Tawafi v Weil
[2017] VSC 643
•21 August 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
S CI 2017 03288
| MERVAIS TAWAFI | Plaintiff |
| v | |
| ASUNTA WEIL | First Defendant |
| REGISTRAR OF TITLES | Second Defendant |
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JUDGE: | Digby J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 August 2017 |
DATE OF JUDGMENT: | 21 August 2017 |
CASE MAY BE CITED AS: | Tawafi v Weil |
MEDIUM NEUTRAL CITATION: | [2017] VSC 643 |
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REAL PROPERTY – Contract of sale – Notice from Registrar of Titles – Operation of Section 90(1) and 90(2) of the Transfer of Land Act – Failure to commence proceedings to maintain caveat
PRACTICE AND PROCEDURE – Application seeking a declaration that the defendant’s caveat in respect of the subject property has lapsed – Whether caveat has lapsed by operation of Section 90(1) of the Transfer of Land Act – Whether sufficient proprietary interest exists to support suspension of the plaintiff’s Transfer of Land – Existence of a serious question to be tried – Weakly asserted proprietary interest – Balance of prejudice – Orders seeking that the Registrar of Titles remove Notice of Action and register the plaintiff’s Transfer of Land
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Little | Michael Benjamin & Associates |
| For the Defendant | Mr S Dizdarevic, Solicitor | Ascot Solicitors |
HIS HONOUR:
This Application
By Originating Motion filed 16 August 2017 and summons of that date, the plaintiff Mr Mervais Tawafi (the Purchaser) seeks orders against the defendant Ms Asunta Weil (the Caveator) and the Registrar of Titles, that the Registrar of Title register a specific dealing in respect of the subject property at 45 Beattys Road, Fraser Rise in the State of Victoria (the Property), and that the Caveator pay the Purchaser’s costs of and incidental to this proceeding.
Background
In a related proceeding S CI 2017 03036 by way of writ (Proceeding 36) commenced by the Caveator dated 1 August 2017. The Caveator in substance alleged that Arup Aloor Mayen, the first defendant in Proceeding 36, was the registered proprietor of the Property and that by an agreement made it is alleged in late January 2016 to early February 2016 the plaintiff in Proceeding 36, Asunta Weil, the Caveator in this proceeding S CI 2017 03288 (Proceeding 88), agreed in late January or early February 2016 to advance to the first defendant Arup Aloor Mayen the sum of $86,000 by way of loan with security over the Property.
In Proceeding 36, the Caveator also alleges that Calder Conveyancing Pty Ltd acted as conveyancer for the first defendant Mayen, as vendor and the third defendant, Tawafi who is the Purchaser in Proceeding 88.
As the plaintiff in Proceeding 36, Asunta Weil also pursues claims for relief in relation to the said loan of $86,000 for a declaration she, as the plaintiff in Proceeding 36, has an interest in the Property, that her caveat filed in respect of the Property be maintained and a claim for damages.
The background to Proceeding 88, in essence, is that the Purchaser signed a contract of sale to purchase the Property described in Certificate of Title 11334 Folio 334 on 11 April 2017 for the sum of $495,000. Settlement of that contract occurred on 26 June 2017. The conveyancer, it is alleged, failed to identify that a caveat had been lodged over the property between the date of contract and the date of settlement.
The caveat AN881236S was lodged by the Caveator on 30 May 2017. The grounds of claim endorsed on that caveat are "part performed oral agreement" et cetera with the registered proprietor. That document is to be found in Exhibit MT1.
The executed transfer of land provided at settlement was submitted for lodgement and registration with the Registrar of Titles on about 28 June 2017. On 29 June 2017 the Registrar of Titles notified the Caveator that pursuant to s 90(1) of the Transfer of Land Act 1958 (Transfer of Land Act) that the caveat would lapse on 31 July 2017 unless the Caveator obtained an order pursuant to s 90(2) of the Act.
