CATCHWORDS VENDOR AND PURCHASER - contract for sale of land - transfer - purchase price not paid in full - vendor's lien as to unpaid balance - action for recovery of balance - caveat protecting lien - whether election between action under contract and caveat necessarv. REAL PROPERTY - caveat - whether sufficiently identifving interest to be protected. PRACTICE AND PROCEDURE - security for costs - matter raised on appeal - no evidence of finances of parties. PRACTICE AND PROCEDUPE - undertaking as to damages - matter raised on appeal - s.108 Real Property Ordinance 1925 (A.C.T.). Real Property Ordinance 1925 (A.C.T.) ss.104(2),108. Sargent v. A.S.L. Developments Ltd. (1974) 131 C.L.R. 634 Hewett v. Court (1983) 149 C.L.R. 639 Wing v. Tottenham and Hampstead Junction Railwav Co. (1868) 3 Ch.App.740 Munns v. Isle of Wight Railway Ca. (1870) 5 Ch. App.414 Lycett v. Stafford and Uttoxeter Railway Co. (1872) 13 Eq.2461 SHARON ANN MIHALTIC v PAUL MIHALIC and ANA MIHALIC NO. A.C.T. G44 OF 1986 Coram: Fox, Kelly and Neaves JJ. 25 March 1987 Canberra IN_THE FEDERAL COURT OF AUSTRALTA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY GENERAL DIVISION No. A.C.T. G44 of 1986 www vw ON APPEAL from the Supreme Court of the Australian Capital Territory BETWEEN : SHARON ANN MIHALIC Administratrix ad Litem of the Estate of Frank Mihalic (Deceased) Appellant and Cross-Respondent AND: PAUL MIHALIC and ANA MIHALIC Respondents and Cross-Appellants MINUTE OF ORDER JUDGES MAKING ORDER: Fox, DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: Kelly and Neaves JJ. 25 March 1987 Canberra. 1. The appeal be allowed with costs. 2. The order of the Supreme Court of the Australian Capital Territory herein dated 24 June 1986 be set aside, and in lieu thereof, the application for removal of the caveaz be dismissed with costs. 3. The cross-appeal be dismissed with costs. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules, IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITOPY No. A.C.T. G44 of 1986 DISTRICT REGISTRY ) ) ) ) y ) ) GENERAL DIVISION ON APPEAL from the Supreme Court of the Australian Capital Territory BETWEEN : SHARON ANN MIHALIC Administratrix ad Litem of the Estate of Frank Mihalic (Deceased) Appellant and Cross-Respondent AND: PAUL MIHALIC and ANA MIHALIC Respondents and Cross-Appellants CORAM: FOX, KELLY AND NEAVES JJ. DATE: 25 MARCH 1987 REASONS FOR JUDGMENT EX TEMPORE THE COURT: We are hearing an appeal from the Supreme Court of the Australian Capital Territory in which it was ordered that a caveat which had been lodged by the present appellant be removed. The facts are not in dispute although it is contended on behalf of the respondents that further evidence should have been aiven bv or on benalf of the appellant. The appellant is the administratrix ad litem of the estate of her deceased husband. (Apparently no simp'e grant of 2. administration has been taken out). Her husband, who was the registered proprietor as lessee of a Crown lease of certain land in the Australian Capital Territory, entered into an agreement dated 28 August 1979 to sell his estate and interest in that land to the respondents for a consideration of $70,000. By memorandum of transfer dated 25 September 1979 the leasehold interest was transferred to the respondents who, on 28 September 1979, became registered as the proprietors thereof. At that stage only $15,417.98 of the purchase price had been paid although the Memorandum of transfer acknowledged receipt of the whole of the purchase money. So far as appears from the papers, no action was taken in respect of the balance of $54,582.02 until 1985. The respondents contend that the payment of this sum was satisfied bv an agreement in the nature of an accord and satisfaction. This is disputed. On 24 September 1985 the appellant as plaintiff commenced proceedings against the respondents as defendants in the Supreme Court by writ of summons claiming the unpaid amount together with interest. On 4 October 1985 a caveat was lodged in the office of the Reqistrar of Titles which, so far as material to the present case, was as follows: "TAKE NOTICE THAT I SHARON ANN MIHALIC of 15 Gundulu Place, Giralana in the Australian Capital Territory, Home Duties, am claiming an equitable estate or interest in the land particularised hereunder as administratrix ad litem of the intestate estate of the late Frank Mihalic (the deceased) pursuant to order of the Supreme Court of the Australian Capital Territory made on 20 September 1985 and as the widow of the deceased and on behalf of mv infant daughter born of the deceased in wedlock, namely Susan Ann Mihalic, we being the sole beneficiaries of the intestate estate of the deceased. The claim is founded on the following facts: 1. Between 30 October 1973 and 28 September 1979 the deceased was reqistered as and was in fact the proprietor as lessee under Crown Lease of all the estate and interest in Block 7 