Walters v Perton (No 2)

[2019] VSC 542

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

TRUSTS EQUITY AND PROBATE LIST

S ECI 2018 00225

IN THE MATTER of the Will and Estate of DONALD GRAEME WARRING,
deceased

- and –

IN THE MATTER of s 34 of the Administration and Probate Act 1958 (Vic), and
S 48 of the Trustee Act 1958 (Vic)

BETWEEN:

LYNNE MARGARET WALTERS	Plaintiff
v
JANE ELIZABETH PERTON (who is sued as trustee of the Port Eagle Investment Trust and as executrix of the will and trustee of the estate of DONALD GRAEME WARRING, deceased)	Defendant

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JUDGE:	Derham AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	14 August 2019
DATE OF JUDGMENT:	16 August 2019
CASE MAY BE CITED AS:	Walters v Perton (No 2)
MEDIUM NEUTRAL CITATION:	[2019] VSC 542

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REAL PROPERTY – Removal of caveat – nature of application to remove caveat under s.90(3) of the Transfer of Land Act 1958 (Vic) – whether application can be made by defendant by summons in an existing proceeding – Shaw v Yarranova Pty Ltd & Anor [2005] VSC 94.

PRACTICE AND PROCEDURE – Whether since the introduction of the Civil Procedure Act 2010 (Vic) the Court has power to allow an application for removal of a caveat by summons in an existing proceeding – Civil Procedure Act 2010 (Vic) s 7, 8 and 9.

COSTS – Where application for removal of a caveat by defendant by summons in an existing proceeding not pursued – Where ultimate determination of the plaintiff’s claims in the proceeding will determine whether the plaintiff has a caveatable interest – Whether defendant should pay the plaintiff’s costs of the summons.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Garratt QC and Mr R Miller of Counsel	Nedovic Lawyers
For the Defendant	Mr P Bick QC and Mr D Farrands of Counsel for the defendant	Darrer Muir Fleiter

HIS HONOUR:

Introduction

1. These reasons deal with the costs of an application made by the defendant by summons filed on 20 March 2019 for the removal of a caveat lodged by the plaintiff over the property at 17 Odenwald Road, Eaglemont, Victoria (Eaglemont property).[1] The application was made pursuant to s 90(3) of the Transfer of Land Act 1958 (Vic) (TLA) by summons filed 20 March 2019 (caveat removal application).

   [1]The land more particularly described in Certificate Title Vol 10515 Folio 218.

1. The background to this proceeding has been described in previously published reasons for decision concerning an application by the defendant to set aside subpoenas issued by the Court at the request of the plaintiff: see Walters v Perton;[2] and in reasons for orders made in a related proceeding: see Perton v Walters.[3]  I will not repeat them in these reasons.

   [2][2019] VSC 356.

   [3][2018] VSC 445.

Caveat removal application

1. The plaintiff claims in this proceeding, amongst other things, that she is the sole beneficial owner of the Eaglemont property, alternatively that she has a one-half beneficial interest in it.  At the time the caveat removal application was made the defendant made no claim in the proceeding, whether by counterclaim or otherwise, for the removal of the caveat.  There is no proceeding for the removal of the caveat on foot other than the caveat removal application made by summons filed in the proceeding on 20 March 2019.

1. By order made on 15 May 2019, the hearing of the caveat removal application, was fixed for hearing on 14 August 2019, together with the hearing of an application by the plaintiff for the trial of a separate question pursuant to r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules).  Further, by the order the parties were required to file and serve short submissions relating to an application by the plaintiff to cross-examine the defendant on her affidavits at the hearing fixed for 14 August 2019.

1. On or about 12 June 2019, the defendant notified the Court that she no longer pressed the hearing of the caveat removal application on 14 August 2019 and would seek a speedy trial of all issues in the proceeding, including the removal of the caveat.[4]  That meant the plaintiff’s application to cross-examine the defendant was no longer pressed as it was limited to the caveat removal application.[5]

   [4]Defendant’s Submission dated 12 June 2019, [2].

