Supreme Court New South Wales Medium Neutral Citation: Thomas v Registrar-General of NSW [2018] NSWSC 1517 Hearing dates: 23 July 2018; 19 September 2018 Date of orders: 10 October 2018 Decision date: 10 October 2018 Jurisdiction: Equity Before: Darke J Decision: Statement of Claim is dismissed with costs. Catchwords: LAND LAW – Torrens system – claim for compensation from Assurance Fund – claimant had interest as equitable mortgagee – caveat lodged – caveat withdrawn following lodgement of fraudulent withdrawal of caveat form – transfer of title to new registered proprietor – claimant alleges that loss was suffered as a result of dealings because claimant forced to sell another property – claimant fails to establish that dealings were a cause of need to sell property – no entitlement to compensation under s 129 of Real Property Act 1900 (NSW) Legislation Cited: Real Property Act 1900 (NSW), s 120, s 129 Cases Cited: Chandra v Perpetual Trustees Victoria Limited [2008] NSWSC 178 Kirkland v Quinross Pty Ltd [2008] NSWSC 286 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Registrar-General v Behn [1980] 1 NSWLR 589 The Registrar-General (New South Wales) v Behn (1981) 148 CLR 562 Category: Principal judgment Parties: Sharon Heather Thomas (Plaintiff) Registrar-General of NSW (Defendant) Representation: Counsel: Mr I R Coleman SC with Ms L Clarke (Plaintiff) Mr H Altan (Defendant) Solicitors: Capsanis & Co (Plaintiff) Fiona Harris, Solicitor for the Registrar-General of NSW (Defendant) File Number(s): 2016/268128 Publication restriction: None Judgment Introduction 1. By her Statement of Claim filed on 6 September 2016 the plaintiff, Sharen Thomas, makes a claim against the Registrar-General for payment of compensation from the Torrens Assurance Fund pursuant to s 129 of the Real Property Act 1900 (NSW) ("the Act"). 2. The facts underpinning the claim will be referred to later in these reasons in more detail. However, by way of introduction, the plaintiff's claim can be briefly summarised as follows. 3. The plaintiff claims to have suffered loss or damage as a result of the operation of the Act in respect of certain land in Terrigal. The plaintiff claims that she and her now deceased partner (Mr George Pincham) held an estate or interest in the land by virtue of an agreement made in June 2003 with the registered proprietors of the land, Messrs Sengoz and Masri. Under the agreement, $230,000 was advanced by the plaintiff and her partner to be secured by way of a second mortgage. No second mortgage was registered, but the plaintiff and her partner lodged a caveat against the title to the property to protect their interest. In August 2005 the property became the subject of a three lot strata plan of subdivision, namely Strata Plan 75435. 4. The plaintiff alleges that in November 2005 a caveat she and her partner had lodged was removed from the title to Lot 1 in SP 75435 following the lodgement of a fraudulent Withdrawal of Caveat form. The removal of the caveat facilitated the registration of a transfer of Lot 1 in SP 75435 to a new registered proprietor. The plaintiff claims to have suffered loss as a result, including loss said to have been sustained because the plaintiff and her partner were forced to sell a home they jointly owned in East Hills. 5. It should be noted that in 2003 the plaintiff and her partner had retained a solicitor, Mr Wehbe, to act for them in relation to the transaction which involved the advance of $230,000 to Messrs Sengoz and Masri. In 2009 the plaintiff, in her own right and as the person entitled to her now deceased partner's estate, instituted proceedings in this Court against Mr Wehbe. It was alleged that Mr Wehbe acted negligently and in breach of fiduciary duties in the course of the transaction in 2003. It was alleged that by reason of those breaches the plaintiff and her deceased partner suffered loss and damage including loss of the outstanding principal, interest thereon, and consequential loss. The consequential loss was alleged to have arisen from defaults under a mortgage over the East Hills property which were said to have resulted in the forced sale of the East Hills property at a loss. 6. The proceedings against Mr Wehbe were settled in 2012 when a Deed of Settlement and Release was entered into. The Deed provided for Mr Wehbe to pay the plaintiff the sum of $450,000 inclusive of costs in return for releases given by the plaintiff, including releases from all claims arising out of the subject matter of the proceedings. 