IIB Global NV & Anor v Scott Darren Pascoe, Elizabeth Ann Occleshaw and Lindsey Jane Dyason (Registered Proprietors) & Ors (No 2) [2011] NSWSC 1270

Supreme Court New South Wales

Medium Neutral Citation: IIB Global NV & Anor v Scott Darren Pascoe, Elizabeth Ann Occleshaw and Lindsey Jane Dyason (Registered Proprietors) & Ors (No 2) [2011] NSWSC 1270 Hearing dates: 14 October 2011 Decision date: 14 October 2011 Jurisdiction: Equity Division Before: Black J Decision: Order extending caveat made Catchwords: REAL PROPERTY - caveat - whether basis for extension of caveat established Legislation Cited: Real Property Act 1900 (NSW) Cases Cited: - Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd [2011] NSWCA 39; (2011) 279 ALR 166 [20] - Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 Sinclair v Hope Investments Pty Ltd [1982] 2 NSWLR 870 Category: Interlocutory applications Parties: IIB Global NV (First Plaintiff) Linden Prescott Dyason (Second Plaintiff) Scott Darren Pascoe, Elizabeth Ann Occleshaw and Lindsey Jane Dyason (First Defendant) Scott Darren Pascoe (Second Defendant) Representation: Counsel: The Second Plaintiff appeared in person J Baird (Scott Darren Pascoe & Elizabeth Ann Occleshaw) Solicitors: The Second Plaintiff appeared in person Goldrick Farrell Mullan (Scott Darren Pascoe & Elizabeth Ann Occleshaw) File Number(s): 11/294682

