Psevdos v First Mortgage Company Home Loans Pty Ltd

[2019] SASC 130

SUPREME COURT OF SOUTH AUSTRALIA

(Appeal from a Master: Civil)

PSEVDOS v FIRST MORTGAGE COMPANY HOME LOANS PTY LTD

[2019] SASC 130

Judgment of The Honourable Justice Hinton

26 July 2019

APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - MASTERS

Appeal from a decision of a Master of this Court.

On 24 August 2018 a Master of this Court dismissed two interlocutory applications made by the appellant. The interlocutory applications were made in proceedings instituted by the respondent in which the respondent sought, amongst other things, the removal of a caveat from a title so that the respondent, as mortgagee in possession, could sell the related property. The Master had ordered that the caveat be removed on 7 December 2017.

The appellant did not appeal against the order of 7 December 2017. Notwithstanding this, and despite the effective conclusion of the proceedings to which the interlocutory applications purported to be adjectival, the appellant pursued this appeal on the basis that the Master had erred in refusing to grant the relief he sought in his two applications.

By his first interlocutory application the appellant sought permission to file and serve a statement of cross-action. By his second interlocutory application the appellant sought an order setting aside the orders made on 7 December 2017 and re-opening the proceedings.

Held; the appeal against the second interlocutory application seeking an order setting aside the orders of 7 December 2017 and re-opening the proceedings should be dismissed. Assuming power exists to do as sought, the application was futile because the property to which the caveat related had been sold. The fate of the first interlocutory application was inextricably linked to the second in that the cause having been determined there was no longer an action in which to introduce a cross-action.

Bankruptcy Act 1966 (Cth) s 302; Law of Property Act 1936 (SA) s 55; National Consumer Credit Protection Act 2009 (Cth); Real Property Act 1886 (SA) s 191; Supreme Court Civil Rules 2006 (SA) rr 35, 242; Trustee Act 1936 (SA), referred to.

PSEVDOS v FIRST MORTGAGE COMPANY HOME LOANS PTY LTD
[2019] SASC 130

Masters Appeal:       Civil

HINTON J:

Introduction

1. This is an appeal against orders made by a Master of this Court dismissing two interlocutory applications made by the appellant in proceedings instituted by the respondent in which, amongst other things, the respondent sought the removal of a caveat from a title so that as mortgagee in possession it may sell the related property. Ultimately, the order was made that the caveat be removed. The appellant has not appealed that order. Despite this, and notwithstanding the effective conclusion of the proceedings to which the interlocutory applications purported to be adjectival, the appellant pursues his appeal against the refusal to grant the relief he sought in those applications.

2. For the reasons that follow I would dismiss the appeal.

   Background

3. In January 2017 the respondent entered and took possession of a property situated at 108 South Terrace, Adelaide (the South Terrace property), in its capacity as mortgagee in consequence of the mortgagors’ default on the loan made to them by the respondent and secured against the property. The appellant was one of the three mortgagors who borrowed from the respondent. He disputes that he held an interest in the property in a personal capacity as tenant in common with the other mortgagors, Mr and Mrs Costi. He contends that he held title in the property and, indeed, borrowed money for its purchase, as trustee for the Orio Investment Trust.

4. Importantly, in June 2016 a sequestration order was made in respect of the bankrupt estate of the appellant. Consequently, whether or not the appellant held an interest in the South Terrace property in a personal capacity or as trustee determined whether such interest formed part of his estate that vested in the trustee in bankruptcy.

5. After taking possession of the South Terrace property the respondent arranged for its sale at public auction on 23 September 2017. However, before the auction could be held, on 20 September 2017, the appellant arranged for a caveat to be placed on the title.

6. Backtracking momentarily, prior to entering and taking possession of the South Terrace property, the respondent, in purported compliance with s 55A(1) of the Law of Property Act 1936 (SA), served a default notice upon the mortgagors alleging that the appellant was a bankrupt. Subsequently, the respondent realised that s 302 of the Bankruptcy Act 1966 (Cth) prohibited reliance upon the fact of the appellant’s bankruptcy to support the action taken under s 55A.

