CATCHWORDS Appeal from Supreme Court of the Australian Capital Territory - Caveat subject of appeal withdrawn before hearing of appeal - Whether appeal competent substratum having gone - Unregistered lease for not more than 3 years - Real Property Ordinance (A.C.T.) 1925, ss. 58, 85, 104 and 105 - Caveat - Amendment on summons for removal - Whether discretion to amend properly exercised - Matters to be considered. ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY. JOHi] VELOUDOS & OTHERS v. GRANT CHARLES YOUNG No. A.C.T. G15 of 1980 CORAM: Davies, Lockhart and Kelly, JJ. 22 December 1981 Canberra, A.C.T. ery IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY No. A.C.T. GLS of 1980 DISTRICT REGISTRY GENERAL DIVISION ON APPEAL FROM THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN: JOHN VELOUDOS, KATINA VELOUDOS, ANTHONY BAKAS, KRITA BAKAS, CONSTANTINE BAKAVGAS, PAMAGIOTA BAKAVGAS, JIM BAKAVGAS and MARIA BAKAVGAS Appellants AND: GRANT CHARLES YOUNG Respondent ORDER JUDGES MAKING ORDER: Davies, Lockhart and Kelly, JJ. DATE OF ORDER: 22 December 1981 WHERE MADE: Canberra, A.C.T. THE COURT ORDERS THAT: 1. The appeal be allowed. 2. The order granting leave to the respondent to amend Caveat No. 5399, Dealing No. 331693 entered on Certificate of Title Volume 699 Folio 17 be set aside. 3. The order dismissing the application to remove the caveat be set aside. 4. The respondent pay the appellants' costs of the appeal. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY No. ACT G.15/1980 GENERAL DIVISION On Appeal from the Supreme Court of the Australian Capital Territory BETWEEN : JOHN VELOUDOS, KATINA VELOUDOS, ANTHONY BAKAS, KRITA BAKAS, CONSTANTINE BAKAVGAS, PAMAGIOTA BAKAVGAS, JIM BAKAVGAS and MARIA BAKAVGAS Appellants AND : GRANT CHARLES YOUNG Respondent REASONS FOR JUDGMENT 22 December 1981 Davies, J The appellants are the registered proprietors of Crown Lease Block 3 Section 36 Fyshwick, being the property more particularly described in Certificate of Title Volume 699 Folio 17. The respondent claims that by a written lease the appellants let to the respondent as from 1 March 1978, part of the building then erected on that land for a term of three years with options to renew the lease for three further periods of three years each. That is the claim made by the respondent in Action No.2460 of 1979 1n the Supreme Court of the Australian Capital Territory and in these proceedings, though the copy of a lease in evidence has somewhat different terms. The respondent did not enter into possession personally but sub-let the land to the American Embassy. Subsequently, in 1979, after a dispute concerning the payment of rent, the appellants purported to terminate the lease, excluded the respondent from the premises and granted a lease directly to "The Secretary of State of the United States of America, acting by Rufus W. Corlew, Contracting Officer, American Embassy, Canberra, A.C.T.". On 17 December 1979, the respondent issued the writ against the appellants in Action No.2460 of 1979. In that action all the Matters in issue between the appellants and the respondent could have been dealt with and appropriate amendments to the claim could have sought an injunction against the appellants from dealing with the property in any way inconsistent with the respondent's alleged interest. The pursuit of that action appears to have been diverted however by the lodgement of a caveat on the Register forbidding "...the registration of any memorandum of transfer or instrument affecting the said Land until this Caveat be by me or by order of the Court or the Judge thereof withdrawn, or until after the lapse of fourteen days from the date of the service of notice of such intended registration...". The land described in the caveat was "...the premises the subject of the said lease being part of the premises described in the said Memorandum of Sublease as Units 8 & 9 and being part of the Building erected on the land in land described as all that piece of land containing 44962 or thereabouts situate in the Australian Capital Territory, and being the whole of the land comprised in Certificate of Title dated the EIGHTEENTH day of NOVEMBER 1977 registered Volume 699 Folio 17". Subsequently the appellants sought an order for the removal of the caveat. The proceedings came on before Mr. Justice Connor in the Supreme Court of the Australian Capital Territory. It was accepted that the description of the land in the caveat was wrong. Nevertheless, it