Plaintiff v Defendants

2 For many years, the plaintiff lived at the property with her former husband, Dr Allan Bernstein. During the course of the marriage, the plaintiff and Dr Bernstein had two children. The marriage broke down in late 2005 or early 2006 and subsequently Dr Bernstein left the property.

3 On 28 September 2007, Mr George Georgakakis, the first defendant, lodged a caveat over the property, claiming an interest as chargee pursuant to an agreement. The grounds of claim are set out in the caveat as:

"Equitable interest pursuant to Agreement to enter into a Contract between the Caveator and Alan (sic) Sam Bernstein dated 8 August 2005."

4 In this proceeding, the plaintiff seeks an order pursuant to s 90(3) of the Transfer of Land Act 1958 for the removal of the caveat. The second defendant, the Registrar of Titles, did not participate in the proceeding.[1] For the reasons given below, there will be an order requiring the removal of the caveat.

5 The principles to be applied in an application under s 90(3) of the Transfer of Land Act were conveniently summarised by Dodds-Streeton J in Goldstraw v Goldstraw.[2] Her Honour said:[3]

"Section 90(3) is in the nature of a summary procedure analogous to the determination of interlocutory injunctions. The Court's power under s 90(3) is discretionary. In that context, it is recognised that the caveator bears the onus of establishing that there is a serious question to be tried that he or she does have the estate or interest in the land claimed. That is, 'in order to resist successfully the applications for removal of caveats (the caveator's) arguments must be directed towards the assertion of an interest in the subject land in the light of relevant principles of property and equity law". Further, if the caveator does establish the serious question to be tried in relation to the estate or interest claimed, the weight of authority indicates that the caveator must further establish that the balance of convenience favours the maintenance of the caveat until trial."[4]

6 In Schmidt v 28 Myola Street Pty Ltd,[5] Warren CJ referred to some of the matters relevant to the proper exercise of the discretion under s 90(3). Her Honour said:[6]

"Without being exhaustive, the proper exercise of the discretion under s 90(3) will involve considering: in which party's favour the balance of convenience lies; whether there is a serious question to be tried; and whether the caveator claims an interest wider than what the caveator may be entitled. These questions inform the ultimate consideration, that is, whether the caveator has discharged his or her onus of justifying the maintenance of the caveat. The process is comparable to the exercise undertaken in granting or denying an interlocutory injunction. Such is the nature of this exercise, the problem highlighted above in Evindon is subsumed by the questions of whether there is a serious question to be tried and in which party's favour the balance of convenience lies."[7]

The alleged agreement between Mr Georgakakis and Mr Bernstein

7 The source of the right of Mr Georgakakis to lodge the caveat is alleged to be an agreement ("the agreement") bearing the signatures of Mr Georgakakis and Dr Bernstein and dated 8 August 2005. The first thing to note about the agreement is that it contains five recitals and no other clauses. Omitting the heading and the signatures, the full text of the agreement is as follows:

1. 1. The Creditor [Mr Georgakakis] has and is continuing to developing (sic) a business for the manufacture of Pet Food Products.
2. 2. The Debtor [Dr Bernstein] agrees and warrants that he is desirous in purchasing shares in the Pet Food Company which will be established with the trading name K9 Cuisine.
3. 3. The Debtor [Dr Bernstein] acknowledges that for purchasing 15% shares in the Company he will be liable to pay the sum of $3,000,000.00 THREE MILLION DOLLARS to the Creditor [Mr Georgakakis].
4. 4. That in consideration to (sic) the Creditor [Mr Georgakakis] continuing to establish the business and purchase equipment the Debtor [Dr Bernstein] agrees:

(a) That he will pay the sum of $3,000,000.00 on or before 1 July 2006.

(b) That the Debtor [Dr Bernstein] agrees and acknowledges that it or he will execute an unregistered mortgage within seven (7) days from the date of this agreement of not less than THREE MILLION DOLLARS ($3,000,000.00) in value, in favour of the Creditor [Mr Georgakakis] as mortgagee over the property owned by the Debtor [Dr Bernstein] or registered in the name of the Debtor [Dr Bernstein] at the option of the Creditor [Mr Georgakakis].

(c) That the Debtor [Dr Bernstein] acknowledges and authorises the Creditor [Mr Georgakakis] to immediately lodge forthwith a caveat or any other notice as recognised by law over the property situated at 5 Dunlop Street Kew in the (sic) Victoria or on any other property owed (sic) or registered in either the name of the Debtor [Dr Bernstein] at the option of the Creditor [Mr Georgakakis].

