Sohtra v Peddi
[2023] VSC 262
•18 May 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2022 00574
IN THE MATTER of an application for recovery of land under Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic)
BETWEEN:
| SHAH NAWAZ SOHTRA | Plaintiff |
| v | |
| MAMATHA PEDDI | Defendant |
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JUDGE: | Derham AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 17 May 2023 |
DATE OF JUDGMENT: | 18 May 2023 |
CASE MAY BE CITED AS: | Sohtra v Peddi |
MEDIUM NEUTRAL CITATION: | [2023] VSC 262 |
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PROPERTY LAW – Sale of Land – Plaintiff sold one of a pair of properties to the defendant – At settlement of the sale, possession of the wrong property given to the defendant – Vendor discovered mistake four years after the settlement of the sale – Vendor, as registered proprietor of the property in possession of the defendant, applies for an order to recover possession of the property – Registered proprietor entitled to recover possession of the property and the rents and profits arising from the property.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms S V Kipen | Mahl Lawyers |
| For the Defendant | No appearance |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
Evidence - plaintiff............................................................................................................................ 2
Evidence - defendant......................................................................................................................... 6
The pleadings..................................................................................................................................... 7
Submissions - plaintiff..................................................................................................................... 7
Submissions - defendant.................................................................................................................. 9
Consideration...................................................................................................................................... 9
Conclusion......................................................................................................................................... 11
HIS HONOUR:
Introduction
By originating motion filed on 25 February 2022, the plaintiff applied under Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) for the recovery of the land at 54A O’Reilly Road, Tarneit, Victoria (‘Subject Property’).[1] In accordance with r 53.03(2) of the Rules, the proceeding was commenced without naming any person as defendant.[2]
[1]The land more particularly described in Certificate of Title Volume 11642 Folio 721.
[2]By order of McDonald J made on 16 May 2023, pursuant to r 77.05 of the Rules, the originating motion filed on 25 February 2022 (meaning the proceeding commenced by the originating motion) was referred to the Derham AsJ for hearing and determination.
By order of Keith JR made on 4 May 2022, Mamatha Peddi was joined as a defendant pursuant to r 9.06 of the Rules.[3] On 7 June 2022, the proceeding was fixed for hearing on 26 July 2022, with directions for the filing and service of affidavits. The application came on for hearing on 26 July 2022 and Ierodiaconou AsJ refused the application and ordered a Court-annexed mediation. The proceeding did not resolve at mediation and the plaintiff applied for orders that the proceeding continue as if commenced by writ.
[3]The power for the Judicial Registrar to do so was referred by Matthews AsJ pursuant to r 84.04(1) of the Rules.
The hearing of the plaintiff’s application was conducted by audio-visual link and it became impossible for the Associate Judge concerned to communicate adequately because the defendant and her husband spoke only limited English. The hearing was adjourned and came on in Court before Keith JR who made orders pursuant to r 4.07 of the Rules for the proceeding to continue as if commenced by writ, and for consequential orders for pleadings and discovery of documents. The plaintiff filed a statement of claim on 9 December 2022 and the defendant a defence on 19 January 2023. The plaintiff made discovery of documents but the defendant did not. On 7 February 2023, the proceeding was set down for trial before me, with appropriate directions.
Evidence - plaintiff
The plaintiff had filed a number of affidavits for the original application under Order 53 of the Rules, and the oral evidence of the plaintiff and his solicitor, Mr Chirag Grewal, confirmed that evidence and supplemented it.[4]
[4]Affidavit of Chirag Grewal made 22 February 2022; affidavit of Shah Nawaz Sohtra made 17 February 2022.
The plaintiff purchased 54 O’Reilly Road, Tarneit, Victoria in February 2013.[5] In early 2016, the plaintiff arranged to have the property subdivided following construction of two mirror image units on it. The Plan of Subdivision was registered on 23 March 2016.[6] Lot 1, on the western side, became designated 54B O’Reilly Road, Tarneit, recorded in Certificate of Title Volume 11642 Folio 720 (‘54B O’Reilly Rd’) whilst Lot 2, on the eastern side, became 54A O’Reilly Road, Tarneit, recorded in Certificate of Title Volume 11642 Folio 721, being the property I have defined as the Subject Property.
[5]The land more particularly described in Certificate of Title Volume 11285 Folio 723.
[6]Plan of Subdivision 726176N.
