Veloudos v Young
[1981] FCA 255
•22 DECEMBER 1981
BAKAVGAS, PAMAGIOTA BAKAVGAS, JIM BAKAVGAS and MARIA BAKAVGAS
And: GRANT CHARLES YOUNG (1981) 56 FLR 182
No. ACT G15 of 1980
Appeal from Supreme Court of the Australian Capital Territory - Real Property
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Davies(1), Lockhart(2) and Kelly(3) JJ.
Appeal from Supreme Court of the Australian Capital Territory _ caveat subject of appeal withdrawn before hearing of appeal _ whether appeal competent substratum having gone _ unregistered lease for not more than 3 years _ Real Property Ordinance (ACT) 1925, ss.58, 85, 104 and 105 _ caveat _ amendment on summons for removal _ whether discretion to amend properly exercised _ matters to be considered
Real Property - Torrens title - Lease for three years with options for further three years - Lease unregistered - Whether lessee's interest protected - Whether caveat needed - Court's discretion to amend caveats - Real Property Ordinance 1925 (A.C.T.), ss. 58, 85, 104, 105.
Appeal - Subject matter of appeal withdrawn before hearing of appeal - Whether appeal competent.
The respondent claimed that by a written lease the appellants, owners of a Crown lease in the Australian Capital Territory, let to the respondent the premises for a term of three years with options to renew the lease for three further periods of three years each. The lease was not registered. After a dispute concerning the payment of rent the appellants purported to terminate the lease. The respondent then lodged a caveat forbidding the registration of any memorandum of transfer and some other interests affecting the said land. The appellants sought an order in the Supreme Court of the Australian Capital Territory for the removal of the caveat. The court dismissed the application and gave the respondent leave to amend the caveat. The appellants appealed against that order to the Full Court of the Federal Court of Australia but before the appeal was heard the respondent had withdrawn the caveat.
Held: Per Davies and Kelly JJ., Lockhart J. dissenting - The appeal should be allowed: (1) The power of the court to amend a caveat is discretionary. (Section 105 (3) of the Real Property Ordinance 1925 (A.C.T.) (the Ordinance).)
Elliott v. Blanshard (1970), 17 FLR 7, referred to.
(2) The interest of the lessee was protected whether or not the lease was registered and a caveat was not required to protect the leasehold interest (excluding the options) of the respondent against registered dealings. (Section 85 (1) of the Ordinance.)
195 Crown Street Pty. Ltd. v. Hoare; Ivermee (Third Party), (1969) 1 NSWR 193, referred to.
(3) This was an inappropriate case in which to give leave to amend the caveat.
Per Lockhart J. - The appeal should be dismissed because the courts will not decide a question that is academic in the sense that it is useless, merely hypothetical, or a dead issue unless the determination would be in the public interest.
Attorney-General v. Scott, (1905) 2 KB 160; Eastham v. Newcastle United Football Club Ltd., (1964) 1 Ch 413; Ku-ring-gai Municipal Council v. Suburban Centres Pty. Ltd., (1971) 2 NSWLR 335, referred to.
Canberra, 1981, July 23; December 22. #DATE 22:12:1981
APPEAL.
Appeal from a decision of the Supreme Court of the Australian Capital Territory (Connor J.) to the Full Court of the Federal Court of Australia.
The facts of the case are set out in the judgment of Davies J. which follows.
B. J. Salmon, for the appellants.
B. R. Gallen, for the respondent.
Cur. adv. vult.
Solicitors for the appellants: Allen R. Nelson & Co.
Solicitors for the respondent: Gallens.
E. F. FROHLICH
The appeal be allowed;
The order granting leave to the respondent to amend Caveat No.5399, Dealing No.331693 entered on Certificate of Title Volume 699 Folio 17 be set aside;
The order dismissing the application to remove the caveat be set aside;
The respondent pay the appellants' costs of the appeal.