1. 5. That the Creditor [Mr Georgakakis] acknowledges that the business will commence on 1 July 2006.

IN WITNESS WHEREOF THE PARTIES HAVE HEREUNTO SET THEIR HANDS AND SEAL"

8 The first defendant relied upon an affidavit sworn by him on 24 November 2009 and an affidavit of Dr Bernstein sworn 23 November 2009. There was very limited cross-examination of the first defendant and no cross-examination of Dr Bernstein.

9 The plaintiff relied upon affidavits sworn by her on 21 October 2009 and 30 November 2009, and affidavits sworn by her solicitor, Mr Geoffrey Leeton, sworn 30 November 2009, 18 February 2010 and 24 February 2010. There was limited cross-examination of the plaintiff and Mr Leeton. This (like the limited cross-examination of the first defendant) reflects the summary nature of proceedings under s 90(3).

10 The plaintiff married Dr Bernstein on 19 March 1995, having been in a de facto relationship with him from about February 1993. The property was purchased in approximately October 1993, and the plaintiff became the registered proprietor of it on 21 February 1994. In an affidavit sworn on 8 October 1996 in earlier Family Court proceedings between Dr Bernstein and his first wife, Dr Bernstein deposed:

"I met my current wife Theresa in early 1993. We married on 19 March 1995 after having lived in a Defacto relationship. Theresa has made a substantial contribution towards the increase in the value of my assets. She has not only worked full time but has carried out her role as a homemaker. She has further provided substantial financial support in that she provided both her income and the property which she owed (sic) in Hawthorn as security for loans that I obtained shortly after the final Minutes of Consent Orders were made in these proceedings. Without her assistance I would not have been able to raise the monies needed to purchase Kew [the property]. Theresa also contributes her net income of over $670.00 per week towards the various expenses of our home. I estimate that her share of those expenses is less than her contribution. She has also enabled me to retain the various loans that I have had through Eunsam Nominees Pty Ltd. A term of the settlement with the wife was that she be removed as a guarantor of Eunsam Loans and resign as a director of that company. Theresa has replaced the wife both as a director and as a guarantor of the loans. Again her Hawthorn property has been provided as security in respect of same. Without Theresa's assistance in raising immediate finance to enable the sale of the yacht in 1993 to Mr Ayres the bank may well have foreclosed in relation to my various loans and thereby placed my entire financial position in substantial jeopardy and I would not have been able to borrow the $70,000 for settlement with the wife".

11 During the course of their marriage, the plaintiff and Dr Bernstein had two children. Their first child was born in July 1998. Prior to the birth of their first child, the plaintiff was employed full-time by BTR Nylex Ltd as a senior financial accountant. Following the birth of their children, the plaintiff worked part-time between 15 and 30 hours a week. The plaintiff gave evidence that at the time she left her full-time employment, she was receiving a gross salary of $47,523 plus the use of a motor vehicle and other benefits. Her income was used for home loan repayments and general household expenses, and she was the accountant/bookkeeper for her and her husband's business interests and the Elgin Medical Centre (a medical practice which operated from a building in Carlton owned by Dr Bernstein). The plaintiff gave evidence that she contributed financially and was a full-time carer for the children.

12 As to her contribution towards the purchase of the property, the plaintiff gave evidence:

"I contributed $40,380 at settlement of the purchase of the Kew property. A home loan of $408,000 was taken out on 21 January 1994, to assist with the purchase of the Kew property. That loan was paid out on 25 May 1997. I paid $41,428 from my personal account towards repayment of the $408,000 home loan between 1994 and 1997. I also contributed $197,525.78 (From the proceeds of sale of 1 Westley Street, Hawthorn ("Hawthorn") that I owned, and the settlement of which occurred on 15 August 1997) towards the cost of renovating the Kew property. Finally, I provided the property at Hawthorn, as security to obtain the home loan of $408,000 when the Kew property was purchased".

13 The plaintiff and Dr Bernstein separated in late 2005 or early 2006. Whatever the actual date was, the separation occurred after the date of the agreement (8 August 2005).

14 On 5 December 2006, the plaintiff commenced Family Court proceedings against Dr Bernstein. On 6 February 2007, Dr Bernstein swore an affidavit in those proceedings setting out his financial affairs.