On 22 February 2016, the plaintiff engaged Mr Mukesh Kumar of Reliance Real Estate (‘Reliance’) to sell one of the properties. He intended to retain the other property as a passive investment. In about late May 2016, Mr Kumar contacted him and advised that he had conducted an inspection of the Subject Property with Mrs Mamatha Peddi and her husband Mr Tripathi Peddi.
In about June 2012, Mr Kumar informed the plaintiff that Mr and Mrs Peddi had agreed to purchase 54B O’Reilly Rd. On 8 June 2016, the plaintiff entered into a contract to sell 54B O’Reilly Rd to Mamatha Peddi and/or Nominee, with vacant possession, for the sum of $285,000.00 payable by a deposit of $28,500.00 with the balance payable at settlement due on 17 June 2016 (‘Contract’). The Contract is in the standard form approved by the Law Institute of Victoria Limited and the Real Estate Institute of Victoria Ltd. The Contract and attached Vendor Statement show clearly the title of the property to be Certificate of Title Volume 11642 Folio 720, being Lot 1 on Plan of Subdivision 726176N, and the street address as 54B O’Reilly Road, Tarneit, Victoria, 3029.
The Contract terms included the particulars of sale, special conditions and general conditions. General Condition 3 entitled ‘Identity of the Land’ provided that:
3.1An omission or mistake in the description of the property or any deficiency in the area, description or measurements of the land, does not invalidate the sale.
3.2The purchaser may not:
(a)make any objection or claim for compensation for any alleged misdescription of the property or any deficiency in its area or measurements; or
(b)require the vendor to amend title or pay any cost of amending title.
It is clear that the purchaser, in this case the defendant, is herself responsible to ensure that what she has inspected is what she contracted to purchase. General Condition 3 means that an omission or mistake in the description, measurements or area of the land does not invalidate the sale and, moreover, that the purchaser cannot make any objection or claim for compensation for any misdescription or deficiency in area or measurements, or require the vendor to amend the title or pay any costs of amending the title.[7]
[7]See Wollert Epping Developments Pty Ltd v Batten [2019] VSC 618, [64]-[81] (Derham AsJ), referring to Koadlow v Bolland (1997) 1 VR 632, 638-642 (Brooking JA, Phillips and Charles JJA agreeing); Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1, 15 (Barwick CJ), 26 (McTiernan J), 29 (Menzies J), 37 (Stephen J), Gibbs J not deciding.
On 15 August 2016, the defendant became registered as proprietor of 54B O’Reilly Rd. The plaintiff is informed by the agent who effected the sale, Mr Kumar, that shortly after settlement of the sale Mr Peddi attended the offices of Reliance and was mistakenly given the keys to the Subject Property and shortly after that the defendant took possession of that property, being the wrong one. The plaintiff had engaged Reliance to let the other property and, in error, Reliance leased 54B O’Reilly Rd between August 2016 and June 2020 on behalf of the plaintiff. During that period, the plaintiff did not visit the property. In March 2021, the plaintiff changed real estate agent, to Mr Hoang Ho of DK Property Partners, to take over the leasing of 54B O’Reilly Rd. That property continues to be let by the plaintiff to renters, as they are now called.
The plaintiff did not realise that the defendant had purchased 54B O’Reilly Rd but taken possession of the Subject Property until he tried to sell the former land in about February 2020. At that time, Mr Kumar of Reliance, who the plaintiff had engaged to sell the land at 54B O’Reilly Rd, told him that he did not own 54B O’Reilly Rd but rather the Subject Property. He asked Mr Kumar to contact the defendant in order to resolve the matter by way of discussion. Mr Kumar was unable to arrange a meeting.
In February 2021, the plaintiff engaged his current lawyers to assist him. They wrote to the defendant a letter of demand on 1 March 2021. That letter set out the background to the acquisition by the defendant of the Subject Property and the retention by the plaintiffs of 54B O’Reilly Rd. The letter claimed that the plaintiff is entitled to be granted an order allowing him to immediately re-enter and take possession of the Subject Property. The letter demanded that the defendant immediately make arrangements for her tenants to vacate the Subject Property and, if she wished, relocate to 54B O’Reilly Rd, and jointly engage a building inspector to inspect both properties and prepare a report as to any key differences in condition or state of repair between the properties. It was said that:
If you are willing to proceed on this basis, we confirm that Mr Sohtra will reciprocate to ensure that both tenancies experience limited disruption. However, if you are unwilling to proceed in accordance with this most reasonable proposal, we confirm that we hold instructions to immediately commence proceedings for an order that would allow Mr Sohtra to re‑enter and retake possession of [the Subject Property]. This will involve significant (and we submit, entirely unnecessary) time and cost for all parties.[8]
[8]Letter from Mahl Lawyers to Mamatha Peddi dated 1 March 2021, contained within the Court Bundle, 70 (‘[CB]’).
