Abou-Hamad v Darwish

The Facts upon which the Caveatable Interest is said to be Based 19The Defendant was the Melkite Greek Catholic Eparch of Australia, and New Zealand, acting with the full authority of the Eparchy of Saint Michael's of Sydney (Melkite Greek), (also known as Melkite Catholic Eparchy of Australia and New Zealand and Melkite Catholic Eparchy of Australia, and Melkite Catholic Eparchy Corporation), ("the Eparchy"). 20From August 2008, the Plaintiff occupied the Property pursuant to a written lease. The monthly rental was $1,200. 21In about March 2009, the Plaintiff is said to have provided $15,000 "to be paid to the Church directly for the purpose of payment of the costs of" an iconostasis for the St John Church. She says that the money was to be paid into a joint account in the names of the Plaintiff and the Defendant, from which the money would be paid, on account of the overall costs, to the carpenter engaged to construct the iconostasis. 22An iconostasis is a wall of icons and religious paintings that separate the nave from the sanctuary in a church. It can be a solid screen of stone, wood or metal. It has a royal door in the centre and two smaller doors on either side. 23The evidence reveals that the estimated cost of the iconostasis was in excess of $70,000. 24The Plaintiff asserts, and the documentary evidence reveals, that the joint account in her name and the Defendant's name, was opened on 23 March 2009 and that she paid $15,020 into that account. (The Plaintiff refers, in the amended Statement of Claim to another amount of $10,000 which she subsequently paid into the joint account, which she also says was used by the Defendant. However, the parties agreed that it was not necessary to deal with that amount in these proceedings since it was not subject of the claim in the Plaintiff's caveat. The amount claimed in the amended Statement of Claim in the Local Court is, however, $25,000. It appears that the alleged bases of the second payment are the same.) 25The Plaintiff's evidence establishes that the amount of $15,020 was not paid out of an account in the Plaintiff's name alone, but out of a joint account in the name of Mrs Alia Abou-Hamad and the Plaintiff, following receipt into that account of the same amount. 26For reasons that were not explained, a receipt dated 10 April 2009, was provided by the Eparchy to Mathiew Pty Limited, which is, apparently, a company in which the Plaintiff has an interest. Furthermore, the receipt states that $15,000 was received from Mathiew Pty Limited "being for Rent". 27Despite what she said regarding the use to which the $15,000 was to be put by the Defendant, the Plaintiff also asserts that she has "always described the payment of $15,000 as rent in advance for the Property". Again, no reasons for doing so were provided. 28The Plaintiff's case is then, that, on 31 March 2009, the Defendant transferred $15,000 from the joint account to an account in his own name, which reduced the debt secured by the mortgage registered on title of the Property. 29However, other evidence reveals that on 13 March 2009, the Defendant had written a cheque, drawn on another account in his sole name, in favour of Holy Saviour School, for $15,000, and that on, or about, 31 March 2009, the Defendant handed a cheque to Mr Baker for $15,000, which the Defendant stated had been "donated" by the Plaintiff for the iconostasis. 30Mr Baker also asserts that on 3 April 2009, he deposited the cheque handed to him by the Defendant into the account of the Holy School Account. However, he says that $15,000 was transferred by him overseas as the first payment for the construction of the iconostasis on 1 April 2009, in the knowledge that he then held the Defendant's cheque for $15,000, being the donation made by the Plaintiff for that purpose. 31Mr Baker also states "the $25,000 donated by [the Plaintiff] was used by [the Elerchy] to purchase the iconostasis". 32In her affidavit in reply to the affidavit of Mr Baker, the Plaintiff says: "The payment of $15,000 that the Archbishop paid to the Church was not drawn from that joint account [in the names of the Plaintiff and the Defendant], but I have since discovered, came from his own account." 33At the hearing, without objection, the Defendant tendered photographs of the iconostasis that is now situated in the Church.