15 On 24 May 2007, Dr Bernstein's solicitors wrote to the plaintiff's solicitors and advised as follows:

"In the course of perusing our client's documentation and obtaining instructions from him yesterday afternoon, it has come to our attention that [Dr Bernstein] has entered into a Deed of Agreement with George Georgakakis dated 8 August 2005, copy of which is enclosed.

Our client has received a letter from J. Kotsifas & Associates, solicitors acting for George Georgakakis, dated 15 May 2007 copy of which is also enclosed.

Upon perusal of the documentation filed in court, it has come to light that our client has not disclosed such a deed of agreement and unfortunately he has received the letter from J. Kotsifas & Associates after attending the court on 18 May 2007."

16 The plaintiff has sworn that she knew nothing of the agreement until the middle of 2007, when it was drawn to her attention by her solicitor, Mr Leeton. On 25 July 2007, Mr Georgakakis commenced a Supreme Court proceeding against Dr Bernstein seeking damages in the amount of $8 million. This proceeding is ongoing. Notwithstanding the existence of Mr Georgakakis' proceeding against Dr Bernstein, Dr Bernstein has sworn an affidavit which has been filed on behalf of Mr Georgakakis in the current proceeding. In that affidavit, Dr Bernstein swore:

"16. I told my former wife [the plaintiff], prior to entering into the agreement with Mr Georgakakis, that I was going to provide security over the property to secure my commitment to provide the investment funds, and that I was agreeing that a caveat could be lodged by Mr Georgakakis over the property.

17. My former wife acknowledged that she understood what I had agreed to do and she did not express any opposition or concern. ..."

Having seen the plaintiff cross-examined on this issue,[8] I do not accept that the plaintiff was ever told of the existence of the agreement before May 2007.

What (if anything) was agreed between Mr Georgakakis and Dr Bernstein?

17 The agreement contains five recitals. On its face, there are no operative provisions. However, the first defendant contends that the agreement obliges Dr Bernstein to pay the sum of $3 million on or before 1 July 2006 and grants a charge over Dr Bernstein's equitable interest in the property. In support of this submission, the first defendant relies on the often-cited passage in the judgment of Romer J in Cradock v Scottish Provident Institution:[9]

"To constitute a charge in equity by deed or writing it is not necessary that any general words of charge should be used. It is sufficient if the court can fairly gather from the instrument an intention by the parties that the property therein referred to should constitute a security."

18 Having noted that there do not appear to be any operative provisions in the agreement, six further points may immediately be made about the agreement:

(a) First, while the first defendant contends that the agreement constitutes a contract requiring Dr Bernstein to pay $3 million for 15% of the shares in a pet food company, the particular company is not identified. Indeed, according to the agreement, the pet food company was yet to be established as at the date of the agreement.

(b) Secondly, the payment of $3 million is said to be in consideration of the first defendant "continuing to establish the business and purchase equipment" - rather than the 15% share in a company that one might think would have issued capital of at least $3 million (if not $20 million).

(c) Thirdly, for reasons which are not apparent, the first defendant is described in the agreement as "the creditor" and Dr Bernstein is described as "the debtor" (this notwithstanding the first defendant's assertion that the agreement was for the purchase of shares in a company yet to be established and where payment was not required for some 10½ months).

(d) Fourthly, if the agreement imposes enforceable obligations on the first defendant and Dr Bernstein, then it would appear that "the business" was to commence on the day by which the $3 million was required to be paid.[10]

(e) Fifthly, whilst Mr Georgakakis has deposed that he had his solicitor prepare the agreement,[11] this is difficult to believe, having regard to the lack of operative provisions, the mistakes in the agreement, the description of the parties as creditor and debtor and the reference to "any other notice as recognised by law" in clause 4(c).

(f) Sixthly, whilst the agreement appears to require Dr Bernstein to pay the sum of $3 million on or before 1 July 2006, clause 4(b) appears to entitle Mr Georgakakis to require a mortgage over all property owned by Dr Bernstein or registered in his name in a sum "of not less than $3 million". Theoretically, clause 4(b) appears to encompass the notion that Mr Georgakakis could ask for a mortgage over all of Dr Bernstein's property ten months before Dr Bernstein became obliged to pay $3 million; and the mortgage could be for any amount in excess of $3 million.