In response, Mr Peddi called Mr Grewal of the plaintiff’s lawyers and told him that the defendant would not relinquish occupation of the Subject Property and told him that they would not be seeking legal advice and had no intention to engage in further discussions. On 11 May 2021, Mr Mario Mantello of Mantello Lawyers, who had acted for the defendant in the purchase of 54B O’Reilly Rd, emailed Mr Grewal saying that they acted for the defendant and would provide a substantive response shortly. Mr Grewal sent a reminder on 31 May 2021 but received no response.
On about 14 October 2021, the plaintiff saw a ‘For Rent’ sign at the Subject Property directing enquiries to Ray White Truganina. The plaintiff informed his lawyers who wrote to Ray White Truganina by email informing them that the plaintiff was the registered proprietor of the Subject Property and demanding that they immediately cease from attempting to deal with it. He received a response that the agent had requested that the ‘For Rent’ board be removed.
On 17 November 2021, Mr Grewal received a telephone call from Mr Peddi who made some settlement proposal. On 22 November 2021, Mr Grewal responded by email saying that if the parties did not reach a settlement the plaintiff would apply to the Supreme Court of Victoria for orders granting him possession of the Subject Property. He received no response.
On 19 October 2021, the plaintiff engaged a locksmith to change the locks at the Subject Property, which was done. On about 11 November 2021, the plaintiff attended the Subject Property, accompanied by Mr Ho, and met with an individual who confirmed that he had leased the property from Ray White Tarneit and was currently residing there with his wife and two children. The plaintiff noticed that the new keys that he and Mr Ho had for the Subject Property no longer worked, so the locks must have been changed again.
In early January 2022, the plaintiff instructed Mr Grewal to contact the Agent, Mr Kumar, to ascertain whether he would assist the plaintiff regaining possession of the Subject Property, and provide an affidavit in this proceeding. Mr Grewal called Mr Kumar and asked him to swear an affidavit outlining the sequence of events relevant to the matter. Mr Kumar said he needed to consult his lawyers, but asked that Mr Grewal send him an email outlining what was required, which Mr Grewal did on 12 January 2022. He received no response, so sent a reminder on 24 January 2022. He received no response to the reminder from Mr Kumar. The plaintiff also sent emails and made calls to Mr Kumar asking for his assistance, without any response.
Evidence - defendant
The defendant did not appear at the trial. My chambers telephoned the number given in the defendant’s notice of appearance and defence, and spoke to Mr Peddi who said the defendant was unwell and could not attend, and a medical certificate would be forthcoming.
The Court record reveals that the defendant had filed an affidavit in opposition to the first application made in the proceeding, the application made pursuant to Order 53 of the Rules. The defendant deposed in her affidavit made on 29 June 2022 that she inspected the Subject Property (which she refers to as ‘54B O’Reilly Road’) and decided to buy it. She gave evidence that the vendor and real estate agent misrepresented the property number as 54B O’Reilly Rd, she relied on the representation and entered into the Contract of Sale. She was given possession of the Subject Property, being the land she inspected. She does not have money for legal representation. The defendant wants to stay in the property which she agreed to purchase with the real estate agent and the vendor.
The pleadings
In their statement of claim, the plaintiff claims, in substance, that as the registered proprietor of the Subject Property he is entitled to possession of it and is being kept out of possession by the defendant leasing it out to third parties, which constitutes a trespass. Notwithstanding that the plaintiff has demanded that the defendant vacate the land and give up possession of it to him, she refuses to do so. It is further said that because of the defendant’s conduct the plaintiff cannot sell or deal with the Subject Property and has been deprived of the use and enjoyment of it. The relief claimed is an order for possession of the Subject Property, damages for trespass, interest and costs. The claim for damages for trespass is not pressed.
The defence filed by the defendant gives an account of the events similar to the account given in her affidavit (see above at [18]). The defendant says that when she settled the purchase of 54B O’Reilly Rd, she thought that she was buying the Subject Property and that was the property she was given possession of by the vendor’s agent. The defendant and her family commenced to live in the Subject Property and later let it out. Essentially, the defendant says that the vendor and the real estate agent misled her and her husband and they wish to have the Subject Property transferred into the defendant’s name. Notwithstanding that this very course of action has been offered to her, she has not co-operated to achieve that result.
