Iceland Properties Pty Ltd v Palta - [2022] VSC 734

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2022 04590

ICELAND PROPERTIES PTY LTD (ACN 614 893 202)	Plaintiff
v
RAKESH PALTA	First Defendant
v
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	15, 18, 25 November 2022
DATE OF RULING:	28 November 2022 (ex tempore); revised ruling published 29 November 2022
CASE MAY BE CITED AS:	Iceland Properties Pty Ltd v Palta
MEDIUM NEUTRAL CITATION:	[2022] VSC 734

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REAL PROPERTY – Caveat – Application to remove caveat – Transfer of Land Act 1958 s 90(3) – Where caveator claims interest as chargee under purported loan agreement – Where registered proprietor alleges that purported loan agreement is a forgery – Where caveator concedes on third day of hearing that purported loan agreement is a forgery – Whether there is a probability on the evidence before the court that caveator will be found to have the asserted equitable rights or interest – Whether that probability is sufficient to justify the practical effect which the caveat has on the ability of the registered proprietor to deal with the property in question in accordance with their normal proprietary rights – Whether balance of convenience favours the removal of the caveat – Lower risk of injustice in ordering removal of caveat.

COSTS – Indemnity costs – Whether unusual circumstances of case justify award of costs on an indemnity basis – Where caveator had resisted removal of caveat on basis of a forged document – Where forgery was readily apparent – Where allegations of forgery subsequently made against director of registered proprietor – Indemnity costs awarded.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Kaine, solicitor, on 15 and 18 November 2022 Mr M Robins KC on 25 November 2022	Kainelaw
For the First Defendant	Mr I Upjohn KC with Mr W Rimmer	Frenkel Partners

HIS HONOUR:

The plaintiff, Iceland Properties Pty Ltd (‘Iceland’), is the registered proprietor of a property located at 81 Gateway Boulevard, Epping, Victoria 3575: certificate of title volume 001503, folio 296 (‘Gateway Boulevard property’). On 12 December 2019, the first defendant, Rakesh Palta, lodged a caveat on the title. The first defendant’s caveatable interest is said to be an interest as a chargee under an agreement dated 2 July 2018 between the first defendant and the registered proprietors, Chashampal Singh Gill (‘Mr Gill’) and Iceland Cold Storage Pty Ltd.

It is common ground that Mr Gill is the sole director of Iceland, the registered proprietor of the Gateway Boulevard property. Iceland applies, pursuant to s 90(3) of the Transfer of Land Act1958, for the removal of the caveat.

In Chan v Liu,[1] the Court of Appeal stated as follows:

In Piroshenko v Grojsman, Warren CJ outlined the principles that a court should apply when determining an application under s 90(3) of the Transfer of Land Act, in terms that have been accepted and followed in subsequent…

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: [2022] VSC 734
Decision Date: 28 November 2022 (ex tempore); revised ruling published 29 November 2022

CaseChat Overview and Summary

The matter before the Court concerned a dispute over a caveat lodged over a parcel of land in Melbourne, registered in the name of Iceland Properties Pty Ltd. The caveat was lodged by Palta, who claimed to have an interest in the property as the chargee under a purported loan agreement. Iceland Properties sought to remove the caveat, alleging that the loan agreement was a forgery. The case was heard in the Supreme Court of Victoria.

The primary legal issues before the Court were whether Palta had a probability of establishing a valid equitable interest in the property, which would justify the continuation of the caveat, and whether the balance of convenience favoured the removal of the caveat. Section 90(3) of the Transfer of Land Act 1958 was the primary legislative provision considered by the Court.

On the third day of the hearing, Palta conceded that the purported loan agreement was indeed a forgery. The Court found that the balance of convenience favoured the removal of the caveat, as the practical effect of the caveat on the registered proprietor's ability to deal with the property in accordance with their proprietary rights outweighed any potential equitable interest Palta might have had. The Court also considered that there was a lower risk of injustice in ordering the removal of the caveat. The Court therefore ordered the caveat to be removed.

In addition to ordering the caveat to be removed, the Court awarded indemnity costs to Iceland Properties. The Court found that the unusual circumstances of the case, including Palta's reliance on a forged document and subsequent allegations of forgery against a director of the registered proprietor, justified the award of costs on an indemnity basis.

Orders