Raffae v Raja
[2011] WASC 182
•2 AUGUST 2011
RAFFAE -v- RAJA [2011] WASC 182
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2011] WASC 182 | |
| 02/08/2011 | |||
| Case No: | CIV:1756/2011 | 25 JULY 2011 | |
| Coram: | EM HEENAN J | 25/07/11 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Operation of caveat extended until further order Liberty to apply | ||
| B | |||
| PDF Version |
| Parties: | DAYANG RAIHAM PANGRIAN HAJI AHMED RAFFAE FAYYAZ AHMAD RAJA THE REGISTRAR OF TITLES |
Catchwords: | Caveat Application to extend Associated action seeking specific performance for conditional contract for sale of subject land Defence that contract is illegal and unenforceable because of contravention of Town Planning and Development Act 1928 Issues give rise to arguable claims Dispute fit for resolution in pending action |
Legislation: | Town Planning and Development Act 1928 (WA) Transfer of Land Act 1893 (WA) |
Case References: | Agaiby v Pantham Nominees Pty Ltd (1985) 55 LGR 405 Braham v Walker (1961) 104 CLR 336 Custom Credit v Ravi Nominees Pty Ltd (1992) 8 WAR 42 Landall Construction & Development Company Pty Ltd v Bogaers [1980] WAR 33 Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
FAYYAZ AHMAD RAJA
First Defendant
THE REGISTRAR OF TITLES
Second Defendant
Catchwords:
Caveat - Application to extend - Associated action seeking specific performance for conditional contract for sale of subject land - Defence that contract is illegal and unenforceable because of contravention of Town Planning and Development Act 1928 - Issues give rise to arguable claims - Dispute fit for resolution in pending action
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Legislation:
Town Planning and Development Act 1928 (WA)
Transfer of Land Act 1893 (WA)
Result:
Operation of caveat extended until further order
Liberty to apply
Category: B
Representation:
Counsel:
Plaintiff : Mr S K Shepherd
First Defendant : Mr A M Houghton
Second Defendant : No appearance
Solicitors:
Plaintiff : Tottle Partners
First Defendant : Arns & Associates
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Agaiby v Pantham Nominees Pty Ltd (1985) 55 LGR 405
Braham v Walker (1961) 104 CLR 336
Custom Credit v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Landall Construction & Development Company Pty Ltd v Bogaers [1980] WAR 33
Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232
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1 EM HEENAN J: The application before the court is by an originating summons and an associated chamber summons, each issued by the plaintiff on 4 May 2011, seeking an order under the Transfer of Land Act 1893 (WA) that the operation of caveat number I861440, registered by the plaintiff against the land the subject of certificate of title vol 2574 folio 797 be extended until further order, and for such further orders as the court may consider appropriate.
2 The application is supported by affidavits filed by a witness on behalf of the plaintiff, not the plaintiff herself, and there have been undertakings for damages offered. The matter came before Simmonds J on 5 May 2011 when an order was made extending the operation of the caveat until 4.00 pm on the date fixed for the hearing of the application under order 4. There were programming orders for the filing of affidavits and submissions, and the application has now been returned for hearing before the court today and I have heard argument from counsel and have considered the written submissions.
3 Although this application for the removal of the caveat has been brought relatively recently, the dispute between the parties has a much older origin, and it is the subject of an action in this court between the same parties, action number CIV 1348 of 2005. That is an action in which the present plaintiff and applicant is the plaintiff and in which the first defendant in the present application is the defendant. It is an action commenced by a writ of summons dated 24 March 2005 in which the plaintiff is seeking specific performance and associated relief in respect of the same alleged obligation in respect of which the caveat has been lodged.
4 In the ordinary course of events one would expect that other action, number CIV 1348 of 2005, to be the vehicle by which the essential issues between the parties concerning their dispute over the entitlement to the plaintiff's claim to be heard and determined, yet we have this application now for the removal of the caveat, which has been lodged to protect the very same claim which the plaintiff has asserted in that action. How can this be so? The explanation appears to be the very slow and unsatisfactorily inconclusive progress of action number CIV 1348 of 2005. Examination of the court file shows that a defence was put in by the defendant to that action on 25 July 2005, raising a series of factual denials and issues and pleading an alleged compromise agreement to vary the alleged obligations for the transfer of land relied upon by the plaintiff. From then on, progress has been very insignificant. There has been a long history of case management conferences which do not appear to have
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- produced any material progress, most of them being adjourned by consent. There was a change of solicitors in February 2009, followed by further adjournments of case management conferences. On 2 February 2011 the new solicitors for the defendant put in, by leave, an amended defence which raised, for the first time, pleas that the alleged contract being relied upon by the plaintiff for her claim to the subject land was illegal and unenforceable because of the provisions of s 20 of the Town Planning and Development Act 1928 (WA).
