Reschke v Trevor Reschke Nominees Pty Ltd - [2018] SASCFC 107

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Permission to Appeal in Private)
RESCHKE v TREVOR RESCHKE NOMINEES PTY LTD
[2018] SASCFC 107
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Blue and The Honourable Justice Lovell)
17 October 2018
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - RIGHT OF APPEAL - WHEN APPEAL LIES - FROM INTERLOCUTORY DECISIONS - LEAVE TO APPEAL
REAL PROPERTY - TORRENS TITLE - CAVEATS AGAINST DEALINGS - REMOVAL
The Plaintiff seeks permission to appeal against decisions of two single Justices, respectively dismissing appeals from decisions of two Masters.
On application of the Plaintiff, a Master granted an extension of time for removal of a caveat. Another Master set aside the original Master’s decision on the basis of material non-disclosure by the Plaintiff. The Plaintiff seeks permission to appeal against the dismissal by a single Justice of an appeal against that decision.
The original Master then heard a fresh application by the Plaintiff for an extension of time for removal of the caveat and refused the application. The Plaintiff seeks permission to appeal against the dismissal by a single Justice of an appeal against that decision.
Held:
1. Permission to appeal granted on ground 1 in relation to the second decision (at [13]-[14])
2. Permission to appeal granted on ground 2 in relation to the first decision (at [18]).
Real Property Act 1886 (SA) s 191, referred to.

RESCHKE v TREVOR RESCHKE NOMINEES PTY LTD
[2018] SASCFC 107
Full Court: Kourakis CJ, Blue and Lovell JJ
THE COURT:

