Lettieri v Gajic & Ors

[2008] VSC 378

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 8496 of 2008

IN THE MATTER of section 90(3) of the Transfer of Land Act 1958 (Vic)

FRANCESCO LETTIERI	Plaintiff
v
MICK GAJIC	First Defendant
- and -
BRUNO STRANGIO	Second Defendant
- and -
REGISTRAR OF TITLES	Third Defendant

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JUDGE:	Kyrou J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 September 2008
DATE OF JUDGMENT:	25 September 2008
CASE MAY BE CITED AS:	Lettieri v Gajic
MEDIUM NEUTRAL CITATION:	[2008] VSC 378

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Real property – removal of caveat – Transfer of Land Act 1958, s 90(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C E Shaw	Sackville Wilks Pty Ltd
No appearance for the First, Second or Third Defendants

HIS HONOUR:

1. This is an application by Francesco Lettieri, who is the registered proprietor of the land at 8 Northern Court, Craigieburn (“Land”) for the removal of a caveat lodged by Mick Gajic preventing dealings in the Land. The application is made by originating motion and summons pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) (“Act”).

1. Mr Gajic is the first defendant.  The second defendant is Bruno Strangio (an undischarged bankrupt) and the third defendant is the Registrar of Titles.  Mr Shaw appeared for Mr Lettieri.  Mr Gajic and Mr Strangio did not appear.  In accordance with normal practice, the Registrar of Titles did not appear.

1. There has already been considerable litigation between Mr Lettieri and Mr Strangio over the Land.  The relevant background is described in a judgment of Whelan J dated 7 August 2008.  I need not repeat all of the details contained in that judgment.  For present purposes, it is sufficient for me to note the following in relation to the dispute between Mr Lettieri and Mr Strangio:

(a)By a contract of sale executed in July 2007, Mr Lettieri agreed to sell the Land to Mr Strangio or his nominee.  The contract provided for a  deposit of $13,000 which was payable on 18 July 2007 and recorded that $500 of that sum had already been paid.  Settlement was to take place on 5 December 2007.  There were special conditions to the contract pursuant to which Mr Lettieri agreed, amongst other things, to sign documents necessary for town planning permits to be applied for.  The deposit was not paid and a notice of default was served on 27 August 2007.  On 20 September 2007, Mr Lettieri served a rescission notice. 

(b)The parties entered into a fresh contract of sale in November 2007.  There is a dispute about the terms of that contract and, in particular, whether the special conditions referred to above were incorporated into that contract.  There is also dispute as to whether Mr Strangio entered into the contract as agent for Sharp Design Pty Ltd, Melbourne-Wide Plant Hire Pty Ltd or Northern 8 Pty  Ltd. 

(c)Under the November 2007 contract, settlement was due on 5 December 2007.  Settlement was not effected on that day.  On 6 December 2007, a notice of rescission was served.

(d)On 18 January 2008, a caveat was lodged on the Land by Melbourne-Wide Plant Hire Pty Ltd.  That caveat has lapsed.

(e)On 25 January 2008, Mr Lettieri entered into a contract with an arms’ length third party purchaser.  That contract was due to settle on 24 March 2008.  The contract has not yet settled. 

(f)Mr Strangio and Sharp Design Pty Ltd initially lodged caveats which eventually lapsed as a result of the operation of s 89A of the Act.

(g)On 6 May 2008, Mr Strangio and Sharp Design Pty Ltd issued a writ and on the same day, they lodged further caveats claiming an interest pursuant to the contract of sale entered into in November 2007. Mr Lettieri applied to this Court under s 90(3) of the Act for removal of those caveats. That application was heard by Whelan J on 7 August 2008. On that day, his Honour ordered that the caveats be removed.

(h)Mr Strangio has appealed to the Court of Appeal in respect of Whelan J’s order. 

1. The caveat that is the subject of the proceeding before me was lodged by Mr Gajic on 5 September 2008.  The caveat describes Mr Gajic’s alleged estate or interest as “Mortgagee” and states the grounds of the claim as “Mortgagee – Francesco Lettieri and Mick Gajic, 18 July 2007”. 

1. Before me, Mr Lettieri relied on an affidavit sworn by him on 15 September 2008 and three affidavits by his solicitor, Scott Munro, sworn on 16, 24 and 25 September 2008. 

1. In his affidavit, Mr Lettieri states that until the caveat was lodged, he had never heard, met or spoken to Mr Gajic, he has still not met or spoken to Mr Gajic, he has not entered into any mortgage arrangement with Mr Gajic in relation to the Land and that Mr Gajic has no interest in the Land.  He states that as a result of the various caveats lodged on the Land by Mr Strangio and others connected with him, he has not been able to effect settlement of the contract of sale of the land to the purchaser, Mr Ali Ozdemir.  He states that although Mr Ozdemir has been co-operative to date, he is concerned that it is becoming increasingly likely that Mr Ozdemir may terminate the contract and sue him for damages. 

1. In his affidavit of 16 September 2008, Mr Munro states the following relevant matters:

(a)According to a company search dated 1 July 2008, the registered office of Melbourne-Wide Plant Hire Pty Ltd is 105 Ordish Road, Dandenong South, its director and secretary is Mr Strangio and its shareholder is Sharp Design Pty Ltd. 

