Sinclair v Registrar-General - [2010] NSWSC 173

No judgment structure available for this case.

CITATION: Sinclair v Registrar-General [2010] NSWSC 173

HEARING DATE(S): 5 February 2010

JUDGMENT DATE :
5 March 2010

JURISDICTION: Equity Division

JUDGMENT OF: Rein J

DECISION: Judgment for the defendant.

CATCHWORDS: LIMITATION OF ACTIONS - limitation of particular actions - actions to recover money recoverable by virtue of an enactment - claim for compensation under Real Property Act 1900 s 129(1) - accrual of cause of action under Limitation Act 1969 s 14(1)(d) - extension or postponement of limitation periods - mistake under Limitation Act 1969 s 56(1) - where defendant mistakenly removed caveat from Register - REAL PROPERTY - Torrens Title - caveats against dealings - who may lodge and what interest sufficient - registered proprietor consenting to caveat - where caveat provided for transfer of land to plaintiffs contingent on an event which had not occurred and might never occur

LEGISLATION CITED: Limitation Act 1969
Real Property Act 1900

CATEGORY: Principal judgment

CASES CITED: Brisbane South Health Authority v Taylor (1996) 186 CLR 541
Brown v Heffer (1967) 116 CLR 344
Central Trust and Safe Deposit Company v Snider [1916] 1 AC 266
City of Canada Bay Council v Bonaccorso Pty Ltd [2007] NSWCA 351
Galvasteel Pty Ltd v Monterey Building Pty Ltd (1974) 4 FCR 335
Hillebrand v Penrith Council [2000] NSWSC 1058
Howard v Miller [1915] AC 318
Kirkland v Quinross Pty Limited [2008] NSWSC 286
Legione v Hateley (1983) 152 CLR 406
Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407
Peco Arts Inc. v Hazlitt Gallery Ltd [1983] 1 WLR 1315
Phillips-Higgins v Harper [1954] 1 QB 411
Registrar-General v Cleaver (1996) 41 NSWLR 713
Samah Zaraah Pty Ltd v 888 Projects Pty Ltd [2007] NSWSC 1041
Stern v Macarthur (1988) 165 CLR 489
Trewin v Flower [1965] NZLR 8
Troncone v Aliperti (1994) 6 BPR 13,291
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514
Wheatley v Bower [2001] WASCA 293

TEXTS CITED: S Lindsay, Caveats Against Dealings in Australia and New Zealand (1995), The Federation Press, Sydney

PARTIES: Leslie Mervyn Sinclair (First Plaintiff)
Ann Searle Sinclair (Second Plaintiff)
Registrar-General (NSW) (Defendant)

FILE NUMBER(S): SC 2008/280324

COUNSEL: J E Richards, C Palmer (Plaintiffs)
G A Sirtes SC (Defendant)

SOLICITORS: Savage & Love (Plaintiffs)
Land and Property Management Authority (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Rein J

Date of Hearing: 5 February 2010
Date of Judgment: 5 March 2010

2008/280324 Leslie Mervyn Sinclair and anor v Registrar-General (NSW)

JUDGMENT

REIN J:

Background

1 The plaintiffs are the registered owners of Lot 3 in DP 19579 (“Lot 3”), which is in Hyland Park, New South Wales. Lot 3 adjoins Lot 28, and Lot 28 is a battle-axe block which backs onto a section of Nambucca Heads known as Deep Creek. In 1984, the plaintiffs, desirous of having access to Deep Creek, entered into an agreement with the then owners of Lot 28, Mr and Mrs Bond (“the Bonds”), that the Bonds, in consideration of the sum of $28,000, would grant to the plaintiffs a right of carriageway 15.29 metres wide and approximately 42 metres long along the back of Lot 28 and abutting onto Lot 3 (“the easement”), and that the Bonds would transfer to the plaintiffs the land the subject of the easement

“in the event of the Council of the Shire of Nambucca agreeing to a subdivision of the lands comprised in the Servient Tenement without dedication of the lawns adjoining the foreshore of Deep Creek” (“ the contingent event ”).