   [5]Plaintiff’s Submission dated 8 July 2019, [4-5].

1. In these circumstances the plaintiff applied for an order in her favour for the costs of the caveat removal application.  The plaintiff submits that, amongst other things, the application was incompetent because the defendant had no originating application before the Court for the removal of the caveat, either by counterclaim or originating motion.[6] 

   [6]Ibid [8].

Transfer of Land Act s 90(3)

1. Under s 89(1) of the TLA, a caveat may be lodged by a person claiming an estate or interest in the land. By s 90(3) of the TLA, any person adversely affected by such a caveat may ‘bring proceedings in a court’[7] against the caveator for the removal of the caveat and the Court may make such order as the Court thinks fit.

   [7]Defined by s 4 to mean a court of competent jurisdiction.

1. The application is in the nature of a summary procedure analogous to the determination of interlocutory injunctions.[8]  The procedure is consequently interlocutory in substance, even though it may give rise to a final order.[9]  The principles applicable are well settled and do not need to be recited here.[10] 

   [8]Eng Mee Yong v Letchumanan [1980] AC 331, 337 (Eng Mee); Piroshenko v Grosjman (2010) 27 VR 489, [12]-[23] (Piroshenko); Goldstraw v Goldstraw [2002] VSC 491, [30] (Goldstraw).

   [9]Eng Mee [1980] AC 331, 337; Smith v Callegari (1988) V Conv R 54-300, 63, 858-9; Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37, 43.

   [10]See for example Piroshenko (2010) 27 VR 489, [7]-[11]; Goldstraw [2002] VSC 491; Sylina v Solanki [2014] VSC 2; Olandezos v Bhatha [2017] VSC 234, [16]-[23]; Hermiz v Yousif [2019] VSC 160, [24]-[26].

1. What is in issue is the competence, or viability, of the mode of the application, being commenced by summons in this proceeding, and the costs consequences of it not being pressed, which means in effect that it is abandoned as an interlocutory application.

1. In Shaw v Yarranova Pty Ltd[11] Hollingworth J faced an application under s 90(3) of the TLA made by summons in an existing proceeding.  The point was taken, as it was here, that the vendor was not entitled to adopt that procedure and, unlike this proceeding, that the Court ought to treat the application as one made by the vendor for summary judgment on the counterclaim.  At this stage there is no counterclaim in this proceeding as there was in that case.  In relation to the competence of the application by summons in the proceeding she said:

An order for the removal of a caveat is a final order for the purposes of s. 90(3) of the TLA. The section permits “proceedings … for the removal of the caveat” to be brought. …The fact that…an application to remove a caveat may be dealt with expeditiously in the Practice Court does not detract from the fact that the court is being asked to make a final order.[12]

[11][2005] VSC 94 (Shaw v Yarranova).

[12]Ibid [33].

1. Her Honour was unable to find, and Counsel did not refer to, any case in which a court has removed a caveat on an application brought by only a summons in an existing proceeding, and concluded that the application was misconceived in so far as it sought the final removal of the caveat by summons.[13]  Nevertheless, her Honour permitted the vendor to re-open their case and proceed to seek summary judgment on the counterclaim, a sensible course and one that applies principles akin to those now enshrined in the Civil Procedure Act 2010 (Vic) (CPA).

   [13]Ibid [41].

1. I am bound by the decision of Hollingworth J in Shaw v Yarranova.  The caveat removal application by summons in that proceeding was misconceived.  However, since Shaw v Yarranova the CPA has been enacted.  The relevant sections for present purposes are:

(a) s 7(1), by which overarching purpose of the CPA and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute;

(b) s 8(1), by which a court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, whether those powers, in the case of the Supreme Court, are part of the Court's inherent jurisdiction, implied jurisdiction or statutory jurisdiction;

(c) s 8(2), by which sub-section (1) applies despite any other Act (other than the Charter of Human Rights and Responsibilities Act 2006) or law to the contrary;

(d) s 9(1), by which in making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to a number of objects, including the just determination of the civil proceeding, the efficient conduct of the business of the court and the efficient use of judicial and administrative resources .