7. By summons dated 20 October 2017 the respondent sought to remedy matters by instituting proceedings in this Court seeking an order under s 55A(2a) of the Law of Property Act 1936 (SA) dispensing with the requirement to give notice as required by s 55A(1). In the same proceedings the respondent sought an order under s 191(1)(d) of the Real Property Act 1886 (SA) directing the Registrar-General to remove the caveat that the appellant had lodged from the certificate of title to the South Terrace property. In what follows I refer to the respondent’s action as the substantive proceedings. It is in the substantive proceedings that the appellant made the two interlocutory applications subject of this appeal.

8. On 7 December 2017 the Master dismissed the respondent’s application to dispense with the requirement to comply with s 55A(1) of the Law of Property Act 1936 (SA), but granted the application under the Real Property Act 1886 (SA). Consequently, the caveat was removed and the South Terrace property was sold. Settlement took place on 25 January 2018.

9. It is necessary to say something more about the substantive proceedings and that aspect of them instituted under s 191 of the Real Property Act 1886 (SA). In Stone v Leonardis White J said:[1]

   Apart from allowing a caveator voluntarily to withdraw a caveat (s 191(h)), s 191 provides two means by which a caveat may be removed: subs (d) and subss (e)-(g). The latter provisions permit the caveatee to warn the caveat whereupon the caveat will be removed unless the court, on the caveator’s application, extends the period of 21 days. In Whallin v Bailbart Investments Pty Ltd, Cox J recommended a procedure for “the general run of [such] cases”. The effect is that applications under s 191(g) are commonly dealt with as interlocutory applications and in a manner similar to applications for an interlocutory injunction.

   A number of matters indicate that a similar approach is appropriate on applications under s 191(d).

   [footnotes omitted]

   [1] (2011) 110 SASR 503 at [20]-[21].

10. White J then proceeded to set out the matters that led him to hold that, on an application under s 191(d),[2] the onus is upon the caveator to satisfy the Court that his or her claim to an interest in the property raises a serious question to be tried, and that, on the balance of convenience, it is better to maintain the status quo until the trial of the action by preventing the caveatee from disposing of the property to a third party.[3] Accepting this, in the present case the appellant bore the onus of satisfying the Master that the question of whether the interest he held in the South Terrace property was trust property and his complaints concerning the administration of the loan raised a serious issue to be tried and that the balance of convenience dictated that the caveat should remain in place.

    [2] Section 191(d) is the forerunner to s 191(1)(d) of the Real Property Act 1886 (SA).

    [3]    Stone v Leonardis (2011) 110 SASR 503 at [22]-[26].

11. Before the Master, in support of his claim that he held the property as trustee for the Orio Investment Trust with the consequence that it did not comprise part of his personal estate, the appellant referred to the loan agreement[4] which identified the borrowers as himself in his capacity as trustee and in his own right, in addition to Mr and Mrs Costi. The Master observed that simply because the appellant may have borrowed the money used to purchase the South Terrace property in his capacity as trustee did not mean that the property necessarily belonged to the trust.[5] The appellant then referred to the purchase contract and the loan application, both as referring to him as purchaser in his capacity as trustee. Next the appellant referred to the loan having been serviced by direct debit from an account held in the trust’s name. The following exchange between the Master and the appellant then occurred:[6]

    [4]    Affidavit of Celia Mary Rose Maslen Powell, affirmed 18 October 2017, exhibit CP2; Appeal Book vol 1 at p 23.

    [5]    Transcript of proceedings, 7 December 2017 at p 30.

    [6]    Transcript of proceedings, 7 December 2017 at pp 30-31.

    HER HONOUR:      I might go back to my earlier question; do the books and records the trust have - this is an asset report - [record] that this has been an asset of the trust [since] 2004?

    MR PSEVDOS:       Yes.

    HER HONOUR:      Do you have those with you today?

    MR PSEVDOS:       No, I don’t.

    HER HONOUR:      You are not able to produce them?

    MR PSEVDOS:       Not this moment but.

    HER HONOUR:      At what moment?

    MR PSEVDOS:       If you are going to make an order for me to produce them I will produce them. I will produce the fact that the minutes record that this asset would be purchased by myself as trustee for the Orio Investment Trust. That minute exists.

    HER HONOUR:      Why hasn’t it been produced? Why haven’t you exhibited [it to] your affidavit material?

    MR PSEVDOS:       This has been filed now.

    HER HONOUR:      It’s not, it was in the previous affidavit material. Your affidavit was, only a couple of days ago, after all of the plaintiffs’ affidavit material, filed and it is when you raised this question.

