Nguyen v Sage Consultant Group Pty Ltd; Dang v Nguyen

[2021] NSWSC 753

Supreme Court

New South Wales

Medium Neutral Citation:

Nguyen v Sage Consultant Group Pty Ltd; Dang v Nguyen [2021] NSWSC 753

Hearing dates:

26 to 29 October 2020. Final submissions 18 December 2020. Evidence completed 31 March 2021.

Decision date:

24 June 2021

Jurisdiction:

Equity

Before:

Robb J

Decision:

See pars [238], [251], [268], [270], [337], [391]-[392], [397], [408], [417] and [421]-[425]. The parties are required to submit agreed or contending draft short minutes of order to give effect to these reasons as required by [421].

Catchwords:

EQUITY — Equitable charges and liens — Contribution to acquisition or improvement of another’s property — Whether defendant holds property on constructive trust for plaintiff — Where plaintiff claims constructive trust arose out of an oral agreement that defendant would hold title to and take out mortgage over the property for plaintiff’s benefit — Where plaintiff claims that she provided all monies other than the mortgage for purchase of the property — Where plaintiff lodged a caveat against the property after judgment creditors had registered a writ for the levy of property against the title to the property — Where terms of the caveat and statements made by plaintiff’s solicitors were inconsistent with plaintiff being the beneficial owner of the property — Where no objective contemporaneous or subsequent evidence corroborates plaintiff’s claim — Where the Court found that the evidence does not justify a finding that the defendant holds the property on constructive trust for the plaintiff

EQUITY — Equitable charges and liens — Contribution to acquisition or improvement of another’s property — Whether plaintiff has an equitable lien over the property arising out of an oral agreement with defendant — Where plaintiff pleaded in the alternative an equitable lien over the property which secured recoupment from the defendant of funds contributed by the plaintiff towards the acquisition of the property — Where plaintiff lodged caveat against the property to protect claimed unregistered equitable lien — Where the plaintiff did not plead any alternative factual basis for the existence of the equitable lien than the constructive trust claim — Where no constructive trust — Where evidence has not established that plaintiff and defendant made any agreement to charge the property to secure any obligation of repayment of contributions plaintiff made towards acquisition of the property — Where the Court found that the plaintiff is not entitled to an equitable lien or charge on the basis of the oral agreement

EQUITY — Equitable interests in property — Mere equities — Whether plaintiff has an equitable interest in the property capable of being protected by a caveat — Where plaintiff lodged a caveat against the property to protect a claimed unregistered equitable interest — Where plaintiff failed to establish a constructive trust or an equitable lien in her favour — Where plaintiff made some monetary contributions towards the acquisition of the property — Where plaintiff may be entitled to be subrogated to the registered mortgage in future but where that may not constitute a present proprietary right — Where the Court found that plaintiff’s interest in the property if it exists is likely a "mere equity"

LAND LAW — Caveats — Caveatable interest — Whether plaintiff has a caveatable interest — Where plaintiff lodged caveat against the property — Where plaintiff’s interest in the property is likely a ‘mere equity’ and not an equitable interest — Where it is established caveats cannot protect ‘mere equities’ — Where the Court found no caveatable interest so that the caveat cannot be maintained

LAND LAW — Caveats — Effect of caveat — Prevention of further dealings — Where caveat lodged after registration of a writ for the levy of property against title to the property prevents the subsequent registration of a writ issued on a judgment obtained before lodgement of the caveat — Where Sheriff unable to execute writ in favour of judgement creditors on the basis of the caveat on the title preventing future registration of a transfer procured under sale of the property by the Sheriff — Where caveator’s claim does not have substance and caveat does not protect a caveatable interest — Where the Court found that the judgment creditors are entitled to an injunction requiring plaintiff to withdraw the caveat and to not lodge another caveat interfering with judgement creditors’ entitlement to register a new writ on the title to the property or the ability of the Sheriff to execute the writ

LAND LAW — Caveats — Removal of caveat — Whether judgment creditors have standing to seek an order for the withdrawal of a caveat pursuant to s 74MA of the Real Property Act — Where judgment creditors do not have an estate or interest in the property — Where it is established that the issue of a writ for the levy of property does not grant judgment creditors an estate or interest in property — Where the Court found that the judgment creditors do not have the requisite standing

LAND LAW — Caveats — Removal of caveat — Service of lapsing notice — Whether judgment creditors to whom a writ has been issued and whose writ is prohibited from registration by terms of a caveat can use lapsing notice procedure in s 74I of the Real Property Act to procure both registration of the writ and also withdrawal or complete lapsing of the caveat on an interlocutory basis — Where caveator sought an order extending the caveat — Where caveator’s claim does not have substance and caveat does not protect a caveatable interest — Where effect of s 74I of the Act is that the caveat only lapses to the extent necessary to enable writ to be registered — Where the Court found that this outcome does not compel the withdrawal or complete lapsing of the caveat to enable the Sheriffs to execute the writ

LAND LAW — Caveats — Removal of caveat — Service of lapsing notice — Whether lapsing notice issued by the Registrar-General on the application of judgment creditors pursuant to s 74I of the Real Property Act was improperly issued or invalid — Where plaintiff claimed lapsing notice was invalid because second writ had already been registered — Where plaintiff failed to establish this in fact — Where the Court found that lapsing notice was probably not improperly issued or invalid

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Conveyancing Act 1919 (NSW)

Crimes (Administration of Sentences) Act 1999 (NSW)

Interpretation Act 1987 (NSW)

Real Property Act 1900 (NSW)

Real Property Amendment (Electronic Conveyancing) Act 2014 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Supreme Court Act 1970 (NSW)

Cases Cited:

Abraham v Abraham [2012] NSWSC 254

Abou-Hamad v Darwish [2012] NSWSC 231

Aged Care Services Pty Ltd v Kanning Services Pty Ltd (2013) 86 NSWLR 174; [2013] NSWCA 393

Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26; (2012) 16 BPR 30,397

Barnes v Addy (1874) LR 9 Ch App 244

Black v Garnock (2007) 230 CLR 438; [2007] HCA 31

Boyd v Thorn (2017) 96 NSWLR 390; [2017] NSWCA 210

Chetcuti v Scarf [2000] NSWSC 637; (2000) 10 BPR 18,193

Chubs Constructions Pty Ltd v Chamma (No 2) (2010) 78 NSWLR 679; [2010] NSWCA 225

Gandel Metals Pty Ltd, in the matter of Centennial Mining Limited (Subject to Deed of Company Arrangement) v Centennial Mining Limited (No 2) [2020] FCA 633

Global Minerals Australia Pty Ltd v Valerica Pty Ltd [2000] NSWSC 1143; (2000) 10 BPR 18,463

Hall v Richards (1961) 108 CLR 84

Hancock v Rinehart [2015] NSWSC 646; (2015) 106 ACSR 207

Iaconis v Lazar [2007] NSWSC 1103

In the matter of Harmon International Holdings Pty Ltd [2019] NSWSC 413

In re Shears and Alder (1891) 17 VLR 316

Nguyen v Sage Consultant Group Pty Ltd [2018] NSWSC 65

New South Wales Crime Commission v Lee (2010) 79 NSWLR 410; [2010] NSWSC 1012

Padovan v MGG Group Pty Ltd (in liq) [2011] NSWSC 1080

Phillips v Walsh (1990) 20 NSWLR 206

Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150

South Carolina Insurance Co v Assurantie Maatschappij De Zeven Provincien NV [1987] AC 24

State Bank of New South Wales v Geeport Developments Pty Ltd (1991) 5 BPR 11,947

Summit Acceptance Pty Ltd v Wild [2011] NSWSC 659

Wilkins v Gibson (1901) 38 S.E. 374

Woodcroft v Director of Public Prosecutions (DPP) [2000] NSWCA 128; (2000) 174 ALR 60

Texts Cited:

F Ticehurst and P Blair, Baalman and Wells Land Titles Office Practice (5th ed, 1998, Looseleaf, Lawbook Co)

JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines & Remedies (5th ed, 2014, LexisNexis Butterworths)

Peter Taylor SC et al, Ritchie's Uniform Civil Procedure NSW (2005, LexisNexis Australia) / Taylor P, Elms E, Bellew Justice G and Meek M, Ritchie's Uniform Civil Procedure NSW (Looseleaf, LexisNexis)

G Stilianou, Land Titling Law and Practice in NSW (2013, Lawbook Co)

Category:

Principal judgment

Parties:

2017 / 60096

Van Tuan Nguyen (first plaintiff)
Phuong Anh Nguyen (second plaintiff)
Ngoc Tu Nguyen (third plaintiff)

Sage Consultant Group Pty Ltd (first defendant)
Quoc Dung Hoang (second defendant)
Thu Thuy Dang (third defendant)
Kennie Thanh Khoi Nguyen (fourth defendant)
Sheriff of New South Wales (fifth defendant)

2019 / 296623

Thu Thuy Dang (plaintiff)

Van Tuan Nguyen (first defendant)
Phuong Anh Nguyen (second defendant)
Ngoc Tu Nguyen (third defendant)
Quoc Dung Hoang (fourth defendant)
Registrar-General of New South Wales (fifth defendant)

Representation:

2017 / 60096

Counsel: C Lambert (first to third plaintiffs)

Solicitors: Ausino Lawyers (first to third plaintiffs)
Gartree Thomson Lawyers (third defendant)

2019 / 296623

Counsel: C Lambert (first to third defendants)

Solicitors: Gartree Thomson Lawyers (plaintiff)
Ausino Lawyers (first to third defendants)

File Number(s):

2017 / 60096; 2019 / 296623

Judgment

Introduction

1. These reasons for judgment concern two proceedings in this Court, being No 2017/60096 (the 2017 proceedings) and No 2019/296623 (the 2019 proceedings). It will be appropriate to begin by explaining the 2017 proceedings.

2. The plaintiffs in the 2017 proceedings are three members of a Vietnamese family who I will refer to as the Nguyens. The first plaintiff is the father, Van Tuan Nguyen, and the second and third plaintiffs are his children, Phuong Anh Nguyen and Ngoc Tu Nguyen. The father resides in Vietnam, but the children live in this country.

3. The first defendant is Sage Consultant Group Pty Ltd (Sage). The second defendant is (Ronnie, sometimes Darren) Quoc Dung Hoang and the third defendant is Mr Hoang’s mother, (Christine) Thu Thuy Dang.

4. It is not necessary to identify the fourth defendant, who at all material times has not resided in this country and was not served with the originating process.

5. The fifth defendant is the Sheriff of New South Wales (the Sheriff), who was joined as a party during the course of the proceedings.

6. The 2017 proceedings were commenced in the District Court in 2017 and were subsequently transferred into this Court [1] . The 2017 proceedings were instituted by the Nguyens because of the conduct of Mr Hoang, which has been responsible for the loss suffered by the Nguyens. In short, Mr Hoang misrepresented himself to the paternal Nguyen as being a lawyer in this country with the right to act for would-be immigrants in respect of obtaining appropriate visas. Mr Nguyen paid money to Mr Hoang to secure permanent residency visas for his two children. That involved at least a breach of contract by Mr Hoang. Subsequently, but not through the agency of Mr Hoang, the Nguyen children achieved permanent residency.

   1. The pleadings were not included in the Court Book and could not be found in the file.

7. Mr Hoang ceased to play an active part in both proceedings after his solicitor filed a notice of ceasing to act. He has also been incarcerated as a result of his conduct involving the Nguyens and other matters. He did not appear at any substantive hearing in either proceeding.

8. Sage was apparently a company associated with Mr Hoang and had some involvement in the events that led to the Nguyens commencing the 2017 proceedings. It has never taken an active part in the proceedings and will be ignored henceforth in these reasons.

9. As noted, Ms Dang is Mr Hoang's mother. At all relevant times, she has lived in this country although she maintains businesses in Vietnam. Ms Dang is the active defendant in the 2017 proceedings and the plaintiff in the 2019 proceedings. Ms Dang does not speak English, and her participation in the proceedings was facilitated through an interpreter.

