JOHNSON v BHASIN
[2020] SADC 140
•1 October 2020
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
JOHNSON v BHASIN
[2020] SADC 140
Decision of His Honour Judge Burnett
1 October 2020
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - REMOVAL - PARTICULAR CASES
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - WHO MAY LODGE AND WHAT INTEREST SUFFICIENT - PARTY WHO HAD LODGED EARLIER CAVEAT
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS - GENERALLY - OTHER MATTERS
The applicant, as the trustee in bankruptcy of the estate of Amel El-Sayed (the Bankrupt), brought an application seeking the extension of time for the removal of a caveat over the land owned by the respondent situated at 1 Parkway Holden Hill (the Property). The applicant claimed an equitable interest in the Property based on the Bankrupt’s financial contributions to the acquisition, maintenance, conservation and improvement of the Property. The caveat was warned by the respondent on 10 July 2020.
The respondent opposed the application, first on the basis that the applicant did not have a caveatable interest, but secondly on the basis that the applicant did not seek permission of the Court to lodge a second caveat over the Property relating to the same matter. The respondent brought a cross application for the removal of the caveat.
The Bankrupt had herself previously lodged a caveat over the Property on 23 July 2014 claiming that she contributed to the acquisition, maintenance, conservation and improvement of the Property. That caveat was warned on 3 January 2017 and removed by the Registrar General on 25 January 2017.
The applicant argued that permission to lodge the caveat was not required as s191(1)(k) of the Real Property Act 1886 (SA) (the Act) only precluded the same caveator from lodging a further caveat relating to the same matter. The applicant and the Bankrupt, he argued, were not the same caveator. Further, the applicant argued that if permission was required, then an order nunc pro tunc could be made by the Court granting that permission and that section 64 of the Act authorised the making of such an order. In the still further alternative, if permission was required and an order could not be made nunc pro tunc, the applicant sought permission to lodge a third caveat over the Property and sought an injunction preventing the respondent from dealing with the Property.
Held:
1. The applicant has established for the purpose of the application that he holds an equitable interest in the Property, which interest is a caveatable interest. The contributions made by the Bankrupt entitled the applicant to claim an equitable interest in the Property through the imposition of a constructive trust.
2. Pursuant to s 191(1)(k) of the Real Property Act, the applicant is precluded from lodging a further caveat over the Property in respect of the same subject matter without permission of the Court, which permission was not obtained. It follows therefore that the caveat lodged by the applicant was unlawful. Under section 191(1)(k) it is unlawful for “any caveator” to lodge a further caveat relating to the same matter, without permission of the Court.
3. No order can be made nunc pro tunc granting permission to lodge the caveat. Such an order would affect the substantive rights of the respondent. An order “nunc pro tunc” in the current case is sought not to overcome a procedural irregularity or difficulty. Section 64 of the Real Property Act does not provide the power to make such an order.
4. Permission is granted to the applicant to lodge a third caveat over the Property in respect of the matters that are set out in the caveat.
5. The applicant is entitled to an interlocutory injunction preventing the respondent from dealing with the Property.
6. The caveat lodged by the applicant should be removed from the title of the Property.
Real Property Act 1886 (SA) s 3, 64, 191(1)(d), 191(1)(e), 191(1)(k) 191(1)(j); Real Property Act 1900 (NSW) s 74; Transfer of Land Act 1958 (Vic) s 91(4); Transfer of Land Act 1893 (WA) s 138(4); Land Act 1994 (Qld) s 389J; Land Transfer Act 2017 (NZ) s 146; Bankruptcy Act 1966 (Cth) s 58; Corporations Act 2001 (Cth) 459P, referred to.
