PSAL Pty Ltd v Registrar of Titles

[2017] WASC 235

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   PSAL PTY LTD -v- REGISTRAR OF TITLES [2017] WASC 235

CORAM:   PRITCHARD J

HEARD:   28 JULY 2017

DELIVERED          :   28 JULY 2017

FILE NO/S:   CIV 2333 of 2014

BETWEEN:   PSAL PTY LTD

Plaintiff

AND

REGISTRAR OF TITLES
First Defendant

FAYYAZ AHMAD RAJA
Second Defendant

DARUL-IMAN (WA) INC
Third Defendant

Catchwords:

Practice and Procedure - Springing Orders - Failure by Plaintiff to prosecute action - Turns on own facts

Legislation:

Bankruptcy Act 1966 (Cth), s 58

Result:

Springing order granted in part

Category:    B

Representation:

Counsel:

Plaintiff:     No appearance

First Defendant              :     No appearance

Second Defendant         :     No appearance

Third Defendant            :     Mr R Harrison

Solicitors:

Plaintiff:     No appearance

First Defendant              :     No appearance

Second Defendant         :     No appearance

Third Defendant            :     Tottle Partners

Cases referred to in judgment:

CVW Group Holdings Pty Ltd v Addison [2011] WASC 267

Omar v Darul-Iman (WA) Inc [2013] WASC 311

PSAL Pty Ltd v Raja [2016] WASC 295

Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [No 3] [2009] WASC 148

PRITCHARD J: 

(These reasons were delivered extemporaneously on 28 July 2017 and have been edited from the transcript.)

1. This is an application by the third defendant by a chambers summons, dated 12 April 2017, for orders in the nature of springing orders.  The orders that are now sought are set out in a minute of proposed orders, dated 27 July 2017 (Minute).  The order sought in that Minute is a springing order that would require the plaintiff to file and serve an extracted copy of an order obtained by it in the Federal Court of Australia granting the plaintiff leave to take fresh steps in these proceedings against the second defendant, who is a bankrupt.  The order sought contemplates that the failure by the plaintiff to take that step and to file that order would result in the plaintiff's writ as against the third defendant being struck out and entry of judgment on the third defendant's counterclaim against the plaintiff. 

2. For the reasons which follow, I am persuaded that it is appropriate to make a springing order, the result of which will be to require the plaintiff (if it wishes to continue to pursue the present action) to file an order for leave to proceed as against the second defendant and, in the event of the plaintiff's failure to do that, the plaintiff's writ as against the third defendant will be struck out.  However, failure by the plaintiff to do so does not warrant an order for judgment on the third defendant's counterclaim.

3. The application in the chambers summons is supported by affidavits filed by the third defendant, namely an affidavit of Mr Abdul Sulaiman Bin Omar (who is the president of the third defendant), sworn on 13 July 2017; an affidavit by Ms Deirdre Ann Solomon, sworn on 2 May 2017 (as to service); and two affidavits by Mr Ross Harrison, the solicitor for the third defendant, sworn on 21 July 2017 and 27 July 2017.

The plaintiff's attitude to this action

1. It is appropriate at this stage to mention, in particular, the matters referred to by Mr Harrison in his affidavit of 21 July 2017.  Mr Harrison deposes that he has made numerous attempts to contact the plaintiff through its director, Mr Dormer, by telephone and by email, as well as by correspondence sent by registered mail to the plaintiff's registered office, with no response having been received from the plaintiff, save on one occasion.  That was on the morning of 4 May 2017, when Mr Harrison was able to speak to Mr Dormer by telephone.  Mr Harrison deposes that the substance of the conversation was that emails being sent to the plaintiff at its email address were being received and read by Mr Dormer; that Mr Dormer was not happy with the outcome of proceedings in courts in Western Australia in which the plaintiff had been involved; that the plaintiff did not intend to take any further part in this action and did not intend to dispute any steps that the third defendant took in the action, but would leave the outcome of the third defendant's applications to the court; that the plaintiff was not currently carrying on business and had no assets; and that Mr Dormer would continue to read emails sent to the plaintiff's email address, but would not respond.

Relevant history of the action

1. The present action has a long history, which traverses related proceedings.  This action, in short, concerns a dispute effectively now only between the plaintiff and the third defendant in respect of their respective claims to an interest in land identified as Lot 100 on Deposited Plan 40528, contained in Certificate of Title Vol 2574 Folio 794 (Lot 100).  It is not necessary to set out a lengthy history of the action here.  Part of the history is referred to in the course of reasons for decision I gave in a related proceeding, Omar v Darul‑Iman (WA) Inc,[1] in which I varied an injunction which had earlier been granted in those proceedings to restrain the registration of various instruments which were awaiting registration at Landgate.  Another aspect of the history of this action is set out in a judgment that I delivered in another related proceeding, PSAL Pty Ltd v Raja.[2]  Those proceedings concerned Lot 103, which is an adjacent piece of land to Lot 100, and which involved similar, but not identical, issues to those raised by the present action. 

   [1] Omar v Darul-Iman (WA) Inc [2013] WASC 311.

   [2] PSAL Pty Ltd v Raja [2016] WASC 295.

2. In short, the position of the parties in the present action is that the registered proprietor of Lot 100 is currently the second defendant, who is bankrupt.  The third defendant says that in about October 2002, it entered into a contract with the second defendant for the purchase of Lot 100.  The third defendant says that it performed all of its obligations as the purchaser under that contract.  Eventually, the second defendant provided the third defendant with an executed transfer for Lot 100.  In the meantime, however, the plaintiff entered into a loan agreement with the second defendant, and the second defendant granted two mortgages to the plaintiff over Lot 100.  It appears that those mortgages have not been repaid.  The second defendant sought to register the second mortgage.  As a result of a dispute in respect of a failure in the notification process required pursuant to caveats lodged over Lot 100, there is a dispute about whether the plaintiff should be permitted to register its second mortgage over Lot 100 ahead of the transfer which the third defendant seeks to register in respect of Lot 100.