10. The involvement of the Sheriff in the 2017 proceedings will become apparent below from my explanation of the procedural course of the two proceedings.

11. In the manner that I will shortly explain, the Nguyens obtained summary judgment against Sage and Mr Hoang. They then sought to recover the amount of the judgment by having the Court issue a writ for the levy of property. Mr Hoang is the registered proprietor of a property at Smithfield, which I will call the Smithfield property. The Nguyens took steps for the Sheriff to sell the Smithfield property in execution of the writ. That course of action was not successful.

12. In the meantime, Ms Dang lodged a caveat against the title to the Smithfield property. Ms Dang claimed to be entitled to an unregistered equitable lien over the Smithfield property. Subsequently, the Nguyens took steps in this Court to have the caveat removed, as the Sheriff would not sell the Smithfield property unless some appropriate arrangement was made concerning the removal of the caveat.

13. Ms Dang responded by asserting that the Nguyens did not have standing to seek an order for the removal of the caveat.

14. Eventually, Ms Dang was ordered to commence new proceedings for the purpose of responding to a lapsing notice which the Nguyens caused to be issued by the Registrar-General. Ms Dang filed a summons which commenced the 2019 proceedings. She sought an order that the lapsing notice was invalid and also declarations to establish the proprietary interest she claimed in the Smithfield property. The Nguyens, Mr Hoang, and the Registrar-General were named as defendants to those proceedings.

15. A number of notices of motion have been filed by the parties in the two proceedings. They included an application by Ms Dang that the Nguyens provide security for her costs.

16. Eventually, the two proceedings were set down to be heard by me at the same time on a number of days commencing on 26 October 2020.

17. The hearing was conducted on the basis that Ms Dang, as the plaintiff in the 2019 proceedings, was the moving party.

18. The most singular thing about these two proceedings is that, both at the commencement of the hearing and in their written submissions after the hearing was completed, the parties were at odds about how the Court should deal with the various applications that were before it and, in particular, in what order.

19. Putting the dispute simply, the Nguyens’ position was that the Court should decide the question of whether Ms Dang had a caveatable interest in the Smithfield property that was properly protected by the caveat, and if she did not, the Court should order that the caveat be withdrawn. Ms Dang's position was, on the other hand, that there was an outstanding question about whether the Nguyens had standing to challenge the validity of Ms Dang's caveat, and that the fair course for the Court was to decide that question, and not to elide it by determining the substantive question of the validity of the caveat. Ms Dang also submitted that it would be unfair for the Court to deprive her of the opportunity to have her security for costs application determined.

20. The existence of this dispute has made it necessary for me to analyse in detail the procedural course of the two proceedings. That is because, as the dispute was presented at the beginning of the hearing, it was entirely obscure as to what had happened in the two proceedings, and what the proper course for the Court to take was.

21. The Court has therefore been placed in the unusual position of conducting the hearing of the two proceedings in the conventional way at the same time as it has had to consider unresolved procedural issues.

22. The following analysis of the procedural course of the two proceedings is more detailed than would usually be required. It has been done in order to enable me to work out what the proper course for the Court to take is, and also to enable me to provide proper reasons for my determination.

23. The case management aspect of the two proceedings has required that I review the Court’s files and the whole of relevant parts of the Court Book in order to understand the procedural history of the proceedings and to determine the proper way to resolve the procedural dispute between the parties, which has had the result that I have considered material that the parties ultimately chose not to tender on the substantive hearing.

24. In fact, as will be seen, the parties were so selective in the evidence they tendered that they omitted evidence that was obviously relevant to the substantive issues. It was necessary for the Court to require the parties to readdress the issue of what evidence was required to be tendered to enable the Court to properly deal with the issues that were in contention between them. I will explain the result of this requirement below.

Structure of these reasons for judgment

25. As it will be necessary for the Court to determine a number of complex procedural and substantive questions, it will be convenient to set out in order the subjects that these reasons will address.

26. First, as mentioned, it will be necessary to examine the procedural history of the two proceedings as the background for explaining the different positions adopted by the parties as to the issues that the Court should determine.

27. Secondly, I will examine the parties’ submissions concerning the issues that should be determined and explain my decision as to the proper course for the Court to take in determining the proceedings.

28. Thirdly, I will explain why I concluded during the course of preparing these reasons for judgment that the parties had omitted to formally tender much of the evidence relevant to the procedural and substantive disputes between them, and the steps that were taken to rectify the deficiencies in the evidence after I had formally reserved judgment.

29. Fourthly, I will determine Ms Dang’s claims to have a proprietary interest in the Smithfield property as, for reasons that will be explained below, I concluded in answer to the procedural dispute between the parties that it was appropriate for the Court to determine that question.

30. Finally, I will consider the challenging question that arises in these proceedings concerning the relationship between caveators and judgment creditors who wish to enforce their judgments by causing the Sheriff to execute writs for the levy of property against properties of judgment debtors that are subject to caveats.

Procedural background

31. I will begin by describing in some detail the somewhat complex procedural history of these two proceedings.

Orders determining the 2017 proceedings

32. The parties accepted that it is sufficient to start with the orders made by Ward CJ in Eq that constitute the substantive orders in the 2017 proceedings, and by which those proceedings were otherwise dismissed.

33. None of the defendants in the 2017 proceedings took any serious steps in this Court to prosecute their defences after those defences were filed.

34. The Nguyens filed a notice of motion seeking orders striking out the defences and for summary judgment to be given in their favour. The notice of motion was dealt with by Ward CJ in Eq sitting as duty judge.

35. On 29 January 2018, her Honour made the following relevant orders:

3. Strike out the defence filed 12 July 2017 by [Mr Hoang] in these proceedings pursuant to UCPR 12.7(2).

4. Strike out the defence of [Ms Dang] filed 24 July 2017 in these proceedings pursuant to UCPR 12.7(2).

5. Judgment for the [Nguyens] in the amount of $103,380 jointly and severally as against [Mr Hoang] (pursuant to UCPR 13.1) and [Sage] (pursuant to UCPR 16.3).

6. Judgment for the [Nguyens] against [Mr Hoang] (pursuant to UCPR 13.1) in the sum of $136,526.

7. Order [Mr Hoang] to pay the [Nguyens] costs of the proceedings on an indemnity basis.

8. Otherwise dismiss the proceedings.

36. The total amount of the judgment entered against Mr Hoang was $239,906.

37. Ward CJ in Eq published her reasons for making these orders on 6 February 2018: Nguyen v Sage Consultant Group Pty Ltd [2018] NSWSC 65. Her Honour struck out the defences filed by Mr Hoang and Ms Dang for want of prosecution: [45]. Her Honour found that the evidence justified an order for summary judgment against Sage and Mr Hoang for breach of contract, or alternatively on the basis of a total failure of consideration: [47]. It was not necessary for her Honour to deal with the separate claims made for damages for misleading and deceptive conduct: [49]. In relation to Ms Dang, her Honour noted at [50] that the only allegation against her in the pleading was that she owed fiduciary obligations to the plaintiffs because she was a director of the company in question. Ward CJ in Eq did not accept that this claim was made out on the evidence before her.

38. I have not had the advantage of reading the transcript of the summary application dealt with by Ward CJ in Eq. It is not clear why her Honour made an order dismissing the proceedings, given that the application against Ms Dang was for summary relief. As mentioned above, her Honour noted at [50] that the only claim pleaded was for breach of fiduciary duty, and that a Barnes v Addy (1874) LR 9 Ch App 244 claim had not been pleaded. It may be that her Honour dismissed the proceedings because she was satisfied that the only basis of the claim pleaded against Ms Dang was unsound.

First writ

39. On 10 May 2018, this Court issued a writ authorising the Sheriff to levy on the property of Mr Hoang to the amount of $240,669 plus interest together with the reasonable costs of the execution of the writ. I will refer henceforth to writs for the levy of property simply as writs, and to this writ as the first writ.

40. NSW Land Registry Services issued a registration notice dated 7 June 2018 to the effect that the first writ had been registered against the title to the Smithfield property with dealing number AN402095.

Lodgement of Caveat

41. Ms Dang's solicitors, Gartree Thomson Lawyers, caused a caveat to be lodged against the title to the Smithfield property on behalf of Ms Dang on 26 June 2018 (the Caveat). The estate or interest claimed by Ms Dang in the property was described as follows:

ACTION PROHIBITED BY THIS CAVEAT

1.   The recording in the Register of any dealing other than a plan affecting the estate or interest claimed by the Caveator.

…

7.   The Recording in the Register of a Writ affecting the estate or interest claimed by the Caveator.

ESTATE OR INTEREST CLAIMED

Lien -

By virtue of: Agreement

Dated: 22/12/2014

Between [Ms Dang]

And [Mr Hoang]

Details Supporting The Claim: Funds advanced to registered proprietor for payment of outgoings with respect to the property

Applications in the 2017 proceedings

42. On 9 July 2018, the Sheriff sent a Notice of Non-Levy to the Nguyens' solicitors that explained that the Sheriff's officers attempted execution of the first writ on 25 June 2018 but were unable to locate the address as the street number could not be located. As it happens, the Smithfield property has two street addresses, and the number on the property when visited by the Sheriff's officers was not the number in the first writ, but the number of the other street address.

43. The Sheriff sent a further Notice of Non-Levy to the Nguyens' solicitors dated 28 August 2018. The notice stated that a levy under the first writ had not been made, notwithstanding an attempt on 20 August 2018, as access could not be gained to the Smithfield property due to a padlocked gate.

44. On 22 November 2018, the Nguyens filed a notice of motion in the 2017 proceedings seeking an order that the Caveat be removed on the ground that there was no caveatable interest pursuant to s 74F of the Real Property Act 1900 (NSW). They also sought an order prohibiting the lodgement of a further caveat, and an order that Ms Dang cease to reside at the Smithfield property. An order for costs was sought against Mr Hoang and Ms Dang, as well as against Gartree Thomson Lawyers.

45. The Nguyens reformulated their relief in an amended notice of motion filed on 24 January 2019, in which they discontinued their claim for costs against Gartree Thomson Lawyers (the Nguyens’ amended motion).

46. As stated, the original notice of motion filed by the Nguyens sought, by prayer 2, an order that the Caveat be removed on the ground that Ms Dang had no caveatable interest pursuant to s 74F of the Real Property Act. While the notice of motion does not say so, that was probably an application for an order for the withdrawal of the Caveat under s 74MA(2) of the Real Property Act. The amended motion made that application explicitly in prayer 3. However, the amended motion went further, in prayer 2, by seeking a declaration that Ms Dang held no equitable lien over the Smithfield property and that the Caveat "was lodged for the collateral purpose of defeating the Judgment of this Court of 6 February 2018, without reasonable cause and is of no effect".

47. On 15 February 2019, Ms Dang filed a notice of motion in the 2017 proceedings, by which she sought an order that the Nguyens’ amended notice of motion be summarily dismissed pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 13.4, or otherwise pursuant to the Court's inherent jurisdiction (the Dang motion). Ms Dang also sought an order in the alternative for the Nguyens to provide security for her costs of the Nguyens’ amended motion.

48. The affidavit of Ms Dang's solicitor in support of the Dang motion annexed a letter that he wrote to the Nguyens’ solicitor dated 1 February 2019, which suggested that the basis for the application for security for costs was that at least one of the Nguyens was ordinarily resident outside Australia.

49. The affidavit annexed a further letter dated 13 February 2019 that set out the basis for Ms Dang's claim for summary dismissal of the Nguyens’ amended motion. That was that the Nguyens did not have an interest in the Smithfield property, and a party can only make an application under s 74MA of the Real Property Act if the applicant is a "person who is or claims to be entitled to an estate or interest" in the subject land. Ms Dang therefore claimed that the Nguyens did not have standing to make the application.

