Mohebbi v Arnold; Dalton v Arnold - [2006] SASC 230

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
MOHEBBI v ARNOLD & ANOR; DALTON v ARNOLD
[2006] SASC 230
Judgment of The Honourable Justice Debelle
2 August 2006
CONVEYANCING - LAND TITLES UNDER THE TORRENS SYSTEM - CAVEATS AGAINST DEALINGS - LAPSE, REMOVAL AND WITHDRAWAL
Sale of land - question as to the authority of the agent to sell and whether sale in breach of court order - purchaser had no notice of either the absence of authority or court order - caveat lodged to secure beneficial interest in the land - no ground on which contract for sale can be set aside - order for specific performance not set aside - caveat to be removed upon payment of amount of beneficial interest.
De Facto Relationships Act 1996 (SA); Enforcement of Judgments Act 1991 (SA), referred to.
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353, applied.

MOHEBBI v ARNOLD & ANOR; DALTON v ARNOLD
[2006] SASC 230
Civil

DEBELLE J. Before the Court are several applications made in different actions. The actions all relate to a house property at Goolwa Beach.
The Parties
Before noting the facts in detail, I will briefly describe the persons involved and list the separate actions. Some persons are parties in more than one action. The persons involved are Mr Peter Dalton, Ms Sally Arnold, Ms Natasha Mohebbi and Mr Angelo Kalivis. Mr Dalton and Ms Arnold had lived in a de facto relationship from 1989 to 1997. During the period of that relationship Ms Arnold purchased two house properties, one at Smithfield and the other at Goolwa Beach. I will refer to each as “the Smithfield property” and “the Goolwa property”. Mr Dalton claimed a beneficial interest in both properties. After the relationship ended, he lodged a caveat on the certificate of title of each in order to protect his interests. In January 2002 Ms Arnold contracted to sell the Goolwa property to Ms Mohebbi. The agent for the sale was Mr Kalivis. Ms Arnold did not complete the contract for sale.
The Legal Proceedings
These facts have spawned an action in the District Court of South Australia (“the District Court”), an appeal from the judgment and orders in the District Court action to the Full Court of this Court, and two further actions in this Court. In addition, there have been bitter and protracted proceedings in the Family Court of Australia between Mr Dalton and Ms Arnold consequent on the breakdown of their relationship. It is unnecessary to refer in any detail to the proceedings in the Family Court. I briefly note the actions in the District Court and in this Court.
On 5 December 1997 Mr Dalton had caused a caveat to be lodged on the certificate of title of each the Goolwa property and the Smithfield property to protect the beneficial interest he claimed in each. He described that beneficial interest as being “in some (at present) undeliverable share or shares” in the land. In 1998, Mr Dalton commenced an action in the District Court (action no. 1203 of 1998) in order to establish the extent of his interest in each of the properties.
The action was heard by Judge Vanstone who found that Mr Dalton had contributed to the cost of purchasing both the Goolwa property and the Smithfield property. She held that Mr Dalton had an interest in the Goolwa property and determined the extent of that interest. She also held that Mr Dalton’s financial contributions to the Smithfield property were absorbed by his outstanding obligation to Ms Arnold and so made no order in respect of the Smithfield property. Ms Arnold instituted an appeal to this Court from that decision. It is the proceeding numbered 1331 of 2001. Mr Dalton cross‑appealed. The appeal was ultimately heard and determined. I will note the outcome later in these reasons.
In 2003 Ms Arnold took steps to have the caveats lodged by Mr Dalton removed. Mr Dalton instituted an action in this Court (action no. 261 of 2003) and obtained an order extending the operation of the caveats until further order.
As Ms Arnold did not complete the contract for the sale of the Goolwa property, Ms Mohebbi commenced an action in this Court for specific performance of the contract of sale. It is the action no. 1294 of 2003. The defendant in that action is Ms Arnold and Mr Kalivis is a third party.
After that brief summary, I will now examine the facts in a little more detail. Although those facts are quite detailed, it is sufficient to note only the main events.
Two Properties Purchased
Mr Dalton and Ms Arnold had lived in a relationship from about 1989 to 1997. During that time, two properties were purchased in the name of Ms Arnold. The Goolwa property was at 2 Frayne Street, Goolwa Beach. The Smithfield property was at 2 Parachilna Street, Smithfield. In September 1997 they ended the relationship.
A Claim for An Interest in Each Property
On 26 August 1998 Mr Dalton commenced an action in the District Court in which he claimed, among other things, that he and Ms Arnold had lived in a de facto relationship within the meaning of the De Facto Relationships Act 1996 and that he had made a substantial contribution to the purchase price of each of the two properties purchased in the name of Ms Arnold and to the improvement of each. He therefore claimed, among other things, a transfer of the Goolwa property and payment of the sum of $10,500.