Paringawood Nominees Pty Ltd v Baulderstone [1999] SASC 380; (1999) 204 LSJS 408; Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57; [2006] HCA 46; Acmnet Pty Ltd v Al Tel Pty Ltd [2007] SASC 96; Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78; Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59; Jandric v Jandric [1999] WASC 22; Costello v The Official Trustee in Bankruptcy Supreme Court of Victoria, No 7927 of 1997; CIC Insurance Limited v Bankstown Football Club Limited [1997] HCA 2; (1997) 187 CLR 384; SAS Trustee Corporation v Miles [2018] HCA 55; (2018) 36 ALR 206; Taylor v The Owners – Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 531; Duck v Bates (1884) 13 QBD 843; Beckett v Sutton (1882) 19 Ch D 646; Clarke-Jervoise v Scutt [1920] 1 Ch 382; Victorian Chamber of Manufacturers v Commonwealth (1943) 67 CLR 335; McCulloch v Fern (2000) 10 BPR 18,073; [2000] NSWSC 729; re Jorss’ Caveat [1982] Qd R 458; Burman v AGC (Advances) Ltd [1994] 1 Qd R 123; Martyn v Glennan (1979) 2 NSWLR 234; Hooper v ANZ Banking Group Ltd (1996) 5 Tas R 398; Emanuele v Australian Securities Commission [1997] HCA 20; (1997) 188 CLR 114; In the Matter of Michael Trevor Prescott, a Practitioner and the Legal Practitioners Act 1981 [2009] SASC 312; MAC v R (2012) 34 VR 193; [2012] VSCA 19; Hartley Poynton Ltd v Ali (2005) 11 VR 568; [2005] VSCA 53; Cini & Ors v Pets Paradise Franchising (SA) Pty Ltd & Ors [2008] SASC 287; Pua Hor Ong v Wu You Yang (2008) 103 SASR 9, considered.
JOHNSON v BHASIN
[2020] SADC 140
This case concerns the construction of s 191(1)(k) of the Real Property Act 1886 (the Act) and the circumstances in which a second caveat may be lodged over the subject land relating to the same matter.
The applicant is the trustee in bankruptcy of the estate of Amel El-Sayed (the Bankrupt). The applicant claims that the Bankrupt contributed to the acquisition, maintenance and improvement of a property situated at 1 Parkway, Holden Hill, being the whole of the land contained in Certificate of Title 5471 Folio 385 (the Property).
The respondent is the sole registered proprietor of the Property. The respondent denies that the Bankrupt or the applicant has any interest in the Property or is entitled to lodge a caveat over the Property. The respondent also denies that the applicant is able to lawfully lodge a second caveat over the Property relating to the same matter.
The applicant registered a caveat over the Property on 30 January 2017, claiming an interest in the Property based on the Bankrupt’s financial contributions to the acquisition, maintenance and improvement of the Property.
That caveat was warned by the respondent on 10 July 2020. The applicant then made an application to extend the time for the removal of the caveat. Although the Court, as a matter of convenience, made an order extending the time for removal of the caveat until further order, it did so on the basis that it remained incumbent on the applicant to establish at the substantive hearing of his application that an extension of time for the removal of the caveat should be granted.
The respondent has also brought an application for removal of the caveat pursuant to section 191(1)(d) of the Act.
The matter is complicated by the fact that the Bankrupt herself had lodged a caveat over the Property on 23 July 2014, claiming that she contributed to the acquisition, maintenance, conservation and improvement of the Property. That caveat was warned on 3 January 2017 and removed by the Registrar-General on 25 January 2017.
As set out later in these Reasons, I am satisfied that the applicant has established on a prima facie basis that he holds an equitable interest in the Property and that the balance of convenience would otherwise favour the granting of the application for the extension of time for the removal of the caveat.
The issue that requires determination is whether the applicant is entitled to lodge a further caveat relating to the same matter over the Property without first obtaining permission of the Court. If he is not, then the application for the extension of time for the removal of the caveat must fail and the caveat must be removed.
Factual Background
The Property was purchased on 19 January 2010 in the sum of $375,000. It was purchased as an investment property by the respondent and the Bankrupt.
Notwithstanding that it was purchased by both the Bankrupt and the respondent as an investment property, the Property was placed in the sole name of the respondent. The evidence from the applicant is that the Bankrupt does not know why that occurred.
There is, however, evidence that the Bankrupt contributed to the purchase, maintenance and improvement of the Property in the following ways:
1. By the payment of $10,000 towards the deposit payable for the purchase of the Property;
2. By the payment of the sum of $52,000 towards repayments of a loan, secured by way of a mortgage, taken out for the purchase of the Property, which payments were made by the Bankrupt to the respondent’s bank account. It appears that $45,000 was paid directly by the Bankrupt and $7,000 was paid from a related company of which the Bankrupt and her husband were directors. It is unclear whether this $7,000 was borrowed by the Bankrupt from the company or received as a dividend;
3. By the payment of part of the sum of $58,050.45 that was applied at settlement to the balance of the purchase price. It appears that one half of that $58,050.45 was made by the Bankrupt’s husband or a company which he controlled. The remaining $29,025.22 of the balance of the settlement monies came from the Bankrupt.