7. The plaintiff now seeks to recover compensation from the Torrens Assurance Fund for the loss of the East Hills property. Relevant legislation 1. Section 120 of the Act provides: (1) Any person who suffers loss or damage as a result of the operation of this Act in respect of any land, where the loss or damage arises from: (a) fraud, or (b) any error, misdescription or omission in the Register, or (c) the land being brought under the provisions of this Act, or (d) the registration (otherwise than under section 45E) of some other person as proprietor of the land, estate or interest, may commence proceedings in the Supreme Court for the recovery of damages. (2) Such proceedings may be taken only: (a) against the person whose acts or omissions have given rise to the loss or damage referred to in subsection (1), or (b) against the Registrar-General. (3) Proceedings against the Registrar-General are to be taken in accordance with Part 14. 1. Part 14 of the Act (ss 128-135) is concerned with the Torrens Assurance Fund. Section 129 relevantly provides: (1) Any person who suffers loss or damage as a result of the operation of this Act in respect of any land, where the loss or damage arises from: (a) any act or omission of the Registrar-General in the execution or performance of his or her functions or duties under this Act in relation to the land (including any such act or omission of the authorised operator), or (b) the registration (otherwise than under section 45E) of some other person as proprietor of the land, or of any estate or interest in the land, or (c) any error, misdescription or omission in the Register in relation to the land, or (d) the land having been brought under the provisions of this Act, or (e) the person having been deprived of the land, or of any estate or interest in the land, as a consequence of fraud, or (f) an error or omission in an official search in relation to the land, or (g) any error of the Registrar-General in recording details supplied in the notice referred to in section 39 (1B), is entitled to payment of compensation from the Torrens Assurance Fund. (2) Compensation is not payable in relation to any loss or damage suffered by any person: (a) to the extent to which the loss or damage is a consequence of any act or omission by that person, or (b) to the extent to which the loss or damage: (i) is a consequence of any fraudulent, wilful or negligent act or omission by any solicitor, licensed conveyancer, real estate agent or information broker, and (ii) is compensable under an indemnity given by a professional indemnity insurer, or (c) to the extent to which that person has failed to mitigate the loss or damage, or (d) to the extent to which the loss or damage has been offset by some other benefit to that person that has arisen from substantially the same circumstances as those from which the loss or damage has arisen, or … (5) The entitlement to compensation under subsection (1) does not confer any entitlement to compensation for personal injury. … 1. Section 129A provides: The total compensation that is payable under this Part, in relation to loss or damage suffered by a person as a result of the person being deprived of land or any estate or interest in land, is limited to the market value of the land at the date on which compensation is awarded to that person plus any legal, valuation or other professional costs reasonably incurred by the person in making the claim. The plaintiff's claim 1. As noted earlier, the plaintiff seeks to recover compensation for the loss of the East Hills property. The claim is brought pursuant to ss 120 and 129 of the Act. The plaintiff contends that this loss was suffered as a result of the operation of the Act in respect of the Terrigal land, and was loss that arises from fraud (see s 120(1)(a)). The plaintiff further contends that the loss arises from either: 1. an act or omission of the Registrar-General in relation to the land within the meaning of s 129(1)(a); or 2. being deprived of an estate or interest in the land as a consequence of fraud within the meaning of s 129(1)(e). 1. The relevant act or omission of the Registrar-General is alleged to be the conduct involved in acting upon the fraudulent Withdrawal of Caveat form so as to cause the withdrawal of the caveat that had been lodged by the plaintiff and her partner over the title to the Terrigal property. 2. It was submitted that once the caveat had been withdrawn, the plaintiff and her partner "lost all chance of recovering their funds, which in turn led to the loss of their home". 3. It was made clear in oral submissions that the plaintiff no longer relied upon the conduct of the Registrar-General in relation to the earlier registration of Strata Plan 75435. 