Prospa Advance Pty Ltd v Tasou
[2024] WASC 359
•2 OCTOBER 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PROSPA ADVANCE PTY LTD -v- TASOU [2024] WASC 359
CORAM: WHITBY J
HEARD: 1 OCTOBER 2024
DELIVERED : 2 OCTOBER 2024
FILE NO/S: CIV 2149 of 2024
BETWEEN: PROSPA ADVANCE PTY LTD
Plaintiff
AND
AFRODITI TASOU
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Real property - Application to extend operation of caveat - Plaintiff’s interest arises under loan agreement with company of which first defendant was a former director - First defendant denies electronically signing loan agreement by Docusign - Requirements for electronic signature - Whether plaintiff’s claim has or may have substance - Balance of convenience
Legislation:
Transfer of Land Act 1893 (WA)
Result:
Plaintiff's application dismissed
Representation:
Counsel:
| Plaintiff | : | Mr L Palmos |
| First Defendant | : | Mr N Siegwart |
| Second Defendant | : | No Appearance |
Solicitors:
| Plaintiff | : | Palmos Legal |
| First Defendant | : | Curae Law |
| Second Defendant | : | No Appearance |
Case(s) referred to in decision(s):
Bashford v Bashford [2008] WASC 138
Bateson v Jones [2013] WASC 8
Bizcap AU Pty Ltd v Sharma [2024] WASC 198
Bride v The Registrar of Titles [2015] WASC 11
Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179
WHITBY J:
Overview
Ms Afriditi Tasou, the first defendant, is the registered proprietor of 19 Fimiston Place, Balcatta (Property).
Ms Tasou was, until 18 August 2023, a director of Essential Facility Management Pty Ltd (Essential).
On 26 September 2023, the plaintiff lodged a caveat over the Property (Caveat) to protect its interests therein as chargee under a loan agreement and guarantee which the plaintiff says was signed by the first defendant in August 2022.
On 9 September 2024, the Registrar of Titles, the second defendant, issued a notice to the plaintiff under s 138B of the Transfer of Land Act 1893 (WA) (TLA) advising that the Caveat would lapse on 3 October 2024 unless, before that time, the second defendant is served with a copy of an order of this court extending its operation. The second defendant has elected to take no part in the proceedings.
By originating summons filed on 27 September 2024, the plaintiff applies pursuant to s 138C of the TLA for the operation of the Caveat to be extended until further order of the court. The plaintiff relies upon the affidavit of Gerard Bryant sworn on 26 September 2024 in support of the originating summons (Bryant Affidavit). The plaintiff has also filed a certificate of urgency and an undertaking as to damages. The plaintiff is represented by a firm of solicitors in Western Australia on instructions from a firm of solicitors in New South Wales.
The application is opposed by the first defendant. The first defendant relies upon the affidavits of Afroditi Tasou sworn on 30 September 2024 (Tasou Affidavit), Angus Thomas Edwards sworn on 30 September 2024 (Edwards Affidavit) and Geoffrey Charles Watts sworn on 30 September 2024 (Watts Affidavit).
Legislation and relevant principles
Section 137 of the TLA provides that any person claiming an interest in land may lodge a caveat. A caveat has the effect of preventing registration of any dealing against the land until the person who lodged the caveat has an opportunity to justify the caveat: Brogue Tableau Pty Ltd v Binningup Nominees Pty Ltd [2007] WASCA 179 [68].
Section 138C of the TLA provides that the court may make an order to extend the caveat:
138C. Supreme Court's powers on application by caveator
(1) A caveator who is served with a notice under section 138B(1) may apply to the Supreme Court, in accordance with rules of the court, for an order extending the operation of the caveat.
(2) On the hearing of an application under subsection (1), the Supreme Court –
(a)if satisfied that the caveator's claim has or may have substance –
(i) may make an order extending the operation of the caveat for such period as is specified in the order; or
(ii) may make an order extending the operation of the caveat until the further order of the court; or
(iii) may make such other orders as it thinks fit concerning the caveat or the land in respect of which the caveat was lodged; and
(3) if not satisfied that the caveator's claim has or may have substance, shall dismiss the application; and
(4) may make such ancillary orders in relation to the application as it thinks fit.
