Luther v Milner - [2009] VSC 595

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 10497 of 2009

BELINDA MARGARET LUTHER	Plaintiff
v
LEONARD ANTHONY MILNER (in his capacity as the liquidator of Sayer Developments Pty Ltd (in liquidation))	First Defendant
and
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	ROSS J
WHERE HELD:	Melbourne
DATE OF HEARING:	12 December 2009
DATE OF JUDGMENT:	15 December 2009
CASE MAY BE CITED AS:	Luther v Sayer & anor
MEDIUM NEUTRAL CITATION:	[2009] VSC 595

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Interest necessary to support caveat under s 89(1) of the Transfer of Land Act – Liquidator – No vesting order, no caveatable interest – Caveat maintained for a collateral purpose as a bargaining chip – costs awarded on an indemnity basis.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr Tim Messer	Brennan Georgiou Eaton
For the First Defendant	Ms Anne Robertson	Andrew Bell

HIS HONOUR:

This matter concerns a costs dispute arising from an application pursuant to s 90(3) of the Transfer of Land Act 1958 to remove a caveat. The background facts may be shortly stated.

Sayer Developments Pty Ltd (“the Vendor”) is the registered proprietor of the land described in Certificate of Title Volume 5036 Folio 014, being the land situated at 39 Webster Street Camberwell (“the Land”).

By contract of sale of real estate dated 17 June 2009 the Vendor sold, and the plaintiff’s husband purchased, the land for the sum of $790,000. The purchaser subsequently nominated the plaintiff as substitute purchaser and the contract was completed at settlement on 28 August 2009.

On the settlement date the plaintiff received from the Vendor the duplicate Certificate of Title for the land, a Transfer in registrable form by which the Vendor transferred all its estate in fee simple in the Land to the plaintiff and a registrable Discharge of Mortgage.

Hence it is apparent that at settlement on 28 August 2009 the plaintiff was the sole beneficial owner of the Land.

On 30 September 2009 a winding up order was made in respect of the Vendor and the first defendant (Mr Milner or the liquidator) was appointed liquidator of the Vendor.

By caveat dated 6 October 2009 and registered the following day (the caveat) the liquidator claimed an estate in fee simple and the grounds of the claim are said to be:

“To protect against fraudulent dealings on the basis that the caveator does not have in his possession the duplicate Certificate of Title.”

On 11 November 2009 the plaintiffs’ solicitors (Brennan Georgiou Eaton, Lawyers, ‘BGEL’) wrote to the solicitor acting on behalf of the liquidator (Andrew Bell, ‘Bell’) setting out the background facts, indicating that the liquidator had no basis for maintaining the caveat and requesting that the caveat be withdrawn.

The letter concludes as follows:

“In circumstances such as this, there is no basis upon which your client can maintain it has a Caveatable interest in the property. Accordingly, we hereby give you notice that if we have not received a Withdrawal of Caveat…

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 Luther v Milner

Details

AGLC: Luther v Sayer [2009] VSC 595
Case: [2009] VSC 595
Decision Date: 15 December 2009

CaseChat Overview and Summary

The case of Luther v Milner involved a dispute over the maintenance of a caveat entered by the liquidator of a company, Luther, against the transfer of a property to Milner. The matter was heard in the Supreme Court of Victoria. The liquidator had entered the caveat without a vesting order and without holding any interest in the property, seeking to use it as a bargaining tool rather than to protect an interest in the property. Milner sought to have the caveat removed and for costs to be awarded against Luther.

The primary legal issue for the court was whether the liquidator had a sufficient interest to support the caveat under section 89(1) of the Transfer of Land Act 1993 (Vic). The court considered whether the entry of the caveat by the liquidator, without a vesting order or a genuine interest in the property, constituted a collateral purpose. The court also needed to determine if the liquidator’s actions were reasonable and justified, and if so, whether costs should be awarded on an indemnity basis.

The court held that the liquidator's entry of the caveat was for a collateral purpose and not to protect any interest in the property. The court found that the liquidator had no caveatable interest as there was no vesting order in place, and the caveat was maintained as a bargaining chip. The court emphasised that a caveat must be entered to protect an actual or potential interest in the land, and not merely as a tactical manoeuvre in negotiations. Given the misuse of the caveat process, the court awarded costs on an indemnity basis, reflecting the unreasonable nature of the liquidator's conduct.

As a result, the caveat entered by the liquidator was deemed invalid, and the transfer of the property to Milner proceeded. The court's decision underscored the importance of maintaining the integrity of the caveat process and ensuring that caveats are entered for legitimate protective purposes. The court's ruling also highlighted the consequences of misusing the caveat process, particularly in terms of the imposition of indemnity costs.

Orders