The Caveator failed to commence proceedings as required under s 90(2) and therefore the caveat, which is the foundation of the Caveator’s arguments before me today lapsed by operation s 90(1) of the Transfer of Land Act on 31 July 2017.
On 2 August 2017 the Caveator commenced proceedings in Proceeding 36 to which I have made reference. Those proceedings included, inter alia, claims by the Caveator for declarations that she has a proprietary interest in the Property, that the caveat on the Property be maintained in her favour, and that the Purchaser’s transfer be prevented from proceeding until the Caveator provides a signed Withdrawal of Caveat or alternatively at the determination of Proceeding 36. As a result of the commencement of Proceeding 36 the Registrar of Titles issued Notice of Action AQ106651G over the Property on 3 August 2017 indicating that no further dealings could be registered in respect of the Property and its title until withdrawal of that notice or further order.
I have outlined that in the related Proceeding 36 issued on 2 August 2017 the Caveator claims to have entered into a loan agreement with the registered proprietor Mayen in or about late January or early February 2016 whereby the Caveator, it is alleged, advanced $86,000 to Mayen and sought to secure that loan by taking security over the property.
Furthermore, in Proceeding 36, as I have also outlined, the Caveator seeks relief against the proprietor and the conveyancer for failing to identify the existence of her caveat prior to settlement and orders seeking a declaration that she has an interest in the Property, that the caveat be maintained and that the Registrar of Titles be prevented from registering the transfer of land to the Purchaser, the plaintiff in this proceeding, pursuant to the contract of sale dated 19 June 2017.
The Registrar of Titles has communicated that the Registrar of Titles will take no active part in the proceeding, but abide its outcome.
The Registrar of Titles has also communicated in substance, as has been canvassed in argument, that in his view the relief sought by the Caveator in Proceeding 36, and by inference this proceeding, cannot be granted because the relevant caveat has lapsed. The Purchaser as third defendant in Proceeding 36 has filed a summons returnable in the Practice Court and orders are sought seeking to have Proceeding 36 as against him dismissed, and orders also for costs.
The materials relied on by the parties
The affidavit material relied on by the parties in these proceedings are the affidavits of Mervais Tawafi sworn 16 August 2017 and exhibits, and a responding affidavit of Patricia Ann Magnayne sworn 20 August 2017. There are also submissions filed by both the Purchaser dated 18 August 2017 and by the Caveator undated but filed today.
Considerations
Section 90 of the Transfer of Land Act provides as follows:
90 Except in certain cases caveat to lapse after thirty days notice given to caveator
(1) Subject to this Act every such caveat except a caveat lodged by the Registrar shall lapse as to any land affected by any transfer or other dealing other than—
(a) a transmission under Division two of Part IV; or
(b) a transfer or dealing as to which the caveator, or the caveator’s agent, has consented in writing;
(c) in the case of a caveat lodged by or on behalf of a beneficiary claiming under a will or settlement—a transfer or dealing giving effect to the appointment of a new trustee or to any other transaction which in the opinion of the Registrar is not inimical to the interests of the beneficiaries; or
(d) a transfer or dealing which is expressed to be subject to the rights of the caveator; or
(e) a transfer or dealing the registration or entry of which is provided for in the caveat— upon the expiration of thirty days after notice given by the Registrar to the caveator that a transfer or dealing has been lodged for registration, but in the case of a transfer or other dealing which does not dispose of the whole of the estate or interest of the registered proprietor in the land affected thereby the caveat shall lapse only to the extent necessary to permit the registration of the transfer or dealing.
(2) If before the expiration of the said period of thirty days or such further period as is specified in any order made under this subsection the caveator or the caveator’s agent appears before a court and gives such undertaking or security or lodges such sum as the court considers sufficient to indemnify every person against any damage that may be sustained by reason of any disposition of the property being delayed, the court may direct the Registrar to delay registering any dealing with the land for a further period specified in the order, or may make such other order (and in either case such order as to costs) as is just.
(3) Any person who is adversely affected by any such caveat may bring proceedings in a court against the caveator for the removal of the caveat and the court may make such order as the court thinks fit.
