Arkbay Investments Pty Limited (In Liquidation) (Receivers and Managers Appointed) v Echelon Property Management Pty Ltd [2014] NSWSC 444

Supreme Court New South Wales

Medium Neutral Citation: Arkbay Investments Pty Limited (In Liquidation) (Receivers and Managers Appointed) v Echelon Property Management Pty Ltd [2014] NSWSC 444 Hearing dates: 11 April 2014 Decision date: 11 April 2014 Jurisdiction: Equity Division Before: Brereton J Decision: Order first defendant to withdraw caveat. Balance of proceedings adjourned. Catchwords: REAL PROPERTY - Torrens title - caveats against dealings - claims of equitable interest as purchaser pursuant to assignment of contract for sale - whether deed of assignment forged - no question of principle. Category: Interlocutory applications Parties: Arkbay Investments Pty Limited (in liq) (first plaintiff) McEvoy Street Alexandria Pty Ltd (second plaintiff) Australian and New Zealand Banking Group Limited (third plaintiff) Echelon Property management Pty Ltd (defendant) Alexandria 1 Pty Ltd (second defendant) Bilal El-Cheikh (third defendant) Representation: Counsel: Mr M Tyson (plaintiffs) Mr N Coburn (first defendant) Mr G Moore (second and third defendants) Solicitors: Allens (plaintiffs) Cambridge Law (first defendant) Madison Marcus (second and third defendants) File Number(s): 2014/ 80714

Judgment (ex tempore) 1HIS HONOUR: On or about 26 December 2013, the first defendant Echelon Property Management Pty Ltd lodged caveat AI262101 in respect of the property comprised in folio identifiers 1/732095 and 2/7243107, being numbers X/XX Bowden Street and XXX-XXX McEvoy Street, Alexandria in the State of New South Wales, claiming an "equitable interest as purchaser of an estate in fee simple under the contract for sale pursuant to the deed of assignment" by virtue of "contract for sale of land 30 July 2013" and "deed of assignment 17 December 2013". The reference to a contract for sale of land dated 30 July 2013 is to a contract between the registered proprietors Arkbay Investments Pty Ltd (Receivers and Managers appointed) and McEvoy Street Alexandria Pty Ltd (Receivers and Managers appointed) as vendors, and Alexandria 1 Pty Ltd as purchaser. 2The registered proprietors are the plaintiffs, and by summons filed on 17 March 2014 seek an order that the first defendant withdraw the caveat, and consequential relief. The second and third defendants are respectively the purchasers under that contract, and one Mr El-Cheikh who is the principal of the purchasers and who has also guaranteed the obligations of the purchasers under the contract; they support the plaintiffs' application for removal of the caveat. 3The caveator's claim to an interest depends on the claim that the benefit of the contract has been assigned to the caveator. 4There is no doubt that by what appears to be a deed of assignment between a company called Tripod Funds Management Pty Limited and the defendant Echelon, Tripod purports to assign the benefit of the contract in question to Echelon. The fundamental question in these proceedings is whether Tripod was ever in a position to do so. 5The answer to that depends on a supposed deed of assignment dated 17 December 2013 purportedly between the second defendant Alexandria 1 and the third defendant Mr El-Cheikh as assignors, and Tripod as assignee. 6Although there are many curiosities and conflicts in the evidence, in circumstances where other proceedings are on foot in which similar issues may arise, and other issues remain outstanding in these proceedings, it is preferable to avoid having to analyse or comment in detail at this stage on that evidence, and in circumstances where two of the critical witnesses, Mr Lazar and Mr Reynolds, have not been available for cross-examination, it is fairer to them not to reach any conclusions which do not have to be reached for the purposes of disposing of these proceedings. 7Two things are quite clear. First, Mr El-Cheikh, the principal of the second defendant, never signed the supposed deed of assignment. He swears that he did not, and his evidence was not shown to be unreliable. There is no evidence that contradicts it. The signature which purports to be his on the purported deed of assignment does not correspond with his authentic signatures on the original contract and on his affidavit. Secondly, Mr Paul Kaperonis, a solicitor whose signature and name purportedly appears on the purported deed of assignment as witness to Mr El-Cheikh's signature at least twice, if not three times, never attested Mr El-Cheikh's signature, nor placed his own signature on the document as a witness. His sworn evidence to that effect was not challenged. 8The purported deed of assignment is a forgery; for present purposes, it matters not by whom. As it was a forgery, there has never been a valid assignment to Tripod and thus, Tripod had no interest in the contract that it could ever have assigned to Echelon. Echelon, therefore, has no caveatable interest. 9THE COURT ORDERS THAT: (1)The first defendant withdraw caveat AI262101 in respect of the land comprised in folio identifiers 1/732095 and 2/243107 by 4pm on 14 April 2014. (2)The balance of the proceedings, including questions of damages and costs and the contempt proceeding, are adjourned to 7 May 2014 at 9.30am before me.