Sokolovska v Galea
[2021] VSC 435
•23 July 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
S ECI 2021 02412
Between:
| VERA SOKOLOVSKA | Plaintiff |
| -and- | |
| PAUL GALEA | First Defendant |
| -and- | |
| REGISTRAR OF TITLES | Second Defendant |
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JUDGE: | Croucher J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 July 2021 | |
DATE OF ORDERS: | 20 July 2021 | |
DATE OF REASONS: | 23 July 2021 | |
CASE MAY BE CITED AS: | Sokolovska v Galea | |
MEDIUM NEUTRAL CITATION: | [2021] VSC 435 | First revision: 16 August 2021 |
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REAL PROPERTY — Caveat — Application by plaintiff for order directing Registrar to remove caveat lodged by first defendant on title to land owned by plaintiff — First defendant asserted equitable interest in property — No appearance by first defendant and his now former solicitor who lodged caveat — Plaintiff emailed originating motion and supporting documents to first defendant’s former solicitor, who declined to accept service, and first defendant — Court satisfied that first defendant taken to be served — Evidence all one way — No prima facie case giving rise to serious question to be tried that first defendant has caveatable interest in land — Balance of convenience requires order sought by plaintiff — No caveatable interest — Application granted — Transfer of Land Act 1958 (Vic), ss 89(4), 90(3) & 113; Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 6.02(1).
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Appearances:Counsel Solicitors
For the Plaintiff Unrepresented/in person N.A.
For the First Defendant No appearance Beswick Foulkes Family Law (not on record)
For the Second Defendant Submitting appearance N.A.
HIS HONOUR:
Overview
This is an application I heard, and granted, in the Practice Court on Tuesday 20 July 2021. I gave only very brief ex tempore reasons and deferred the publication of settled written reasons until later in the week. These are those reasons (which I shall leave in the present tense).
Vera Sokolovska (the plaintiff) applies for an order, pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) (“the TLA”), directing the Registrar of Titles (the second defendant) to remove a caveat lodged on Ms Sokolovska’s title to land (on which are residential premises) by solicitors Beswick Foulkes Family Law (“Beswick Foulkes”) on behalf of Paul Galea (the first defendant).
On the evidence before me, I make the following findings:
a) first, I am satisfied that, despite his failure to appear, whether by solicitors or in person, or to file any materials, and despite his former solicitors’ express failure to accept service, given the operation of s 89(4) of the TLA, Mr Galea is taken to have been served with Ms Sokolovska’s originating motion, affidavit and other documents, and in a timely fashion;
b) second, contrary to the assertion in the caveat, I am not satisfied that Mr Galea has established a prima facie case giving rise to a serious question to be tried that he has any equitable interest — whether arising from an implied, resulting or constructive trust — in Ms Sokolovska’s property; and
c) third, given the foregoing, and that Ms Sokolovska has sold her property and that it is due to settle in three days (on Friday 23 July 2021), I am satisfied that the balance of convenience favours the removal of the caveat.[1]
[1]See, for example, Piroshenko v Grojsman (2010) 27 VR 489 at 491[6]-495[23] (per Warren CJ).
Accordingly, I shall grant the application and make the order sought.
Despite her success and Mr Galea’s failure, I make no order as to costs in Ms Sokolovska’s favour against Mr Galea as she has not engaged lawyers for this application. Instead, Ms Sokolovska appears to have drafted her own documents and she appears in person (via Zoom, actually, because of the current lockdown). Further, the Registrar has made the usual submitting appearance, save as to costs, and there is no reason to make any costs order against her.
My more detailed reasons for these conclusions and orders follow.
Background and evidence
Introduction
I turn first to the background to and evidence in this matter.
The following is taken from the account of Ms Sokolovska in her affidavit (and annexures), the substance of which I accept.
As indicated a moment ago, no material has been filed and no appearance has been made by Mr Galea or his former solicitors Beswick Foulkes. At most, annexed to Ms Sokolovska’s affidavit are two letters addressed to her (or her former solicitors) from Beswick Foulkes, in which various assertions are made on behalf of Mr Galea. However, since there is no affidavit material filed by either Mr Galea or Beswick Foulkes swearing or affirming to the truth of those assertions, I am not prepared to act on any of them, except to the extent that any aspect of them may be conceded by Ms Sokolovska in her affidavit.