In total, the Bankrupt contributed the sum of $91,025.22 towards the purchase of the Property or to loan repayments. In addition, there is evidence that the Property was rented by the Bankrupt and the respondent to tenants. Rent from the tenants was deposited into an offset account in the name of the respondent and therefore went to the repayment of the loan and the mortgage.
There have been considerable communications between the applicant and the respondent in relation to the interest that has been claimed by the applicant in the Property. The respondent in that correspondence has accepted that the Bankrupt made contributions to the acquisition and maintenance of the Property, but has asserted that the respondent’s interest in the Property was 80.81% and applicant’s interest was 19.19%.
It follows from this concession that the respondent accepts that the applicant has an equitable interest in the Property, although there remains a dispute about the extent of that interest.
On 23 July 2014, the Bankrupt lodged a caveat over the Property. In that caveat, the Bankrupt claimed to be beneficially entitled to an estate or interest in fee simple in some present indefinable share or shares in the Property by virtue of having contributed towards the acquisition, maintenance, conservation and improvement of the Property. It is unclear what prompted the Bankrupt to lodge a caveat over the Property.
The Bankrupt was made bankrupt on 5 September 2016 at which time the applicant was appointed as her trustee in bankruptcy. The applicant, at the time of his appointment, was not aware that the Bankrupt had lodged the caveat over the Property. The applicant first became aware of that fact in January 2017.
On 3 January 2017, the respondent applied to the Registrar-General pursuant to s 191(1)(e) of the Act to remove the caveat that had been lodged by the Bankrupt in 2014. The Bankrupt did not apply to extend the time for removal of the caveat and accordingly the caveat was removed by the Registrar-General on 25 January 2017.
At the same time, the applicant lodged a further caveat which was registered on 30 January 2017 over the Property. In that caveat the applicant claimed:
By virtue of the bankruptcy of Amel El-Sayed (“The Bankrupt”), the property of the Bankrupt vested pursuant to Section 58 of the Bankruptcy Act 1966 (Cth) and pursuant to his appointment as trustee of the estate of the Bankrupt on 20 September 2016 and by virtue of the fact that the Bankrupt is beneficially entitled to an estate or interest in fee simple in some (at present) indefinable share or shares having made financial contributions to the acquisition, maintenance and improvement of the said land.
Following the lodgement of that caveat, from about July 2017 the applicant and the respondent’s lawyers corresponded about the caveat and the applicant’s alleged interest in the Property by reason of the contributions made by the Bankrupt. There is a dispute as to the current value of the Property which I do not need to resolve.
On 10 July 2020, the respondent lodged an application with the Registrar General for removal of the caveat pursuant to s 191(1)(e) of the Real Property Act. The applicant obtained an order, on an interim basis, from this court extending the time for the removal of the caveat. By application dated 14 August 2020, the respondent has sought the removal of the caveat.
Issues for Determination
The issues set out below require determination.
First, does the applicant have a caveatable interest such that (in the absence of the argument surrounding the lodgement of the second caveat relating to the same matter) an order should be made extending the time for removal of the caveat.
Secondly, is it lawful for the applicant to lodge a caveat relating to the contributions by the Bankrupt for the acquisition, maintenance and improvement of the Property when the Bankrupt had already lodged a caveat over the Property relating to the same matters.
Thirdly, if it is not lawful for the applicant to lodge such a caveat, can the applicant obtain an order nunc pro tunc that he be given permission to do so.
Fourthly, if the caveat lodged by the applicant is not lawful and no order is made nunc pro tunc, can the applicant, with permission of the Court, lodge a third caveat over the Property.
Fifthly, should an injunction be granted in favour of the applicant restraining the respondent from dealing with the Property.