    MR PSEVDOS:       Yes, I rely upon, I think it is reasonable too, there are three documents before this court together - and documents not produced by me, these are documents produced by the plaintiff, a standard loan application form even though it features the logo of Orio Mortgage being as their standard which clearly says that the ‘applicant is Spiros Psevdos as trustee for’. There is a loan agreement or before then, there is in fact a contract to purchase - a sale and purchase of land contract that clearly says that ‘the purchaser is Spiros Psevdos as trustee for’, followed up by a loan agreement that includes myself, in my own right, which is a standard, and treatment of how you deal with a trust deed when dealing with loan agreements and mortgage as trustee for Orio Investment Trust. On balance, I think that’s reasonably sufficient for me to believe that there is enough evidence before the court to come to the conclusion that it is probably a trust asset. On the balance of probabilities it is.

12. The first of the appellant’s two interlocutory applications (FDN 12) was filed on 6 December 2017. In that application, which the appellant asked be made specially returnable for the following day, the appellant sought leave to file and serve a counterclaim and consequential programming orders for the filing of any responding defence. The transcript for proceedings on 7 December 2017 indicates that the Master was aware of the appellant’s first interlocutory application and had read the papers. The appellant’s first and second affidavits were before the Court. They provided little evidence in support of the claim that he held an interest in the South Terrace property as trustee. The first interlocutory application was held over to a directions hearing on 23 February 2018.[7] The Master commented that in the light of the orders she had made that “some of the things in your application, Mr Psevdos, may well fall away”.[8]

    [7]    The directions hearing was subsequently administratively vacated.

    [8]    Transcript of proceedings, 7 December 2017 at p 56.

13. The appellant’s second interlocutory application (FDN 36) was filed on 14 May 2018 and sought an order in the following terms:

    The order made on 7 December 2017, that determined Spiros Psevdos as trustee of the Orio Investment Trust “is not the beneficial owner of the property” (the subject portion) be set aside and in lieu thereof a declaration be made that the subject portion of the land was beneficially owned by the Trust fund.

14. Both interlocutory applications were heard by the Master on 18 May 2018, approximately six months after the substantive proceedings had been determined. Further, it is to be recalled that the outcome of the substantive proceedings in relation to the application under s 55A(1) of the Law of Property Act 1936 (SA) was favourable to the appellant. Thus, to the extent that his interlocutory applications were pursued, it was within the decisional context of the application for the removal of the caveat under s 191(1) of the Real Property Act 1886 (SA).

15. By the time of the hearing on 18 May 2018 the appellant had filed and served his fourth affidavit. It contained more evidence regarding the capacity in which he purchased and held an interest in the South Terrace property, but did not exhibit the trust accounts.

16. With respect to FDN 12 the Master reasoned:

    Psevdos says that he is entitled to file a counterclaim against the plaintiff in this action. It seems that he seeks to file a counterclaim to challenge the conduct of the plaintiff in taking possession of the property. By way of remedy he seeks, amongst other things, a variety of declarations, damages and compensation, and possession of the property. In his submissions he referred to “electing to show cause” by way of counterclaim or cross-action. He says that these proceedings have not resolved, as he has elected to proceed by counterclaim. He relied on what he says are breaches by the plaintiff of the Uniform Consumer Credit Code. In particular, he argued that the Code applied to the loan because it was a fully documented loan, and at the time that the plaintiff took possession of the property, it was not used as an investment.

    The plaintiff opposed the orders sought on the basis that there is no provision available to grant leave to Psevdos to file a counterclaim. Any counterclaim should have been filed at the time that a defence was filed; it was not. There is now no ability to grant him leave to do so. Psevdos’ application is not misconceived; there is no power to grant the leave sought. It argued that the Code did not apply to this loan at any time.

    FDN 12 must be dismissed. It is misconceived. This matter did not proceed on pleadings. It dealt with a discrete issue. It commenced as an application by the plaintiff to have a caveat removed from the property. Psevdos was given ample opportunity to raise all of the issues that he sought to raise in opposition to this order, by way of affidavit material, prior to the hearing on 7 December 2017.

17. The broader relief that the appellant sought relied upon the application of the National Consumer Credit Protection Act 2009 (Cth) (NCCPA). It was unnecessary in view of the Master’s conclusion as set out in the passages quoted above that the Master determine whether the Code was applicable to the respondent’s administration of the loan, nonetheless she ventured the tentative view that it was not.

