Rolico Pty Ltd v Quen Jen Fu

[2005] NSWSC 683

CITATION:	Rolico Pty Ltd v Quen Jen Fu [2005] NSWSC 683
HEARING DATE(S):	01/07/05
JUDGMENT DATE :	1 July 2005
JUDGMENT OF:	White J
DECISION:	1. Decline to make the injunction sought; 2. refuse the order in paragraph 1 of the summons; 3. proceedings stood over to the Registrar's list on Thursday 7 July; 4. costs of today's application will be the defendant's costs in the proceedings; 5. The exhibits may be returned after twenty-eight days.

CATCHWORDS:	PRACTICE AND PROCEDURE - Application to extend caveat or for an injunction - Interest in land claimed on the basis of option to purchase - Dispute as to authenticity of alleged option - Delay - Undertaking as to damages from company with nominal paid up capital - Extension of caveat and injunction refused - No question of principle.
PARTIES:	Rolico Pty Limited v Quen Jen Fu
FILE NUMBER(S):	SC 3789/05
COUNSEL:	Plaintiff: D Allen Defendant: C J Bevan, A C M Iuliano
SOLICITORS:	Plaintiff: J Kekatos Lawyers Defendant: N/A

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

WHITE J

Friday, 1 July 2005

3789/05 Rolico Pty Limited v Quen Jen Fu

JUDGMENT

1 HIS HONOUR: These proceedings started as an application by the plaintiff for an order extending a caveat over the defendant’s property. Proceedings were commenced yesterday when orders for short service were obtained. I am told that the caveat will expire perhaps today. Given the lateness of the hour, I will not go into the facts in as much detail as might otherwise be warranted.

2 The defendant opposed the extension of the caveat. The caveat prohibits the recording in the register of any dealing other than a plan affecting the estate or interest claimed by the caveator or set out in schedule 1. The defendant needs to refinance her existing borrowings and the caveat precludes that finance being completed. It is clear that the caveat is too wide and the plaintiff did not ultimately press for the order which it sought in paragraph 1 of the summons. Instead it seeks an injunction until further order or until a fixed time, from entering into any contract for sale or, I assume, the granting of any option over the property which is the land in lot D in folio identifier 378203.

3 On 2 April 2004, the defendant entered into a contract for the sale of that land to two companies called H F Developments Australia Pty Limited and H F Homes Pty Limited. On 28 July 2004, H F Developments entered into a contact with the plaintiff to sell a lot in an unregistered plan, being part of that land. The contract provided that the vendor, that is H F Developments, would subdivide the property into five lots before completion.

4 The plaintiff claims an interest in the land pursuant to an alleged agreement between it and the owner, Mrs Fu. The plaintiff contends that that agreement was procured by a Mr Mulkearns, who is a director of the H F Development companies, from Mrs Fu. It produces a document where the only part of the document which it could be claimed bears Mrs Fu’s signature to the agreement is on the execution page, but that page is itself, self-evidently, not an original document but a photocopy. There are handwritten amendments to the document which are initialled, it would appear, by Mr Mulkearns, but not by Mrs Fu.

5 There is a handwritten clause on the document which acknowledges that Mrs Fu has entered into a contract for the sale of the land with H F Developments and that the plaintiff has entered into a contract for sale for the proposed lot 1, being part of the subject property. The handwritten clause says that should the contract for sale between Mrs Fu and H F Developments not settle or be terminated or rescinded for any reason, then the plaintiff will be entitled to exercise the option. The document bears a date 12 July 2004, which is sixteen days before the date the plaintiff entered into the contract to purchase the proposed lot 1.

6 After the caveat was lodged, the defendant’s solicitor wrote, on 6 June 2005, disputing the authenticity of the alleged deed of option. The defendant denied ever having dealt with the plaintiff in relation to the purported deed of option and denied ever granting one.

7 The proceedings were only commenced yesterday. Because of the shortness of time which the defendant has had to deal with the application, I can infer that the defendant has not herself been able to give evidence. There is evidence from her husband that she is presently skiing. On the other hand, the plaintiff has had the time of its choosing to put on such evidence as it wished to establish a prima facie case that the defendant entered into the alleged agreement.

8 The alleged option agreement provides, in substance, that if the option is exercised, the defendant will sell the land, being lot 1 in a proposed subdivision, for a price of $1,500,000. There is attached to the option a draft contract for sale of land pursuant to which the defendant would apply for the registration of a plan of subdivision. There is annexed what is said to be a copy of the vendor’s, that is the defendant’s, plan of subdivision. All of that is very puzzling because there is nothing else in the evidence to suggest that Mrs Fu ever intended, even conditionally, to embark upon a subdivision of the land.

9 It seems to me that on the present state of the evidence and taking into account the inability of the defendant to be able to give direct evidence herself on the topic, the case that she did enter into an agreement with the plaintiff in terms of the alleged option is a very weak one. I say that because there is no suggestion that any officer of the plaintiff had any dealings with her, and there is no evidence from Mr Mulkearns about his alleged dealings with her. All there is is the document itself which was provided by Mr Mulkearns to the plaintiff’s solicitor which itself is, to say the least, a curious document.

10 I do not think there is any immediate threat by the defendant to sell the property. I have no doubt that the defendant would like to sell the property as soon as she can at a proper price in order to reduce her borrowings. Her immediate objective appears to be to see if H F Homes and H F Developments can raise finance to complete their purchase. If that were successful, then the plaintiff would not be prejudiced. There was a suggestion, however, that the contract with those companies has been terminated.

11 For a time, I considered whether or not I should make an order that the defendant not enter into a contract for the sale of the property, or grant an option to a third party to purchase the property, without first giving the plaintiff seven or fourteen days’ notice of her intention to do so. On reflection, however, it seems to me that the plaintiff has had an opportunity to put on its evidence to obtain an injunction to restrain the defendant from selling the property. It has been on notice since 6 June 2005 that the defendant was in the process of refinancing, yet it was not until the course of submissions that the alternative claim for an injunction was made. There is a possibility that even an injunction in such a limited form, might prevent the defendant from making what would otherwise be a quick or advantageous sale of the property. I am not satisfied that the plaintiff’s undertaking as to damages would provide sufficient protection to the defendant in such an event. The company has a paid up share capital of only $4. Otherwise there is no material in relation to its financial position, apart from the fact that it has entered into the contract of 28 July 2004, pursuant to which a $50,000 deposit was paid. That provides no assurance as to its ability to meet an undertaking as to damages.

12 Having regard to those deficiencies in the plaintiff’s evidence, the last minute nature of the application and the apparent inadequacy of an undertaking as to damages, I decline to make the injunction sought. I also refuse the order in paragraph 1 of the summons.

13 The proceedings can stand over into the Registrar’s list on Thursday 7 July.

14 The costs of today’s application will be the defendant’s costs in the proceedings. The exhibits may be returned after twenty-eight days.

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