The course of the oral hearing
19When the matter was called on, I suggested to the parties that logically, although heard together, the defendant's application for summary dismissal should be decided first, for if successful, the plaintiff's application would be rendered otiose. Both parties agreed with this general approach.
The Evidence
20The evidence lead was entirely documentary consisting of the following:
(a)The affidavit of Anthony David Cavanagh sworn on 2 February 2012 and filed on the 6th ("ADC");
(b)The affidavit of Paul Sanders-Pattinson sworn on 29 April 2011 and filed on the same day ("PS-P 1");
(c) The affidavit of Paul Sanders-Pattinson sworn on 27 May 2011 and filed in Court pursuant to leave on 14 June 2011 ("PS-P 2");
(d)The affidavit in reply of Paul Sanders-Pattinson sworn on 14 March 2012 and filed on 15 March 2012 ("PS-P 3");
21PS-P 1 was filed in the Goldberg matter, apparently in error. With the consent of the parties I removed it from file no. 2010/32737, amended the case number and the name of the defendant, initialled those changes, and placed it with the papers in file no. 2010/425204, the present matter. The affidavits read by the parties respectively contain a great deal of evidence, however, as the issues were refined during the course of the hearing, it became apparent that the plaintiff's case against the defendant revolves around the lapse in the caveat lodged by Mr. Goldberg to signal or protect the unregistered second mortgage. This permits me to focus on the material relevant to that issue.
Summary Dismissal
22The principle to be applied is not in doubt. It has been authoritatively stated in Dey v. Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J; and General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130, per Barwick CJ. It has been restated in these terms in Agar v. Hyde (2000) 201 CLR 552 at 575 per Gaudron, McHugh, Gummow and Hayne JJ at 575 [57]:
It is, of course, well accepted that a court whose jurisdiction is regularly invoked in respect of a local defendant (most often by service of process on that defendant within the geographic limitations of the court's jurisdiction) should not decide the issues raised in those proceedings in a summary way except in the clearest of cases. Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways (citations omitted), but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.
23The defendant invoked r. 14.28 and r. 13.4 of the Rules, as has been stated already. As I understood the argument of learned counsel for the defendant, Mr. Griscti, the Rules were invoked concurrently and ultimately summary dismissal pursuant to r.13.4 UCPR was sought. Mr. Griscti accepted that the defendant bore the onus of clearing the high bar established by the authorities to which I have referred. No argument was addressed that the phrase no reasonable prospects of success introduced a permissive or discretionary approach by analogy with Spencer v. Commonwealth of Australia (2010) 241 CLR 118, concerned with s.31A(2) Federal Court of Australia Act 1976 (Cth). I do not mean to suggest that any such argument was open: Spencer at 139 [53] - [54].
24Spencer, however, remains relevant, if only, because the joint judgment to which I have referred emphasises that the presently applicable test should be understood as requiring formation of a certain and concluded determination that a proceeding would necessary fail as a precondition to the enlivenment of the summary dismissal power: 135 [53]; and in considering whether that legal standard has been achieved, the court is to exercise exceptional caution: 140 [55]; see also General Steel Industries at 129.
25Although not mentioned by the parties, I think it apposite to consider whether the principle expressed in Wickstead v. Browne (1992) 30 NSWLR 1 at [11] - [22] intrudes on the power invoked by the defendant in the context of the present application. The principle expressed by Handley and Cripps JJA is:
... [O]ne of a number of defendants cannot be entitled to summary dismissal before trial because of evidentiary deficiencies in the plaintiff's case. If at the close of the plaintiff's case at the trial there was no evidence against this [defendant] he would not be entitled at that stage to judgment if any of the other defendants intended to go into evidence (citations omitted). .... The court will not entertain a motion for judgment by some only of the defendants because of any gaps in the plaintiff's case against those defendants because any gaps in the plaintiff's case against those defendants may be filled when the other defendants go into evidence. In particular, one or more of the defendants going into evidence may seek to exculpate themselves by inculpating defendants against whom the plaintiff had no admissible evidence at the close of this case.
