Windshuttle v Wild
[2000] QSC 461
•14 December 2000
SUPREME COURT OF QUEENSLAND
[2000] QSC 461
File No 1904 of 1999
BETWEEN:
LARRY JOHN WINDSHUTTLE
Plaintiff
AND:
DARREN WILD
Defendant
AND:
IRENE WILD
as personal representative of the Estate of Darren Wild (deceased)
First Defendant
MOYNIHAN J – REASONS FOR JUDGMENT
| DELIVERED ON: | 14 December 2000 |
| HEARING DATES: | 4 – 5 December 2000 |
| ORDER: | 1. The Plaintiff be registered as proprietor of Lot 18 on Registered Plan 14134; and 2. Direct the removal of the defendant’s caveat. |
| CATCHWORDS: | REAL PROPERTY – GENERAL PRINCIPLES – INCIDENTS OF ESTATES AND INTERESTS IN LAND – OWNERSHIP – contract entered into for the sale of land – whether contract was settled – whether plaintiff entitled to registration as proprietor of land |
| COUNSEL: | Mr BA Laurie for the plaintiff Mr GK Flint for the defendant |
| SOLICITORS: | O’Reilly & Lillicrap for the plaintiff |
The plaintiff seeks a declaration that he is entitled to be registered as proprietor of an estate in fee simple of and for the removal of a caveat over Lot 18 on Registered Plan 14134. The land is undeveloped vacant land at Birkdale.
The original defendant died prior to trial, his personal representative was substituted and the action continued against her. The essential issue of the trial is which of the competing interests of the plaintiff and the defendant in the land should prevail.
In 1989, Gordon John Wight and his wife Desley Kay Wight acquired lot 18. They subsequently separated and divorced. Mrs Wight seems to have played no significant role in the events in issue. It is therefore convenient to refer to “Wight”. Wight was a real estate salesman and manager of a real estate office in the area in which the land is situate.
Lot 18 was approximately seven acres and Wight proposed to subdivide it and sell the blocks off. The land however had drainage problems and in the event the necessary approvals were not obtained, it seems to do so would require expenditure. These considerations bear on the value and saleability of lot 18.
Wight was having difficulty in financing the purchase of a residential property and Wight raised this difficulty with his friend, Darren Wild, the original defendant. It seems that Wight and Wild agree on what Wight called in his evidence a joint venture in which Wild was to contribute $32,000, $4,000 already lent to Wight, and a further $28,000 in return for an interest in lot 18.
It appears this agreement was made in April 1989. Wight signed an acknowledgment that Wild had bought “a full 50% share of my property situated at 39-47 Byng Road, Birkdale [ie lot 18] for the price of $32,000. Wild paid the additional money but nothing was done to effect a transfer or to caveat to protect his interest.
Wight’s financial position deteriorated and Westpac Bank exercised its rights under mortgages secured over lot 18 and put in train steps to sell as mortgagee in possession.
The plaintiff, Windshuttle, a next door neighbour, was interested in buying lot 18 and approached Wight with that in mind. According to Wight, he spoke to Wild about Windshuttle’s proposition which involved paying out Westpac and transferring to Wight a parcel of land, lot 27 on Registered Plan 14134. Wight’s evidence is that he offered lot 27 to Wild in satisfaction of Wight’s obligations and that Wild agreed to the proposal.
In January 1990, Wight signed a contract to sell lot 18 to Windshuttle. The contract provided for completion within 90 days by a payment of $85,000 at the vendor’s direction and for a stakeholder to deliver the certificate of title and transfer documents for lot 27 to Wight. Windshuttle had difficulty obtaining finance but, after a number of extensions, the sale was settled in June 1990 and the mortgage paid out with Windshuttle’s money.
The solicitor who acted for Windshuttle and for Wight in respect of the contract of January 1990 gave evidence. It should be noted, lest it be thought I have overlooked it, that when he gave evidence he had been struck off the Roll of Solicitors in respect of matters canvassed in his cross-examination and that his diary notes were not available.
He gave evidence that Wight and Windshuttle concluded their agreement for the sale and purchase of lot 18 in his office and that he prepared a contract to give effect to the agreement. The responsibility for effecting the conveyance was handed over to the conveyancing department of the firm of which he was a member. He had no involvement in the preparation of any contract between Wild and Wight.
During the extended period for the completion of the contract of sale, telephone inquiries were made of the solicitor by Wild. These inquiries were on the basis that Wild apparently expected some benefit from the completion. The solicitor’s evidence was that the first time he became aware that Wild asserted an interest in lot 18 was when he read correspondence from Wild’s solicitor to Wight’s solicitor during the latter part of 1991.
Wight’s transfer to Windshuttle had not been lodged for registration before Wild lodged a caveat on 7 October 1992. I accept Windshuttle’s evidence that he was not aware that the conveyance had not been completed to registration until late in the piece.
Wight’s evidence was that Wild’s financial position was deteriorating at the time of completion of the contract of sale. Wild expressed to Wight disenchantment with lot 27 and gave Wight instructions to find a buyer for it, but no buyer was forthcoming.
The solicitors for Wild wrote to Wight on 18 October 1990 stating that they were instructed, he had agreed to acknowledge a debt and interest owing to Wild. It enclosed two copies acknowledging an indebtedness of $32,000 “as at 1 November 1989” and a liability to pay interest. After further follow up correspondence and, apparently, telephone calls, Wild’s solicitor wrote to Wight on 4 December forwarding another acknowledgment of debt. Wight did not execute any acknowledgment and did not respond to the correspondence.
