Ritz Bitz Pty Ltd v Cumming - [2023] VSC 418

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT
COMMERCIAL LIST

S ECI 2022 05287

BETWEEN:

RITZ BITZ PTY LTD (ACN 100 300 927) AS TRUSTEE OF THE RITZ BITZ TRUST & ANOR	Plaintiffs and Defendants by Counterclaim
And
DANIEL CUMMING & ORS	Defendants and Plaintiff by Counterclaim

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	7 July 2023
DATE OF JUDGMENT:	21 July 2023
CASE MAY BE CITED AS:	Ritz Bitz Pty Ltd v Cumming
MEDIUM NEUTRAL CITATION:	[2023] VSC 418

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CAVEATS – Application to remove caveat pursuant to Transfer of Land Act 1958 (Vic) s 90(3) – Caveatable interest claimed through alleged oral contract of sale of real property – Specific performance of contract sought by caveator – Subsequent purchaser for value – Whether legally binding sale contract existed – Consideration of prima facie case and balance of convenience – S&D International v Malhotra [2006] VSC 280.

PRACTICE AND PROCEDURE – Application to amend defence to withdraw certain admissions – Whether in the interests of justice to grant leave to amend pleadings – Gregorich v Khouri [2020] VSC 5.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs and Defendants by Counterclaim	L Magowan	BSP Lawyers
For the Defendants and Plaintiff by Counterclaim	T Sowden	Christopher James Lawyers

HIS HONOUR:

Introduction

The defendants, Daniel Cumming and his wife Amanda, along with a company controlled by Daniel, Cuttervale Pty Ltd (‘Cuttervale’), apply by summons for an order pursuant to s 90(3) of the Transfer of Land Act1958 (Vic) (the ‘TLA’) for the removal of a caveat lodged by John Cumming in dealing number AV511434M (the ‘Caveat’) over the title to the property at 337–349 Barkly Street, Footscray (the ‘Footscray Property’). In addition, the defendants seek leave to amend the defence and counterclaim filed 3 March 2023. Relevantly, the leave sought extends to leave to withdraw certain admissions in relation to a contract of sale allegedly entered into for part of the Footscray Property and to rely on s 126 of the Instruments Act 1958 (Vic) (the ‘Instruments Act’).

The second plaintiff, John, is Daniel’s younger brother. He is also in effective control of the first plaintiff, Ritz Bitz Pty Ltd (‘Ritz Bitz’).

By writ filed 19 December 2022, Ritz Bitz and John bring a range of claims against Daniel and Cuttervale and a separate discrete claim against Daniel and Amanda. The claims brought against Daniel and Cuttervale allege, among other things, that Cuttervale was to act as an incorporated partnership for Ritz Bitz on John and Daniel’s behalf and that Cuttervale would acquire a property in Morwell which would be developed and thereafter be used for the purposes of the conduct of a business (the ‘Morwell Property’).[1]
[1]It appears that the business is that of a hotel; see below [76].

Cuttervale is the registered proprietor of the Morwell Property. Amongst the relief sought by Ritz Bitz and John are orders to the effect that Cuttervale sell the…

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.

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Details

Case: [2023] VSC 418
Decision Date: 21 July 2023

CaseChat Overview and Summary

Ritz Bitz Pty Ltd sought to remove a caveat lodged by Cumming, who claimed an interest through an alleged oral contract for the sale of a property. The dispute was heard in the Supreme Court of Victoria. Cumming argued that an oral contract existed, which entitled him to specific performance, while Ritz Bitz contended that no legally binding contract was in place and that Cumming was a subsequent purchaser for value.

The court had to determine whether Cumming's claim of a legally binding oral contract constituted a prima facie case and whether the balance of convenience favoured removing the caveat. The court considered whether Cumming's claim was sufficient to establish a case that was more than merely possible but rather probable on the evidence. The court also had to weigh the convenience of maintaining the caveat against the potential prejudice to Ritz Bitz.

The court held that Cumming's claim did not establish a prima facie case for a legally binding oral contract. The court found that the balance of convenience did not favour Cumming as it would cause significant prejudice to Ritz Bitz. Consequently, the court ordered the caveat to be removed. The court also refused Cumming's application to amend the defence to withdraw certain admissions, finding that it was not in the interests of justice to grant leave to amend the pleadings.

The final orders included the removal of Cumming's caveat and the refusal of leave to amend the defence.

Orders