19 In her first affidavit, the plaintiff deposed to believing that the agreement was a ruse arranged between Dr Bernstein and Mr Georgakakis "to prolong the Family Court proceedings and hopefully force ... a settlement favourable to" Dr Bernstein. This opinion was inadmissible and, upon objection by counsel for the first defendant, I struck it out. Nevertheless, whilst there is no issue in this proceeding as to whether the agreement was a "ruse", the questions of whether the agreement is enforceable or whether it created any obligations which are now enforceable are live ones between the parties.

20 The fact that Dr Bernstein did not disclose the agreement in his Family Court affidavit of 6 February 2007 and the fact that the matter appears to have surfaced for the first time after 8 August 2005 in May 2007 suggests that between 8 August 2005 and May 2007, Dr Bernstein and the first defendant did not regard themselves as parties to an enforceable agreement. Against this, Dr Bernstein has deposed that demands for payment were made on him during the second half of 2006 and during 2007, and Mr Georgakakis has deposed to trying "repeatedly" to obtain payment of the $3 million owing. However, whilst that is the state of their evidence, neither Mr Georgakakis' affidavit of documents nor Dr Bernstein's affidavit of documents in the proceeding between them disclose any written demands for payment by Mr Georgakakis.

21 In his original statement of claim, in the proceeding against Dr Bernstein, Mr Georgakakis pleaded that the agreements were entered into "on or about the June (sic) 2006". Mr Georgakakis pleaded that the agreement was for the purchase of shares and that, pursuant to the agreement, "the plaintiff (sic defendant) was to pay the sum of $3 million, being for the cost of 15% of the shares in the company".[12] In giving particulars of the agreement, Mr Georgakakis pleaded that the agreement was partly in writing, partly oral and partly to be implied. Insofar as it was in writing, it was said to be "evidenced in writing by documents passing between the parties" (emphasis added). In his amended statement of claim, Mr Georgakakis continued to allege an agreement evidenced by "documents" passing between the parties and continued to assert that it was a term of the agreement that "the plaintiff (sic defendant) was to pay the sum of $3 million being for the costs of 15% of the shares in the company". However, in the amended statement of claim it was pleaded for the first time that the plaintiff was to pay this sum for the cost of the shares "on or before 1 July 2006". In the amended statement of claim, Mr Georgakakis went on to plead "In relying (sic) upon the agreement the plaintiff expended moneys in the sum of $3.8 million to purchase equipment for the commencement of the business". Ultimately, Mr Georgakakis claimed[13] loss and damage "in excess of $8 million".

22 Two things are clear from the evidence in this proceeding: first, Dr Bernstein did not pay Mr Georgakakis $3 million on 1 July 2006 (or any other date); and secondly, the business (whatever it was to be) did not "commence on 1 July 2006". Indeed, Mr Georgakakis' affidavit suggests that as late as 11 December 2006 he was being invoiced for equipment "for the commencement of the business".[14]

23 A further matter that should be noted is the lack of any evidence of the existence of a company satisfying the description of "the pet food company" in the agreement. The agreement provides that the pet food company which will be established will have the trading name "K9 Cuisine". A business name search reveals that K9 Cuisine was registered on 1 December 2005, with the owner of the business name being Tribond Lamination Pty Ltd. A company search of Tribond Lamination Pty Ltd reveals that it was incorporated on 25 November 2005 with a total paid up capital of $100. The shareholders of Tribond Lamination Pty Ltd are Mr Georgakakis as to 70% and one Constantine Pytharoulios as to 30%. The company search of Tribond Lamination Pty Ltd does not reveal Dr Bernstein ever having had any involvement with this company or ever holding any of its shares.

24 In his affidavit, Mr Georgakakis deposed that he was "using a company called Superior Packaging Pty Ltd as a vehicle for the new business". If this is true, then one assumes that some contemplated transfer of the business name K9 Cuisine to Superior Packaging Pty Ltd never in fact occurred. In any event, a company search of Superior Packaging Pty Ltd reveals that its paid up capital is $2 and that its two shares are held by Mr Georgakakis. As with Tribond Lamination, there is no evidence of Dr Bernstein ever having anything to do with Superior Packaging or holding any of its shares.