26This principle may have application, because as I have said, although the related proceedings have not been consolidated or otherwise joined, they are being case managed together and, one would expect, in due course would be listed for hearing together with evidence in one standing as evidence in the other. I observe that in his letter to the defendant's solicitors dated 18 March 2011 (annexure "L" to PS-P1), the plaintiff foreshadowed seeking an order when the matter was before the Court on 4 April 2011 joining together the proceedings. That letter attached a copy of the Statement of Claim in the present matter. In the event, no such order was either sought or made. I bear in mind also the plaintiff's application to join Mr. Goldberg as a defendant in the present proceedings, which I will discuss later.
27As Beech-Jones J demonstrated in Dickson v. Chaffey and Reddawn [2012] NSWSC 336 the principle is referrable to evidentiary gaps in the plaintiff's case (at [26]) and even where it applies it has its limits: Breheny v. Cairncross & Ors. [2002] NSWCA 69 at [7] per Hodgson JA; and see also Dickson at [26] - [28].
28I will not retrace the steps of Beech-Jones J's analysis of the relevant cases with which, with respect, I agree, and with gratitude, I adopt. The principle discussed in Wickstead can be excluded if the applicant for summary judgment demonstrates that the evidentiary gap in the plaintiff's case, which the applicant has exposed, will not be closed at the trial. Presumably, this demonstration must achieve the same high degree of certainty required to be achieved by the applicant for summary dismissal for the application to be made good. For instance, in one of the authorities reviewed by Beech-Jones J, PAO & Ors. v. Trustees of the Roman Catholic Church (2011) NSWSC 1216, Hoeben J at [102] said the following:
In the negative sense, the evidentiary position is that the Archdiocese trustees have closed the door on likely sources of further evidence and the plaintiffs have not been able to point to any other source of evidence which has not been met by the evidence of the Archdiocese trustees [my emphasis].
29I am conscious, however, that the defendant's argument in the present case is directed to the following matters:
(a)There was no retainer between the defendant and the plaintiff's assignor, and accordingly no duty, whether in contract or in tort, to support the allegations of breach at [56] of the Statement of Claim;
(b) That the defendant's involvement with the practice of Mr. Goldberg was limited to, and by, the statutory office of manager to which he had been appointed;
(c) There was no loss;
(d)And if there was a loss, causation could not be demonstrated;
(e)The purported assignment was ineffective to transfer to the plaintiff the cause of action upon which he relied.
30To make good these arguments, the defendant relied upon "ADC" and some of the documents annexed to the plaintiff's affidavits.
31I am satisfied to the requisite high degree of certainty that if the case were allowed to go to trial in the ordinary way the plaintiff cannot establish a retainer in the sense used in the Statement of Claim between the defendant and the plaintiff's assignor. On any reading of the Statement of Claim the word 'retainer' is used in its usual sense of a contract between a legal practitioner and client for the provision of legal services. If one reads the words, and following duties, used in conjunction with the word 'retainer' as extending the plaintiff's case beyond one limited to breach of contract, the extension can do no more than take the matter into a case based on negligence rather than breach of contract. In that event, the duty must be determined by reference to a relationship very much like solicitor and client, say, where the defendant has undertaken to perform legal work on behalf of the defendant. The detailed evidence about the relationship between the defendant, on the one hand, and the plaintiff and his assignor, on the other, satisfy me that there is no triable issue about this.
32The starting point is ADC-04, the minute of the resolution of the Council of the Law Society of New South Wales appointing the defendant manager of Mr. Goldberg's practice pursuant to s.114B, Legal Profession Act 1987. ADC-05 is the minute of the resolution terminating Mr. Brown's appointment (see [10] - [11] hereof). It is necessary to set out the relevant statutory provisions from the Legal Profession Act 1987 (repealed):
92 Supreme Court may appoint receiver
...
