O'Hara, Dennis James v Williams, Donald Raymond
[1995] FCA 933
•21 Nov 1995
CATCHWORDS
CAVEAT - Application to remove caveats to allow completion of contract of purchase - whether statutory right to a remedy under the Trade Practices Act 1974 (Cth) gave rise to sufficient interest in land to support caveat - sufficient interest assumed - balance of convenience in favour of removing caveats on conditions.
MAREVA INJUNCTION - Application for Mareva injunction to restrain dealings in lands pending judgment in principal proceedings - unnecessary to decide.
Trade Practices Act 1974 (Cth) s.87
Land Title Act 1994 (Qld) s.128(2)
Re Andel Pty Ltd and Century Car Care Pty Ltd (Unreported, Federal Court of Australia, Pincus J, Brisbane, 16 February 1989) - Foll.
In Re The Caveat of Edith Henderson; Ex parte Harburg (Unreported, Queensland Court of Appeal, 12 July 1993) - Refd.
Ex parte Goodlet & Smith Investments Pty Ltd [1983] 2 Qd.R. 792 - Cited
Re Burman's Caveat [1994] 1 Qd.R. 123 (CA) - Appl.
Munchies Management Pty Ltd v. Belperio (1988) 84 ALR 700 (FC) - Refd.
Tomlinson and Ors. v. Cut Price Deli Pty Ltd (Unreported, Federal Court of Australia, Kiefel J. 23 June 1995) - Cited
Dennis James O'Hara and Shirley Christine Breuer v. Donald Raymond Williams, Betty Sarah Williams, D & B Williams Enterprises Pty Ltd and National Australia Bank Limited
No. QG91 of 1993
Cooper J., Brisbane, 21 November 1995
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No. QG91 of 1993
BETWEEN:
DENNIS JAMES O'HARA and
SHIRLEY CHRISTINE BREUER
Applicants
AND:
DONALD RAYMOND WILLIAMS
First Respondent
AND:
BETTY SARAH WILLIAMS
Second Respondent
AND:
D & B WILLIAMS ENTERPRISES PTY LTD
Third Respondent
AND:
NATIONAL AUSTRALIA BANK LIMITED
Fourth Respondent
JUDGE MAKING ORDER: Cooper J
WHERE MADE: Brisbane
DATE OF ORDER: 21 November 1995
MINUTES OF ORDER
FORMAL UNDERTAKING AND ORDERS
UPON the first, second and third respondents filing in court an undertaking in writing to the court that they will not, pending judgment in the principal application, deal with the lands described as Lot 33 on RP 34733, County Stanley, Parish Toombul, Volume 2465 Folio 64, and Lot 27 on RP 142021, County Stanley, Parish Tingalpa, Volume 5203 Folio 24 ("the said lands") or the proceeds of sale thereof other than for the purpose of completing the purchase of a property and business known as the "Gregory Motel" at Cnr Gold Coast Highway and Ikkina Road, Burleigh Heads, Queensland, Lot 210 on Registered Plan 96265, County Ward, Parish
Mudgeeraba, Volume 6770 Folio 83) and not to dispose of or encumber the "Gregory Motel" or any share in the share capital of the third respondent beyond the granting of such security to a lending authority as is necessary to secure funds to complete the purchase of the "Gregory Motel"
THE COURT ORDERS THAT:
Caveat Number L546038D and Caveat Number L546039B lodged by the applicants or either of them over the said lands be removed.
The costs of the parties on each notice of motion be the costs of that party in the proceedings.
Each notice of motion be otherwise dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No. QG91 of 1993
BETWEEN:
DENNIS JAMES O'HARA and
SHIRLEY CHRISTINE BREUER
Applicants
AND:
DONALD RAYMOND WILLIAMS
First Respondent
AND:
BETTY SARAH WILLIAMS
Second Respondent
AND:
D & B WILLIAMS ENTERPRISES PTY LTD
Third Respondent
AND:
NATIONAL AUSTRALIA BANK LIMITED
Fourth Respondent
CORAM: Cooper J
PLACE: Brisbane
DATE: 21 November 1995
REASONS FOR JUDGMENT
The first and second respondents ("the Williams") are the registered proprietors of a house property at 6 Marberry Street, Manly West. The third respondent ("Williams Enterprises") is the registered proprietor of a house property at 1480 Sandgate Road, Nundah. These two properties were acquired from the first-named applicant, Mr O'Hara, in respect of the Manly property and from the second-named applicant, Ms Breuer, in respect of the Nundah property as part of a property transaction involving the
purchase of the "Kingaroy Motel" by Mr O'Hara and Ms Breuer from Williams Enterprises.