The appellants are the registered proprietors of Crown Lease Block 3 Section 36 Fyshwick, being the property more particularly described in Certificate of Title Volume 699 Folio 17. The respondent claims that by a written lease the appellants let to the respondent as from 1 March 1978, part of the building then erected on that land for a term of three years with options to renew the lease for three further periods of three years each.That is the claim made by the respondent in Action No.2460 of 1979 in the Supreme Court of the Australian Capital Territory and in these proceedings, though the copy of a lease in evidence has somewhat different terms. The respondent did not enter into possession personally but sub-let the land to the American Embassy.
Subsequently, in 1979, after a dispute concerning the payment of rent, the appellants purported to terminate the lease, excluded the respondent from the premises and granted a lease directly to 'The Secretary of State of the United States of America, acting by Rufus W. Corlew, Contracting Officer, American Embassy, Canberra, A.C.T.'.
On 17 December 1979, the respondent issued the writ against the appellants in Action No.2460 of 1979. In that action all the matters in issue between the appellants and the respondent could have been dealt with and appropriate amendments to the claim could have sought an injunction against the appellants from dealing with the property in any way inconsistent with the respondent's alleged interest.
The pursuit of that action appears to have been diverted however by the lodgement of a caveat on the Register forbidding '...the registration of any memorandum of transfer or instrument affecting the said Land until this Caveat be by me or by order of the Court or the Judge thereof withdrawn, or until after the lapse of fourteen days from the date of the service of notice of such intended registration...'. The land described in the caveat was '...the premises the subject of the said lease being part of the premises described in the said Memorandum of Sublease as Units 8 & 9 and being part of the Building erected on the land in land described as all that piece of land containing 4496m2 or thereabouts situate in the Australian Capital Territory, and being the whole of the land comprised in Certificate of Title dated the EIGHTEENTH day of NOVEMBER 1977 registered Volume 699 Folio 17'. Subsequently the appellants sought an order for the removal of the caveat.
The proceedings came on before Mr. Justice Connor in the Supreme Court of the Australian Capital Territory. It was accepted that the description of the land in the caveat was wrong. Nevertheless, it was said to the learned Judge that there was a difficulty in describing the land the subject of the lease for the respondent had lost and was unable to trace his counterpart of the sub-lease. His Honour said,
'There is sworn evidence before me in an affidavit of Grant Charles Young that he has lost and been unable to trace his counterpart of the sub-lease. I cannot offer any opinion as to whether or not that evidence will be finally accepted or rejected; but at this stage there is no reason for me to doubt the bona fides of that evidence. If it is correct, of course, if it is the loss of this document which gives rise to the drafting difficulties in describing the area of land involved to be protected by the caveat, I think that it would be a reflection on the law to allow this factor to defeat a caveat and have the result of saying that because a sub-lease has been lost it is therefore not possible to give a sufficient description of the land for the purposes of the caveat.
I am of the view that amendments can be made which, although they will not result in a perfect description of the area of the land, are sufficient for the purpose; and I propose therefore to amend the caveat and to dismiss the application to remove it.
I give leave to amend Caveat number 5399 of 11 April 1980, in which Grant Charles Young of 14 Willis Street, Evatt is the caveator by adding after the word 'sub-lease', where it first appears, the words 'wherein John Veloudos, Katina Veloudos, Anthony Bakas, Krita Bakas, Constantine Bakavgas, Pamagiota Bakavgas, Jim Bakavgas and Maria Bakavgas are sub-lessors and Grant Charles Young is sub-lessee' and after the expression 'the subject of the said lease' to delete all words appearing after that and substituting for them 'being part of the premises and being an area of approximately 929.03 square metres presently occupied by representatives of the government of the United States of America.'
