Plaintiff v First Defendant

1 The plaintiff ('Andrews Family Holdings') applies under s 90(3) of the Transfer of Land Act 1958 ('the Act'_) f_or the removal of the caveat, which is no. AC360020X on Certificate of Title Volume 10927 Folio 860. The land which is a property at Modewarre. The caveat was lodged on 18 October 2017 by Yellow Tractor Pty Ltd ('Yellow Tractor'), the first defendant.

2 In summary of my conclusions I find that the caveat should be removed as Yellow Tractor is now de-registered and in any event it has no caveatable interest in the land.

3 Mr Annesley, the second defendant, who was a director of Yellow Tractor until it was deregistered and who represents himself, although with some assistance from a friend, Mr Savvas Kanakaridis, who has been present in Court, sought an adjournment of seven days to obtain legal advice.

4 The Court in determining an adjournment application has to weigh the interests of all parties. The plaintiff submits that its application is urgent as settlement is fixed for tomorrow and that this is the second attempted sale of the property, the first sale under a contract with Mr Annesley as the purchaser, having been rescinded because of his failure to tender the balance of the purchase price.

5 Mr Annesley filed an affidavit setting out the grounds for his opposition to the removal of the caveat. He also signed notices purporting to be under s 78B of the Judiciary Act 1903 which were filed and served on Monday of this week. The notices appear to raise issues concerning whether the Bills of Exchange Act 1909 (Cth), the Banking Act 1959 (Cth) and A New Tax System (Goods and Services Tax) Act 1999 (Cth) are laws under the Commonwealth Constitution, interpretive issues concerning them and raise the question:

Is it unlawful to use Australian Currency or Money, within Australia, or the Commonwealth of Australia, for the purpose of paying for goods, services, debts and/or other financial obligations?

6 This question appears to arise from Mr Annesley's attempt to settle the first contract of sale by tendering a document that was entitled 'Promissory Note'.

7 The originating process and other documents served by the plaintiff appear to have reached at least Mr Kanakaridis last Thursday or Friday.

8 I also take into account that the plaintiff has pointed out that Mr Annesley through previous litigation[1] has some familiarity with the lodging of caveats and disputes about them.

9 Taking those matters into account, I do not think an adjournment is warranted.

10 There is then the question whether as the plaintiff seeks, the Court should dispense with the requirements of personal service, the documents having been served by email and express post. While personal service of originating process is normally required, one important objective of service of documents is to ensure that the defendant has the matter brought to its attention. I am satisfied in this case that the initiating documents, being the originating motion, summons and affidavits have come to Mr Annesley's attention. As I said, he signed constitutional notices on Monday and he has affirmed an affidavit this morning, that he tells me was drafted last night, setting out his side of the case.

11 The key issue is whether Mr Annesley, or Yellow Tractor, has a caveatable interest and that is the matter I have discussed with him this morning. I am satisfied he is aware of that issue and has had the opportunity of addressing me in respect of it. He has appeared this morning. I therefore dispense with the requirement of personal service of the originating process.

12 Yellow Tractor has been deregistered after it lodged the caveat through Mr Annesley. Mr Annesley tells me, and I am prepared to accept for the purposes of this decision, that the de-registration occurred through an oversight of non-payment of registration fees to ASIC and that the oversight has been remedied. So Yellow Tractor may soon be again registered. But as of today, it is not registered, and the plaintiff submits that ASIC holds any property that it owns.

13 I next consider the principles that govern the removal of a caveat.[2] The Court has to exercise the discretion given by s 90(3) of the Act. The onus is on the caveator to justify the maintenance of the caveat. The caveator, which as I have said, is Yellow Tractor, must persuade the Court that there is a serious question to be tried as to the existence of the equitable interest or any interest claimed to support the caveat. If there is a serious question to be tried then the court considers the balance of convenience. The caveatable interest is described as 'agreement dated 25 February 2017', that being the first contract to which I have referred, and which the plaintiff rescinded.

14 There are at least two obstacles to Yellow Tractor's reliance on the caveat. The first is that, as I have said, it is no longer registered. Secondly, it was not party to the initial contract under which it claims an interest. Mr Annesley was the purchaser under that contract. He says that Yellow Tractor was going to be nominated as the purchaser, but that, in fact, never did occur. Nor did Mr Annesley grant a mortgage to it.

15 Mr Annesley suggests that he tendered the balance of purchase price to settle the sale of the property to him. The deposit was paid. But, Mr Annesley contends that the balance was paid or tendered by delivery of a document entitled 'Promissory Note'. It states that Mr Annesley 'makes this payment of $2,100,000.00 ... by way of this Promissory Note, (note), being Lawful Australian Money and Lawful Australian Currency, pursuant to the following laws...'. Clause 11.4 of the contract provided that at settlement, payments may be made or tendered: (a) in cash; or (b) by cheque drawn on an authorised deposit taking institution; or (c) if the parties agree, by electronically transferring the payment in the form of cleared funds. There is no provision made for a promissory note to be used to pay the balance of the purchase price. In any event, I am not satisfied that the document was a promissory note. The document was not accompanied by the payment of money nor did it contain any promise to pay money. Its delivery did not satisfy the contract requirements for payment of the balance of the purchase price at settlement.