50. The Nguyens' solicitor apparently made a further application for the Sheriff to sell the Smithfield property under the first writ as, on 27 March 2019, the Office of the Sheriff sent a letter to the Nguyens' solicitor that stated the requirements that the Nguyens had to satisfy before the Sheriff would act upon the request. Among other things, the Nguyens were required to supply a valuation of the Smithfield property by a licensed independent valuer (not an appraisal from a real estate agent). They were required to pay a land sale fee of $867 and also to deposit $10,000 to cover further costs. The letter also stated: "Please ensure you have minimum 6 months validity on the Writ for Levy of Property before the date of expiry".

51. On 2 April 2019, Ward CJ in Eq listed the Dang motion for hearing before Lindsay J on 24 May 2019, limited to the issue of the summary dismissal application.

52. The written submissions served by Ms Dang in anticipation of the hearing fixed before Lindsay J made clear in par 3 that there were two principal issues. The first was whether the Nguyens’ amended motion should be summarily dismissed by reason that than the Nguyens had no standing to apply for the relief they claimed and because the Court would not otherwise grant that relief. The second was whether the notice of motion should be summarily dismissed because the relief claimed is not appropriately sought in proceedings which have been finally determined.

53. Ms Dang also submitted that the Nguyens did not have a right to a declaration that Ms Dang did not have any interest in the Smithfield property, because the relief claimed was not directed at the resolution of any controversy between the Nguyens and Ms Dang. Ms Dang submitted, at par 19:

While the plaintiffs may have a financial interest in recovering their judgment, that gives rise to no controversy between Ms Dang and themselves. And that financial interest in recovery of judgment is a different thing altogether from an interest supporting the maintenance of a claim for a declaration as to interest in the land.

54. Ms Dang further submitted that the relief claimed in the Nguyens’ amended notice was not available, relying upon the decision of McLelland J (as his Honour then was) in Phillips v Walsh (1990) 20 NSWLR 206 at 210, on the basis that the 2017 proceedings had been dismissed against Ms Dang, and the relief sought could not be described as the 'working out' of the orders made in the proceedings.

Second writ

55. The first writ issued on 10 May 2018 expired 12 months later on 10 May 2019 under UCPR r 39.20.

56. On 13 May 2019, after the first writ had expired, the Nguyens’ solicitors filed a notice of motion seeking an order that the first writ “be renewed or extended for 12 months”.

57. The Court made a new order for the issue of a writ on 22 May 2019, and on the same date that writ was issued (the second writ).

Further conduct of 2017 proceedings

58. On 24 May 2019, Lindsay J made an order giving the Nguyens liberty to file a notice of motion, returnable before his Honour on 19 June 2019, which joined the Sheriff as a respondent to the motion, and sought directions for the conduct by the Sheriff of a sale in execution of the first writ in respect of the Smithfield property.

59. Lindsay J also made a notation as to the questions that may arise for determination on such a notice of motion, in the following terms:

2) NOTE that questions which may arise for determination on such notice of motion are:

a) first, whether a transferee from the Sheriff on a sale of the [Smithfield property] pursuant to [the first writ] is entitled to priority over any estate or interest in the land claimed by [Ms Dang] pursuant to [the Caveat] lodged against the title to the land after registration of the writ, such that the transferee is entitled to registration of a transfer free of any estate or interest claimed in the land by [Ms Dang] as caveator.

b) secondly, whether the Sheriff should be directed to make an application for an order that [the Caveat] be withdrawn.

c) thirdly, whether, upon a sale of the land in execution of the writ, any proceeds of the sale payable to [Mr Hoang] pursuant to rule 39.15(c) are charged with such, if any, entitlement [Ms Dang] may have under, or by reference to, her caveat.

60. It appears that it was not brought to Lindsay J's attention that the first writ had expired, and that the second writ had been issued.

61. Lindsay J also ordered that Ms Dang's claim in her notice of motion for an order summarily dismissing the Nguyens' notice of motion be adjourned to 19 June 2019 before his Honour for directions.

62. The Nguyens filed a further notice of motion on 4 June 2019 (the second Nguyens motion), to which the Sheriff was made a respondent. They claimed the following relief:

1. The Court directs the Sheriff of New South Wales, along with [Mr Hoang and Ms Dang] are joined as a Respondent to this motion.

2. The Court directs the Sheriff of New South Wales execute the [first writ for levy of property] on the title to the [Smithfield property] and put the said property to public auction.

3. Where it is determined by the Court that a transferee from the Sheriff on the sale of the land is not entitled to registration of a transfer free of any estate or interest claimed by [Ms Dang] pursuant to [the Caveat], the Court directs the Sheriff of New South Wales to make an application to the Court that [the Caveat] on the land be withdrawn.

63. The evidence provided to the Court during the procedural management of the proceedings established that the Sheriff declined to cause the Smithfield property to be sold in execution of the first writ because of the possibility that Ms Dang may have been entitled to the interest claimed in the Caveat. Further, the existence of the Caveat would likely prejudice the sale because potential purchasers might be dissuaded from offering a fair market price because of doubt as to whether the transfer to them by the Sheriff would take priority over the interest claimed in the Caveat. The Sheriff had required that issue to be resolved before steps were taken to sell the Smithfield property.

64. Lindsay J made case management orders on 19 June 2019. They included, by order 1, an order that Ms Dang's claim for an order that the Nguyens amended motion be summarily dismissed, and the Nguyens second motion, be heard together with evidence on the one application being evidence on the other. By order 2, his Honour noted that the questions that arise for determination on those applications include the questions noted in par 2 of the orders made on 24 May 2019. His Honour listed the proceedings for further directions on 3 July 2019.

65. The proceedings were then adjourned on a number of occasions and came before Lindsay J on 21 August 2019. His Honour made the following notations and orders:

1. ORDER that [Mr Hoang], in consultation with the National Australia Bank, inform the Sheriff no later than 23 August 2019, of the amount claimed by the Bank to be due to it under its mortgage over the subject property.

2. NOTE that the parties propose, in consultation with the Sheriff, to consider whether there can be any agreement between them to facilitate a sale of the property on the terms set forth in paragraphs 2 to 5 inclusive of MFI S5 or some variation thereof.

3. NOTE that it is agreed between the Sheriff and all parties that the Sheriff will be responsible for her own costs associated with her appearance before the Court in these proceedings, and that no party will seek costs against the Sheriff in relation to her appearance in the proceedings.

4. ORDER that the proceedings be listed before Lindsay J for directions at 9:30am on 4 February 2019.

66. The MFI referred to in note 2 consisted of consent orders proposed by the Sheriff. Those orders were never made. Paragraphs 2 to 5 consisted of a direction to the Sheriff from the Court under s 135 of the Civil Procedure Act 2005 (NSW) to sell the Smithfield property and pay the net proceeds of sale into court. For that purpose, Ms Dang would be directed to withdraw the Caveat and to give up possession of the Smithfield property.

Application for recording of second writ for levy of property

67. On 25 June 2019, the Nguyens’ solicitor lodged a request for the registration of the second writ. The request was given dealing No AP330678R. The request was: “Writ AP330678R to be registered as the renewed writ for the extension of operation of writ AN402095 registered on the title of [the Smithfield property]”.

68. There is no direct evidence of the Registrar-General’s response to this application.

Application for issue of lapsing notice

69. On 31 July 2019, the Nguyens' solicitor lodged an application for the preparation of a lapsing notice in respect of the Caveat. The ground of the application stated was:

(f) The applicant being the judgment creditor in [the 2017 proceedings] applies under SECTION 74I OF THE REAL PROPERTY ACT 1900 for the preparation of the notice referred to in that section.

The above mentioned caveat prohibits the registration of THE RENEWED WRIT ISSUED ON 22/5/2019 AP330678R.

70. While the Nguyens’ amended motion directly sought an order from the Court under s 74MA of the Real Property Act that Ms Dang withdraw the Caveat, by the application referred to in the preceding paragraph, the Nguyens sought to proceed by the alternative course of seeking the issue of a lapsing notice under s 74I of the Real Property Act.

71. On 4 September 2019, Lindsay J noted: "that the parties are presently engaged in discussions about whether a sale of the property can be arranged on terms sufficient to accommodate competing interests", and stood the proceedings over to 13 September 2019 for directions.

72. NSW Land Registry Services issued a Notice to Caveator of Proposed Lapsing of Caveat. Materially, the lapsing notice stated:

Notice is hereby given that the following dealing affecting the above applicant and folio (sic) been lodged for registration.

AP330678 REQUEST

Accordingly, I hereby give notice that a recording will be made in the Register of the lapsing of your [Caveat] as regards the said dealing as to the applicant and folio referred to above, upon the expiration of 21 days after the date of service of this notice upon you, unless an order extending the operation of the Caveat is obtained from the Supreme Court of New South Wales and such order (or an office copy thereof) is lodged with me within that period.

If your Caveat is lapsed the above dealing will be registered.

73. The Nguyens' solicitor served the lapsing notice on Ms Dang's solicitors under cover of a letter dated 9 September 2019.

Further conduct of the 2017 proceedings continued

74. The proceedings came before Lindsay J again on 18 September 2019. His Honour made the following notation:

1. NOTE that the parties inform the Court that:

a) they have been unable to reach an agreement about whether a sale of the subject property can be arranged on terms sufficient to accommodate competing interests.

b) on 13 May 2019, the plaintiffs filed a notice of motion seeking a renewal or extension of their writ for the levy of property.

c) on 22 May 2019, a Registrar of the Court ordered that the writ continue in force for 12 months from that day.

d) the Registrar-General has declined to register the renewed writ because of the presence on the title of the property of [the Caveat].

e) on 9 September 2019, at the instigation of [the Nguyens], [Ms Dang] was served with the lapsing notice relating to her Caveat.

f) according to the terms of the lapsing notice, [Ms Dang's] caveat will lapse on 30 September 2019.

75. Note 1(c) recorded that the Registrar-General had declined to register the second writ because of the prohibition in the Caveat. This is the only indication that the Registrar-General actually declined to register the second writ for that reason. I infer that Lindsay J must have been satisfied by what he was told in court that it was appropriate for him to make that note.

76. Section 74H of the Real Property Act governs the effect of a caveat lodged under s 74F. Section 74H(5)(f) provides: "Except in so far as it otherwise specifies, a caveat lodged under section 74F to protect a particular legal or equitable estate or interest in land… does not prohibit the Registrar-General from recording in the Register with respect to the same land… (f) a writ or the cancellation of the recording of a writ in accordance with section 105D…" It appears that the Registrar-General declined to record the second writ in this case because the terms of the Caveat prohibited the registration of another writ.

77. The events recorded in these notations are the source of Ms Dang's continuing claim that the Nguyens do not have standing to challenge the validity of the Caveat. I will explore the legal basis of that position below, but for the moment it is sufficient to note that Ms Dang originally argued that the Nguyens’ application for an order that she withdraw the Caveat under s 74MA of the Real Property Act was misconceived because the issue of the first writ did not give the Nguyens an interest in the Smithfield property, and the existence of such an interest is a pre-requisite to standing to seek the withdrawal order. In respect of the Nguyens’ application under s 74I of the Real Property Act, Ms Dang's position is that, at the time that the Nguyens made their application for the issue of a lapsing notice under s 74I of the Real Property Act, the first writ had expired but it remained registered against the title. The Registrar-General did not have statutory power to register the second writ against the title while the first writ remained registered, because of the effect of s 105(5) of the Real Property Act. Consequently, Ms Dang seeks to argue that the Nguyens’ standing to make the application cannot be based upon the failure of the second writ to be registered because of the prohibition in the Caveat.

75. His Honour made various orders for the service of affidavits and submissions. By order 4, he ordered that any application to be made by Ms Dang responsive to the lapsing notice be made by way of summons returnable before his Honour on 27 September 2019.

76. By order 7, Lindsay J ordered the Sheriff to file and serve any affidavits and written submissions the Sheriff proposed to file, including any response to the summons to be filed by Ms Dang.