2 Clause 7 of the deed between the Bonds and the plaintiffs dated 29 October 1984 (“the Deed”) provides:

“It is hereby agreed between the parties hereto that the interest in the freehold comprising part of the servient tenement hereby created shall entitle the Grantees to protect the same by caveat.”

3 The reason for the contingency was that the plaintiffs had applied to the Council of the Shire of Nambucca (“the Council”) for a subdivision of Lot 3 and Lot 28 (showing the enlarged Lot 3 as Lot 29, with the enlargement extending Lot 3 down to Deep Creek), and the Council had approved the subdivision subject to the dedication to the Council as a public reserve, free of cost, of a portion of land along Deep Creek approximately 10 metres wide fronting Lot 3 and Lot 28 (I shall refer to this requirement as “the public access requirement”).

4 On 21 March 1985, the plaintiffs lodged with the Registrar-General a caveat detailing the easement and claiming also an interest in the land the subject of the Deed, which I shall refer to as “the land”.

5 It appears that the Registrar-General had a policy that when a caveat was lodged in respect of an interest that was subsequently created, it would treat the caveat as having lapsed. The easement the subject of the caveat had been created, so the caveat was treated as having lapsed, it not being recognised that the caveat also claimed an interest in the land based on the Deed.

6 The Bonds sold and transferred Lot 28 to Mr and Mrs Hill (“the Hills”) in August 1986, and the Hills sold and transferred Lot 28 to Mr and Mrs Byrne (“the Byrnes”) in February 1988.

7 The plaintiffs’ case is brought for compensation from the Torrens Assurance Fund (“the Fund”) pursuant to s 129(1) of the Real Property Act 1900, which provides:

The plaintiffs rely only on subsection (c).

8 In 2005, Mr Sinclair told Mr Byrne that he had discovered that the Council had “changed its policy and it is now possible to subdivide around Deep Creek without having to dedicate a 10 metre strip to the Council”. Mr Sinclair claimed that he and Mrs Sinclair had the right to have the title to the land conveyed to them “if Council changes its policy on subdivision to permit this transfer”, and that they would like to do so. Mr Byrne replied that he knew nothing about the matter and would rather not transfer any of his property if he did not have to do so.

9 There was a further discussion between Mr Byrne and Mr Sinclair, and a copy of a letter obtained from LegalCo Management Pty Ltd (“LegalCo”) dated 29 March 2005, which endeavoured to outline the history of the matter (see Annexure “M” to Mr Sinclair’s affidavit of 29 May 2009), was provided to Mr Byrne. Through his solicitors, Mr Byrne indicated that he had purchased the property without notice of any interest in the property other than that disclosed on the title, and that he did not acknowledge that the plaintiffs had any interest in any part of Lot 28 other than the easement.

The Parties’ Submissions

10 The plaintiffs accept that the Byrnes are entitled to take the position which they have taken, and that they have no enforceable claim against the Byrnes.

11 Ms Richards of counsel (who appeared with Mr Palmer for the plaintiffs) accepted that the plaintiffs would have had no remedy against the Hills either, and that once the Hills became registered as the owners of Lot 28, this was the end of any interest that the plaintiffs held in respect of the land: see Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407 at 418-421; City of Canada Bay Council v Bonaccorso Pty Ltd [2007] NSWCA 351 at [70].

12 Ms Richards accepted that even up to the time that the Hills were registered, the plaintiffs had no interest in land that could be registered on the titles of Lot 28 or Lot 3 (other than the easement in respect of which there is no issue). The plaintiffs’ case, however, was that:

13 The Registrar-General (for whom Mr Sirtes SC appeared) resisted the claim on a number of bases. The Registrar-General submitted that the plaintiffs did not have a caveatable interest (for reasons to which I shall return) and suffered no loss by removal of the caveat, and that even if they did, the plaintiffs’ claim was statute-barred by reason of s 14(1)(d) of the Limitation Act 1969.

Relevant Legislation

14 I will set out the sections of the two Acts to which reference was made.

Limitation Act 1969

Section 132 was the subject of amendment, effective on 13 May 2009, but it was agreed by the parties that the earlier form of s 132 applied to these proceedings.

(d) a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.