18. It is important to observe that in the final paragraph in the passage quoted above two reasons are given for dismissing the application. First, that it was misconceived. Second, that it was, in any event, too late to seek the relief contained in the application.

19. Turning to FDN 36, the Master said:

    Psevdos, in support of this application, filed a significant amount of affidavit material by which he sought to demonstrate that he owned the property in his capacity as trustee, not in his own right. Much of this material was not available at the hearing on 7 December 2017. Effectively, Psevdos, by FDN 36, is asking me to reopen the argument, allow the introduction of fresh evidence, and make different orders in substitution of the ones made on 7 December 2017.

    In my view, Psevdos’ application is misconceived. If he seeks to challenge the orders that I made on 7 December 2017, he must appeal them. In the course of any appeal, he may seek to adduce fresh evidence. In the event that the appeal judge allows the fresh evidence, he or she would be entitled to have regard to the evidence that was before me on 7 December 2017, as well as the evidence that Psevdos now seeks to adduce.

    I am not now in a position to consider fresh evidence and change the finding that I made on 7 December 2017. At the time of the hearing on 7 December 2017, I found that the evidence before me did not support a finding that Psevdos was the registered proprietor of the property in his capacity a trustee of the Orio Investment Trust. He cannot seek to make up that evidential deficit after the event.

20. The formal order made by the Master in relation to each of FDNs 12 and 36 was “FDN12 and FDN36 are dismissed”. Costs applications followed and on 30 August 2018 the Master ordered that the appellant pay the respondent’s costs of and incidental to the hearing and determination of FDNs 12 and 36 “on the usual basis”.

21. The appellant now appeals against the orders dismissing FDNs 12 and FDN 36.

    The appellant’s argument on appeal

22. The appellant’s Notice of Appeal contains two grounds.

23. My understanding of the first ground is that the Master is said to have erred in the exercise of her discretion refusing the appellant leave to file and serve his statement of cross-claim.

24. The cross-claim targets the conduct of the respondent in the administration of the loan made in relation to the purchase of the South Terrace property and the action taken upon default. The appellant’s criticism of the respondent’s administration of the loan concerned in the main the application of the NCCPA. He contends that the Master was wrong in her tentative conclusion that the NCCPA did not apply to the loan in this case. He submits that the loan was of a type caught by the NCCPA and that:

    I did not as trustee grant a mortgage in favour of the Respondent on terms or covenant that permit the waiver of any statutory obligation to give notice in the event of default leading to, a demand for “bullet re-payment” (acceleration) after the fact, the taking of possession and finally the exercise of mortgagees’ power of sale.

    The Respondent’s conduct reduces to a unilateral change of credit terms. The Respondent exercised powers pursuant to a credit contract, and mortgage, unilaterally changing its terms without first giving notice, of not less than 20 days. A contravention of this kind imposed a criminal penalty of 100 penalty units and is a strict liability offence.

    [footnote omitted]

25. Thereafter in his written submissions the appellant documents the asserted failings by the respondent to comply with obligations imposed by or under the NCCPA. Ultimately, he contends that such conduct resulted in the property being sold at less than the market value, adopting a process that resulted in the incursion of excessive cost.

