Skymation Pty Ltd v Als342 Pty Ltd - [2021] VSC 386

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

PROPERTY LIST

S ECI 2021 01633

SKYMATION PTY LTD (ACN 009 948 099)	Plaintiff
v
ALS342 PTY LTD (ACN 643 815 945)	First Defendant
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	24 June 2021
DATE OF JUDGMENT:	20 July 2021
CASE MAY BE CITED AS:	Skymation Pty Ltd v ALS342 Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 386

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REAL PROPERTY – Caveats – Application for removal of a caveat under s 90(3) of the Transfer of Land Act 1958 (Vic) – Whether there is a prima facie case to be tried – BCA Asset Management Group Pty Ltd v Sand Solutions Pty Ltd [2021] VSC 177, referred to – Whether caveator has a caveatable interest by reason of a loan agreement – Whether the caveator was a party to the proposed loan by reason of a nomination clause – Salter v Gilbertson (2003) 6 VR 466, referred to – ACN 096 278 483 Pty Ltd v Vercorp Pty Ltd [2011] QCA 189, referred to – Finding that caveator has established a prima facie case to be tried – Whether the balance of convenience favours removal – Where the secured sum is relatively modest – Finding that there is real doubt whether the secured sum is payable to the caveator – Finding that the balance of convenience favours removal of the caveat – Application granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M A Black	Wisewould Mahony
For the First Defendant	Mr B J Parker	Summer Lawyers Pty Ltd

HER HONOUR:

Introduction and background

This proceeding, which seeks to remove a caveat over a residential property in Maple Grove, Toorak (‘property’), was commenced on 18 May 2021. The plaintiff, Skymation Pty Ltd (‘Skymation’), is the trustee of a trust established by Mr Emil Negri in 2002, and is the registered proprietor of the property.

The first defendant is a company within a corporate group headed by Assetline Investments Pty Ltd (‘Assetline’), a Sydney-based company in the business of providing loan finance.

In September 2020, Mr Negri made inquiries with Assetline about Skymation borrowing the sum of $400,000.00, to be secured by the property (‘proposed loan’). On 18 September 2020, he received a formal letter of offer from Assetline (‘Letter of Offer’). On the same day, he executed the Borrower Declaration included in the Letter of Offer, and returned it to Assetline together with a non-refundable payment of $2,860.00.

On 25 September 20, Summer Lawyers Pty Ltd, the solicitors for Assetline (‘Summer Lawyers’), sent Wisewould Mahony, the solicitors for Skymation and Mr Negri, a letter and annexed documents (‘security documents’). This letter described the lender as ALS342 Pty Ltd (‘Lender’). The Lender is the first defendant in this proceeding. The letter also enclosed a document headed “Checklist of required settlement documents” (‘checklist’).

One of the items on the checklist was as follows:

A statutory declaration…

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: [2021] VSC 386
Decision Date: 20 July 2021

CaseChat Overview and Summary

Skymation Pty Ltd brought an application to remove a caveat lodged by Als342 Pty Ltd over a property. The application was brought under section 90(3) of the Transfer of Land Act 1958 (Vic), which allows for the removal of a caveat where the caveator cannot establish a prima facie case to be tried or where the balance of convenience favours removal. The primary legal issue was whether Als342 had established a prima facie case to be tried by demonstrating a caveatable interest in the property. The court also had to determine whether the balance of convenience favoured the removal of the caveat, considering the relative sums involved and the likelihood of the debt being owed to Als342.

The court examined the basis for Als342’s claim of a caveatable interest, which stemmed from a loan agreement. It was necessary to determine if Als342 was a party to the proposed loan by virtue of a nomination clause. The court referred to previous cases, including BCA Asset Management Group Pty Ltd v Sand Solutions Pty Ltd [2021] VSC 177, Salter v Gilbertson (2003) 6 VR 466, and ACN 096 278 483 Pty Ltd v Vercorp Pty Ltd [2011] QCA 189, to assess the validity of Als342’s interest. Ultimately, the court found that Als342 had indeed established a prima facie case to be tried, as there was a reasonable basis to believe that it had a caveatable interest in the property. However, the court also considered the balance of convenience, noting that the sum secured by the caveat was relatively modest, and there was real doubt as to whether the debt was payable to Als342.

Given the modest sum and the uncertainty over the debt's existence, the court concluded that the balance of convenience favoured the removal of the caveat. This decision was influenced by the fact that the burden of maintaining the caveat was likely to outweigh any potential benefits to Als342. Consequently, the application for the removal of the caveat was granted. The court's decision emphasised the need for a careful assessment of both the legal basis for the caveat and the practical considerations affecting the balance of convenience.

Orders