Caveatable Interest
The court, on an application for the extension of time for the removal of a caveat, will apply the same test as that of an interlocutory injunction. Therefore, the court must determine whether there is a prima facie case (in the sense described below) and whether on the balance of convenience an order extending the operation of the caveat should be made.[1]
[1] Paringawood Nominees Pty Ltd v Baulderstone [1999] SASC 380 at [4], [10]-[12] and [14]-[16], (1999) 204 LSJS 408 citing Whallin v Bailbart Investments Pty Ltd (1987) 47 SASR 198 at 203.
The applicant must make out a prima facie case in the sense that if the evidence remains as it is, there is a probability that at trial, he will be entitled to relief.[2] The reference to a prima facie case does not mean that the applicant must show that it is more probable than not at trial that it would succeed: it is sufficient that it shows a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.[3]
[2] Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at 82; [2006] HCA 46.
[3] Ibid.
The applicant must satisfy two further requirements; first, that the balance of convenience, being the inconvenience or injury he would be likely to suffer if the caveat is not extended, outweighs the inconvenience or injury the respondent would suffer if the caveat is extended; and secondly, that damages are not an adequate remedy.[4] The onus lies on the applicant to satisfy the Court of these matters.[5]
[4] Acmnet Pty Ltd v Al Tel Pty Ltd [2007] SASC 96 at [19], [20], [134], [145] per Layton J
[5] Ibid.
In the present case, I am satisfied that on the prima facie basis referred to above, the applicant has established that he has a proprietary interest in the Property through the imposition of a constructive trust.
The Courts have shown a willingness to impose a constructive trust requiring the legal owner of the land to hold land on trust for another in circumstances where the other person has made contributions to the acquisition, maintenance or renovation of property, pursuant to a joint endeavour or relationship which has failed, in circumstances where blame cannot be attached to either party.
In Muschinski v Dodds,[6] the High Court found that the parties held their respective legal interests as tenants in common upon trust to repay each his or her respective contributions to the venture. Deane J, (Mason J agreeing), held that it was appropriate to impose a constructive trust in the circumstances of that case to give effect to the general equitable principle which restores to a party contributions which he or she made to a joint endeavour which fails, when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them.
[6] (1985) 160 CLR 583 at 614; [1985] HCA 78.
In Baumgartner v Baumgartner,[7] the High Court held the assertion by one party after the relationship had ended that the property was his beneficially to the exclusion of any interest of the other, amounted to unconscionable conduct which attracted the intervention of equity and the imposition of a constructive trust at the suit of that other party.
[7] (1987) 164 CLR 137 at 147-8; [1987] HCA 59.
The underlying basis for the constructive trust is founded upon unconscionable conduct. As Deane J held in Muschinski:
Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct … the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specifically provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him to do so.[8]
(citations omitted)
[8] (1985) 160 CLR 583 at 619-620; [1985] HCA 78.
Claims for the imposition of a constructive trust have been held to give rise to a caveatable interest in land.[9]
[9] Jandric v Jandric [1999] WASC 22 at [32].
I am satisfied on a prima facie basis that the Bankrupt has made contributions to the purchase, maintenance and improvement of the Property and that those contributions entitle her to claim an equitable interest in the Property through the imposition of a constructive trust. This gives rise to a caveatable interest in the Property.
Pursuant to s 58 of the Bankruptcy Act 1966 (Cth) where a debtor becomes a bankrupt, the property of the bankrupt, not being after acquired property, is vested in the trustee. The trustee in bankruptcy holds that interest on trust for the creditors of the bankrupt estate.[10] In the present case, therefore, the equitable interest held by the Bankrupt is, upon the bankruptcy, vested in the applicant, as the trustee in bankruptcy.
[10] Costello v The Official Trustee in Bankruptcy, Supreme Court of Victoria, No 7927 of 1997, per Beach J at 4.
I am also satisfied that the balance of convenience favours extending the time for the removal of the caveat. The applicant is claiming a proprietary interest in the Property. Such an interest will usually mean that the balance of convenience will favour the granting of an application to extend the time for the removal of the caveat. The respondent has not put on any evidence or made any submission to the effect that damages would be an adequate remedy or that she would suffer any inconvenience if the caveat remained on the Property.
