Thomson v Golden Destiny Investments Pty Ltd (No 3) [2016] NSWSC 78

Supreme Court New South Wales

Medium Neutral Citation: Thomson v Golden Destiny Investments Pty Ltd (No 3) [2016] NSWSC 78 Hearing dates: 4 and 5 February 2016 Decision date: 17 February 2016 Jurisdiction: Equity - Expedition List Before: Stevenson J Decision: Application dismissed Catchwords: REAL PROPERTY – caveats – caveat lodged without reasonable cause – what loss attributable to caveator's refusal to remove caveat – alleged loss of a chance to purchase alternative property – whether causation shown on the balance of probabilities – whether lost opportunity was of some value Legislation Cited: Civil Procedure Act 2005 (NSW) Real Property Act 1900 (NSW) Cases Cited: Lee v Ross (No 2) [2003] NSWSC 507 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Thomson v Golden Destiny Investments Pty Ltd [2015] NSWSC 1176 Texts Cited: Concise Oxford Dictionary (2011, Oxford University Press) Category: Principal judgment Parties: Joseph Luis Alonso (Third Plaintiff) Kay Alison Alonso (Fourth Plaintiff) New Galaxy Investments Pty Ltd (Third Defendant) Representation: Counsel: G A Sirtes SC with N Bilinksy (Third and Fourth Plaintiffs) M L D Einfeld QC with D Krochmalik (Third Defendant)

Solicitors: Fox & Staniland Lawyers (Third and Fourth Plaintiffs) Gardner Ekes Lawyers (Third Defendant) File Number(s): SC 2014/228930

Judgment

Introduction 1. This is an application by two of the plaintiffs in these proceedings, Mr and Mrs Alonso, for compensation against the third defendant, New Galaxy Investments Pty Ltd ("NGI") pursuant to s 74P of the Real Property Act 1900 (NSW). 2. On 23 April 2014 the plaintiffs, including Mr and Mrs Alonso, exchanged contracts with the first defendant, Golden Destiny Investments Pty Ltd ("GDI") to sell six adjoining properties at Turramurra on terms that: 1. settlement was to occur on 22 July 2014; 2. the total purchase price for the properties was $15.3 million; and 3. on exchange, part of the purchase price, $8 million, was to be released to the vendors and paid to them in proportion to the overall sale price of the six properties. 1. Of the $8 million, $6 million was paid by NGI, allegedly in anticipation that GDI would novate to NGI the six sale contracts pursuant to an agreement described as the "Short Form Deed". 2. On 18 July 2014, relying on its rights under the Short Form Deed, NGI lodged caveats over the title of the Turramurra properties, including that owned by Mr and Mrs Alonso. The caveats remained on the title on the scheduled completion date of 22 July 2014, and settlement of the sale did not proceed. 3. On 4 August 2014 the vendors, including Mr and Mrs Alonso, commenced proceedings in this Court seeking removal of the caveats. 4. Those proceedings were heard by Sackar J over some 12 hearing days in March and May 2015. 5. Sackar J delivered judgment on 21 August 2015: Thomson v Golden Destiny Investments Pty Ltd [2015] NSWSC 1176. 6. At [15] of that judgment, Sackar J stated: "On the third day of final submissions, i.e. 15 May 2015, Mr Donohoe, then counsel for NGI, indicated to the Court that he had been instructed to concede that NGI was not at that time ready, willing and able to complete the New Contracts. Mr Donohoe also conceded that at that time there was no legal basis on which he could maintain the caveats. After a brief adjournment, Mr Donohoe indicated that the documentation to facilitate the withdrawal of the caveats was being prepared and he asked to be excused to attend to that process." 1. NGI removed the caveats from the titles of the relevant properties, including that of Mr and Mrs Alonso, on 15 May 2015. 2. So far as concerns the caveats, Sackar J concluded: "However, as a matter of practical reality, it was NGI's caveats which prevented the settlement at all relevant times from taking place. The moment the caveats were withdrawn, immediate steps were taken to organise a settlement. Intimate knowledge of the history of the matter points, in my view, to NGI's caveats as being the significant, if not sole, impediment to settlement occurring." [At [379]] And: "In relation to the case put by the plaintiffs, I am satisfied that NGI did not have a caveatable interest in the Turramurra Properties and, further, that NGI did not have reasonable cause to lodge the caveats. As a consequence, I am satisfied that the plaintiffs are entitled to compensation pursuant to s 74P of the RPA." [At [644]] 1. On 22 May 2015 Sackar J ordered that the $6 million (referred to at [3] above) be paid into Court. That sum remains in Court. 2. On 3 July 2015 the sales were completed and Mr and Mrs Alonso received the sum of $1,076,659.75 (in addition to the sum that they had received on the exchange of contracts). 3. On 20 November 2015, Sackar J made an order pursuant to s 82 of the Civil Procedure Act 2005 (NSW) that NGI make an "interim payment of damages" to the plaintiffs pursuant to s 74P of the Real Property Act in the sum of $796,026.41. 4. Of that amount, $96,911.30 was attributable to Mr and Mrs Alonso's then claim for damages which, for the most part, comprised a claim for "rent" in the order of $39,312 and "interest on balance" in the sum of $27,965 (together with minor amounts for electricity, water and insurance costs). 5. Also on 20 November 2015, Sackar J stayed the order at [13] pending NGI's appeal against Sackar J's decision.