In determining whether the caveat should be extended pursuant to s 138C of the TLA, the plaintiff has the onus of satisfying the court that:
1.The plaintiff's claim has or may have substance, that is, there is a serious question to be tried as to the existence of a proprietary interest in the property[1]; and
2.The balance of convenience favours the maintenance of the caveat.
[1] Bride v The Registrar of Titles [2015] WASC 11 [14].
The relevant principles for the determination of an application to extend the operation of a caveat were summarised by Beech J (as his Honour then was) in Bashford v Bashford.[2] The relevant principles include:
1. The caveator bears the onus of demonstrating that there is a serious question to be tried as to whether a caveatable interest exists: Bashford at [47].
2.It is not appropriate to attempt to resolve conflicts of evidence on affidavit: Bashford at [48].
3. The caveat will not be removed unless the claim to an interest in the land appears to be without foundation: Bashford at [49].
4. The balance of convenience is a factor to be considered in an application to extend the operation of a caveat. However, interlocutory removal of a caveat will be unusual where an arguable case as to the existence of a caveatable interest has been demonstrated. That is because the purpose of a caveat is the protection of a proprietary interest. Removal of the caveat will, in many cases, have the effect of destroying the benefit of the proprietary interest claimed in the caveat: Bashford at [50].
[2] Bashford v Bashford [2008] WASC 138 (Bashford).
In Bateson v Jones, Pritchard J (as her Honour then was) said:[3]
[t]he existence of a serious question to be tried involves showing a sufficient likelihood of success to justify the preservation of the status quo in all of the circumstances. How strong the likelihood of success needs to be depends upon the nature of the rights asserted and the practical consequences likely to flow from the order sought. Consequently, whether there is a serious question to be tried, and the consideration of those factors going to the balance of convenience, are not wholly independent inquiries. (citations omitted)
[3] Bateson v Jones [2013] WASC 8 [19].
Does the plaintiff's claim have, or may it have, substance?
The plaintiff claims an interest as chargee pursuant to an agreement dated 18 August 2022 (Agreement).[4] The plaintiff asserts that it, the first defendant, Essential and Mary Athanasiou are parties to the Agreement.
[4] Bryant Affidavit Annexure 'GB-4'.
The plaintiff submits that, by the Agreement, the plaintiff loaned Essential the amount of $257,500.00 and the performance of Essential's obligations under the Agreement were personally guaranteed by the first defendant and Ms Athanasiou.[5]
[5] Cl 12.2 of the Agreement.
The plaintiff relies upon the following clauses of the Agreement in support of its claim for a proprietary interest in the Property:
1.Clause 2.2 which provides that if the amount loaned to and paid to Essential was over $150,000.00, or an Event of Default occurs under the Agreement, then the first defendant will grant security over her Secured Property (as that term is defined under the Agreement and which includes any real property) to secure the amount owing under the Agreement.
2.Clause 2.3 which provides that the first defendant consented to the registration of a caveat against her Secured Property and unconditionally and irrevocably agreed to the plaintiff procuring the registration of a caveat on any register.
Mr Bryant deposes that Essential failed to pay an instalment of $3,045.43 which was due and payable on 30 June 2023.[6] The plaintiff submits that, at 6 September 2024, $195,773.81 remained outstanding under the Agreement.
[6] Bryant Affidavit [15].
On 19 September 2023, the plaintiff commenced proceedings in the District Court of Western Australia against Essential, Ms Athanasiou and the first defendant seeking orders for damages for the outstanding amount under the Agreement (District Court Proceedings).[7]
[7] Bryant Affidavit Annexure 'GB-11'.
On 24 January 2024, the plaintiff obtained default judgment against Essential, Ms Athanasiou and the first defendant in the District Court Proceedings.[8] On 20 June 2024, the first defendant filed a chamber summons to set aside the default judgment against her.[9] On 31 July 2024, the default judgment entered in the District Court Proceedings against the first defendant was set aside.[10]
[8] Bryant Affidavit Annexure 'GB-12'.
[9] Bryant Affidavit Annexure 'GB-13'.
[10] Bryant Affidavit Annexure 'GB-14'.
The first defendant submits that the plaintiff's claim does not have substance because she did not sign the Agreement. The first defendant relies on the following evidence in support of this submission:
1.The Agreement is purported to have been signed by the first defendant by way of 'Docusign'. Docusign is a service which allows a person to digitally sign documents and works as follows:[11]
[11] Edwards Affidavit [5].