(2) An opinion of the Law Society Council in relation to a solicitor is an opinion for the purposes of subsection (1) (a) if it is:
...
(b) an opinion that a person is unable to obtain payment or delivery of property of the solicitor because the solicitor:
(i) is mentally or physically infirm,
(ii) is bankrupt, has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors, has compounded with his or her creditors or has made an assignment of his or her remuneration for their benefit,
...
(vii) has ceased to hold a practising certificate
(3) An action of the Law Society Council in relation to a solicitor is an action for the purposes of subsection (1) (b) if it is:
(a) a refusal to issue a practising certificate to the solicitor,
(b) the cancellation of the solicitor's practising certificate, or
...
114C Powers of manager
(1) The manager of a solicitor's practice may, subject to the terms of his or her appointment:
(a) act as a solicitor and barrister on behalf of the existing clients of the practice,
(b) accept instructions from, and act as a solicitor and barrister on behalf of, new clients,
(c) dispose of, and otherwise deal with, any property in relation to the solicitor,
(d) exercise any right in the nature of a lien over property held by the manager on behalf of the clients of the practice,
(e) incur such expenses as are reasonably related to the conduct of the practice, and
(f) do all such things as are ancillary to the exercise of the powers referred to in paragraphs (a)-(e),
as if he or she were the solicitor to whom the practice belongs.
(2) The manager of a solicitor's practice may not exercise any of the functions conferred by this section in relation to the affairs of a client of the practice unless the consent of the client has been obtained to the manager's exercise of those functions.
114D Management continues under receivership
(1) The manager of a solicitor's practice may continue to exercise his or her functions under this Part even if a receiver is appointed under Part 8 in respect of the solicitor's property.
(2) The manager of a solicitor's practice for which a receiver is appointed must comply with any lawful direction given by the receiver in connection with the conduct of the practice.
114E Acts of manager to be taken as acts of solicitor
(1) An act done by the manager of a solicitor's practice is, for the purposes of any proceedings or transaction that relies on that act, to be taken to have been done by the solicitor.
(2) Nothing in this section subjects a solicitor to any personal liability in relation to any act done by the manager of the solicitor's practice.
114F Manager may be reimbursed for damages
(1)The Law Society may reimburse a manager for any damages and costs recovered against the manager, or an employee or agent of the manager, for an act or omission in good faith and the purported exercise of a function under this Act.
(2) (Repealed)
(3) Neither the manager of a solicitor's practice nor the Law Society Council are liable for any loss incurred by the solicitor as a consequence of any act or omission of the manager or the Council in the conduct of the solicitor's practice if it was done or omitted in good faith and in purported exercise of a function under this Act.
114K Termination of management
When a solicitor's practice ceases to be under management, any money held by the manager in connection with the practice is (after re-imbursement of any money paid by the Law Society or out of the Public Purpose Fund in satisfaction of claims and amounts paid or payable under Parts 7, 8 and 8A and after payment of the expenses of the management of the practice) to become the property of the solicitor.
211 Protection from liability
No liability is incurred by:
(a) the Bar Association or the Bar Council, or their committees,
(b) the Law Society or the Law Society Council, or their committees, including a Management Committee to which a function is delegated under section 74
(c) an investigator, or an investigator's assistant, appointed under section 55, or
(d) the company referred to in Division 2 of Part 3 or its directors,
or an employee or agent of any of them for anything done, suffered or omitted to be done in good faith in the exercise, or purported exercise, of a function under this Act.