15 The plaintiffs’ claim is brought pursuant to s 129(1)(c) of the Real Property Act. The plaintiffs claim that it is the operation of ss 41-43A of the Real Property Act, which provides for indefeasibility of title, that has led to loss or damage.

Real Property Act Sections 131 and 132

16 It will be observed that s 131 of the Real Property Act dealt with administrative proceedings which a party claiming compensation must bring before Court proceedings are allowed to be taken (see s 132(2)(a)). Section 132(2)(b) (in its earlier form) required any court proceedings to be brought within 12 months of the administrative determination. In this case, administrative proceedings were brought and determined more than 12 months before the plaintiffs commenced these court proceedings. The plaintiffs were therefore out of time and sought leave pursuant to s 132(2). The Registrar-General neither consented to nor opposed the grant of leave.

17 Both parties accepted that even if leave were granted, the Court would need to determine whether s 14(1)(d) of the Limitation Act (relied on by the Registrar-General) or s 56 of the Limitation Act (relied on by the plaintiffs) applied. The plaintiffs offered no explanation for their failure to commence court proceedings within 12 months of the administrative determination, and it was not argued by the Registrar-General that they ought to have provided one. The decision of Austin J in Kirkland v Quinross Pty Limited [2008] NSWSC 286 was relied on by the plaintiffs. In that case, the plaintiffs had commenced court proceedings without availing themselves of the s 131 administrative proceedings, and there was no limitation question: see [89]-[94]. Austin J considered that there was no significant prejudice to the Registrar-General and granted leave pursuant to s 132(2). Since no prejudice was asserted to arise here because it was accepted that the Registrar-General was able to argue the limitation point, and because no case was mounted that leave should not be granted, I granted leave.

Limitation Act Section 14(1)(d)

18 Mr Sirtes asserts that the plaintiffs’ claim is really one for loss of an opportunity, namely the lost opportunity of obtaining an order preventing the sale by the Bonds to the Hills without protection of the equitable interest claimed by the plaintiffs. Section 129(1) of the Real Property Act requires that the plaintiffs have suffered “loss or damage ... in respect of any land” as a result of the operation of the Real Property Act, and that the loss or damage must relevantly here have arisen from “any error … or omission in the Register in relation to the land” (s 129(1)(c)). Ms Richards accepted that the claim was “a cause of action to recover money recoverable by virtue of an enactment” (s 14(1)(d) of the Limitation Act), but contended that the cause of action did not accrue until 2005, when the Byrnes refused to transfer the land to the plaintiffs.

19 Leaving aside Mr Sirtes’ other points and subject to a consideration of the case relied upon by Ms Richards, viz Registrar-General v Cleaver (1996) 41 NSWLR 713, it seems to me that if loss or damage arose as a result of the operation of the indefeasibility provisions, that loss arose at the moment the Hills were registered as owners. There was no agreement entered into between the Hills and the plaintiffs whereby the Hills agreed to transfer the land if the Council agreed to a subdivision, but rather only an agreement between the plaintiffs and the Bonds. Once the Hills were registered, the only course of action open to the plaintiffs was to assert a right to damages against the Bonds. Even that claim had the difficulty that whilst the Bonds, by the Deed, agreed that they covenanted “for themselves, their heirs, executors, successors entitle [sic] and assigns” (clause 6 of the Deed), it was not part of the agreement that they would procure the entry into a tripartite agreement by any purchaser of Lot 28. The Bonds may well have been able to argue that all that they were promising was to transfer the land to the plaintiffs should the Council approve a plan of subdivision without the public access requirement whilst they remained the owners of Lot 28. Of course, the Council did not approve the subdivision without the public access requirement whilst the Bonds owned Lot 28, and indeed no plan of subdivision was submitted by the plaintiffs after 1984, when it was approved subject to the public access requirement.