The plaintiff Burke Reschke seeks permission to appeal against orders by single Justices dismissing appeals against orders by Masters in relation to the removal of a caveat.
The defendant Trevor Reschke Nominees Pty Ltd (TRN) is owned and controlled by the plaintiff’s brother Dru Reschke and his mother Vivian Reschke. It owns approximately 225 hectares of land at Coonawarra (the subject land).
Adjacent and to the south of the subject land is approximately 194 hectares of land (the Rocky Castle land) owned by Fabriano Pty Ltd (Fabriano). Burke Reschke in a different action claims beneficial ownership of the Rocky Castle land by reason of a constructive trust based on proprietary estoppel.
Adjacent and to the north of the subject land is approximately 165 hectares of land (the Vineyard land) owned by Reschke Vineyards Pty Ltd (Reschke Vineyards), a company effectively owned and controlled by Burke Reschke. Adjacent and to the east of the Vineyard land is approximately 165 hectares of land (the Grazing land) that was also owned by Reschke Vineyards.
In January 2017 Burke Reschke lodged a caveat over the title to the subject land in support of a claim to beneficial ownership by reason of a constructive trust based on proprietary estoppel. This was prompted by the entry by TRN into an agreement to sell the subject land to a Mr Gartner. After TRN applied to the Registrar-General to have the caveat removed, Mr Reschke in February 2017 instituted this action making the constructive trust claim and seeking an extension of time for removal of the caveat pursuant to section 191(g) of the Real Property Act 1886 (SA) (the Act).
On 14 March 2017 a Master heard argument on Burke Reschke’s application to extend time for removal of the caveat and reserved judgment. On 11 May 2017 the Master delivered reasons and made an order extending the time for removal of the caveat.
On 12 May 2017 a solicitor Mr Westley sent an email to the solicitor acting for TRN in this action attaching a copy of a contract between Reschke Vineyards and Mr Gartner for the sale of the Grazing land. The contract was executed by Mr Gartner on 10 April 2017 and by Burke Reschke on 19 April 2017.
On 16 May 2017 TRN applied for an order removing the caveat on the basis of material non-disclosure supported by an affidavit by its solicitor exhibiting the Grazing land contract. That application was heard by a different Master on 5 October 2017. At that hearing, Burke Reschke relied upon two further affidavits in addition to his two affidavits relied upon at the hearing before the original Master. He was also cross-examined. He gave explanations why he sold the Grazing land notwithstanding his overall desire to retain ownership and control of Reschke family land; exhibited email communications to which Dru Reschke was a party with a view to proving that he was aware of the sale of the Grazing land; and explained why he had not disclosed the sale to the original Master. TRN did not adduce any evidence on its application other than the affidavit by its solicitor filed in support of the application. The Master heard argument and reserved judgment.
On 20 November 2017 the Master delivered reasons for judgment and made an order setting aside the May 2017 orders by the original Master on the basis of material non-disclosure by Burke Reschke of the April 2017 sale of the Grazing land, reserving liberty to Mr Reschke to make a fresh application for extension of time for removal of the caveat. On 7 March 2018 a single Justice dismissed Mr Reschke’s appeal against that order.[1] This is the subject of the first application for permission to appeal.
[1] Reschke v Trevor Reschke Nominees Pty Ltd [2018] SASC 22.
On 26 March 2018 the original Master heard Burke Reschke’s fresh application for an extension of time for removal of the caveat. The Master gave ex tempore reasons for dismissing the application. The Master accepted that Burke Reschke had established a prima facie case but considered that damages were an adequate remedy. The Master said:
At the first hearing of this matter the plaintiff’s position was that the land should not be sold so that the family property may remain intact. His position now is that parcels of land may be sold where it is commercially convenient to do so.
In the circumstances where the plaintiff’s case has gone from one of emotional attachment to commercial expediency, I do not accept that damages would not be an adequate remedy. The loss of infrastructure currently located on the subject land can be compensated for by an award of damages. There are no other circumstances which suggest damages would not be an adequate remedy.
On 30 August 2018 a single Justice dismissed Mr Reschke’s appeal against that order.[2] The Judge concluded that no House v The King error had been demonstrated and in any event the Judge would have exercised his own discretion not to extend time for removal of the caveat. This is the subject of the second application for permission to appeal.
[2] Reschke v Trevor Reschke Nominees Pty Ltd [2018] SASC 120.
The principal ground of appeal sought to be advanced on the second appeal is that, in assessing the balance of convenience, the Judge gave insufficient weight to the fact that a prima face case had been established and ought to have found that damages would not be an adequate remedy. The applicant contends that, in exercising the jurisdiction conferred by section 191(g), great weight must be placed on the fact that removal of a caveat will destroy the proprietary interest claimed and that the Master and the Judge on appeal did not refer to this factor or decisions in relation to it. The applicant refers to a series of decisions in the Supreme Court of Western Australia in relation to the equivalent Western Australian statutory provision[3] and to decisions by single Judges of this Court which he contends are to the same effect.[4]
[3] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42 at 50 per Owen J (with whom Malcolm CJ and Walt J agreed; Bashford v Bashford [2008] WASC 138 at [105] per Beech J; National Australia Bank v McCourt [2010] WASC 237 at [39] per Corboy J; Bride v The Registrar of Titles [2015] WASC 11 at [16] per Edelman J.
[4] Cini v Pets Paradise Franchising (SA) Pty Ltd [2008] SASC 287 at [51] per Bleby J; Pua Hor Ong v Wu You Yang Pty Ltd [2008] SASC 365 at [66] per Kourakis J; McInnes v Davies [2014] SASC 184 at [16] per Stanley J.
The question of the proper approach to the assessment of the balance of convenience on an extension application under section 191(g) is a matter of general public importance. In light of existing authorities, it is arguable that the Master erred in approaching the question and erred in any event in assessing the significance of Burke Reschke’s sale of the Grazing land to the importance of the retention of the subject land and that the Judge consequentially erred in upholding the Master’s approach and decision. In particular it is arguable that the Master and the Judge ought to have considered the nature of the proprietary interest that the applicant might have established, the effect of the loss of that property on the applicant’s agricultural management of the adjoining properties and the prospect that the applicant may have been in a position to purchase any remaining interest in the land if he was successful. Permission should be granted to appeal on ground 1 against the 30 August 2018 order by the Judge dismissing the appeal against the 26 March 2018 order by the original Master.
Ground 2 of the appeal contends that the Judge erred in attempting to resolve conflicting evidence on affidavits during an application of this nature. The applicant points to paragraph [81] of the reasons for judgment which addressed what is described as the applicant’s emotional attachment to the land. Permission to appeal should be refused because it is not arguable that the Judge made findings on conflicts of evidence.
The principal ground of appeal sought to be advanced on the first appeal (ground 2) is that the Judge erred in finding that the applicant’s non-disclosure was material and of a kind that warranted setting aside the original Master’s original order. The applicant contends that any non-disclosure was not material because an extension order ought still have been made if the sale of the Grazing land had been disclosed and in this respect relies on the same contentions as are sought to be advanced on the second appeal. In this respect, there is a large overlap between the two proposed appeals.
An additional contention sought to be advanced on the first appeal is that the Master should have found that there was no non-disclosure because TRN via Dru Reschke was aware of the sale. On 1 March 2017 Phil Schell, an agent acting for Mr Gartner, sent an email to Burke Reschke, copied to Dru Reschke, attaching a letter of offer from Mr Gartner and on 16 March 2017 Dru Reschke sent an email to Burke Reschke saying “Mr Westley refuses to do the paperwork for the sale to Gartners for you – You might need Tim to Camscanner it …, take out the text and copy it, and give it to Phil Schell direct”. The Master in his reasons for judgment said that Burke Reschke’s argument that Dru Reschke was aware of the sale required the Master to “accept that a solicitor acting for a party to a transaction had advised his client in another matter of the other matter” and said “There is no evidence that that occurred. I am not prepared to draw that inference.” He concluded that only Burke Reschke was aware of the transaction.
In light of the emails of 1 and 16 March 2017 and the fact that TRN did not adduce any evidence on its application other than the affidavit by its solicitor exhibiting the contract for the sale of the Grazing land, did not adduce any evidence from Dru Reschke and did not adduce any evidence that he was not aware of the existence of the sale, it is arguable that the Master erred in his approach to the question whether TRN was aware of the sale.
Given the high degree of overlap between the two appeals if permission is granted and the evidence (or absence of evidence) in relation to TRN’s knowledge of the sale, it is appropriate to grant permission also to appeal on ground 2 against the 7 March 2018 order by the Judge dismissing the appeal against the 20 November 2017 order by the Master. However, no sufficient basis has been established to grant permission to appeal on the other ground (ground 1) sought to be advanced, namely that the Judge erred in not finding that the cross-examination of Burke Reschke extended beyond the scope permitted by the Master and caused prejudice.
We grant permission to appeal against the orders made on 7 March 2018 on the second ground of appeal sought to be advanced. We grant permission to appeal against the orders made on 30 August 2018 on the first ground sought to be advanced.