(4) Where a caveat lapses in whole or in part by virtue of subsection (1) in consequence of the lodging of a transfer or dealing and the transfer or dealing is withdrawn from registration or the Registrar exercises any of the powers conferred on the Registrar by section 105(1) in respect of it, the Registrar shall reinstate the recording of the caveat in any relevant part of the Register to which the caveat relates and the caveat shall thereupon have effect as if it had not lapsed.
(5) Nothing in subsections (1), (2), (3) and (4) shall apply to or in relation to the case where there is lodged for registration a transfer or dealing that is to pass to the caveator upon being registered the estate or interest in any land that he claims in the caveat.
(6) In any case of the kind referred to in subsection (5), the caveat shall lapse as to the land affected by the transfer or dealing upon registration thereof.
Section 105 of the Transfer of Land Act provides as follows:
105 Registrar to refuse registration if documents or evidence not supplied
(1) If the Registrar is of the opinion that the submission of any document, a response to any requisition or the giving of any information, evidence or notice or the doing of any act is necessary or desirable, then, if the document, information, evidence or notice is not supplied or given or the act is not done within such time as the Registrar allows—
(a) the Registrar may refuse to accept, complete or proceed with any application, registration, dealing or matter whatsoever or to do any act or make any entry or memorandum; and
(b) the Registrar may return all or any of the instruments and documents lodged in connection with the matter that the Registrar thinks fit; and
(c) the fees paid in respect of the matter are forfeited.
The approach the court takes in applications to remove caveats is an approach analogous to that in respect of applications for injunction. That is, the burden of proof for the establishment of the caveatable interest, and the maintenance of a caveat, is upon the caveator.
Furthermore, the court approaches such applications to enable the registered proprietor to enjoy the land unaffected by the caveat unless the caveator can establish an arguable proprietary interest sufficient to support the subject caveat and can also establish that on the balance of convenience the caveat should be maintained until the trial of the contested proprietary interest.
In this matter however a somewhat unusual circumstance exists. Here I am satisfied on the materials and the submissions that have been made that the caveat sought to be supported by the Caveator lapsed on 31 July 2017. Therefore this is not a matter which is properly approached by considering the usual contest in relation to a caveat.
On the contrary, there is no caveat, as has been pointed out in argument repeatedly by counsel for the Purchaser, and as has been conveyed by the Registrar of Titles in the correspondence referred to during the course of argument.
Mr Dizdarevic, the solicitor advocate for the Caveator, has argued in essence that the Registrar’s understanding of the timing provisions for the notice given by the Registrar in relation to the registered caveat interest, is misconceived. The Caveator argues that proceedings were issued by the Caveator within time under s 90(2) of the Transfer of Land Act and that the plaintiff Purchaser and the Registrar of Titles are wrong in their view about the time limits under s 90(2) of the Transfer of Land Act.
The Caveator via its solicitor advocate also argues under s 105(1) of the Transfer of Land Act that there should be an order suspending the transfer that is sought to be affected by the lodgement of the relevant documents with the Registrar of Titles.
Put another way, under both s 90(2) and s 105(1) the Caveator argues that in respect of s 90(2), notice has been given in a timely manner and, therefore, the registration of the Purchaser’s transfer has been suspended by the Caveator’s notice to the Registrar of Titles or ought to be suspended under s 105(1).
In my view, the Registrar of Titles’ notice of 29 June 2017[1] results in the date by which the Caveator was required to make an application seeking orders as set out in s 90(2) of the Transfer of Land to be effective to suspend the registration of the relevant transfer being 31 July 2017, and accordingly, the Caveator was out of time. This is because a counting of the days commencing from 30 June 2017, being the next day after the date of the notice, thirty days elapsed on 30 July 2017, a Sunday, and accordingly the expiry date was 31 July 2017 as the Registrar of Titles has also concluded in respect of invoking the operation of s 90(2) and yet the Caveator’s application was not issued until 2 August 2017.
