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[2001] NSWSC 624
Supreme Court of NSW
2001-07-13
Santow J, Clarke JA, Cohen J, McLelland J
Original judgment source is linked above.
INTRODUCTION 1 Before me is an application by Notice of Motion by the Plaintiff to extend the operation of a caveat in relation to what I will call the "Castle Cove property" belonging to the First Defendant. 2 It arises in the context of litigation presently part heard before me. The First Defendant presses upon me that it is relevant that that litigation is brought by a legally assisted Plaintiff; that among the discretionary matters I ought to consider, if otherwise the First Defendant fails in demonstrating no caveatable interest, that such Notice of Motion will give rise to no separate action of the kind allowing for a fresh capacity to permit of a cost order against the Plaintiff. This is because, if the Plaintiff suffers a cost order in the main proceedings, it would use up the $15,000 cost recovery limit for legally assisted parties. 3 The issues start with whether the Plaintiff has a caveatable interest of the kind necessary to ground a caveat, that is to say, an equitable interest in land. Related to that issue is whether the caveat correctly identifies such a caveatable interest. That leaves open the possibility that the Court might permit amendment of the caveat where there is under s74L of the Real Property Act a merely technical deficiency in the description of the interest claimed. 4 In that regard, I should also note s74K of the Real Property Act, not relied upon by the Plaintiff, in his Originating Process or written submissions. In Beca Developments Pty Ltd v Idameneo (No. 92) Pty Ltd (1990) 21 FamLR 459 at 471-2 Clarke JA eschewed an excessively technical approach, following the introduction of ss74K and 74L. Subsequently in The Marriage of Stevens (1991) 15 FamLR 51 at 52-3 Cohen J expressed the view that the power to extend may permit an extension wherever the caveator's claim may have substance; moreover the Court "probably" has power to amend the caveat "to permit it to claim any caveatable interest which the Court is satisfied the caveator holds", though it not be that originally delineated in the caveat. 5 That decision was at odds with an earlier decision of McLelland J in Depsun Pty Ltd v Tahore Holdings Pty Ltd (1990) ANZConvRep 334 where it was doubted that there was power to allow amendment of the estate claimed in the caveat. 6 All of this however falls by the wayside when it is appreciated that the only amendment the Plaintiff seeks is a more apposite description of the estate or interest claimed, so as to add to "orders made" the words "including agreement made". This is so as to encompass a supposed agreement said to have been acknowledged by both parties either explicitly or implicitly. That agreement was said to have been of an at least sufficiently arguable entitlement to an interest in the nature of an equitable lien over a fund there identified derived from the sale of other property. This was said somehow to have transmogrified into an acknowledgment that there was some kind of interest in the Castle Cove property itself. It will be apparent from the orders that what the Judge at the end "noted" falls far short of any acknowledgment by the First Defendant of any equitable interest in the Castle Cove property. 7 I quote below what was noted by the Judge: "The agreement between the Plaintiff and First Defendant that: (a) the Orders and agreements embodied herein are made in resolution of the Plaintiff's claim (which the First Defendant disputes) to an entitlement to orders in the nature of Mareva injunctions or orders and/or asset preservation orders against the First Defendant in and in connection with these proceedings, (b) the Plaintiff acknowledges that, as and from 5 pm today, the First Defendant shall be at liberty to apply to and for his own purposes or as he may direct the monies (the "Fund") (or any part thereof) representing or forming part of the monies paid to him at the direction of the Defendant Kate Woowin in July 1999, the subject of Orders made by Herron DCJ in August 1999 and by Simos J on 28 October 1999, (c) neither the acknowledgment in (b) nor any other provision hereof shall, or shall be taken to, prejudice the Plaintiff's right to contend that he acquired an entitlement to an interest in the nature of an equitable lien over the Fund which entitlement the First Defendant denies), or an entitlement enforceable against the First Defendant in person in equity to the extent that the Plaintiff may establish an entitlement to such a lien, (d) the orders and agreements embodied in these Short Minutes are made upon the basis that the First Defendant represents and warrants to the Plaintiff that he is presently entitled at law and in equity to a 55/100 share in the Property and that his interest in the Property is unencumbered. (e) the Plaintiff consents to a copy of these Short Minutes, and the orders made by reference to these Short Minutes, being communicated to Hang Seng Bank (Bahamas) Limited with a view to moneys in the account numbered 401-01-2273 with that company being released to the First Defendant or as he may direct;"