16 As mentioned, Mr Annesley also issued constitutional notices that raise various issues that are said to be constitutional issues. I will not take the time at this point to set them all out. But, in my opinion, they do not raise matters of a constitutional character that arise in this proceeding. The relevant requirements of s 78B(1) of the Judiciary Act 1903 are:

Where a cause pending in a federal court including the High Court or in a court of a State or Territory involves a matter arising under the Constitution or involving its interpretation, it is the duty of the court not to proceed in the cause unless and until the court is satisfied that notice of the cause, specifying the nature of the matter has been given to the AttorneysGeneral of the Commonwealth and of the States, and a reasonable time has elapsed since the giving of the notice for consideration by the AttorneysGeneral, of the question of intervention in the proceedings or removal of the cause to the High Court.

17 In my opinion, the matters stated in the notices do not have that character. As has been pointed out, most recently by Gageler J in Re Culleton[3], in order for the obligations of s 78B to be engaged the case itself must give rise to a constitutional matter and an assertion that is does, does not by itself establish that there is a constitutional matter. His Honour stated:

To give rise to the obligation not to proceed without notice a cause pending in court must truly "involve" a matter arising under the Constitution or involving its interpretation. As Toohey J stated in Re Finlayson; Ex parte Finlayson, in a passage quoted with approval by Gummow, Hayne and Callinan JJ in Glennan v Commissioner of Taxation:

[I]n terms of s 78B, a cause does not 'involve' a matter arising under the Constitution or involving its interpretation merely because someone asserts that it does.

In short, the constitutional point must be real and substantial.[4]

18 The position is not altered by Mr Annesley's action in serving purported 'constitutional notices'.

19 In Mr Annesley's affidavit, he states that he did not authorise any of the deposit money be released to the agent or the vendor prior to settlement. He says that he had discussions with the agents and had received a further 30 days extension of the settlement date because he was waiting for another transaction to be completed. He was told that that the extension would not be a problem and that it had been accepted and approved by the vendor, but at a later point he was told that the vendor had changed its mind. He refers to the first caveat that he lodged and to the plaintiff's application to the Registrar of Titles to remove it. The Registrar notified him that unless he commenced a court action the caveat would automatically lapse. He states that: 'As I was not ready, at that time to commence legal action against the plaintiff, I registered a second caveat against the title of the property, in the name of Yellow Tractor Pty Ltd'. He then explains the reasons for the de-registration of the company.

20 Mr Punivalu, the plaintiff's solicitor, in his principal affidavit describes Mr Annesley's tender of the promissory note and the lodging of the first caveat on 14 August 2017 and its removal by the Registrar.

21 Mr Annesley alleges in his affidavit that there was an irregularity in the commencement of the proceedings. That point has not been pressed this morning and I am not satisfied there is any such irregularity.

22 I do not see any serious question to be tried about the existence of a caveatable interest by Yellow Tractor even if it still was registered. It was not a party to the contract of sale and did not have any legal or equitable interest in the property. I therefore consider that under s 90(3) of the Act, the Court should, in the exercise of its discretion, order the removal of the caveat.

23 There is then the plaintiff's application that the Court should restrain by injunction, Mr Annesley from lodging further caveats in respect of the land. The Court has granted injunctions in that form when it has been appropriate to do so.[5] The Court has a general power to grant injunctions[6].

24 In my opinion, this is an appropriate case in which to grant such an injunction. Two caveats have now been lodged: the first by Mr Annesley which he did not defend and the second by Yellow Tractor of which he was a director and which is now a deregistered company which was not a party to the contract. Mr Annesley did not suggest that he will not, if he can, lodge further caveats on the title. I am persuaded that it is appropriate to issue an injunction restraining the second defendant, Mr Annesley, whether by himself, his servants, or agents, or howsoever otherwise, from lodging any caveats or causing any person or entity to lodge any caveats in respect of the property without the prior leave of the court.

25 The plaintiff seeks an order that Mr Annesley pay its costs of the proceeding. The caveat was lodged by Mr Annesley on behalf of Yellow Tractor, which is no longer registered. For reasons I have mentioned it did not have a caveatable interest. In my opinion, Mr Annesley should pay the plaintiff's costs of the proceeding on a standard basis.

[1] ANZ v Annesley [2015] VSC 781.

[2] Piroshenko v Grojsman (2010) 27 VR 489.

[3] Re Culleton (2017) 340 ALR 550 and Mao v AMP Superannuation Ltd [2017] NSWSC 987 [75]-[128] (Ward CJ in Eq).

[4] Re Culleton (2017) 340 ALR 550 [29] (Citations omitted).

[5] Maryvell Investments Pty Ltd v Velissaris [2008] VSC 19 (Bongiorno J).

[6] Supreme Court Act 1986 s 37.