History of relationship between Ms Sokolovska and Mr Galea
Ms Sokolovska and Mr Galea formed a friendship some years ago. At one point, they would see each other “on the side” on occasions, but that aspect of their relationship was only short-lived and ended in 2011.
Over time, Mr Galea began to use illicit drugs, went bankrupt, lost his property and his business, and became homeless. At one stage, he was imprisoned for six months over offences involving threats to another or others.
Mr Galea’s rental of Ms Sokolovska’s Kingsville property
Between October 2016 and February 2017, Ms Sokolovska allowed Mr Galea to rent her property at 202 Somerville Road in Kingsville. However, Mr Galea made only the one payment (of about $870)[2] and then failed to pay his rent for another five months. Mr Galea allowed others into the house and a good deal of damage was caused to the property while he was there. Ultimately, Ms Sokolovska had to evict him.
Ms Sokolovska’s Yarraville property and Mr Galea’s caveat
[2]Ms Sokolovska annexed the managing agent’s rental invoice to her affidavit.
Ms Sokolovska is the sole registered proprietor of premises at 19 Bena Street in Yarraville, and has been since 2008. This, for her, was an investment and is the property on which Mr Galea lodged the caveat. Ms Sokolovska entered into a contract of sale of the property on 25 May 2021 for a price of $1,150,000. Settlement is scheduled for Friday 23 July 2021.
Somehow, Mr Galea must have got wind of the sale, or at least the impending sale. This is because, on 26 May 2021, Mr Galea caused Beswick Foulkes to lodge a caveat, in his name, on the title to the Yarraville property. Ms Sokolovska received notice of the caveat from the Registrar the same day. In terms, the caveat names Mr Galea as the caveator, but it does not provide his address. Instead, the caveat goes on to record that it was lodged by Beswick Foulkes and, under the heading “Notices to”, Beswick Foulkes is mentioned again, as is the firm’s address. It is also asserted in the caveat that the grounds of the claim are an “implied, resulting or constructive trust” and of a “freehold estate”, and that there is an absolute prohibition on dealing.
Mr Galea’s time at the Yarraville property
In or around March of 2019, Ms Sokolovska allowed Mr Galea to move into the Yarraville premises. In order to achieve this, Ms Sokolovska had to end the lease of the existing tenants. She too moved in about a month later, albeit not as Mr Galea’s intimate partner (as he was to claim later, on 26 May and 30 June 2021, via letters from Beswick Foulkes).
Despite an agreement between them, while at the Yarraville property, Mr Galea did not contribute anything towards their living expenses, such as food, drink, dog food (for his dogs), clothing, utilities, home insurance and rates. Instead, in Ms Sokolovska’s view, he was no more than a “property damaging squatter”. What is more, Mr Galea failed to contribute despite the fact that he was receiving, on Ms Sokolovska’s understanding, in the order of $3,000 per month in payments as a result of an insurance claim in respect of an injury to his back.
Ms Sokolovska conceded that Mr Galea did start some renovation work on the house in the first six weeks of his occupancy, but swore that he then stopped and left the work unfinished. The kitchen, in her view, was left in “a ripped-up state”.
Mr Galea also became very difficult to approach, argumentative and intimidating. He filled the premises with hoarded furniture and rubbish, which he refused to remove. Ultimately, Ms Sokolovska had to pay $1,250 to have it removed herself.
In July 2020, things came to a head. Ms Sokolovska explained to Mr Galea that they had to move out of the premises because she could no longer afford to live there, as she had no money left (her income through her business was suffering as a result of the COVID-19 pandemic) and Mr Galea was making no contributions to household expenses.