The appellants appeal against that order. In the course of argument to this Court it was stated that, by way of implementation of his Honour's order for amendment of the caveat, the respondent had withdrawn caveat number 5399 and had lodged and registered a fresh caveat in the terms described in his Honour's judgment. Thus, it is immediately apparent that the caveat which his Honour gave leave to amend is no longer in existence. It has been withdrawn. No order of this Court can affect it. However, we were informed by Mr. B.J. Salmon, counsel for the appellants, without dissent from Mr. B.R. Gallen, counsel for the respondent, that 'My learned friend indicates that he undertakes on behalf of his client, if this appeal is successful, to withdraw that caveat.' Thus, the proceedings are not purely or even principally academic notwithstanding that the notice of appeal did not in terms appeal from the whole of his Honour's judgment which, in addition to granting leave to amend the caveat, went on to order that the application to remove the caveat be dismissed and that the defendant's costs be taxed and paid by the plaintiffs. The notice of appeal referred to :
'(a)The decision of His Honour Mr. Justice Connor to grant the Defendant in the proceedings leave to amend Caveat No.5399, and
(b)The decision of His Honour Mr. Justice Connor that he could amend the said caveat in such a way that it could contain a sufficient description to identify the land over which the Defendant claimed an interest.'
The order sought was 'That Caveat No.5399 be removed from Crown Lease being Block 3 Section 36 Fyshwick registered in Volume 699 Folio 17'. Although the notice of appeal was thus expressed, it should be read as going to the whole of his Honour's order. It would be an unduly technical reading of the notice to restrict it to part only of his Honour's order. I take the notice of appeal to encompass an appeal against the whole of the order, including the order for costs.
Indeed, Mr. Salmon opened his submissions on the footing that the appeal lay against the whole of the order. Mr. Salmon said, 'This is an appeal from an order by his Honour Mr. Justice Connor on a summons for the removal of a caveat.' After describing the caveat, Mr. Salmon said,
'There are other things in the caveat but it is that description of the estate or interest which became the basis of the application for the removal of the caveat. That is the basis of the appeal here, except that it was amended by his Honour. The appellant submits that, even with that amendment, it could not stand.'
Mr. Salmon then explained that the course adopted to comply with his Honour's order had been to withdraw the caveat and lodge a fresh one. He said,
'In my submission, the course which should have been adopted was to file the order with the Registrar of Titles... A completely new caveat was lodged. My learned friend indicates that he undertakes on behalf of his client, if this appeal is successful, to withdraw that caveat. In other words, this is not an academic exercise.'
Subsequently, Mr. Salmon said, in answer to a question asked from the Bench, 'Costs are not an insignificant aspect, but that is not the subject of this appeal.' I do not take this to be a statement that the order made by Connor J on the matter of costs was not a matter under appeal but simply that it was not a matter to which argument in the appeal had to be put. That this interpretation is correct appears from the transcript at pages 13 and 14. Mr. Justice Lockhart said to Mr. Salmon in the course of argument,
'...I understand one of the parties wants the point dealt with and maybe it will be dealt with, but so far as I can see it is totally academic save as to costs.'
Mr. Salmon responded,
'If in fact the earlier order was wrong and if in fact the caveat should have been removed, then we would have had costs and the ruling. If the only effective part of your Honour's (sic) ruling was on costs, the result, academic though it may be, would have an effect.'
In the light of these matters I think that there is an issue with respect to costs with which the Court should deal. Furthermore, in withdrawing the caveat and lodging a further caveat, the respondent was simply attempting to comply with the leave granted by his Honour's order. Therefore the crux of the issue in dispute between the parties is still unresolved. I think this Court should rule upon that issue and I think that, in the light of the undertaking expressed to us, both this Court and the Supreme Court of the Australian Capital Territory have authority to ensure that the application made for the removal of the caveat is not frustrated by the course which was taken to implement his Honour's decision. I therefore turn to consider the merits of the appeal.
His Honour had power to order that the caveat be amended. Section 105 of the Real Property Ordinance 1925 provides that an application may be made for the removal of a caveat. Section 105(3) provides :
'105(3) The Court or Judge, upon proof that the caveator has been summoned, may make such order in the premises, either ex parte or otherwise, as to the Court or Judge seems fit.'
This provision empowers the making of an order for the amendment of a caveat. See In Re The Victorian Farmers' Loan and Agency Co. Limited (1897) 22 VLR 629, Queensland Estates Pty. Limited v Co-ownership Land Development Pty. Limited (1969) Qd.R 150 and Elliott v Blanshard (1970) 17 FLR 7.
