Jovanovski v T Square Investments Pty Ltd

[2019] VSC 641

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

PROPERTY LIST

S ECI 2019 03728

TONY JOVANOVSKI BETI JOVANOSKA	Plaintiffs
v
T SQUARE INVESTMENTS PTY LTD (ACN 619 624 029)	First Defendant
and
REGISTRAR OF TITLES FOR VICTORIA	Second Defendant

---

JUDGE:	Cameron J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 September 2019
DATE OF JUDGMENT:	20 September 2019
CASE MAY BE CITED AS:	Jovanovski & Anor v T Square Investments Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2019] VSC 641

---

REAL PROPERTY – Caveats – Application to remove caveat under s 90(3) Transfer of Land Act 1958 (Vic) – No serious issue to be tried – Order for removal made.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J Stavris	Anthonys Solicitors
For the First Defendant	Mr J Ribbands	Defteros Lawyers
For the Second Defendant	No appearance	No appearance

HER HONOUR:

What is this case about?

1. Mr Tony Jovanovski and Ms Beti Jovanoska (together, the ‘Plaintiffs’) have made an application to this Court pursuant to s 90(3) of the Transfer Land Act 1958 (Vic) (the ‘Act’) to remove a caveat from the title to their land.

1. The Plaintiffs say that T Square Investments Pty Ltd, the First Defendant in this matter, have no proprietary interest in the title to their land.

Background

1. The Plaintiffs have been the joint registered proprietors of the property at 180 Hobbs Road, Wyndham Vale, Victoria (the ‘land’) since 27 August 2013. The land is described as Lots 1 and 2 on Title Plan 680909H in Certificate of Title Volume 06993 Folio 407.

1. On 20 November 2017, the Plaintiffs and the First Defendant entered into a Contract of Sale (the ‘Contract’), in which the Plaintiffs sold the land to the First Defendant for the sum of $6,500,000 with specific conditions regarding the payment of that sum.

1. Relevantly, it was a condition of the Contract that the First Defendant would make the following payments:

(i)     $10,000 – on signing of Heads of Agreement;

(ii)  $640,000 – within 7 days of signing the Contract;

(iii)      $650,000 – 18 months from the date of the contract (12 May 2019); and

(iv)$5,200,000 – 3 years from the date of the Contract (20 November 2020).

1. I am satisfied on the evidence, which was not contradicted, that the First Defendant complied with payments (i) and (ii) above.

1. The First Defendant lodged a caveat numbered AQ752776D on the title to the land on 21 February 2018 (the ‘caveat’).

1. The Plaintiffs provided evidence, with which I agree, that the First Defendant did not comply with its obligation to pay $650,000 in May 2019.

1. Following the failure to make that payment, a Rescission Notice was sent to the First Defendant, the principal place of business of Hobbs Springs Estate Pty Ltd (As Trustee for the Hobbs Springs Estate Unit Trust) (ACN 626 987 906) (‘Hobbs’) as the nominated purchaser of the land, and both of their solicitors on 22 May 2019. At that time, there was no evidence before me of a nomination of an alternative purchaser.

1. It appears on the evidence before this Court that the Rescission Notice was not complied with and no further deposit amount was paid. No evidence was put before me to the contrary.

1. On 22 June 2018, the First Defendant nominated Hobbs as the purchaser of the land under the Contract, in place of the First Defendant. From that date, Hobbs became exclusively liable for the due performance of all the obligations of the First Defendant pursuant to the Contract.

1. On the evidence there was some deal of correspondence in which the Plaintiffs’ solicitors requested the removal of the caveat given the rescission of the Contract and the nomination of Hobbs as purchaser, but the First Defendant claimed to maintain a caveatable interest.

1. At its height, the First Defendant substantiated its alleged caveatable interest by letter dated 23 July 2019 in which its solicitors stated:

“Our client has a caveatable interest in the subject property as purchaser, pursuant to the contract of sale dated 20 November 2017.”

1. This correspondence did not demonstrate any proprietary interest nor did it advance any arguable case that justified the imposition of the caveat on the land.

The case for an adjournment

1. At the hearing of this application there was an oral application by counsel for the First Defendant that instructions could not be received in time for the hearing of the determination of this matter.

1. The application for an adjournment was refused for the following reasons:

(v)   The First Defendant had notice of this Application since at least 15 August 2019;

(vi)At all relevant times, it is apparent that the First Defendant had legal representation; and

(vii)     The First Defendant advanced evidence that its director, Doctor Chowdhury, is presently in London. No explanation was given to this court as to why Doctor Chowdhury’s presence in London presented a barrier to obtaining instructions in a very straightforward matter such as this.

Legal Principles

1. Section 90(3) of the Act provides that:

Any person who is adversely affected by any such caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit.

1. The principles that are to be applied for an application under s 90(3) of the Act are clearly set out by Warren CJ in Piroshenko v Grojsman & Ors[1] (Piroshenko). Her Honour states:

Caveats under the Torrens system are treated by the courts as analogous to applications for interlocutory injunctive relief. In so far 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 grant interlocutory injunctive relief…

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.[2]

[1][2010] VSC 240.

[2]Ibid, [7].

1. This “two-stage approach” has been applied in other decisions of the Supreme Court of Victoria,[3] and also in the Victorian Court of Appeal.[4] I will address these two issues separately below.

   [3]See, for example, Yamine v Mazloum [2017] VSC 601, [15]; National Australia Bank Limited v Nilsen & Anor [2018] VSC 368, [19]-[22]; and Hermiz v Yousif [2019] VSC 160, [24].

   [4]Lawrence & Hanson Group Pty Ltd v Young [2017] VSCA 172, [36]–[38].

Is there a serious issue to be tried?

1. Given the fact that the First Defendant nominated Hobbs as the purchaser of the land under the Contract, there is no basis to support a conclusion that there is a serious issue to be tried in relation to the maintenance of the First Defendant’s caveat over the land.

1. An argument pressed by the First Defendant to the Plaintiffs was that the maintenance of this caveat was somehow connected with more complicated commercial matters.

1. No evidence was presented to the Court about these matters. Even if further evidence was adduced about these matters, they would be completely irrelevant to this application.

1. Accordingly, I am unsatisfied on the evidence that there is a serious issue to be tried in this case.

The balance of convenience issue

1. There being no serious issue to be tried, it is unnecessary for me to consider any matters going to the balance of convenience.

Leave to amend the Plaintiffs’ Summons

1. By way of an Amended Originating Motion filed on 27 August 2019 and at the hearing of this application, the Plaintiffs requested leave to amend its Summons filed on 15 August 2019.

1. The amendments were procedural in nature only and did not affect the substance of the application made.

Decision

1. For the reasons set out above, the Plaintiffs’ application is granted.

1. I make the following orders:

(viii)   Leave to amend the Plaintiffs’ Summons filed on 15 August 2019 is granted.

(ix) The caveat (AQ752776D) which was lodged on 21 February 2018 on the Certificate of Title Volume 06993 Folio 407 be removed.

(x)   A copy of the Orders of this Court, once authenticated, be served on the Registrar of Titles and the First Defendant by the Plaintiffs within 7 days of the Orders being made.

(xi) The First Defendant pay the Plaintiffs’ costs, as agreed or otherwise to be taxed on a standard basis.