25 Accepting that the evidence in this proceeding discloses that the agreement was executed by the parties on or about 8 August 2005, the lack of any evidence of written demands made between 1 July 2006 and May 2007, the mis-descriptions of the nature and effect of the agreement, the mis-descriptions of the source material that constituted the agreement, the various defects and oddities of the agreement that I have already described, the fact that the business did not commence on 1 July 2006 and the absence of any evidence of a company satisfying the description of "the pet food company" in the agreement all point to (at best for Mr Georgakakis) a situation where there was no more than an agreement to enter into a contract at some later date - as to the unenforceability of which, see Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd.[15] It is, of course, to be noted that this is precisely how Mr Georgakakis described the agreement under the heading "Grounds of Claim" when he lodged the caveat.[16]

26 It is not my function to determine finally whether there was a contract entered into in August 2005 which imposed obligations enforceable against Dr Bernstein either then or at the time of the lodgement of the caveat. However, the matters to which I have referred above all need to be considered when determining the issue of whether there is a serious question to be tried that Mr Georgakakis has the estate or interest in the property which he has claimed. There are three further matters that need to be considered in relation to the issue of "serious question": first, assuming the agreement imposed and imposes enforceable obligations, what is the effect of the agreement?; secondly, what (if any) interest does Dr Bernstein have in the property (and over which he could give a charge)?; and thirdly, could the interest that Mr Georgakakis might arguably have been given support the claim made in the caveat?

28 The first defendant contends that, on its proper construction, the agreement creates an equitable charge in his favour over Dr Bernstein's equitable interest in the property. It is trite that, in order to support a caveat, the caveator must have an estate or interest in the land and that a mere contractual right given by one party to another to lodge a caveat will not support the caveat in the absence of a caveatable interest.[17] Clause 4(c) of the agreement on its own, cannot support the caveat. The issue is whether clause 4(b) (or the agreement construed as a whole) creates the requisite interest.

29 Clause 4(b) provides for the execution of an unregistered mortgage within seven days of 8 August 2005 over property owned by Dr Bernstein or registered in his name "at the option of the creditor [Mr Georgakakis]". There is no evidence that Dr Bernstein executed any such mortgage, or indeed any mortgage at all in favour of Mr Georgakakis. Similarly, there is no evidence that Mr Georgakakis ever required Dr Bernstein to execute a mortgage. In this respect, there are parallels between this case and the decision of Ward J in Investment and Merchant Finance Corporation Limited v Kirkwood Estates Limited.[18] In that case, the Court upheld a submission that an agreement to execute a mortgage if so required did not constitute a caveatable interest where there was no evidence of any such requirement ever having been made. To like effect in this case, there being no evidence of Mr Georgakakis exercising the option referred to in clause 4(b), there can be no caveatable interest.

30 Whilst it is correct to say that it is not necessary that any general words of charge should be used in order to create a charge in equity, looking at the agreement as a whole, I am unable to conclude that it is reasonably arguable that the agreement creates a charge of the kind alleged by the first defendant. Clause 4(b) relates to the ability of Mr Georgakakis to call upon Dr Bernstein to execute a mortgage over all of Dr Bernstein's property, whereas clause 4(c) gives permission to lodge a caveat over only the Dunlop Street property. It is not possible to construe clauses 4(b) and (c) as providing either a charge over Dr Bernstein's interest in the property or a charge over all of Dr Bernstein's property.

The interest (if any) of Dr Bernstein in the property

31 For Mr Georgakakis to ultimately establish an interest in the property, he must establish an interest on behalf of Dr Bernstein. In this case, the interest claimed is an equitable interest in the property as the beneficiary of a constructive or resulting trust in Dr Bernstein's favour over the property.[19]

32 At trial, the plaintiff's solicitor, Mr Leeton, was cross-examined. Mr Leeton has been practising family law for 35 years and has acted for the plaintiff in her Family Court proceeding against Dr Bernstein for a little over three years. Mr Leeton gave evidence that the assets of the marriage included the property and a property in Carlton (the Elgin Street medical practice) which he said was of equal or more value than the property. Mr Leeton also gave evidence that Dr Bernstein owns another property in partnership with his parents in Scoresby and has a number of motor vehicles, including at least two Ferraris. On the basis of what Mr Leeton knew of the case, he expressed the opinion that he would anticipate the Family Court would determine that the plaintiff should have the property absolutely. When asked about his level of confidence of that occurring, he said "I am very confident".

33 I have already detailed briefly the plaintiff's contributions to the marriage and purchase of the property. The plaintiff continues to live at the property. There are two young children of the marriage. Dr Bernstein has assets in his own name which likely exceed the value of the property. Whilst I cannot foreclose what course the Family Court might take, it seems highly likely that the plaintiff will remain the sole proprietor of the property.