20 It is necessary then to consider whether Cleaver, a decision of the New South Wales Court of Appeal, requires a different view of the matter. In Cleaver, the owner of two lots that had been subdivided in 1967 sold Lot 1, and at the time of sale created a height-restrictive covenant burdening Lot 1 and benefiting Lot 2. The Registrar-General noted the benefit on Lot 2’s title but did not note the burden on Lot 1’s title because, apparently, the vendors failed to provide a copy of the certificate of title for Lot 1. Lot 1 was subsequently sold to Mr and Mrs Cirino (“the Cirinos”) in 1980, and Lot 2 was sold to Mr and Mrs Stephenson (“the Stephensons”) in 1976. The Stephensons subsequently sold Lot 2 to Mr and Mrs Cleaver (“the Cleavers”) in 1978. In 1988, the Registrar-General purported to register the covenant in favour of Lot 2 upon Lot 1, but the Cirinos objected and sought either removal of the encumbrance from their certificate of title or compensation. It was held that the Registrar-General could not register the covenant, and the Cleavers sought compensation pursuant to a provision in similar terms to s 129(1) of the Real Property Act.

21 The Cleavers claimed that had they known that Lot 1 was not burdened with the height restriction, they would not have purchased Lot 2, which had extensive views of Middle Harbour. One of the arguments advanced on behalf of the Registrar-General was that the claim was statute-barred because the Cleavers had bought Lot 2 in 1989, and more than six years had passed since the purchase. The Cleavers argued that they did not suffer loss until the notation on Lot 1’s certificate of title was removed by the Registrar-General following the Cirinos’ success in the case.

22 The Court of Appeal unanimously upheld the decision of the trial judge (Cole J, as His Honour then was) that the claim was not statute-barred. Clarke JA (with whom Abadee A-JA agreed) held that loss was only suffered by the Cleavers when the owners of Lot 1

“insisted on their rights to enjoy that lot without the burden of the covenant and were entitled to maintain that insistence because of, for example, the doctrine of indefeasibility. If the Registrar-General’s endorsement of the notation of the burden on the register for Lot 1 had not been objected to by those owners and the premises then re-sold, the loss would, as it seems to me, not have been suffered. It follows that it was not inevitable that the respondents would suffer loss from the omission” (at 721).

23 The conclusions as to the time that loss was suffered in Cleaver were in the context of a case where the plaintiffs had purchased a property believing it to have the benefit of a height restriction burdening another property, when in fact it did not. The case was one, as Clarke JA noted, in which entry into a contract exposed the plaintiffs to a contingent loss, and to which the approach of the High Court in Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 was relevant (see Cleaver at 719-721).

24 Handley JA put the matter this way:

“The defect was discovered when the proprietors of lot 1 threatened to breach the height restriction. Until then the respondents’ views had not been under threat and they could, with complete honesty, have sold their property with the benefit of the height restriction and in all probability never have suffered any loss. Other contingencies could also have supervened. Planning restrictions might have prevented the owners of lot 1 from building a potential second storey. On the other hand the respondents’ views, or the views from a potential second storey on lot 1, might have been interrupted by new buildings on the opposite side of Endeavour Street or beyond. These practical contingencies, and others suggested by the trial judge, reinforce my conclusion that the respondents did not suffer loss until they discovered the defect in their title, and their action is therefore not statute barred” (at 724-725).

25 In the present case, the plaintiffs did not enter into a contract for the purchase of land based on a misconception, and the contract did not give rise to a contingent loss or liability. The plaintiffs entered into an agreement for the transfer of land which was subject to a condition that might never be fulfilled. On the plaintiffs’ case, the only means of protecting that claimed equitable interest was to lodge a caveat, which would have led to the receipt of notice by them and the opportunity to obtain an order against the Bonds or the Hills requiring the Bonds to take a step that would protect the claimed interest. Once the Hills were registered as owners in 1986, the plaintiffs had no right to seek any transfer from the Hills. What was lost by the expunging of the caveat was the plaintiffs’right to receive notice and take action upon receipt of that notice.

26 It follows, in my view, that Cleaver does not apply to this case. Due to the operation of s 14(1)(d), the plaintiffs’ claim therefore became statute-barred by 1992 unless s 56 of the Limitation Act applies.