5 Following that amended defence there was a case management conference conducted on 3 February 2011 by a registrar of this court, which gave the plaintiff leave to file a reply by 4 March 2011 and directed that the parties submit the dispute to mediation to be conducted by a mediation registrar, and gave directions in relation to the impending mediation.
6 I have been informed by counsel, and therefore accept, that a mediation was conducted, resulting in the decision by the parties to apply in these caveat proceedings for a resolution of the issue, essentially the issue raised by the amended defence, whether or not the contract alleged by the plaintiff and relied upon for the relief which she claims is illegal and unenforceable under the provisions of the Town Planning and Development Act as amended.
7 I must say that this appears to be a curious initiative having regard to the fact that the action in CIV 1348 of 2005 had by then been on foot for six years or more and it is all the more curious that it should have prompted proceedings under the Transfer of Land Act when there was already an opportunity available to determine such an issue of law in the action then pending. However, that is the way the parties have approached the decision.
8 The situation before me is that the defendant to the originating summons, the first defendant, the defendant in what I will call the principal action is in effect submitting that the point newly introduced by the amended defence in February 2011 raising the Town Planning and Development Act is so obvious and conclusive that there is no merit in the plaintiff's claim and hence no arguable basis for the preservation of the caveat which so far has remained undisturbed.
9 I do not consider that that is a submission which I should accept. The situation is that in about August 2000 the plaintiff and the first defendant agreed that the plaintiff would transfer to the defendant land
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- situated at 10 Towerhill Road, Alexander Heights in the state of Western Australia, which is referred to later as the Towerhill Road land, to enable the defendant to purchase and subdivide another property. This other property is known as the Sultana Road land and is part of the land identified as lot 20 on diagram 24292, being all the land described in the certificate of title, vol 1912 folio 802. The intention of the parties was that the Sultana Road land would be subdivided and one of the emerging subdivided lots would be transferred to the plaintiff together with a money sum to be calculated to give effect to equality in value of exchange for the original Towerhill Road land when compared to the value of the subdivided Sultana Road land, including all expenses.
10 As a result, the plaintiff, by her husband, alleges that she negotiated the purchase of the Sultana Road land and paid for the deposit on behalf of the first defendant for the Towerhill Road land, that the Towerhill Road land was transferred to the first defendant on 20 August 2000, and that on 22 August 2000 the plaintiff and the first defendant executed a memorandum in writing confirming that, as consideration for the transfer of the Towerhill Road land, the first defendant, following the subdivision, would transfer a one hectare lot of the land to the plaintiff.
11 The Sultana Road land was registered in the name of the first defendant on 25 August 2000 and it is alleged that in October 2000 the first defendant made a statutory declaration confirming the terms of the agreement that he would, after subdivision, transfer a one hectare lot of the Sultana Road land to the plaintiff in consideration of the transfer of the Towerhill Road land, next sell the Towerhill Road land at a mutually agreed price, not less than its market value, next pay to the plaintiff the difference between the value of the Towerhill Road land and the net cost of the one hectare subdivided lot of the Sultana Road land and next fix the net cost of the one hectare subdivided lot for the Sultana Road land as $92,500 less the subdivision expenses for a single lot of one hectare determined by dividing pro rata the cost of the subdivision between the four subdivided lots.
12 Following this and, so the plaintiff asserts, pursuant to the alleged agreement, the Towerhill Road land was transferred to the plaintiff. The first defendant purchased the Sultana Road land. In 2001 the first defendant sold the Towerhill Road land and paid the defendant $20,000 from the proceeds.
13 Next a plan of subdivision was registered in respect of the land, being deposited plan 40528, whereby the land was subdivided into three
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- lots of approximately one hectare and one lot of 1.4 hectares, and finally on 20 April 2004 the first defendant consented to the caveat in question being lodged over the portion of the Sultana Road land identified as lot 1.
14 The caveat relied upon a statutory declaration which asserted that the basis for the interest being claimed was an equitable interest as purchaser arising from the agreement and included a copy of the first defendant's statutory declaration filed in these proceedings.
15 The subsequent history is that on 12 September 2004 the first defendant sold the Towerhill Road land but has since failed to transfer lot 1 to the plaintiff or to account to her for the additional proceeds from the sale of the Towerhill Road land. Hence these proceedings have been brought.
16 As I have previously remarked, the pleadings in the principal action CIV 1348 of 2005, until the February 2011 amendments, denied a number of these allegations and introduced other defences, but I am satisfied from the materials before me that there is an arguable case for the plaintiff to contend for the terms of the agreement as asserted. I do not regard those denials as a sufficient reason for refusing to extend the caveat or to contemplate an order which would in effect determine the substance of the action CIV 1348 of 2005.
