Plaintiffs ordered to pay compensation for wrongful lodgement of caveat.
CATCHWORDS:
REAL PROPERTY - CAVEAT - COMPENSATION - COMPENSABLE LOSS - Purchasers' solicitor insisted on untenable construction of contract, probably due to not having retained a complete copy of contract in file - Vendors rescinded - Purchasers sought specific performance and lodged caveat - whether caveat lodged "without reasonable cause" - whether solicitor and Purchasers could have reasonable ground to believe that contract not validly rescinded - whether inability of Vendors to discharge loan out of proceeds of resale of land during currency of caveat was a loss "attributable" to wrongful lodging of caveat. HELD: Purchasers had lodged caveat without reasonable cause - payments of interest which would have been avoided but for existence of caveat were a loss attributable to the wrongful lodgement of caveat.
Andrew Kwang Lee - First-named Plaintiff Catherine Bok Lee - Second-named Plaintiff Ju Hyung Lee - Third-named Plaintiff Na Young Lee - Fourth-named Plaintiff Raymond Ross - First Defendant Bernadine Ross - Second Defendant Karen Ross - Third Defendant Cheryl Ann Thomas - Fourth Defendant Registrar General of New South Wales - Fifth Defendant
FILE NUMBER(S):
SC 2787/97
COUNSEL:
A. Blank - Plaintiffs R. Sofroniou - First Defendant
SOLICITORS:
Daniel Svir - Plaintiffs Horowitz & Bilinsky - First Defendant
Introduction
1 On 11 April 2003 I delivered judgment in these proceedings: Lee v Ross [2003] NSWSC 289. I held that no contract for the sale of land had come into existence between the Defendants as Vendors and the Plaintiffs as Purchasers. Alternatively, I held that even if such a contract had come into existence, it had been validly terminated by the Vendors on 7 March 1997 for wrongful repudiation by the Purchasers. I stood the matter over for the bringing in of Short Minutes of Order reflecting my reasons for judgment. 2 When the matter came back for the making of orders, Ms Sofroniou, who appears for the Vendors, sought an order for compensation under s.74P(1) of the Real Property Act 1900 (NSW). That section provides, in so far as is relevant:
“Any person who, without reasonable cause … lodges a caveat with the Registrar-General under
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
AGLC
Lee v Ross (No 2) [2003] NSWSC 507
Case
[2003] NSWSC 507
Decision Date
CaseChat Overview and Summary
In the matter of Lee v Ross, the dispute involved the validity of a caveat lodged by the purchasers against the vendors' property. The case was heard in the Supreme Court of New South Wales. The purchasers had lodged a caveat after their solicitors insisted on an untenable construction of the contract, likely due to an incomplete copy of the contract being retained in their file. The vendors rescinded the contract, leading the purchasers to seek specific performance and lodge a caveat. The central legal issues before the court were whether the caveat was lodged without reasonable cause and whether the inability of the vendors to discharge their loan out of the proceeds of the resale of the land during the currency of the caveat was a loss attributable to the wrongful lodgement of the caveat.
The court examined whether the purchasers and their solicitor could have had reasonable grounds to believe that the contract was not validly rescinded. It was noted that the solicitor's insistence on an untenable construction of the contract was probably due to not having a complete copy of the contract in their file. The court determined that the purchasers had indeed lodged the caveat without reasonable cause. The court also found that the payments of interest that would have been avoided but for the existence of the caveat were a loss attributable to the wrongful lodgement of the caveat. The inability of the vendors to discharge their loan out of the proceeds of the resale of the land during the currency of the caveat was considered a compensable loss.
Ultimately, the court held that the purchasers had lodged the caveat without reasonable cause, and the payments of interest that would have been avoided but for the existence of the caveat were a loss attributable to the wrongful lodgement of the caveat. The court awarded compensation for this loss. The final orders of the court included the removal of the caveat and the awarding of compensation to the vendors for the interest payments incurred due to the wrongful lodgement of the caveat.