33Annexure P to PS-P3 is an undated but sworn affidavit of the plaintiff's assignor, Mr. Anthony Samek. He deposes to his engagement of Mr. Goldberg as his solicitor in relation to mezzanine finance (see P2 [4]). He was aware of the application for temporary finance by the Whitton's (page 3[7]), and that the amount of the loan was $125,000. He was also aware of the caveat lodged by Mr. Goldberg to protect the loan: page 4[9]. Mr. Samek spoke to Mr. Goldberg on the 20th of May 2004 about his concern with the loan to the Whitton's but, inferentially, he relied upon Mr. Goldberg's reassurances. About the time the Law Society cancelled Mr. Goldberg's practising certificate Mr. Samek heard that the Society had taken over his office. He had some subsequent contact with Mr. Goldberg who again reassured him. Inferentially, he relied upon those assurances. He received a letter from the Law Society on 3 September 2004 that made no mention of the Whitton loan or the caveat. Contact was made with the defendant at about the same time, who told Mr Samek that he could not advise him on the matter of Mr. Samek's business with Mr. Goldberg.
34Mr. Samek says that on 5 February 2005 we wrote to Mr. Brown and in response he forwarded copies of trust ledgers around 13 April 2005 (page 5 [13]). This may be a mistake. The use of the plural personal pronoun suggests the involvement of Mr. Sanders-Pattinson and the evidence is that they met on 21 February 2005 (PS-P 2 [18] Annexure P). It is clear from Annexure P, the plaintiff's letter to Mr. Samek of 21 February 2005, that the former was acting for the latter as a kind of commercial agent, or other representative, for reward. Legal proceedings against Mr. Goldberg were already in contemplation at that stage. The plaintiff suggested a further meeting on 25 February 2005.
35On 4 March 2005 a further letter, clearly drafted and signed by the plaintiff as agent for Mr. Samek and his father, was sent to the defendant. From this, the natural inference is that the Samek's were relying upon the plaintiff and that the plaintiff "was acting" on their behalf. The letter sought the return of all business documents and information about monies deposited with Mr. Goldberg (PS-P 2 Annexure Q).
36The defendant replied on 9 March 2005. He informed the plaintiff that he had been appointed Manager by the Law Society Council and stated that Mr. Goldberg's practice is now closed (PS-P 2 Annexure R). Mr. Brown set out his requirements for the release of files and trust monies. The list of files did not include any file relating to the loan to the Whitton's. This is because, notwithstanding an earlier search, the defendant had not located such a file: PS-P 2, Annexure K, L, N and O. These annexures are correspondence passing between the defendant and the solicitor then acting for the Whitton's, Nemes, Thomas & Co.
37It is notable that in the correspondence I have referred to, passing between the plaintiff and the defendant, no specific request for information or documents relating to the loan to the Whitton's was raised.
38Following receipt of the defendant's letter of 9 of March 2005, the plaintiff wrote to him again in his capacity as agent for the Samek's. He requested specific files, which did not include any file relating to the Whitton's.
39The plaintiff attended the Law Society, not Mr. Goldberg's office at 99 Elizabeth Street Sydney, on 19 March 2005 to uplift files and cheques due to the Samek's. He had a short conversation with the defendant. Files and cheques were delivered into the plaintiff's possession and he signed for them. There was no conversation about the Whitton matter, nor was there any conversation from which one could infer that Mr. Brown was being engaged to act pursuant to s.114B of the Act (PS-P 2 [21]).
40The plaintiff wrote to the defendant again on 29 March 2005 (PS-P 2 Annexure T) seeking information about specific matters, but again not including the Whitton matter. As with other correspondence this was a request for information to be provided to the plaintiff and not for the provision of legal services or advice.
41On 5 April 2005 (Annexure U PS-P 2) the plaintiff wrote to the defendant seeking further information from Goldberg's accounts. At PS-P 2 [23] he acknowledges no mention was made of the Whitton matter. The reference to a unit is a reference to the Whitton's home unit. This, the plaintiff says, was a non-event. Certainly, it was not raised with the defendant.
42On the same day the plaintiff wrote to his principals, the Samek's. The penultimate paragraph reads:
In regard to the pro-rata percentage from the Trust, the funds will be due at the end of the month with the retainer agreement. [PS-P2 Annexure V].