4. The plaintiff accepted that the payment received in 2012 from Mr Wehbe was in respect of a loss that was a consequence of negligence on the part of a solicitor within the meaning of s 129(2)(b)(i), and seemed to further accept that the loss was compensable under an indemnity given by a professional indemnity insurer within the meaning of s 129(2)(b)(ii). However, it was submitted that whilst the payment must be taken into account to reduce the compensation payable to the plaintiff, it did not bar the claim for compensation. The plaintiff contended that this is because the scope of compensation under s 129(1) is not constrained in the way compensation pursuant to a professional indemnity policy is; rather, compensation under s 129(1) extends more broadly to any loss or damage that arises from an act or omission of the Registrar-General. 5. The plaintiff's claim for compensation is calculated on the basis that the East Hills property is now worth about $1 million. The plaintiff accepts that the $450,000 received in compensation from Mr Wehbe must be deducted. The plaintiff also seemed to accept that an amount representing the mortgage debt on the East Hills property would also need to be brought to account. 6. The Registrar-General submitted that the plaintiff's claim must fail for a number of reasons. The principal arguments raised were: 1. that the plaintiff and her partner did not acquire any interest in the Terrigal property as part of the agreement made in June 2003; 2. that the loss in respect of which compensation from the Torrens Assurance Fund is claimed is not compensable under s 129(1) of the Act because it concerns land that was not the subject of the fraudulent dealing, or any relevant operation of the Act; 3. that in any case the claimed loss was not relevantly caused by, or was too remote from, the fraudulent removal of the caveat over Lot 1 in SP 75435 and the subsequent transfer of that property to a new registered proprietor; 4. that compensation is not payable in relation to the claimed loss because the loss arose from the negligence of a solicitor (Mr Wehbe) and was compensable under an indemnity given by a professional indemnity insurer, and thus fell within s 129(2)(b); and 5. that the plaintiff has failed to establish on the evidence the quantum of the loss sustained. 1. Before dealing with the various issues raised, it is necessary to set out the relevant facts in more detail. Summary of relevant facts 1. The plaintiff and her partner purchased the East Hills property as joint tenants in 1991. In 2003 the property was subject to a mortgage in favour of the Bank of Western Australia. About $190,000 was owing under that mortgage. 2. On 20 May 2003 the plaintiff and her partner entered into an agreement with Messrs Sengoz and Masri. The agreement, which was signed by the parties (and erroneously dated 20 May 2002 in one place), was in the following terms: Sheran [sic] Thomas and George Pincham have agreed to refinance their home at 44 Enright Street Easthills NSW 2213 for the purpose of investing as private investors with Abraham Sengoz. Abraham Sengoz and Sam Masri have agreed to provide security for the monies being invested by way of registered second mortgages over residential real estate where the values of such real estate are Twenty Five percent higher that [sic] the registered mortgages. Properties being offered are 40 Campbell Crescent Terrigal which is currently valued at $1,900,000 (one Million Nine Hundred Thousand Dollars) which has a First Mortgage of $1,120,000.00 (one Million One Hundred and Twenty Thousand dollars) Valuation done by Combined Valuers NSW. Amount agreed to be invested is $230,000.00 (Two Hundred and Thirty Thousand Dollars) as a registered second Mortgage. Abraham Sengoz and Sam Masri have agreed to provide an annual return of 20% (Twenty Percent) per annum on monies invested by Sharen Thomas and George Pincham to Abraham Sengoz and Sam Masri. Returns on investment will be paid monthly in advance commencing from the time above monies are invested. Term of investment is agreed to be Twelve Months of inception of principle amount loaned. Principle amount loaned can be paid in full by Sengoz and Masri prior to original term with Thirty day written notice. 