The Action in the District Court
The action in the District Court was heard by Judge Vanstone. On 6 September 2001, the judge published her reasons. She found
1.that Mr Dalton and Ms Arnold had been living in a de facto relationship within the meaning of the De Facto Relationships Act from February 1989 to 1 September 1997;
2.that the prerequisites for a division of property under the Act had been satisfied; and
3.that the court had jurisdiction to make an order for division of property and that it was just and equitable to do so.
The judge made orders to give effect to her reasons. For present purposes, it is necessary to refer only to para 3 and para 4 of the order which were in these terms:
3.That the defendant on or before 31 October 2001 pay to the plaintiff the sum of $35,000.00, being a sum estimated to represent a half share of the value of the Goolwa property, without any deduction for the interests – registered or not – of any other party and upon the defendant so doing the plaintiff shall tender to the defendant in registrable form a discharge of the caveat registered by him on the Smithfield and Goolwa properties.
4.That the matter be adjourned until 7 November 2001 (at 10.00 am). If the defendant does not comply with paragraph 3 hereof, then on that day the Judge will consider what orders should be made to facilitate the sale of the Goolwa property, and, the distribution of the proceeds of sale, after deduction of the sale expenses, equally between the plaintiff and the defendant.
By notice of appeal dated 20 September 2001 Ms Arnold instituted an appeal against the judgment and orders of Judge Vanstone.
After instituting the appeal, Ms Arnold applied for a stay of the orders of Judge Vanstone. On 3 October 2001 a Master of this Court ordered a stay until 31 October 2001. On 26 October 2001 Mr Dalton lodged a cross‑appeal. When the adjourned application for a stay resumed on 31 October 2001, the Master refused to extend the stay. His reason was that the proceedings were resuming before Judge Vanstone on 7 November 2001 so that, if Ms Arnold had not complied with the order by then, the judge would make further orders which might be the subject of an appeal.
The hearing on 7 November 2001 before Judge Vanstone was adjourned to 21 November and then to 28 November. On 28 November Ms Arnold did not appear. The judge made the following further orders:
1.     The property at 2 Frayne Street, Goolwa, be sold in manner following:-
(a)     the said property be forthwith listed for sale by private treaty for a maximum period of three months from the date of this order with an agent or agents agreed upon by the parties and in default of agreement as determined by this Court;
(b)     the listing price for the sale of the said property be as nominated by the appointed agent or agents but at not less than $70,000.00 unless otherwise agreed by the parties;
(c)     in the event that a contract for sale of the said property has not been entered into at the expiration of the said period of three months or at such earlier time as may be agreed upon by the parties then the said property be offered for sale by public auction as soon as practicable thereafter upon such terms and conditions and at such reserve price as may be agreed between the parties and in default of agreement as determined by this Court;
(d)     upon completion of the sale of the said property the proceeds thereof be disbursed as follows:
i)in payment of all costs, commissions and expenses of sale including auction expenses if any;
ii)in discharge of all rates and taxes and other like charges outstanding in respect of the said property;
iii)in discharge of all mortgages or encumbrances affecting the said property;
iv)a fifty percent of the gross sale price less the costs, commissions and expenses of sale referred to in paragraph 1 (d) (i) hereof be paid to the plaintiff;
v)the balance thereof to the defendant.
2.The parties may apply for further orders and directions.
The judge adjourned the hearing to 14 December 2001 but Ms Arnold did not then appear. The proceedings were further adjourned to 30 January 2002.
On 7 December 2001 Mr Dalton lodged a further notice of cross‑appeal and, in addition, applied for a stay of the orders of Judge Vanstone. The application for a stay was heard by Prior J on 14 December 2002 and adjourned sine die as Mr Dalton had not been able to serve the application for a stay on Ms Arnold. He had had difficulty in locating Ms Arnold. The appeal was ultimately listed for hearing. Before noting the outcome of the appeal, it is necessary to note other events.
Goolwa Property Advertised for Sale
On 3 December 2002 Ms Arnold had called Mr Kalivis by telephone. He is a land agent at Goolwa trading as Century 21 Fleurieu Coast Group. She instructed him to sell the Goolwa property for not less than $70,000. She said she would send the order of Judge Vanstone to him. On 6 December 2001 Mr David Brown, who was then Ms Arnold’s partner, sent a letter by facsimile transmission to Mr Kalivis. The letter was in these terms:
To Angelo
Here is the court order for the sale of 2 Frayne St.
Mr Dalton’s address is
17 Chatswood Way
Salisbury Park
Send him any correspondence as ‘info’ only as he does not have a say in what happens, just agreeing to the sale price.
Thanks
David Brown [signed]
The statement “Send him any correspondence as ‘info’ only as he does not have a say in what happens, just agreeing to the sale price” plainly misrepresents the effect of the order. However, a copy of the order was also sent to Mr Kalivis. If Mr Kalivis had read the order, he would have been aware of the true position. On 13 December 2001, Mr Kalivis first advertised the Goolwa property for sale.