Submissions - plaintiff
The plaintiff, as the registered proprietor of the Subject Property, has the right to exclusive possession of it, and to receipt of the rents and profits arising from it.[9] Since at least the time of expiry of the plaintiff’s demand of 1 March 2021, the plaintiff has not authorised the defendant to occupy the Subject Property, by way of renting it to third parties or otherwise. Thus the defendant, by occupying or leasing the property to tenants, directly interferes with the plaintiff’s right to possession and makes her a trespasser. Her conduct is plainly intentional. Trespass is an injury to possession.[10] The tort is concerned with protecting the right to exclusive possession of land, rather than ownership, and not any other interest. However, the party with the immediate right to possession of the land may often be, and in this case is, the owner of the land.
[9]Hunter v Canary Wharf Ltd [1997] AC 655, 703 (Lord Hoffman), 724 (Lord Hope of Craighead); Brown v Tasmania (2017) 261 CLR 328, [385] (Gordon J); Romani v New South Wales [2023] NSWSC 49, [44], [47]–[48] (Wright J).
[10]Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274, [71] (Bell P, Gleeson JA and Payne JA).
The defendant has failed to make discovery of documents, so the terms of the rental agreement active at the time of the plaintiff’s letter of demand are unknown. The plaintiff submits, however, that a period of around 30 days would have been a reasonable time as the tenants could have relocated to 54B O’Reilly Road, of which the defendant is the registered proprietor, as offered in the plaintiff’s letter of demand.
In any event, the defendant entered into a new residential rental agreement on 16 October 2021.[11] The evidence of Mr Grewal revealed that this rental agreement came into the plaintiff’s possession through Mr Ho, his real estate agent, who obtained it from the tenants then occupying the Subject Property. It is submitted that by this stage the reasonable time following the end of any implied licence must have elapsed. Further, at the time of entry into the new agreement, the defendant was on notice by reason of the plaintiff’s letter of demand that she did not have the plaintiff’s authority to occupy the Subject Property, by renting out or otherwise. Thus, after a reasonable time had elapsed following the plaintiff’s demand, the defendant’s interference with the land has been unauthorised.
[11]Residential Rental Agreement dated 16 October 2021 [CB 72]. The rental agreement is a fixed term rental agreement expiring on 5 April 2022 and refers to 54B O’Reilly Rd. However, the defendant is the Rental Provider and she has not let 54B O’Reilly Rd, which has been in the possession of the plaintiff. Thus this reference should be taken as a reference to 54A O’Reilly Road, which is the land in dispute.
The plaintiff submits that the Court should make an order for possession of the Subject Property in his favour. The plaintiff consents to a stay of the operation of the order for a period of up to six months, to allow for the defendant’s current rental agreement to come to an end.
Lastly, at the time that the plaintiff’s written submissions were filed, the plaintiff was open to making an application to the Court for a direction to the Registrar of Titles to amend the Register pursuant to s 103 of the Transfer of Land Act 1958 (Vic) (‘TLA’) and had made an offer to the defendant to this effect. However, this would require the plaintiff to amend his statement of claim to seek such relief and join the Registrar of Titles to the proceeding and would also require the defendant’s cooperation, which has not been forthcoming to date. Given that the defendant has failed to appear at the trial, and the costs that would be involved in amending the statement of claim and proceeding without any co-operation from the defendant, the plaintiff withdrew that offer to attempt to apply under s 103 of the TLA.
Submissions - defendant
The defendant did not appear. The so-called ‘defence’ she has filed does not disclose a defence to the plaintiff’s claim.
Consideration
The plaintiff, as the registered proprietor of the Subject Property, has the prima facie right to exclusive possession of it.[12] Indeed, in the absence of evidence to the contrary, the registered proprietor is deemed to be in possession of the land, as being the person with the prima facie right to possession.[13] There is in this case, of course, evidence to the contrary. The defendant is either in occupation of the Subject Property herself, and thus in possession, or by renting the Subject Property she is in possession by receipt of the rents and profits arising from the land. It is clear that she is entitled to neither.
[12]Hunter v Canary Wharf Ltd [1997] AC 655, 703 (Lord Hoffman), 724 (Lord Hope of Craighead); Brown v Tasmania (2017) 261 CLR 328, [385] (Gordon J); Romani v New South Wales [2023] NSWSC 49, [44], [47]–[48] (Wright J).
[13]Powell v McFarlane (1979) 38 P and CRL 452, 470-472;cited with approval in Petkov v Lucerne Nominees Pty Ltd (1992) 7 WAR 163, 167; Bayport v Watson [2002] VSC 206, [39] (Ashley J).
