Launer v Carbon Black Lab Pty Ltd - [2014] VSC 671

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

Not Restricted

COMMERCIAL COURT
PRACTICE COURT

S CI 2014 5765

DARRYL LAUNER	Plaintiff
v
CARBON BLACK LAB PTY LTD (ACN 140 192 730)	Defendant

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	6 November 2014
DATE OF JUDGMENT:	6 November 2014
CASE MAY BE CITED AS:	Launer v Carbon Black Lab Pty Ltd
MEDIUM NEUTRAL CITATION	[2014] VSC 671

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REAL PROPERTY – Caveat – Application to remove caveat under Transfer of Land Act 1958, s 90(3) – Caveat protected defendant’s interest as purchaser of land – Defendant said to have breached essential term of contract of sale of land by failing to settle purchase – Where plaintiff entered into contract to sell property to third party after purporting to rescind contract with defendant – Piroshenko v Grojsman (2010) 27 VR 489, considered – Whether balance of convenience favoured removal of caveat - Bradto Pty Ltd v State of Victoria (2006) 15 VR 65, considered.

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Appearances	Solicitors
For the Plaintiff	Mr M J Kenny, Solicitor	Kalus Kenny Intelex
For the Defendant	Mr J Kohn of Counsel	Noble Lawyers

HIS HONOUR:

By Motion and Summons dated 28 October 2014, the plaintiff makes a pressing application in the Practice Court for orders to remove Caveat AK492485P (the Caveat) recorded on Certificate of Title Volume 10294, Folio 536, which land is referred to in the materials as Lot 136K.

The plaintiff also applies for orders dispensing with the requirement of Orders 5.03(1) and 8.02 of the Supreme Court (Civil Procedure Rules) 2005, and for the Court’s leave to commence the proceeding nunc pro tunc by Originating Motion in Form C. There has been no opposition by the defendant to such orders. I will make the orders sought in relation to the dispensation and leave sought by the plaintiff.

The materials relied on by the parties in this application are set out in paragraphs 1 and 2 of the defendant's Outline of Submissions dated 5 November 2014 with the addition of the affidavit of Mr Falzon, sworn 5 November 2014, and the affidavit of Mr Phillpott sworn 6 November 2014.

The plaintiff seeks the removal of the Caveat pursuant to s.90(3) of the Transfer of Land Act 1958.

The interest claimed by the defendant in support of the Caveat (Exhibit “FF-5” to the Falzon affidavit sworn 28 October 2014) is set out in the Caveat as follows: “As purchaser pursuant to a Contract of Sale dated 17 July 2013 from Darryl Launer as Vendor”. I shall refer to the Contract of Sale dated 17 July 2013 (Exhibit “FF-4” to the Falzon affidavit, 28 October 2014) as “the Contract of Sale”.

The defendant submits that its caveatable interest is clearly supported by the said Contract of Sale and the question here is whether in the circumstances the defendant is entitled to maintain the Caveat or whether circumstances have changed such that the defendant is now not entitled…

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: [2014] VSC 671
Decision Date: 6 November 2014

CaseChat Overview and Summary

In Launer v Carbon Black Lab Pty Ltd, the dispute before the Court involved the validity of a caveat lodged by Carbon Black Lab against a property sold by Launer. The dispute arose under the Transfer of Land Act 1958, specifically section 90(3), which governs the application to remove a caveat. The crux of the matter was whether the defendant's caveat was justified given that Launer purported to rescind the contract of sale with Carbon Black Lab for an alleged breach of contract terms, and subsequently entered into a new contract with a third party.

The primary legal issue for the Court was whether the balance of convenience favoured the removal of the caveat. Carbon Black Lab argued that their caveat was necessary to protect their interest as a purchaser of the land, which they claimed was not breached by Launer. Launer contended that Carbon Black Lab had breached the contract by failing to settle the purchase, thereby entitling Launer to rescind the contract and sell the property to a third party. The Court had to consider the precedent set in Piroshenko v Grojsman and the principles established in Bradto Pty Ltd v State of Victoria to determine whether the defendant's caveat should be upheld.

The Court found that the defendant's caveat was indeed justified. It concluded that the balance of convenience did not favour the removal of the caveat, as Carbon Black Lab's interest as a purchaser was sufficiently protected. The Court held that the defendant's alleged breach of contract did not undermine the validity of their interest under the caveat. Consequently, the application to remove the caveat was dismissed. The Court's decision underscored the importance of protecting the interests of bona fide purchasers and the need for careful consideration of the balance of convenience when dealing with caveats under the Transfer of Land Act 1958.

Orders