Hanover Investments v Registrar General [1999] NSWSC 21 (27 January 1999)

Last Updated: 10 February 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Hanover Investments v Registrar General [1999] NSWSC 21

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 001133/99

HEARING DATE{S): 27 January, 1999

JUDGDMENT DATE: 27/01/1999

PARTIES:

(Plaintiff) Hanover Investments Pty Limited

v

(Defendant) Registrar General

JUDGMENT OF: Sperling J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

For Plaintiff: T G R Parker

SOLICITORS:

Plaintiff: Windeyer Dibbs

Defendant: W L Wright, Land Titles Office

CATCHWORDS:

Real property - caveat - whether second caveat in respect of the same interest - whether the proviso operated - whether leave should be granted

ACTS CITED:

Real Property Act, s 740

DECISION:

Leave granted to lodge further caveat

JUDGMENT:

THE SUPREME COURT

OF NEW SOUTH WALES

EQUITY DIVISION

SPERLING J

WEDNESDAY 27 JANUARY 1999

001133/99 - HANOVER INVESTMENTS PTY LIMITED. V . REGISTRAR GENERAL.

JUDGMENT:

HIS HONOUR: Section 74O of the Real Property Act 1900

provides, so far as is material, that where a caveat lapses any further caveat by the same caveator in respect of the same estate or interest and purporting to be based on the same facts has no effect unless the Supreme Court has made an order giving leave for the lodgment of the further caveat and that order or an office copy of it accompanies the further caveat when lodged with the Registrar General.

Section 74L provides, so far as is material, that if in any legal proceedings a question arises as to the validity of a caveat the court shall disregard any failure to comply strictly with the requirements of the subject part of the Act.

The facts deposed to in these proceedings are in summary and so far as is material as follows. It is asserted that monies to which the plaintiff had an entitlement in equity were used in substantial part to discharge a mortgage over the subject property and to effect repairs and improvements to the subject property.

On 30 June 1998 a caveat was lodged in respect of the property by the present plaintiff Hanover Investments Pty Limited being the party claiming the relevant interest arising from the application of the monies to which I have referred. That caveat was registered on 13 July 1998.

In that caveat the nature of the estate or interest in the land claimed by the caveator was as follows:

"Equitable interest as beneficiary of a constructive trust, the registered proprietor having received and unconscionably used the caveator's money in discharge of a mortgage over the property and effecting repairs and improvements thereto".

It is common ground that the caveat lapsed within the

meaning of S.74O. The evidence is that the plaintiff did not resist the lapsing of that caveat because it was advised that the asserted estate or interest in the land could not be sustained on the information then available. The evidence is that at that stage the plaintiff, although suspecting the way in which the monies had been applied, was not in a position to establish by evidence that this was so.

What then transpired was that, in proceedings initially instituted in Queensland but then transferred to New South Wales, a defence was filed on behalf of the registered proprietor of the property and others which admitted to the application of the proceeds of the sale of certain units in a property trust to discharging a mortgage over the subject property and to effecting repairs and improvements to the property. The evidence in the present proceedings shows that the plaintiff in the present proceedings has a bona fide basis upon which to argue that the monies so applied were monies to which it has an equitable claim and accordingly that the application of those monies gave rise to an estate or interest in equity in the subject property.

A second caveat was then lodged dated 30 October 1998 and registered on that day. The nature of the estate or interest claimed in that caveat was as follows:

"Equitable interest by virtue of the facts stated below. Arising out of the registered proprietor utilising monies the subject of a trust of which the caveator is a beneficiary such monies being used to discharge a mortgage over the land and to effect improvements thereto."

Counsel for the plaintiff submits that the second

caveat was not in respect of the same estate or interest as the first, he concedes that it was based on the same facts. The distinction sought to be drawn is that the estate or interest asserted by the first caveat was one as beneficiary under a constructive trust whereas the estate or interest asserted under the second caveat was an entitlement to an equitable charge.

I am of the opinion that it is not permissible to look beyond the language of the caveats in order to resolve the issue as to whether the estate or interest claimed in the respective caveats is the same or different.