On 2 January 2002 Kalivis wrote to Dalton informing him that Century 21 Fleurieu Coast Group had been appointed agents and informing him of the terms on which the Goolwa property had been offered for sale. The letter read:
We advise that we have been appointed sole selling agents for the above‑mentioned property, and have proceeded accordingly as per court order dated 28/11/01.
We advise the following to date
1)    Marketing commenced on 13/12/01.
2)    Signboard on property and Internet facilities are in place.
3)    Advertised price is $78,000 with notification to achieve $70,000 and upwards.
4)    To date several inquiries have been received but nothing concrete as yet.
We expect the busy period over the next 60 days should bring some offers. Should you require any further information please contact the writer on 85550267 or A/H 0412897263.
Assuring you of our best intentions at all times.
Mr Dalton admits receiving that letter. He said that he received it on or about 4 January 2002 and, on receiving it, telephoned Mr Kalivis. The evidence as to the date of the telephone conversations was confused. On some occasions it was said to have occurred on 4 January and on others on 7 January. The precise date is of no moment. Mr Dalton gave evidence that he informed Kalivis that he did not agree to his appointment as sole agent and stating that the appointment did not comply with the order in the District Court made on 28 November 2001. He told him that the Goolwa property was not for sale. He admitted in cross‑examination that at the end of the conversation he was concerned that Mr Kalivis would continue to offer the property for sale. Mr Dalton admitted also that he was somewhat aggressive when he telephoned Mr Kalivis because he was distraught that someone believed he had authority to sell the property.
In an affidavit sworn on 28 October 2005 Mr Kalivis said that, on receipt of the facsimile from David Brown, he had telephoned Mr Dalton as a matter of courtesy to confirm that he had been engaged as agent to sell the Goolwa property. In his sworn evidence he said that that assertion was incorrect and that he did not speak to Mr Dalton until Dalton telephoned him on 4 January. He said that he remembered Dalton telephoning him and that he (Kalivis) had confirmed the details of the listing for sale of the Goolwa property. His account of this call differs from that of Dalton. He said that he told Dalton that he had a copy of the order and that Dalton said words to the effect, “that’s fine”. Kalivis said that Dalton did not at any time in that conversation object to him selling the Goolwa property. He said that they discussed the price in terms similar to those in the letter from Kalivis to Dalton of 2 January 2002. Kalivis said that he had a clear recollection of the telephone conversation because Dalton was “extraordinarily forthright”, telling him about his family situation, his dispute with Ms Arnold, and a battle for custody of their two children. Kalivis posted a copy of the agency agreement to Dalton. Kalivis said that Dalton did not later dispute that he was agent to sell the Goolwa property. He did not either telephone him or write to him. He said he was not informed of the appeal against the order of Judge Vanstone.
I find that Mr Dalton understood from the letter from Mr Kalivis of 2 January 2002 that Kalivis had advertised the Goolwa property for sale at a price of $78,000. I find that Dalton rang Kalivis on 4 January 2002 and, among other things, expressed his dissatisfaction with the fact that the Goolwa property had been listed for sale. For reasons which appear later, it is not necessary to make any further findings of fact concerning this telephone conversation and, in particular, it is unnecessary to find whether Dalton informed Kalivis he could not proceed with the sale until he (Dalton) consented. It is sufficient to find that the telephone conversation occurred and that, as Kalivis admitted, he was aware of the terms of the order of Judge Vanstone. If Dalton did inform Kalivis that he had no authority to sell the Goolwa property, Kalivis nevertheless continued to offer the property for sale and Dalton did not take any step to prevent him from doing so.
By 2002 Dalton had married. His wife’s name is Mrs Julia Dalton. She gave evidence that she had gone to Goolwa on 8 January 2002 for the purpose of inspecting the Goolwa property. At first, she did not disclose that she was Dalton’s wife. She inspected the property as a prospective purchaser. Her evidence was that she inspected the property with Kalivis. She said that, after the inspection, she gave her name to Kalivis and told him that he could not sell the Goolwa property until the court proceedings had been resolved. Mr Kalivis did not recall the inspection by Mrs Dalton or that he had ever met her. He does not recall that she had said to him that he could not sell the Goolwa property. Mr Kalivis had no note about her inspection in his file. His evidence was that he listed in his file persons who expressed interest as potential purchasers.
Again, it is not necessary to make any finding as to what, in fact, happened on 8 January. It is sufficient to note that, notwithstanding the visit, Kalivis continued to offer the Goolwa property for sale. It should also be noted that Ms Dalton reported to her husband that the property was still being advertised for sale, notwithstanding what had been said in the conversation between Dalton and Kalivis. Despite that information Dalton took no steps to seek to prevent the sale. He was aware that a sign listing the property for sale had been placed on the Goolwa property.