8 It will be readily appreciated that what is there agreed could not, even taken at its highest, amount to any agreement by the First Defendant of even an arguable interest in the Castle Cove property, albeit that if the Plaintiff's current proceedings are successful such an interest might then be made out. What is there referred to relates to a fund of money, not to the Castle Cove property, albeit connected to litigation concerning that property. 9 The difficulty for the Plaintiff is that the amendment to the caveat which he really needs would be one which was cross-referenced to paragraph 29 and perhaps 50 and also paragraph 55, of the Amended Statement of Claim filed 10 November 2000 from which I quote: "(a) paragraph 29 (under the heading " The Castlecrag Property Subject to An Equitable Charge ") '29. Accordingly, Mr Kang is entitled in equity to a charge, in an amount equal to the sum of $89,100.00 (pleaded in paragraph 6(a)(I) hereof) together with such interest as may be allowed by this Court, on the interest of Christopher in the land known as 21 Cammeray Road, Castle Cove ("the Substituted Property") which (as recorded in orders and notations made by Simos J on 3 November 1999) represents the proceeds of the sale of the Castlecrag Property paid to or at the direction of Christopher.' (b) paragraph 50 (under the heading " Alienations of Property Voidable ") '50. If (as Mr Kang seeks in these proceedings) the Mortgage and (to the extent it might be found to underlie the Mortgage) the Loan Agreement are set aside: (a) Christopher will liable to account to Mr Kang, or as the Court may direct, for so much of the proceeds of the sale of the Castlecrag Property as were paid to him or at his direction (as pleaded and particularized in paragraph 33) as might be necessary to satisfy the entitlements of Mr Kang under the District Court Judgment; and (b) Christopher will hold on trust for Mr Kang, or as the Court may direct, so much of the Substituted Property as represents for the purpose of these proceedings (as recorded in orders and notations made by Simos J on 3 November 1999) the proceeds of the sale of the Castlecrag Property paid to him, or at his direction, as may be necessary to satisfy the entitlements of Mr Kang under the District Court Judgment.' (c) paragraph 55 (the Relief Claimed ) 'A DECLARATION that he is entitled to an equitable charge on the Substituted Property for the sum of $89,100.00 (pleaded in paragraph 6(a)(I) hereof) together with such interest as may be allowed by this Court.'
10 But that was never the amendment sought. In proceedings of this kind it is inappropriate for the Court to deal with a hypothetical possibility that the caveat might be either so amended or a new one substituted.
CONCLUSION 11 The Plaintiff has failed at the threshold in establishing a caveatable interest in the subject property such that I do not need to deal with discretionary matters. It will be clear that I have not pre-empted any aspect of the Plaintiff's case based upon its Amended Statement of Claim. 12 Should the Plaintiff choose to file a fresh caveat which appropriately identifies the relevant paragraphs of the Statement of Claim, the issues of caveatable interest and discretionary issues will again arise. Without pre-empting the latter, the First Defendant can be taken to be aware of how seriously the Court would regard any breach of the existing Mareva orders which themselves preclude disposal of the Castle Cove property though being incapable from that fact alone of grounding a caveatable interest; see Meagher Gummow and Lehane "Equity Doctrines and Remedies" (Butterworths, 1992) at 609-10. I would not wish to join the Gadarene Swine referred to by the learned authors by adding to the scope of Mareva injunctions by deeming them to give rise to an equitable interest in their property subject matter. Nor has either party invited me to do so.
COSTS AND ORDERS 13 I dismiss the Plaintiff's Notice of Motion with costs.
Last Modified: 07/30/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Kang
Kwan & 2 Ors
CITATION : Kang v Kwan & 2 Ors [2001] NSWSC 624 revised - 27/07/2001 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 3510/99 HEARING DATE(S) : 13/07/01 JUDGMENT DATE : 13 July 2001
(1990) 21 FamLR 459
(1991) 15 FamLR 51