Further caveat
The issue then arises as to whether the applicant, as the trustee in bankruptcy, is entitled to lodge a caveat over the Property when a caveat has been lodged previously by the Bankrupt relating to the same matter. The answer to that question is dependent upon the construction of s 191(1)(k) of the Act and of the words “any caveator” in that section.
Section 191(1)(k) of the Act provides that it shall not be lawful for any caveator other than the Registrar General, or anyone acting on behalf of such caveator, to lodge a further caveat relating to the same matter without the permission of the court.
Section 191(1)(k) must be construed according to the modern approach of the statutory interpretation. In CIC Insurance Limited v Bankstown Football Club Limited,[11] Brennan CJ and Dawson, Toohey and Gummow JJ held:
The modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means … one may discern the statute was intended to remedy.
[11] [1997] HCA 2; (1997) 187 CLR 384, 408.
In SAS Trustee Corporation v Miles,[12] Edelman J held:
[T]his Court said that the task of statutory construction must begin and end with the text of the statute. That statement does not mean that the text of a statute must be interpreted only according to the range of semantic meanings of the individual words. It means only that the interpretation of a statute, like any other legal instrument, is an interpretation of its words. Those words are interpreted in their context and in light of their purpose although legal rules can sometimes exclude or restrict the use of some context. In ascertaining the reasonably intended meaning of Parliament context is, literally, those matters to be considered (simultaneously) together with the text. Context can give words an interpretation that is the opposite of their ordinary meaning and grammatical sensehttps:// - FTN.21. Context can also permit a construction of words that excludes their application to matters that would have fallen within the application of their literal meaning. However, as with contractual interpretation, where ‘the clearer the natural meaning the more difficult it is to justify departing from it’ - FTN.23, so too in statutory interpretation ‘questions of degree arise’ and it will be more difficult to displace an interpretation that ‘has a powerful advantage in ordinary meaning and grammatical sense’.
(citations omitted)
[12] [2018] HCA 55; (2018) 265 CLR 137 at [64].
Gaegler and Keane JJ in Taylor v The Owners – Strata Plan No 11564[13] provided assistance as to how the court should approach the task of statutory construction where there are alternative meanings. Although they dissented in this case, this passage has been widely quoted:
Statutory construction involves attribution of legal meaning to statutory text, read in context. ‘Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning … But not always.’ Context sometimes favours an ungrammatical legal meaning. Ungrammatical legal meaning sometimes involves reading statutory text as containing implicit words. Implicit words are sometimes words of limitation. They are sometimes words of extension. But they are always words of explanationhttps:// - FTN.67. The constructional task remains throughout to expound the meaning of the statutory text, not to divine unexpressed legislative intention or to remedy perceived legislative inattention. Construction is not speculation, and it is not repair.
Context more often reveals statutory text to be capable of a range of potential meanings, some of which may be less immediately obvious or more awkward than others, but none of which is wholly ungrammatical or unnatural. The choice between alternative meanings then turns less on linguistic fit than on evaluation of the relative coherence of the alternatives with identified statutory objects or policies.
(Citations omitted)
[13] [2014] HCA 9; (2014) 253 CLR 531 at [65] to [66].
“Caveator” is defined in s 3 of the Act as meaning any person lodging a caveat. The issue for determination in this case is whether the reference to any caveator in s 191(1)(k) refers to the caveator who lodged the first caveat or whether it refers to any caveator who lodges a further caveat that relates to the same matter.
I do not consider that the applicant and the Bankrupt are the same caveator for the purposes of s 191(1)(k). The trustee, pursuant to s 58 of the Bankruptcy Act, becomes vested with the property of the Bankrupt. The trustee is a different person from the Bankrupt and has different obligations.
An examination of the two caveats demonstrates that they relate to the same matter. Both caveats claimed an interest in the Property based on the contributions made by the Bankrupt to the acquisition and maintenance of the Property. Both claim the interest through the imposition of a constructive trust.
The construction of s 191(1)(k) begins with the observation that the words ‘any caveator’ are very broad. ‘Any’ is a word which excludes limitation or qualification.[14] The word ‘any’ negates qualification and affirms generality.[15] In Beckett v Sutton[16] it was held that “any” was as wide a word as possible. In Clarke-Jervoise v Scutt[17] it was held that “any” is a word of very wide meaning and prima facie the use of it excludes limitation. This proposition has been accepted by the High Court in the Victorian Chamber of Manufacturers v Commonwealth[18] per Williams J who held that “any” is a word which ordinarily excludes limitation or qualification and which should be given as wide a construction as possible except where the subject matter or context suggested otherwise.