Sale of the Goolwa Property
On 24 January 2002 Ms Mohebbi offered to purchase the Goolwa property for $70,000. By letter dated 26 January 2002 Ms Arnold accepted the offer. There is no evidence whether a formal contract was prepared. I find that Mr Kalivis did not inform Mr Dalton that a contract had been made. Kalivis said that he did not find it necessary to inform him of the sale because the price of $70,000 was within the terms of the order. The contract specified completion on 22 February 2002 but it was not completed on that date. There is a question whether a land broker wrote to Dalton informing him of the sale and the price. It is unnecessary to decide that question.
Hearing in District Court Resumes
On 30 January 2002 the hearing of the action in the District Court resumed. Mr Dalton attended but Ms Arnold did not. Mr Dalton informed Judge Vanstone that the Goolwa property had been listed for sale. He did not mention his telephone conversation with Kalivis or state that he instructed him not to sell the Goolwa property. He did, however, inform the judge that it appeared that Mr Kalivis was not aware that an appeal had been instituted against the orders of Judge Vanstone. He asked if an order could be made to prevent the sale but the judge was not prepared to do so. The judge told Mr Dalton to contact the agent and advise him of the orders made on 28 November. She further informed him that, if an offer had been made to purchase the property, Mr Dalton could make an application to her. The judge then adjourned the hearing to 27 March 2002.
A Stay of Orders in the District Court
On 22 February 2002 Mr Dalton made an application in this Court to have Ms Arnold’s appeal and his cross‑appeal listed for hearing and for other orders including a stay of the order of Judge Vanstone. I heard the application on 1 March 2002. I made the necessary orders to enable the listing of the appeal and cross‑appeal for hearing. I also made an order staying the orders of Judge Vanstone made on 6 September and 28 November 2001. By reason of that order the hearing in the District Court on 27 March 2002 did not proceed. My order of 1 March did not in terms prevent the sale of the Goolwa property from proceeding. There was no evidence of that sale before me and I was not informed of it. However, it did not in fact proceed because Ms Arnold did not complete it.
The Full Court Appeal
The appeal was heard on 7 August 2002. Ms Arnold did not attend. The Full Court allowed her an opportunity to explain her failure to attend and state why the appeal should not be allowed. An explanation was provided on behalf of Ms Arnold but it was not signed by her. Submissions were also made on her behalf. However, the Full Court ignored the submissions for the reasons expressed in its judgment. On 20 December 2002 the Full Court published its reasons and allowed the appeal. The Full Court held that Mr Dalton was entitled to a further $9,000 and varied the orders of Judge Vanstone by substituting for para 1(d)(iv) of that order an order in these terms:
(iv)50% of the gross sale price less the costs, commissions and expenses of sale referred to in paragraph 1(d)(i) hereof plus the sum of $9,000.00 be paid to the plaintiff.
The Full Court further ordered that Ms Arnold pay Mr Dalton’s disbursements of the appeal and that those disbursements were to be paid out of the sale of the Goolwa property. Shortly stated, the effect of that decision is that Mr Dalton is to receive half of the net proceeds of the sale of the Goolwa property plus a further $9,000 and his disbursements incurred on the appeal to the Full Court.
The Caveat is Warned

The next event of note occurred on 12 February 2003 when the Registrar‑General wrote to Mr Dalton warning the caveat over the Goolwa property. In response to that letter, Mr Dalton commenced proceedings against Ms Arnold in this Court. It is the action no. 261 of 2003. In that action, he sought, among other things, an order extending the caveat. On 28 February 2003 Master Kelly extended the operation of the caveat until further order. In his affidavit sworn on 30 October 2005 Mr Dalton stated that he thereafter communicated with Ms Arnold’s solicitor requesting valuations of the Goolwa property and marketing strategies from a minimum of three real estate agents before choosing an agent to sell the property. The correspondence has not been proved. Mr Dalton said that he received no answer until 17 October 2005 when he received a letter from Mellor Olsson, the solicitors for Ms Mohebbi, informing him that Ms Mohebbi’s action (the action no. 1294 of 2003) had been listed for hearing on 24 October. Before noting that letter, it is necessary to note other events.
Ms Mohebbi Commences Proceedings
On 15 September 2003 Ms Mohebbi commenced an action in this Court against Ms Arnold seeking an order for specific performance of the agreement for sale of the Goolwa property. It is action no. 1294 of 2003. Her solicitor had difficulty ascertaining Ms Arnold’s whereabouts for the purpose of serving the proceedings. The summons was renewed. On 13 May 2004 an order for substituted service was made. On 1 June 2004 Ms Arnold filed an address for service. Her solicitor was Mr D Starke of Starke Lawyers. Ms Arnold filed a defence asserting, among other things, that Mr Kalivis was not her agent and denying she had accepted Ms Mohebbi’s offer to purchase by letter dated 26 January 2002. This was in plain contradiction of objective facts, including the letter dated 26 January 2002 signed by Ms Arnold accepting the offer. Mr Kalivis was joined as a third party in the action.