26. In support of his second ground of appeal, which attacked the disposal of the second interlocutory application, the appellant contended that the Master had power pursuant to r 242 of the Supreme Court Civil Rules 2006 (SA) (SCCR) to set aside the order she made on 7 December 2017. He submitted that the Master ought to have been satisfied on the evidence adduced that the South Terrace property was trust property and was not purchased nor held by him in his personal capacity. In support of this contention the appellant took the Court to the loan application that was forwarded to the respondent.[9] The application identifies the applicant seeking finance as “Trust Spiros Psevdos”. Further, the application sets out the asset position of the trust and purports to distinguish the liabilities of the trust from those of the appellant. Next the appellant took the Court to the front page of the sale/purchase contract for the South Terrace Property.[10] In that document the purchaser is identified as, “Spiros Psevdos as Trustee of the Orio Investment Trust and/or Nominees”. The appellant submitted that he did not have a copy of the entire contract and enquiries had failed to locate a copy. The appellant then pointed out that in the loan agreement the borrowers were identified as Mr and Mrs Costi and the appellant, the latter in his capacity a trustee.[11] Referring to the terms and conditions of the loan, the appellant pointed out that they made him liable under the loan agreement in his own right as well as in his capacity as trustee.[12] Next the appellant pointed to a bank statement recording payments made in compliance with the loan agreement for the South Terrace property out of an account held in the appellant’s name as trustee.[13] The point was that the loan was serviced by the trust consistent with the property being trust property. Further, in the document conferring power on the appellant to act in the purchase of the South Terrace property for Mr and Mrs Costi he is again styled, “Trustee of the Orio Investment Trust”,[14] and in a schedule to the contract for the purchase of the South Terrace property containing the executive clause it can be seen that the appellant signed in his capacity as trustee.[15] Next the conditional approval of finance provided by the respondent records the identity of the three borrowers as Mr and Mrs Costi and the appellant in his capacity as trustee and personally.[16] Insurance cover was arranged in the name of the appellant as trustee,[17] and in a document entitled, “Instructions and Authority to Act”, dated 14 July 2004, the appellant instructed Costi & Co Commercial Lawyers, to complete a memorandum of transfer and memorandum of mortgage, amongst other documents, nominating himself in his capacity as trustee as the purchaser and titleholder of the South Terrace property along with Mr and Mrs Costi.[18] The appellant submitted that Costi & Co did not follow instructions in that the title does not refer to him as trustee but rather as titleholder in a personal capacity.

    [9]    Appeal Book vol 2 at p 582.

    [10]   Appeal Book vol 2 at p 458.

    [11]   Appeal Book vol 1 at p 23.

    [12]   Appeal Book vol 1 at p 166.

    [13]   Appeal Book vol 2 at p 499.

    [14]   Appeal Book vol 2 at p 455.

    [15]   Appeal Book vol 2 at p 465.

    [16]   Appeal Book vol 2 at p 467.

    [17]   Appeal Book vol 2 at p 470.

    [18]   Appeal Book vol 2 at p 476.

1. This evidence in combination was sufficient, the appellant contended, for the Master to conclude that the South Terrace property was in part trust property.

2. In his oral submissions the appellant then said:

   Yes.  I went before the court and that being on the 14th or the material was filed on the 14th. I made an application not necessarily to change the - sorry, to set aside the order that the caveat be removed.  That’s spent.  The caveat was removed. They proceeded to issue proceedings and they settled the matter on 25 January with the Costis in what I say was a clandestine transaction but that’s a matter for trial and it’s not something that I really want to labour on today on the basis that these are the documents and these are the reasons why I couldn’t provide them to you before 7 December.

   This is what you did have. Every effort was made to explain that.  Can the correction be made even though your ruling wasn’t conclusive per se, it was based on the documents before me Judge Bochner couldn’t make. Judge Bochner then says this is a matter of appeal.  I’m not appealing the judgment, the judgment or the ruling.  I’m asking for a correction to be made or an addition that based on the fact that these documents now before me I thought it was a very efficient way of dealing with it as opposed to pleading it out on appeal and incurring further cost is for the declaration to be made.

   Now there is a knock-on effect and I had a very brief conversation with Mr Ryder today is the trustee in bankruptcy considers this an asset of the bankrupt, that’s myself.  They refused after that order to hand me back possession of the property.  They refused to accept - I could take a prospective purchaser to the property but I needed to be supervised by the trustee in bankruptcy last December.

3. The appellant then explained the “knock-on effect” being that the interest he held in the property had been treated as forming part of his estate and thus was amenable to realisation and the proceeds distributed amongst his creditors by the trustee in bankruptcy.

4. I was advised that the trustee in bankruptcy was in Court for the hearing of the appeal but did not wish to participate in the appeal.

5. The appellant went on in his submissions to state that his primary concern in these proceedings was that this Court make an order declaring that the evidence that was provided to the Master was factually incorrect. That is, the appellant made plain that his primary concern was not to have the orders made by the Master set aside. Rather he said:

   My primary concern is that this court make a declaration, not necessarily changing the findings of Judge Bochner, but on the basis that it did warrant a correction on the basis of the evidence that was put in August that it does warrant a correction.

6. The declaration sought was to the effect that the South Terrace property was held by the appellant as trustee for the Orio Investment Trust and thus belonged to the trust.

7. The respondent seized on this and submitted that, the appellant not seeking the correction of orders made but an alteration to reasons, the appeal should be dismissed. Further, and in any event, the respondent contended that there was no utility in the appeal. The caveat had been lifted, the property sold and the mortgage discharged. Any claim the appellant might have against the respondent could be brought as an independent action.