1. In June 2003 the plaintiff and her partner retained Mr Wehbe to act for them on the transaction involving the proposed refinancing and investment. The transaction settled on 13 June 2003. The plaintiff and her partner borrowed a total of $500,000 from First Mortgage Company Home Loans Pty Ltd to be secured by first mortgage over the East Hills property. The Bank of Western Australia mortgage was discharged using part of the proceeds of the new loan. A further $230,000 was paid to Messrs Sengoz and Masri as the investment amount. The remaining proceeds went towards costs or were otherwise applied at the direction of the plaintiff and her partner. 2. The plaintiff and her partner signed a Deed on about 13 June 2003 that provided for the sum of $230,000 to be lent to Messrs Sengoz and Masri and for the sum to be secured by way of a registered second mortgage (cl 2) or unregistered second mortgage to be secured by way of caveat (cl 3). This Deed does not appear to have been executed by Messrs Sengoz or Masri. The plaintiff and her partner also signed a form of mortgage over the Terrigal property, but again the instrument was not signed by either Mr Sengoz or Mr Masri. In any event, no mortgage in favour of the plaintiff and her partner was ever registered on the title to the Terrigal property. 3. However, on about 1 July 2003 the plaintiff and her partner lodged a caveat (9745672) against the title to the Terrigal property, claiming an unspecified interest based on an agreement between them and Messrs Sengoz and Masri. 4. Later in 2003 the plaintiff and her partner signed a revised version of the Deed they signed in June 2003. This revised version appears to have been signed by Messrs Sengoz and Masri. 5. In October 2003 the plaintiff and her partner, as caveators, gave their consent to a variation of a mortgage held by Shakespeare Haney Securities Limited over the Terrigal property, so that the amount secured under the mortgage was increased to $3.43 million, and the term of the mortgage extended to 15 August 2004. 6. In November 2004 the plaintiff and her partner agreed to withdraw their caveat so as to allow a refinance of the borrowings over the Terrigal property. The proposed refinance was to be with the National Australia Bank. As part of the transaction which followed, the plaintiff and her partner received a repayment of $30,000 of the amount they had invested, leaving a balance of $200,000. It appears that Messrs Sengoz and Masri may have taken the opportunity to grant a second mortgage in favour of PDB Cap Pty Ltd, rather than refinance with the National Australia Bank. PDB Cap Pty Ltd lodged a caveat over the title to the Terrigal property claiming an interest under an equitable mortgage dated 22 November 2004. 7. The plaintiff and her partner lodged their own caveat (AB303816) on about 23 February 2005. The interest claimed in the caveat was again unspecified, but was stated to arise by virtue of an agreement between the caveators and Messrs Sengoz and Masri dated 13 June 2003. 8. The plaintiff deposed that she and her partner "were still having hassles" with payments from Messrs Sengoz and Masri. She deposed that these hassles had been going on for six months or more. The plaintiff further deposed that after a period of "dribs and drabs" the payments "just stopped". The evidence is not clear about when that occurred. There is some documentary evidence that suggests the payments may have ceased in about May 2006. 9. In August 2005 the Terrigal property became the subject of a three lot strata plan, namely SP 75435. In those circumstances, caveat AB303816 henceforth affected the three lots in the Strata Plan. 10. In November 2005, caveat AB303816 was withdrawn from the title to Lot 1 in SP 75435. This occurred following the lodgement of a Withdrawal of Caveat form which apparently contained the signatures of the caveators. However, the plaintiff has deposed, and the Registrar-General has not challenged, that the signatures were not placed upon the form by either of the caveators. The plaintiff thus contends, and I accept, that the lodgement of the form was a fraudulent act. I note that evidence was adduced from a forensic document examiner that supported the hypothesis that the signatures on the Withdrawal of Caveat form were forgeries. 