Murfett Legal Pty Ltd v Frigger

[2015] WASC 406

MURFETT LEGAL PTY LTD -v- FRIGGER [2015] WASC 406

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2015] WASC 406
Case No:	CIV:3007/2012	Heard:	8 DECEMBER 2014
Coram:	LE MIERE J	Delivered:	5/11/15
No of pages:	8	Judgment Part:	1 of 1
Result:	Defendants' application dismissed
Category:	B
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Parties:	MURFETT LEGAL PTY LTD ANGELA CECELIA THERESA FRIGGER HARTMUT HUBERT JOSEF FRIGGER REGISTRAR OF TITLES
Catchwords:	Caveats Removal of caveats Court's discretion to remove caveats Caveatable interest in land Level of caveat specificity Balance of convenience
Legislation:	Legal Profession Act 2008 (WA) Legal Profession Regulations 2009 (WA) Transfer of Land Act 1893 (WA)
Case References:	Frigger v Murfett Legal Pty Ltd [2012] WASC 447 Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : MURFETT LEGAL PTY LTD -v- FRIGGER [2015] WASC 406 CORAM : LE MIERE J HEARD : 8 DECEMBER 2014 DELIVERED : 5 NOVEMBER 2015 FILE NO/S : CIV 3007 of 2012 BETWEEN : MURFETT LEGAL PTY LTD

Plaintiff

AND

ANGELA CECELIA THERESA FRIGGER
HARTMUT HUBERT JOSEF FRIGGER
First Defendants

REGISTRAR OF TITLES
Second Defendant

Catchwords:

Caveats - Removal of caveats - Court's discretion to remove caveats - Caveatable interest in land - Level of caveat specificity - Balance of convenience

Legislation:

Legal Profession Act 2008 (WA)

Legal Profession Regulations 2009 (WA)
Transfer of Land Act 1893 (WA)

Result:

Defendants' application dismissed

Category: B

Representation:

Counsel:

Plaintiff : Mr R J Lilley
First Defendants : In person
Second Defendant : No appearance

Solicitors:

Plaintiff : Murfett Legal
First Defendants : In person
Second Defendant : No appearance

Case(s) referred to in judgment(s):

Frigger v Murfett Legal Pty Ltd [2012] WASC 447
Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222
Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419
Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407



1 LE MIERE J: The first defendants, Mr and Mrs Frigger, who I will refer to as the defendants, have applied to remove a caveat lodged by the plaintiff over the defendants' property.

The caveat

2 The defendants engaged the plaintiff firm of lawyers to perform legal work. The plaintiff gave the defendants a costs agreement and disclosure documents. The defendants signed the costs agreement dated 29 September 2010 (the Costs Agreement) and the disclosure documents. The plaintiff performed legal services for the defendants and rendered an invoice. The defendants did not pay the amount of the invoice. The defendants applied for leave for assessment of costs out of time. The application was dismissed: Frigger v Murfett Legal Pty Ltd [2012] WASC 447. The Costs Agreement provides that the defendants agree to secure payment of all moneys payable by them to the plaintiff by charging, amongst other things, all their real property.

3 In November 2011 the plaintiff lodged a caveat over the defendants' property at 29 Gairloch Street, Applecross. The defendants caused the second defendant, the Registrar of Titles, to issue to the plaintiff notice under Transfer of Land Act 1893 (WA) s 138B giving notice that the caveat would lapse on 27 December 2012 unless the plaintiff obtained an order pursuant to s 138B(2). The plaintiff issued an originating summons seeking an order that the operation of the caveat be extended. On 18 December 2012 I ordered that upon the plaintiff's undertaking as to damages the operation of the caveat be extended until 6 February 2013. I subsequently ordered that the operation of the caveat be extended until further order.

