Toh & Anor v Wu & Anor  VSC 36 (12 February 2018) Daly AsJ.
The chronology was –
2017 First defendant commences family law proceeding in Federal Magistrates Court
against her husband. The plaintiffs in the subsequently issued Supreme
Court proceeding are her in-laws and are registered proprietors of a
property. Application (not yet determined) to join plaintiffs as parties
to the family law proceeding and to restrain sale of property or have proceeds
of sale retained in trust pending determination of
28 November 2017 Caveat lodged by first defendant over the property, grounds of claim being “court order under the Family Law Act 1975”.
15 January 2018 Plaintiffs notify intention to issue and issue s. 90(3) application.
16 January 2018 Service of application and material in support.
18 January 2018 Hearing at which caveat ordered to be removed. Order that net proceeds of sale be held in trust. Costs reserved.
29 January 2018 Settlement of sale of property due.
Daly AsJ ordered that each party should bear their own costs of the s. 90(3) application. Her Honour reasoned –
- In removing the caveat the court had not considered whether there was a serious question to be tried. Although the interest claimed in the caveat was not prima facie a recognized proprietary interest the underlying documents tolerably revealed claims pursuant to a resulting or constructive trust, and the suddenness of the application severely compromised the caveator’s ability to respond. However, the balance of convenience overwhelmingly favoured removal because of settlement and finance difficulties. The removal was also influenced by the fact that, having regard to the existing Federal Magistrates’ Court proceedings, it was in the parties’ interests for property interests to be determined in one proceeding, not fragmented across jurisdictions.
- Special circumstances warranted the plaintiffs not receiving their costs, namely their failure to warn the caveator of the intended application. While it would often be unnecessary or impractical to warn of an application, the application here was made some 7 weeks after lodgement of the caveat and only 7 business days before settlement of the sale was due. The caveator was ambushed.
- The caveator’s alleged impecuniosity was irrelevant to the costs decision.
Whether related VCAT proceedings rendered an application under s. 90(3) an abuse of process.
Van Klaveren v Otelta Pty Ltd and Ors  VSC 10 (23 January 2018) Daly AsJ.
Save for several interesting ancillary points this was a simple case of a caveat being removed under s. 90(3) because of no serious question to be tried that the caveator still had a leasehold interest claimed in the caveat, nor did the balance of convenience favour relief. The ancillary points were –
- A reminder that the application was interlocutory. Accordingly objections to the admissibility of a solicitor’s affidavits were rejected. Under Rules of Court evidence in an interlocutory application may be given on information and belief and it “would be unusual, albeit not unheard of, for cross-examination to be permitted on what is really a summary procedure”.
- The judge grappled with the argument that the application under s. 90(3) was an abuse of process because there was a proceeding on foot elsewhere. This argument was based on Yuksels Nominees Pty Ltd v Nguyen & Anor  VSC 663 where T. Forrest J had stated that if there is already a proceeding on foot to substantiate the caveat an application to remove the caveat is prima facie vexatious and will likely be stayed. In that case the caveator had commenced a County Court proceeding not to establish a proprietary interest but for damages and accordingly that application was not stayed. In this case the lessee while still in possession had commenced a VCAT proceeding in 2016, not yet heard, disputing the right of the landlord to terminate the lease and prematurely claiming relief against forfeiture. In 2017 the lessor re-entered but the lessee did not seek a hearing for relief against forfeiture although this relief remained in the Points of Claim. At interlocutory hearings, in one of which an application for an injunction to restrain sale of the property was refused, VCAT members treated the claim as being only for damages and refused leave to amend to assert the lease was still on foot. Her Honour held that the VCAT proceeding was not one to substantiate the interest claimed in the caveat, noted that T Forrest J only used the expression prima facie, and that unlike the County Court VCAT had no jurisdiction under s. 90(3).
Finally, insofar as the caveator argued that the caveat should remain as security for payment of any damages ordered by VCAT, this amounted to the impermissible use of the caveat as a bargaining chip.
Commentary: Yuksels must be read with authority that it is permissible for a registered proprietor both to take the procedure for caveat removal under the Transfer of Land Act s. 89A and also to commence an application under s. 90(3): eg Nineteenth Jandina Pty Ltd v Hijim Pty Ltd  VSC 298 at  per Osborn J –“The fact that proceedings by a caveator are on foot to enforce the interest which the caveat has been lodged to protect, is not a bar to the exercise of the Court’s discretion under s. 90(3)”.
A claim for costs against the Registrar of Titles arising from lodgement of a Notice of Action
Lee Nyong Pty Ltd & Anor v Di Blasi & Anor  VSC 5 (15 January 2018) J. Forrest J.
But for one novel point this was a standard case of a caveator claiming an equitable interest pursuant to a charge being ordered to pay indemnity costs to a prior registered second mortgagee. The caveat was voluntarily removed only after the mortgagee had commenced a s. 90(3) application. The caveator was motivated by alleged fraudulent withdrawal of a previous caveat: if so, his Honour observed, the appropriate action was to notify the police and claim compensation from the Assurance Fund not maintain a position with no chance of success vis a vis mortgagees.
The novel point was that costs were also sought against the Registrar of Titles, the facts relevant to this point being:
- before the second mortgage was lodged for registration the caveator had caveated based on a charge but due, the caveator alleged, to forgery in a notice of withdrawal this caveat had been withdrawn;
- after registration of a second mortgage the caveator re-caveated and the Registrar of Titles lodged a Notice of Action relating to the allegation, based only on the caveator’s assertion, of forgery. The Notice was purportedly an exercise of power under the Transfer of Land Act s. 106(1)(f) enabling the Registrar to “take any other step necessary to protect the operation, effectiveness and integrity of the Register, including, but not limited to, the making of a notation on a folio of the Register”. The Registrar stated that the Notice did not prevent the lodgement or registration of any dealings and would be removed when he considered appropriate;
- the Registrar subsequently refused to remove this Notice unless in substance the caveator either consented or failed to enjoin registration of a transfer;
- part of the relief sought in the caveat removal proceeding was that the Registrar withdraw the Notice and pay costs;
- once the caveat was removed the Registrar removed the Notice.
His Honour observed:
- A Notice of Action had no statutory force. It is not a creature of statute and simply indicates that the Registrar has concerns about a particular transaction.
- The Registrar argued that he had a discretion to refuse to register dealings where registration may cause detriment to the public, or may result in a claim for indemnity under s. 110(1). The Notice was a reasonable initial response but eventually the principles associated with priority, indefeasibility, and bona fide purchasers should have prevailed. His Honour had reservations as to whether proper consideration was given to the plaintiffs’ request for the removal of the Notice.
- However costs would not be ordered against the Registrar: the sole cause of s. 90(3) application was not the Registrar’s Notice but rather the caveator’s failure to remove the second caveat, whereby “this whole debacle would have been avoided”.