3. In the present action, the plaintiff seeks relief as against the Registrar of Titles, as against the second defendant and as against the third defendant.  As against the Registrar of Titles, the plaintiff seeks an order compelling the Registrar of Titles to register the second mortgage on the title for Lot 100; an order vacating the injunction mentioned above; and, in the alternative, an order that the first defendant be restrained from registering any transfer on the title of the property until the mortgages are discharged.  As against the second defendant, the plaintiff seeks an order for possession of the property pursuant to the terms of the mortgages, and an order for indemnity costs pursuant to cl 20 of the mortgages.  Finally, as against the third defendant, the plaintiff seeks a declaration that the plaintiff’s interest in Lot 100 pursuant to the loan agreement and the PSAL mortgages takes priority over any interest claimed in Lot 100 by the third defendant.

The application for the springing order

1. The application for the springing order reflects the fact that the plaintiff has not (consistent with the position outlined by Mr Dormer to Mr Harrison) taken any action in the present matter for many months.  The second defendant became a bankrupt in December 2015.  Pursuant to orders sought by the parties by consent in May 2016, I stayed the present action until leave to proceed against the second defendant had been granted by the Federal Court.

2. It appears that the plaintiff has taken no steps to obtain the leave of the Federal Court to pursue the present action.  That leave is required before the plaintiff can continue the action insofar as it involves the second defendant.[3]  The consequence has been a delay of a very considerable period in the context of a dispute which itself has been ongoing for many years.

   [3] Bankruptcy Act 1966 (Cth) s 58(3)(b).

3. In bringing the application for a springing order, the third defendant relies upon the Court's power to make orders of that nature, in its inherent jurisdiction to control proceedings before the Court and to ensure that its own orders are complied with.  The bases on which it seeks to do so are set out in its submissions filed by the third defendant and dated 3 May 2017.  The third defendant says that the failure by the plaintiff to take any step in the proceedings since May 2016 (in circumstances where, as a result of the plaintiff terminating its solicitors' retainer, its solicitors were given leave to withdraw, and where the plaintiff has not made any arrangements to accept registered mail and is not responding to attempts at communication) amounts to contumacy on the part of the plaintiff.  The third defendant submits that that conduct provides a basis for the making of an order of the kind which is sought in para 1(a) of the Minute. 

4. Having regard to the authorities referred to by the third defendant, including CVW Group Holdings Pty Ltd v Addison,[4] and having regard to the review of the authorities undertaken by Hasluck J in Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [No 3],[5] I accept the third defendant's submission.  It is therefore appropriate to grant an order of the kind sought in para 1(a) of the Minute.  That is, if the plaintiff does not obtain the leave of the Federal Court to proceed, its writ as against the third defendant should be struck out. 

   [4] CVW Group Holdings Pty Ltd v Addison [2011] WASC 267.

   [5] Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [No 3] [2009] WASC 148.

Whether the order should extend to judgment on the third defendant's counterclaim

1. However, I am not satisfied that it is appropriate to make an order in terms of the balance of the Minute.  I have some reservations about whether it is appropriate to grant a springing order which, if the order 'springs', would have the result that judgment would be entered against the plaintiff on the third defendant's counterclaim.

2. Leaving that issue to one side, my primary practical concern in relation to the orders that are sought is that they are in the nature of a mandatory injunction as against the plaintiff, to compel it to withdraw the mortgage which it seeks to have registered in respect of Lot 100, and a prohibitory injunction to restrain the plaintiff from taking any further steps in registering that mortgage.  I have reservations about proceeding to make an order of that kind on both practical and legal grounds.

3. In circumstances where the plaintiff has not sought to prosecute its own action and where there would, in any event, be questions about the appropriate relief which should be granted if the third defendant succeeds in its counterclaim, the preferable course, in my view, is to require the third defendant to proceed to trial on the counterclaim and to ensure that any party who may be interested in that proceeding is given the opportunity to participate.  I will therefore make orders which list the trial of the third defendant's counterclaim for hearing, on the assumption that the plaintiff will not seek to pursue its action at all.  At the time of that trial, it will be necessary and appropriate for the continuation of the injunction, granted in CIV 1081 of 2012, to be considered.  The orders that I will make include an order that requires the third defendant (which is the first defendant in that action) to file an application to discharge that injunction (if it wishes to do so), which is to be determined in conjunction with its counterclaim with respect to its interest in Lot 100 in the present action. 

4. The intention of the programming orders which I will make today is to ensure not only that the third defendant's counterclaim proceeds to a hearing, but that, if the plaintiff or any other party wishes to be heard, it can be heard and the issue of the competing interests of the plaintiff and the third defendant in Lot 100 can then be properly considered by the Court.  That can occur with input, if appropriate, from the Registrar of Titles in relation to the nature of any orders which should be made to resolve the dispute which exists about the registration of the interests in Lot 100 which are claimed. 

5. In making these orders, I will also make an order that the plaintiff has liberty to apply, on 48 hours' notice, to extend the time for compliance with the order that it obtain leave from the Federal Court to proceed as against the second defendant.  If the plaintiff changes its position and wishes to actively prosecute its action, then for that to occur it need only advise the Court and the solicitors for the third defendant and seek orders to facilitate its renewed participation in the action.