Defendants application to remove the caveat

4 The defendants' application to remove the caveat is in a minute of proposed order for removal of caveat dated November 2014 together with an unsworn affidavit of Mrs Frigger. In that unsworn affidavit Mrs Frigger says as follows. In January 2013 the plaintiff filed a claim in the Magistrates Court for a total sum of $15,500 for the balance outstanding for professional services provided by the plaintiff to the defendants. On 29 April 2013 the plaintiff's application for default judgment was dismissed on condition that Mr Frigger paid $15,500 into the court. Mrs Frigger annexes a copy of an order by the Magistrates Court made on 29 April 2013 which ordered that Mr Frigger's application dated 22 February 2013 to set aside judgment is granted conditionally upon Mr Frigger paying into court the sum of $15,500. Mrs Frigger's unsworn affidavit continues as follows. On 9 May 2013 Mrs Frigger paid $15,500 into the court. The defendants have purchased a property in Hobart and are required to provide their residence as a security for a loan. Mrs Frigger attaches to her unsworn affidavit a copy of a standard form contract for sale of real estate in Tasmania. The date of the contract is 29 October 2014. The defendants are the purchaser. The property is in Hobart. The sale price is $7,850,000. The completion date is 45 days after the date of the contract. The contract states that it is not subject to the purchaser obtaining finance approval. The contract states that there are additional special clauses specified in annexure B but that annexure is not attached.

Grounds of application

5 The defendants advance three grounds on which the caveat should be removed. First, the plaintiff does not have a caveatable interest in the land. Secondly, the caveat does not sufficiently specify the estate or interest in the land claimed by the plaintiff. Thirdly, on the balance of convenience the caveat should be removed.

Caveatable interest

6 The defendants' challenge to the plaintiff's caveatable interest is on the basis that the defendants have a good defence to the claim against them for outstanding legal fees. The defendants' argument is that the plaintiff did not adequately comply with the requirements of disclosure as to costs required by the Legal Profession Act 2008 (WA) s 260.

7 The court may make an order extending the operation of the caveat if it is satisfied that the caveator's claim has or may have substance. The plaintiff says that the defendants are indebted to it, that the debt is secured by a charge, and the charge is a caveatable interest. The plaintiff has established a prima facie case that the defendants are indebted to them in the sum of $12,772.96, being the balance outstanding for professional services provided to the defendants pursuant to the Costs Agreement, together with interest at the maximum rate prescribed by the Legal Profession Act and Legal Profession Regulations 2009 (WA) pursuant to the Costs Agreement. The plaintiff has commenced proceedings in the Magistrates Court to recover that debt. The defendants dispute their liability. The defendants say that they are not liable to the plaintiff because the plaintiff did not adequately comply with the requirements of disclosure as to costs required by the Legal Profession Act s 260. It is for the Magistrates Court to determine that issue. I am satisfied from the affidavits affirmed by Mr Markovich on 12 December 2012 and 14 January 2013 that there is a prima facie case that the defendants are indebted to the plaintiff in the amount claimed by the plaintiff in the Magistrates Court proceedings. I am confirmed in that view by the finding of Hall J in Frigger v Murfett Legal Pty Ltd [24] that he was unable to accept that there was any deficiency in the plaintiff's compliance with the requirements of disclosure as to costs required by s 260 of the Legal Profession Act.

8 There is a prima facie case that the plaintiff has a charge over the land to secure the amount owing to it by the defendants under the Costs Agreement. The land is charged with the payment of the debt. It is an equitable interest because no estate or interest is conveyed or agreed to be conveyed. An equitable charge creates a proprietary interest which is able to be protected by a caveat. The plaintiff's claim that it has a caveatable interest in the land has or may have substance.

The drafting challenge to the caveat

9 The defendants' second attack upon the caveat relates to its drafting. The defendants say that the caveat fails to adequately specify the estate or interest in the land claimed by the plaintiff.

10 Section 137 of the Transfer of Land Act 1893 (WA) provides, relevantly, that any person claiming any estate or interest in land may lodge a caveat with the Registrar in an approved form. The form which has been approved by the Registrar is Form C1. That is the form used by the plaintiff to lodge the caveat. The form requires the caveator to specify the estate or interest claimed and to specify the grounds on which the claim is made. The caveat states that the estate or interest claimed is 'as chargee' and that the caveator claims that estate or interest by virtue of 'a costs agreement made between the caveator and the registered proprietors dated 29 September 2010'. The defendants say that the description of the plaintiff's alleged caveatable interest is defective because the caveat describes the interest claimed 'as chargee' whereas the interest claimed by the plaintiff is an equitable interest as equitable chargee, not a legal interest.