43I would infer this is a reference to the plaintiff's retainer agreement with the Samek's and to a commission due to him. There was certainly not a reference to any retainer with the defendant. The attached Proposed Action Schedule Stage 1 is a proposed strategy for further conduct of the Sameks' affairs by the plaintiff, not by the defendant. It is notable it makes no mention of the Whitton matter.
44The defendant wrote on 13 April 2005 (PS-P 2 W) providing copies of ledger cards. It can be seen from the foot of the first card attached to the letter, the general affairs card, that there is a reference to registration fees on Caveat re. mtge from Whitton. The defendant does not refer to it in the body of the letter, and this is the first mention of Whitton in the correspondence between the plaintiff and the defendant.
45The plaintiff obviously picked up that reference because he had a meeting with Mr. Samek where it was discussed: PS-P 2 [25]. It is again notable that what was discussed between them was action to be taken by them, not the defendant on the Samek's behalf, to recover a debt.
46From P S-P 2, Annexure X, I infer that this action included obtaining a copy of the caveat. It appears in PS-P 2 immediately before Annexure Y. The copy was obtained, I infer, from the matter at the very top of the first page, at 1:11 p.m. on 26 April 2005, probably before the letter of demand to Mr. and Mrs. Whitton was written on the same (Annexure X). The point about Annexure X itself is that it records the appointment of the defendant as a manager of Mr. Goldberg's practice, not as solicitor retained by the Samek's. On the contrary, it goes on to state:
I [the plaintiff] have been appointed as agent for Anthony, Anita, and Valerian Samek for all matters relating to their trust investments.
It makes a demand for a repayment of the debt, suggests a meeting, and requests the Whitton's contact the plaintiff, not the defendant, for the purpose of setting it up. Between that letter and a copy of the caveat is a document entitled a formal demand for payment dated 7 July 2005. Curiously the plaintiff does not refer to this document in his affidavit or say whether it was ever dispatched. He makes no statement one-way or the other about whether he received any response from the Whitton's.
47On the 2nd of May 2005 (PS-P 2 Annexure Y) the plaintiff wrote to the defendant about some discrepancies in the trust account. No request for help or information was made, nor was the Whitton matter so much as mentioned. On 26 May 2005 (PS-P 2 Annexure A3), the defendant responded with an explanation of the apparent discrepancies.
48On 3 August 2005 the plaintiff filed a Statement of Claim on behalf of Valerian Samek against the Whitton's (PS-P2 [31]; Annexure A4). The address for service was the address of the plaintiff not of the Samek's, nor of the defendant.
49On 25 November 2005, Valerian Samek, the named plaintiff in the proceedings against the Whitton's, signed a document entitled Authority authorising the plaintiff to act on his behalf in all matters relating to the:
(a)Supreme Court proceedings No. 31429 of 2005 against the Whitton's;
(b)Pertaining to the caveat protecting that loan;
(c)Pertaining to the loan agreement between Samek and the Whittons (PS-P3 Annexure FF).
50Around the time that this occurred, the defendant in his capacity as manager wrote to Mr. V. Samek about a discrepancy in the trust accounts relating to another client (letter 15 November 2005 PS-P2 Annexure A5). Mr. Samek responded on 22 November 2005 directing correspondence or further documentation to the plaintiff: PS-P2 Annexure A6. It is not clear which of two versions was dispatched. The correspondence did not mention the Whitton matter in any way. As already recounted, default judgement against the Whitton's was obtained on 14 June 2006 in the sum of $329,371.93 (PS-P2 A8; [35]). The defendant had not been involved in obtaining this judgment in any way.
51It was only after this that the plaintiff specifically raised with the defendant the question of the mortgage from Whitton: PS-P2 A9. The timing is not explained in any way by the affidavit evidence. The plaintiff wrote a follow-up on 6 July 2006 (PS-P 2, Annexure A10) to which the defendant responded on 27 July 2006. The defendant said that he had considered the material, but he was unable to further assist (PS-P 2, Annexure A 11). The plaintiff persisted, rejoining on 1 August 2006 (PS-P 2, Annexure A12). On 8 August 2006, the defendant wrote back:
Please note that I was appointed to the practice of Mr. Goldberg and that practice was closed. It's office premises vacated and my management of the practice concluded some time ago. Mr. and Ms. Samek must take steps to ensure, for example, that any documents lodged on their behalf by Mr. Goldberg which stated that his office address was the address for service are appropriately amended.