Despite several notices to vacate the property, Mr Galea failed to do so. In addition to the unfinished kitchen, he caused other damage to the property. For example, he left nails in the walls, drug paraphernalia in nooks and crannies and rubbish about the place, as well as damaged plaster. Ms Sokolovska annexed photographs showing the undamaged state of the premises before Mr Galea moved in and its appalling state after he was finally evicted. It is obvious, as Ms Sokolovska asserts, that the damage caused would have reduced the value of the property substantially. In that regard, Ms Sokolovska also annexed a relevant opinion of a real estate agent Tristan Tomasino of Biggin & Scott. Mr Tomasino’s opinion, proffered on 7 June 2021, was in the following terms:
In making our assessment, which is from a place of managing the property for 14 years, as well as selling other well-presented homes in the local vicinity and the market at [the] time, it is our professional opinion the property was in severe and worse condition than when we managed the home and was severely devalued due [to] the kitchen, cupboards, and several other items missing from the home.
We believe this was a detriment to the sale price of approximately $150,000-$200,000 and if the home was not missing these items, the price would have been substantially higher.
I accept Mr Tomasino’s opinion.
Further, Ms Sokolovska spent in the order of $9,000 to $9,500 on materials that Mr Galea was supposed to use, but never did, in renovating the property.
In addition, Mr Galea’s failure to leave, when directed to do so, caused Ms Sokolovska to lose rental income that she might otherwise have earned and caused her to pay the usual utilities and other costs when she was denied use of the premises by him. She also lent him thousands of dollars which he never repaid.
During this period, Mr Galea threatened to hurt Ms Sokolovska several times. He threw glass bottles at her on occasions, and once lunged at her with a metal rod. Mr Galea was also involved in fights with others, frequently. Ms Sokolovska annexed photographs of the injuries he sustained on occasions.
Mr Galea ultimately barricaded himself inside the house, changed the locks and installed security cameras without Ms Sokolovska’s consent. In March 2021, Ms Sokolovska was driven to enlist the help of Victoria Police to remove Mr Galea from the premises. She also applied for, and was granted, a family violence intervention order against Mr Galea for two years.
Mr Galea’s (unsworn) assertions and Ms Sokolovska’s responses thereto
Beswick Foulkes’s letter of 26 May 2021
In Beswick Foulkes’s letter of 26 May 2021 to Ms Sokolovska’s previous solicitors Ferraro & Company, the following things (among others) are asserted or offered:[3]
[3]While the letter is headed “Without prejudice save as to costs”, given that, as I shall explain, I am satisfied that Mr Galea has been served with this material and yet he has chosen not to appear and defend the matter, I take it that he has waived any argument that might have been raised in objection to the admissibility of this material despite the “without prejudice” heading to the letter.
a) The caveat was lodged to “protect [Mr Galea’s] interests”.
b) Mr Galea made “substantial contributions (being of a financial nature in terms of materials and expenses as well as significant manual labour to the [Yarraville] property)”.
c) Ms Sokolovska “made representations to [Mr Galea] prior to and during the course of him commencing work to the effect that the property would be the relationship home into the future”.
d) Mr Galea “undertook the work believing that into the future he would have an interest in the property”.
e) “Notwithstanding that [Mr Galea] believes that the amount he would ultimately receive upon determination of the Court would be substantially more … he is prepared to accept payment of $75,000 in full and final settlement of all claims … .”
Annexed to the letter was a list of things Mr Galea asserted he had done at Yarraville (and at other properties connected with Ms Sokolovska, including her café and her mother’s premises) and household items for which they each paid half during their period of cohabitation.
Beswick Foulkes’s letter of 30 June 2021
In Beswick Foulkes’s letter of 30 June 2021 sent directly to Ms Sokolovska,[4] the following assertions were made:
[4]Presumably, by this stage, Ms Sokolovska’s solicitors were no longer acting in the matter.
1) Contrary to your denial of the same, our client instructs that you and he were a couple in a de facto relationship. That relationship is evidenced by the fact that you cohabitated as domestic partners including having sexual relations.
2) Our client moved into the [Yarraville] property in April 2019. You moved in on 19 May 2019 and you and he commenced your de facto relationship from that point, which ended on 4 September 2020.
3) Our client instructs that your de facto relationship is also evidenced by the fact that you purchased furniture together, including a washing machine, a dryer, a fridge, a leather couch, two extra couches, lamp shades, ox-hide rugs, and a king-size bed. You both contributed to the purchase of the aforesaid furniture. Our client instructs that you and he picked out the colour scheme for the house together, attended shops and hardware outlets together on the basis that it was intended to be your long-term relationship residence.
