Pham v Sebie

[2015] NSWSC 745

Supreme Court

New South Wales

Medium Neutral Citation:	Pham v Sebie [2015] NSWSC 745
Hearing dates:	12 June 2015
Date of orders:	12 June 2015
Decision date:	12 June 2015
Jurisdiction:	Equity Division
Before:	Young AJA
Decision:	See [12]
Catchwords:	CONVEYANCING – breach of contract for sale and remedies – purchasers remedies – specific performance EQUITY – equitable remedies – specific performance – breach of contract PRACTICE AND PROCEDURE – parties – specific performance suit – joinder of non-parties to contract REAL PROPERTY – Torrens title – caveats against dealings – removal – duty of vendor
Cases Cited:	ANZ Executors & Trustee Company Ltd v Qintex Australia Ltd (1990) 2 ACSR 676 Tasker v Small (1837) 3 My & Cr 63; 40 ER 848
Category:	Principal judgment
Parties:	Andy Vuong Duc Pham – first plaintiff Thi Huong Giang Pham – second plaintiff Robert Sebie – first defendant
Representation:	Counsel: B M Zipser – for the plaintiffs R Sebie – defendant in person Solicitors: Bui Lawyers – for the plaintiffs R Sebie – defendant in person
File Number(s):	2015/56505

Judgment

1. This is a purchaser's suit for specific performance. The first defendant is the alleged vendor. The second defendant is the mortgagee for the first defendant. The third defendant is a company which appears to have some association with the first defendant who, apparently, lent the first defendant money to purchase the property in the first place. The third defendant is a caveator. The fourth defendant is a person who filed a caveat after the plaintiff filed a caveat to protect its alleged interests and who claims to have lent money to the first defendant.

2. Lord Cottenham LC, in the seminal case of Tasker v Small (1837) 3 Mylne and Craig Reports 63; 40 ER 848, laid it down that in a suit for specific performance the only parties are to be the purchaser and the vendor because it is only between them that there is privity of contract. Despite the fact that that rule has been criticised from time to time and there are some exceptions, see, for instance, ANZ Executors & Trustee Company Ltd v Qintex Australia Ltd (1990) 2 ACSR 676 at 680 (Queensland Full Court), the rule is still one of the cardinal rules of equity.

3. The rule does cause some problems to purchasers because, in a case such as the present, where there are two caveats, the purchaser wants to get a clear title and so wants to get the caveat removed. However, the authorities say that the vendor's duty is to remove the caveats, it is not the purchaser's responsibility and probably the purchaser has no locus standi to have the caveat removed.

4. The purchaser, if successful in the suit, will get a suit for specific performance and directions will be made for the implementation of the suit for specific performance. The vendor may convince the judge who is making directions that he or she cannot complete because of impecuniosity and cannot remove the caveats. Otherwise, an order will be made that the vendor remove the caveats and if he or she breaches that order, then the usual order for imprisonment will be made. Alternatively, the Court will order that so much of the purchase price be withheld from the vendor as will discharge caveats, such as the present, which claim that there is some sort of secured loan against the vendor's interest in the property.

5. It is only an unnecessary complication and raises the matter of additional costs to have the mortgagees and the caveators as parties to the specific performance suit. Harvey CJ in Eq made this quite clear in the leading case of Thomson v Richardson (1928) 29 SR (NSW) 221; there, his Honour struck out the caveators as parties to the suit.

6. In the present case, the Commonwealth Bank, the mortgagee, has filed a submitting appearance. The third defendant has appeared here by counsel. It was never served with any papers, according to its counsel, whose word, of course, I accept. It is content to be struck out of the suit, so long as its costs are provided for.

7. The fourth defendant is in a weaker position to anybody else because his caveat was after the plaintiff's caveat. His caveat does not indicate an interest in land. My Associate received a missive from him the other day, attaching a medical certificate in the most general form and seeking an ‘administrative adjournment’ because of his ill health. He has not appeared today, even though my Associate sent a note saying that because other parties were involved we could not be involved in any ‘administrative adjournment’.

8. It seems to me appropriate to order that the second, third and fourth defendants be struck out of the suit, reserve the costs of the third defendant, who has appeared.

9. The Registrar was convinced that the first defendant had been evading service and made an order for substituted service. The first defendant appeared today. He says he was never served and that is right. He has been given half an hour or so to read the affidavits, which he has, at least, partially done. He appears in person. He denies he was evading service. He has indicated he wishes to defend the suit and has asked for an adjournment for two weeks to file a defence and affidavits.     The plaintiff does not oppose that on certain conditions. One is that the first defendant pay the costs of and occasioned by the adjournment.

10. I will grant the adjournment. I will not make any orders for costs today, but reserve the costs, the reason being that if there is a live issue as to whether the order of the Registrar as to substituted service was justified or not, then that may have an effect on costs in due course.    

11. The proceedings were by summons so a formal defence is not necessary, but it is necessary for the Court to know what the issues are. Mr Sebie has asked for 14 days, to file a ‘defence’.

ORDERS

12. I make the following orders and directions:

1. That the defendant, no later than 26 June 2015, serve on the plaintiff and file with the Court, a statement of the issues that he says operate to deny the plaintiff relief in these proceedings.

2. The defendant should also file and serve by that date the affidavits on which he relies to substantiate the matters in his statement of issues.

3. The plaintiff is to file all additional evidence by 10 July. I use the word ‘additional’ evidence, rather than evidence in reply because it seems to me, having read what the plaintiff has filed, that it may very well be necessary:

1. to put some material into proper form, which is currently in inadmissible form; and

2. to supply some omissions which should have been covered in the evidence filed to date. The matter should then go to the Registrar's List for the fixing of a new hearing date if it is not earlier settled.

4. I stand the matter over to the Registrar's List at 9am on 14 July 2015.

5. Costs reserved.

6. I order that the second, third and fourth defendants be struck out of the suit and reserve the costs of the third defendant.

7. I direct the plaintiff to notify the third defendant of the dates of any adjournment.

Decision last updated: 16 June 2015