8. Turning to the first ground of appeal more specifically, the respondent contended that there was no requirement that the appellant obtain leave to institute his cross-action under the SCCR. All that was required was that the cross-action be filed and served within the time prescribed (i.e. within the time allowed for the filing and serving of a defence).[19] That said, under the Bankruptcy Act 1966 (Cth) if and to the extent that the appellant was instituting the proceedings in a personal capacity as opposed to as trustee, the prosecution of the cross-action would depend upon the appellant’s trustee in bankruptcy electing whether or not to do so.[20] In any event, leave to proceed was not required but an extension of time was. On this issue, the respondent contended that, if the Court were minded to entertain an application for an extension of time (and, presumably set aside the orders made on 7 December 2017) such application should not be granted because, primarily, the real issue was whether the appellant had met the standard necessary for the maintenance of the caveat which, on 7 December 2017, he did not. Counsel added that if the Court declined to grant an extension of time it would cause no injustice to the appellant because the substance of the cross-action, as detailed in the appellant’s first and second affidavits, had already been considered by the Court.

   [19]   Supreme Court Civil Rules (2006) (SA), r 35(3).

   [20]   Bankruptcy Act 1966 (Cth), s 60.

9. As to the second ground of appeal, the respondent attacked the foundation for the cross-action as equivocal. The appellant was reliant upon documents that also suggested that in some respect he held a personal interest in the property. The better interpretation of the documents was that the Orio Investment Trust acted as an agent for the appellant, that it lent from the respondent and then on-lent to the appellant to buy the property in his own right. In this connection, counsel for the respondent first took the Court to the statement of counterclaim in which the appellant states that he is the registered proprietor of the South Terrace property “in my own right and in my capacity as trustee for the Orio Investment Trust”.[21] Thus on his own admission the appellant personally had some interest in the South Terrace property. Next the deed for the Orio Investment Trust in clause 12 invested power in the trust to borrow money in addition to power to mortgage or charge property.[22] This power coupled with the power contained in clause 11 to lend money to the beneficiaries created the structure that would allow for the trust to have borrowed money from the respondent and then lent it on to the appellant to buy the South Terrace property.[23] The appellant was the specified beneficiary of the trust.

   [21]   Appeal Book vol 2 at p 335.

   [22]   Appeal Book vol 1 at p 111.

   [23]   Appeal Book vol 1 at p 108.

10. Counsel then took the Court to the Nomination and Authority Form to which the appellant had referred.[24] This document demonstrated that the trust acted as agent for Mr and Mrs Costi. It was submitted that a similar document must have existed in order for the trust to act as agent for the appellant. Whether or not this be so, the document that related to Mr and Mrs Costi was indicative of the possibility of the trust acting in a dual capacity. Again that possibility is fuelled by the statement of counterclaim.

    [24]   Appeal Book vol 2 at p 455.

11. Counsel for the respondent conceded that the evidence upon which the respondent relied as demonstrating that the appellant in a personal capacity had an interest in the South Terrace property was imperfect. Nonetheless, the documentary evidence was insufficient to satisfy the Master that the appellant did not have a personal interest in the property. The contract itself was equivocal as was the application for finance.[25] Counsel said that there was no dispute that the trust was the borrower and was liable for the loan. Nor was there any dispute that in his own right the appellant was also a borrower. But the fact that the trust was a borrower did not mean it held title in the South Terrace property.

    [25]   Appeal Book vol 2 at p 582.

12. Counsel for the respondent brought his submissions to a close contending that the documentary evidence was limited. It did not allow the Court to determine whether the trust was titleholder and banker, or titleholder or banker. Counsel contended that ordinarily a court might expect to be provided with the Orio Investment Trust balance sheet maintained as required under the Trustee Act 1936 (SA) in addition to the trust accounts. These documents not being provided, the Court should infer that they cannot assist the appellant. The ultimate point made was that the question of whether the trust had an interest in the property was not clear at all and that what was before the Master on 7 December 2017 was simply insufficient to satisfy her that the caveat should be maintained.

13. Lastly, this was an inappropriate forum for the appellant to seek a declaration binding on the trustee in bankruptcy as to the beneficial ownership of the South Terrace property.

    Consideration

14. Focussing on FDN 36, the power contained in r 242 SCCR is not as broad as a literal understanding of the rule suggests. The breadth of r 242 SCCR remains to be determined.[26] Whatever its ambit, it is discretionary.