[14] Duck v Bates (1884) 13 QBD 843 at 851-2.
[15] Id at 852.
[16] (1882) 19 Ch D 646 at 648.
[17] [1920] 1 Ch 382 at 387-388.
[18] (1943) 67 CLR 335 at 346.
In my opinion, there is no contextual justification for restricting the meaning of the word “any” in s 191(1)(k). The applicant suggested that the words “such caveator” provided a justification for a restriction or qualification in the meaning of the word “any”. I disagree. The words “such caveator” are referring to the caveator who lodged the further caveat which relates to the same matter. That caveator may be the same caveator who lodged the first caveat or may be a second and different caveator.
The applicant also submitted that if the words “any caveator” were given a wide meaning this would preclude a separate legal entity, for example, a business partner, who made their own contributions to the acquisition or maintenance of the Property from lodging a caveat. I do not consider that such a contribution would be in respect of the same matter as the hypothetical first caveator who had lodged a caveat in relation to their contributions. The matter in relation to the first caveator, derives from the contributions of the first caveator. The contributions made by the second caveator give rise to a different matter.
It would have been a simple matter for Parliament, if it intended only the same caveator who lodged the first caveat to be caught, to use the words “same caveator”, rather than ‘any caveator’. Under s 74O of the Real Property Act 1900 (NSW) the restriction expressly applies where a caveat has lapsed or has been withdrawn and ‘the same caveator lodges a further caveat with the Registrar-General in respect of the same estate, interest or right and purporting to be based on the same facts as the first caveat’. Section 91(4) of the Transfer of Land Act 1958 (Vic) provides that a caveat that has lapsed or been removed by an order of the court shall not be renewed by or on behalf of the same person in respect of the same interest. Section 389J of the Land Act 1994 (Qld) provides that a further caveat cannot be lodged by the same caveator in respect of the same or substantially the same grounds as that stated in the original caveat unless leave of the court has been granted. Section 146 of the Land Transfer Act 2017 (NZ) also provides that a caveat against dealings must not be lodged or on behalf of the same person for the same estate of interest as the caveat against dealings that has been removed or lapsed.
Contextual considerations therefore favour a conclusion that the words “any caveator” in s 191(1)(k) of the Real Property Act (SA) are not restricted to the same caveator.
Section 191(1)(k) should be construed widely. The purpose of the provision is to restrict the obstructive use of successive caveats relating to the same subject matter.[19] It has been held in relation to what constitutes the “same interest” in s 74O of the NSW legislation, that to construe the words broadly will assist in the legislative intent to prevent the obstructive use of successive caveats, while to construe the words narrowly and allow interests defined in unique or technically different ways to escape the section, would frustrate the legislative intent.[20] The same reasoning applies to the interpretation of the words ‘any caveator’ in s 191(1)(k). It is a provision that aims to protect the land owner from having to deal with another caveat relating to the same matter, when it has been successful in having the first caveat removed or withdrawn. Section 191(1)(k) is not a permissive provision expanding the circumstances in which a caveat may be lodged, but rather is a restrictive provision.
[19] Butt, Land Law, 5th ed. 2006 at [2036].
[20] Ibid citing McCulloch v Fern (2000) 10 BPR 18,073; [2000] NSWSC 729 at [7].
In these circumstances, I do not consider that the applicant is entitled, without permission of the Court, to lodge a caveat over the Property in respect of the same subject matter as the first caveat that was lodged by the Bankrupt.
It follows that the order for extending until further order the time for the removal of the caveat should be revoked. It also follows that the caveat should be removed either as a consequence of that order or by virtue of the application by the respondent under s 191(1)(e) of the Real Property Act to remove the caveat. I note that the test for an application for removal of a caveat is the same test applied as in an application for the extension of time for the removal of the caveat, namely the test for an interlocutory injunction.[21] As I have found that it is not lawful for the applicant to have lodged a further caveat over the Property in relation to the same matter, it follows that insofar as it is necessary to do so, I would grant the application to remove the caveat.
