DUIC v DUIC

Judgment 1HIS HONOUR: The plaintiff, Josip Duic, commenced proceedings against the defendant, his son, by way of statement of claim on 28 February 2011. 2The plaintiff claimed an order for possession of the property as 2A Mellor Street, West Ryde. 3In the statement of claim, the property is described as having a mixed residential and business use and that the plaintiff ordinarily resides in the residence comprising part of the building erected on the land. 4The defendant was conducting a radiator repair business on the business part of the property (paragraph 2 of the statement of claim). 5The statement of claim records the fact that the defendant, who is the applicant on a notice of motion filed on 16 March 2011, asserted payments having been made to the plaintiff in the amount of $360 per week since 1996. The plaintiff denies that assertion. 6It was said on behalf of the plaintiff that there was no written or oral lease in respect of the property and that in early 2011, the plaintiff informed the defendant that he would sell the property to finance his entry to a retirement village. 7The notice of motion filed on 16 March 2011 came before me on 17 March 2011 in the Duty Judge list. In paragraph 3, an order was sought pursuant to s.74K(2) of the Real Property Act 1900 that the operation of Caveat number AF911491 lodged in respect of the West Ryde property be extended until further order of the Court. 8Alternative relief is claimed pursuant to s.74O of the Real Property Act for leave to the plaintiff to lodge a further Caveat in respect of the land. 9In support of the notice of motion, the applicant relied upon his own affidavit affirmed on 16 March 2011. The affidavit was read in support of the relief claimed. In addition, the following documents were tendered in support of the application:- (1) Exhibit A - a proposed defence to the primary proceedings number 2011/64779. (2) Exhibit B - a copy of the Caveat AF911491. (3) Exhibit C - a copy of the notice to caveator of proposed lapsing of the Caveat together with a copy of a letter dated 24 February 2011 enclosing a copy of the notice to caveator. 10The power of the Court to extend the operation of a caveat is governed by the provisions of s.74F of the Real Property Act . One essential condition, even on an interlocutory basis for an order extending the operation of a caveat, is that the Court is satisfied that the caveator's claim on the Caveat has or may have substance: s.74K(2). 11The Court, on an application under s.74K, proceeds upon well-established principles. In particular, the Court regards the caveator as being in an analogous position to an applicant for an interlocutory injunction. Accordingly, the onus is upon the caveator to establish two matters. First, the caveator's claim to an interest in the land must raise a serious question to be tried. In this respect, it has been said that the onus is not a difficult one to discharge insofar as "it is not a very demanding test" : Dowdle v Inverell Shire Council (1998) 9 BPR 17,349 at 17,350. 12Secondly, if there is a serious question to be tried, the Court then decides where the "balance of convenience lies" : Eng Mee Young v Letchumanan [1980] AC 331 at 337 to 338. 13The onus is on the caveator to show that, on the balance of convenience, 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 land. 14I have had the benefit of written submissions both from Mr R Gration, counsel for the applicant, and Mr D Raphael, counsel for the respondent. Those submissions were supplemented by oral submissions on behalf of each party. 15Without doing injustice, I hope, to the very detailed and helpful submissions by Mr Raphael, there are two matters raised in opposition to an order extending the operation of the Caveat. 16First, that the Caveat was defective in that it did not disclose the nature of the estate or interest as the basis the Caveat. 17Second, that the applicant had not established an enforceable estate or interest in land to sustain the Caveat: s.74F of the Real Property Act . 18In the submissions for the applicant, it was emphasised that the applicant does not have to establish a real prospect of success or even to establish that it is more probable than not at trial that he will establish the interest claimed. 19The nature of the estate or interest in land relied upon was said to arise on the evidence from both labour and money expended in respect of improvements to the property over a period of 29 years since 1982, together with the payment of all rates and other outgoings on it upon the basis of the plaintiff/respondent's alleged assurance given on a number of occasions after 1982 that, in effect, the land would be the defendant/applicant's and that he, the plaintiff/respondent would not sell the property. 20Further reliance is placed upon alleged representations made by the plaintiff/respondent to the effect that "the property would one day belong to the applicant" . Reliance was placed upon a number of authorities including those in respect of a "common intention" constructive trust said to arise on the basis of an estoppel by encouragement. Reliance was also placed upon the principles of proprietary estoppel. 21The relevant authorities were referred to in submissions and were conveniently collected and referred to in the judgment of Ward J in Australian Building & Technical Solutions Pty Limited v Boumelhem [2009] NSWSC 460. 22On the question of balance of convenience, it was submitted that the circumstances of the case indicated that that balance favoured the extension of the operation of the Caveat and that, in the circumstances of the present matter, the balance substantially favoured the applicant. Reliance was placed, inter alia, upon the applicant's evidence that his business would be substantially damaged if sold, he having established a clientele in the relevant area. It was also contended that there was no evidence which would indicate hardship or detriment to the respondent in the event that the operation of the caveat was extended. 23The order sought was that the Caveat be extended until the determination of the substantive proceedings (2011/64779).