77. The proceedings were then stood over to 27 September 2019 before his Honour for directions.

Commencement of the 2019 proceedings

81. Ms Dang filed the summons ordered by Lindsay J on 23 September 2019. The Nguyens were the first to third defendants. Mr Hoang was the fourth defendant. The Registrar-General was the fifth defendant.

82. The position of the Sheriff and the Registrar-General in these two proceedings may be a little unclear. The Sheriff became a party to a notice of motion in the 2017 proceedings. The Sheriff was not made a party and has not taken any steps formally in the 2019 proceedings. The Registrar-General was made a defendant to Ms Dang's 2019 proceedings. The Registrar-General has not taken any active part in the proceedings.

83. Ms Dang sought an interim order under s 74K(2) of the Real Property Act extending the operation of the Caveat until further order.

84. In so far as and the Nguyens were interested in the final relief claimed, that relief was as follows:

5. A declaration that the “Notice to Caveator of Proposed Lapsing of Caveat…” addressed to [Ms Dang]… is not a notice validly prepared and issued under Real Property Act 1900 (NSW), s 74I(1) and of no effect for the purpose of s 74I.

6. A declaration that [Mr Hoang] holds his interest in the Land on trust for [Ms Dang].

7. A declaration that [Ms Dang] is entitled to an equitable lien over the Land.

8. In the alternative to paragraph 6, a declaration that [Ms Dang] is entitled to recoupment from [Mr Hoang] for funds contributed by [Ms Dang] in relation to the Land.

9. A declaration that the entitlement of [Ms Dang] as referred to in paragraph 8 above is secured by the equitable lien declared in paragraph 7 above.

…

11. An order that [the Nguyens] withdraw their application or request under Real Property Act 1900 (NSW), s 105(2), to have recorded on the register for the Land the Writ for the Levy of Property of [Mr Hoang] issued by the Court on 22 May 2019.

85. Prayer 5 sought an order that would uphold Ms Dang's argument that the Nguyens did not have standing to apply for the issue of the lapsing notice.

86. However, by prayers 6 to 9, Ms Dang sought declarations to establish in a positive way that she had certain interests in the Smithfield property.

87. Furthermore, it is implicit in Ms Dang's application in prayer 11, that the Nguyens be ordered to withdraw their application for the second writ to be recorded on the title, that Ms Dang was specifically putting in issue the Nguyens’ entitlement to enforce the writ. It may be that Ms Dang could only be entitled to such an order if she established that she had a prior beneficial interest in the Smithfield property that, so to speak, exhausted the equity of Mr Hoang, with the result that there was no interest of Mr Hoang against which the writ in practical terms could be executed. Prayer 11 may therefore have given the Nguyens a proper interest to resist Ms Dang's claims for the declarations in prayers 6 to 9, even if they otherwise did not have that standing.

Evidence provided on behalf of the Sheriff

88. On 26 September 2019, Mr David Dodds, Senior Assistant Sheriff, affirmed an affidavit in response to the orders made by Lindsay J. Mr Dodds explained the processes followed by the Sheriff in implementing writs and provided the following explanation concerning the consequences of a caveat being lodged against the title to the relevant land:

10. The Sheriff is required to take steps to sell the Property under the terms of the Uniform Civil Procedure Rules 2005, but is also mindful of the duty not to sacrifice the value of the Property as set out in those Rules.

…

12. The Sheriff will take direction from the judgment creditor concerning the creditor's wishes in executing the writ. Where there is a caveat recorded on the title, the Sheriff will ask the creditor to take steps to ascertain the amount claimed under the caveat, and to reach an accommodation with the caveator to execute a withdrawal of the caveat and provide it on settlement in exchange for an amount sufficient to satisfy the caveator.

13. Where a caveat is on title and the creditor is unable to provide the Sheriff with information concerning the nature and value of the interest claimed by the caveator, the Sheriff is unlikely to proceed with the sale.

14. If the quantum of the interest claimed by the caveator cannot be ascertained, the Sheriff is not in any position to determine whether or not there will be sufficient equity in the property to ensure that there will be any surplus available for the judgment creditor.

15. A further reason for not proceeding to sell when the quantum of the interest of the caveator cannot ascertained (sic) is that any purchaser at a Sheriff's sale will then be required to take steps to deal with the interest of the caveator. The Sheriff considers that this potential blot on the title of the registered proprietor will have a significant deterrent effect on bidders at a sale by public auction, and may not achieve the approximate market value, or even a fair market value for the property.

16. If the Sheriff proceeded to a sale with a caveat on the title which was not to be removed on settlement the Sheriff takes the view that such a sale is likely to achieve an offer which is substantially below the fair market for the property, having regard to the uncertainty which a purchaser would face in addressing the issue of the caveat.

17. The Sheriff takes the view that a purchaser at a Sheriff's sale must deal with the caveator before becoming registered and that a caveat lodged against the subject property, and not removed, will prevent the purchaser from becoming registered a proprietor (sic).

89. This affidavit was not read at the hearing. I will not rely upon it to prove any contentious fact the subject of these reasons for judgment in so far as the fact is relevant to the dispute between Ms Dang and the Nguyens inter se.

90. I wish to express the gratitude of the Court for the assistance provided by the Sheriff in this matter, both by means of the affidavit made by Mr Dodds and by the helpful written submissions of Ms Patricia Lane of counsel dated 27 September 2019. The Sheriff did not appear at the final hearing but invited the Court to make such use of the affidavit of Mr Dodds and the submissions of Ms Lane as it thought appropriate. The submissions addressed, among other things, aspects of the questions noted by Lindsay J, and explained the statutory regime governing the office of the Sheriff, the issue and execution of writs, and the practical relationship between the lodgement of caveats against the title to land the subject of writs and the practice of the Sheriff in dealing with such writs, where a caveat has been lodged that will prevent the registration of a transfer of the land under a contract entered into by the Sheriff.

91. The Sheriff was invited by the Court to assist it by explaining the Sheriff’s practice in executing writs in cases where a caveat was lodged against the title. The Sheriff responded to the invitation without opposition from the parties. The Court necessarily became aware of the Sheriff’s response, and I will take it into account in a general way when I consider the operation of the statutory regime governing the relationship between writs and caveats.

92. It is sufficient to note that the lodgement of a caveat may sometimes frustrate the processes of the Court in respect of the enforcement of its judgments. That may occur in particular if the judgment creditor does not have standing to cause invalid caveats to be withdrawn, or even because the process of achieving withdrawal of the caveat may not be achievable within the six month protected period, which I will explain below.

Further steps in the two proceedings

93. After an intervening directions hearing, Lindsay J made further directions in the 2019 proceedings on 27 September 2019.

94. Relevantly, by orders 3 to 5, Lindsay J ordered that the proceedings proceed by way of pleadings and ordered that a statement of claim and defences and cross claims be filed by certain dates.

95. By order 8, his Honour made an order extending the operation of the Caveat up to and including 14 November 2019.

96. Ms Dang filed her statement of claim on 11 October 2019. It will be convenient to defer a consideration of the allegations made in the statement of claim until the merits of that claim are considered.

97. Ms Dang swore her primary affidavit in support of the relief claimed in the statement of claim on 11 October 2019.

98. The Nguyens filed their defence on 1 November 2019. In substance, they put Ms Dang to proof of her claim. The Nguyens did not avail themselves of Lindsay J's invitation to file a cross claim. However, in pars 42 to 48 of their defence, the Nguyens in effect pleaded a claim against Ms Dang that, as a result of Mr Hoang defrauding the paternal Nguyen of $238,705, Ms Dang received and retained for her own benefit the amount of $172,550, which the Nguyens claimed as money had and received by Ms Dang. They also claimed that those monies were held on constructive trust for them by Ms Dang.

99. It is necessary to be aware that the Nguyens pleaded this informal cross claim in their defence. However, on the last day of the hearing, they abandoned this claim. That will be relevant when the issue of the appropriate costs orders come to be considered.

100. It will be convenient, however, to note that in her statement of claim Ms Dang pleaded her claim that the lapsing notice was not validly issued under s 74I(1) of the Real Property Act as follows:

38.   At the time of issue of the Purported Notice:

a. s 105(5) of the Real Property Act 1900 (NSW) obliged [the Registrar-General] to not record the Second Writ in the Register unless the recording of the First Writ had been cancelled; and

b.   the recording of the First Writ had not been cancelled.

39.    In the premises, at the time of issue of the Purported Notice:

a.   the Second Writ could not be recorded in the Register because of the operation of this 105(5) of the Real Property Act 1900 (NSW);

b.   the Judgment Creditors were not:

i.   judgment creditors under a writ that could not be recorded because of the Caveat; and

ii. within the class of persons who could make application for the issue of a notice under s 74I(1) of the Real Property Act 1900 (NSW).

40. In the premises, the Purported Notice was not a notice validly prepared and issued under s 74I(1) of the Real Property Act 1900 (NSW) and is of no effect for the purpose of s 74I.

101. The Nguyens responded to this claim in par 39 of their defence by saying, in substance, that there is nothing in the Real Property Act that requires the cancellation of the first writ before the issue of the lapsing notice under s 74I and that the second writ may be recorded once the Registrar-General cancels the recording of the first writ.

102. They pleaded further in par 40:

… and further say irrespective of the same any interest alleged in the Property by the Plaintiff is nothing more than a sham and the Court should decline to extend [the Caveat] recorded on the title of the Property as sought in the summons commencing these proceedings and order [the Registrar-General] to cancel the record of the same on the title of the Property.

103. It will be convenient to note at this point that I do not consider the Nguyens to have prosecuted their claim at the final hearing that the lodgement of the Caveat was a sham dishonestly intended to thwart the judgment of the Court. That serious claim was not directly put to Ms Dang in cross-examination. The Nguyens directed their forensic attention to establishing that Ms Dang did not have the interests in the Smithfield property that she claimed.

104. The principal affidavit in support of the Nguyens' defence was affirmed by their solicitor on 4 November 2019.

105. On 14 November 2019, Lindsay J made certain case management orders and further extended the Caveat up to and including 3 December 2019.

106. The Court Book contains at pages 853 to 887 an affidavit of Mr Hoang apparently prepared in November 2019. The affidavit was ultimately not affirmed and was not read at the final hearing.

107. Ms Dang affirmed a further substantial affidavit in support of her claim in the 2019 proceedings on 2 December 2019.

108. On 3 December 2019, Lindsay J made further orders in both the 2017 and the 2019 proceedings. Primarily, his Honour noted that the solicitor for Mr Hoang in both proceedings had filed a notice of ceasing to act.

109. Lindsay J also made an order further extending the caveat up to and including 6 February 2020.

110. His Honour then stood the proceedings over for further directions on 6 February 2020.

111. On 3 February 2020, the Nguyens' solicitor filed a further substantial affidavit affirmed by him on 31 January 2020 in the 2019 proceedings.

112. Lindsay J made further orders in both the 2017 and the 2019 proceedings on 6 February 2020. Relevantly, his Honour referred both proceedings to the Registrar "for the appointment of a date for the further hearing of the two proceedings (with an estimated duration of three days)".

113. By order 5 in the 2019 proceedings, Lindsay J extended the Caveat until further order.

114. On 12 February 2020, the Registrar in Equity made an order in each of the proceedings listing them to be heard on 26 October 2020 by me with an estimate of three days.

Application for renewal of second writ

115. On 26 May 2020, the Nguyens filed a further notice of motion in the 2017 proceedings seeking an order that the second writ be renewed for a further 12 months, as that writ expired on 22 May 2020.

116. The Principal Registrar of the Court, on 29 May 2020, made the following orders and notations:

THE COURT NOTES THAT:

1. The matter is listed for hearing before the Honourable Justice Robb on 26 October 2020.

THE COURT ORDERS THAT:

2. The notice of motion for writ for the levy of property is refused until the issues relating to the operation of the caveat on the subject property are resolved.

117. It will be noted that both proceedings were simply fixed to be heard by me commencing on 26 October 2020, without any separate orders being made as to how the various notices of motion that remained extant would be dealt with in relation to the merits of the substantive questions of whether Ms Dang had an interest in the Smithfield property, whether that interest was properly protected by the Caveat, and whether the Court should make an order that the Caveat be withdrawn.