11. The withdrawal of caveat AB303816, and the withdrawal of the caveat that had been lodged by PDB Cap Pty Ltd, allowed the registration of a transfer of the fee simple in respect of Lot 1 in SP 75435 to a new registered proprietor, Heidelberg Investments Pty Ltd. It appears from the transfer form that Heidelberg Investments Pty Ltd paid a consideration of $1.43 million for the transfer. The mortgage held by Shakespeare Haney Securities Pty Ltd was discharged from Lot 1 in SP 75435 at the same time. 12. Caveat AB303816 (and presumably the caveat lodged by PDB Cap Pty Ltd) remained against the titles to Lots 2 and 3 in SP 75435. In July 2006, however, the plaintiff and her partner agreed to the withdrawal of the caveat from those titles. That allowed the eventual completion of contracts for the sale of those lots in July 2007. It appears that Lot 2 was transferred to Mr Sengoz for $550,000, and Lot 3 was transferred to Mr Sengoz for $650,000. It appears that following these transactions, Lots 2 and 3 became subject to a mortgage in favour of the National Australia Bank to secure an amount of $2.72 million. 13. There is evidence that the plaintiff and her partner had gone into default under the mortgage over the East Hills property by September 2006. It appears from a default notice issued at that time that the amount of the loan had been increased to $540,000, and that an amount of about $551,000 was owing. A series of default notices followed, and in 2007 the mortgagee commenced proceedings for possession. An order for possession had been obtained by the end of that year. 14. However, it appears that by agreement with the mortgagee, the plaintiff and her partner sold the East Hills property in early 2008 for the sum of $510,000. There is evidence that an amount of almost $102,000 remained outstanding on the mortgage loan account following the sale. 15. In the meantime, both Mr Sengoz and Mr Masri had become bankrupt (on 1 February 2008 and 12 October 2007 respectively). 16. The plaintiff's partner died in May 2008. 17. As noted earlier, in 2009 the plaintiff, in her own right and as the person entitled to her deceased partner's estate, commenced proceedings against Mr Wehbe. It was alleged that Mr Wehbe acted negligently and in breach of fiduciary duties in the course of acting on the refinance and investment transaction in 2003. The allegations made against Mr Wehbe included the following: 1. that he failed to obtain a registrable second mortgage from Messrs Sengoz and Masri prior to settlement of the investment; 2. that he failed to obtain the consent of the first mortgagee to the registration of a second mortgage in favour of the plaintiff and her partner; and 3. that the sum of $230,000 was paid to Messrs Sengoz and Masri without obtaining proper security. 1. It was alleged that by reason of Mr Wehbe's breaches, the plaintiff and her partner suffered loss and damage including: 1. loss of the outstanding principal sum of $200,000; 2. loss of interest thereon; 3. penalties and default interest incurred as a consequence of not receiving interest on the principal sum to enable the mortgage over the East Hills property to be serviced; and 4. consequential loss arising from default under the loan secured over the East Hills property, resulting in the forced sale of the East Hills property at a loss to the plaintiff and her partner. 1. The proceedings were defended by Mr Wehbe. He filed a Defence on 19 November 2009, and an Amended Defence on 6 February 2012. He appears to have been represented by DLA Piper Australia throughout the proceedings. 2. In the meantime, on 11 November 2011 the plaintiff lodged an administrative claim for compensation from the Torrens Assurance Fund pursuant to s 131 of the Act. 3. At some stage during 2012 the plaintiff and Mr Wehbe entered into a Deed of Settlement and Release. The Deed includes the following provisions: BACKGROUND A [Sharen] Thomas and George Pincham (Pincham) were the registered proprietors of the land at 44 Enright Street, East Hills in New South Wales, Folio Identifier 82/35736 (East Hills Land). Pincham is now deceased. B In or about June 2003, Thomas and Pincham borrowed the sum of $500,000 from First Mortgage Home Loans Pty Ltd (FirstMac) secured by way of a first registered mortgage over the East Hills Land (FirstMac Loan). Part of the FirstMac Loan was to refinance an existing mortgage on the East Hills Land. C Thomas and Pincham on-lent $230,000 of the FirstMac Loan to Abraham Sengoz and Sam Masri (Sengoz and Masri) (Investment Loan). Sengoz and Masri agreed to pay Thomas and Pincham interest of 20% per annum on the Investment Loan. The Investment Loan provided for an unregistered second mortgage over a property owned by Sengoz and Masri situated at 40 Campbell Crescent, Terrigal (Terrigal Land). D Thomas and Pincham retained Wehbe and his firm, Robert Wehbe & Partners, to act for them in relation to the FirstMac Loan and the Investment Loan. E Sengoz and Masri subsequently defaulted on the Investment Loan and failed to repay $200,000 of the principal sum of $230,000 and/or all interest due. F