Ms Mohebbi’s action was listed for hearing before me on 24 October 2005. Late in the afternoon of Friday, 14 October 2005, the parties to that action appeared before me and informed me that they had reached a compromise. With the consent of each of the parties to that action, I made the following orders:
1.As between the plaintiff and the defendant the agreement between them dated the 26^th day of January 2002 referred to in the statement of claim for the sale and purchase of the land comprised in Certificate of Title Register Book Volume 5280 Folio 516 (‘the land’) ought to be specifically performed and carried into execution at the purchase price of $70,000.
2.The defendant is to produce to the plaintiff evidence that she is able to give clear title to the land free of any claim, charge or interest by the date of settlement set out in order 4 below.
3.The defendant pay to the plaintiff her costs of this action agreed in the sum of $10,000 and to be deducted from the balance payable of the purchase price.
4.Upon the plaintiff paying to the defendant’s solicitor on or before noon on the 7^th day of November 2005 the balance payable after deduction from the purchase price of the following:
(a)     the costs agreed at $10,000 in order 3 above; and
(b)     a deposit of $2,000 paid by the plaintiff to the third party, Angelo Kalivis of Century 21 Fleurieu Coast Group; and
including any allowance for adjustment of the following:
(a)     council rates;
(b)     emergency services levy;
(c)     water rates; and
(d)     land tax
in respect of the land, as at 7 November 2005, the defendant is to deliver to the plaintiff a Memorandum of Transfer of the land in registrable form together with the duplicate Certificate of Title relating to the land such that it gives to the plaintiff clear title to the said land free of encumbrances, charges and caveats.
5.Should the defendant refuse or neglect or be unable to produce the duplicate Certificate of Title pursuant to this order upon payment into Court by the plaintiff of the balance of the purchase price and any allowance in respect of rates taxes or other outgoings then any person (including the defendant) in possession of the duplicate Certificate of Title shall deliver up the same to the Registrar of the Court within 21 days of the date of service of this order upon him or her.
6.The defendant is to pay to the third party, as agent for the sale of the land, a commission of $3,000 and upon payment thereof the defendant’s third party claim against the third party be dismissed.
7.There is no order as to costs between the defendant and the third party.
8.Each party forthwith to execute all such instruments and do all such things as may be necessary to carry into effect the terms of this judgment and order.
9.Further consideration of the summons to be adjourned to 9.00 am on 21 November 2005 unless notices of discontinuance have been filed prior to that date.
10.The parties are granted liberty to apply on short notice for further directions and orders including such directions and orders as may be necessary to give effect to the transfer of the land the subject of these orders.
Notwithstanding that I had made it clear to the parties that I was not familiar with the facts of that action, none of the parties informed me of the terms of the orders of Judge Vanstone and, in particular, of the terms of para 1 of that order which required, among other things, that the Goolwa property be sold by an agent or agents agreed by Ms Arnold and Mr Dalton. I was informed only that there was a dispute with another party concerning the removal of a caveat. I was not given any details of that dispute.
A Letter to Dalton
On 15 October 2005 Mr Starke, Ms Arnold’s solicitor, sent Mr Dalton a letter. The letter was in these terms:
We act for Sally Arnold.
We write to you with respect to your caveat and court order over the property at 2 Frayne Street, Goolwa Beach, being the whole of the land comprised in Certificate of Title Volume 5280 Folio 516. As you are aware a contract on this property was in the sum of $70,000.00. Our client has commercially resolved matters and the sale on this property shall proceed, however, clear title has to be given to the purchaser in order for this to occur your caveat court order has to be removed. The terms of settlement were recorded in the Supreme Court of South Australia before His Honour Justice Debelle on Friday 14^th October 2005 with the Goolwas [sic]property settlement scheduled for 7^th November 2005.
There are outstanding matters between you and Ms Arnold with respect to Supreme Court of South Australia Action No: SCCIV-03-261 and District Court of South Australia Action No: 1203 of 1998. His Honour Justice Debelle was made aware of outstanding issues.
So as to advance these matters we propose that the settlement money from the sale of 2 Frayne Street, Goolwa Beach SA is paid into Suitors Fund of the Supreme Court of South Australia, which will allow settlement in the Supreme Court Action No: 1294 of 2003 but this is subject to you removing your caveat and the Court Order over the Goolwa Beach property. You interest is protected as the gross sale price less the costs, commissions and expenses shall be paid and the balance paid into the Suitors fund of the Supreme Court of South Australia. Then His Honour Justice Debelle can attend to finalising matters between you and Ms Arnold. His Honour has indicated his availability for such matter to be listed before him on Monday 24^th October 2005 and or that week.