11 The question is whether the caveat sufficiently specifies the plaintiff's interest. In Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407 Mason CJ, Dawson and McHugh JJ said:

It has been said that the purpose of requiring the caveator to 'specify' the estate or interest claimed is to enable the registered proprietor to know, or find out, the claim which he or she will have to meet. It has also been said that another purpose is to enable the Registrar-General to determine whether a dealing lodged for registration is inconsistent with the estate or interest claimed by the caveator. But, in evaluating the significance of that purpose, regard must be had to the existence of the Registrar-General's power under s 137 to require the caveator to provide a statutory declaration stating the nature of the estate or interest in the title thereto. In the ultimate analysis, it seems to us that 'specify' should be understood in the sense of 'mention definitely or explicitly'. Subject to some qualification, that is the meaning adopted by the Full Court of the Supreme Court of Western Australia in Kuper v Keywest Constructions Pty Ltd [1990] 3 WAR 419 [422] - [423].

Their Honours referred to two objections to the sufficiency of the description of the interest claimed in the caveat in that case. The first was that the caveat did not state the amount of the security. Their Honours said that a statement of the amount of the debt is not required as an element in the requisite description of the caveator's interest.

12 The caveat should be read as a whole to determine whether the nature of the interest claimed is adequately stated. In my opinion it is. The description of the interest as chargee by virtue of a Costs Agreement made between the caveator and the registered proprietors dated 29 September 2010 is a sufficient description of the estate or interest claimed without adding the word 'equitable'. In Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222 Holland J in Eq held that the description 'an estate or interest as mortgagee' was a sufficient description of the interest claimed. His Honour stated that the description of an estate or interest 'as mortgagee' was sufficient without adding the word 'equitable' or using the word 'chargee' and added:

Even if the use of those words might have made the description more complete or more accurate, they would not, I think, carry any meaning significantly or relevantly different from the word 'mortgagee' [232].

13 In Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419 the Full Court of the Supreme Court considered a caveat in which the estate or interest claimed was described as 'an estate or interest as purchaser of an estate in fee simple as to the estate or interest of the above named Registered Proprietor in the land above described by virtue of two contracts of sale'. The court held that the estate or interest claimed by the purchasers was a caveatable equitable interest in the land. The court further held that the caveat was in proper form, notwithstanding that it did not describe the estate or interest claimed as 'equitable'.

14 The estate or interest in land which is claimed need not state in precise legal language the nature of the estate or interest which is claimed, if a reader is able, with legal advice, to work it out from what is stated in the caveat. A person inspecting the caveat, with appropriate legal understanding, would understand that the interest claimed was an equitable interest as chargee arising from the Costs Agreement. The caveat sufficiently specifies the estate or interest claimed by the plaintiff.

Balance of convenience

15 The defendants challenge the amount of the plaintiff's claim. The plaintiff says it is entitled to interest on its outstanding fees. Clause 6.4 of the Costs Agreement provides that the defendants agree to pay the plaintiff interest on the amount of any bill which is unpaid for longer than 30 days at the maximum rate prescribed by the Legal Profession Act 2008 and Legal Profession Regulations 2009. The plaintiff says that interest is continuing to accrue and it is not possible to ascertain the amount of the defendants' indebtedness until the debt is paid or judgment is entered against the defendants. The defendants say that the plaintiff is not, or should not be, entitled to an award of interest on the outstanding debt. The defendants submit that the plaintiff was responsible for a delay in pursuing the proceedings in the Magistrates Court and on that ground should not be awarded interest. The plaintiff's entitlement to interest under the Costs Agreement or otherwise is a matter to be determined by the Magistrates Court. The plaintiff has made out a prima facie case that it is entitled to interest.

16 The defendants say that the balance of convenience favours the removal of the caveat because they have paid $15,500 into the Magistrates Court as security for the plaintiff's claim. However, the amount claimed by the plaintiff, including interest, exceeds that sum. Therefore, the payment into court is not a complete security for the defendants' claimed debt.

17 The defendants say that they require the caveat to be removed so that they may offer the property as security for a loan to raise the purchase price for the purchase of the property in Tasmania. There is no evidence of any loan application by the defendants or that they are unable to raise a loan without the caveat being removed, whether by offering other property as security or otherwise.

18 The court has a wide discretion to order the removal of a caveat. One basis for the exercise of the discretion is that alternative security is offered. The defendants have provided security for part of the debt which is secured by the charge which is the subject of the caveat but not a complete security. The defendants have not offered alternative security for the total of the alleged debt. I am not satisfied that in the exercise of my discretion I should remove the caveat. The defendants' application is dismissed.