3. Section 25 Evatt in the Australian Capital Territory registered in Volume 476 Folio 93 (the property); 2. By written contract dated 28 August 1979 executed by the deceased and Paul Mihalic and Ana Mihalic (the caveatees) the deceased in consideration that he transfer the whole of his right title and interest in the property to the caveatees the caveatees promised to pay him the sum of $70,000; 3. On 25 September 1979 the deceased transferred the whole of his right title and interest in the property to the caveatees as joint tenants; 4. The caveatees paid to the deceased or at his direction the sum of $15,417.98 pursuant to the contract but have not paid the whole or any part of the balance of $54,582.02." There followed a description of the subject Land and thereafter the caveat continued: "The caveator forbids the registration of anv memorandum of transfer or instrument affecting the said land until the caveat be by me or bv 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 reqistration at the following address:- 15 Gundulu Place Giralang in the Australian Capital Territory." That caveat replaced an earlier one numbered 9336 lodged on 30 July 1985 which was withdrawn before the action was commenced. A defence to the common law action was filed bv the respondents together with a counter-claim which related to the caveat. As amended, the principal claims therein were as follows: "]. An order pending suit and permanently that the plaintiff be restrained from lodging anv further caveat on the title to the said property for so longa as the defendants Or either of them are reqistered as the proprietors thereof. 2. A declaration that caveat lodged on dealing RN 522653 is irregular in both form and substance. 3. A declaration that the plaintiff has no caveatable interest in the said property. 4. An order that the plaintiff show cause why the said caveat should not be removed. 5. Further or alternatively an order that the plaintiff withdraw the said caveat within two davs of the date this order is made and that in default thereof the Registrar execute a withdrawal of the said caveat for and on behalf of the plaintiff." On 28 April 1986 the respondents filed in the action a notice of motion. The notice as amended during the course of the hearing before the Supreme Court sought orders as follows: "lL. That pending suit the plaintiff be restrained from ledging any further Caveat on the title to Block 7 Section 25 Division of Evatt being the whole of the land contained in Register Book Volume 476 Folio 93. 2. An order that the plaintiff show cause why Caveat lodged with the Registrar of Titles on dealing RN 522653 being Caveat MNo.9437 forbidding the registration of any Memorandum of Transfer or instrument on the Crown Lease in Reqister Book Volume 4976 ECsic] Folio 93 should not be removed." The notice of motion came before the Supreme Court for hearing in May 1986. The learned Judge decided in favour of the respondents on the footing that the appellant ought not to be permitted to claim both an equitable interest in the leasehold by way of a vendor's lien protected by caveat and at common law for the unpaid purchase price and apparently on the basis that the claim at common law should have priority. The appellant was said fo be pursuing alternative and inconsistent rights and, in effect. his Honour held that something in the nature of an election had occurred. His Honour found against the respondents on other submissions to which we will return. With respect to his Honour, we are clearly of the view that the appellant is entitled to maintain both the common law action and the caveat. The latter in fact protects a vendor's 5. lien for the balance of the purchase money while the common law action seeks payment of it. The two remedies, represented by the common law claim and proceedings to enforce the vendor's lien, are, in truth, complementary to each other. The appellant would not, of course, be entitled, by recourse to both remedies, to recover a greater sum than the sum proved to be owing on account of the purchase price. Any moneys recovered by the pursuit of one remedy would have to be brought to account to reduce what could be recovered by the pursuit of the other. But to recognise this does not require the conclusion that the two remedies which the appellant is seeking to pursue reflect mutually inconsistent rights so as to require her to elect between them: Sargent v. A.S.L. Developments Ltd. (1974) 131 C.L.R. 634. Support for the view to which we have come is, we think, to be found in the discussion of the nature of a vendor's lien by the High Court in Hewett v. Court (1983) 149 C.L.R. 639 to which his Honour was seemingly not referred (see also Wing v. Tottenham and Hampstead Junction Railway Co. (1868) 3 Ch. App. 740; Munns v. Isle of Wight Railway Co. (1870) 5 Ch. App. 414; Lycett v. Stafford and Uttoxeter Railway Co. (1872) 13 Eq. 261). In the circumstances