The situation is that the first caveat asserts an equitable interest as beneficiary of a constructive trust whereas the second asserts an equitable interest without further definition as to the nature of that interest. The estate or interest asserted in the first caveat is within the ambit of that asserted in the second. That asserted in the second is wider than that asserted in the first. The second would comprehend an equitable charge as well as a constructive trust.

Whilst there are some distinctions to be drawn between a constructive trust and an equitable charge it seems to me that to assert a substantive difference between the estate or interest claimed in the respective caveats is to draw too fine a line. Moreover, because the wording in the second caveat asserts an estate or interest in terms sufficient to cover the estate or interest asserted in the first caveat, it is impossible to contend that the second caveat is not lodged in respect of the estate or interest asserted in the first.

I proceed therefore on the basis that s 74O is attracted, such that, in terms of the section, the second caveat has no effect unless the proviso to the section be satisfied.

The evidence before me shows that the Registrar General gave notice to the plaintiff that he intended to remove the recording of the second caveat from the register on the ground that it asserted the same estate or interest as the first. In the present proceedings the plaintiff has joined the Registrar General as the defendant. The registered proprietor of the subject property has not been joined.

On behalf of the Registrar General the view of the effect of s 74O in relation to the second caveat which I have expressed in this judgment was supported. The first claim made in the summons filed by the plaintiff in the present proceedings is for a declaration that the second caveat is not invalid by the operation of s 74O. For the reasons I have given that claim must be refused.

The second claim is for an injunction restraining the Registrar General from cancelling the recording of the caveat. For the same reasons that claim must be refused.

The third claim is in the alternative, being for an order pursuant to the proviso to s 74O granting leave to the plaintiff nunc pro tunc for the lodgment of the caveat.

As I read s 74O, the court has no power to make an order pursuant to the proviso to s 74O which would have retrospective effect. The section provides, as part of the proviso, that any such order or an office copy must accompany the further caveat when lodged with the Registrar General. That part of the proviso could not be complied with in the case of an order which purported to operate in relation to a caveat that has already been lodged. It cannot therefore have been intended by the legislature that the court would have power to make an order which had effect in relation to a caveat already lodged.

My attention has been drawn to s 74L. However, I am of the opinion that that section has no application which would enlarge the power of the court in the way sought by the plaintiff.

It follows that the claim for an order pursuant to the proviso to s 74O must be refused.

The plaintiff's summons claims such further or other order as the court sees fit. Counsel for the plaintiff submits that the court should at least now make an order pursuant to the proviso in order to enable a further caveat to be lodged. I am of the opinion that in the circumstances of this case it is appropriate for the court to grant that relief. The circumstances in which the first caveat lapsed do not seem to me to be such as to make it just and reasonable that the plaintiff should be denied the protection of its claimed interest by caveat.

Accordingly, I propose to make an order pursuant to the proviso. I have mentioned that the registered proprietor has not been joined as a defendant to these proceedings. I am in some doubt as to whether that ought to have been done. It is appropriate in those circumstances for me to direct that a copy of the orders which I will make and a copy of this judgment be served on the registered proprietor and that I give liberty to apply to the registered proprietor.

What I have said in that regard and the direction I propose to give in that regard should not be construed as a decision by me that the registered proprietor has a right to be heard in relation to the proceedings. I express no view in that regard either way.

Mr Wright on behalf of the Registrar General applies for an order for the costs of the present proceedings. Counsel for the plaintiff submits there should be no order as to costs. The position is that although interesting arguments were raised in support of the summons, the plaintiff has failed in its case against the Registrar General and the order which it has obtained is not one which the Registrar General gave notice it would oppose, nor did the Registrar General oppose that order.

In these circumstances, costs should follow the result in the ordinary way. The plaintiff is ordered to pay the Registrar General's costs of the summons.

I make an order pursuant to paragraph 1 of the short minutes of order dated 27 January 1999 which I have initialled. I note paragraph 2. I make orders pursuant to paragraphs 3,4,4A,5 and 6 of the short minutes of order.

oOo

LAST UPDATED: 08/02/1999