Re AIK Corporation Pty Ltd; Ex Parte AIK Corporation Pty Ltd
[2007] WASC 37
•10 JANUARY 2007
RE AIK CORPORATION PTY LTD; EX PARTE AIK CORPORATION PTY LTD [2007] WASC 37
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2007] WASC 37 | |
| Case No: | CIV:1020/2007 | 10 JANUARY 2007 | |
| Coram: | EM HEENAN J | 9/01/07 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Application to extend caveat refused Leave granted to apply on notice for leave to lodge a new caveat | ||
| B | |||
| PDF Version |
| Parties: | AIK CORPORATION PTY LTD ROCIO HERRICK REGISTRAR OF TITLES |
Catchwords: | Torrens land Caveat Purchaser under contract of sale Default in settling on day for completion or by extended date Vendor giving notice of default and termination Caveat lodged after notice of default Section 138B Notice given for removal of caveat Long delay in attempting to enforce purchaser's claim No evidence of being ready, willing or able to complete Ex parte application to extend caveat refused |
Legislation: | Transfer of Land Act 1893 (WA) |
Case References: | Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
AIK CORPORATION PTY LTD
Plaintiff
AND
ROCIO HERRICK
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Torrens land - Caveat - Purchaser under contract of sale - Default in settling on day for completion or by extended date - Vendor giving notice of default and termination - Caveat lodged after notice of default - Section 138B Notice given for removal of caveat - Long delay in attempting to enforce purchaser's claim - No evidence of being ready, willing or able to complete - Ex parte application to extend caveat refused
(Page 2)
Legislation:
Transfer of Land Act 1893 (WA)
Result:
Application to extend caveat refused
Leave granted to apply on notice for leave to lodge a new caveat
Category: B
Representation:
Counsel:
Plaintiff : Mr C P K Russell
First Defendant : No appearance
Second Defendant : No appearance
Solicitors:
Plaintiff : Birman & Ride
First Defendant : No appearance
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Nil
(Page 3)
1 EM HEENAN J: I am sitting to hear an ex parte motion to extend the operation of a caveat. This application was instituted on 9 January 2007 simultaneously with the issue of the writ of summons. It is supported by an undertaking by the corporate plaintiff for damages, a certificate of urgency and an affidavit of Ms Annette Ilse Kuhnert sworn 9 January 2007 which sets out some of the background of the transaction giving rise to the alleged interest in the land which is claimed by this caveat.
2 Neither the writ of summons nor the application for the extension of the caveat has been served on the defendant vendor or the second defendant, the Registrar of Titles. The reason for the urgency, so it is argued, is because the caveat which claims the interest in the subject land will, if not extended by order of this court, expire at midnight tonight by virtue of the operation of s 138B of the Transfer of Land Act 1893 (WA).
3 The particular caveat is caveat numbered J984373C, dated 13 November 2006 and lodged at the Land Titles Office on or about that date. The caveat appears at pages 25 and 26 of the affidavit of Ms Kuhnert and after identifying the subject land, the caveator claims an estate in fee simple as purchaser in the subject land pursuant to a contract of sale dated 25 July 2006 by which the defendant vendor and registered proprietor agreed to sell its estate and interest in the land above described to the caveator.
4 That caveat remained on the title and still remains at present, but the registered proprietor made an application to the Registrar of Titles pursuant to s 138B of the Transfer of Land Act seeking a notice to be sent to the caveator giving 21 days from the date of service of the caveat, after which the caveat would lapse unless an order of this Court were obtained extending its operation and a copy of the order lodged with the Registrar. That notice was issued by the Registrar of Titles on 20 December 2006 and it specifies that the caveat will lapse on 11 January 2007.
5 It was therefore only two days before the potential lapse of the caveat that this writ and ex parte application were issued and that is of some significance having regard to the fact that the contract of sale relied upon by the plaintiff caveator for its claimed title was dated 25 July 2006. That document, or two versions of it including one which was stamped, appears at pages 4 to 10 of the affidavit of Ms Kuhnert.
6 It is a contract for the sale of land by offer and acceptance under the REIWA approved forms involving an offer by the plaintiff, AIK Corporation Pty Ltd and/or nominee, to purchase the land at lot 384
(Page 4)
- Hampshire Drive, Cape Burney, WA 6530, of certificate of title volume 2626, folio 958, which is vacant land. The purchase price was $120,000, payable by a deposit of $2000 to be paid within seven days and the balance on settlement on or before 5 September 2006.
7 There was no provision for the contract to have been made subject to finance or any other discharging condition. The contract is accompanied by a schedule, the effect of which appears to be to make the sale subject to certain existing encumbrances in the form of restrictive covenants which affect the subject land. There is no suggestion before me that there is any impediment in the vendor's title which would justify the plaintiff purchaser refusing to accept the transfer of the land subject to those conditions.
8 As I have said, this unconditional agreement for the sale of the land was due for completion on or before 5 September 2006. On the day before the last day for completion the purchaser's solicitors communicated with a firm of settlement agents, presumably acting for the vendor, asking for an extension of the settlement date for the following properties, then mentioning two blocks, and asking for an extension of 21 days for each; one of those was the subject land. The facsimile transmission requested a reply advising whether or not the settlement agent's clients were agreeable to the requested extension.