52On 15 August 2006, the plaintiff wrote to the defendant (PS-P 2, Annexure A14) noting, inter alia, that he had been in regular correspondence with the offices of Charles Goldberg & Co. up until 22 November 2005. He pointed out that the lapsing notice, to which I will return, had been sent to those offices on 27 May 2005. He asserted that we, presumably the Samek's and him, had requested that all correspondence be directed to the latter's address. He asserted that the correspondence dated 5 April 2005 included the Whitton mortgage documentation. This is not so; it included a ledger card only which referred to the caveat which the plaintiff and Mr. Samek followed up without reference the defendant.
53It is necessary to return to the circumstances in which the caveat lapsed, so far as they are discernible from the evidence before me on this application. Some of this material has been touched on before. As I have recounted in the background facts, the Whittons' home unit was subject to three mortgages. One registered first mortgage to the St. George Bank, the unregistered second mortgage to the Sameks and the unregistered third mortgage to World Wide Diamonds & Alight Financial Services Pty Limited.
54A copy of the caveat prepared by Mr. Goldberg to protect the second mortgage is at PS-P 2, Annexure D. The nominated address for service is the address of the solicitor, Mr Goldberg. It contains a standard notation on the printed form:
Note: If the caveator's name or address for service of notices changes, LPI must be notified on form 08CX.
55From the caveat it can be seen that the consent of the registered proprietors was not obtained. A real property search dated 21 April 2005 apparently forms part of the same exhibit, for it is not separately marked. The source of that search is not disclosed in PS-P2, but it shows the registered first mortgage, the caveat by Valerian Samek, and a further caveat protecting the unregistered third mortgage. Annexure F is an offer of a further loan, the unregistered third mortgage to a company related to Mr. Whitton. Annexure F, item 9, contains this material:
Brokerage fee payable: Carl Nilsson
56Although item 8 suggests no fee is payable, it is interesting to observe that Mr. Nilsson is an employee of Mr. Samek's company: PS-P 3, Annexure P, p.3[7]. This suggests to me that at all material times the Sameks must have been aware that the Whittons had raised further borrowings. The plaintiff asserts that on the 17th of May 2004 Mr. Goldberg wrote to the third mortgagee noting the Sameks' caveat: PS-P 2 [8]. He refers to Annexure G which is a real property search dated 6 February 2004 with a handwritten endorsement about that caveat. From this evidence I infer that each of the second and third mortgagee were aware of the other.
57The third mortgagee became aware that Mr. Goldberg was no longer practising and requested the release of files from the practice including the file relating to the Whitton's and related companies. Three such requests form Annexure J to PS-P 2.
58I have already recounted the evidence that solicitors acting on behalf of the Whitton's made a similar request on 7 September 2004 (PS-P 2 Annexure K) which extended to the Samek loan. Clearly, the Whittons and their lawyers were aware of its existence. They also requested the third mortgagee's file, but that undoubtedly had already been released to the third mortgagee. The Samek to Whitton file and two other loan files could not be located by the defendant (PS-P 2 Annexure L). Nor could he locate any relevant loose papers. But it would be pure speculation to suppose that all of the Whitton loan files had been released to the third mortgagee in response to its request ( P S-P 2, Annexure J), and there is no evidence to suggest that that is so.
59In October 2004 the third mortgagee issued a notice under s.57(2)(b) of the Real Property Act 1900 (NSW) ("RPA") to enliven its power of sale. The Whittons' solicitors responded seeking time (PS-P 2 Annexure M). Those solicitors corresponded again with the defendant at his 170 Phillip Street address asking for documentation. As has already been relayed, the defendant again said that searches indicate that I do not hold any of the loan documents referred to: PS-P 2 Annexure O.