Your consent to proposed course of action is sought. If such consent is forthcoming please arrange for a conveyancer or solicitor to act on your behalf to prepare your withdrawal of caveat and the Court Order so that at settlement the balance of proceeds is provided in a bank cheque drawn payable to “Supreme Court of South Australia Suitors Fund”.
If your consent is not forthcoming then the matter will have been listed on before His Honour Justice Debelle on Monday 24 October 2005 or that week for appropriate Orders.
We would appreciate if you could provide a facsimile transmission number and or e-mail address so that we can communicate without delay.
We thank you for your co-operation.
The second paragraph of the letter over‑states what occurred on 14 October, if not misrepresents it. Mr Starke was present in court on 14 October. He said:
[T]here is a dispute between the defendant and another party, not a party to these proceedings, with respect to a caveat over the said property. It’s another action in this court and may have to bring that matter on urgently to seek orders for that caveat to be removed and if there is going to be disagreement the money can be paid in the suitors fund. I just highlight that to you.
He said nothing more to inform me as to the nature of the dispute. It is apparent that he is referring to Mr Dalton’s caveat. The extent of the over‑statement is readily apparent.
Mr Dalton did not answer Mr Starke’s letter. Mr Starke then arranged for Ms Arnold’s application to be listed for hearing.
In the meantime, Mr Dalton had received the letter from Mellor Olsson which has already been mentioned, informing him of the trial on 24 October and seeking documents. Mr Dalton then sent my associate a letter by facsimile transmission dated 17 October 2005 seeking adjournment of the trial listed for 24 October. Mr Dalton lives in Maroochydore in Queensland. It is clear that Mr Dalton did not know that the parties to the action had reached a compromise. In his letter, Mr Dalton said that he wished to brief a legal representative to appear on his behalf on 24 October. It appears that Mr Dalton had not by then received the letter from Mr Starke of 15 October. My attention was later drawn to the terms of the order made by Judge Vanstone. On learning of that order, I was concerned that my order might have been inconsistent with that order. I therefore asked Mr Dalton and the parties in the action no. 1294 of 2003 to appear before me. On 31 October 2005 the parties in that action appeared for the purpose only of listing the various applications. Mr Dalton was not present but was supplied with a copy of the transcript.
The Applications
The applications before the Court are as follows:
1.an application by Ms Arnold in action no. 261 of 2003 to remove Mr Dalton’s caveats from the certificates of title to the Goolwa property and the Smithfield property;
2.an identical application by Ms Arnold in the action no 1294 of 2003; and
3.an application by Mr Dalton in the action no. 261 of 2003 to retain the caveats. The application is unnecessary in that Mr Dalton had the benefit of an order extending the operation of the caveats until further order. Mr Dalton clearly had standing to oppose the application by Ms Arnold without himself making an application.
In that last application Mr Dalton also applied for an order that his application be heard concurrently with the action no. 1294 of 2003, the District Court action no. 1203 of 1998 and the appeal from the orders of Judge Vanstone. This was Mr Dalton’s means of seeking to set aside the consent orders made on 14 October 2005 in action no. 1294 of 2003. The appeal had been heard and determined. It was not necessary to refer to it for any purpose other than noting the orders made by the Full Court. The action in the District Court had not been transferred to this Court. However, the parties consented to my referring to the judgment in that action and the transcript of proceedings.
With the consent of all parties, I listed the applications in the actions 261 of 2003 and 1294 of 2003 for hearing on 9 November. When the applications were called on, the parties agreed that I should also resolve Mr Dalton’s complaints concerning the consent orders made on 14 October 2005.
One notable feature of these proceedings is that Ms Arnold has on several occasions avoided service of proceedings and has failed to attend court proceedings, including her own appeal to the Full Court. She has also failed to answer letters from Mr Dalton. Ms Arnold’s conduct has been one cause of the delays in resolving the issues between the parties. I do not overlook the fact that Mr Dalton had lodged the two caveats and sought to set aside the sale to Ms Mohebbi. Although Ms Mohebbi had standing to set aside the caveats, it was also necessary for Ms Mohebbi to bring proceedings to enforce the contract of sale against Ms Arnold. I have already mentioned that Ms Mohebbi had difficulty in serving her proceedings upon Ms Arnold. I find that, while Ms Arnold’s conduct has not been the only cause of delay, her conduct is certainly a major cause of all of the delays.
A Bona Fide Purchaser
The effect of Mr Dalton’s evidence and submissions is that the sale to Ms Mohebbi could not proceed because Ms Arnold, and Mr Kalivis as her agent, advertised the Goolwa property for sale in breach of the terms of the orders made by Judge Vanstone. It is unnecessary to decide whether they did act in breach of that order. For the purposes of these proceedings, I am prepared to assume that they did. However, for the reasons which follow, even if it is assumed that Ms Arnold and Mr Kalivis did act in breach of the order, their conduct does not affect the validity of the contract for sale.