As the High Court has pointed out in an entirely different context, a person who enters the land of another must justify that entry by showing either that the entry was with the consent of the occupier or that the entrant had lawful authority to enter.[14]
[14]Kuru v New South Wales (2008) 236 CLR 1, [43] (Gleeson CJ, Gummow, Kirby and Hayne JJ). Citing Halliday v Nevill (1984) 155 CLR 1, 10; Entick v Carrington (1765) 2 Wils KB 275, 291; 95 ER 807, 817; Great Central Railway Co v Bates [1921] 3 KB 578, 581-582; Southam v Smout [1964] 1 QB 308, 320; Morris v Beardmore [1981] AC 446, 464; Eccles v Bourque [1975] 2 SCR 739, 742-743.
In the famous 18th century case of Entick v Carrington,[15] Lord Camden, the Chief Justice of the Common Pleas, said:
… our law holds property of every man so sacred, that no man can set his foot upon his neighbour’s close without his leave; if he does he is a trespasser, though he does no damage at all; if he will tread upon his neighbour’s ground, he must justify it by law…
[15](1765) 2 Wils KB 275, 291; 95 ER 807, 817.
Thus trespass to land is actionable per se, without proof of damage.[16] Furthermore, an authority to enter land may be revoked and, if it is revoked, the entrant no longer has authority to remain on the land but must leave as soon as is reasonably practicable.[17]
[16]Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353; Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274 (Bell P, Gleeson and Payne JJA).
[17]Kuru v New South Wales (2008) 236 CLR 1, [43] (Gleeson CJ, Gummow, Kirby and Hayne JJ).
Assuming that by reason of a mistake by Mr Kumar, acting as agent for the plaintiff, the defendant was let into possession of the Subject Property, she was a mere licensee under an implied licence. That licence was clearly revoked by the plaintiff’s solicitor’s letter of demand of 1 March 2021. Since a reasonable time after that demand, the defendant has been a trespasser on the Subject Property. A reasonable time has clearly elapsed. For the reasons advanced by the plaintiff’s Counsel, she is a trespasser.
It is clear that an order should be made for the plaintiff to recover possession of the Subject Property.
In relation to the costs of the proceeding, the usual rule is that the unsuccessful party must pay the successful party’s costs, unless there are special circumstances that justify a departure from that rule. The plaintiff has been wholly successful in this proceeding, and so the defendant should be ordered to pay his costs of the proceeding.
Moreover, an indemnity costs order is appropriate. The plaintiff has made very reasonable offers to resolve the situation by a sensible commercial resolution in the letter of demand of 1 March 2021 and recently by letter dated 8 May 2023. The defendant has unreasonably refused to entertain the offers. The defendant has disclosed no defence to the claim, has failed to comply with orders of the Court (including in relation to discovery of documents and preparation of the Court Book) or to provide further and better particulars of her defence, as requested.
This is a case where the defendant, properly advised, should have known she had no chance of successfully defending the plaintiff’s claim. When a litigant presses on where on proper consideration their case should have been seen to be hopeless, the discretion to make a special costs order may be enlivened. French J (as he then was) in J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers Western Australia[18] considered that the discretion to award such costs would be enlivened when a party persisted, for whatever reason, in what should on proper consideration have been seen to be a hopeless case. The defendant has continued her defence of the claim ‘in wilful disregard of known facts or clearly established law’.[19]
[18]J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers Western Australia (Federal Court of Australia, French J, 9 February 1993); cited in Macedon Ranges Shire Council v Thompson [2009] VSCA 209, [15] (Redlich JA and Beach AJA); Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399, [19].
[19]Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189, [7].
In addition, this is a case where the defendant’s conduct has caused loss of time to the Court and to the plaintiff. The defendant has breached her obligations under the Civil Procedure Act 2010 (Vic) (‘CPA’) by failing to participate in the proceeding for many months, thereby breaching the overarching obligations to cooperate, act promptly and minimise delay (see ss 20 and 25 of the CPA).
Conclusion
For these reasons, it is appropriate to make orders for the plaintiff to recover possession of the Subject Property, including possession of the rents and profits arising from the property, and a special order as to costs, requiring the defendant to pay the plaintiff’s costs of the proceeding from the filing of the plaintiff’s statement of claim on 9 December 2022 on an indemnity basis. I will also reserve liberty to the plaintiff to apply for further orders necessary to give effect to the order.
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