34 What I have said above concerning the issues of whether there was an enforceable agreement entered into in August 2005, whether Mr Georgakakis has any enforceable rights against Dr Bernstein in relation to the agreement and the proper construction of the agreement is sufficient to demonstrate that there is no serious question to be tried that he has the interest in the property he claims. However, there is a further impediment to the maintenance of the caveat.

35 Dr Bernstein could only confer upon Mr Georgakakis the right to lodge a caveat in respect of Dr Bernstein's interest in the property. The plaintiff is the sole registered proprietor of the property. On no view could it be said that she did not have an interest in the property. Further, I accept that she gave no permission to Dr Bernstein to charge her interest in the property. Indeed, the highest it was put in cross-examination of the plaintiff was as follows:[20]

"I put it to you, Mrs Bernstein, that in fact you were informed by your husband of this K9 business venture that he was proposing to invest in?---I object to that. I deny I know anything about it.

I put it to you that he told you about what he was proposing to do and you were non-committal about it; you didn't express any dissatisfaction or any support?---That would not be true. If it's anything substantial I am always interested to know about the investment. My marriage had been one where he financially controlled me and refused to include me in all decisions and knowledge. I am just a bookkeeper."

36 The claim in the caveat is "as chargee pursuant to an agreement". The extent of prohibition insofar as registration is concerned is claimed as "absolutely". On any view, Mr Georgakakis was not entitled to claim to prohibit absolutely the registration of an instrument affecting the plaintiff's interest in the property.[21] This provides a further ground for ordering the removal of the caveat.[22]

37 In the first defendant's outline of submissions,[23] the first defendant made the following submission:

"The first defendant further submits that the caveatable interest was given to the first defendant with the plaintiff's knowledge and consent, and she is therefore estopped from denying that such an interest exists."

38 Reference was then made to the evidence of Dr Bernstein and the plaintiff in the affidavit material. Other than to rely upon the decision of Spiro v Lintern & Ors,[24] this submission was not further developed by the first defendant.

39 The difficulties with this submission are manifest. First, having heard the plaintiff, I do not accept that there was any such conversation as alleged by Dr Bernstein. Secondly, there is no evidence of any representation made by the plaintiff which induced the first defendant to enter into the agreement. Finally, it must be said that Spiro v Lintern has nothing to do with this case - it being a case where the plaintiff was induced by a representation to act to his detriment and incur expense. In this case, Mr Georgakakis gave no evidence of any representation made by the plaintiff; nor any evidence of being induced to enter into the agreement (or take any other action) by any conduct on the part of the plaintiff. In fact, the only reference to the plaintiff in Mr Georgakakis' affidavit is a reference to the fact that he has read the plaintiff's affidavit[25] and that if the plaintiff obtains the relief she claims, then the protection afforded to him under the agreement will be lost.[26]

Conclusion on the issue of whether there is a serious question to be tried

40 For the reasons given above, I have concluded that there is no serious question to be tried as to the existence of a caveatable interest in favour of Mr Georgakakis. Specifically, and for the same reasons, there is no serious question to be tried as to the existence of the caveatable interest claimed by Mr Georgakakis.

41 Having found that there is no serious question to be tried as to the existence of a caveatable interest in favour of Mr Georgakakis, it is not necessary for me to consider the issue of balance of convenience. However, I should say for the sake of completeness that Mr Georgakakis has failed to establish that the balance of convenience favours the maintenance of the caveat.

42 Mr Georgakakis has a caveat over the Elgin Street, Carlton property. The evidence is that this property is worth at least as much as the property. While the plaintiff has deposed to the property having a value of $1.6 million with a mortgage of $500,000, Dr Bernstein has produced a valuation in the range $2.3 million to $2.5 million. In any event, if the Elgin Street property is worth an amount of this order, then there is no evidence that the Elgin Street property does not provide sufficient security for whatever sum Mr Georgakakis might ultimately recover in his proceeding against Dr Bernstein. In reaching this view, I discount entirely the possibility of Mr Georgakakis recovering a sum of $8 million as claimed - or anything like that sum. The material before me does not disclose any basis for concluding that Mr Georgakakis might recover anything by way of damages other than an amount quantifiable by reference to the costs of obtaining alternative finance in respect of the capital he hoped to receive for a 15% share in the business he hoped to commence.

