Pakenham Valley Pty Ltd v Firstline Homes Pty Ltd

[2010] VSC 482

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
PRACTICE COURT

No. 5211 of 2010

PAKENHAM VALLEY PTY LTD	Plaintiff
v
FIRSTLINE HOMES PTY LTD & REGISTRAR OF TITLES	Defendants

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	15 October 2010
DATE OF JUDGMENT:	15 October 2010
CASE MAY BE CITED AS:	Pakenham Valley Pty Ltd v Firstline Homes Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2010] VSC 482

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PROPERTY LAW – Removal of caveat – No serious question to be tried – Balance of convenience - Transfer of Land Act 1958 s 90(3)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms S Burchell	Russell Kennedy
For the Firstnamed Defendant	No appearance
For the Secondnamed Defendant	No appearance

HIS HONOUR:

1. This is an application pursuant to s 90(3) of the Transfer of Land Act 1958 for an order that the Registrar of Titles remove a caveat from the title to land particularised in the originating motion and located at Lakeside, Pakenham.

1. The second defendant has advised that it does not oppose the terms of the proposed order and will abide by the Court's decision as to the merits.

1. The plaintiff is the registered proprietor of the land and sold it to the first defendant on 12 December 2009.  Subsequently, the first defendant nominated a third party as purchaser by way of documentation delivered to the vendor's solicitors on or about 20 April 2010. 

1. It seems that the initial version of that documentation may have been the subject of subsequent amendment, but for present purposes this complication is essentially irrelevant.

1. Settlement of the contract of sale became due on 13 May 2010.  On 24 May 2010, the plaintiff served a notice of rescission requiring completion of the contract within 14 days.  The contract was not completed within the time specified.

1. The first defendant had however lodged a caveat on 6 May 2010 claiming ownership of the land pursuant to the contract of sale.  Following the expiry of the notice of rescission, the plaintiff's solicitors requested the removal of the caveat but the first defendant has refused to remove it.

1. In order to uphold the caveat before me, the caveator must show there is a serious question to be tried as to its caveatable interest and that the balance of convenience favours the maintenance of the caveat.[1] 

   [1]Goldstraw v Goldstraw [2002] VSC 491 (Unreported, Dodds-Streeton J, 14 November 2002), [30].

1. I have permitted Mr Hans Eric Richmond, a director of the first defendant, to address the Court this afternoon because this is, in substance, a relatively small claim and it is desirable in the interests of justice that he be given the opportunity to be heard.

1. Mr Richmond has taken three objections to the effect of the notice of rescission.  First, he says that it misstates the date of the nomination of the third party purchaser.  I am satisfied that it in fact reflects the date contained in a nomination form given by the first defendant to the plaintiff's solicitors but in any event the correctness of this recital is not material to the rights with which I am concerned.

1. Secondly, Mr Richmond contends that the notice of rescission was sent to the first defendant at the wrong address.  The address to which it was sent was in fact the address stated in the contract and the registered office of the first defendant at the relevant time.  Further, a notice was sent to the first defendant's conveyancer at the address which Mr Richmond says was the correct address and his own documentation shows that the notice was received by the first defendant two days after it was sent.  There is nothing in this point.  Notice was given both in strict compliance with the contract and also effectively as a matter of fact.

1. Thirdly, it is said that the first defendant was willing to perform the contract during the period of the notice of rescission and had indicated a willingness to do so prior to the sending of the notice of rescission.  In particular, the plaintiff's solicitors had been emailed a copy of a communication which stated in part:

The named purchaser appears to be confident that the matter will be settled by Firstline Turnkey Homes Pty Ltd.[2]

[2]Firstline Homes Pty Ltd was formerly known as Firstline Turnkey Homes Pty Ltd.

1. This email was dated 24 May 2010.

1. I am satisfied that no communication of willingness to settle the contract was in fact made in response to the notice of rescission during the period to which it related.  Mr Richmond's affidavit evidence does not refer to such communication and the plaintiff's solicitor’s affidavit discloses the course of communications with the first defendant and also shows no relevant communication was made.

1. Accordingly, I am not satisfied that there was a response to the notice of rescission which could deprive it of legal effect.  Likewise, there was no prior communication on the part of the plaintiff or its solicitors which could be said to somehow disentitle it from relying on the notice of rescission and the plain terms of that notice.  Accordingly, I am not satisfied that there is a seriously arguable case that the first defendant has a caveatable interest in the land.  I am not satisfied that there is a serious question to be tried as to the first defendant's caveatable interest.

1. Further, and in any event, I am satisfied that the balance of convenience favours the discharge of the caveat.  Both the plaintiff and the first defendant are commercial dealers in land.  The contract price was only $125,000.  If, contrary to the strong view that I have formed, the first defendant has contractual rights which are arguable, then it seems to me that there is no basis on which to conclude that those rights could not be satisfactorily compensated by a way of an award of damages.  In particular, this is not a situation where the land in issue was purchased for a purpose of special use by the purchaser.  Essentially the land was stock in trade from the point of view of both the plaintiff and the first defendant.  The balance of convenience favours releasing the plaintiff from continuing holding costs.  It favours the facilitation of the sale of the land.  Any claim and counterclaim that may hereafter be made as between the parties is a matter properly suited to the jurisdiction of the Magistrates' Court.  Conversely, the dispute is not an appropriate one for this Court and does not raise an issue on the balance of convenience which justifies the continuation of this proceeding.

1. Accordingly, I propose to make an order to the effect of that sought in the summons.

Costs

1. In my view, costs should follow the event and I will order that the first defendant pay the plaintiff's costs including reserved costs.  Ms Burchell also seeks an order for costs on a special basis from 30 September 2010 and relies upon a Calderbank letter of that date which is exhibited to Mr Richmond's affidavit.  That offer was one to settle in more advantageous terms than have been achieved by the first defendant as a result of proceeding to contest the matter and in my view the offer was clear.  I am satisfied that the letter was understood by the first defendant's director, Mr Richmond, and that he chose to proceed to fight the matter on the basis of his belief that he had technical reasons for avoiding the notice of rescission.  I propose to order that the plaintiff's costs as from 30 September 2010 be paid on a solicitor/client basis by the first defendant.