was said to the learned Judge that there was a difficulty in describing the land the subject of the lease for the respondent had lost and was unable to trace his counterpart of the sub-lease. His Honour said, "There is sworn evidence before me in an affidavit of Grant Charles Young that he has lost and been unable to trace his counterpart of the sub-lease. I cannot offer any opinion as to whether or not that evidence will be finally accepted or rejected; but at this stage there is no reason for me to doubt the bona fides of that evidence. If it is correct, of course, if it 1s the loss of this document which gives rise to the drafting difficulties in describing the area of land involved to be protected by the caveat, I think that it would be a reflection on the law to allow this factor to defeat a caveat and have the result of saying that because a sub-lease has been lost 1t is therefore not possible to give a sufficient description of the land for the purposes of the caveat. I am of the view that amendments can be made which, although they will not result in a perfect description of the area of the land, are sufficient for the purpose; and I propose therefore to amend the caveat and to dismiss the application to remove it. I give leave to amend Caveat number 5399 of ll April 1980, in which Grant Charles Young of 14 Willis Street, Evatt is the caveator by adding after the word ''sub-lease', where 1t first appears, the words 'wherein John Veloudos, Katina Veloudos, Anthony Bakas, Krita Bakas, Constantine Bakavgas, Pamagiota Bakavgas, Jim Bakavgas and Maria Bakavgas are sub-lessors and Grant Charles Young is sub-lessee' and after the expression 'the subject of the said lease' to delete all words appearing after that and substituting for them 'being part of the premises and being an area of approximately 929.03 square metres presently occupied by representatives of the government of the United States of America." The appellants appeal against that order. In the course of argument to this Court it was stated that, by way of implementation of his Honour's order for amendment of the caveat, the respondent had withdrawn caveat number 5399 and had lodged and registered a fresh caveat in the terms described in his Honour's judgment. Thus, it is immediately apparent that the caveat which his Honour gave leave to amend is no longer in existence. It has been withdrawn. No order of this Court can affect it. However, we were informed by Mr. B.J. Salmon, counsel for the appellants, without dissent from Mr. B.R. Gallen, counsel for the respondent, that "My learned friend indicates that he undertakes on behalf of his client, if this appeal is successful, to withdraw that caveat." Thus, the proceedings are not purely or even principally academic notwithstanding that the notice of appeal did not in terms appeal from the whole of his Honour's judgment which, in addition to granting leave to amend the caveat, went on to order that the application to remove the caveat be dismissed and that the defendant's costs be taxed and paid by the plaintiffs. The notice of appeal referred to : "({a) The decision of His Honour Mr. Justice Connor to grant the Defendant in the proceedings leave to amend Caveat No.5399, and (b) The decision of His Honour Mr. Justice Connor that he could amend the said caveat in such a way that it could contain a sufficient description to identify the land over which the Defendant claimed an interest." The order sought was "That Caveat No.5399 be removed from Crown Lease being Block 3 Section 36 Fyshwick registered in Volume 699 Folio 17". Although the notice of appeal was thus expressed, it should be read as going to the whole of his Honour's order, It would be an unduly technical reading of the notice to restrict it to part only of his Honour's order. I take the notice of appeal to encompass an appeal against the whole of the order, including the order for costs. Indeed, Mr. Salmon opened his submissions on the footing that the appeal lay against the whole of the order. Mr. Salmon said, "This 1s an appeal from an order by his Honour Mr. Justice Connor on a summons for the removal of a caveat." After describing the caveat, Mr. Salmon said, "There are other things in the caveat but it is that description of the estate or interest which became the basis of the application for the removal of the caveat. That is the basis of the appeal here, except that it was amended by his Honour. The appellant submits that, even with that amendment, 1t