1. The combined effect of these provisions is, in my opinion, that the statutory requirement set out in s 90(3) of the TLA that the person bring proceedings in a court against the caveator for the removal of the caveat, if it means commence a proceeding either by writ, originating motion or possibly a counterclaim,[14] must yield, if necessary and appropriate to give effect to the overarching purpose. That is because by s 8(1) of the CPA the Court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers, and by s 8(2) it must do so despite any other Act (in this case s 90(3)) or law to the contrary (the decision in Shaw v Yarranova).[15]

   [14]Bearing in mind that proceeding is defined in the Supreme Court Act 1986 (Vic) to mean any matter in the Court other than a criminal proceeding; and that a matter in the court refers to a proceeding in the sense of a vehicle by which the jurisdiction of the Court is invoked: Braeside bearings Pty Ltd v HJ Brignell & Assocs (Boronia) [1996] 1 VR 17. See also the definition of proceeding in r 1.13 of the Rules.

   [15]See Yarra Australia Pty Ltd v Oswal [2013] VSCA 356, [9].

1. If the caveat removal application were otherwise well founded in fact and law, it would in my view have been able to be brought by summons in the proceeding.  But in a case such as the present one, the caveat removal application amounts in substance to an application summarily to dismiss the plaintiff’s claim that she has an equitable proprietary interest in the Eaglemont property sufficient to sustain the caveat she has lodged.  In other words, because of the operation and effect of the CPA, the Court must look to the substance of the application rather than its form – if that will further the overarching purpose.  That approach is consistent with a more robust and proactive approach and avoids unduly technical and costly disputes about non-essential issues.[16]

   [16]Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303, [56]-[57].

What costs order is appropriate

1. Orders were made on 14 August 2019, arising out of submissions made for and against the trial of a separate question pursuant to r 47.04 of the Rules.  Those orders included orders for the filing of a further amended statement of claim and a defence and counterclaim.  It is anticipated that the ultimate relief sought by the counterclaim will include the removal of the caveat. 

1. The matters relevant to the determination of the validity of the caveat are intimately wrapped up with the claims made by the plaintiff for a declaration that she has a beneficial or equitable proprietary interest in the Eaglemont property.  They are two sides of the same coin. 

1. The fact that the defendant has employed the wrong procedure is not itself determinative, for the reasons I have given.  What is material is the substance of the matter.  In that regard, the effective abandonment of the caveat removal application has put the plaintiff to expense in the preparation of affidavits and written submissions.  The plaintiff submitted that not all of that work is thrown away because it will be relevant to the ultimate disposition of the issues in the proceeding.

1. In my view most of the work involved in the preparation of the affidavits of the plaintiff sworn on 1 April and 3 May 2019 and the plaintiff’s submissions filed on 13 May (dated 10 May), 29 May and 9 July 2019 (dated 8 July) has been thrown away.  In arriving at this conclusion, I take into account the likelihood that some of the work involved is relevant to the ultimate disposition of the question whether the plaintiff has the claimed equitable proprietary interest in the Eaglemont  property.  The trial will, however, be likely to be the subject of viva voce evidence, and not be a trial on affidavit.  None of the affidavits or submissions are necessary for the trial.  To the extent that the preparation of the affidavits and submissions involved a consideration of the affidavits of the defendant sworn on 20 March and 9 April 2019, and the plaintiff’s submissions filed on 21 March and 12 June 2019, that work has partly been thrown away.

1. It is for these reasons appropriate to order that the defendant pay the plaintiff’s costs thrown away by the abandonment of its caveat removal application made by summons filed on 20 March 2019.  The analysis of the affidavit material and submissions referred to above as having been wholly or partly thrown away should provide some guidance for the costing exercise. 

1. Finally, there is nothing remaining in the defendant’s summons of 20 March 2019, so it should be dismissed.