Thomas issued proceedings against Wehbe in the Supreme Court of NSW, Proceedings No 2009/297596, alleging that Wehbe breached his duty of care to Thomas and Pincham and/or his retainer in the course of acting for her in relation to the FirstMac Loan and the Investment Loan (Proceedings). G Thomas alleges that she has suffered loss and damage as a result of Wehbe's alleged breaches of duty and/or retainer. H Wehbe denies the allegations made. I The parties have agreed to resolve the Proceedings without admission of liability by either party on the terms set out in this document. OPERATIVE PROVISIONS … 3.1 The parties have agreed without admission of liability to resolve the Proceedings on the basis that Wehbe pay Thomas the sum of $450,000 inclusive of Thomas' costs of the Proceedings and all other out of pocket expenses including, for the avoid [sic] of doubt, any amount that Wehbe is required to pay on behalf of Thomas to: 3.1.1 Medicare Australia pursuant to the Health and Other Services (Compensation) Act 1995 pursuant to a valid Notice of Past Benefits or Notice of Charge; and/or 3.1.2 Centrelink pursuant to a Notice of Charge/clearance from Centrelink. 3.2 Wehbe is authorised to deduct and/or pay from the settlement sum of $450,000 any moneys repayable in respect of the claim made by Thomas to any person or body whether in respect of workers compensation, Centrelink, sick leave payments, make up pay, accident pay or otherwise concerning which any demand or notice has been served or given to Wehbe or his solicitor or insurer either before, on or after the date of this document. … 3.4 Payment of the settlement sum of $450,000 stated in clause 3.1 less any amounts payable by Wehbe pursuant to clause 3.2 (the Settlement Amount) is to be made by electronic transfer to Thomas' solicitor, John Capsanis Solicitors and Barristers' Trust Account BSB 112879, account number 482170010. … 3.6 Upon the payment of the Settlement Amount, Thomas releases and discharges Wehbe from all claims, liabilities, costs and expenses whatsoever and howsoever arising out of the FirstMac Loan, the East Hills Land, the Terrigal Land, the Investment Loan, the Proceedings, the subject matter of the Proceedings and/or the matters recited above. … 5.1 This document may be raised or pleaded as a complete defence to the continuance of the Proceedings or any claims, proceedings or cross claims which may be filed now or in the future in respect of FirstMac Loan, the Investment Loan, the East Hills Land, the Terrigal Land, the Proceedings, the subject matter of the Proceedings and/or the matters recited above, provided however, Thomas may commence proceedings to recover any payment which Wehbe has defaulted in payment of pursuant to this [sic] terms of this document. 1. The sum of $450,000 was paid to the plaintiff in accordance with the Deed. 2. The plaintiff's administrative claim for compensation was ultimately refused on 7 June 2016. Reasons for the refusal of the claim were provided on 28 June 2016. Determination 1. The plaintiff brings her claim on the basis that she is a person who has suffered loss or damage as a result of the operation of the Act in respect of any land. As I understand the plaintiff's case, the operation of the Act from which loss or damage is said to result concerns the withdrawal of caveat AB303816 in respect of Lot 1 in SP 75435 and the registration of the transfer of Lot 1 in SP 75435 to Heidelberg Investments Pty Ltd. The plaintiff contends that the effect of those dealings was to deprive the plaintiff and her partner of an interest in Lot 1 in SP 75435, and ultimately bring about the need to sell their East Hills property. 2. A threshold issue arises as to whether the plaintiff or her partner obtained any interest in the Terrigal land from their June 2003 agreement with Messrs Sengoz and Masri. The Registrar-General referred to paragraph 4 of the Statement of Claim in which it is alleged that the plaintiff and her partner were entitled to an interest in the Terrigal land by virtue of an agreement "stated to be between the parties dated 13th June 2003". It was pointed out that the Deed signed at that time by the plaintiff and her partner was not signed by either Mr Sengoz or Mr Masri, and thus no interest in land could have been created (see s 23C(1)(a) of the Conveyancing Act 1919 (NSW)). 