4) You also took our client to your dentist and introduced him as your partner.
5) You cooked dinner on most evenings, whereas he did most of the housekeeping.
6) You introduced our client to your mother, and he later undertook work for her at her home.
7) Our client has witnesses who will attest to the fact that you were in a relationship. Those witness attended your said home where you cohabitated and will attest to you both being in a relationship.
8) You sent messages to our client’s mother.
9) Our client also worked at your coffee shop and you displayed an exhibition of his artworks at that coffee shop.
10) Our client paid the rates on the said home and … a week before you moved out without his request or prior knowledge you reimbursed him for those rates payments.
11) Our client undertook a significant amount of renovations and improvements to the home which have previously been detailed.
12) The reason that the property was left untidy when our client vacated was due to the fact that he was forced out of the property on short notice on the basis that you made a complaint to the police and insisted that he be evicted peremptorily from the property. Our client was given insufficient time to remove his belongings from the property which were located within the home.
13) Your claim that you lost rental is unsustainable given the fact that you were living together with our client in a relationship in the home.
14) Our client has been clean from the usage of drugs for a period dating well back before he commenced cohabitation with you as aforesaid.
15) Our client instructs that over the whole period of the time that he occupied the said home he undertook significant renovations and repairs and you and he agreed that he would undertake the said works for the purposes of benefitting your relationship. Our client was unable to complete the kitchen because he was forced out of the property on short notice.
16) The kitchen was complete other than there being no doors installed. Otherwise, all other works on the kitchen were completed, including:
a) The installation of cabinets;
b) The plumbing was connected;
c) Electrical works were undertaken;
d) Tiling, including splashbacks;
e) Hotplates, oven and sink were installed; and
f) Our client had meticulously replaced the floorboards to match given where the island bench was located.
17) Our client paid for the purchase of new carpets for bedrooms one, two and three, and … he arranged for the existing carpet in the property to be re-laid in the bungalow at the rear of the property at his cost.
18) Our client requests that you provide particulars of the sale for the property, including a copy of the contract of sale and details of any mortgage debt or other debts relating to the property.
19) We confirm that our client maintains that he is entitled to settlement from you. He invested monies, time and effort into the said home based on representations that you made to him that it would be his home as well as yours into the future, and that those representations entitle our client to an equitable interest in the property.
20) Our client instructs that should you bring a Supreme Court action to seek to remove the caveat he intends to defend the same. Our client also intends to pursue proceedings against your client for an equitable settlement based on the aforesaid facts and circumstances.
21) Our client would prefer to negotiate a resolution of this matter without recourse to litigation.
Ms Sokolovska’s response to those letters
Apart from other aspects of her affidavit already mentioned, Ms Sokolovska directly responded to the allegations of Mr Galea in his solicitors’ letters of 26 May and 30 June 2021, in the following terms:
[Mr Galea] and I were not in an intimate relationship as he has insinuated. We did not sleep in the same room. We did not do anything together. There was no relationship as [Mr Galea] alludes to.
…
In retrospect, [Mr Galea] used me and expected me to help him when he had nothing. He knew I had money and property. Ever since [Mr Galea] went downhill, he dragged me down into … the abyss of his ever-increasing problems which in the long run resulted in substantial financial loss, mental stress and emotional abuse health issues for me. I now suffer post-traumatic stress and struggle every day.
I vehemently deny the lacerating allegations [Mr Galea] has laid in the letters of 26 May … and 30 June 2021. I see this as nothing but intimidation tactics and a fishing expedition for wrongful financial gain. I would like to emphasise that I have evidence for all the facts I have stated in this letter.
Through his actions and perfidy, despite the kindness I showed, [Mr Galea] has caused me [a] significant amount of financial damage and [an] inestimable amount of stress and anxiety. The [magnitude] of [Mr Galea’s] callous disregard [of] my property is beyond belief. Out of spite, [Mr Galea], upon being evicted forcibly by Victoria Police, has placed this [caveat] on my property to extend the tyranny of his control over me and to make me suffer further losses as a result. [Mr Galea] has no basis for this caveat and we were not in a de facto relationship as [he] alludes to. [Mr Galea’s] actions have been audacious and riddled with vengeance and greed.