Limitation Act Section 56(1)

27 Section 56(1) of the Limitation Act provides that where a cause of action is for relief from the consequences of a mistake, the limitation period does not begin to run until the plaintiff discovers the mistake or could with reasonable diligence have discovered it. In order to rely upon s 56(1) and overcome the time bar in s 14(1)(d), the plaintiffs must demonstrate: first, that their cause of action is one for relief from the consequences of a mistake; and secondly, that their cause of action was brought within six years of them discovering the mistake or being able to have discovered it if they had exercised reasonable diligence.

28 Ms Richards submitted that the plaintiffs’ cause of action was to be characterised as one for relief from the consequences of a mistake, the mistake being that of the Registrar-General in removing the caveat. Mr Sirtes argued that the plaintiffs’ claim could not be characterised as one for relief from the consequences of a mistake, and was instead one for compensation from a statutory fund, since the plaintiffs rely on s 129(1) of the Real Property Act.

29 Mr Sirtes also contended that: (a) s 56 was not available because ss 131 and 132 of the Real Property Act provided a code; (b) there was no evidence from the plaintiffs that they did not know that the caveat had been removed; and (c) the removal of the caveat would have been discovered by the plaintiffs if they had exercised reasonable diligence well prior to 2002 (that is, six years before the claim was made).

30 Before considering the first point, I shall deal with the other points raised by Mr Sirtes. With regard to Mr Sirtes’ second point, there seems to me to be a good basis for arguing that since s 131(2)(a) and (b) of the Real Property Act sets out a limitation period for bringing administrative proceedings and s 132 sets out a further limitation period within which court proceedings should be commenced, the Real Property Act provides its own limitation period and s 56 of the Limitation Act has no bearing on the matter at all. However, as Ms Richards pointed out, the defendant relies on s 14(1)(d) of the Limitation Act, and if ss 131 and 132 of the Real Property Act constitute a code for the statutory compensation scheme, s 14(1)(d) of the Limitation Act cannot be relevant either. I accept Ms Richards’ contention that the ‘code’ cannot be a code for the purpose of excluding s 56 of the Limitation Act, yet not be a code for the purpose of including s 14(1)(d) of the Limitation Act.

31 So far as the third point is concerned, Mr Sinclair did say in his affidavit (at paragraph 45) that he was not aware of the caveat lapsing, and he was not cross-examined on this evidence (or any of his evidence).

32 Ms Richards’ response to the fourth point was that the plaintiffs are not to be fixed with the level of prudence expected of solicitors. I note that the plaintiffs’ lawyers had alerted them to the difficulties in relation to the transfers (see Annexure BB to Mr Sinclair’s affidavit), but in the absence of any cross-examination of Mr Sinclair, I am not persuaded that the plaintiffs should have appreciated that the caveat had been removed simply because there had been various transfers of land.

33 Returning then to the first point, it appears that there are very few cases which consider s 56, and the only one to which my attention was drawn was Hillebrand v Penrith Council [2000] NSWSC 1058. In Hillebrand, the plaintiffs sued the defendant council for wrongfully selling three portions of the plaintiffs’ land as a result of mistakes claimed to have been made by the defendant. Austin J held that the plaintiffs’ claim was barred by s 14(1)(b) of the Limitation Act, and that s 56 was not available because the plaintiffs sought relief from the consequences of negligence, rather than a mistake (at [48]).

34 The only detailed consideration of a provision very similar to s 56 is found in Phillips-Higgins v Harper [1954] 1 QB 411. In Phillips-Higgins, the plaintiff mistakenly failed to realise that she had been (on her case) underpaid, and that money was due to her. Pearson J (as his Lordship then was), interpreting s 26(c) of the now repealed Limitation Act 1939 (UK), held that that plaintiff’s claim was properly characterised as one to recover moneys due to her under a contract, not one for relief from the consequences of a mistake (at 418-419). Pearson J provided three examples of actions which would be caught by the Limitation Act 1939 (UK): an action for money paid in consequence of a mistake; an action for rescission or rectification of a contract entered into in consequence of a mistake; and a reopening of an account settled in consequence of a mistake (at 418). Phillips-Higgins has been followed in Australia in Wheatley v Bower [2001] WASCA 293 at [111], [119] per Malcolm CJ (Kennedy and Wallwork JJ agreeing), in which it was held that a partner’s claim against his former partners that debts owed to him had not been paid was statute-barred, and that the Western Australian equivalent of s 56 was not applicable.