Application that an order be made nunc pro tunc permitting the lodgment of the caveat by the applicant
[21] Moore, Gratten and Griggs, Australian Real Property Law 7th ed 2020 at [5.90] citing inter alia re Jorss’ Caveat [1982] Qd R 458; Burman v AGC (Advances) Ltd [1994] 1 Qd R 123; Martyn v Glennan (1979) 2 NSWLR 234; Hooper v ANZ Banking Group Ltd (1996) 5 Tas R 398.
The applicant, as an alternative, sought an order that permission be granted nunc pro tunc to lodge the caveat that was registered over the Property on 30 January 2017. Section 191(1)(k) renders unlawful the lodging of the further caveat without permission of the Court.
An order nunc pro tunc, if ordered, would mean that the permission to lodge a further caveat would have the same legal force and effect as if it had been granted on the same day as when the caveat was lodged without permission.[22]
[22] Emanuele v Australian Securities Commission [1997] HCA 20; (1997) 188 CLR 114 at 131-132.
In Michael Trevor Prescott, a Practitioner and the Legal Practitioners Act 1981,[23] Bleby J held:
The power [to make an order nunc pro tunc] is not plenary. It cannot be used to relieve a party of the consequences of their acts. It would be used where the Court is issuing the order to correct a slip, error or procedural defect in an existing proceeding that is not the subject of a process prescribed by statute, but relates to the internal rules and regulations of the Court. It will also be used where the Court is intervening to correct a slip, error or procedural defect in a process that is prescribed by statute, but only where the statute, by its own language, clearly authorises it. In that case, the power will be circumscribed by the construction of the statutory provisions in their context, and having regard to the purpose which the relevant provision is intended to serve.
[23] [2009] SASC 312 at [36].
Section 191(1)(k) provides that the lodging of the further caveat without permission is unlawful. I do not consider it appropriate that an order be granted nunc pro tunc permitting the second caveat to be lodged. In effect, such an order would affect the substantive rights of the respondent in that it would render lawful what was previously unlawful. It would prevent or hinder the respondent from disposing or dealing with the Property. In such a situation, an order granting leave nunc pro tunc will generally not be made.[24]
[24] MAC v The Queen (2012) 34 VR 193; [2012] VSCA 19 at [11].
In Hartley Poynton Ltd v Ali,[25] Ormiston JA (Buchanan JA and Eames JA agreeing) held, after examining the history of nunc pro tunc orders:
This tedious exercise has been designed to show that, with a few minor exceptions, nunc pro tunc judgments and orders … have not been granted to alter the substantive rights of parties but only to overcome procedural irregularities and difficulties.
[25] (2005) 11 VR 568; [2005] VSCA 53 at [73].
This is not a case where a slip, error or procedural defect was made by the applicant in the process prescribed by statute.
The present case can be contrasted to the decision in Emanuele v Australian Securities Commission.[26]In that case, the Court granted leave nunc pro tunc for the Commission to bring proceedings to wind up a company in insolvency pursuant to s 459P of the Corporations Act 2001 (Cth). Leave was required prior to the proceedings being instituted. The Court granted leave nunc pro tunc because s 459P did not affect the substantive rights of the appellant and that the requirement to obtain leave was a procedural provision only. The bringing of the application did not affect the rights of the appellant.[27]
[26] [1997] HCA 20; (1997) 188 CLR 114.
[27] Id at 131, 156.
The language of s 191(1)(k) does not permit an order to be made nunc pro tunc. It would defeat the purpose of s 191(1)(k) if permission did not have to be granted prior to the lodging of the further caveat, but could be later granted. The power to make an order nunc pro tunc is also inconsistent with the power to award compensation pursuant to s 191(1)(j) of the Act where compensation can be awarded where the caveat is wrongfully lodged. A respondent’s existing rights to compensation created by the applicant lodging an unlawful caveat would be taken away by a nunc pro tunc order.
The applicant has submitted that s 64 of the Act provides legislative power for the making of an order nunc pro tunc giving permission to lodge a further caveat relating to the same matter.