Ms Mohebbi had no notice of any want of authority in Ms Arnold to sell the land or of any reason why Mr Kalivis could not act as Ms Arnold’s agent. She was not aware of the order made in the District Court. She correctly believed that she was dealing with the registered proprietor. Assuming she had searched the certificate of title, she would have ascertained no more than that Ms Arnold was the registered proprietor and that Mr Dalton had lodged a caveat. A search of the caveat would have disclosed no more than that Mr Dalton claimed a beneficial interest in the land. There was, in short, nothing to put Ms Mohebbi on notice that was anything standing in the path of Ms Arnold’s capacity to contract to sell the Goolwa property to her. Expressed in other words, Ms Mohebbi was a bona fide purchaser for value without notice of any defect in the capacity of Ms Arnold to contract to sell the Goolwa property to her. There is, therefore, no ground on which Mr Dalton can set aside the contract. The consequence is that there is no basis on which the Court can set aside the order for specific performance of that contract. If Mr Dalton seeks some remedy from Ms Arnold and Mr Kalivis on the ground that the sale was made in breach of the order of Judge Vanstone, that is a matter between those parties only. It does not concern Ms Mohebbi nor does it affect the validity of the contract to sell the Goolwa property.
The Caveat on the Goolwa Property
The next question is whether the Court should order the removal of the caveat on the Goolwa property. Mr Dalton lodged the caveat in order to protect his beneficial interest in the Goolwa property. That interest was determined by Judge Vanstone in the proceedings in the District Court and by the order of the Full Court which varied the order of Judge Vanstone. The extent of that interest is one half of the gross sale price after payment of the costs, commissions and expenses of sale, plus the sum of $9,000. With the qualification I note below, effect must therefore be given to the order of Judge Vanstone as varied by the Full Court. That order provided that, upon payment to Mr Dalton of half of the net proceeds of the sale of the Goolwa property plus payment of the sum of $9,000 and Mr Dalton’s disbursements of the appeal, Mr Dalton must present Ms Arnold with a discharge of the caveat in registrable form.
It is necessary to ensure that there is no inconsistency between the orders of Judge Vanstone as amended by the Full Court and the order made by consent in action no. 1294 of 2003 on 14 October 2005. Paragraph 3 of the orders made on 14 October 2005 requires Ms Arnold to pay Ms Mohebbi the sum of $10,000 as the costs of Ms Mohebbi. Those costs were incurred because it was necessary for Ms Mohebbi to commence proceedings to enforce the contract of sale. Mr Dalton was not a party to that action. He did not cause those costs to be incurred. The sum of $10,000 should not, therefore, be deducted from the sale price in a way which would adversely affect Mr Dalton’s beneficial entitlement to the proceeds of the sale of the Goolwa property as decided by the Full Court. Thus, the sum of $10,000 should be deducted from Ms Arnold’s share of the sale price after deducting all of the costs, commissions and expenses of the sale and after Mr Dalton has been paid his one half share plus the further sum of $9,000 and his disbursements in the Full Court. The order made on 14 October 2005 should be amended so that the deduction of $10,000 is made in that way. Once that payment has been made, there is no ground upon which the Court can refuse to order removal of the caveat. It may also be necessary to put in place a procedure to ensure that, on the caveat being removed and the sale to Ms Mohebbi proceeding, Mr Dalton receives what is due to him. In that way, his legitimate interests in the Goolwa property can be protected. That is a matter which can be addressed, if necessary, in the orders which will be made to give effect to these reasons.
The Caveat on the Smithfield Property
Ms Arnold has also applied for an order that the caveat on the certificate of title of the Smithfield property should be removed. The caveat was lodged to protect Mr Dalton’s beneficial interest in the Smithfield property. The question whether Mr Dalton has an interest in that property has been determined by the decision of Judge Vanstone who held that he had no interest in the Smithfield property. The Full Court did not alter that part of Judge Vanstone’s decision. Judge Vanstone had ordered that, upon payment of the amount due to Mr Dalton out of the proceeds of the sale of the registrable Goolwa property, he should present Ms Arnold with a discharge of the caveat in form in respect of the certificate of title for the Smithfield property. Once Mr Dalton receives what is due to him from the proceeds of sale of the Goolwa property, there is no ground in law for not ordering removal of the caveat.
Mr Dalton seeks to resist such an order on two grounds. First, he gave uncontroverted evidence that in 2005 he had paid $3,377.55 for rates and taxes outstanding in respect of the Smithfield property. He asked to be reimbursed for that sum. He had paid those outstanding rates and taxes because the City of Playford was threatening to sell the property in order to recover the outstanding rates and taxes. In that way, he provided a benefit to Ms Arnold. I have no doubt that Mr Dalton paid the sum in order to seek to preserve what he perceived to be his interests in the Smithfield property. However, when he made that payment in 2005, Mr Dalton knew that Judge Vanstone and the Full Court had decided that he had no interest in the Smithfield property.