(a)the sender uploads the document to a portal on the Docusign website or creates a new document on the Docusign website;
(b)the sender adds (or creates) signing parties to the document and inputs a name and an email address for each party;
(c)the sender marks the areas on the document where they need a party to add information, including their signature or initials;
(d)the document is emailed by Docusign to the email addresses inputted for each of the recipient parties;
(e)the emails received contain a link. When a recipient clicks the link, the Docusign website opens and displays the document;
(f)the recipient can review the document and can 'sign' the relevant areas by clicking on parts of the document;
(g)the signature that is applied to the document is generated by Docusign. It is not the recipient's actual signature;
(h)the sender is then notified that the document has been signed. When all parties sign the document on Docusign, they will all receive an email with the document displaying the digital signatures; and
(i)a Docusign document will display text on the top of each page, which is inserted by Docusign, containing the words 'Docusign Envelope ID:' followed by a unique identification number.
2.The first defendant was asked by her brother and the husband of Mary Athanasiou, Chris Athanasiou, to assist him by being a director of his cleaning company Essential. The first defendant agreed to be a director but she was not part of the business.[12]
[12] Tasou Affidavit [11] - [12].
3.The first defendant deposes that:[13]
[13] Tasou Affidavit [11] - [21].
(a)she does not remember seeing the Agreement;
(b)the signatures on the Agreement are not hers;
(c)her email address is [redacted] - it has been for at least five years and she does not have any other email address;
(d)she has thoroughly reviewed her emails, including deleted items, and she has not received any emails from Docusign;
(e)she has not received any emails before December 2023 from the plaintiff;
(f)she does not remember clicking on any Docusign links or signing any documents digitally;
(g)she did not see a copy of the Agreement until it was given to her in May 2024 (when the plaintiff foreshadowed commencement of the District Court Proceedings);
(h)she did not receive any of the money referred to in the Agreement;
(i)she did not receive the letter dated 6 September 2023 attached to the Bryant Affidavit[14] and the address to which the letter was addressed, that is Unit 1, 10 Stanford Way, Malaga WA, is her brother Chris' office/workshop which is owned by Chris and Mary Athanasiou and that she does not receive mail that is sent there; and
(j)while she speaks English well, she is not confident reading and writing English and usually relies on her relatives to help her understand complicated documents.
4.In May 2024, Mr Watts, the first defendant's fiancé, deposed that he assisted her to review her email account - the address of which was [redacted]. Mr Watts searched for any emails from Docusign or from the plaintiff. Mr Watts found emails from the plaintiff from December 2023, but he did not locate any emails from the plaintiff earlier than that or any emails from Docusign at all. Mr Watts deposed that he called the plaintiff's office in December 2023 on behalf of the first defendant and advised the plaintiff of her email address and mobile phone number as it was apparent to him that the plaintiff did not have them.[15]
[14] Bryant Affidavit Annexure 'GB-8'.
[15] Watts Affidavit [4] - [6].
In order for the plaintiff to have a proprietary interest in the Property, the first defendant must have created the interest by a written instrument signed by the first defendant.[16] I accept that if the first defendant did sign the Agreement, the Agreement is capable of giving rise to a proprietary interest in the Property and therefore, capable of sustaining the Caveat. However, if the first defendant did not sign the Agreement, then the plaintiff has no proprietary interest in the Property capable of sustaining the Caveat.
[16] Property Law Act 1969 (WA) s 34.
By 'signing' a document electronically through the service Docusign, a person's actual signature is not applied to the document. The 'signature' which is applied is instead a digital representation of the person's signature.
Section 10 of the Electronic Transactions Act 2011 (WA) sets out the requirements for a valid electronic signature under the laws of Western Australia:
10. Signatures
(1) If, under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication if —
(a) a method is used to identify the person and to indicate the person's intention in respect of the information communicated; and
(b) the method used was either —
(i) as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or
(ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence;
and
(c) the person to whom the signature is required to be given consents to that requirement being met by the use of the method mentioned in paragraph (a).
…
(3) The reference in subsection (1) to a law that requires a signature includes a reference to a law that provides consequences for the absence of a signature.
There is a factual dispute between the parties as to whether the first defendant signed the Agreement. While I recognise that a factual dispute cannot generally be resolved on an application to extend a caveat which proceeds by way of affidavit, I am satisfied that, on the evidence before me, the plaintiff has not discharged its onus of demonstrating that its claim has, or may have, substance. That is because:
1.The plaintiff has only adduced into evidence a copy of the Agreement which is purported to be signed by the first defendant.