[1]Affidavit of Patricia Ann Magnayne sworn 20 August 2017, Exhibit PAM-1.
In my view, it matters not that s 105(1) of the Transfer of Land Act might have achieved a similar result in suspending the progress of the registration of the subject transfer.
That is because what is ultimately critical is that there was no effective caveat at, and after 31 July 2017 and accordingly the first defendant did not make its application under the Transfer of Land Act within time for the reasons I have outlined.
Furthermore, pursuant to s 91(4) of the Transfer of Land Act, the Caveator cannot seek to renew the caveat once it is lapsed.
The Caveator has also argued that the court ought to have regard to the merits of the proprietary interests which the Caveator asserts she enjoys in respect of the subject land. However, I am unpersuaded that there is any sufficient prima facie case or arguable triable issue in relation to the Caveator’s asserted proprietary interest.
The reasons for that conclusion are primarily these. Notwithstanding that instructions have been taken in respect of the Caveator’s potential case in support of a proprietary interest in the Property, including as reflected in the writ of 1 August 2017 issued on 2 August 2017 and service on the Caveator some many days ago of the Purchaser’s Originating Motion and Summons of 16 August 2017 and further, the Purchaser’s submissions in relation to this matter of 18 August 2017, there is no sworn material which has been placed before the court seeking to support the proprietary interest which the Caveator contends for in opposition to the Purchaser’s application.
The Purchaser, however, has deposed to it being uninvolved in, and unaware of the asserted part performed oral agreement relied upon to found the Caveator’s proprietary interest and likewise denies the alleged agreement made about late January or early February 2016 whereby the Caveator, by her Writ in Proceeding 36, alleges that she agreed to loan $86,000 to the vendor, one Mayen.
That contradictory material filed by the Purchaser is to be found in his sworn affidavit of 16 August 2017, paragraph 11, where he deposes that he has no knowledge of, or any connection with, the alleged loan agreement which is sought to be relied upon by the Caveator, as between the Caveator and the vendor, Mayen.
Further to that, there is material to which Mr Little for the Purchaser has taken me in the affidavits which refers to a different sum, in the order of approximately $77,000, that is said on at least one occasion to be the amount of the loan between the Caveator and Mayen, and not the $86,000 pleaded in the Writ of 2 August 2017.
Ultimately before me there is no material, and most notably no sworn material, in support of the Caveator’s asserted arguable basis for her proprietary interest in support of the caveat in issue. There is accordingly in my view no basis upon which to find an issue serious enough to be tried so as to defer, or ultimately possibly defeat the Purchaser’s present application.
The Caveator also argues that there will be no prejudice to the Purchaser if this matter is allowed to go to trial and in the meantime the Purchaser’s ability to register the purchase of the Property is suspended.
Although I recognise that on the Caveator’s assertion that there had been a loan in respect of which, if her assertions are sufficiently supported and sufficiently arguable (which I am not persuaded they are), she would lose the potential leverage and potential protection of the caveat which was at one point registered in respect of the Property and thereby suffer prejudice, as I have indicated, I consider that the Caveator’s asserted serious issue to be tried is so unsupported and so palpably weak that the balance of prejudice, although hypothetically recognisable in terms of the Caveator’s position, does not materially support the Caveator and in the circumstances of this matter heavily favours the Purchaser in this application.
This is so both because of the weakness of the merits of the case argued by the Caveator for the reasons that I have outlined, and also because the Purchaser in this proceeding, the primary proceeding before me, has been able to demonstrate significant present and future potential prejudice in being deferred in his right to register the purchase of the Property for which he has paid in the sum of $495,000.
The Purchaser’s prejudice also includes deferral or constraint of the registration of his interest in the land which he is entitled to occupy and enjoy.
The Purchaser also is here prejudiced because the Purchaser has entered into a building contract for the construction of improvements on the Property which cannot be moved forward because finance is required for that contract to be commenced and fulfilled and his financier will not provide required advances until it is able to lodge an effective mortgage in relation to the Property which in turn is not possible because of the earlier mentioned Notice of Action that has been noted by the Registrar of Titles in respect of the Property.
