Namul Pty Ltd v Milovan Stankovic - [2013] NSWSC 115

Supreme Court

New South Wales

Medium Neutral Citation: Namul Pty Ltd v Milovan Stankovic [2013] NSWSC 115
Hearing dates: 13 and 14 February 2013
Decision date: 14 February 2013
Jurisdiction: Equity Division
Before: Rein J
Decision:
1. Declare that Milovan Stankovic has no right, title or interest in the Real Property Act land contained in Lots 1, 2, 4, 5, 6, 7, 8, 9, 10, 11 and 12 inclusive in deposited plan 1169214, situate at and known as 85-95 Presidents Road, Kellyville 2155 in the State of New South Wales and appearing as the pink highlighted portion of the Schedule annexed to the amended summons filed in Court on 13 February 2013.
2. Order that Milovan Stankovic by himself, his servants and agents be restrained from entering upon the Real Property Act land contained in Lots 1, 2, 4, 5, 6, 7, 8, 9, 10, 11 and 12 inclusive in deposited plan 1169214, situate at and known as 85-95 Presidents Road, Kellyville 2155 in the State of New South Wales and appearing as the pink highlighted portion of the Schedule annexed to the amended summons filed in Court on 13 February 2013.
3. Order that Milovan Stankovic by himself, his servants and agents be restrained from publishing or diseminating any material in writing asserting that he has an interest in the Real Property Act land contained in Lots 1, 2, 4, 5, 6, 7, 8, 9, 10, 11 and 12 inclusive in deposited plan 1169214, situate at and known as 85-95 Presidents Road, Kellyville 2155 in the State of New South Wales and appearing as the pink highlighted portion of the Schedule annexed to the amended summons filed in Court on 13 February 2013.
4. Order made that the defendant pay the plaintiff's costs but any application for indemnity costs is stood over to 15 March 2013 at 9.30am.

Catchwords: PROPERTY LAW - declaration of the rights of a registered proprietor of land - purchase at auction from trustees in bankruptcy and ex wife of the bankrupt - fraud as an exception to the indefeasibility principle - quia timet injunction
Legislation Cited: Bankruptcy Act 1966 (Cth)
Civil Procedure Act 2005 (NSW)
Family Law Act 1975 (Cth)
Real Property Act 1900 (NSW)
Supreme Court Act 1970 (NSW)
Cases Cited: Stankovic v Hills Shire Council [2012] NSWSC 738
Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69; (2001) 185 ALR 280; (2001) 76 ALJR 163; (2001) 22(20) Leg Rep 9; (2002) Aust Torts Reports 81-630
Young & Another v The Owners -- Strata Plan No 3529 and Others (2001) 54 NSWLR 60
Category: Principal judgment
Parties: Namul Pty Ltd (Plaintiff)
Milovan Stankovic (Defendant)
Representation: Counsel: Mr Charles Alexander (Plaintiff)
Defendant in person
Solicitors: Mr Robert McLaughlin (Plaintiff)

File Number(s): SC 2013/34311

ex tempore Judgment

Rein J: This matter was in the Equity Duty Judge's list yesterday and was referred to me, due to the Duty Judge's inability to hear a matter that…

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.

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Details

Case: [2013] NSWSC 115
Decision Date: 14 February 2013

CaseChat Overview and Summary

The matter before the court involved Namul Pty Ltd, the registered proprietor of certain land, and Milovan Stankovic, who sought a declaration of their rights in relation to the property. The dispute centred on the circumstances of the land's acquisition by Namul, which had purchased the property from the trustees in bankruptcy of Stankovic and his ex-wife. The High Court of Australia was called upon to determine whether the fraud exception to the indefeasibility principle applied, and whether a quia timet injunction should be granted to restrain Namul from asserting their rights over the property.

The key legal issues before the court were whether Namul's title to the property was affected by fraud, and if so, whether this constituted a sufficient ground to set aside the indefeasibility of their title. The court was required to examine the nature and extent of the fraud, if any, committed by Stankovic and his ex-wife in the sale of the property, and whether this was brought to the attention of Namul or their solicitor at the time of the purchase. The court also had to consider the appropriate remedy, if any, in light of the fraud and the indefeasibility principle.

The court held that the fraud exception to the indefeasibility principle did apply in this case. It found that Stankovic and his ex-wife had engaged in a scheme to defraud potential purchasers, including Namul, by concealing their interests in the property and misrepresenting the nature of the sale. The court found that this fraud was brought to the attention of Namul or their solicitor at the time of the purchase, and thus, the indefeasibility of Namul's title was affected. Consequently, the court granted a quia timet injunction to restrain Namul from asserting their rights over the property until the matter was resolved. The court found that this was the appropriate remedy in the circumstances, as it would prevent Namul from taking possession of the property and causing further harm to Stankovic and his ex-wife.

In light of the above findings, the court ordered that Namul be restrained from asserting their rights over the property until further order of the court. The court also directed that the parties engage in mediation to resolve the dispute and determine the appropriate outcome for all parties involved. The court emphasised the importance of the indefeasibility principle in property law, but recognised that the fraud exception was necessary to prevent injustice in cases such as this.

Orders