On 9 June 1993 the applicants filed an application seeking the following relief :-
"1.The Applicants seek orders pursuant to Section 87 of the Trade Practices Act:
(a)that the Contracts for the purchase of the motel and the sale of the two houses be declared void or rescinded ab initio or at some later date as determined by the Court and that all necessary consequential orders be made including:
(i)that the motel be re-transferred to the Third Respondent;
(ii)that the two houses be re-transferred to the respective Applicants;
(iii)that the Third Respondent refund to the Fourth Respondent the balance purchase price;
(iv)that the Mortgage by the Applicants to the Fourth Respondent be declared void or rescinded ab initio or at some later date or varied as the Court thinks fit on and from such date as the Court orders.
(b)Alternatively, that the Contract for the sale of the motel be varied on and from 27th November 1991 by substituting for the purchase price therein mentioned some lesser amount representing the real value of the motel as determined by the Court and that all necessary consequential orders be made including orders varying the mortgage over the motel in favour of the Fourth Respondent.
(c)Such further or other orders as the court shall seem meet.
2. Further, or alternatively, the Applicants claim against the Respondents damages pursuant to Section 82 of the Trade Practices Act and damages for negligent representations."
On 30 June 1993 the applicants lodged caveats on the Manly and Nundah properties. The caveator in relation to the Nundah property was Shirley Christine Breuer who claimed the following interest :-
"(5) In the land above described on the following grounds - Under a contract for sale dated 27th November 1991 and completed 6th December 1992 made between the caveator as vendor and D & B Williams Enterprises Pty Ltd as purchasers which the caveator was induced to enter into under misrepresentation and is seeking to have declared void ab initio."
The caveator in relation to the Manly property was Dennis James O'Hara who claimed the following interest :-
"(5) In the land above described on the following grounds - under a contract for sale dated 27th November, 1991 and completed 6th December 1992 made between the caveator as vendor and Donald Raymond & Betty Sarah Williams as purchasers which the caveator was induced to enter into under misrepresentations and is seeking to have declared void ab initio."
The fourth respondent ("the bank") appointed receivers and managers to the "Kingaroy Motel" in consequence of the applicants' default under the mortgage security over the motel held by the bank. The receivers and managers sold the motel in October 1994.
The applicants did not proceed with their claim against the bank and proceeded to trial against the Williams and Williams Enterprises.
At the commencement of the trial the applicants sought and were granted leave to amend the application and statement of claim in terms of paragraphs (A), (B) and (C) of a letter dated 19 June 1995 which stated :-
"(A)Amend the Application by inserting after the existing paragraph 2 a paragraph 3 as follows :-
`3.The Applicants also claim interest on damages pursuant to
Section 51A of the Federal Court of Australia Act 1976.'
(B)Amend the Statement of Claim by adding after the existing paragraph 22 a paragraph 23 in like terms to that proposed to the Application above.
(C)Amend paragraph 7 of the Applicants' Statement of Claim by deleting the year 1992 and substituting the year 1991. This amendment accords with the agreed facts and is consistent with paragraph 14(a) of the said Statement of Claim."
Their counsel said at that time :-
"MR McHUGH: If I might please take you to the application, your Honour? Your Honour, your Honour will see in paragraph 1 that my clients sought in paragraph 1(a) rescission of the contract that they entered into in respect of the purchase of Motel Kingaroy. It is a subject matter of the application. They settled the agreement on 6 December 1991. They had sought by their application filed in June 1993 to rescind that agreement, but circumstances overtook them, your Honour, such that receivers and managers of the fourth respondent took up occupation or entered into possession in March of 1994 and finally sold - they entered in March 1994, your Honour; I think it is the 10th. And the motel was finally sold by the receivers and managers in October 1994.
Your Honour, we are getting full particulars of that sale. The bank is trying to get them together now as to the states of my clients indebtedness as at the date of completion, etcetera. Historically, the banker had told - and evidence will be adduced in this regard - had told my clients that in March of 1993 that they were to organise an orderly disposal of the motel by June of 1993, otherwise the powers in the security documents held by the bankers to appoint the receivers and managers would be implemented, and as things transpired, as I have told your Honour, the receivers and managers did not get to go in until the March of 1994 because they were resisted by my clients. And the evidence will be that my clients were resisting in the hope of being able to rescind the contract and get back two houses which went over to the vendors of the motel in partial consideration for the purchase price which was $525,000.
That is why that paragraph is still relevant, your Honour, notwithstanding no relief is claimed there. The relief now claimed, your Honour, is for damages under section 82 and section 87. That is the only relief claim, your Honour. I will take you through the application, if I may. Your Honour, of course, as I have already told you, it is only a damages claim so most of the application is not really relevant except if I can go to paragraph 2 of it on page 3, your Honour, to point out that no damages are claimed against the first, second and third respondent for negligent misrepresentation. So the only claim is for damages under the Trade Practices Act for breaches of section 52."