Moreover, the litigation commenced by the Caveator, namely Proceeding 36, will if pressed probably take many months to determine, during which time the Purchaser’s Transfer of Land will be unable to be registered, further exacerbating his detriment and prejudice to which I have earlier made reference.
Furthermore, I observe that the Caveator is not willing, it would appear, to act to permit the Purchaser’s dealing in relation to the title of the Property, in circumstances where she and her lawyers either know, or ought to know, that the Caveator’s claim in Proceeding 36 against the Purchaser and the Registrar of Titles is probably fundamentally flawed.
Conclusion
The Purchaser further has a strong prima facie entitlement to complete the registration of his freehold interest in the Property free of any interference by way of the weakly asserted proprietary interest which is argued by the First Defendant in this matter. Conversely, the Caveator has neither satisfied me that she can make out a relevant prima facie case, nor a serious issue to be tried in respect of her asserted proprietary interest in the Property. The Caveator has also failed to establish, although in the circumstances there need no finding on this aspect, that the balance of convenience is in her favour.
For these reasons, I shall make the orders sought by the plaintiff Purchaser.
Costs
I also propose to make an order that in this matter that costs be paid by the Caveator to the Purchaser on an indemnity basis and to do so for the following reasons.
As an overarching observation, I note my view that the materials of this matter reflect that the plaintiff in the primary proceeding before me bears no blame or responsibility for the events which have given rise to his need to make these applications. Further, in respect of the dealings between the relevant parties, including the Caveator and the Registrar of Titles my view is the same.
In my view, indemnity costs are justified here because of the very weak case that has been argued by the Caveator, including throughout the course of correspondence in relation to the Purchaser’s application for orders effecting the registration of his transfer.
The Purchaser has also for some considerable time and on a number of occasions, including as far back as 20 July 2017, as reflected in the evidence referred to in argument, including Exhibits “MT-4” and “MT-5”, sought to have the Caveator identify the arguable basis upon which she asserted a proprietary interest sufficient to support the caveat.
Not only did the Purchaser not receive any proper response to his abovementioned communications, he did not receive any sensible indication of how it was that the Caveator justified the caveatable interest which she asserted or how she resisted the relief which the Purchaser sought. Furthermore, the Caveator’s solicitors were in my view high handed in their rejection of the proper requests by the Purchaser for an explanation of their client’s caveatable interest, including as reflected in the Caveator’s solicitor’s letter of 21 July 2017, Exhibit “MT-5”.
Further, the Purchaser has from at least 20 July 2017 on a number of occasions, including at Exhibit “MT-4” of that date and by subsequent correspondence, for example, at Exhibit “MT-8” of 10 August 2017, and even before being forced to issue process in about the middle of August 2017, warned the Caveator that her case was palpably weak and explained why in considerable detail.
Further the Purchaser warned that he would be seeking indemnity costs if the matter was either not resolved by the Caveator abandoning the position she was taking or somehow otherwise appropriately resolving the matter.
On 14 and 18 August 2017, the Caveator wrote without prejudice letters, which were relied on without objection in these applications indicating, somewhat inconsistently with the attitude that has been taken in argument today by the Caveator and in her written submissions filed today, that she would not prevent the dealing which was in issue being registered by the Registrar of Titles. However, the Caveator’s letter of 14 August 2017 says many contradictory and confusing things and ultimately does not put forward any proposed agreement to facilitate the Registrar of Titles recognising and registering the Purchaser’s interests.
The Caveator’s letter of 18 August made it clearer that she would accede to dropping the Caveator’s resistance to the registration of the Purchaser’s transfer. However, that letter put forward proposals which, although difficult to interpret, either proposed that the Caveator pay the third defendant’s costs in resolution of Proceeding 36, or it would appear from a hand written amendment to the proposed orders relevant to that letter, at best proposed a resolution by which there be no order in Proceeding 36 as to the costs as between the Caveator as plaintiff and the Purchaser as third defendant.