In her oral submissions before me, Ms Sokolovska confirmed, albeit briefly, most aspects of her affidavit. While she was not sworn or affirmed or subject to cross-examination, she struck me as honest and reliable.
Service
Background
Introduction
I shall return to the foregoing evidence when considering the substance of Ms Sokolovska’s application. Before doing so, however, I must address the issue of service, to which I now turn.
Documents filed
On 7 July 2021, Ms Sokolovska filed her originating motion, summons to the two defendants and supporting affidavit with annexures.
Attempted service on Beswick Foulkes and Mr Galea
On 15 July 2021, by way of attempted service, Ms Sokolovska emailed Beswick Foulkes and annexed those documents to the same email.
On 16 July 2021, Beswick Foulkes emailed a letter to Ms Sokolovska in response, and said this:
We refer to your email received 15 July 2021 at 5.23 p.m. attaching Court documentation issued in the Supreme Court of Victoria.
Please note that this firm: -
a) Is not instructed to accept service of this documentation on behalf of Mr Galea;
b) Is no longer acting for Mr Galea.
Otherwise, you should contact Mr Galea direct in regard to this matter.
At 3:39 p.m. on 16 July 2021, Ms Sokolovska emailed Mr Galea personally (she is aware of his email address) in the following terms:[5]
[5]Emphasis in original.
Dear Mr Galea,
Please see the attached Court Sealed Summons.
Regards,
Vera Sokolovska.
At about the same time on 16 July 2021, Ms Sokolovska emailed Mr Galea personally in the following terms:
Dear Mr Galea,
RE: S ECI 2021 02412 Sokolovska, Vera vs Galea, Paul — Hearing Date Confirmation
Please see the email below as served to your former legal representative. I have been since informed by them that they are no longer representing you.
Please see the attached documents and documents through the link provided by the way of service.
…
Dear Mr Beswick,
RE: Galea and Sokolovska - S ECI 2021 02412 Sokolovska, Vera vs Galea, Paul — Hearing Date Confirmation
Please see the attached Letter of Hearing Date Confirmation from the Supreme Court.
Please see the following documents by the way of service available through the link below.
[Listed here were the following documents: Originating Motion; Overarching Obligations; Proper Basis; Affidavit; Exhibits; Summons; and Court Confirmation Letter.]
[The link mentioned above was set out here.]
At 5:43 p.m. on 19 July 2021, Ms Sokolovska emailed Beswick Foulkes and Mr Galea personally, in the following terms:
Dear Mr Beswick [and] Mr Galea,
RE: S ECI 2021 02412 Sokolovska, Vera vs Galea, Paul - Directions Hearing
Further to my email with court sealed documents previously, please see the details of the Directions Hearing tomorrow at the revised time of 11:30am. Please also note the details of how to attend the hearing below.
I have provided you with the required details to enable you to attend and address your matter in front of his [H]onour.
On 20 July 2021, a solicitor from Beswick Foulkes emailed Ms Sokolovska again. This email was in the following terms:
I have already forwarded you an email on 16 July 2021 informing you that: -
a)I have no instructions to accept service of the Supreme Court proceedings that you have issued; and
b)I am no longer acting for Mr Galea.
Therefore, I will not be appearing before the Court today, and you should notify the Court of the above facts.
Service on Registrar
On 19 July 2021, the Registrar of Titles wrote to Ms Sokolovska. In that letter, the Registrar:
a) acknowledged receipt of Ms Sokolovska’s papers;
b) indicated that she did not intend to appear in the action or to claim costs;
c) set out a form of order that would be appropriate, should the Court grant the relief sought, and explained the procedure for implementing any such orders;
d) asked Ms Sokolovska to confirm that she would not seek costs against the Registrar.
The same day, the Registrar wrote the Prothonotary and advised that she would not be appearing in this matter.
Discussion
Order 6 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic)
Order 6 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (“the Rules”) sets out the requirements for good service in a range of circumstances.