could not stand." Mr. Salmon then explained that the course adopted to comply with his Honour's order had been to withdraw the caveat and lodge a fresh one. He said, "In my submission, the course which should have been adopted was to file the order with the Registrar of Titles... A completely new caveat was lodged. My learned friend indicates that he undertakes on behalf of his client, if this appeal is successful, to withdraw that caveat. In other words, this 1S not an academic exercise." Subsequently, Mr. Salmon said, 1n answer to a question asked from the Bench, "Costs are not an insignificant aspect, but that 1s not the subject of this appeal." I do not take this to be a statement that the order made by Connor J on the matter of costs was not a matter under appeal but simply that it was not a matter to which argument in the appeal had to be put. That this interpretation is correct appears from the transcript at pages 13 and 14, Mr. Justice Lockhart said to Mr. Salmon in the course of argument, "...I understand one of the parties wants the point dealt with and maybe it will be dealt with, but so far as I can see it is totally academic save as to costs." Mr. Salmon responded, "Tf in fact the earlier order was wrong and if in fact the caveat should have been removed, then we would have had costs and the ruling. If the only effective part of your Honour's (sic) ruling was on costs, the result, academic though it may be, would have an effect." In the light of these matters I think that there is an issue with respect to costs with which the Court should deal. Furthermore, in withdrawing the caveat and lodging a further caveat, the respondent was simply attempting to comply with the leave granted by his Honour's order. Therefore the crux of the issue in dispute between the parties is still unresolved. I think this Court should rule upon that issue and I think that, in the light of the undertaking expressed to us, both this Court and the Supreme Court of the Australian Capital Territory have authority to ensure that the application made for the removal of the caveat LS not frustrated by the course which was taken to implement his Honour's decision. I therefore turn to consider the merits of the appeal. His Honour had power to order that the caveat be amended. Section 105 of the Real Property Ordinance 1925 provides that an application may be made for the removal of a caveat. Section 105(3) provides : "105(3) The Court or Judge, upon proof that the caveator has been summoned, may make such order in the premises, either ex parte or otherwise, as to the Court or Judge seems fit." This provision empowers the making of an order for the amendment of a caveat. See In Re The Victorian Farmers' Loan and Agency Co. Limited (1897) 22 VLR 629, Queensland Estates Pty. Limited v Co-ownership Land Development Pty. Limited (1969) Qd.R 150 and Elliott v Blanshard (1970) 17 FLR 7. However, the following are reasons why that course should not, in the present case, have been adopted : (i) (ii) Any protection to which the respondent was entitled could have been obtained by means of orders made in Action Number 2460 of 1979. The Supreme Court of the Australian Capital Territory has adequate authority to make final and interlocutory orders for the protection of property. Section 85(1) of the Real Property Ordinance 1925 provides "Every register dealing with land shall be subject to any prior unregistered lease or any agreement for a lease or for letting from year to year for a term not exceeding three years affecting the land." The alleged agreement between the respondent and the appellants was a lease or an agreement for a lease for a term not exceeding three years notwithstanding the options of renewal. See 195 Crown Street Pty. Ltd. v Hoare; Ivermee and Anor. (1969) 1 NSWR 193. Accordingly, a caveat was not required to protect the leasehold interest against registered dealings. (111)Indeed, s.85(1) and s.58, which provides that the estate of the registered proprietor is Paramount save for "(d) any prior tenancy from year to year or for any term not exceeding three years", suggest that Parliament recognised that there might be difficulties in the registration of such interests. The interest of the lessee is protected whether or not the lease be registered. Mr. Salmon submitted that such a lease should not be registered. The practice in the various (iv) (v) States on this matter is dealt with in Torrens Title in Australasia by E.A. Francis Vol.1l pp.267-71. I