Mr Dalton may have made the payment believing that he would ensure that the Smithfield property was not sold by the City of Playford and would be available to discharge what he perceived to be the obligations of Ms Arnold to him. Mr Dalton had no legal liability to make the payment. The liability to pay the rates and taxes was that of Ms Arnold. Mr Dalton’s payment of the rates and taxes was, therefore, a voluntary payment. Because the payment was made voluntarily, Mr Dalton is not entitled to recover from Ms Arnold the overdue rates he has paid. Where a person voluntarily makes a payment on behalf of another and does so because he believes that he might later gain some benefit from that action, he is not entitled to recover the sum paid: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 373 – 374.

Mr Dalton also claims that Ms Arnold is liable to pay him in excess of $100,000 for costs in various actions in this Court, in the District Court and in the Family Court as well as interest and other charges. It is unnecessary in these proceedings to determine whether any sum is due by Ms Arnold to Mr Dalton and, if so, the amount of that sum. Even if it is assumed that Ms Arnold is indebted to Mr Dalton, that fact does not give Mr Dalton any beneficial interest in the Smithfield property. He is, of course, at liberty to seek to enforce any judgment by obtaining an order against the land under the Enforcement of Judgments Act 1991 but, even if he is entitled to pursue that remedy, he nevertheless has no interest in the Smithfield property which justifies extending the operation of the caveat.
The Claim for Compensation
Mr Dalton made a claim against Ms Arnold for compensation for a reduction in the market value of the Goolwa property caused by the neglect of Ms Arnold since 1998. He also sought to be compensated for what he claimed to be the increase in land prices of coastal properties since the sale in 2002. There are a number of obstacles in the path of this claim. The first is that, even assuming that such a claim exists, it is a claim which Mr Dalton must establish against Ms Arnold. More importantly, it is a claim which stands separately and apart from Ms Mohebbi’s claim in action no. 1294 of 2003 for specific performance of the contract to sell the Goolwa property. It is not, therefore, a ground for varying the orders made in that action on 14 October 2005.
There are other difficulties with the claim. I briefly note them. There is an absence of any evidence as to the condition of the Goolwa property in 1998 and, more particularly, a complete absence of expert valuation evidence as to the value in 1998. If Mr Dalton suggests that the Goolwa property was sold for less than its market value, that claim is not supported by expert valuation evidence. He has not filed any evidence in support of a claim. In addition, two valuations have been proved by other parties which show that the sale price of the Goolwa property represented its market value. To the extent that Mr Dalton claims that the value of the Goolwa property has increased since 1998, there was no valuation evidence to support that claim. More importantly, the intent of the orders made by Judge Vanstone was that the land should be sold within a reasonable time. The appeal to the Full Court did not in any way concern the question whether the Goolwa property should be sold. It was concerned only with the extent of Mr Dalton’s interest in the Goolwa property and in the Smithfield property. In summary, the Goolwa property was sold within the time intended by the orders of Judge Vanstone and of the Full Court and it was sold for a price consistent with that value. In this respect the claim for compensation provides no ground on which the Court should refuse to remove the caveat.
Conclusion
In addition to Mr Dalton’s caveat, the Legal Services Commission has lodged a caveat to protect fees payable to it. The Legal Services Commission has not been heard on the present application. It is necessary to adjourn the proceedings until the Legal Services Commission has been heard or, alternatively, that one of the parties proves the terms upon which the Legal Services Commission is willing to discharge its caveat.
These reasons will be sent to each of the parties so that they may prepare minutes of order. I will fix a date 21 days hence for argument as to the terms of the order and as to any application for costs. On that date I will also deal with the position of the Legal Services Commission.
In the action no. 1294 of 2003 it will be necessary to make an order which will vary the terms of the order made on 14 February 2005 so that the payment by Ms Arnold of $10,000 for Ms Mohebbi’s costs is made in a way which will not adversely affect Mr Dalton’s entitlement to the proceeds of sale pursuant to the orders of Judge Vanstone as varied by the Full Court. It may be desirable that a settlement statement on the sale to Ms Mohebbi can be prepared which gives effect to these reasons. That can be attached to any order as a rule of court. Alternatively, the proceeds of the sale may have to be paid into court and orders made disbursing them in accordance with these reasons.
In the action no. 261 of 2003 it will be necessary to make an order that the Registrar‑General remove the caveat in respect of the Goolwa property but only after Mr Dalton has been paid what is due to him by Ms Arnold. In the same action it will be necessary to make an order that the Registrar‑General remove the caveat in respect of the Smithfield property but only after Mr Dalton has been paid what is due to him by Ms Arnold.