Section 64 provides:
In any proceeding in the Court respecting any land or any transaction, contract, or application relating thereto, or any instrument or record affecting any such land, it shall be lawful for the Court to direct the Registrar-General to cancel, correct, record, substitute, issue or make any certificate of title, or any memorial or entry in the Register Book, or otherwise to do such acts and make such entries as may be necessary to give effect to any judgment, decree or order of such Court given or made in such proceeding and the Registrar-General shall obey every such direction.
In my opinion, s 64 does not assist the applicant. This is not a case where the Court has given a judgment or made an order affecting land in respect of which it is necessary to give effect. Section 64 is used to cast on the Registrar-General the duty to give effect to an order of the Court.[28] The applicant cannot point to any order which it says the Court should make and in respect of which it is necessary to correct the Register.
[28] Francis, Torrens Title in Australasia, 1st ed., 1972, vol 1 at 85.
Permission to Lodge a Further Caveat
Section 191(1)(k) does not prevent a third caveat being lodged over the Property relating to the same matter if permission of the court is given prior to such a caveat being lodged.
The applicant, in the third alternative, has applied for such permission.
In considering whether or not to grant leave to issue a further, and in this case, third caveat, the same test is applied, namely whether there is a serious issue to be tried in the sense that the applicant has a prima facie case that has sufficient likelihood of success justifying in the circumstances a preservation of the status quo pending the trial and that the balance of convenience favors the granting of permission.
For reasons that I have previously stated, I consider that the applicant has established a prima facie case that he holds an equitable interest in the Property. That interest arises from the contributions of the bankrupt to the purchase and maintenance of the Property. In cases where the applicant has established a caveatable interest, the balance of convenience will usually fall heavily in favor of the caveator.[29] That is so in the present case for the reasons that I have previously expressed. I note that the defendant has not adduced any evidence or made any submissions that the balance of convenience favours her.
[29] Cini & Ors v Pets Paradise Franchising (SA) Pty Ltd & Ors [2008] SASC 287 at [70]; Pua Hor Ong v Wu You Yang (2008) 103 SASR 9 at [66] referred to in Moore, Gratten and Griggs, Australian Real Property Law’, 7th Edition, 2020 at [5.90].
For these reasons, I grant permission for the applicant to lodge a further caveat on the Property relating to the same matter.
Interlocutory Injunction
In the still further alternative, the applicant seeks an interlocutory injunction preventing the respondent from dealing with the Property. The test for an interlocutory injunction is set by the High Court in Australian Broadcasting Corporation v O’Neill[30] which has previously been referred to by me in these Reasons.
[30] (2006) 227 CLR 57 at 82; [2006] HCA 46.
There is no impediment in granting an interlocutory injunction in circumstances where a caveat has been lodged or is to be lodged.
I am satisfied that the applicant has established a prima facie case that he is entitled to the relief sought. As I have found, the applicant has established on a prima facie basis that he holds an equitable interest in the Property which the respondent is refusing to recognize.
For the reasons that I have previously expressed, I also consider that the balance of convenience favours the applicant in that without an injunction there is nothing to prevent the respondent from dealing with the Property. The fact that the respondent, after a period of three years, has warned the caveat, gives rise to an inference that she may be seeking to deal with the Property. The fact that the Property is an investment property provides further support for this inference. As I have observed the respondent has not made any submissions or adduced any evidence as to any inconvenience that she has suffered as a result of being unable to deal with the Property.
In the circumstances, I am prepared to grant an injunction preventing the respondent from dealing with the Property.
I will hear the parties as to the precise form of the injunction.
Conclusion and orders
For the reasons that I express, I find that the applicant has established a prima facie case that he holds an equitable interest in the property, which interest is a caveatable interest.
However, I find that s 191(1)(k) of the Real Property Act precludes the applicant from lodging a further caveat over the Property in respect of the same subject matter without the permission of the court, which permission was not obtained. It follows that the caveat which was registered on 30 January 2017 is unlawful.
I do not consider that an order can be made nunc pro tunc granting permission to lodge that caveat. I do not consider that s 64 of the Act provides the power to make such an order.
I grant leave for the applicant to lodge a third caveat over the Property in respect of the matters that are set out in the caveat.
The applicant is entitled to an interlocutory injunction preventing the respondent from dealing with the Property.
I order that caveat number 1266912 be removed from the title of the Property.
I will hear the parties as to the precise terms of the orders.
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