat should not be extended. I consider that the plaintiff has not established a prima facie case (in the sense referred to in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57) that he made the Payment or that if he did, that the Payment was made in partial discharge of a personal obligation as guarantor of the loan by Orix to the first defendant. I also consider that any claim that the plaintiff might bring against the first defendant for an indemnity or for unjust enrichment in respect of the Payment ‑ and no proceedings have been commenced by him ‑ would be time barred. Finally, the substantial delay between the events that are alleged to give rise to the plaintiff's estate or interest in the Land and the lodging of the caveat and the fact that the plaintiff has taken no steps to vindicate his claim count against preserving the caveat as a matter of convenience. The plaintiff swore an affidavit on 9 June 2010 in support of his application to extend the caveat. The affidavit annexed a statutory declaration that he made in answer to a requisition from the second defendant. The affidavit confirmed the matters stated in the declaration. In summary, the plaintiff stated that:(a)He was a director of the first defendant between 16 November 2000 and 23 November 2006. He granted the Guarantee in that capacity.(b)On about 31 October 2001, the plaintiff was served with a notice of demand made by Orix through its solicitors. The demand was for immediate payment of all money secured by the Mortgage and owing under the mortgage loan agreement. The demand was addressed to the first defendant as borrower and mortgagor and to the plaintiff (and others) as guarantor (see annexure 'TG‑9' to the plaintiff's affidavit of 9 June 2010).(c)On 19 November 2001, the plaintiff paid to Orix's solicitors the sum of $41,666.67 in partial discharge of his obligations as a guarantor. It is that payment which has been defined earlier in these reasons as 'the Payment'. The Payment was acknowledged by Orix solicitors dated 14 December 2001 and addressed to 'Mr T Grego, Managing Director, D Club Pty Ltd' (annexure 'TG-11' to the plaintiff's affidavit of 9 June 2010). The letter referred to the first defendant's default and to the subsequent notice of demand and stated that '…our client is entitled to recover from D Club Pty Ltd and each of its guarantors the moneys set out in the Demand less the amount of $41,666.67 paid on behalf of the Borrower on 19 November 2001'.(d)The Payment was made using funds borrowed from Delmere Holdings Pty Ltd as trustee for the DTMT Trust (Delmere). The loan is said to have been evidenced by a letter dated 19 November 2001 and written by the plaintiff to Mr J Dujmovic of Delmere (annexure 'TG-10' to the plaintiff's affidavit of 9 June 2010).(e)The loan made by Orix to the first defendant was repaid in 2004 and the Mortgage was discharged at that time (a discharge of mortgage dated 23 January 2004 was annexed to the affidavit of Pauline Mary O'Dea sworn on 24 September 2010 and filed on behalf of the first defendant).(f)The first defendant has not paid to the plaintiff any amount on account of the Payment. (g)In 2009, the plaintiff served a statutory demand on the first defendant demanding payment of the sum of $348,288. The demand was set aside: see D Club Pty Ltd v Grego [2009] WASC 24 (COR 169/2008).