BCA Asset Management Group Pty Ltd v Sand Solutions (Vic) Pty Ltd & Ors [2021] VSC 177, Derham AsJ, 13 April 2021.
Before 2009 William Attwood, married to Jane Attwood, became sole registered proprietor of approximately 29 ha. at Devenish (the AustLII report says this occurred on 17 April 2013 but this seems incorrect). The subsequent chronology was –
16 February 2009 Broken Creek Developments Pty Ltd (‘BCD’) incorporated with the second defendant (‘Colling’) its sole director and member.
20 August 2009 223 Coopers Road Devenish (‘the Land’) now comprised the 29 ha. plus land in Certificates of Title Volume 11153 Folios 541 and 542.
1 February 2010 Colling and BCD lodge caveats over the Land claiming an interest as a beneficiary under a constructive trust of which the Attwoods were the constructive trustees (‘First Caveats’).
25 June 2010 Sand Extraction Agreement between Jane Attwood and Devenish Sands Pty Ltd. This agreement: was conditional on the grant of an Extractive Industry Work Authority and approval of the company’s Work Plan within 180 days (clause 2.1); had an initial term of 10 years (clause 11.1); and could be terminated by Ms Attwood on the happening of a Default Event, which was defined to include an Insolvency Event (clauses 12.1 and 13.1). It was unclear whether Ms Attwood waived compliance with the conditions precedent or when this agreement commenced.
12 January 2011 First Caveats withdrawn.
26 May 2011 Ms Attwood registered as the sole proprietor of the Land.
29 July 2011 Work Authority issued to Devenish Sands Pty Ltd.
23 November 2011 Colling lodges caveat over the Land claiming an interest as beneficiary under a constructive trust between himself and Ms Attwood (‘Second Caveat’).
14 January 2013 First defendant (‘Sand Solutions’) incorporated.
9 July 2014 Work Authority transferred from Devenish Sands Pty Ltd to Sand Solutions.
8 August 2014 Devenish Sands Pty Ltd wound up in insolvency.
17 April 2015 Devenish Sands Pty Ltd by its liquidator disclaims any interest in the Land under the Sand Extraction Agreement.
13/14 September 2016 Second Caveat withdrawn.
July 2017 on Sand Solutions seeks access to the Land for the purposes of remediation. At all times, Sand Solutions proceeds on the basis it had no right of access.
10 November 2017 Contract of sale whereby Ms Attwood agrees to sell the Land to BCA Civil Pty Ltd.
20 March 2018 Caveat by Sand Solutions over the land in Certificates of Title Volume 11153 Folios 541 and 542 claiming an interest as the grantee of a profit à prendre pursuant to an agreement entered into 16 June 2010 (‘Third Caveat’). Sand Solutions was not at this time in existence and the only agreement known that might support a profit à prendre was the Sand Extraction Agreement with Devenish Sands Pty Ltd.
23 March 2018 Ms Attwood commences proceeding seeking an order for the removal of the Third Caveat.
Undated Caveat withdrawn before hearing.
28 March 2018 Zammit J. orders Sand Solutions to pay Ms Attwood’s standard costs and otherwise dismisses the proceeding stating that the Court would take a ‘very dim view’ if Sand Solutions again caveated.
4 May 2018 Plaintiff registered as the sole proprietor of the Land.
1 August 2020 Colling appointed sole director of Sand Solutions.
26 February 2021 Sand Solutions, by a solicitor, lodges caveat (‘Fourth Caveat’) claiming an interest as grantee of an easement pursuant to the Sand Extraction Agreement.