need not consider it further. It 1s sufficient that the interest of a person under such a lease is protected whether or not the interest be registered or there be a caveat protecting it. The term of three years from 1 March 1978 had only a short time, ten months, to run at the time of his Honour's order and the caveat did not seek to protect the interest of the respondent under the options to renew. The caveat described the estate or interest as ",..created by unregistered Memorandum of Sublease dated on or about the First day of March 1978 for a term of three years commencing on the First day of March 1978 and reserving for the first eighteen months of that term a rental of $1,560 per calendar month and for the remaining eighteen months of that term a rental at the rate of $1,733.32 per calendar month ...". Even had the caveat sought to protect the respondent's interest under the options to renew, it would have been ineffective to do so. Section 85({2) of the Real Property Ordinance 1925 provides "85.(2) No right or convenant to purchase the freehold or to assign the reverslonary interest of the lessor contained 1n any lease or agreement, and no right or convenant to or for the renewal of any lease or agreement, shall be valid as against any subsequent purchaser of the reversion, lessee, Mortgagee Or encumbrancee unless the lease or agreement is registered." The subject leaSe was not registered and therefore the options for renewal were not valid as against any subsequent purchaser of the reversion, lessee, mortgagee or encumbrancee. (vi) The respondent was unable to describe the land the subject of his interest save as ""...an area of approximately 929 square metres presently occupied by representatives of the Government of the United States of America". But a principal purpose of the Torrens system is to effect certainty of title and certainty of description. A defect of the general law was its reliance upon occupation as a root of title and upon descriptional data other than surveyed measurements. I would not presently wish to hold that it may never be proper for a document on the Register to describe land by reference to an occupation. But, certainly, it would have to be an exceptional case to warrant that course. I do not see the present to be such a case. Having regard to all these matters it seems to me that this was an inappropriate case in which to have given leave to amend the caveat. His Honour said, "It 1s clear on the authorities that a caveat is not more than a statutory injunction to hold the status quo and prevent that status quo from being altered before the caveator can get to the court to have his rights decided upon by the court." In my view, however, no caveat was necessary having regard to the provisions of ss.58 and 85(1) and, if any protection were necessary, it could have been better effected by means of an interlocutory order in Action No.2460 of 1979. The caveat did not properly describe the land the subject of the interest and the amendment allowed by his Honour did not in my view achieve an 10, adequate description. For these reasons, I am of the opinion that the proper order to Make was an order for the removal of the caveat. I would allow the appeal and would order that the respondent pay the costs of the appeal and of the hearing below. I would remit the matter to the Supreme Court of the Australian Capital Territory so that, 1f it is called upon to do so, it may make whatever ancillary orders are necessary. a ' Io certify thee. Urs v.d bie { \ preseding pa i353 6.0 a tous copy of tre i Reasons Tor J wemeut hergia of Dis woeucus ° Mr. Jusv.ce Danes Debord. Kaw Associate "Ted? Me (2-Br v IN THE FEDERAL COURT OF AUSTRALIA ) ) DISTRICT REGISTRY )NO. F.C. 15 OF 1980 ) GENERAL DIVISION ) ON APPEAL from the Supreme Court of the Australian Capital Territory No. S.C. 894 of 1980 BETWEEN: JOHN VELOUDOS, KATINA VELOUDOS, ANTHONY BAKAS, KRITA BAKAS, CONSTANTINE BAKAVGAS, PAMAGIOTA BAKAVGAS, JIM BAKAVGAS and MARIA BAKAVGAS Appellants AND: GRANT CHARLES YOUNG Respondent REASONS FOR JUDGMENT LOCKHART J. 22 December 1981 This appeal raises a question of academic interest only. The appellants are the lessees of Crown land at Fyshwick in the Australian Capital Territory. The lease is registered under the Real Property Ordinance 1925. On 1 March 1978 the appellants sub-let to the respondent portion of the building erected on the land ("the premises") for a term of three years commencing that day. Also in March 