Ms Dang’s notice of motion in 2019 proceedings

118. Ms Dang filed a notice of motion in the 2019 proceedings on 28 September 2020 (second Dang motion). The notice of motion sought the following relief:

1. Pursuant to the orders of Her Honour Ward CJ in Eq. made on 2 April 2019, prayers 1 and 2 of the Notice of Motion filed by [Ms Dang] on 15 February 2019 in [the 2017 proceedings] be determined prior to any other matter before the Court.

2. The [Nguyens] are to pay [Ms Dang's] costs of the whole of these proceedings.

IN THE ALTERNATIVE TO PARAGRAPH 1 AND 2

3. The Defence/Cross-Claim filed by [the Nguyens] on 1 November 2019 is struck out or summarily dismissed pursuant to Uniform Civil Procedure Rules 2005, rules 14.28 and 13.4 or otherwise pursuant to the Court's inherent jurisdiction.

4. The proceedings be otherwise dismissed.

5. The [Nguyens] are to pay [Ms Dang's] costs of the whole of these proceedings.

FURTHER, IN THE ALTERNATIVE TO PARAGRAPHS 3, 4 AND 5

6. Pursuant to the Uniform Civil Procedure Rules 2005, rule 42.21(1), the [Nguyens] are to provide security for [Ms Dang's] costs of the Cross-Claim for such amount as the Court thinks fit and by way of payment into Court or unconditional and irrevocable bank guarantee from an Australian trading bank in favour of [Ms Dang].

7. Any security ordered to be given by the [Nguyens] to be given within 28 days of this order or within such other time as the Court thinks fit.

8. Until security is given in accordance with paragraphs 7 and 8 above, the whole of the proceedings be stayed.

9. If security is not given in accordance with paragraphs 7 and 8 above, pursuant to Uniform Civil Procedure Rules 2005 r 42.21(3) the proceedings are dismissed.

10. The [Nguyens] to pay [Ms Dang's] costs of and incidental to this Notice of Motion.

IN THE ALTERNATIVE TO ALL PARAGRAPHS ABOVE

11. The Hearing commencing 26 October 2020 is vacated

12. Such further orders as the Court thinks fit

119. Ms Dang was not given leave to file this notice of motion.

The parties’ positions concerning the issues for determination

120. Before the hearing commenced on 26 October 2020, the Nguyens delivered a written outline of opening submissions on 23 October 2020 and Ms Dang responded on 26 October 2020.

The Nguyens’ position

121. As foreshadowed above, by pars 9 and 10, the Nguyens set out what they described as the "only four real issues which require determination by the Court". Those issues were:

(a)   Are any of the moneys allegedly advanced to Dang [read Hoang] in relation to the Property subject to the presumption of advancement between Dang and her son Hoang and has Dang discharged her burden to displace the presumption?

(b)   Relatedly, if the moneys allegedly advanced to Hoang in relation to the Property are not by way of advancement, does Dang have a valid equitable interest in the Property that rises higher than a mere equity or loan and what is the extent of that equity and is the Caveat lodged on behalf of Dang on title therefore valid or a mere sham lodged with the improper purpose to defend a judgment of this Court?

(c)   Where the Court finds Dang's interest in the Property does not rise higher than a mere equity or loan and Dang is entitled to an equitable lien over the Property in respect of the "Agreement" of 12 December 2014; is a transferee from the Sheriff on the sale of the Property pursuant to registered Writ AN402095 entitled to priority over any estate or interest in the land claimed by Dang pursuant to Caveat AN448892 lodged against the title of the land after registration of the Writ, such that the transferee is entitled to registration of a transfer free of any estate or interest claimed in the land by Dang as caveator?

(d) Relatedly, where the transferee is not entitled to registration of a transfer free of any estate or interest claimed in the land by Dang as caveator, upon the sale of the land in execution of the Writ, are any proceeds of the sale payable to Hoang pursuant to UCPR 39.15(c) charged with such, if any, entitlement Dang may have under, or by reference to, her caveat.

122. Issue (a) appears to begin with the assumption that Ms Dang may have paid money towards the acquisition of the Smithfield property that would cause a resulting trust to arise in her favour, subject to the issue of whether the presumption of advancement applies, with the effect that the payments would be treated as a gift to Mr Hoang.

123. Issue (b) assumes the presumption of advancement does not apply and asks whether the circumstances of any payment gave Ms Dang a valid equitable interest in the Smithfield property that the Caveat could validly protect. Alternatively, it asks whether any payment was only a loan or a mere equity.

124. Issue (c) is expressed in a manner that may involve a contradiction in terms. It assumes that the Court finds both that Ms Dang only has a mere equity or loan and also that she has an equitable lien, being a form of charge. If she does have a charge, that would give her an equitable interest in the property. On that basis, the question posed is whether a transferee under a sale by the Sheriff would have priority over the estate claimed by Ms Dang pursuant to the Caveat, so that the transferee would be entitled to registration as proprietor of the Smithfield property free of the interest claimed by Ms Dang.

122. This issue is partly based upon a misconception. The dealing number of the writ referred to is the number given to the first writ. That writ has expired. The Nguyens had since obtained the second writ. The Nguyens' problem is that the Registrar-General declined to register the second writ, apparently because of the prohibition contained in the Caveat. The question is whether that fact authorised the issue of the lapsing notice under s 74I of the Real Property Act, and whether that gives standing to the Nguyens to challenge the validity of the Caveat, and further, whether, as defendants to the summons, they have standing to challenge the existence of any equitable interest in the Smithfield property claimed by Ms Dang. If they have standing, and they succeed, the Caveat will be withdrawn, a third writ may then be issued and recorded, and the transferee under any contract of sale made by the Sheriff will not face the impediment of the Caveat preventing them from becoming the registered proprietor of the Smithfield property.

123. A footnote to the statement of issue (c) identifies the source of the issue as the notation in par 2 of the orders made by Lindsay J on 24 May 2019. However, those orders were made in the 2017 proceedings, without apparent knowledge of the fact that the first writ had expired, or that the second writ had been issued on 22 May 2019. This matter no longer raises questions about what happens if a caveat is lodged after a judgment creditor registers a writ. The question that is now raised is what happens when a caveat is lodged and the caveat prevents the subsequent registration of a writ issued on a judgment obtained before the lodgement of the caveat.

124. I do not see how issue (d) arises in reality. First, issue (d) does not arise if issue (c) is no longer relevant. Further, the evidence given by Mr Dodds on behalf of the Sheriff shows that, the Sheriff will not, for commercial and practical reasons, sell property of a judgment debtor in accordance with a writ where the presence of a caveat creates a blot on the title that has the result that she could not be satisfied that she would achieve a fair market value for that property. With respect to the question of whether a purchaser from the Sheriff will take the property subject to the interest claimed by the caveator, no determination made by this Court in the present proceedings will bind persons who are not party to these proceedings.

125. In any event, a caveat lodged against the title to land before the recording of a writ in the Register by the Registrar-General will, where the land is sold by the Sheriff in the exercise of the writ, prevent registration by the purchaser of the transfer executed by the Sheriff, unless the purchaser succeeds in an application to the Court for the withdrawal of the caveat: see Black v Garnock (2007) 230 CLR 438; [2007] HCA 31 at [8], [43] and [52]-[53]. As the Caveat was lodged before the application to record the second writ in the Register, the reasoning of the majority of the High Court, to the effect that a party claiming an unregistered interest in land under the Real Property Act is not entitled to an injunction to prevent the registration of a transfer by the Sheriff to a purchaser under a contract for the sale of land under a writ that has been lodged for registration during the protected period, is not relevant. Nor is the suggestion made but not decided by Barrett JA, with the agreement of the other Judges of Appeal, in Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26; (2012) 16 BPR 30,397 at [66] that the reasoning of the majority in Black v Garnock might allow a caveat lodged after the recording of the writ in the Register to prohibit the registration of a transfer executed by the Sheriff. Further, the provisions of the Real Property Act that govern the effect of sales made by the Sheriff in execution of writs do not impinge on the effectiveness of a caveat lodged before the recording of the writ in the Register.

126. As the Caveat was lodged before the second writ was lodged for registration, from the perspective of the Nguyens' case, there are only two issues. First, do they have standing to challenge Ms Dang's claim to be entitled to an equitable interest in the Smithfield property that is protected by the Caveat, by reason of the combined effect of the lapsing notice being valid and their position as defendants to the summons filed by Ms Dang? If so, has Ms Dang established that she has an equitable interest in the Smithfield property? A subsidiary question may be whether the Caveat must be withdrawn, if Ms Dang establishes that she has an interest that is not the one protected by the Caveat. If it must be withdrawn, there will be a question as to whether Ms Dang should be permitted to lodge a further caveat to protect the interest that she does establish.

127. The continuation of any caveat will prevent the registration of the second writ, which has the effect that the Smithfield property will not be sold by the Sheriff. On the other hand, if the Nguyens succeed on the substantive issues concerning Ms Dang's interest in the Smithfield property, and establish that the Caveat must be withdrawn, the third writ may then be registered, and there will be no impediment to the Smithfield property being sold by the Sheriff.

Ms Dang’s position

131. It will now be necessary to set out the issues as contended for by Ms Dang in par 8 of her written outline:

There are numerous discrete issues that will require resolution during the conduct of these proceedings, with each one bearing an impact on the remainder of the proceedings that will follow:

(a)   Can the Nguyens bring a cause of action via an Amended Motion within the same 2017 Proceedings against Dang for whom the 2017 Proceedings have already been dismissed.

(b)   Do the Nguyens otherwise have standing to bring the 2017 Proceedings against Dang.

(c)   What is to happen to the Notice of Motion filed 4 June 2019 by the Nguyens. Is this Motion pressed or no longer pressed. Dang has incurred significant costs due to the filing of this Motion.

(d)   Do the Nguyens have standing to issue the lapsing Notice causing the 2019 Proceedings.

(e)   Should an order for Security for Costs be made against the Cross-Claimants, being the Nguyens in the 2019 Proceedings.

(f)   If no Security for Costs is ordered, only then does the court have to turn to the issue subject of the Summons and Defence/Cross-Claim in the 2019 Proceedings.

(g)   Are the Nguyens capable of bringing the Cross-Claim or Defence against Dang in it (sic) current form or at all, due to the principles of Res Judicata, Estoppel, Anshun Estoppel or otherwise barred from re-litigation.

h)   Should the 2019 Proceedings be adjourned to allow Dang the opportunity to travel to Vietnam to produce further evidence to rely upon not available electronically.

(i)   Does Dang have a caveatable interest, and if so, what is the quantum of the interest.

(j)   What utility would any orders sought by the Nguyen’s serve. Would the Nguyens reap any benefit from the sheriff executing the Writ.

132. Issues (a) and (b) concern the issues raised by the Dang motion filed in the 2017 proceedings, being whether the Nguyens were not entitled to make an application under s 74MA of the Real Property Act, because the first writ did not give them a proprietary interest in the Smithfield property, and because they were not entitled to make an application in the 2017 proceedings after they had been dismissed.

133. Issue (c) refers to the second Nguyens motion in the 2017 proceedings, being the application to join the Sheriff and for orders directing the Sheriff to execute the first writ and to apply to the Court for an order that the Caveat be withdrawn.

134. I do not understand the Nguyens to have directly responded to the questions stated in issue (c). However, the Nguyens did not in fact press that notice of motion.

135. Issue (d) concerns the live question of whether the Nguyens did not have a right to cause the lapsing notice to be issued pursuant to s 74I of the Real Property Act because they had applied for the registration of the second writ while the first writ remained recorded against the title to the Smithfield property.

136. The application for security for costs the subject of issues (e) and (f) will only be of practical significance if the effect of the judgment in the two proceedings is that the controversy between the Nguyens and Ms Dang is not finally determined, and further proceedings are necessary in which the Nguyens are the effective plaintiffs. Even if the course that the proceedings have taken to date has unfairly deprived Ms Dang of the opportunity to pursue her claim for security for costs, there will be no point in determining an application for security for costs after all of the substantive issues have been decided.

