Lombardo v Bahnan - [2014] VSC 410

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL & EQUITY DIVISION

S CI 2014 4070

MICHAEL LOMBARDO	Plaintiff
v
SAMIR BAHNAN	First Defendant
and
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	WARREN CJ
WHERE HELD:	Melbourne
DATE OF HEARING:	22 August 2014
DATE OF JUDGMENT:	28 August 2014
CASE MAY BE CITED AS:	Lombardo v Bahnan
MEDIUM NEUTRAL CITATION:	[2014] VSC 410

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REAL PROPERTY – Removal of caveat – Whether serious question to be tried that the first defendant had a caveatable interest in property the subject of contract of sale – Where interest claimed a constructive trust resulting from unjust enrichment of the plaintiff – No serious question to be tried – Balance of convenience favourable to the removal of caveat – Transfer of Land Act 1958 s 90(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr S E Marantelli	Hentys Lawyers
For the First Defendant	Mr S P Matters	Vasilaras & Co
For the Second Defendant	No appearance

HER HONOUR:

The plaintiff seeks the removal of a caveat.

The plaintiff and the first defendant jointly operated a scrap metal business through the company, A1 Metal Recyclers Group Pty Ltd (‘A1’) from 1 August 2007. By late 2011 the plaintiff and the first defendant resolved to split the scrap metal business through the vehicle of a sale of business agreement (‘the agreement’). The agreement provided:

(a) that the plaintiff resign as a director of A1;

(b) that the first defendant pay either $80,000 or $130,000 to the plaintiff (the amount is in dispute between the parties);

(c) that the plaintiff transfer 50 per cent of the shares in A1 to the defendant upon payment of the balance of either $130,000 or $80,000 (as disputed) ($80,000 of which had been paid leaving a disputed balance of $50,000);

(d) that properties at 52 Malcolm Place, Campbellfield (‘Malcolm Place’) and 41 Sarah Street, Campbellfield (‘Sarah Street’) which were jointly owned as tenants in common be partitioned.

(e) that the plaintiff become the sole owner of Malcolm Place and the first defendant become the sole owner of Sarah Street.

On 15 January 2013 the plaintiff and the first defendant executed two transfers of land to effect the partition of the properties. The consideration expressed in both transfers was ‘Desire to Partition Land’. On 4 April 2013 the two properties were partitioned in accordance with the agreement.

Sometime in 2011, likely on or around 28 October 2011, the plaintiff entered into a lease with A1 for the properties at 52 Malcolm Place and the land described in Certificate of Title Volume 9910 Folio 297. The lease was for a term of two years.

In October 2013 the plaintiff commenced proceedings in the Magistrates’ Court against A1 and the first defendant, as guarantor under the lease, for arrears of rent under the lease. On 27 October 2013 the term of the lease expired and thereafter the company, A1 continued in possession of the properties as a month to month tenant.

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.

Continue reading Lombardo v Bahnan

Details

AGLC: Lombardo v Bahnan [2014] VSC 410
Case: [2014] VSC 410
Decision Date: 28 August 2014

CaseChat Overview and Summary

In Lombardo v Bahnan, the appellant, Lombardo, sought to remove a caveat lodged by the first respondent, Bahnan, over a property that was the subject of a contract of sale between Lombardo and the second respondent, another party to the contract. The application was made under the Transfer of Land Act 1958, seeking the removal of the caveat on the basis that Bahnan had no reasonable cause of action in relation to the property. The case came before the Supreme Court of Victoria, which was required to determine whether there was a serious question to be tried regarding Bahnan's claim of a caveatable interest in the property and whether the balance of convenience favoured the removal of the caveat.

The central legal issue before the court was whether Bahnan's claim of a caveatable interest in the property was sufficient to warrant the maintenance of the caveat. Bahnan argued that she held a constructive trust interest in the property, resulting from an alleged unjust enrichment of Lombardo. The court had to assess the merits of Bahnan's claim and determine whether it presented a serious question to be tried. Additionally, the court needed to weigh the balance of convenience to decide whether it was more just and convenient for the caveat to be removed.

The court found that there was no serious question to be tried in relation to Bahnan's claim of a constructive trust interest. The evidence did not support the assertion that Bahnan had a caveatable interest in the property, and her claim did not present a reasonable cause of action. Furthermore, the court determined that the balance of convenience favoured the removal of the caveat, as the contract of sale was nearly complete and the removal of the caveat would facilitate the transfer of ownership. Consequently, the court granted Lombardo's application to remove the caveat, consistent with the provisions of the Transfer of Land Act 1958 s 90(3).

The final orders of the court were that the caveat lodged by Bahnan be removed and that Lombardo be permitted to proceed with the sale of the property to the second respondent. Bahnan was ordered to pay Lombardo's costs associated with the application.

Orders