1978 the respondent in turn sub-let premises to representatives of the Government of the United States of America. On 15 September 1979 the respondent failed to pay rent due to the appellants under his sub-lease. On 1 October 1979 the appellants entered into possession of the premises,excluded the respondent therefrom and since then have collected rent from the servants and agents of the Government of the United States of America. oe e/2 On 30 May 1980 the appellants filed a notice of appeal in this Court from the order of the Supreme Court in these terms:- "1. The Appellant appeals from: (a) The decision of His Honour Mr. Justice Connor to grant the Defendant in the proceedings leave to amend Caveat No. 5399, and (b) The decision of His Honour Mr. Justice Connor that he could amend the said Caveat in such a way that it could contain a sufficient description to identify the land over which the Defendant claimed an interest. GROUNDS 2. That His Honour Mr. Justice Connor was wrong in law. 3. That as there was no Registered Plan to which reference could be made, then nobody reading the Caveat document itself could sufficiently identify the land over which the Defendant claimed his interest. ORDERS SOUGHT- That Caveat No. 5399 be removed from Crown Lease being Block 3 Section 36 Fyshwick registered in Volume 699 Folio 17." When the appeal came on for hearing, counsel for the appellants informed the Court that, after the order of the Supreme Court was made, the respondent withdraw caveat No. 5399 and lodged a third caveat in a form which accorded with the amendments allowed by the Supreme Court in respect of caveat No. 5399. It is not clear whether caveat No. 5399 was withdrawn before or after the filing of the notice of appeal. 2 /S4 All that this Court is asked to do by the appellants is to order that caveat No. 5399 be removed from the Register. This order cannot now be made as the caveat has been withdrawn. There is nothing to remove. Nor do the appellants appeal against the Supreme Court's order for costs against them. Indeed, counsel for the appellants expressly disclaimed that the Supreme Court's order for costs was the subject of the appeal. I would dismiss the appeal. As to costs of the appeal I would make no order as neither party argued that the appeal was academic. | certify that this and the Lou ¢ >) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Lockhart. Associate IN THE FEDERAL COURT GF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY No. A.C.T. G15 of 1980 DISTRICT REGISTRY ed GENERAL DIVISION ON APPEAL FROM THE SUPREME COURT OF T A ITAL TE ORY BETWEEN: JOHN VELOUDOS, KATINA VELOUDOS, ANTHONY BAKAS, KRITA BAKAS, CONSTANTINE BAKAVGAS, PAMAGIOTA BAKAVGAS, JIM BAKAVGAS and MARTA BAKAVGAS Appellants AND: GRANT CHARLES YOUNG Respondent ORAM: Davies, Lockhart and Kelly, JJ. 22 December 1981 REASONS FOR JUDGMENT KELLY, J. In this matter I have had the advantage of reading in draft the reasons for judgment of Lockhart, J. I would respectfully adopt his summary of the facts in question and of the history in this Court of the appeal from the judgment of the Supreme Court of the Australian Capital Territory. There is a threshold point to be decided. Since the caveat, the removal of which was sought by the appellants, has now in fact been removed by the respondent, it is clear that in one sense the subject matter of the appeal is academic since nothing that this Court can say or do will affect directly the rights of the parties. -2- "The court does not grant declarations of purely academic interest, and this declaration will be of that character." Eastham v. Newcastle United Football Club Ltd. [1964] 1 Ch. 413 at p.450 per Wilberforce, J. (as he then was). "T am firmly of the opinion that it is not the function of the established courts to entertain applications which are designed solely or primarily as a means of obtaining legal advice for potential litigants, and that the court should, so far as possible, avoid making determinations of hypothetical questions." Ku-ring-gai Municipal Council v. Suburban Centres Pty. Ltd. [1971] 2 N.S.W.L.R. 335 at p.339 per Else-Mitchell, J. The statements just quoted were made in judgments delivered in matters at first instance. An appeal to this Court from the judgment of another Court cannot, I think, be said to be an application designed solely or primarily as a means of obtaining legal advice for potential litigants. The appeal was, no doubt, instituted in good faith for nothing was