For example, rule 6.02(1) requires this:
Except where otherwise provided by or under any Act or these Rules, originating process shall be served personally on each defendant.
It is plain that, upon being told by Beswick Foulkes that they would not accept service for Mr Galea and that they no longer acted for him, Ms Sokolovska, as an unrepresented litigant, did the sensible thing, given today’s technology and the urgency of the matter — i.e. she tried to serve Mr Galea via email. Indeed, she did what his former solicitors told her to do.
However, while the recent history of this matter might give rise to a suspicion that Mr Galea received and read those emails, but simply chose not to respond, I do not think it is open to me to infer that this is necessarily so.
While there may well be other arguments under Order 6 that render such an attempt at service satisfactory, as it happens, I need not explore them in this case. This is because it seems to me plain that s 89(4) of the TLA comes to Ms Sokolovska’s rescue. I turn to that provision now.
Section 89(4) of the TLA
Section 89(4) of the TLA provides as follows:[6]
Every notice relating to any such caveat and any proceedings in respect thereof if served at the address specified in the caveat shall be deemed to be duly served.
[6]My emphasis.
Back in 1996, while sitting in the Practice Court in National Australia Bank Ltd v Dyer (“Dyer”),[7] Batt J had this to say about s 89(4):
[7]National Australia Bank Ltd v Dyer (unreported, Supreme Court, 14 August 1996) at 2-4 (per Batt J).
There is no suggestion that actual personal service or anything that could be argued to be appropriate substituted service has been effected on the Firstnamed Defendant [the caveator] but I am satisfied that the originating motion, summons and affidavits with exhibits were served upon Home Wilkinson & Lowry at the address of that firm that is stated in the caveat. The question then arises whether the service of Court proceedings on the solicitors named in the caveat as the address for service constitutes good service. For the reasons which follow, in my view, it does.
[His Honour then set out s 89(4) of the TLA and continued.]
Even without reference to the other provisions of that Act, in my view, service of the originating motion (and, I consider, subsequent documents such as the summons and affidavits in the proceeding begun by originating motion), if effected at the address mentioned, is good service for the purpose of the Court’s practice and procedure and its Rules. Section 89(4) is an exception to, and within the contemplation of, Rule 6.02(1) of Chapter I of the Rules.
In my view, the natural meaning of the word “thereof” in sub-s (4) is “of any such caveat: the reference which “thereof” makes is not, in my view, to the word, “notice”. In addition, the sub-section is not be read as though it read “every notice relating to “any proceedings in respect of any such caveat”. Both those readings would be, in my opinion, very strained.
Moreover, the two cases I shall next mention show that the sub-section is to be read as I have read it.[8]
[8]His Honour then referred to Gunn v Land Mortgage Bank of Victoria Ltd (1890) 12 ALT 49 and Ex parte Little (1958) 58 SR (NSW) 173 at 177, which dealt with the corresponding New South Wales provision.
In Gunn v Land Mortgage Bank of Victoria Ltd (1890) 12 ALT 49, it was held that personal receipt by the person being notified, in that case, of the notice is not necessary. Secondly, Hardie J in Ex parte Little (1958) 58 SR (NSW) 173 at 177 said that the corresponding New South Wales section:
… did not entitle the caveator to require a person serving notice on the caveator at the address specified in the caveat to arm himself with evidence that the caveator in fact received or had brought to his attention the notice in question. The responsibility for bringing that result about rests with the caveator and the caveator alone. It is, in short, the duty of the caveator to ensure that his or her current address is on the caveat and on the register.
Section 89(4) does not stand by itself. There is also s 113. So far as is material, that section, relating to service of notices, provides:[9]
[9]While Batt J included s 113(2) in this passage, I have excluded it, as it is in a different form today.
(1) Any notice under this Act may be served or given by being sent by letter posted to the person concerned at the person's address for service shown in the Register.
…
(3) The address appointed in a caveat as the place at which notices relating to the caveat may be served shall be the address for service of the caveator,
…
(6) The Registrar shall on request in an appropriate approved form by a caveator amend the address appointed in the caveat at which notices may be served.