    [26]   Keung v Abbott (No 2) [2019] SASCFC 39.

15. When FDN 36 was heard by the Master the appellant’s focus was upon attempting to persuade the Master that she should, in effect, entertain his arguments afresh as to there being a serious issue to be tried warranting the retention of the caveat in the meantime. The appellant’s evidence was new but not fresh in the sense that lawyers use those terms. Of course, the caveat had been removed and settlement had taken place on the South Terrace property. In my view the Master was right to refuse the application. Not only do I detect no error in the exercise of the discretion to re-open, assuming the power extended to permit her to do so, I consider the Master was right in her conclusion. Near on six months had passed, the appellant had his opportunity to contest the removal of the caveat, no sufficient reason was given that warranted granting him a second opportunity (assuming that could be done), and in any event, settlement having occurred, the application was futile. The whole purpose of the caveat was to preserve the subject of the cause. That could no longer be achieved. The appeal against the dismissal of FDN 36 must be dismissed.

16. The fate of FDN 12 cannot be separated from FDN 36 in that unless the orders of 7 December 2017 are set aside there is no cause in which to introduce the cross-action. Accordingly, the appeal against FDN 12 must also be dismissed.

17. In this Court in the course of the appellant’s reply the following interchange occurred;

    HIS HONOUR:    The first argument put against you as I understood it is you appeal orders not reasoning.

    MR PSEVDOS:    Yes. I’m asking for a correction to the judgment.

    HIS HONOUR:    That in a way is not a correction to orders made, but to the reasoning, factual reasoning. So the other way you can deal with that is to say it’s wrong and that it’s led to a wrong conclusion, the order. Not - because if it doesn't lead to a wrong conclusion then -

    MR PSEVDOS:    Well it has led to a wrong conclusion and the power does vest with this court to make correction.

    HIS HONOUR:     But you don’t complain about the order and the order is spent.

    MR PSEVDOS:    Well it would be futile to change an order that’s spent. But it also would be unjust to leave an order, a ruling in play, in place, or reason of ruling that the order was effectively relying upon.

    To accept this proposition that the order has been spent and there’s no utility in making a correction or a declaration that it was in fact - well what's come before the court now, confirms that this is a trust asset, to me is an injustice. …

18. Thus the appellant no longer seeks orders quashing the orders made by the Master on 7 December 2017. He seeks a declaration either from this Court on appeal, or, from this Court upon remittal to the Master, that the South Terrace property was trust property. When these proceedings are stripped back it is apparent that the appellant sought to contest the application to lift the caveat on 7 December 2017 on the basis of the contentions advanced in his counterclaim supported by his first and second affidavits. Whilst the relief sought in the first interlocutory application was not considered on that occasion by the Master, the evidential material in support was. That material did not persuade the Master that there was a serious issue to be tried justifying the maintaining of the caveat. Having read the appellant’s first two affidavits, in addition to the respondent’s affidavits, I am of the view that the Master’s conclusion on 7 December 2017 was reasonably open.

19. In a sense it cannot be said that the appellant is now seeking a second opportunity to persuade the Court that there is a serious issue to be tried because he does not ask that the 7 December 2017 orders be altered. But if he does not challenge the relief granted in the substantive proceedings, that is the end of the matter. That is not to decide that a cross-action could not be introduced into the substantive proceedings. That question can await another day. The appellant’s difficulty is that the substantive proceedings were determined. The Master’s reasons make plain that her orders were perfected. It is no longer open to introduce into the action a cross-action unless the orders of 7 December 2017 be set aside, but, as indicated, the appellant does not seek such order.

20. It is trite that an appeal is only entertained against orders not reasons.[27] I decline the appellant’s invitation to grant a form of declaratory relief on the hearing of this appeal. Such relief, if pursued, should be sought in the normal way. I note the respondent’s concession that on the documents the question of the nature of the appellant’s interest in the South Terrace property is equivocal. I am inclined to agree. No need arises for me to consider whether I would draw an adverse inference from the appellant’s failure to adduce the trust’s accounts. If the question of the capacity in which the appellant held title in the South Terrace property arises elsewhere for consideration I anticipate oral evidence will need to be called.

    [27]   riclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45 at 64 (Barwick CJ and Kitto J).

21. I dismiss the appeal.