//
[2017] WASC 328
General information, not legal advice.
Supreme Court of WA
2017-11-20
Pritchard J
Original judgment source is linked above.
(These reasons were delivered extemporaneously on 31 October 2017 and have been edited from the transcript.)
1 In these proceedings, the plaintiffs made an application for the extension of a caveat, which they had lodged over land at 40 Leslie Road, Wandi (the Land). The Land is owned by the first defendant, who is the father of the first plaintiff. For reasons which I will come to in a moment, the caveat was extended on an interim basis, but shortly before this hearing the plaintiffs took steps, of their own volition, to withdraw the caveat.[1]
2 The first defendant has now applied for an order that the plaintiffs pay him compensation for damage which he says he has suffered as a result of the caveat remaining in place on the title to the land. He relies on the undertaking as to damages given by the plaintiffs when they initially sought the extension of the caveat. The undertaking was in the usual terms, and provides that the plaintiffs 'will pay to any party restrained or affected by the restraints imposed by the caveat as extended by [the order sought] or by any interim continuation thereof, such compensation as the Court may in its discretion consider in the circumstances to be just, such compensation to be assessed by the Court'.
3 For the reasons which follow, the first defendant's application for compensation will be dismissed.
4 The present proceedings were commenced in March 2017 when the plaintiffs sought to extend a caveat over the Land pursuant to s 138C of the Transfer of Land Act 1893 (WA) (the Act). The caveat had been placed over the Land by the plaintiffs, and was said to protect an interest that the plaintiffs claim in the Land as equitable chargees. That interest was said to be pursuant to a document described as an 'Acknowledgment and Charge', dated 3 June 2013 and signed by the first defendant, in which the first defendant acknowledged, amongst other things, that there was an outstanding sum of money owed by the first defendant to the plaintiffs in the sum of $60,000, in respect of a loan from the plaintiffs to the first defendant, together with interest on that loan which was described as 'a lump sum payment of an amount equal to 20 percent (20%) of the market value of the property [at 40 Leslie Road, Wandi] as at the date of repayment, less the outstanding sum'. The Acknowledgment and Charge thus indicates that the first defendant charged his estate and interest in the Land as security for payment of that outstanding sum and all future moneys due from the first defendant to the plaintiffs, together with interest.
5 The plaintiffs claim that they loaned amounts totalling approximately $60,000, at various times, to the first defendant and that the arrangement was that, upon the intended subdivision of the Land, the first defendant was to repay them not only the principal, but interest in the form of a share of the value of the Land.
6 Following the commencement of the present proceedings in this Court on 9 March 2017, the parties consented to orders being made by the Court to extend the operation of the caveat, on an interim basis, pursuant to s 138C of the Act, until further order of the Court. That was on the basis that a special appointment would be listed for a hearing on the question of the extension of the caveat in the longer term.
7 Shortly after that, the parties attended a mediation before a Registrar of the Court and reached agreement on heads of agreement in relation to their underlying dispute concerning the debt allegedly owed by the first defendant to the plaintiffs. It appears that the parties agreed that those heads of agreement would be recorded in a more detailed form in a deed of settlement. Regrettably, the parties' agreement appears to have broken down at the point of agreeing on the terms of that deed of settlement.
8 The plaintiffs were represented by lawyers when the present proceedings were commenced. The first defendant was represented in March when the consent orders were signed to extend the operation of the caveat. Since shortly after the mediation, all parties have been selfrepresented.
9 It was not until September 2017 that the first defendant formally requested that the matter be listed again before the Court to determine the question of the extension of the caveat. The genesis for that particular application was that the first defendant now seeks to refinance his debts, in respect of which the Land has been provided as security in the past.
10 The matter came before me on 24 October 2017 for a directions hearing. I ordered that the matter be listed for a substantive hearing in a few weeks' time. The first defendant subsequently sought an urgent hearing of the plaintiffs' application to extend the caveat on the basis that his finance issues required urgent resolution.
11 Following that, but before the hearing of today's application, the plaintiffs decided to withdraw the caveat. They informed the Court that they did so as a result of the stress of litigation and their intention to pursue the underlying debt elsewhere.
12 The first defendant seeks that the plaintiffs pay him compensation in the amount of approximately $47,441, together with a further amount of $50,000. The figure of $47,441 is an approximate one because the first defendant says that he has incurred further damage over and above that amount in recent weeks. The figure of $47,441 represents interest which the first defendant says he has incurred in respect of credit card debts, interest which his son has incurred in respect of his credit card debts, and other debts and extra interest the first defendant claimed to have paid to his financier. (Insofar as the first defendant's son is concerned, the first defendant considers that the interest incurred by his son on credit card debt should be paid by way of compensation to the first defendant, because the son has agreed to help the first defendant refinance his debts, using the Land as security.) As I understand it, the additional $50,000 that the first defendant seeks in compensation represents damage for the stress which the first defendant says he suffered as a result of the caveat remaining in place over the Land since March this year.
13 The first defendant did not adequately or properly particularise, or provide evidence for, the damage he claims to have suffered, which he says should be the subject of a payment of compensation. However, he indicated he was prepared to deal with his application for compensation today. Had I formed the view that compensation was properly payable in these circumstances, I would have given the first defendant the opportunity to provide more evidence to the Court. However, having formed the view I have that there is no proper basis for the payment of compensation it is not necessary to provide that further opportunity to the first defendant.
14 In my view, it would not be appropriate or just to require the plaintiffs to pay compensation to the first defendant for the extension of the caveat over the Land from the date of the interim extension of the caveat in March until the withdrawal of the caveat, which I am told occurred in the last couple of days. I have reached that view for two reasons. First, the order to extend the caveat was made with the consent of the parties pursuant to O 43 r 16 of the Rules of the Supreme Court 1971 (WA). That is, the caveat was extended, on an interim basis only, with the consent of the first defendant. Secondly, following the breakdown in the agreement that the parties reached in relation to their underlying dispute, it appears that the first defendant did not take prompt steps to have the matter brought back before the Court. Instead, it took several months for the first defendant to do so. In my view, if the first defendant incurred any damage or additional costs as a result of the interim extension of the caveat, that damage cannot justly be sheeted home to the plaintiffs.
15 For completeness, I should add that there may be a question as to whether an undertaking of the kind given by the plaintiffs would be capable of providing a basis for a claim to compensation in circumstances where the other party has consented to the extension of the caveat itself. For the purposes of the present application, it is not necessary to resolve that question because I have concluded that there is no just basis for an order for compensation in the circumstances I have described.
16 Accordingly, the first defendant's application for compensation will be dismissed.
[1] The Court was advised, after these reasons were delivered, that the withdrawal of the caveat had not been processed by the second defendant, pending the further order of the Court. That issue is explained further in my reasons published in Woodford v Pattinson [No 2] [2017] WASC 334.