On 15 November 1991, Wild’s solicitor wrote to Wight stating that he was instructed that on or about 28 April 1989, Wight and Wild had entered into an agreement whereby Wight sold his half share in lot 18 to Wild. The letter apparently enclosed a copy of the April 1989 acknowledgment referred to earlier. It also enclosed a transfer form and associated documents designed to effect the transfer by Mr and Mrs Wight as joint tenants of lot 18 to Mrs Wight and Wild as tenants in common in equal shares. Wild did not execute the documents.
No witnesses were called in the defendant’s case but an affidavit sworn by Wild on 14 December 1992 in OS 1193/92 (Wild’s application for a vesting order to be referred to later) was tendered in the defendant’s case. In that affidavit, Wild had deposed that between January and July 1990 the solicitor I referred to earlier and he had a number of conversations at the Alexandra Hills Hotel during the course of one of which Wight stated he was in financial difficulties. Wild deposed that he recalled saying in the solicitor’s presence words to the effect that his share in lot 18 was “50 percent unencumbered” and that he was not concerned that Westpac was pressing Wight. He deposed that the solicitor said that Westpac would sell the property. Wild further deposed to a further conversation in which the solicitor told him to the effect that because the Wights “were in financial difficulties with the bank it would not agree to assign 50 percent of lot 18 unencumbered” to Wild. The solicitor, Wild deposed, advised him to leave the property in the Wights’ name until they had sold another property of theirs and paid some money to the bank and that he could then get his transfer. The solicitor, while acknowledging he had become aware, having been told by Wild that the Wights were in financial difficulty, denied that any such conversations took place.
Wight in his evidence did not recall being at the Alexandra Hills Hotel with the solicitor but he did recall being there with Wild on occasions. He did not recall or denied any conversation in the solicitor’s presence in which Wild asserted he had a 50 percent unencumbered share in lot 18.
Wild sued the Wights in the District Court by plaint number 481 of 1992. On 7 October of that year, Judge Morley QC declared to the effect that an agreement of 27 April 1989 between Wild as purchaser and the Wights as vendors be specifically performed and carried into execution, that the Wights held the estate in fee simple in lot 18 as the trustees “for the (Wights) as joint tenants in se and (Wild) as tenants in common in equal shares”.
Wild applied to this Court for a vesting order (OS 1193/92); Windshuttle and Westpac Bank unsuccessfully applied to be joined as respondents. On 18 December 1992, Mackenzie J ordered that a half share in lot 18 be vested in Wild and that the Wights pay the costs. By that stage this action had been instituted and Mackenzie J made an order in the action restraining Wild from presenting the vesting order to the Registrar of Titles until 5 January 1993.
On 5 January 1993, Lee J in this action, on Windshuttle’s undertaking as to damages and Wild’s undertaking not to present the vesting order of 18 December 1992 to the Registrar of Title, adjourned the application to a date to be fixed with costs and gave trial directions.
There are a number of considerations which arise at this stage. The oral conversations in issue took place some ten years ago. Wild was of course not available to give evidence or for that matter to have his deposition tested. In this context, it is curious that Wild’s solicitors first concern was an acknowledgment of debt by Wight in circumstances where Wild had apparently become disenchanted with lot 27 which had been put up for sale without a buyer coming forward; concern to obtain a transfer of an interest in lot 18 was put forward somewhat later.
The submissions on behalf of the defendant have the virtue of being succinct. They are that firstly Wild’s prior equitable interest is established by reason of the order Judge Morley QC of 7 October 1992, and of the vesting order of Mackenzie J of 18 December 1992. That may be accepted. Secondly, the solicitor I have referred to earlier was at all times Windshuttle’s solicitor. Wild had informed him of his (Wild’s) prior interest in the lot and his knowledge is imputed to Windshuttle. No submissions were directed to other considerations in either orders.
It was neither pleaded nor argued that Windshuttle’s claim took priority was defeated by his failure to lodge a transfer or caveat.
There are a number of formidable obstacles in the path of the latter submissions. First, that case is not pleaded and was not put forward until addresses. Secondly, it is dependant on accepting the evidence of Wild’s affidavit, notwithstanding the evidence of Windshuttle and Wight. As I have mentioned earlier, I am conscious of the considerations bearing on a finding in respect of this. I am not prepared to conclude Wild told the solicitor about his equitable interest in lot 18 prior to Windshuttle’s completion of the contract of sale with the Wights. Thirdly, had I been satisfied the conversation with Wild, the solicitor and Wight took place, the solicitor was not there as Windshuttle’s solicitor, indeed he may not have been retained by Windshuttle in respect of the transaction at the relevant time. Counsel for the defendant declined the opportunity to provide authority in support of the proposition. It is probably that Wild authorised Wight to sell lot 18 to Windshuttle and accepted Wight’s proposition that he (Wild) accept lot 27.
It seems to me that the position is that Wild had an equity prior in time to Windshuttle’s. Windshuttle was however a bona fide purchaser for value. He had no notice of Wild’s claim to an interest in lot 18 prior to entering into, or for that matter, paying over his money. Indeed it seems he did not know registration had not been finalised or of Wild’s claims until he learned Wild had lodged a caveat.
In the circumstances, I declare the plaintiff is entitled to be registered as proprietor of Lot 18 on Registered Plan 14134 and direct the removal of the defendant’s caveat.
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