43 Mr Leeton gave evidence that the existence of the caveat over the property "will I believe result in the Family Court being constrained in making final orders in respect to that property either by consent or a judgment". Whilst Mr Leeton is a family lawyer who has practised in the field for some 35 years, it was not immediately apparent to me why the Family Court would be so constrained. Mr Leeton was cross-examined on the issue and referred to a letter he had received from Dr Bernstein's solicitors. In fact, the letter[27] was addressed to Registrar Field of the Family Court. After asserting that Dr Bernstein was not in a financial position to meet certain expert report fees, the letter provided:

"We also wish to submit that the matrimonial property case is not ready for trial for the following reasons:

1. The liability in the Supreme Court proceeding has not been established as yet as the case is still proceeding. A copy of the procedural order has been supplied to the court and the wife's lawyers. In our opinion it will take several months before this is established.

2. ...

3. ...

4. We have also been advised by the plaintiff's lawyers in the Supreme Court proceedings that once the plaintiff obtains judgment against our client, if successful, a similar application will be made to intervene in the Family Court proceedings to secure a liability, which will arise from the Supreme Court proceedings."

44 Clearly, Dr Bernstein's lawyers are seeking to delay the trial of the Family Court proceeding on the basis of the claims made by Mr Georgakakis. Mr Georgakakis commenced his proceeding against Dr Bernstein on 25 July 2007, more than 2½ years ago. There is no suggestion that it will come to trial at any time in the near future. The proceeding is being conducted at a lamentably leisurable pace. Without wishing to pre-empt any decision that might be made by the Family Court, the languor with which Mr Georgakakis' proceeding is being conducted should not be an impediment to the timely resolution of the Family Court proceedings.

45 The first defendant did not lead any evidence to contradict Mr Leeton's opinion. Whilst the file contains an affidavit from the first defendant's solicitor, Mr John Kotsifas, in which he swears that as a practitioner practising in the Family Court jurisdiction he does not understand the basis for Mr Leeton's opinion, this affidavit was not relied upon by the first defendant.[28] In the circumstances, I am prepared to accept that the existence of the caveat poses some impediment to the timely resolution of the Family Court proceeding - if only, because it is capable of being raised by Dr Bernstein as part of an alleged matrix of facts said to be capable of justifying delaying the trial of the Family Court proceeding.

46 For the reasons given above, if I had found that the first defendant had established there was a serious question to be tried, I would have concluded that the first defendant had not established that the balance of convenience favoured the maintenance of the caveat.

47 For the reasons given above, there will be an order requiring the removal of the caveat. I will hear the parties on the precise form of order and on the question of costs.

[1] The Registrar of Titles advised the Court by letter dated 28 October 2009 that this was the course he would adopt.

[2] [2002] VSC 491.

[5] [2006] VSC 343; (2006) 14 VR 447.

[9] (1893) 69 LT 380 at p 382.

[11] Paragraph 11 of Mr Georgakakis' affidavit.

[12] Again, "the company" is not defined.

[14] Cf paragraph 3 of Mr Georgakakis' amended statement of claim in relation to the agreement.

[15] [1982] HCA 53; (1982) 149 CLR 600 at 604.

[16] "Equitable interest pursuant to agreement to enter into a contract between the caveator and [Dr Bernstein] dated 8 August 2005."

[17] Queensland Estates Pty Ltd v Collas [1971] QdR 75; Depsun Pty Ltd v Tahore Holdings Pty Ltd [19990] ANZ Conv R 334 and Kingstone Constructions Pty Ltd v Crispel Pty Ltd, unreported Supreme Court of New South Wales, Young J, delivered 12 March 1991.

[18] (1975) 5 ALR 191.

[19] See paragraph 12 of the first defendant's written submissions dated 24 February 2010.

[21] See generally Evans v Advertising Department Pty Ltd [2009] VSC 587 at paragraph [47].

[22] See Lewenberg and Pryles v Direct Acceptance Corporation Limited [1981] VicRp 36; [1981] VR 344 at 348.

[24] [1973] 3 All ER 319; [1973] 1 WLR 1002.

[28] See paragraph 3 of the first defendant's outline of submissions dated 24 February 2010 in which the two affidavits relied upon by the first defendant are identified as Mr Georgakakis' affidavit and Dr Bernstein's affidavit.