Determination 43There are a number of problems that the Plaintiff faces in her application that, in my view, are insurmountable. 44As stated, the Summons that the Plaintiff filed does not seek any final relief. It has been stated, more than once, that "a Summons claiming an order extending operation of a caveat must include a claim for final relief. A Summons which claims, as this one does, only an order extending the operation of a caveat until further order is defective in not claiming any final relief": Wu v Dardaneliotou [2008] NSWSC 1319 at [2]. 45In Iaconis v Lazar [2007] NSWSC 1103; (2007) 13 BPR 24,937 at [22], Young CJ in Eq (as his Honour then was) said: "A caveat should only remain on the title pending the application by the person claiming the equitable or other interest to commence a suit for specific performance or otherwise to vindicate that equitable interest. Indeed, the standard order when a caveat was challenged was that the caveat be removed in any event unless within a month the caveator commenced a suit and then, and only then, was the caveat to be extended until the hearing of the suit; see eg Ex parte Muston (1903) 3 SR (NSW) 663." 46As has been stated, the Plaintiff commenced the Local Court proceedings, and the Plaintiff's counsel submitted that this was sufficient. 47In Waco Kwikform Ltd v Jabbour [2010] NSWSC 1379 White J (at [62]), said that where there was no dispute about the interest claimed by the caveator and where the caveator might have no need to seek any relief other than an order for the extension of the caveat, it may not be necessary for the summons to include a claim for final relief. But, where the defendant has made it clear that he contested the enforceability of the charge asserted by the caveator, the observations of Young CJ in Eq in Iaconis v Lazar and of Brereton J in Wu v Dardaneliotou applied. (Also see White J's decision in Summit Acceptance Pty Ltd v Wild [2011] NSWSC 659 at [21].) 48In Break Fast Investments Pty Ltd v C & O Voukidis Pty Ltd [2011] NSWSC 871, Black J after referring to Iaconis v Lazar and Wu v Dardaneliotou at [3], said: "[4] I do not regard those cases as necessarily requiring that the application for substantive relief be made in the same proceedings as those in which orders extending the caveat are sought." 49However, his Honour continued at [4]: "The policy underlying those decisions, namely that a caveat should only remain on the title pending an application for substantive relief, is satisfied where other proceedings exist which will determine the caveator's entitlement to that relief." 50I respectfully agree with his Honour's statements. 51As stated, in the amended Statement of Claim, the Plaintiff's claims are broadly identified as "breach of contract/debt recovery" and for a liquidated sum of $25,000, or, in the alternative, "damages for breach of contract and/or conversion", together with interest and costs. She makes no assertion of any trust, and does not, otherwise, refer to, or make any claim of, any equitable interest in the property, the title of which the Caveat has been lodged. 52Reliance was placed on what White J said at [63] in Waco Kwikform Ltd v Jabbour , "that the failure to claim such final relief should not be a bar to the making of the order for extension of the caveat provided that the plaintiff undertakes to file a further amended summons seeking to "vindicate" the interest claimed in the caveat". 53In that case, the paragraph before what I have quoted was in the following terms: "[62] One can envisage cases where there may be no dispute about the interest claimed by the caveator and the caveator might have no need to seek any relief other than an order for extension of the caveat. In such case, I respectfully doubt whether it would be necessary for the summons to include a claim for final relief. But, in the present case, the defendant has made it clear that he contests the enforceability of the charge. The observations of Young CJ in Eq and Brereton J referred to above apply." 54In the present case, not only has the Plaintiff given no such undertaking, but the amended Statement of Claim, which was filed well after the Supreme Court proceedings commenced, and after some argument had been heard, does not seek to vindicate the interest claimed in the caveat. 55It follows, in my view, that the Local Court proceedings will not determine the Plaintiff's entitlement to relief in relation to the Caveat or otherwise "vindicate the interest claimed in the caveat". 