(b)The caveat dated 6 March 2008 lodged by Sharp Design Pty Ltd was signed by Mr Strangio as the sole director and secretary of Sharp Design Pty Ltd.  An ASIC search dated 1 July 2008 shows that Sharp Design Pty Ltd’s previous registered office was Level 1, 2 Barkly Avenue, Armadale, and that Mr Strangio was not and has not been a director or secretary of that company.

(c)On 6 August 2008, a caveat was lodged by Complete Specialised Insurances Pty Ltd.  An application was made to this Court for an order removing that caveat.  Mr Strangio attended and addressed the Court on behalf of Complete Specialised Insurances Pty Ltd.  An order for removal of the caveat was made on 4 September 2008 by Vickery J.

(d)The caveat that is the subject of the proceeding before me shows Mr Gajic’s address as 2 Barkly Avenue, Armadale.

(e)Mr Paul Pattison, who is Mr Strangio’s trustee in bankruptcy, wrote to Mr Munro on 12 September 2008 confirming that Mr Strangio does not have Mr Pattison’s consent to act in the appeal to the Court of Appeal referred to previously, and that Mr Pattison has no intention of pursuing that matter.

(f)There is an unrelated proceeding in this Court (No 6722 of 2008).  A copy of an order dated 22 July 2008 in that proceeding shows Mr Strangio’s address as 1, 2 Barkly Avenue, Armadale, the same as the address given in the caveat that is the subject of this proceeding, and the address of Mr Gajic. 

(g)On 10 September 2008, Mr Munro telephoned Mr Gajic.  Mr Gajic acknowledged that a caveat had been lodged but said he could not talk to Mr Munro at that time and asked Mr Munro to call him back in an hour or so.  Mr Munro called back but Mr Gajic’s telephone was switched off and no message bank facility was available. 

(h)On 10 September 2008, and immediately following his telephone conversation with Mr Gajic, Mr Munro received a telephone call from Mr Strangio.  Mr Strangio told him that there was no point fighting the caveat lodged by Mr Gajic because once it was removed, another one would be placed on the Land and there would be many others.  Mr Munro then received a second telephone call from Mr Strangio straight after the first call ended in which Mr Strangio threatened Mr Munro and said that if the caveat was removed, there would be another 60 people to put a caveat over the Land. 

(i)On 11 September 2008, Mr Munro wrote to Mr Gajic demanding that the caveat be removed.  Mr Gajic has not responded to that letter.

(j)Mr Munro has corresponded with the Registrar of Titles.  The Registrar has informed him that the Registrar does not intend to appear in this proceeding and does not intend to claim costs. 

1. Mr Munro’s affidavit of 25 September 2008 deposes to two telephone conversations between Mr Munro and Mr Strangio on 22 and 24 September 2008 in which threats were made by Mr Strangio.

1. On 23 September 2008, Master Evans made an order for substituted service on Mr Strangio. An affidavit of service in accordance with that order was filed on behalf of Mr Lettieri. Mr Gajic was served at the address shown on the caveat in accordance with s 113(3) of the Act.

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

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

1. In Goldstraw v Goldstraw,[1] Dodds-Streeton J stated: 

Section 90(3) is in the nature of a summary procedure analogous to the determination of interlocutory injunctions. The Court’s power under section 90(3) is discretionary. In that context, it is recognised that the caveator bears the onus of establishing that there is a serious question to be tried that he or she does have the estate or interest in the land claimed. That is, ‘in order to resist successfully the applications for removal of caveats (the caveator’s) arguments must be directed towards the assertion of an interest in the subject land in the light of relevant principles of property and equity law. Further, if the caveator does establish the serious question to be tried in relation to the estate or interest claimed, the weight of authority indicates that the caveator must further establish that the balance of convenience favours the maintenance of the caveat until trial.

[1][2002] VSC 491, [30] (citations omitted).

1. I have concluded that there is no serious question to be tried.  There is simply no evidence that Mr Gajic has a caveatable interest. 

1. Even if I were wrong as to this, in relation to the balance of convenience, the evidence overwhelmingly supports Mr Lettieri.  The caveats that Mr Strangio and persons connected with him have lodged in relation to the Land have delayed settlement of the sale of the Land to Mr Ozdemir.  I am satisfied on the evidence that Mr Gajic is acting in concert with Mr Strangio.  Accordingly, I will order that the caveat be removed.

1. The orders sought by Mr Lettieri go further.  He seeks an order preventing the Registrar from registering any caveat lodged by any person, other than by a purchaser of the Land from Mr Lettieri, without the leave of the Court.  This application was made on the basis of the threats made by Mr Strangio to Mr Munro.  In the unusual circumstances of this case, I am of the opinion that it is appropriate for further relief to be granted to Mr Lettieri to enable the sale to Mr Ozdemir to be completed.  Rather than making the orders sought by Mr Lettieri, however, I propose to order that the Registrar not register any caveat by any person, other than a purchaser from Mr Lettieri, without the leave of the Court for a certain period, namely until 6 November 2008.  This should be sufficient to enable the settlement to be concluded and for a transfer in favour of Mr Ozdemir to be registered.