35 In Peco Arts Inc. v Hazlitt Gallery Ltd [1983] 1 WLR 1315, the plaintiff and the defendant had mistakenly believed that the painting purchased by the plaintiff from the defendant was an original by Ingres. The case was concerned with whether the plaintiff could, with reasonable diligence, have discovered the mistake. The defendant did not contend that the fact that the mistake was mutual was a ground which precluded the plaintiff from relying on s 32(1)(c) of the Limitation Act 1980 (UK), the equivalent of s 56 of the Limitation Act 1969 (NSW).

36 In Trewin v Flower [1965] NZLR 8, the Court reached the same conclusion as in Phillips-Higgins, but by a different route, and I do not think that it provides assistance on the present issue.

37 As a matter of first impression, a claim for statutory compensation based on loss or damage arising as a result of the operation of the Real Property Act does not appear to be a claim for relief from the consequences of a mistake. The cause of action is one for money recoverable by virtue of an enactment, although in this case the damage is claimed to arise from an error, misdescription or omission, and that is why, as Ms Richards accepted, s 14(1)(d) of the Limitation Act is relevant. Mistake is certainly not essential for s 129(1)(a), (b), (d) or (e) of the Real Property Act. Section 129(1)(c), (f) and (g) uses the words “error”, “misdescription” or “omission”, which could be characterised as a mistake, but s 129(1) requires the loss or damage to be the result of the operation of the Real Property Act, which adds an intermediate qualifier. Further, it would be an anomaly if a claim under s 129(1)(c), (f) or (g) of the Real Property Act were subject to s 56 of the Limitation Act, but a claim under s 129(1)(a), (b) or (d) of the Real Property Act were not.

38 In Hillebrand, this Court did not accept that claimed mistakes by the defendant council changed a cause of action from being one in negligence to one for relief from the consequences of a mistake. It can be said here that the fact that there was an error or omission by the Registrar-General (accepting this as equivalent to a mistake) does not take the cause of action out of being one for money recoverable by virtue of an enactment and make it a cause of action for relief from the consequences of a mistake. Although not considered in Hillebrand, there is another basis which can be discerned for the conclusion that s 56 is not available, and that is that the mistake referred to in s 56, from the consequences of which relief is sought, must be made by the plaintiff. The examples given by Pearson J are all of that kind. “Mistake” by a defendant per se does not itself found a cause of action – there must be some other characterisation available to make it actionable, such as negligence or misleading and deceptive conduct, which reinforces the view that the mistake required for s 56 must be the plaintiff’s mistake. If s 56 is read in the wide way for which the plaintiffs contend, then a claim for negligence (where the negligence can be characterised as a mistake made by the defendant) could be brought within s 56. As Hillebrand demonstrates, s 56 is not available in that context.

39 Ms Richards argued that a wide inclusive view should be taken of s 56 because it is an ameliorative provision. In Phillips-Higgins, Pearson J said of the United Kingdom equivalent of s 56 that it was no doubt “intended to be a narrow provision, because any wider provision would have opened too wide a door of escape from the general principle of limitation by six years’ lapse of time” (at 419). I think that this is apt in the present context of s 56 of the Limitation Act 1969 (NSW).

40 In Brisbane South Health Authority v Taylor (1996) 186 CLR 541, McHugh J, after enumerating the rationales for limitation provisions said:

“In enacting limitation periods, legislators have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut-off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case” (at 553).

The area of discourse was not s 56, but I think this passage is a further reminder that courts should not read provisions which ameliorate the effects of general limitation provisions too generously.

41 It follows, in my view, that s 56(1) is not available and that the plaintiffs’ claim is statute-barred.

Other Issues

42 In the light of my conclusion that the plaintiffs’ claim is statute-barred, I strictly do not need to consider the other issues, but it is appropriate that I deal with them nevertheless.

