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RDN Developments Pty Ltd v Shtrambrandt

RDN Developments Pty Ltd v Shtrambrandt

Case [2011] VSC 130 16 May 2011

Unjust Enrichment

Compensatory Damages

Statutory Construction

Property Law

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST C

No. 8744 of 2009

RDN DEVELOPMENTS PTY LTD (ACN 099 924 277)

Plaintiff

ARKADY SHTRAMBRANDT

PROSPERO FRANZESE

and

ANDREW MAY

Defendants

Third Party

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JUDGE:	CROFT J
WHERE HELD:	Melbourne
DATE OF HEARING:	24, 25, 27, 31 January; 1-3 and 14 February 2011
DATE OF JUDGMENT:	16 May 2011
CASE MAY BE CITED AS:	RDN Developments Pty Ltd v Shtrambrandt & Ors
MEDIUM NEUTRAL CITATION:	[2011] VSC 130	1^st Revision: 16 June 2011 – [7]

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TORRENS SYSTEM – Claim for compensation for lodging caveat without reasonable cause – Transfer of Land Act 1958 (Vic), s 118 - Lee v Ross (No 2) (2003) 11 BPR 20,991.

SALE OF LAND – Effect of sale of lots on unregistered plan of subdivision without complying with the requirements of sub-s 9AA(1) of the Sale of Land Act 1962 (Vic) – Sale of Land Act, s 9AE.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff and Third Party	Mr J.S. Barber	De Wet Partnership
For the First Defendant	In person
For the Second Defendant	No appearance

HIS HONOUR:

Introduction

The plaintiff’s claim is for compensation from the first defendant under s 118 of the Transfer of Land Act 1958 (Vic) (“the Act”) for lodgement of a caveat without reasonable cause. Although there are two named defendants to this proceeding, the claim is now solely against the first defendant, as, on 19 January 2011, the second defendant’s solicitors informed the Court that the second defendant had settled with the plaintiff. As a result, the contribution notice it had served on the first defendant on 23 November 2009 was discontinued, and the second defendant played no further part in defending the plaintiff’s claim.

The plaintiff claimed compensation on the basis of loss which it claimed to have suffered as a result of delay in the sale of the whole of the property the subject of the caveat. The delay, it was said, was caused by the presence of the caveat and the loss flowing from the delay due to a falling property market. The sum now claimed is $453,025.79, plus statutory interest, made up as indicated below.

Background

It is common ground that from about 11 November 2006 until about 7 March 2009, the plaintiff was the registered proprietor of the land described in Certificate of Title Volume 6595 Folio 817, situated at and known as 21 Alfada Street, Caulfield South (“the property”).

Subsequently to 11 November 2006, the plaintiff demolished the then existing house on the property and constructed two townhouses in its place.

On 13 October 2008, the second defendant, as solicitor and agent on behalf of the first defendant, lodged a caveat (numbered AG 139394B in the Land Titles Office) on the title to the property, claiming “an estate in fee simple” and specifying as the grounds of claim that “[t]he registered proprietor holds the property on trust for the caveator…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading RDN Developments Pty Ltd v Shtrambrandt

Details

AGLC: RDN Developments Pty Ltd v Shtrambrandt [2011] VSC 130
Case: [2011] VSC 130
Decision Date: 16 May 2011

CaseChat Overview and Summary

In the matter of RDN Developments Pty Ltd v Shtrambrandt, the plaintiff sought compensation for the lodgement of a caveat without reasonable cause against the defendant's property. The dispute arose when the defendant lodged a caveat on the plaintiff's property after the plaintiff had sold lots on an unregistered plan of subdivision, which did not comply with the statutory requirements of the Sale of Land Act 1962 (Vic). The case was heard in the Supreme Court of Victoria, with the plaintiff arguing that the caveat was lodged without reasonable cause, while the defendant contended that the caveat was validly lodged due to the irregularity in the sale of the lots. The court was tasked with determining whether the caveat was lodged with reasonable cause and whether the sale of the lots was valid despite the irregularity.

The central legal issues before the court were whether the defendant's caveat was lodged without reasonable cause and whether the sale of the lots on the unregistered plan of subdivision was valid under the Sale of Land Act 1962 (Vic). The court considered whether the defendant had acted reasonably in lodging the caveat in light of the irregularities in the sale and whether the irregularities invalidated the sale of the lots. The court also examined the relevant statutory provisions and relevant case law, such as Lee v Ross (No 2) (2003) 11 BPR 20,991, to determine the appropriate legal standards for assessing the reasonableness of the caveat and the validity of the sale.

The court found that the defendant's caveat was not lodged without reasonable cause, as the irregularities in the sale of the lots provided sufficient grounds for the defendant to believe that the sale was invalid. The court held that the defendant had acted reasonably in lodging the caveat in light of the irregularities, and that the caveat was therefore valid. The court also held that the irregularities in the sale did not invalidate the sale of the lots, as the statutory requirements for the sale of land were not strictly adhered to. The court relied on the principles established in Lee v Ross to conclude that the irregularities did not render the sale invalid, and that the sale was therefore valid. The court ultimately dismissed the plaintiff's claim for compensation.

The court ordered that the plaintiff take nothing by way of claim and that each party bear their own costs of the proceeding.

Orders