Woodward v Hee No. Scciv-04-215

[2004] SASC 75

WOODWARD v HEE
[2004] SASC 75

Appeal from a Master

1. VANSTONE J:     This is an appeal against a decision of a Master.  The matter came before the Master on 8 March 2004, being exactly one week ago.  The appellant/plaintiff issued an inter partes summons on 25 February 2004, but the orders sought therein did not disclose the immediate issue between the parties.  Rather, the orders sought were in terms of the De Facto Relationships Act 1996 and in particular s10 of that Act.  Accompanying the summons was a Notice for Specific Directions seeking removal of a caveat lodged upon the plaintiff’s property by the defendant and ancillary orders.  His Honour refused that application.

2. Pursuant to s 50(2) of the Supreme Court Act1935 an appeal from a Master’s decision lies, subject to the rules of court, to a single judge.  Rule 106.05 deals with appeals against decisions of Masters.  Sub-rule 2 provides as follows:

   (2)    Any appeal from a Master:

   (a)in relation to an order made under the Real Property Act 1886 or under Rule 60;

   (b)from an order, decision or judgment to which sub-rule (1) does not apply;

   (c)where the parties consent to the appeal being dealt with by a single Judge;

   is to be to a single Judge and is to be governed by Rule 97.

3. I am satisfied that the order made by the Master was not a final “finding, decision, direction, award or judgment”.  It does not dispose of any property division under the De Facto Relationships Act. 

4. The matter comes before me as one of some urgency, as indeed was its nature before the Master.

5. The plaintiff and defendant were formerly in a relationship.  It seems that they both agree that they lived together for over three years, that period commencing in 2000.  In about November 2000 the plaintiff purchased a block of land and she used her birth name to do so.  The property remains in her name only.  To assist with the purchase price she borrowed some money and a mortgage was registered.  Later a building contract for the erection of a house on that land was struck.  The original mortgage was discharged and a much larger one undertaken.

6. In the second half of 2003 the parties separated.  In November of that year the plaintiff took steps to place the property on the market.  On 4 December 2003 the defendant lodged a caveat against the title.  However, by letter dated 5 December 2003, his solicitors advised the real estate agent appointed to act for the plaintiff in the sale of the property that he did not wish to purchase the property and that he would undertake to lift the caveat at settlement, providing he was given some security as regards his interest in it.

7. On about 12 December 2003 the plaintiff executed a contract for sale of the property.  The sale price was $247,500.  (I would estimate, on the basis of the papers, that such a price would leave equity in the property of perhaps $85,000 or $90,000).  However, on 17 February 2004 the plaintiff’s solicitors were advised that the defendant no longer undertook to lift the caveat at settlement.  Settlement was to take place on 27 February but did not, on account of the caveat.

8. The plaintiff has received a notice to complete;  indeed it is said to be the second such notice sent by the purchasers, who remain willing and anxious to settle.  Damages, perhaps significant damages, may accrue if settlement does not take place soon.

9. There are various views as to the fundamental purpose underlying registration of a caveat.  It can be seen as an interim procedure designed to provide opportunity to the caveator to register an instrument or to freeze the position until the caveator’s claim can be established by litigation.  Or taking a wider view, it can be used simply as a device to prevent the property owner from dealing with the land.  However the entitlement to maintain the caveat is always subject to the court’s power to remove it, and a court might well be inclined to do so where the caveator had done nothing to otherwise advance his claim.  (See Lindsay, S., Caveats Against Dealings in Australia and New Zealand, Federation Press 1995, Chapter 1.)

10. The defendant may well have an entitlement to an interest in the property pursuant to the De Facto Relationships Act.  As I understand it, he has never instituted proceedings to make good his claim, apparently contenting himself with the protection afforded him by the caveat.

11. Disclosed on the papers are suggestions by the defendant that the price struck under the contract for sale of the property is lower than should have been obtained.  There is a suggestion that the property was not marketed effectively.  In order to refute those suggestions the plaintiff filed affidavits from herself and from the real estate agent whom she retained and who negotiated the contract.  The purchasers are strangers to both the plaintiff and her agent.  Further, she provided a valuation from a licensed valuer, who opines that the property is worth $235,000.  That, of course, is some $12,500 less than the contract price.  Plainly these matters cannot be fixed precisely.

12. On the material before me I see no reason to think that the contract price is other than a satisfactory one.  I consider that as regards that matter there is no serious issue to be tried.  It does seem that this matter carried some weight with the Master, along with the suggestion that if the caveat is lifted and the plaintiff allowed to complete the sale, then the defendant will have lost the chance to purchase the house himself.  Whether that is the defendant’s settled intention is not entirely clear but I am prepared to assume so.  Significantly, though, the contract was entered into at a time when the defendant had clearly expressed no interest in buying the plaintiff’s equity.  In these circumstances it seems to me that his wish to buy it should not be elevated over the rights of the purchasers. 

13. The plaintiff has at all relevant times offered to pay into court the net proceeds of the sale if settlement is allowed to take place. 

14. Seen in its best light the defendant’s object in registering the caveat must have been to both protect any equity in the property to which he could establish he was entitled and to allow himself an opportunity to lodge proceedings to establish that claim.  I note that under the De Facto Relationships Act he only has a year to do so after the separation.  Over the ensuing three months he did not do so.  Nevertheless, the plaintiff does not dispute that the defendant may have a claim and, as I said, is prepared to take steps to replace the security that the caveat gives him with security in another form.

15. In all those circumstances there does not seem to me to be any reason why the caveat should be allowed to stand in the way of the settlement of the contract.  Accordingly my orders are as follows:

    1.that the appeal is allowed and the orders numbered 1 and 2 made by Master Bowen Pain on 8 March 2004 are discharged;

    2.that the Registrar-General shall remove caveat No. 9679243 lodged in the Lands Titles Office Registration Office on 4 December 2003 from Certificate of Title Registered Book Volume 5826 Folio 724 forthwith by entering a memorandum that the same is discharged;

    3.that the plaintiff be directed to pay into the Suitors’ Fund, with reference to Action No. 215 of 2004, the net proceeds of the sale of the property;  that is the proceeds after deduction of amounts payable under any mortgage, amounts due for agent’s fees, land broker’s fees, rates and taxes and the like;

    4.that the parties may apply for further orders and directions;

    5.the matter is certified fit for counsel.

    I shall hear the parties as to costs.