43 There is ample authority for the proposition that a contract for the sale of land gives to the purchaser an equitable interest: Galvasteel Pty Ltd v Monterey Building Pty Ltd (1974) 4 FCR 335. Mr Sirtes submitted that the reason why this is so is because, subject to the payment of the purchase price, the Court will order specific performance of the contract of sale, which would result in the property vesting in the purchaser: Howard v Miller [1915] AC 318 at 326; and see Central Trust and Safe Deposit Company v Snider [1916] 1 AC 266 at 272; Brown v Heffer (1967) 116 CLR 344 at 349; see also S Lindsay, Caveats Against Dealings in Australia and New Zealand (1995), The Federation Press, Sydney at 104.

44 Mr Sirtes argued that in the absence of fulfilment of the precondition to which the transfer of land was subject in this case, the plaintiffs would not be entitled to a decree of specific performance. It followed, he submitted, that until the plaintiffs had obtained approval of a subdivision without the public access qualification, they did not have an equitable interest in land and did not have a caveatable interest, and hence had suffered no loss by reason of the removal of the caveat. Ms Richards responded by asserting that a Court of Equity would act against a party, in this case the Bonds, who attempted to sell to a third party without seeking from the purchaser an acknowledgement of the interest of the plaintiffs. Ms Richards also drew attention to clause 7 of the Deed and relied on Troncone v Aliperti (1994) 6 BPR 13,291 as authority for the proposition that the agreement by a vendor to the lodgement of a caveat carries with it, by implication, an estate or interest in land sufficient to support it: see Troncone at 13,292-13,296 per Mahoney JA, with whom Priestley JA and Meagher JA concurred.

45 Mr Sirtes submitted that mere agreement to the lodging of a caveat could not give rise to a caveatable interest, but I do not think that this is consistent with Troncone. Further, the proposition that an equitable interest can only exist if specific performance in the strict sense is available is not consistent with the approached preferred by Mason and Deane JJ in Legione v Hateley (1983) 152 CLR 406 at 446; see also Stern v Macarthur (1988) 165 CLR 489 at 522 and the detailed discussion of this issue in relation to conditional contracts in Lindsay at 104-10, which I am not persuaded may now be out of date. I do not accept that a contract in which performance by the promisor is subject to a contingency (as here) is equivalent to a contract by which an option is granted, so I do not think that cases such as Samah Zaraah Pty Ltd v 888 Projects Pty Ltd [2007] NSWSC 1041, to which Mr Sirtes referred, are relevant here. I proceed upon the basis that the plaintiffs did have a caveatable interest.

46 Accepting that the caveat was validly lodged and that had the caveat not been removed the plaintiffs, if given notice of the sale to the Hills, would have been able to approach the Court for relief, there are the following obstacles in the plaintiffs’ path:

“My above clients own 63 Banyandah Road Hyland Park being Identifier 3/19579 and an issue has arisen relating to the neighbouring property, FI 28/612246 which lies between my clients’ property and Deep Creek.

I understand that for many years there was a Council policy that land adjacent to Deep Creek would be dedicated for a public right of way, but that that policy changed some years ago and is no longer in force.

I should be most grateful if you would confirm the date when that policy changed and refer me to Council’s decision in that respect.”

“Reference is made to your request for Council to confirm its position on the requirement for land to be dedicated as a public right-of-way, in relation to Lot 28 DP 612246.

A search of Council’s records does not reveal the existence of any formal right-of way benefiting your client’s property, and it does not appear that Council has a policy that identifies land adjacent to Deep Creek to be dedicated for a public right-of-way. Please be advised however, that Council generally favours the public control of foreshores areas [sic] as a means of ensuring that coastal development is sensitive to environmental constraints and does not impede on public access to the coastal foreshore.

For more site specific information, a search of the LPI records may be useful. For your information the following notations are listed on DP 612246:

(A) Covenant H572800

(B) Benefited by right of carriageway H57280

47 I make three observations about that correspondence:

(1) The plaintiffs’ solicitors referred to a policy that the land adjacent to Deep Creek would be dedicated for a public right of way. The Council’s response was that it did not appear that the land was dedicated for a public right of way, nor did it have a policy that identified land adjacent to Deep Creek to be dedicated for a public right of way. Those are different questions to the question of whether the Council still had a policy that if a subdivision was sought, a public right of way would be required. The solicitors’ letter to the Council did not enclose a copy of the Council’s approval of the plan of subdivision in 1984, which did address this issue.