Judgment 1This matter has been listed before me today to deal with paragraph 2 of a motion filed by the first named first defendant, Mr Scott Pascoe, as trustee in bankruptcy for Mr Arthur Dyason. That paragraph of the motion relevantly seeks an order that the operation of Caveat AG197714, lodged in relation to land at Brierfield New South Wales be extended until further order of the Court. By that caveat, Mr Pascoe claims an interest in the land as one of the registered proprietors arising from the fact of registration as registered proprietor pursuant to his appointment as trustee of the bankrupt estate of Mr Arthur Dyason. 2It appears that IIB Global NV ("IIB Global") requested the issue of a lapsing notice under s 74I of the Real Property Act 1900 (NSW). The effect of such a notice is that the caveat will lapse unless extended by the Court. 3The application for an extension of the caveat is opposed by Mr Linden Dyason who is the second plaintiff in the proceedings. I have previously held in my judgment delivered on 21 September 2011 that Mr Linden Dyason is not entitled to represent IIB Global in the proceedings and I have not changed my view in that regard, although Mr Dyason has drawn my attention to the fact that on 9 October 2011 he was appointed as delegate of IIB Global to execute a transfer of mortgage which had in fact been executed some time previously. I have nonetheless heard Mr Dyason in opposition to the motion because he is party to the proceeding, irrespective of whether strictly he has any personal legal interest in the outcome. I accept, as Mr Dyason puts by way of submission, that he has at least a practical interest in the outcome of the application. 4I am satisfied that the interested parties in the caveat have been served with the application. In particular, there is evidence before me that Mr Arthur Dyason as the bankrupt and Mrs Lindsey Dyason as a registered proprietor have been served, Mr Linden Dyason appears and IIB Global is party to the proceedings. 5I should first refer to three relevant provisions of the Real Property Act . Section 74F(2) of the Real Property Act provides that any registered proprietor of an estate or interest who, relevantly, fears an improper dealing with the estate or interest by another person may lodge with the Registrar-General a caveat prohibiting the record of any dealing affecting that estate or interest. Counsel for Mr Pascoe has confirmed in submissions that the relevant caveat was lodged under s 74F(2) of the Real Property Act . The application to extend the caveat is in turn made under s 74K of the Real Property Act which empowers the Court, if satisfied that a caveator's claim "has or may have substance", to make an order extending the caveat for such a period as is specified in the order or until further order, or to make such other orders as it thinks fit. The section also requires the Court, if not so satisfied, to dismiss the application. 6An application to extend a caveat is analogous to an application for an interlocutory injunction and Mr Pascoe must satisfy the Court that his claim for an interest in the property raises a seriously arguable case for final relief and that the balance of convenience favours extension of the caveat. The principles applicable in the converse situation of an application to remove a caveat were recently summarised by the Court of Appeal in Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd [2011] NSWCA 39; (2011) 279 ALR 166 at [20], where Campbell JA (with whom Tobias JA and Macfarlan JA agreed) observed that: "The primary judge correctly proceeded on the basis that on an application for an order to remove a caveat, it is not necessary for the court to make a final determination as to the interest claimed by the caveator, or a final determination as to the priority that the caveator may or may not have over competing interests. Rather, the court should enquire whether the caveator would have been granted an interlocutory injunction to protect the interest that the caveator claimed in the caveat. If no such interlocutory injunction would have been granted, the caveat should be ordered to be withdrawn ... [u]nder currently applied principles, an interlocutory injunction is granted if the court is satisfied that there is a serious question to be tried, and that the balance of convenience favours the granting of an interlocutory injunction ... ". 7The evidence establishes that Mr Pascoe is in fact one of the registered proprietors of the land in his capacity as bankruptcy trustee for Mr Arthur Dyason. I do not consider it is necessary for the purpose of this application for me to address further the circumstances in which Mr Pascoe has been appointed as sole trustee in place of Mr Pascoe and Ms Occleshaw or the associated transfer of the interest in the property from Mr Pascoe and Ms Occleshaw to Mr Pascoe. 8It appears that IIB Global has sought to register as a transfer of mortgage from The Trust Company (PTAL) Ltd ("PTAL") to IIB Global, which has not to date been registered by reason of the caveat. For the reasons set out in my earlier judgment in these proceedings, I consider that there is at least a seriously arguable case that PTAL has no continuing interest as mortgagee to transfer to IIB Global, (1) given the evidence as to the discharge or proposed discharge of the mortgage by PTAL and the consideration received by PTAL for that discharge and (2) because it is difficult to see how PTAL (or IIB Global as transferee of the mortgage from PTAL) could properly enforce that mortgage against Mr Pascoe (as Mr Arthur Dyason's bankruptcy trustee) after it had agreed to discharge the mortgage, had received payment of the amount due on that basis, and a discharge of the mortgage had been executed and lodged for registration. 9It follows that there is also a seriously arguable case that a transfer of the mortgage from PTAL to IIB Global would be an improper dealing with Mr Pascoe's estate or interest, since it would subject that interest to a mortgage in favour of IIB Global which was either already discharged or at least not properly enforceable. In this situation, it seems to me that the requirements of the Real Property Act s 74F(2) are satisfied, or at least there is a seriously arguable case that they are satisfied, and the caveat is sustainable on that basis. 10To the extent that relevant principles include consideration whether an interlocutory injunction would have been granted, it seems to me that an interlocutory injunction would have been granted to restrain PTAL from enforcing the mortgage where it agreed to discharge that mortgage and received payment on that basis, since a serious question to be tried would be established and the balance of convenience would favour the granting of an interlocutory injunction in that situation. 11I note that s 74F(2) of the Real Property Act specifically authorises a caveat prohibiting the recording of any dealing affecting the relevant estate or interest which is, in substance, the form of the caveat lodged by Mr Pascoe. I do not consider that it is necessary to consider the questions which arise where an equitable interest is asserted by the registered proprietor of the kind that arose in Mir Bros Projects Pty Ltd v 1924 Pty Ltd [1980] 2 NSWLR 907 at 922 and Sinclair v Hope Investments Pty Ltd [1982] 2 NSWLR 870 at 875 where the caveat adopts the form of prohibition which is contemplated by the relevant subsection. 12I consider that the appropriate order is that the caveat be extended until further order of the Court. Where Mr Dyason has opposed that application and has been unsuccessful in that opposition, he should pay the costs of and incidental to paragraph 2 of the motion. 13Accordingly, I order that: 1. The operation of Caveat AG197714 lodged in relation to the land which is situated at xxx xxxxxxxx xxxx, Brierfield NSW 2454 contained in Certificate of Title Folio 31/707896 be extended until further order of the Court. 2. The second plaintiff pay the costs of and incidental to paragraph 2 of the motion. 3. These orders be entered forthwith.