3. The plaintiff's pleading suffers from a lack of precision in this respect. There does not appear to be any agreement between the parties that is actually dated 13 June 2003. However, the allegation can, without injustice to the Registrar-General, be read as referring more generally to the investment transaction that settled on 13 June 2003. That transaction involved the execution by all parties of the agreement dated 20 May 2003. Clauses 2 and 3 of that agreement, read together, contained an agreement on the part of Messrs Sengoz and Masri to grant a registered second mortgage over the Terrigal property to secure the amount of $230,000 that was to be invested by the plaintiff and her partner. On that basis, the plaintiff and her partner acquired an interest in the Terrigal property, as equitable mortgagees, arising from an enforceable agreement to grant a mortgage over the property. That interest was sufficient to form the basis of a caveat over the title to the Terrigal property (and later over the titles to the three lots in SP 75435). 4. The two caveats that were subsequently lodged by the plaintiff and her partner were defective in that the nature of the estate or interest claimed was not specified. However, I do not think that anything turns on that deficiency. The fact remains that in November 2005 the plaintiff and her partner had an interest in the three lots in SP 75435, and had the benefit of a caveat against the title to those lots. 5. As a result of the withdrawal of caveat AB303816 in respect of Lot 1 in SP 75435, and the registration of the transfer of that lot to Heidelberg Investments Pty Ltd which obtained the benefit of indefeasibility of title under the Act, the plaintiff and her partner lost their interest in Lot 1 in SP 75435. 6. In my opinion, loss or damage sustained as a result of those dealings constitutes loss or damage suffered as a result of the operation of the Act in respect of Lot 1 in SP 75435. Moreover, such loss or damage could be regarded as arising from: 1. acts or omissions of the Registrar-General in the exercise or performance of his functions or duties under the Act, within the meaning of s 129(1)(a); or 2. the plaintiff and her partner being deprived of an estate or interest in Lot 1 in SP 75435, within the meaning of s 129(1)(e), and is thus capable of falling within s 129(1) of the Act. 1. It is necessary to consider the extent to which loss or damage has, for the purposes of s 129(1) of the Act, resulted from the operation of the Act in respect of Lot 1 in SP 75435. This requires an assessment of the evidence before the Court, and the application of the principles of causation that have been developed in other contexts, including the principles set forth by the High Court in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 (see Chandra v Perpetual Trustees Victoria Limited [2008] NSWSC 178 at [17]-[18]; Kirkland v Quinross Pty Ltd [2008] NSWSC 286 at [70]). 2. Whilst it seems clear that the plaintiff and her partner lost their interest in Lot 1 in SP 75435, there is little evidence before the Court concerning the value of that interest. It is not known how much Messrs Sengoz and Masri owed to Shakespeare Haney Securities Pty Ltd, which held a registered mortgage over each of the three lots in the strata plan. It is not known how much each of the lots was then worth, although it could be inferred that Lot 1 had a value in the vicinity of the $1.43 million apparently paid by Heidelberg Investments Pty Ltd. That is, it is not known whether there was any "equity" available which could have been applied towards a repayment of the amount outstanding to the plaintiff and her partner. 3. The plaintiff deposed that there was "no way" she and her partner would have agreed to the withdrawal of their caveat "without receiving our money". That may be accepted. It may also be accepted that had the caveat not been withdrawn, the plaintiff and her partner would have been in a position to negotiate with Messrs Sengoz and Masri if the latter had wished to pursue a dealing that was hindered by the caveat. Again, however, there is a paucity of evidence that would allow an assessment of the likelihood that in those circumstances the plaintiff and her partner would have been able to obtain a repayment of some or all of the amount outstanding. 4. Whether the plaintiff and her partner would have been able to extract a repayment from Messrs Sengoz and Masri, had the caveat remained on the title, is really a matter of speculation. It may well have been the case that they were powerless to stop a sale of Lot 1 in SP 75435 which involved the payment of all of the proceeds of sale to the registered mortgagee. 5. It is not possible, on the evidence before the Court, to undertake a rational assessment of the value of the lost interest in Lot 1 in SP 75435, or the likelihood of receipt of a payment (or the likely amount of a payment) had the caveat remained in operation. 