18 March Plaintiff writes requesting withdrawal of caveat.
22 March Plaintiff email foreshadowing urgent application for caveat removal.
24 March Email by caveator’s solicitor saying he was to confer with his client. No further response.
31 March Plaintiff commences proceeding under Transfer of Land Act s. 90(3) returnable on 13 April.
6 April Email from caveator’s solicitor stating: his client maintained that it had rights to go upon the land and extract the sand, in accordance with a (cancelled) planning permit and a Licence granted by Earth Resources; it was anticipated that VCAT would reinstate the permit; if his client succeeded at VCAT then his client would, if necessary, commence court proceedings seeking a declaration that it had the rights it claimed; but to avoid costs the caveat would be withdrawn.
8 April Caveat not yet withdrawn, plaintiff’s solicitor writes with draft order for caveat removal and payment of indemnity costs.
Undated Caveat withdrawn after service of Originating Motion and Summons.
13 April Hearing.
An affidavit was filed on behalf of the plaintiff deposing that: no grant of easement by Ms Attwood to Sand Solutions had ever been drafted; the plaintiff intended to use the Land as a commercial water park with caravan facilities; to undertake this development other investors were required, one of whom withdrew on learning of the possible easement, others of whom would not proceed until the caveat issue was resolved, and one of whom was seeking return of her investment unless the caveat was removed within 30 days but would also seek immediate refund of her investment if Sand Solutions and Colling further caveated; delay put at risk necessary support by the Benalla Rural City.
Derham AsJ ordered –
1. Sand Solutions and Colling to pay indemnity costs because –
(a) the claim to an easement (or to any other proprietary interest) lacked any basis;
(b) the plaintiff sought withdrawal of the caveat before the proceeding was commenced, which did not occur;
(c) before the proceeding was commenced Sand Solutions was warned that the plaintiffs would suffer damage from the Fourth Caveat, and after commencement of the proceeding an award of indemnity costs against Sand Solutions and Colling was foreshadowed;
(d) the caveat was lodged as a bargaining chip;
(e) it was impermissible for the innocent registered proprietor to bear any differential between standard and indemnity costs, occasioned by the delinquent conduct of Sand Solutions and Colling. [27]-[28]
2. That Sand Solutions and Colling be restrained, until further order, from lodging for registration any caveat in reliance on a profit à prendre or an easement. As to the power to grant an injunction –
(a) Normally the injunction would be in the nature of a final or permanent injunction: as an injunction restraining Sand Solutions and Colling from lodging any further caveat on the basis of the Sand Extraction Agreement, or on the basis of an alleged profit à prendre or easement, would be an order in aid of the plaintiff’s proprietary right to quiet and peaceful enjoyment of the Land as registered proprietor; [15]
(b) However because Sand Solutions and Colling had not appeared in court, and there may be some other basis for their belief that a subsisting proprietary right existed surviving the indefeasibility provisions of the Transfer of Land Act, it was appropriate to apply principles applicable to the grant of interlocutory injunctions by analogy; [16]
(c) An interlocutory injunction would go because –
(i) The plaintiff had demonstrated a prima facie case that there was a high probability, approaching a certainty, on the evidence, that its proprietary interest in the Land was free from any proprietary interest of the kind claimed in the Third and Fourth Caveats. There was also a prima facie case that if not restrained Sand Solutions and Colling would continue to lodge caveats as bargaining chips in pursuit of asserted rights under the Sand Extraction Agreement; [29]-[30]
(ii) The injury which the plaintiff was likely to suffer was one for which damages would not provide an adequate remedy. In cases concerning the ‘quieting of title’, meaning the seeking of the assistance of the Court to protect and preserve the title to land against unwarranted challenges or claims, damages were not considered an adequate remedy; [31]
(iii) The balance of convenience favoured the plaintiff. The strength of the plaintiff’s claim, the weakness of the claims raised by the Third and Fourth Caveats, and the evidence of actual and potential injury to the plaintiff occasioned by the caveat entailed that the course carrying the lower risk of injustice (if it should turn out to have been wrong) was to restrain Sand Solutions and Colling, but, because they had not appeared, to give them liberty to apply to discharge the injunction. [32]
Philip. H. Barton
Owen Dixon Chambers West
Tuesday, May 25, 2021