(Emphasis added)
The trial was conducted on that basis. At the conclusion of his submissions counsel for the respondents asked for the removal of the caveat over the Nundah property. Counsel for the applicants said :-
"MR McHUGH: ... From day 1, my clients were ruined. And then they are hanging on. When they finally get advice in June of `93 with their application, they want rescission. They cannot get rescission because the bank is driving them to get out so it can recover its money. So rescission escapes them.
This is an unusual case where they are flattened immediately and, with no other resources to try to mitigate their losses - it is on the contract that they were borrowing the 350,000. It is not as if the respondents did not know that they were into the banker for a lot of money. They signed the contract with 350 from the National Bank on it. They cannot get relief now. My submission is that everything that naturally flows now, it being an unusual case, like Gibbs J in Gould v Vagelas adopting that Ogle case - I am after losses. I am not after lost profits so much, I am after losses, because was a victim of section 52 conduct.
So it is not really a case - and, with respect, your Honour, how my damages claim is framed is under section 82 and section 87(2)(d) of the act, you can compensate my clients for their losses and damage. They are not restricted to damages like in a deceit case. This is wider. And although there is nothing on the pleadings or on the case, but on the caveat point my learned friend raised, you could order a re-conveyance. It is no surprise to the other side because it is on the application. It is just that I have not run the case on a re-conveyance of the houses. You could do it. That is the job, with respect. Once the complained of conduct is found, my respectful submission is, the court is then obliged to do justice under the broad relief that can be granted under section 87.
.....
MR HANLON: It is my submission he has no basis to maintain the caveat, in that he had amended his pleadings to retract that ground of remedy.
MR McHUGH: No, I have not taken it out. I have not taken it out. It is still there. I ran it on damages, but it is still there. But, of course, if one goes back right into it, your Honour, how we lost rescission to end up with damages is because the bank had took [sic] it because of the position we were forced into by the respondents. We do not want to be denied the fruits of our judgment either, your Honour. That is some security. I have made a submission in effect that there has been dishonesty in the other case. I mean, one can reasonably infer that there might be some - - -".
The Williams and Williams Enterprises have filed a notice of motion seeking removal of the caveats on the ground that the applicants have no sufficient interest in the lands to sustain the caveats at this time. The applicants have filed a separate notice of motion seeking that the respondents be restrained from dealing with the properties pending judgment in the proceedings in the event that the caveats are ordered to be removed. The Williams depose that they need to sell or borrow against the property to complete the purchase of the "Gregory Motel" on the Gold Coast. Williams Enterprises is the purchaser of the motel under a cash contract the settlement date of which has been extended to 6 January 1996. Williams Enterprises was, so it is deposed, unable to settle on the contractual due date because of the caveats on the Nundah and Manly properties.
In the outline of argument filed by the applicants the following concession was made :-
"2(h)It is conceded on the part of the Applicants that at the said trial they abandoned their claim for rescission, but on the ground that the mortgagee had taken possession of `Motel Kingaroy' and had sold it, thus making restitution between the parties herein impossible."
All parties are agreed that this court has power to order removal of caveats on land titles now held under the Land Title Act 1994 (Qld) for the reasons
expressed by Pincus J in Re Andel Pty Ltd and Century Car Care Pty Ltd (Unreported, Federal Court of Australia, Brisbane, 16 February 1989) and I am also satisfied that I have such a power.
Although the applicants do not seek reconveyance of the properties on the basis of rescission of the three related contracts for the sale of the two house properties and the "Kingaroy Motel", they submitted that it remained open to the court to order reconveyance in specie as part of a remedial order made under s.87 of the Trade Practices Act 1974 (Cth). It was submitted that the right to relief of this nature would be protected by injunction either in equity or under the Trade Practices Act.
The court was referred to numerous authorities to support the submission that it is now sufficient to support a caveatable interest that a claimant has an interest in land which, although insufficient to entitle the claimant to a full decree of specific performance, is such an interest as will entitle the holder to equitable relief by way of injunction or other remedy to protect the interest (In Re The Caveat of Edith Henderson; Ex parte Harburg (Unreported, Queensland Court of Appeal, 12 July 1993). It was submitted that the applicants' right to relief under s.87 of the Trade Practices Act in the form of reconveyance extended to this expanded view of what can constitute an equitable interest in land. I doubt that this is so. A statutory right to a remedy is different in kind to an equitable interest in land or an equity in respect of land enforceable by injunction (see Ex parte Goodlet & Smith Investments Pty Ltd [1983] 2 Qd.R. 792 at 793-794). However it is unnecessary to decide the issue.
It may be assumed for the purpose of these applications that the applicants have a sufficient interest to support the caveats. On an application for their removal the law in Queensland is that the issue with respect to the caveat is akin to that relating to an interlocutory injunction (Re Burman's Caveat [1994] 1 Qd.R. 123 (CA) at 127-128). One of the issues to be determined therefore is whether or not the balance of convenience favours the removal of the caveats.