placed before this Court to indicate the contrary. It would be odd, in my opinion, if a right of appeal to a superior court given by Statute in respect of a judgment should be lost because the respondent to the appeal takes some action which renders in one sense the appeal academic. Had the appellants appealed against the order for costs made by the learned Judge at first instance, there would be no difficulty in deciding the appeal on the matters of substance raised. But the question of costs is really ancillary and the determination of the question of substance would be no less academic if only the question of costs remainea to be considered, as is presently the case. In my opinion, therefore, the appeal ought to be decided on the question of substance. The appellants did not challenge the order for costs made in tne Supreme Court. Although the question was raised before this Court, counsel for the appellants stated that although costs were not an insignificant aspect they were not the subject of the appeal. It must be assumed, I think, that counsel made that statement deliberately with full knowledge of the terms of the notice of appeal. It is provided by s.104 of the Real Property Ordinance 1925 that "any person claiming any estate or interest in the land under any unregistered instrument, or by devolution in law or otherwise, may by caveat in the form of the Fifteenth Schedule forbid the registration of any instrument affecting the land, estate or interest either absolutely or until after notice of the intended dealing given to the caveat or as is required and enjoined in the caveat.'"' The section further provides that every such caveat shall contain a sufficient description to identify the land and the estate or interest therein claimed by the caveator. The amendment permitted by the Supreme Court would have resulted in a description of the estate or interest claimed as follows:- "estate or interest created by an unregistered Memorandum of Sub-lease wherein John Veloudos, Katina Veloudos, Anthony Bakas, Krita Bakas, Constantine Bakavgas, Pamagiota Bakavgas, Jim Bakavgas and Maria Bakavgas are the sub-lessors and Grant Charles Young is the sub-lessee dated on or about the First day of March 1978 for a term of three years commencing on the First day of March 1978 and reserving for the first eighteen months of that term a rental of $1,560.00 per calendar month and for the remaining eighteen months of that term a rental ~4- at the rate of $1,733.32 per calendar month for the premises the subject of the said lease being part of the premises and being an area of approximately 929 square metres presently occupied by the representatives of the Government of the United States of America." The power of the Court to amend a caveat is discretionary. It is to be found in s.105(3) of the Real Property Ordinance 1925 which states that "The Court or Judge, upon proof that the caveator has been summoned, may make such order in the premises, either ex parte or otherwise, as to the Court or Judge seems fit." See Elliott v. Blanshard, (1970) 17 F.L.R. 7 at p.9 and the cases there cited. In considering whether the discretion of the learned Judge at first instance was correctly exercised, I have had the benefit, too, of reading the reasons for judgment prepared by Davies, J. I respectfully agree with what he has said on this subject save that I would reserve for further consideration in a suitable case the sufficiency of the description identifying the land and the estate or interest therein claimed by the respondent. In an appropriate case consideration could be given not only to In re Paul (1902) 19 W.N.(N.S.W.) 114, Re Robertson; Clarke's Caveat (1907) 7 S.R.(N.S.W.) 474, In re Powell's Caveat [1966] Q.W.N. 14, In re Oil Tool Sales Pty. Ltd.; Classified Pre-Mixed Concrete Pty.Ltd., Caveator [1966] Q.W.N. 17 and In re Jones; Dale, Caveator (1935) 35 S.R. (N.S.W.) 560 but also to a number of Canadian cases, viz., licKillop and Benjafield v. Alexander (1912) 1 D.L.R. 586, Merchants Bank v. Hastie (1914) 16 D.L.R. 793 and Ukrainian Greek Orthodox Church of Canada v. Independent Bnay Abraham Sick Benefit and Free Loan Association and Riverside Cemetery (1959) 20 D.L.R.(2d.) 363. In the result, I would allow the appeal and order that the respondent pay the costs of the appeal. eat reat « I oertify that this and the4 precedang pages are a true copy of the Reasons for Judgment herein of his Honour Mr, Justice Ket ChAA ea a Associate Dated: 22(12[&1