Assuming for the moment that there has been no amendment or alteration pursuant to sub-s (6) of the address appointed in the caveat at which notices may be served, it is, in my view, clear beyond peradventure from sub-s (3) that the address given in the caveat in question is the address for service.
It is also clear from sub-s (1), if not also sub-s (2), that a notice under the Act might be served by being posted to, in contradistinction to being hand delivered at, the address for service. I am not, however, satisfied, or prepared to proceed on the basis that an originating motion and associated documents is or are “notice under the Act”. Thus, I think that all that s 113 provides for present purposes is a statement that the address given in the caveat is the address for service of the caveator, but I have already said that in my view s 89(4) is sufficient to show that for present purposes.
Subject to one matter, I therefore consider that these proceedings and all the requisite documents are shown to have been duly served.
Justice Batt went on to explain the qualification in this way:[10]
The one qualification is that the latest information as to the caveatrix’s address for service that the plaintiff’s solicitor had, or has, is from a search made on or shortly after 19 March 1996, and I am not prepared in a matter such as this to apply the presumption of continuity forward from that date to the present [i.e. 14 August 1996], particularly when the solicitors, Home Wilkinson & Lowry, informed the plaintiff’s solicitors by a letter dated 7 May 1996 that they no longer were acting for the Firstnamed Defendant and did not know her current whereabouts. It seems to me that if they had (for whatever reason) ceased to act for her, it is possible that at about the time of cesser, she amended or had amended the address for service in the caveat.
[10]National Australia Bank Ltd v Dyer (unreported, Supreme Court, 14 August 1996) at 4-5 (per Batt J).
There is no such need for qualification in this case. The “address specified in the caveat”, within the meaning of s 89(4) of the TLA, was the address of Beswick Foulkes. The caveat was lodged by that firm on behalf of Mr Galea as recently as 26 May 2021. It is plain from their letters that, at least until 30 June 2021, Beswick Foulkes were acting for Mr Galea in his dispute with Ms Sokolovska. In the letter of 30 June 2021, Beswick Foulkes even mentioned the prospect that, if Ms Sokolovska were to bring “a Supreme Court action to seek to remove the [caveat, Mr Galea] intends to defend the same”. As we have seen, it was only on 16 July 2021 that the solicitors said they were no longer acting, that they would not accept service and that Ms Sokolovska “should contact Mr Galea direct in regard to this matter”. Unlike in Dyer, there is no suggestion in any of Beswick Foulkes’s correspondence with Ms Sokolovska that they did not know of Mr Galea’s current whereabouts. Also unlike in Dyer, the timeframe is very compressed in the present case. Thus, if a “presumption of continuity forward” is required, I think it is safe to make that presumption in this particular case.[11]
[11]Indeed, in far more drawn-out and uncertain circumstances than these, Williams J in National Australia Bank Ltd v Spagnolo [2010] VSC 160 (at [5]-[24]) was prepared to rely on s 89(4) of the TLA as providing for good service. Her Honour referred to and relied on Batt J’s reasoning in Dyer. Her Honour also relied on the more recent decision of Kaye J in Zampichelli v Zampichelli [2009] VSC 489 at [9]-[12] (but see also [13], where his Honour said that he was “comforted in that view by the fact that the plaintiff’s solicitor has spoken to the first defendant’s solicitor, who has advised him that the papers were received by him and they had been forwarded by the first defendant’s solicitor to the first defendant at his last known address”), who in turn also had relied on Batt J’s reasoning in Dyer.
In those circumstances, despite his failure to appear, whether by solicitors or in person, or to file any materials, and despite the absence of personal service in the usual way, I am satisfied that Mr Galea was duly served. This is because, by s 89(4) of the TLA, which operates as an exception to the general rule in r 6.02(1) of the Rules, Mr Galea is taken to have been served with Ms Sokolovska’s originating motion (as well as with her affidavit and other documents), and in a timely fashion.
The merits of Ms Sokolovska’s application
Introduction
I turn now to the substance of Ms Sokolovska’s application.
