Popescu v A and B Castle Pty Ltd

[2016] VSC 175

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

S CI 2016 01151

HELEN MARY POPESCU	Plaintiff
v
A & B CASTLE PTY LTD	First Defendant
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	GINNANE J
WHERE HELD:	Melbourne
DATE OF HEARING:	15 April 2016
DATE OF JUDGMENT:	15 April 2016 (Revised)
CASE MAY BE CITED AS:	Popescu v A & B Castle Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 175

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REAL PROPERTY – Application to remove caveat – Whether estate or interest in land – Whether equitable charge created – Landscaping work – Unpaid debt – Romalpa clause regarding materials used – No serious question to be tried – Caveat disproportionate – Balance of convenience favours removal of caveat – Transfer of Land Act 1958 s 90(3).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr L M Stanistreet	HDME Lawyers
For the First Defendant	Mr H A Aizen	McIntyre & Statton

HIS HONOUR:

1. The plaintiff seeks the removal of a caveat on the title of her property at Highton. The caveat is dated 22 February 2016 and claims an interest as chargee. The property has been sold with settlement due next Friday, 22 April 2016.

1. Under s 89(1) of the Transfer of Land Act 1958 (‘the Act’) a caveat can only be lodged by a person claiming an estate or interest in land. The estate or interest in land must be established to the requisite standard by the person who lodged the caveat if the caveat is challenged. An application to remove a caveat involves two steps.[1] First the caveator, in this case the first defendant (‘Castle’), must establish that there is a serious question to be tried that it has the claimed estate or the interest and secondly, having done so, it must establish that the balance of convenience favours the maintenance of the caveat on the title until trial.

   [1]Piroshenko v Grojsman (2010) 27 VR 489 (Warren CJ); Carbon Black Pty Ltd v Launer [2015] VSCA 126.

1. Castle carried out landscaping work at the plaintiff's property in Highton. Mr Castle, in an affidavit on behalf of Castle says that:

All works executed by Castle involved installation of turf on the property, installation of walls, provision of pebbles, installation of decking, installation of fences, plumbing, provision of plants, installation of a driveway and the supply of screens.

1. Castle claims that the plaintiff still owed it approximately $115,000 for the work that it carried out. Part of that claim is for the materials described in Mr Castle’s affidavit.  The balance appears to be for the cost of labour.

1. Castle demanded payment of the sum that it claims in a letter February 2015. But, the caveat was only lodged on 22 February this year and Castle’s County Court proceeding seeking payment of the amount that it claims was commenced on 1 April.

1. The clause upon which Castle relies to create the equitable charge to give it an  interest in the land is contained in quotations and in invoices. The quotations contain the following clause:

All materials used in this contract remain the property of A & B Castle Enterprises until paid in full. (‘the clause’).

1. Mr Castle states that the defendant carries on business under the name AB Castle Enterprises, which I will assume is the same as A & B Castle Enterprises.

1. Castle contends that because the plaintiff accepted the quotations, that it follows that a similar term applied to all the work that it performed at her property.

1. The first issue is whether there is a serious question to be tried, that is, whether the clause created an interest in Castle as an equitable chargee over the Highton property. Castle says that the clause was a Romalpa clause that gave it an interest as an equitable chargee over the land.

1. Assuming that the contract or contracts for the work that Castle performed contained the same clause, I am not satisfied that there is a serious question to be tried that the clause does create an equitable charge. In my opinion the authorities to which both counsel  referred[2]  do not establish that proposition.

   [2]Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd [2009] WASCA 171 (‘Perron Investments’); Kay’s Leasing Corporation Pty Ltd v CSR Provident Fund Nominees Pty Ltd [1962] VR 429 (‘Kay’s Leasing Corporation’).

1. There is authority that a contractual right to own and take possession of fixtures under a Romalpa clause confers on the holder of that right an equitable interest in the land which entitles the holder to enter upon the land to sever and remove the fixtures.[3] Most of the cases  relied on for this proposition involved hiring agreements under which the owner of goods that had become fixtures had a right upon the hirer’s default to enter the property and retake possession of them to enforce its security.  The clause in this case did not give such a right. It is unclear if all of the items that Castle supplied to the plaintiff had become fixtures.

   [3]Perron Investments [2009] WASCA 171, [13] (McLure JA); Kay’s Leasing Corporation [1962] VR 429; In re Morrison Jones & Taylor Ltd [1914] 1 Ch 50.

1. The other relevant point is that as Newnes JA said in Perron Investments Pty Ltd v Tim Davies Landscaping Pty Ltd:

expenditure of work and materials under a construction contract does not of itself confer on an unpaid contractor any interest in the land on which the work is done.[4]

[4][2009] WASCA 171, [56] (Pullin JA agreed and McLure JA dissented).

1. Even if I had been persuaded that Castle did have an equitable charge in the property, I am not satisfied that the balance of convenience favours the maintenance of the caveat until trial. The caveat is said to support an amount of $115,000. I am not satisfied that all of that sum is for materials that it supplied and it is quite unclear what part is for labour. Reference was made to the Court’s power to amend caveats, but no specific modification or amendment of the caveat was suggested to limit it to the value of materials supplied. The amount of Castle’s claim that may relate to materials is disproportionate to the value of the property, which on the basis of its recent sale is $1.85 million.

1. I order that the caveat AM 580515A recorded on Certificate of Title Volume 8076 Folio 595 be removed.