9 There is a document from Sun City Settlements in reply, another facsimile, dated 5 September 2005, which includes the passage, and I quote:
"Further to your request of 4th September 2006, we have informed our vendor client of your request. The vendor client is agreeable to the request on the basis that your client pays the required penalty interest due on the contract from the 5th September 2006 until such time as settlement is achieved. We advise that our clients are ready, willing and able to settle as settlement is due 5th September 2006. We await receipt of your transfers of land and EAS Enquiry in due course."
10 There may be scope to question whether or not the settlement agent had authority to vary terms of the contract as there is really nothing to suggest that they did have that authority, but on the present application I will assume, without deciding, that there was authority for the settlement agent to make that variation and that the variation agreed involved the extension of the time of settlement of the contract to 26 September 2006.
(Page 5)
11 On the evidence before me, it is clear that the contract was not completed on or before 26 September 2006 and there is no evidence to suggest that there were any attempts or offers made to settle on or before that date.
12 The next step was that on 12 October 2006, by a firm of solicitors, the vendor gave notice of default to the plaintiff or nominee, specifying default by the plaintiff in failing to complete on or before 5 September 2006, and giving notice that the vendor intended to enforce the vendor's rights unless the default was remedied and certain costs were tendered.
13 By that notice the vendor also specified that if the default was not remedied within the time specified, that is within 10 business days from the date of service of the notice, the contract might be terminated. The notice ends with a paragraph stating that the vendor claims interest at the penalty rate on the purchase price from and including 5 September 2006 until such time as settlement is achieved.
14 It seems to me, without having heard any argument on the matter, that that notice specifies an alleged default and leaves open the opportunity for the purchaser to complete within 10 days of receipt of this notice, which would have been well after the date originally fixed for completion and also after the extended date fixed for completion.
15 The next step in the sequence is that the solicitors acting for the would be purchaser responded by letter of 25 October 2006 alleging that the notice of default was defective because of an alleged waiver of the requirement that settlement take place on 5 September 2006 and saying that:
"It continues to be our clients [sic] intention to settle as soon as possible."
- This letter entirely ignores the fact that if there had been an extension it was until not later than 26 September 2006. Its assertion of an intention to settle as soon as possible and within 14 days is outside the time for settlement specified in the notice of default.
16 A reply came from the solicitors for the vendor dated 27 October 2006 asserting that the notice of default was not defective and making reference to the vendor's consent to an extension being on the basis that a contract of extension was to be prepared and saying that:
"That was not complied with and therefore does not bind our client."
(Page 6)
17 This is a little difficult to follow on the limited information presently before the court, but it seems to imply that there were supplementary oral terms or perhaps a collateral contract specifying that the requested extension to 26 September 2006 was dependent upon the performance of certain additional obligations, one of which was to execute a form of contract of extension.
18 Be that as it may, the communication from the vendor's solicitors of 27 October 2006 ended by stating that it was the vendor's instructions to issue a notice of termination under cl 24.2(d) of the general conditions. Such a notice was issued dated 27 October 2006 and a copy appears at pages 22 to 24 of the affidavit which I have already described. The effect of the notice is that the vendor is attempting to terminate the contract and to forfeit the deposit.
19 It was not until after that notice of termination was given and received that a caveat was lodged, and it was not until after the caveat was about to lapse that the present proceedings were brought. There is no evidence before me of any present readiness, willingness or ability by the plaintiff to complete the transaction. The balance of the purchase price has not been paid into court or offered and there is no evidence about the solvency of the plaintiff, AIK Corporation Pty Ltd, to support the undertaking as to damages.
20 This makes it very difficult to assess the real merits of the plaintiff's claim which cannot, by any stretch of the imagination, be any better than the strength of its claim for specific performance. Against the claim for specific performance there is this delay in settlement which I have described in the narrative of the history which I have given. There is the absence of any evidence of present readiness, willingness or ability to complete by paying the purchase price and there is the absence of any evidence as to the financial strength of the plaintiff to support the undertaking as to damages.
21 There is also the fact that this application and the writ have been brought very late in the day, long after the existence of the dispute with the vendor obviously became apparent stemming from communications in October 2006 involving the notice of default and then the notice of termination.
22 It seems to me that the present dilemma of the imminent lapse in the caveat is really due to the fact that the plaintiff has taken no steps to bring proceedings or to protect its position until the very last minute and I must
(Page 7)
- say that this has some similarity with the plaintiff's neglect to settle on the due date or any other date. I must say that there is no evidence before me of any reason why the plaintiff did not settle when originally obliged or within the extended period if the extension was valid.
23 It seems to me that to grant the relief sought by the plaintiff in the absence of hearing the first defendant on an ex parte application is to risk the possibility of prejudice of a substantial kind to the first defendant. All I can say is that the law always has favoured, and when it comes to relief of an equitable kind involving specific performance still insists upon, a plaintiff seeking such relief acting promptly.
24 For those reasons I am not prepared to extend the caveat on this ex parte application. What I propose are orders to this effect:
(1) first of all to refuse the application for ex parte orders;
(2) order that the writ of summons, the application for the extension of the caveat and the other papers which have presently been filed, be served on the defendants as soon as possible;
(3) give leave to the plaintiff to amend the application to seek leave pursuant to s 138D of the Transfer of Land Act to lodge a further caveat claiming this interest following the lapse of the existing caveat, and to re-list this matter for hearing before the Judge in chambers on 17 January 2006 and to give any party affected by these orders liberty to apply.
25 All questions of costs will be reserved. Those will be the orders.
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