137. As I understand it, issue (g), so far as it raises questions based upon res judicata, issue estoppel or Anshun estoppel, no longer arises. The Nguyens have abandoned their notional cross claim.

138. As to issue (h), I declined at the hearing to adjourn the proceedings. The Court had made the usual case management orders that required the parties to serve their evidence long before the date of the hearing. Ms Dang allowed the two proceedings to be set down for hearing without raising her need to obtain further evidence from Vietnam.

139. Furthermore, Ms Dang did not make a timely application on notice before the hearing for an adjournment, and did not support the application by proper evidence concerning the additional evidence that she hoped to obtain from Vietnam. In the circumstances, there was no proper basis for permitting the adjournment.

140. Issue (i) raises the substantive question concerning the existence of the interest in the Smithfield property claimed by Ms Dang and the validity of the Caveat.

141. Issue (j) was raised by Ms Dang during the course of the hearing. It concerned whether the evidence showed that the amount secured by first mortgage over the Smithfield property was such that either the Sheriff would decline to execute the third writ, or that the Court should decline to require the Sheriff to do so, because of a lack of utility.

The Court’s approach to the hearing

142. It will now be appropriate to explain how the Court, at the commencement of the hearing, resolved the dispute between the parties as to how the hearing should proceed.

143. I determined that the only practical course available for the Court was to receive the evidence relevant to all of the extant applications and then allow the parties to make the submissions that they thought were appropriate. The Court would then decide how the individual applications should be dealt with.

144. I took that course for a number of reasons. First, the two proceedings had been set down for final hearing together on 26 October 2020. Secondly, it was not practically possible for the Court to review the whole of the Court Book and the two files, in the manner that I have now done above, in order to be in a position to properly determine the order in which individual applications should be dealt with. Thirdly, it was not realistic to think that the Court could properly hear argument on preliminary questions and then give considered judgments before moving on to subsequent questions, in a manner that could be achieved in the time allotted for the hearing.

145. However, I did not accept the Nguyens' position that the Court should simply determine the substantive questions concerning Ms Dang's entitlement to an interest in the Smithfield property and the validity of the Caveat, and ignore the various notices of motion. That course would have permitted the Nguyens to sidestep potential liabilities for costs that have been incurred as a result of notices of motion filed by them in the 2017 proceedings and by reason of their notional cross claim in the 2019 proceedings.

146. I did not deal with the second Dang motion filed on 28 September 2020 in the 2019 proceedings as a separate application. It was not practicable to deal with that application separately at the commencement of a hearing that was fixed to determine all issues in the proceedings.

147. In any event, the Court will deal with the Nguyens’ amended motion in the 2017 proceedings. The Court would not entertain an application for summary dismissal of the Nguyens defence in the 2019 proceedings at a hearing set down to deal with that issue finally on its merits. As explained above, it was too late for the Court to consider a security for costs application by Ms Dang, if the Court was able to finally determine all issues in the proceedings.

148. The result is that the Court in these reasons for judgment will determine the substantive question as to whether Ms Dang has an equitable interest in the Smithfield property of either of the alternative forms claimed in her statement of claim. If an equitable interest in the Smithfield property is established by Ms Dang, the question will then arise as to whether it is protected by the Caveat. Whether or not Ms Dang establishes that she has an equitable interest in the Smithfield property that is protected by the Caveat, it will remain necessary for the Nguyens to establish that they have a right to an order against Ms Dang that she withdraw the Caveat. It may be an unfortunate result of the procedural history of the two proceedings that the Nguyens might not succeed in obtaining an order that the Caveat be withdrawn even if they prove that Ms Dang does not have a caveatable interest in the Smithfield property.

Observations on the evidence tendered by the parties

149. The Court Book in this matter consisted of four lever arch folders full of documents.

150. Apparently, because the parties had not resolved the question of how the Court should deal with the various notices of motion and the claim raised by Ms Dang's summons and statement of claim, the Court Book was compiled by inserting in chronological order each of the notices of motion, the summons and the statement of claim together with the affidavits and exhibits served by the parties in respect of each initiating process. This had the result, particularly in relation to the exhibits, that there was significant duplication and that the structure of the Court Book was not conducive to its utility.

151. At the hearing, the parties were selective with respect to the evidence that they tendered from the Court Book.

152. Ms Dang read two of her own affidavits together with the exhibits to those affidavits, which became Exhibits D1, D2 and D3.

153. It appears that the material in those exhibits relates in some way to the merits of Ms Dang's claim, although ultimately Ms Dang's final submissions hardly referred to or explained the material in her exhibits.

154. So far as the Nguyens are concerned, I have explained above that they submitted that there was no need for the Court to deal with the notices of motion in either of the proceedings, and that it would instead be sufficient for the Court to determine the substantive issues of the validity of the Caveat and the existence of a proprietary interest in the Smithfield property claimed by Ms Dang.

155. The Nguyens chose not to read any affidavit evidence at the hearing. They relied on certain exhibits relating primarily to bank statements, and also on a list of documents that became Exhibit P2. That was the list of documents contained in the affidavit of their solicitor affirmed on 4 November 2019 apparently in response to Ms Dang's summons.

156. As far as I have been able to ascertain, the parties between them did not tender a search of the Smithfield property, the Caveat, the orders for the issue of writs and the writs themselves, any application to the Registrar-General, or any relevant documents issued by the Registrar-General. The parties did not even tender the documents behind tabs 68 to 70 in volume 4 of the Court Book, which plainly concern the issue and recording of the writs and a title search for the Smithfield property.

157. Notwithstanding this approach, the Court was left with the Court Book for the purpose of conducting the exercise that I have set out above in my treatment of the procedural background. That exercise necessarily brought to the Court's attention many relevant documents that were before the Court for the purpose of interlocutory hearings, even if not formally put into evidence in the course of those hearings.

158. By paragraphs 5 and 12 of the statement of claim, Ms Dang has alleged, and by the corresponding paragraphs of the defence the Nguyens have admitted, that Mr Hoang has been the registered proprietor of the Smithfield property since 3 June 2015, that the Nguyens obtained the Court's judgment against Mr Hoang on 29 January 2018, that the first writ was issued on 10 May 2018 and was later recorded in the Register, that the Caveat was lodged on 26 June 2018, that the second writ was issued on 22 May 2019, that the Nguyens applied to the Registrar-General for the recording of the second writ on 19 June 2019, and that a further such application was made by the Nguyens on 25 June 2019.

159. However, by their response to par 13 of the statement of claim, the Nguyens neither admitted nor denied that on 9 September 2019, the Registrar-General issued the lapsing notice to Ms Dang in relation to the Caveat under s 74I(1) of the Real Property Act. That response was justified by the Nguyens on the basis that par 13 of the statement of claim made no allegation against the Nguyens.

160. In addition to the failure of both parties to tender evidence relevant to the procedural and substantive issues upon which they had made submissions, it appeared from my reading of Ms Dang’s final written submissions dated 27 November 2020 that she had put submissions that were clearly based upon evidence that was not tendered at the hearing.

161. As I understand it, the argument is based on the fact that s 74I of the Real Property Act requires the Registrar-General to issue a lapsing notice on application “by a judgment creditor under any writ that cannot be recorded because of the caveat”. Ms Dang submitted that, at the time the lapsing notice was issued, a writ had in fact been registered by the Registrar-General. Accordingly, Ms Dang submitted, the lapsing notice was technically invalid.

162. Ms Dang relied upon a title search for the Smithfield property obtained on 5 November 2020 (after the completion of the hearing), which was annexure I to the affidavit of Ms Dang's solicitor affirmed on 5 November 2020. The contents of this affidavit were not in evidence.

163. I reviewed the affidavit only for the purpose of determining whether it contained any support for Ms Dang's claim in her submissions that the Nguyens had failed to inform the Court that a writ had been recorded on the Register, notwithstanding the prohibition in the Caveat.

164. The second schedule in the title search for the Smithfield property obtained on 5 November 2020 records the following relevant notification:

4   AN402095 WRIT BY [THE NGUYENS]. WRIT NO 2017/00060096 ISSUED ON 10/5/2018

AP330678   ORDER OF COURT

5   AN448892   CAVEAT BY [MS DANG]

165. The first part of notification 4 refers to the recording of the first writ in the Register. AP330678 is the dealing number of the Request lodged by the Nguyens’ solicitor on 25 June 2019 that the second writ be recorded. I will explain below why the Request should not, as a matter of the Registrar-General’s practice, have led to the cancellation of the recording of the first writ and the recording of the second writ. However, it is not clear why the Request was described as “order of court”, and it is unclear what the effect of the notification is. It is unlikely that the Registrar-General would have issued the lapsing notice under s 74I of the Real Property Act if the second writ had been recorded in the Register.

166. However, as the parties between them had not tendered all of the documents relevant to the writs and the recording of the writs in the Register, or any related documents, I formed the view during the course of the preparation of these reasons that I should defer completing them, and that I should require the parties to complete the evidentiary record in so far as it concerns uncontroversial documents necessary to enable the Court to fully understand the chronology of events relevant to the issue and recording of writs.

(1) Where a caveator is served with a notice prepared under section 74I (1) or (2), 74J (1) or 74JA (3), the caveator may prepare, in the manner prescribed by rules of Court, an application to the Supreme Court for an order extending the operation of the caveat.

(2)   Subject to subsection (3), on the hearing of an application made under subsection (1), the Supreme Court may, if satisfied that the caveator’s claim has or may have substance, make an order extending the operation of the caveat concerned for such period as is specified in the order or until the further order of that Court, or may make such other orders as it thinks fit, but, if that Court is not so satisfied, it shall dismiss the application.

…

(5)   When making an order under subsection (2), the Supreme Court may make such ancillary orders as it thinks fit.

…

366. Subsection (1) has the effect that this Court has the powers granted by subsections (2) and (5) irrespective of whether the lapsing notice is prepared by the Registrar-General under s 74I or s 74J. The specific powers granted by the first of the subsections are powers either to make an order extending the operation of the caveat or to dismiss the application.

367. The Court is also authorised to make such other orders as it thinks fit, but that power is only exercisable if the Court is satisfied that the caveator’s claim has or may have substance. The Court cannot make such order as it thinks fit under subsection (2) in this case, as it has decided that Ms Dang’s claim does not have substance.

368. Perhaps strangely, s 74I may have been effective in the present case if the Court had found that Ms Dang was entitled to the equitable lien that the Caveat sought to protect. In that case, the Court would have found that the caveator’s claim “has or may have substance”, so the power in the Court to make such other orders as it thinks fit would have been enlivened. It is established by authority that this power extends to restricting the prohibitory effect of the caveat so that it is not wider than is necessary to protect the true interest of the caveator: see for example Queensland Estates Pty Ltd v Co-Ownership Land Development Pty Ltd [1969] Qd R 150. The Court could have made an order that the Caveat be varied so that it only prohibited the registration of a dealing that affected Ms Dang’s right to recover a specified amount by way of charge over the Smithfield property. That right could have been realised by the payment of the amount due to Ms Dang out of the sale price of the property after repayment of the outstanding NAB mortgage. There would have been certainty and the Sheriff could have made a judgment as to whether to sell the property in execution of the writ based upon the expected sale price. Further, potential purchasers would not be deterred provided that the purchase price exceeded the total amount charged on the property.

369. The problem arises where the Court finds that the caveator’s claim does not have substance, because then the Court does not have the wide discretion granted to it by subsection (2).

370. The power in subsection (5) in the Court to make such ancillary orders as it thinks fit is available whether the Court is satisfied that the caveator’s claim has substance or it determines to dismiss the caveator’s application.

371. In the present case, the Court’s conclusion on Ms Dang’s application for an extension of the Caveat is that the claim should be dismissed. Consequently, an order should be made that terminates the continuing operation of the order made by Lindsay J on 6 February 2020 that the operation of the Caveat be extended until further order.