6. Of course, the focus of the plaintiff's case is not so much upon losses of that kind, but rather a loss said to have been suffered by reason of the need to sell the East Hills property. It was submitted that this was also a loss suffered as a result of the withdrawal of the caveat and the transfer of Lot 1 in SP 75435 that occurred in November 2005. For the reasons which follow it is my opinion that the evidentiary foundation for that submission is lacking. 7. It seems to be the case, and indeed the plaintiff accepted, that the plaintiff and her husband were reliant upon the promised returns on their investment to service the loan that was secured over the East Hills property. The evidence suggests that at all relevant times the debt secured on the East Hills property was at least $500,000. The debt had reached $550,000 by September 2006. 8. The loan was made in June 2003. It was expressed to be interest only for the first five years, with a variable rate of interest. The rate was 6.95% at the commencement. At that rate, almost $35,000 would be required to be paid in interest each year. Under the agreement with Messrs Sengoz and Masri, the plaintiff and her partner were to receive monthly payments calculated on the basis of an annual return of 20% on the amount invested. From November 2004, the amount invested was $200,000, so the annual return was thereafter meant to be $40,000. As noted earlier, the evidence concerning the making of these payments is incomplete, but it is likely that the payments had ceased by about May 2006. 9. The plaintiff has not established that had the dealings with Lot 1 in SP 75435 not occurred, she and her partner would likely have received a payment from Messrs Sengoz and Masri which could have been applied in reduction of the debt secured on the East Hills property. The plaintiff did not give evidence that there was some other source of funds available that could and would have been applied towards that debt. In these circumstances, it cannot be concluded that had the withdrawal of the caveat and the transfer of Lot 1 in SP 75435 not occurred, the plaintiff and her partner would have been able to service the debt on the East Hills property such that it would not have become necessary to sell it. Those dealings in respect of Lot 1 in SP 75435 cannot in my view be regarded as a cause of the need to sell the East Hills property. It follows that the loss of the East Hills property has not been shown to be a loss suffered as a result of the operation of the Act in respect of any land for the purposes of s 129(1) of the Act. 10. There is thus no basis to claim an entitlement to compensation under s 129(1) for the loss of the East Hills property. Neither would there be any basis to claim compensation for any loss incurred upon the sale. There was in any event no satisfactory evidence that the property was in fact sold for less than its true value. 11. These conclusions are sufficient to dispose of the plaintiff's claim. It is not necessary to deal with the Registrar-General's argument that the claimed loss of the East Hills property was not recoverable under s 129(1) of the Act because it concerned land that was different from the land the subject of the relevant dealings. I do not propose to express any view on that matter. That is best left to a case where a loss of that kind is shown to have been caused by the operation of the Act. It is also unnecessary to consider whether the claimed loss falls within s 129(2)(b) such that compensation is not payable in relation to it. Finally, it is unnecessary to consider whether the plaintiff established the quantum of the loss allegedly sustained. I would observe, however, that even if the starting point of quantification is the present value of the East Hills property (as to which see Registrar-General v Behn [1980] 1 NSWLR 589 at 597F-G; affirmed in The Registrar-General (New South Wales) v Behn (1981) 148 CLR 562), the likely amount of debt that would have remained secured on the property had it not been sold would need to be taken into account. The ability of the plaintiff or her partner to pay interest would need to be considered, but there was little evidence to suggest that a substantial debt could have been serviced. 12. For the above reasons, the plaintiff's Statement of Claim must be dismissed. The Court will also order that the plaintiff pay the Registrar-General's costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 October 2018