McCulloch v Fern [2000] NSWSC 729

Reported Decision : (2000) NSW ConvR 55-952

New South Wales Supreme Court

CITATION : McCulloch v Fern [2000] NSWSC 729 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2095/99 HEARING DATE(S) : 20 & 21 July 2000 JUDGMENT DATE : 21 July 2000

Kevin Francis McCulloch (P) PARTIES : Donald John Fern (D1) Androula Fern (D2) JUDGMENT OF : Hamilton J

COUNSEL : R Sergi (P) D A Allen (D1 & 2) SOLICITORS : Kennedy & Cooke (P) A Relf & Co CATCHWORDS : CONVEYANCING [184] - Torrens system - Caveats against dealings - Who may lodge - Person who lodged earlier caveat - Whether interest claimed in earlier caveat was the same interest - Circumstances in which leave to lodge will be granted. LEGISLATION CITED : Real Property Act 1900 s 74O(1) & (2) Bell v Mainbarder Pty Ltd 7 November 1991 NSWSC unreported CASES CITED : Calverley v Green (1984) 155 CLR 242 Hanover Investments v Registrar-General [1999] NSWSC 21 Taylor v Commonwealth Development Bank of Australia [1992] ANZ ConvR 161 DECISION : Leave granted to lodge second caveat in respect of same interest.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

FRIDAY, 21 JULY 2000

2095/99 KEVIN FRANCIS McCULLOCH v DONALD JOHN FERN & ANOR

JUDGMENT

HIS HONOUR:

1 This is the hearing of a notice of motion by the plaintiff in these proceedings to extend the operation of caveat 6711548 lodged in respect of the land in folio identifier 87/880417 ("the land"). The application is necessitated by reason of a lapsing notice in respect of the caveat. 2 A short history of the matter is as follows. At a time when the plaintiff's wife was unfortunately dying of cancer, she became involved with the defendants who were conducting a form of religious community. Shortly beforehand in 1986 they had purchased the land from a John Hankinson for $115,000 and had satisfied the purchase money by paying $20,000 and by giving a mortgage back to Mr Hankinson to secure the balance of $95,000. Some time thereafter, probably in 1988, the plaintiff's wife paid $93,325 to Mr Hankinson. This was paid to satisfy $90,000 of the $95,000 mortgage debt, the balance being interest to that time. I do not intend to go at great length into the circumstances surrounding the payment of those moneys. Suffice it to say that, in my view, the evidence available shows an arguable case that the plaintiff may be entitled to have a trust interest in the property declared in his favour. The $93,325 was paid out of a joint bank account of the plaintiff and his wife and represented the proceeds of a matrimonial home which they had then recently sold. The evidence appears to show that the plaintiff certainly did not intend his half share of the moneys to be a gift to the defendants and, as I say, while the circumstances have not yet been rendered entirely clear, they raise to my mind an arguable case that there was a trust interest in favour of the plaintiff and his wife, whose interest passed to the plaintiff on her death. Consequently the whole interest, if it be declared, will vest in him. 3 The plaintiff's long delay in doing anything about the enforcement of the interest and laches were put as grounds why this application ought be refused. Whilst I understand that a defence of laches may be agitated at the trial, in light of the explanation given for the delay in bringing the proceedings, I do not think that the delay should lead to an application for interlocutory relief by the plaintiff being refused. 4 The existence of the trust interest is denied on behalf of the defendants. However, whether or not it exists involves contested questions of fact which must be determined at a trial. The balance of convenience strongly indicates that there should be interlocutory relief, since no immediate inconvenience to the defendants is put forward as arising from the maintenance of a caveat on the title or an injunction in lieu, and the plaintiff faces a much greater inconvenience by reason of the risk which naturally exists of contrary adverse interests being created by the proprietors, or the proceeds dissipated upon sale before the trial. In saying this, I am not suggesting that there is any evidence of an inclination of the defendants to do those things in derogation of the plaintiff's interests, but it appears that they regard the property as theirs to deal with as they like, and in that state of mind may very well do so unless restrained. 5 However, the defendants have raised objections, which do in my mind have some substance, to the continued existence of the present caveat. The history of the matter is that, when the plaintiff turned to do something about his claimed interest in the land, he first placed a caveat on the title being caveat 5241566 lodged on 25 November 1998 ("the first caveat"). The first caveat claimed an interest in land stated as follows: "The caveator is entitled to two undivided one-third shares in the land as tenant in common with the registered proprietors"