However, the following are reasons why that course should not, in the present case, have been adopted :
(i) Any protection to which the respondent was entitled could have been obtained by means of orders made in Action Number 2460 of 1979. The Supreme Court of the Australian Capital Territory has adequate authority to make final and interlocutory orders for the protection of property.
(ii)Section 85(1) of the Real Property Ordinance 1925 provides 'Every register dealing with land shall be subject to any prior unregistered lease or any agreement for a lease or for letting from year to year for a term not exceeding three years affecting the land.' The alleged agreement between the respondent and the appellants was a lease or an agreement for a lease for a term not exceeding three years notwithstanding the options of renewal. See 195 Crown Street Pty. Ltd. v Hoare; Ivermee and Anor. (1969) 1 NSWR 193. Accordingly, a caveat was not required to protect the leasehold interest against registered dealings.
(iii)Indeed, s.85(1) and s.58, which provides that the estate of the registered proprietor is paramount save for '(d) any prior tenancy from year to year or for any term not exceeding three years', suggest that Parliament recognised that there might be difficulties in the registration of such interests. The interest of the lessee is protected whether or not the lease be registered. Mr. Salmon submitted that such a lease should not be registered. The practice in the various States on this matter is dealt with in Torrens Title in Australasia by E.A. Francis Vol.1 pp.267-71. I need not consider it further. It is sufficient that the interest of a person under such a lease is protected whether or not the interest be registered or there be a caveat protecting it.
(iv)The term of three years from 1 March 1978 had only a short time, ten months, to run at the time of his Honour's order and the caveat did not seek to protect the interest of the respondent under the options to renew. The caveat described the estate or interest as :
'...created by unregistered Memorandum of Sublease dated on or about the First day of March 1978 for a term of three years commencing on the First day of March 1978 and reserving for the first eighteen months of that term a rental of $1,560 per calendar month and for the remaining eighteen months of that term a rental at the rate of $1,733.32 per calendar month ...'.
(v) Even had the caveat sought to protect the respondent's interest under the options to renew, it would have been ineffective to do so. Section 85(2) of the Real Property Ordinance 1925 provides :
'85.(2) No right or convenant to purchase the freehold or to assign the reversionary interest of the lessor contained in any lease or agreement, and no right or convenant to or for the renewal of any lease or agreement, shall be valid as against any subsequent purchaser of the reversion, lessee, mortgagee or encumbrancee unless the lease or agreement is registered.'
The subject lease was not registered and therefore the options for renewal were not valid as against any subsequent purchaser of the reversion, lessee, mortgagee or encumbrancee.
(vi)The respondent was unable to describe the land the subject of his interest save as '...an area of approximately 929 square metres presently occupied by representatives of the Government of the United States of America'. But a principal purpose of the Torrens system is to effect certainty of title and certainty of description. A defect of the general law was its reliance upon occupation as a root of title and upon descriptional data other than surveyed measurements. I would not presently wish to hold that it may never be proper for a document on the Register to describe land by reference to an occupation. But, certainly, it would have to be an exceptional case to warrant that course. I do not see the present to be such a case.
Having regard to all these matters it seems to me that this was an inappropriate case in which to have given leave to amend the caveat. His Honour said,
'It is clear on the authorities that a caveat is not more than a statutory injunction to hold the status quo and prevent that status quo from being altered before the caveator can get to the court to have his rights decided upon by the court.'
In my view, however, no caveat was necessary having regard to the provisions of ss.58 and 85(1) and, if any protection were necessary, it could have been better effected by means of an interlocutory order in Action No.2460 of 1979. The caveat did not properly describe the land the subject of the interest and the amendment allowed by his Honour did not in my view achieve an adequate description.
For these reasons, I am of the opinion that the proper order to make was an order for the removal of the caveat. I would allow the appeal and would order that the respondent pay the costs of the appeal and of the hearing below. I would remit the matter to the Supreme Court of the Australian Capital Territory so that, if it is called upon to do so, it may make whatever ancillary orders are necessary.
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