Neither of those letters, in my view, reflect a reasonable approach to the resolution of that matter in a way that would obviate the need for the Purchaser to bring this application to court today so as to enforce what I have found to be his clear entitlements. In any event, in my view the Caveator proposed what she did so late that it made no material difference to the earlier unsatisfactory conduct on the part of the Caveator and her practitioners which justifies an indemnity cost order in this matter.
Further, in relation to the failure of the Caveator to articulate the basis of the claim that founded her resistance to the transaction in question being registered, the Caveator’s solicitor has submitted on numerous occasions that it was having difficulty seeking instructions from the Caveator, principally because of language difficulties. However, by 2 August 2017 it is clear from the Writ which was by then finalised, filed and served that the Caveator as plaintiff in Proceeding 36 had been able to provide instructions to her solicitors, including specifically about the issues in that proceeding, namely an alleged agreement in late January 2016 and early February 2017 which is alleged to establish the proprietary interest of the Caveator, and in turn gave her a proprietary right sufficient to file a caveat.
The practitioners for the plaintiff in Proceeding 36 and in respect of these allegations I have referred to, filed and served an Overarching Obligations Certificate which verified compliance with the requirements of the Civil Procedure Act s 16 to 26. This in my view, necessarily meant that appropriate instructions had been received so as to provide a basis for the alleged claims. In those circumstances I do not accept that there were inadequate instructions available to the Caveator’s solicitors to articulate the basis of the proprietary interest asserted by the Caveator in this proceeding. In my view it appears that the Caveator’s solicitors were so instructed by 2 August 2017, when the Caveator’s Writ was issued in Proceeding 36.
Furthermore, in passing I note that the argument that has been put forward as one of the central planks of the Caveator’s case before me, namely that there was a timely application under s 90(2) of the Transfer of Land Act in respect of the relevant caveat, is nowhere evident in the indorsement of claim on the Caveator’s Writ of 1 August 2017.
The Caveator also sought to argue that she did not know until she received the materials in support of the Purchaser’s application that there was an issue about the Purchaser’s building contract and the Purchaser’s need for finance, which in turn put the Purchaser in a position where he needed to be able to register his transfer so as to be able to provide a mortgage to the financier of the building contract.
However, contrary to the Caveator’s submissions, in fact, the affidavit material filed and served by the Purchaser in about the middle of August 2017, in particular the affidavit of 16 August 2017 sworn by Mr Mervais Tawafi, details the Purchaser’s predicament in relation to the building contract. I therefore conclude that the Caveator in fact has known for some considerable time that that she needed to take into account these matters when considering whether to resist or resolve the Purchaser’s applications.
Similarly, it was put in submissions by the Caveator that she did not know until very recently that the Purchaser was unaware of the alleged agreement between Ms Weil and the vendor of the Property, Mayen. However, that fact is clearly communicated in paragraph 11 of Mr Tawafi’s affidavit sworn 16 August 2017. Accordingly, there has been sufficient time for this matter to also have been taken into account in considering the Caveator’s attitude to the Purchaser’s application and the Caveator’s want of merits in respect of that application, as the Purchaser had long pointed out to the Caveator.
In my view, these factors justify the exceptional costs order that I have foreshadowed.
Orders
1. Pursuant to Rule 45.05 of the Supreme Court (General Civil Procedure) Rules 2015, the plaintiff has leave to:
(a) dispense with the requirements of Rules 5.03(1) and 8.02; and
(b) proceed by Originating Motion in Form 5C.
2. The second defendant will register all dealings on the title of the property (being Certificate of Title Volume 11334 Folio 334) including the plaintiff’s Transfer of Land form dated 26 June 2017 (Dealing Number AN986651U), and it will remove the Notice of Action (Dealing Number AQ106651G) from the title.
3. The first defendant pays the plaintiff’s costs of and incidental to this proceeding on an indemnity basis, such costs to be taxed in default of agreement.
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