In Piroshenko v Grojsman,[12] Warren CJ discussed in some detail the varying approaches that might be taken in considering an application under s 90(3) of the TLA. Among them, I understood her Honour to endorse the following two-stage test. First, there is an onus on the caveator — Mr Galea, in this case — to satisfy the Court that there is a prima facie case giving rise to a serious question to be tried that he has the interest claimed in the property, or, put another way, a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat. Second, he must establish that the balance of convenience favours the maintenance of the caveat.[13]
[12]Piroshenko v Grojsman (2010) 27 VR 489.
[13]Piroshenko v Grojsman (2010) 27 VR 489 at 491[6]-495[23] (per Warren CJ). Her Honour also noted (at [19]) that “[a]ny assessment of the first limb of the test which depends in part upon a consideration of the practical consequences likely to flow from the maintenance of the caveat in question, cannot but introduce some consideration of the balance of convenience into the assessment of the serious question to be tried, even if that assessment is in a different form to that performed when considering the test’s second limb”.
Whether prima facie case giving rise to serious question to be tried
Since Mr Galea did not appear or file any material in defence of his caveat, the determination of the merits of the matter becomes simple at one level and difficult at another. It is made relatively simple by the fact that, absent any evidence on oath or affirmation from Mr Galea, and given the sworn evidence filed by Ms Sokolovska, I am inclined to accept her account over his. Ms Sokolovska’s account was also supported by hearing from her in the flesh (albeit over Zoom and not on oath or affirmation, and without cross-examination).
The difficulty, however, arises from the fact that this is not simply a contest on the evidence. Instead, it is, as Warren CJ explained, a question of whether Mr Galea has discharged his onus of satisfying the Court that there is a prima facie case giving rise to a serious question to be tried that he has the interest claimed in the property, or a prima facie case with sufficient likelihood of success to justify the maintenance of the caveat. One way of looking at the matter is to ask whether the assertions made on behalf of Mr Galea in his former solicitors’ letters, which are annexed to Ms Sokolovska’s affidavit, are capable of, and do, meet that burden.
As foreshadowed at the outset of these reasons, I am not satisfied that they do. There are, in substance, two reasons.
First, as I have said, on the evidence before me, I accept Ms Sokolovska’s account and reject Mr Galea’s assertions. The extent of Mr Galea’s case is merely unsworn or unaffirmed assertions in his former solicitors’ letters, which, perhaps luckily for him, Ms Sokolovska has included in her materials. It is true that those assertions, if capable of being accepted, and subject to a qualification I am about to mention, might amount, at a very long stretch, to a type of equitable interest in the form of a constructive trust impressed upon the title to the property. But, given my conclusions about the state of the evidence, in my view, that is insufficient to raise even a prima facie case giving rise to a serious question to be tried that Mr Galea has the interest claimed in the property.
Secondly, even if there were such a prima facie case, even on Mr Galea’s own assertions in his solicitors’ letters, the estimated value of that (notional) interest pales into insignificance when, on the evidence I accept, it is compared with the likely value of the damage he has done to Ms Sokolovska’s property and the consequential devaluation of that property he has caused. If anything, the loss he has caused far outstrips any interest, ex hypothesi, that he might have. In other words, on the evidence before me, I am satisfied that it is not Ms Sokolovska who owes him anything, but that it is he who owes her a good deal. Equity would not — and should not — allow him to succeed in any such application when he has such filthy hands.
Accordingly, Ms Galea fails on this first limb of the test.
Whether balance of convenience favours removal or retention of caveat
In my view, Mr Galea fails on the second limb of the test as well.
Given the foregoing, and that Ms Sokolovska has sold her property and that it is due to settle in only three days, I am satisfied that the balance of convenience favours the removal of the caveat, and pronto. In the circumstances of this case, I can see no justification for putting Ms Sokolovska to the inconvenience and potential cost involved in delaying settlement in any way whatsoever.
Orders
Accordingly, I shall order that:
1. Pursuant to s 90(3)[14] of the TLA, the Registrar of Titles is directed to remove caveat number AU383262H recorded on Certificate of Title Volume 5766 Folio 176.
[14]In the first iteration of this order, I mistakenly referred to s 103 of the TLA. That was corrected, the next day, under the slip rule.
2. There be no order as to costs.
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