of this case it is impossible to see how the true extent of anv lien could be established except by action of some kind. Any lien must eventually be founded ona proven debt and, if the appellant is to establish such a debt, it can only be established by action. It has been contended on behalf of the respondents that the caveat the principal parts of which have already been set out did not sufficiently "identify the estate or interest" claimed by 6. the caveator (s.104(2) of the Real Property Ordinance 1925). What the caveat did was to set out rather fully the basis of the claim, and, although it did not state in formal terms that what was being claimed was a "vendor's lien", it was unnecessary for this to be done. It was made apparent that there was a sale for a certain amount and that, while there had been a transfer, only part of the purchase money had been paid. The claim was expressed to be equitable in nature. The statement could be given whatever legal description was apparent and the only one that seems appropriate is that of a wendor's lien, as it is known. The extent of the interest is made plain by a statement of the wnpaid amount. We see no adequate basis for challenging the sufficiency of the caveat. It could be added that, 1f that caveat were held inoperative for some reason, another one could be lodged forthwith. Alternatively, an interim injunction could be sought to the same effect. A matter which was much pressed before the learned Judge and has been pressed before us is that the appellant caveator did not show cause before the learned Judge in the sense that no witness was called to give evidence as to the question of unpaid purchase monies. This seems to us to be at best a very technical consideration. At the time of the hearing a statement of claim. a defence anda counter-claim had been filed. as had the notice of motion. The defence set out both the payment in fact made, and dealt with the question how the balance of 654,582.02 was satisfied. The notice of motion simply sought an order that the appellant be directed to show cause. At the hearing, the application seeking an order to show cause was merged with the 7. question whether cause did exist. His Honour remarked upon the inadequacy of the procedural steps which had been taken and the confusion thereby created but it seems to us that the tolality of the material should be treated, as his Honour treated it, as sufficient upon which to consider whether cause was shown. Argument relying upon the receipts clause of the transfer, already referred to, has not been pursued. We are, therefore, of the view that the appellant should succeed. After the conclusion of the principal argument counsel for the respondents asked that, if his clients should fail. an order be made that the appellant give security for costs of the action. This was based laraelv, if not whollv, upon a statement made during the course of argument, in answer to a question from the bench, that the claim against the subject property is the only asset of the estate. We indicated at the time that we would not make such an order, there being no evidence before us upon which an order could be properly based and the application properly being a matter for the Supreme Court. An application was also made, on the principle that a caveat operates in much the same way as an interlocutory injunction, that the appellant, if successful, should be required to give an undertaking as to damages. We were of the view that this was not a matter proper to be raised for the first time on the appeal, and we referred to s.108 of the Real Property Ordinance 1925. We, therefore, refused those applications. Rg, We cannot part with the case without noting that this appeal cannot resolve the real issue in dispute between the parties. That issue is whether any part of the purchase price for the leasehold interest in the subject land remains outstanding. That question, which is essentially one of fact, remains outstanding in the suit with little apparent effort being made to bring that issue to trial. It should be resolved as expeditiously as possible and we can only urge the parties to co-operate to that end. In our opinion, the appeal should be allowed with costs. The order of the Supreme Court should be set aside and in lieu thereof it be ordered that the application for the removal of the caveat be dismissed with costs. The cross-appeal should be dismissed with costs. I certify that this and the eight (8 ) preceding pages are a true copy of the Reasons for Judgment herein of the Court. Associate vi = Dated: 25 rch 1987 Counsel for the Appellant/Cross-Respondent: T I Higgins QC - with B Hull Solicitors for the Appellant/Cross-Respondent: John Faulks & Co. Counsel for the Respondents/Cross-Appellants: T M Johnstone Solicitors for the Respondents/Cross-Appellants: Sneddon Hall & Gallop Date of hearing: 24 March 1987 Date judament delivered: 25 March 1987