372. That being the case, does the Court have power under s 74K(5) of the Real Property Act to make an order that the Caveat be withdrawn?

373. The meaning of the term “ancillary” was considered by Giles JA, with whom Meagher and Beazley JJA agreed, in Woodcroft v Director of Public Prosecutions [2000] NSWCA 128; (2000) 174 ALR 60 at [72], where his Honour said:

[72] An ancillary order must be ancillary to something, here to the restraining order, in that it is incidental or supplemental to it. The range of paragraphs in s 48(1), which I have not set out other than para (a), shows that a narrow view of what is incidental or supplemental should not be taken: for example, enforcing an undertaking as to damages given when a restraining order is made: para (d). There is no point in attempting an exhaustive description of the situations in which an ancillary order varying the property the subject of a restraining order may be made. In the situation presented to Simpson J, was the order an ancillary order?

374. Further, in Chubs Constructions Pty Ltd v Chamma (No 2) (2010) 78 NSWLR 679; [2010] NSWCA 225, the Court said:

[22] The term “ancillary” is not defined in the Workplace Injury Management and Workers Compensation Act, the co-ordinate Workers Compensation Act 1987, or the Workers Compensation Regulation. The appellant referred to a number of synonyms of the term: viz, subservient or subordinate, accessory or auxiliary, incidental. These synonyms are consistent with the Macquarie Concise Dictionary (1996) definitions of accessory and auxiliary (when used as an adjective), and an accessory, subsidiary, or helping thing or person (when used as a noun).

375. It is not, in my view, helpful to attempt to interpret a statutory provision granting the Court an ancillary power in one context by analysing the reasoning in judgments that have carried out the exercise in entirely different statutory contexts.

376. The question is whether the making of an order for the withdrawal of a caveat that has been found by the Court on an interlocutory hearing not to have substance, with the result that the caveator’s application under s 74K of the Real Property Act must be dismissed, is ancillary to the Court’s power to make that order.

377. With some hesitation, because of the inherent elasticity of the word “ancillary”, I have come to the conclusion that s 74K(5) does not empower the Court to make an interlocutory order for the withdrawal of a caveat, even where it decides to dismiss the application for the extension of the caveat because of a finding that the caveat does not have substance. First, an order for the withdrawal of the caveat is more consequential than an order dismissing an application that it be extended. The former is not truly ancillary to the latter. Secondly, the contrary view would lead to different outcomes depending upon whether the caveator responded to service of the lapsing notice by making an application for the extension of the caveat under s 74K or not. In the former case, the caveat will lapse sufficiently to permit registration of the writ but there will be no mechanism to compel the withdrawal of the caveat. An order for the withdrawal of the caveat could only be made where the caveator failed in an application for an order extending the caveat.

378. There are, however, in my view countervailing considerations. As I have recorded above, the Explanatory Note to the RP Amendment Bill clearly states that the objective of the amendments to the Real Property Act that made the lapsing notice process available to judgment creditors in respect of writs was to “allow the sheriff, where appropriate, to sell the land to satisfy debts recognised by the Court through the issue of a writ”. Section 34(2)(e) of the Interpretation Act 1987 (NSW) includes the Explanatory Note to the RP Amendment Bill within the material that may be considered in the interpretation of a provision of an Act. Section 34(1) relevantly provides:

(1)   In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material—

…

(b)   to determine the meaning of the provision—

(i)   if the provision is ambiguous or obscure, or

(ii)   if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable.

379. In my view, it is in the present context legitimate to say that the effect of s 74K(5) of the Real Property Act is obscure in relation to whether an order, to the effect that a caveat that has been found to be without substance should be withdrawn, is ancillary to a power to dismiss an application for the extension of the caveat. More significantly, however, I consider that it is arguably unreasonable to give s 74K an interpretation that has the result that the lapsing notice process, that has been extended to judgment creditors whose writs cannot be registered because of prohibitions in caveats, can only lead to the registration of the writ in circumstances where the continued effect of the caveat is that the achievement of registration of the writ is, for practical purposes, useless. The saga that is the background of the present case that I have related above demonstrates the truth of this proposition. It may be that the contrary result is not manifestly absurd, but in my view it would be perverse.

380. While I have found it tempting to rely upon the statement of purpose in the Explanatory Note to give the word “ancillary” in s 74K(5) an expansive or liberal interpretation in order to achieve what I consider would be the effective operation of the statutory provisions, on balance I consider that would be an incorrect approach. Sections 74F to 74K of the Real Property Act have been in force in their present terms for a period that has long predated the legislative attempt to improve the fortunes of the holders of writs who cannot procure registration. Notwithstanding the clarity of the Explanatory Note and the licence given by s 34 of the Interpretation Act, it would go too far for the Court to use the stated purpose for the introduction into s 74I of a right given to the holder of a writ to institute the lapsing notice process as a lever to expand the ambit of what may be accepted as an ancillary order for the purposes of s 74K(5) of the Real Property Act.

381. If that conclusion is correct, it has the unfortunate consequence that the provisions of the Real Property Act that govern how judgment creditors may achieve execution of writs that are issued to them by the courts, in the face of caveats lodged against the title to land owned by judgment debtors, are not fit for purpose. The objective of the RP Amendment Act has not effectively been achieved. It will often not avail a judgment creditor to secure the registration of a writ if the caveat remains on the title to prohibit the registration of a transfer from the Sheriff to a purchaser. The circumstances may justify the Sheriff in deciding that her duties do not permit her to execute the writ. The judgment creditor may then have to negotiate to obtain the caveator’s consent from a position of abject weakness. The Court has not been given the power to make appropriate interlocutory orders at the suit of the judgment creditor.

382. There is a question of whether the terms of s 74LA of the Real Property Act may ameliorate this outcome. It is not necessary to decide this question, as it involves a question as to how the Registrar-General should implement the Act. I would hesitate to determine the effect of the provision without giving the Registrar-General an opportunity to make submissions to the Court on the issue. As noted above, the Registrar-General was made a party to the 2019 proceedings, but has not taken part and has had no reason to think that this question would arise in the proceedings.

383. Section 74LA provides:

(1)   If the operation of a caveat is extended for a specified period by an order of the Supreme Court under this Part and no further order is made by the Court extending the operation of the caveat before the expiration of the period specified in the order, the caveat lapses on the expiration of that period.

(2)   If the operation of a caveat is extended until the further order of the Court by an order of the Supreme Court under this Part, the caveat lapses if the Registrar-General, on being satisfied that the proceedings in which the order was obtained have been finalised and that no further order is likely to be sought, makes a recording in the Register to the effect that the caveat has lapsed.

384. As explained above, in the present case, the Court had made an order extending the Caveat. When final orders are made, there will be no further order extending the Caveat, and whether or not an order for the withdrawal of the Caveat is made, an order will be made dismissing the application by Ms Dang for an order extending the Caveat. Consequently, the order extending the Caveat until further order would have to be discharged.

385. It may be arguable that these events would cause the Caveat to lapse or would cause the Registrar-General to make a recording in the Register to the effect that the Caveat has lapsed.

386. Section 74LA speaks simply in terms of the caveat lapsing. It does not say that, in cases where the lapsing notice has been issued under s 74J, the caveat lapses entirely, but where it has been issued under s 74I the caveat should lapse only to the extent necessary to permit the registration of the dealing. It may be arguable that s 74LA should be interpreted as if these different results are to be implied. However, it remains possible that the legal effect of the Court vacating the order for the extension of the Caveat until further order will have the effect that the Caveat will lapse entirely.

Final nature of hearing

387. To this point, the operation of the provisions of the Real Property Act concerning the effect of the issue of lapsing notices has been considered in the context of the determination of an interlocutory application for the extension of a caveat. The present proceedings have, however, involved more than the determination of an interlocutory application.

388. Ms Dang did seek interlocutory relief in prayer 2 of her summons, being an interim order under s 74K(2) of the Real Property Act extending the operation of the Caveat until further order.

389. There has been no hearing of that interlocutory application, as the Court, apparently by consent of the Nguyens, made orders extending the Caveat on 27 September 2019, 14 November 2019, and 3 December 2019, and on 6 February 2020, the Court extended the Caveat until further order.

390. In the meantime, all of the parties' claims for substantive relief have been heard by the Court and part of the purpose of these reasons for judgment is to determine those claims on a final basis. While some of the issues arise under the various notices of motion filed by the parties, including Ms Dang's claim for the summary dismissal of the Nguyens' amended notice of motion in the 2017 proceedings, the Court also has before it Ms Dang's claims for declarations in prayers 2 to 5 of her summons establishing her estate or interest in the Smithfield property, as well as her claim in prayer 11 for an order that the Nguyens withdraw their application under s 105(2) of the Real Property Act to have the second writ recorded on the Register.

391. For the reasons I have given above, I have found that Ms Dang is not the beneficial owner of the Smithfield property on the basis that it is held on her behalf by Mr Hoang as a constructive trustee. I have also found that Ms Dang is not entitled to an equitable lien or charge on the basis of an oral agreement made by her with Mr Hoang on 22 December 2014.

392. While I have held that it may be that Ms Dang is entitled to be subrogated to the NAB mortgage over the Smithfield property to recover payments that she has made on behalf of Mr Hoang against the mortgage, that equitable right will not be exercised by her until the mortgage has been entirely repaid. That is an event that may not occur until the Smithfield property has been sold. In those circumstances, it is probably correct to describe Ms Dang's interest in the Smithfield property, if it exists, as a "mere equity" that falls short at this stage of an equitable interest. A caveat cannot be lodged to protect such a mere equity: see for example Chetcuti v Scarf [2000] NSWSC 637; (2000) 10 BPR 18,193 and Global Minerals Australia Pty Ltd v Valerica Pty Ltd [2000] NSWSC 1143; (2000) 10 BPR 18,463.

393. Notwithstanding that the Nguyens lack standing to bring an interlocutory application under s 74MA of the Real Property Act for an order that the Caveat be withdrawn, they have established in final proceedings that Ms Dang does not presently have an estate or interest in the Smithfield property. As the second writ has expired, it will now be necessary for the Nguyens to be issued with a new writ. Ms Dang can no longer prevent them from obtaining registration of the new writ. However, the continuation of the Caveat with its residual effect will deprive the Nguyens of the benefit of their statutory entitlement to recover their judgment debt by means of the execution of the new writ by the Sheriff. If Ms Dang does not withdraw her baseless Caveat of her own accord, her conduct will deprive the Nguyens of the enjoyment of their lawful entitlement without legitimate cause.

394. In Iaconis v Lazar [2007] NSWSC 1103, Young CJ in Eq (as his Honour then was) said, at [22]: “A caveat should only remain on the title pending the application by the person claiming the equitable or other interest to commence a suit for specific performance or otherwise to vindicate that equitable interest”. As White J (as his Honour then was) noted with apparent approval in Summit Acceptance Pty Ltd v Wild [2011] NSWSC 659 at [19], Young CJ in Eq “expressed general agreement with the submission of counsel in that case that the scheme of the Real Property Act is that caveats are temporary”. As Hallen AsJ (as his Honour then was) said in Abou-Hamad v Darwish [2012] NSWSC 231:

[48] In Break Fast Investments Pty Ltd v C & O Voukidis Pty Ltd [2011] NSWSC 871, Black J after referring to Iaconis v Lazar and Wu v Dardaneliotou at [3], said:

[4] I do not regard those cases as necessarily requiring that the application for substantive relief be made in the same proceedings as those in which orders extending the caveat are sought.

[49] However, his Honour continued at [4]:

The policy underlying those decisions, namely that a caveat should only remain on the title pending an application for substantive relief, is satisfied where other proceedings exist which will determine the caveator’s entitlement to that relief.

[50] I respectfully agree with his Honour’s statements.