60From this material, I infer that there is likely to be evidence at any trial of this matter that as at May 2005 the Whittons and their solicitor were well aware of the fact of the Whittons' indebtedness to Samek, the unregistered second mortgage, and the caveat protecting the Sameks' position. The solicitors were also aware that Goldberg was no longer in practise, the office was closed, and the manager after searching could not find the files or other relevant papers.
61A person may not procure the lapsing of a caveat without reasonable cause: s.74P(1) RPA, so it is curious that on the 2nd of May the Whittons' solicitor lodged an application for preparation of a lapsing notice (s.74J RPA), which was granted (PS-PZ), and which he purported to serve under cover of letter dated 24 May 2004 to be delivered by registered post to the former offices of Mr. Goldberg. No courtesy copy was sent to the manager whom the solicitor knew to operate from the Law Society's premises at 170 Phillip Street.
62It is notable that under s.74N(1) RPA a number of different modes of service are permissible, other than service at the address in New South Wales at which notices may be served specified under s.74F(5) (viii) RPA.
It is curious that the statutory declaration referred to in s.74J(2) RPA was not lodged until at least 5 July 2005 declaring that:
The letter was subsequently returned "left address/unknown 31/5";
with the return to sender endorsement exhibited as evidence of service, as if the former could prove the latter.
63It is even more curious that the statutory declaration was taken as evidence of the due service of the notice on the caveator within the meaning of s.74J (2), and that in accordance with s.74J (4) RPA, the Registrar General made a recording in the register to the effect that the caveat had lapsed, having the legal effect of lapsing it: see search dated 19 August 2005 forming part of PS-P Annexure A2.
64Perhaps if there is to be a trial, evidence may be led which explains some of these matters. However, it is important for me to observe that the evidence satisfies me, to the degree of certainty necessary, that plaintiff and his assignor were aware of the cessation of practice by Mr. Goldberg and that the defendant, as manager, operated out of the Law Society premises: after all, it is clear from the evidence I have already referred to that the plaintiff had attended upon the defendant there more than once. Further, as I have previously observed, the plaintiff and his assignor obtained a copy of the caveat on 26 April 2005. From that they would have seen the address for service of notices and a notation requiring notification of changes in that address: s.74N(3) RPA.
65Notwithstanding the commencement of proceedings No. 13429 of 2005, and the prior steps taken to recover the debt, it appears that the Sameks were out of the loop thereafter in relation to steps taken by the other creditors for recovery from the Whittons. It was as though the various attempts by the creditors to secure recovery were operating in parallel universes. PS-P3 Annexure T is a letter dated 15 September 2005 from the Whittons' solicitors to the solicitors for the third mortgagee. T[he] second caveator is mentioned, although by then the caveat had lapsed by dint of s.74J(4) RPA. PS-P2 Annexure A7 and PS-P3 Annexure K are the same direction to pay issued by the third mortgagee's solicitors to the purchasers conveyancer. Settlement took place on 25 May 2006 at 12 noon. The balance payable on settlement was $811,115.61. The amount of the deposit is not known as the contract is not in evidence. If the deposit was the usual 10 per cent, the sale price was around $906,000; if 5 per cent then a little over $859,000. From the valuation attached to each annexure, I infer that the sale occurred pursuant to the exercise by the third mortgagee of a power of sale: The valuation is addressed to one of them. Items 7 - 10 on the direction to pay relate to interests associated with the third mortgagee and total $91,107.33. The deposit, I assume, was released to the third mortgagee or at its direction, and brings the amount received by or on behalf of the third mortgagee to a figure in excess of $100,000. From this it is possible to infer, and for the purpose of this interlocutory application I do infer, that had the Samek's caveat not lapsed those funds would have been available to recoup the losses of the second mortgagee.