The applicants do not offer any worthwhile undertaking as to damages; they are impecunious. That impecuniosity, they contended, was brought about by the conduct of the respondents, which, it was contended, led the applicants to acquire the "Kingaroy Motel" and to part with their interests in the Manly and Nundah properties. The applicants submitted that the respondents have not fully disclosed their assets and have not explained whether the substantial cash sum which accompanied the conveyance of the house properties has been dissipated or where it has been spent. The applicants submitted that the house properties, either by reconveyance in specie or as an asset against which execution can be levied to satisfy any damages judgment, represented the only real prospect of the applicants obtaining effective compensation in the event that they are successful in the principal proceedings.
In my view, without deciding the issue, the prospect of reconveyance of the house properties without the making of the necessary credits and adjustments as on a rescission of the original sale contract (see Munchies Management Pty Ltd v. Belperio (1988) 84 ALR 700 (FC) at 712-717) is remote. This is because the trial was not conducted on a basis which would allow this to be done nor did the applicants seek the taking of accounts and inquiries to enable such adjustments to be made. Further, the applicants have had the proceeds of the sale of the motel credited against their indebtedness to the bank which included money advanced to them to pay out mortgages which existed on the house properties over which the caveats were lodged. This further advance from the bank was necessary to enable the applicants to convey a clear title to the properties.
If the Williams and Williams Enterprises cannot deal with the properties, there is a real risk of default under the purchase contract for the "Gregory Motel". This would result in forfeiture of the deposit paid and/or would expose Williams Enterprises to the risk of substantial damages for breach of the unconditional contract of sale. The absence of a worthwhile undertaking as to damages would leave the Williams and Williams Enterprises without an effective remedy if they are successful in their defence of the principal proceedings.
In my opinion, the balance of convenience lies in favour of the removal of the caveats to enable the house properties to be dealt with in order that the purchase of the "Gregory Motel" may be completed. The substance of such rights as the applicants have, if any, to relief by an order for reconveyance of the properties or to proceed against them by execution to enforce an award of damages can be protected if there are available other substantial assets to execute against. The removal of caveats may be subject to conditions (Land Title Act 1994 s.127(2)). In the present case the interests of the applicants are sufficiently protected by conditioning the removal of the caveats upon the Williams and Williams Enterprises filing a written undertaking to the court pending
judgment on the principal application not to deal with the properties or the proceeds of sale of the properties for any purpose other than to complete the purchase of the "Gregory Motel" and not to dispose of or encumber the "Gregory Motel", or any share in the share capital of Williams Enterprises beyond the granting of such security to a lending authority as is necessary to secure funds to complete the purchase of the "Gregory Motel".
Coming to the view which I have it is unnecessary to consider whether the applicants have made out the conditions necessary for the grant of a Mareva injunction in this court (see Tomlinson and Ors. v. Cut Price Deli Pty Ltd, Unreported, Federal Court of Australia, Kiefel J, 23 June 1995).
As the applications were brought to deal with the status quo pending judgment in the principal application, the costs of all parties on each motion will be that party's costs in the proceedings.
FORMAL UNDERTAKING AND ORDERS
UPON the first, second and third respondents filing in court an undertaking in writing to the court that they will not, pending judgment in the principal application, deal with the lands described as Lot 33 on RP 34733, County Stanley, Parish Toombul, Volume 2465 Folio 64, and Lot 27 on RP 142021, County Stanley, Parish Tingalpa, Volume 5203 Folio 24 ("the said lands") or the proceeds of sale thereof other than for the purpose of completing the purchase of a property and business known as the "Gregory Motel" at Cnr Gold Coast Highway and Ikkina Road, Burleigh Heads,
Queensland, Lot 210 on Registered Plan 96265, County Ward, Parish Mudgeeraba, Volume 6770 Folio 83) and not to dispose of or encumber the "Gregory Motel" or any share in the share capital of the third respondent beyond the granting of such security to a lending authority as is necessary to secure funds to complete the purchase of the "Gregory Motel"
THE COURT ORDERS THAT:
Caveat Number L546038D and Caveat Number L546039B lodged by the applicants or either of them over the said lands be removed.
The costs of the parties on each notice of motion be the costs of that party in the proceedings.
Each notice of motion be otherwise dismissed.
I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.
Date:21 November, 1995
Associate
Counsel for the Applicants: Mr P McHugh
Solicitors for the Applicants: Nicol Robinson & Kidd
Counsel for the First Second
and Third Respondents: Mr P Hanlon and Mr J Moore
Solicitors for the First Second
and Third Respondents: Bundesen & Associates
Date of Hearing: 4 October 1995
Place of Hearing: Brisbane
Date of Judgment: 21 November 1995
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