395. I also respectfully agree with these judicial explanations of the essential nature of caveats under the Real Property Act. Undue focus on the explicit terms of Pt 7A Div 3 of the Real Property Act dealing primarily with caveats against dealings may create the false impression that no order can be made in respect of a caveat unless authorised by the provisions. However, that impression misjudges both the essentially interlocutory administrative and judicial processes created by the provisions and the essential nature of caveats, as being temporary statutory creations intended to exist only until the time that a final determination is made as to the existence of the estate or interest in the land claimed by the caveator. In my view, the proposition that the relevant provisions of the Real Property Act constitute a complete code is correct in relation to the operation of caveats in respect of their essential existence as temporary creations. It does not follow that caveators can maintain baseless caveats after a party in final proceedings against the caveator has established that the protected estate or interest does not exist, just because the successful party was not entitled to commence an interlocutory application for the withdrawal of the caveat under s 74MA of the Real Property Act.

395. On the contrary, successful parties in the position of the Nguyens are entitled to an injunction requiring Ms Dang to withdraw the Caveat. As explained above, the continuing recording of the Caveat in the Register will deprive the Nguyens of their entitlement to cause the new writ to be executed without lawful cause. This result gives the Nguyens an entitlement to the issue of an injunction to remove the impediment on the execution of the new writ, within the principle annunciated by Lord Brandon of Oakbrook, with the agreement of the other Law Lords, in South Carolina Insurance Co v Assurantie Maatschappij De Zeven Provincien NV [1987] AC 24 at 40, being “when one party to an action can show that the other party has either invaded, or threatens to invade a legal or equitable right of the former for the enforcement of which the latter is amenable to the jurisdiction of the court”. Although the Nguyens, as parties entitled to the issue of a new writ, do not have an interest in the Smithfield property that would conventionally be described as a proprietary interest, they do have a right to be issued and to register a writ on the title to the land, which will give them the special rights described by Kitto J in Hall v Richards in the extract from his Honour’s judgment that is set out above. I consider that those rights are capable of being protected by injunction, and that the Court is not powerless to protect the Nguyens from the consequences of the maintenance of the invalid Caveat: see the discussion by the learned editors of Meagher, Gummow and Lehane’s Equity Doctrines & Remedies (supra) at [21-330] and [21-335] of the question of whether it remains necessary for the interest sought to be protected by an injunction to be in the nature of a proprietary interest.

396. Consequently, the Nguyens are entitled to an injunction requiring Ms Dang to withdraw the Caveat and to not lodge another caveat that interferes with the entitlement of the Nguyens to register a new writ on the title to the Smithfield property or the ability of the Sheriff to execute the writ in accordance with her usual practice.

Validity of lapsing notice

398. The second argument put by Ms Dang is that the Registrar-General improperly issued the lapsing notice under s 74I of the Real Property Act because the second writ had in fact been registered, so it was not the case that registration of that writ was prohibited by the Caveat.

399. I reject this argument, because I am not satisfied that Ms Dang has established the factual basis to support it. It is doubtful, in any event, whether a finding that the lapsing notice had been wrongly issued by the Registrar-General would have the effect for which Ms Dang contends. Ms Dang did not take proceedings to challenge the validity of the lapsing notice before she commenced the 2019 proceedings. Although she sought an order in her summons that the lapsing notice was wrongly issued, she nonetheless made an application under s 74K of the Real Property Act as if it had been validly issued. She therefore commenced proceedings in this Court that could only be commenced if there was a valid lapsing notice. It is at least doubtful that the Court should in the circumstances contemplate the making of an order predicated on the conclusion that a precondition to the commencement of the proceedings had not been satisfied.

400. However, the parties did not address this question and, for the reasons that follow, it is not necessary that it be considered further by the Court.

401. In the present case, the issue by the Registrar-General of the lapsing notice is based upon the Nguyens' application for the recording on the Register of the second writ. In form, the second writ appears to be a new writ rather than a renewal of the first writ.

402. Baalman and Wells, Land Titles Office Practice (Lawbook Co, 1998, 5th ed., looseleaf) says at [570.300]:

… In order for the Registrar-General to record a renewal of a writ, an Application to Record Writ (Form 09W) must be lodged together with the renewed writ (or a copy of the renewed writ certified by the Sheriff to be a true copy). If a Request (Form 11R) is lodged together with a copy of an order of court renewing the writ, this will not be sufficient. Only an Application to Record Writ (Form 09W) will result in the renewed writ being recorded.

403. I have referred above, when setting out the history of these proceedings, to the application made by the Nguyens' solicitor on 25 June 2019 for the registration of the second writ. That application was made by Request (Form 11R). There is no evidence that the Nguyens lodged an Application to Cancel Recording of Writ (Form 09WW) or an Application to Record Writ (Form 09W).

404. The statement of the Registrar-General's practice referred to above would suggest that the Registrar-General may have issued a Requisition to the Nguyens' solicitor, before the Registrar-General would record the second writ in the Register (putting aside the fact that the Caveat prohibited the recording of the second writ).

405. As I have already mentioned, there is no evidence of the response of the Registrar-General to the Nguyens' application.

406. There is also no evidence that the Registrar-General actually recorded the second writ in the Register in breach of s 105(5) of the Real Property Act. It is improbable that the Registrar-General would have taken that step.

407. For the reasons that I have given above when discussing the entries in the title search for the Smithfield property, I do not interpret them as meaning that the Registrar-General recorded the second writ in the Register before the lapsing notice was issued.

408. Consequently, Ms Dang is not entitled to the declaration that she seeks in prayer 5 of the summons and statement of claim.

The Nguyens’ 9 December 2020 notice of motion

409. On 9 December 2020, the Nguyens filed a notice of motion without the leave of the Court. The respondents to the notice of motion are the Sheriff and a firm of solicitors by the name of Daniela Fazio Lawyers Pty Ltd (Daniela Fazio). The notice of motion stated that it was listed for determination at the same time and date as I delivered judgment in these proceedings, but no such listing was made by the Court.

410. The notice of motion appears to assume that the Court would find that Ms Dang had no interest in the Smithfield property, and by prayer 1 sought various orders to effect the removal of the Caveat. The notice of motion also sought orders for the renewal of the second writ and that it be deemed to have the same force and effect as the first writ. An order was sought against the Registrar-General that the first writ be cancelled and the renewed second writ be registered “in the same position and with the same priority as that of the [first writ]”.

411. Orders were then sought against Daniela Fazio. These orders related to a caveat that Daniela Fazio had apparently lodged against the title to the Smithfield property to protect an unregistered charge over that property that Mr Hoang had granted to Daniela Fazio to secure an obligation that he owed for the payment of legal fees. The Nguyens sought an order that Daniela Fazio withdraw its caveat within seven days.

412. The Nguyens then sought orders against the Sheriff under UCPR r 39.5 and ss 114 and 135 of the Civil Procedure Act (NSW) 2005 that authorised and required the Sheriff to sell the Smithfield property in the execution of the renewed writ, and to pay the net proceeds of sale, after payment of all proper fees and disbursements and the discharge of the registered mortgage over the Smithfield property, first to the paternal Nguyen, secondly to Daniela Fazio, and thirdly to Mr Hoang.

413. In order to ensure that the notice of motion was dealt with properly, I arranged for it to be listed for directions before me on 4 March 2021. On that occasion, Daniela Fazio was represented by counsel. I made directions that required the Nguyens to advise Daniela Fazio of the basis of their claim against it in the notice of motion and stood the notice of motion over for further directions on 1 April 2021.

414. On that date, there was no appearance for Daniela Fazio, but counsel for the Nguyens informed the Court that consent short minutes of order had been agreed between the Nguyens and Daniela Fazio. Those orders, if made, would have involved the withdrawal of the notice of motion, the notation of a consent by Daniela Fazio to the recording of the renewed writ against the title to the Smithfield property, and also the notation of an agreement between the Nguyens and Daniela Fazio that, if the Nguyens succeeded in these proceedings and the Court ordered the Registrar-General to renew the writ and the Sheriff to sell the Smithfield property, a specified amount would first be paid out of the net proceeds of sale to Daniela Fazio, the legal costs of the Nguyens in enforcing the judgment in the 2017 proceedings would then be paid, and any residual amount would be applied in accordance with the final orders of the Court in these proceedings.

415. After some consideration of the consent short minutes of order, it became apparent that the solicitor for Ms Dang had not been given adequate notice of the agreement between the Nguyens and Daniela Fazio, and that Ms Dang was entitled to make submissions as to whether the orders should be made as they may affect her interests. I made a direction that permitted Ms Dang to advise my Associate as to whether she objected to the orders being made, in which event I would relist the notice of motion to deal with any dispute.

416. On 8 April 2021, my Associate was advised by the solicitor for Ms Dang that Ms Dang did have objections to some of the orders in the consent short minutes of order, and wished to submit that if some orders were made then they should be made on a particular basis.

417. In my view, the publication of these reasons for judgment will have the effect that it is no longer necessary for the Court to deal with the notice of motion in its present form or to resolve the issues raised on behalf of Ms Dang, without all issues being considered in the light of the conclusions reached in these reasons.

418. It will be appropriate, however, for the Court to make a number of observations concerning the notice of motion. First, the Court cannot make any order concerning the caveat lodged by Daniela Fazio in the absence of Mr Hoang. He has an obvious interest in any order made concerning the fate of that caveat. The Court should also not note any agreement between the Nguyens and Daniela Fazio concerning the priority of payments from the net proceeds of sale of the Smithfield property. Such an agreement will be of no effect if it does not bind Mr Hoang and the Sheriff, and give the Sheriff proper protection if she complies with it.

419. Furthermore, there is a serious question about the appropriateness of the Court making the types of orders sought in the notice of motion against the Registrar-General and the Sheriff. Ordinarily, the appropriate course would be for the parties to consider the effect of these reasons, and if it appeared to be convenient to do so, to discuss with the Registrar-General and the Sheriff the consequences of the orders that may be made and to explore whether they are prepared to consent to orders that may be appropriate. The Court is unlikely to usurp the right of the Registrar-General and the Sheriff to decide how they should perform their duties.

420. Neither the Nguyens nor Ms Dang have been completely successful in these proceedings. Complicated questions may remain to be resolved. The practical outcome of the proceedings is likely to depend in large part on the market value of the Smithfield property and the amount of the outstanding debt owed to the registered mortgagee. The Court can only urge the parties to approach the future conduct of these proceedings on a commercially sensible basis, with the object of minimising the risk of the multiplication of expensive and futile disputes.

Orders

421. It will be necessary for the parties to consider these reasons for judgment for the purpose of making submissions to the Court as to the orders that are appropriate to give effect to the reasons, remembering that it will now be necessary for the Court to make an order for the issue of a new writ or for the renewal of some earlier writ. The parties’ legal representatives should discuss the orders to be made and submit agreed or contending short minutes of order to my Associate. That should be done within 21 days of the publication of these reasons for judgment.

422. It will also be necessary for the Court to hear the parties on the issue of the costs of the two proceedings. The parties should submit outline of submissions on this issue within the same 21 days.

423. I will then decide whether it is necessary for a further oral hearing to take place, and if so, a time will be fixed by arrangement between my Associate and the legal representatives of the parties.

424. I direct the Nguyens to cause these reasons for judgment to be served on the Sheriff and the Registrar-General within 7 days. Both are invited, but not required, to deliver to my Associate and to serve on the parties any submissions that they may wish to make concerning the orders that it will be appropriate for the Court to make to give effect to the judgment. Such submissions should be provided within the 21 day period referred to above.

425. I also direct the Nguyens to cause these reasons for judgment to be served on Daniela Fazio within 7 days. Although Daniela Fazio has probably not properly been joined as a party to these proceedings, it has a sufficient interest, given what I have said about the Nguyens’ 9 December notice of motion, to be given a copy of the judgment for the purpose of proper steps being taken to deal with the caveat lodged by Daniela Fazio, as well as the enforcement of any rights claimed by that company. For that purpose, Daniela Fazio is invited to provide to my Associate brief submissions concerning the future course of these proceedings within the 21 day period to which I have referred.

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Endnote

Decision last updated: 24 June 2021