17 The new amendments introduced, however, raise other questions. In relation to the plea raised by those amendments the first defendant asserts that the agreement relied upon is in contravention of the provisions of the Town Planning and Development Act in that it is not, at least explicitly, conditional upon subdivisional approval being sought and obtained; that it makes no provision for the subdivision to be sought and obtained within the time limit specified by the Act or at all; and that, for these and other reasons, it is by virtue of s 20B illegal and unenforceable.
18 The first defendant's submission goes on to rely upon s 20(1)(b) of the Town Planning and Development Act to contend that if the agreement were to be proved, the plaintiff would at the most only be entitled to a return of the consideration paid under the legal agreement, and that that would be a money claim which would not be a justification for the preservation of the caveat. In effect, the first defendant submits that the caveat should be removed and that he should be free to deal with the land.
19 The first defendant has disavowed any immediate intention to sell, but has suggested methods of refinancing which imply recourse to the
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- land for the purpose of mortgaging. It is not necessary to pursue those possibilities.
20 The basis for the first defendant's contention that the agreement is totally unenforceable, other than to the limited extent contemplated by s 20(1)(b) is the decision of the Full Court of this court in Landall Construction & Development Company Pty Ltd v Bogaers [1980] WAR 33, and particular reference is paid to the observations of Wickham J at page 34 and following.
21 By contrast, the plaintiff submits that if the contract fails to comply with the provisions of the Town Planning and Development Act as it stood at the date of the contract, that is not an obstacle of the claim which is presently made for various reasons. Firstly, the plaintiff's contention is that upon a proper construction of the agreement relied upon, it was always contemplated that the land the subject of lot 1 would be a subdivided lot, and that the agreement recognised a process of application for subdivision which implicitly made the contract conditional on subdivision approval being sought and approved.
22 Nevertheless, the first defendant maintains the position that the contract is defective because no time for applying for or securing that subdivisional approval and consent has been specified. As to that, I have been referred to the passage in the reasons of Wickham J in Landall Construction v Bogaers at 35 which makes reference to the reasons of Dixon CJ in Braham v Walker (1961) 104 CLR 336, 379. These acknowledge that, in certain circumstances, a past illegality, which has been spent and which would no longer obstruct implementation of the statutory purpose or prohibition, may result in a contract previously unenforceable becoming enforceable.
23 Whether or not that is the case in the present instance is a matter which would require further consideration and fuller argument. The plaintiff also relies on the recent decision of the Court of Appeal in Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232, where his Honour at [30] - [33] undertakes a most helpful review of the history of the decisions relating to the effect of s 20 of the Town Planning and Development Act, and in which his Honour makes reference to another decision of Burt CJ in Agaiby v Pantham Nominees Pty Ltd (1985) 55 LGR 405. The plaintiff advances the submission that in the present case this contract, as alleged and relied upon by the plaintiff, does not contravene the Act as properly construed.
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24 It is enough for me to say that I consider that the plaintiff's submissions in this respect raise a serious question for decision and that it would be appropriate for that issue to be decided in the substantive proceedings. There would be a number of considerable procedural disadvantages in me attempting to embark upon what would be, in effect, a final determination of these questions of law on the present originating summons. First of all, there has not been a sufficient opportunity in these proceedings to consider the exact terms of the alleged contract in circumstances where there are disputes as to the extent of those terms which in my view merit determination by trial if they cannot otherwise be agreed. Secondly, even if the terms of those contracts could be satisfactorily determined and construed in the present proceedings, an order which had the effect of terminating this caveat would leave the other proceedings pending. It may be possible in the other proceedings for the successful defendant to seek to apply, as a matter of res judicata, the ruling in this case, if I were to make one, that there were no grounds for the preservation of the caveat, but there would be cumbersome consequences if any party wished to appeal.
25 I have no doubt that it is in every respect preferable for action number CIV 1348 of 2005 to be completed and to serve its purpose of adjudicating according to law the issues between the parties, including the issue raised by the amended defence. I am satisfied that there are substantial reasons for the plaintiff to assert a claim to the land which is the subject of the caveat, and that being the case that the balance of convenience favours the continuation of the caveat. There are many authorities for that view including Custom Credit v Ravi Nominees Pty Ltd (1992) 8 WAR 42.
26 Accordingly I will grant the order sought by the plaintiff in the originating summons in CIV 1756 of 2011, namely, that the operation of caveat number I861440 lodged by the plaintiff against the title to the land, comprising certificate of title vol 2574 folio 797, be extended until further order and I will grant liberty to the parties to apply in that respect.
27 On the present application it seems that I should direct that the plaintiff take all due steps to prosecute with diligence and bring to an early trial action number CIV 1348 of 2005. Quite how she should decide to do that should be for her solicitors and advisers to recommend but there has been an order for directions in that action made as recently as 3 February 2011 which needs to be complied with, and it seems to me that then that action will be ready to be entered for trial.
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28 The costs of this originating summons and the hearing will be reserved for determination in the associated action CIV 1348 of 2005.
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