56The next problem with the Caveat is that it uses the phrase "an equitable interest". This is an inadequate description as has been held in a number of cases: Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Ltd ; Circuit Finance Pty Ltd v Crown & Gleeson Securities Pty Ltd ; Raptis v Wija Investments Development Pty Ltd [2007] NSWSC 870; Perpetual Trustee Company Ltd v English [2011] NSWSC 264. 57A further problem is that I am not satisfied, on the evidence, that the Plaintiff has an arguable case even as asserted by her, to establish an equitable interest in the subject property. She appears to accept, in her most recent affidavit, that the Defendant paid the amount of $15,000, to the Elerchy, in order to assist in the purchase of the iconostasis, albeit that he paid it out of a different account, which account was in his sole name. 58Furthermore, there does seem to be evidence, which is undisputed, that the iconostasis has been purchased and that it adorns the Church. 59It follows, in my view, that this is not a case in which a mortgage has been paid out with funds obtained in breach of trust and fiduciary duty, thereby allowing the Plaintiff to stand in the shoes of the mortgagee whose mortgage debt has been paid out: Boscawen v Bajwa [1996] 1 WLR 328. To the contrary, it appears to be a case in which the precise purpose for which the $15,000 was placed in the joint account, was achieved. 60That matter, of course, will have to be decided in the Local Court proceedings if the Plaintiff proceeds with it. However, in this court, I am entitled to consider the Plaintiff's evidence acknowledging that $15,000 was paid by the Defendant. 61In any event, the Plaintiff did not make any submissions on the principles or the precise circumstances that would make it unconscionable for the Defendant to deny the proprietary interest that she claimed. As has recently been pointed out in Agusta Pty Ltd v Provident Capital Ltd [2012] NSWCA 26, by Barrett JA (with whom Campbell JA and Sackville AJA agreed): "73 In Boscawen v Bajwa [1996] 1 WLR 328 at 335, in a passage approved by the High Court in Bofinger v Kingsway Group Ltd [2009] HCA 44 at [94], Millett LJ described the foundation of subrogation as an equity that arises from the conduct of the parties on well-settled principles and in defined circumstances which make it unconscionable for the defendant to deny the proprietary interest claimed by the plaintiff." 62Even though there are Australian cases that have assumed that subrogation is available as a remedy when funds have been misapplied and are traceable to a payment discharging a debt: Gertsch v Atsas (1999) 10 BPR 18,431, [19]-[20]; National Australia Bank Ltd v Rusu [2001] NSWSC 32, [51]; Raulfs v Fishy Bite [2008] NSWSC 1195, [25]; Lygon Nominees Pty Ltd v Zeccola (unreported, Supreme Court of Victoria, Mandie J, 26 May 1998); Cook, Re; Italiano Family Fruit Co Pty Ltd (in liq) [2010] FCA 1355; (2010) 190 FCR 474; (2010) 276 ALR 349; (2010) 80 ACSR 680; each of those cases appears to involve facts very different from the present case which include that the Defendant appeared to have used other funds to satisfy the purpose for which the Plaintiff's funds were to be used. In any event, no circumstances were pointed to that make it unconscionable for the Defendant to deny the proprietary interest that has been claimed. 63In my view, the Plaintiff is really seeking "security" until the amount she claims in the Local Court proceedings, if successful, is paid to her by the Defendant. That does not provide a basis for a caveatable interest in the Property. 64If she is successful, then she may enforce any judgment. One of the methods of enforcement may be against the Property if the Defendant does not satisfy the judgment debt: see, for example, s 106(1)(c) Civil Procedure Act 2005 and Uniform Civil Procedure Rules 2005, rule 39.21. 65Finally, in my view, the maintenance of the Plaintiff's caveat is an interference with the Defendant's right, as registered proprietor, to deal with the Property. Whether he has no present intention to do so is irrelevant. The simple fact is that his rights to do so are presently being interfered with. 66The Plaintiff has not satisfied me that it would be better to maintain the status quo until the trial of the action, by leaving the Caveat in place so as to prevent disposal of the Property. In this regard, she bears the onus of proof: Duic v Duic [2011] NSWSC 371. 67For any or all of these reasons, the Plaintiff's caveat could not be extended. 68I order that the Plaintiff's notice of motion be dismissed and order her to pay the Defendant's costs.

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