(2) The solicitors’ letter did not seek any indication of whether approval would be given to a plan of subdivision without the public access requirement.

(3) The Council’s statement that it

points to the significant prospect that as a condition of approval of a plan of subdivision, the Council would require such a public right of access.

48 It seems an odd proposition that a change in council policy almost twenty years after the removal of the caveat from the Register in 1986 should govern whether the plaintiffs suffered loss by reason of the caveat’s removal. Even in 2005, when the plaintiffs sought the transfer of the land from the Byrnes, they did not have approval from the Council for a plan of subdivision without the public access requirement. Even if it were appropriate to consider the position as at 2005 or later, in my view, the correspondence does not establish on the balance of probabilities that a subdivision without the public access requirement would be approved even now. I do not think that the Byrnes would have been required to transfer the land to the plaintiffs even if the caveat had still been in place in 2005.

Conclusion

49 In my view, the plaintiffs’ claim fails, and there should be judgment for the defendant. I will hear the parties on the issue of costs.

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City of Canada Bay Council v F & D Bonaccorso Pty Ltd [2007] NSWCA 351

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Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22

CITATION:	Sinclair v Registrar-General [2010] NSWSC 173
HEARING DATE(S):	5 February 2010
JUDGMENT DATE :	5 March 2010
JURISDICTION:	Equity Division
JUDGMENT OF:	Rein J
DECISION:	Judgment for the defendant.
CATCHWORDS:	LIMITATION OF ACTIONS - limitation of particular actions - actions to recover money recoverable by virtue of an enactment - claim for compensation under Real Property Act 1900 s 129(1) - accrual of cause of action under Limitation Act 1969 s 14(1)(d) - extension or postponement of limitation periods - mistake under Limitation Act 1969 s 56(1) - where defendant mistakenly removed caveat from Register - REAL PROPERTY - Torrens Title - caveats against dealings - who may lodge and what interest sufficient - registered proprietor consenting to caveat - where caveat provided for transfer of land to plaintiffs contingent on an event which had not occurred and might never occur
LEGISLATION CITED:	Limitation Act 1969 Real Property Act 1900
CATEGORY:	Principal judgment
CASES CITED:	Brisbane South Health Authority v Taylor (1996) 186 CLR 541 Brown v Heffer (1967) 116 CLR 344 Central Trust and Safe Deposit Company v Snider [1916] 1 AC 266 City of Canada Bay Council v Bonaccorso Pty Ltd [2007] NSWCA 351 Galvasteel Pty Ltd v Monterey Building Pty Ltd (1974) 4 FCR 335 Hillebrand v Penrith Council [2000] NSWSC 1058 Howard v Miller [1915] AC 318 Kirkland v Quinross Pty Limited [2008] NSWSC 286 Legione v Hateley (1983) 152 CLR 406 Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407 Peco Arts Inc. v Hazlitt Gallery Ltd [1983] 1 WLR 1315 Phillips-Higgins v Harper [1954] 1 QB 411 Registrar-General v Cleaver (1996) 41 NSWLR 713 Samah Zaraah Pty Ltd v 888 Projects Pty Ltd [2007] NSWSC 1041 Stern v Macarthur (1988) 165 CLR 489 Trewin v Flower [1965] NZLR 8 Troncone v Aliperti (1994) 6 BPR 13,291 Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 Wheatley v Bower [2001] WASCA 293
TEXTS CITED:	S Lindsay, Caveats Against Dealings in Australia and New Zealand (1995), The Federation Press, Sydney
PARTIES:	Leslie Mervyn Sinclair (First Plaintiff) Ann Searle Sinclair (Second Plaintiff) Registrar-General (NSW) (Defendant)
FILE NUMBER(S):	SC 2008/280324
COUNSEL:	J E Richards, C Palmer (Plaintiffs) G A Sirtes SC (Defendant)
SOLICITORS:	Savage & Love (Plaintiffs) Land and Property Management Authority (Defendant)