2.The plaintiff has not adduced any other evidence to support the contention that the first defendant signed the Agreement, such as evidence as to what email address the Agreement was sent to, on what basis the plaintiff says the first defendant had access to that email address, or the steps that the plaintiff took, if any, to verify that the first defendant consented to the application of her electronic signature to the Agreement.
3.The evidence of the first defendant is that she did not receive any email from Docusign or the plaintiff (before December 2023) and that she did not see the Agreement until March 2024.
4.Mr Watts deposes that the first defendant did not receive any email from Docusign or the plaintiff (before December 2023).
5.In September 2023, the plaintiff's solicitors sent correspondence to the first defendant at Chris and Mary Athanasiou's address, not the first defendant's address.
6.In all the circumstances, it is my view that on the current evidence before the Court, there is no substance to the plaintiff's claim that the first defendant signed the Agreement.
At the hearing of the application on 1 October 2024, counsel for the plaintiff requested an interim extension of the Caveat so that the application could be programmed to a further hearing to allow the plaintiff to put on evidence in response to the first defendant's evidence and submissions that she did not sign the Agreement. Counsel for the plaintiff submitted that, given the affidavits and submissions relied upon by the first defendant were filed on 30 September 2024, the plaintiff would be denied procedural fairness if it was not afforded the opportunity to adduce further evidence. I refused the plaintiff's request because, in my view, the plaintiff had ample notice of the first defendant's opposition to the extension of the Caveat on the basis that she did not sign the Agreement. Firstly, in the District Court Proceedings the first defendant, in applying to set aside the default judgment, adduced evidence in support of her contention that she did not sign the Agreement. Secondly, by letter dated 16 August 2024, the first defendant's solicitors advised the plaintiff's solicitors that the first defendant did not sign the Agreement and that there was no basis to support the operation of the Caveat.[17] This is the plaintiff's application, and it bears the onus of demonstrating that it has a caveatable interest. It has failed to do so despite being on notice of the first defendant's opposition to the Caveat on the basis that she did not sign the Agreement.
[17] Tasou Affidavit Annexure 'AT-5'.
This case bears striking resemblance to the case of Bizcap AU Pty Ltd v Sharma[18] in which Hill J refused to extend the operation of a caveat on the basis that the applicant in that case had not established its claim that the first respondent had electronically signed a document by Docusign. The plaintiff sought to distinguish Bizcap on the basis that, in Bizcap, the first respondent had informed the police of the fact that she denied signing the document. It is not in dispute that the first defendant has not informed the police that she did not sign the Agreement. However, I do not agree that this is fact upon which the outcome of Bizcap depended. Hill J found that the caveat should not be extended in Bizcap because there was sufficient doubt as to whether the first respondent electronically signed the agreement.[19] In so finding, her Honour said:[20]
It is my view that some steps should have been taken by the applicant to verify that the first respondent's electronic signature was applied with her consent. There is no evidence before me that this is the case.
[18] Bizcap AU Pty Ltd v Sharma [2024] WASC 198 (Bizcap).
[19] Bizcap [40].
[20] Bizcap [41].
I am likewise satisfied that, on the affidavit evidence before me, there is insufficient evidence to demonstrate that the plaintiff's claim that the first defendant entered into the Agreement, that is that she signed the Agreement, has, or may have substance. In the absence of the plaintiff being able to demonstrate this, its claim that is has a proprietary interest in the Property as chargee pursuant to the Agreement, does not have substance. Given this finding, I dismiss the plaintiff's application.
Balance of convenience
Although I do not need to consider the balance of convenience given my finding, I make these observations. Firstly, the likelihood of success of the plaintiff's claim has a bearing upon the factors going to the balance of convenience. Secondly, the plaintiff has a judgment for the outstanding amount under the Agreement against Essential and Ms Athanasiou. The plaintiff has lodged caveats against five properties registered in the name of Ms Athanasiou.[21] These factors would have caused me to determine, in any event, that the balance of convenience does not favour the extension of the Caveat.
[21] Tasou Affidavit Annexures 'AT-8', 'AT-10', 'AT-12', 'AT-14' and 'AT16'.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
RP
Associate to the Honourable Justice Whitby
2 OCTOBER 2024
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