70 Pitt Street Sydney v McGurk [2004] NSWSC 449

New South Wales Supreme Court

CITATION : 70 Pitt Street Sydney v McGurk [2004] NSWSC 449 HEARING DATE(S) : 19 May 2004 JUDGMENT DATE : 19 May 2004 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : Previous judgment was interlocutory. Principles concerning re-opening judgment not applicable. Caveat ordered to be withdrawn. Solicitor ordered to pay costs of application on indemnity basis.

CATCHWORDS : CONVEYANCING - LAND TITLES UNDER THE TORRENS SYSTEM - caveats against dealings - order for withdrawal of caveat - circumstances in which withdrawal may be ordered even if court has earlier declined to order withdrawal - PROCEDURE - miscellaneous procedural matters - court declines to order removal of caveat - whether such an order interlocutory - whether application on basis of facts arising since previous judgment for order for withdrawal of caveat involves re-opening previous judgment - COSTS - litigant fails to comply with undertaking to court through fault of his solicitor - later court proceedings occasioned by the failure to comply with undertaking - whether solicitor to pay costs of later proceedings, and on what basis LEGISLATION CITED : Real Property Act 1900 CASES CITED : 70 Pitt Street Sydney v McGurk [2004] NSWSC 413 PARTIES : 70 Pitt Street Sydney Pty Limited - Plaintiff Michael Loch McGurk - Defendant FILE NUMBER(S) : SC 2753/04 COUNSEL : M J Cohen - Plaintiff C R C Newlinds SC - Defendant SOLICITORS : Michell Sillar - Plaintiff Henry Davis York - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY JUDGE LIST

CAMPBELL J

WEDNESDAY 19 MAY 2004

2753/04 70 PITT STREET v MICHAEL LOCH McGURK JUDGMENT – Extempore (Revised 20 May 2004) HIS HONOUR: Adjournment Application 1 This is a matter where the plaintiff has exercised liberty which I granted it on 10 May 2004 to restore the matter before me. On 10 May 2004 I decided, in 70 Pitt Street Sydney v McGurk [2004] NSWSC 413 that a caveat, insofar as it related to Lots 7 and 9 in strata plan 70713, should not be ordered to be withdrawn. I held that the caveator was not entitled to prevent a particular sale from settling when the proceeds of sale would go to a creditor of the vendor who had security over the land. However, I declined to order the caveat be withdrawn because the defendant/caveator gave an undertaking to the Court, the effect of which was that the defendant would attend the settlement which was proposed concerning the sale of Lots 7 and 9 on Wednesday 12 May, and, if the purchaser of those Lots was then willing to settle, would proffer a withdrawal of caveat. 2 The reason why the matter has been restored today is that on 12 May neither the defendant nor any representative of his attended the settlement. In consequence, the settlement went off. A further Notice to Complete has been issued concerning the sale of Lots 7 and 9. There is evidence before me that it was by reason of a mistake on the part of the solicitors for the defendant that no one attended the settlement. 3 The plaintiff is having a meeting with its bankers tomorrow, where a general review of the finance facility provided by those bankers will take place. 4 Today the plaintiff seeks an order that, notwithstanding the decision I gave on 10 May, the caveat be withdrawn insofar as it relates to Lots 7 and 9. The defendant seeks to have today's application adjourned to Friday. The basis on which that was put to me was that, while the events of Wednesday the 12th were unfortunate, what has happened has happened, and there is no urgency in bringing the matter on before Friday. As well, it was said that, concerning withdrawal of the caveat insofar as it relates to four other Lots in the building, the defendant wishes to advance an additional cross-claim, which could most conveniently be dealt with at the same time as the plaintiff's present application. 5 I decline to adjourn the plaintiff's present application. That does not stop the defendant from taking such steps as it might wish to bring on for comparatively urgent hearing any further application it might wish to make relating to the four Lots other than Lots 7 and 9. It seems to me that the circumstance that, for whatever reason, an undertaking to the Court has not been complied with, that in consequence a settlement has gone off, and that the review of the finance facility is happening tomorrow, create a circumstance where it is better to deal with the plaintiff's matter now.

[Evidence and argument followed.] Can the Plaintiff bring this Application 6 I outlined the circumstances in which the matter was before me in the judgment I recently gave concerning the application for adjournment. 7 So far as the ability of the plaintiff to make the application is concerned the situation is, it seems to me, that the plaintiff is making, today, a fresh application for an order that the caveats be withdrawn, on the basis of facts which have arisen since my earlier judgment. 8 A decision of the Court declining to order a caveat be withdrawn, at least where the reasons are like those which I gave in my judgment of 10 May 2004, is a decision of an interlocutory kind. It is open to a party to make a fresh application for the caveat to be withdrawn, on the basis of facts which have arisen since an earlier refusal of the Court to make an order that the caveat be withdrawn, without any question of re-opening a previous judgment arising. Whether the Caveat should be Removed 9 The plaintiff seeks an order that the caveat, insofar as it relates to Lots 7 and 9, be withdrawn. Nothing has changed since my previous judgment about the prima facie entitlement of the plaintiff to not have the caveat interfere with settlement of the sales of Lots 7 and 9, in circumstances where the proceeds of any such sale would be to the Commonwealth Bank. The principles are set out at paragraph [15] of that judgment. 10 The only basis on which I earlier declined to make an order for withdrawal of the caveat was that an undertaking was given. That undertaking has not been complied with. The undertaking which was given was, as recorded in paragraph [23] of my earlier judgment, an undertaking "To attend and hand over withdrawal of caveat on Wednesday if the purchaser is then willing to complete ". 11 There is evidence that the defendant executed withdrawals of caveat, and delegated the task of attending the settlement with those documents to a solicitor. The solicitor failed to attend through, it seems, not knowing precisely where he was going, and not leaving enough time to get there. Under those circumstances, when the undertaking has proved not to be something that the Court can count on, the reasons which I formerly gave lead to the conclusion that the caveats should now be withdrawn. 12 Mr Newlinds SC, in opposition to an order being made for withdrawal of the caveat, submitted that the settlement went off because both parties were not ready. That, in my view, simply does not matter. The only unreadiness on the part of the vendor which has been clearly demonstrated is that it did not have the withdrawals of caveat available. 13 Next, Mr Newlinds submitted that the failure to perform the undertaking was not the defendant's fault, and he had used his best endeavours to comply with it. The undertaking in its terms was not one which required best endeavours – it required performance. The reasons why the undertaking was not performed might be relevant to whether the breach was of a type which has consequences beyond this present application. However, all that matters for the present purposes is that it was in fact not carried out. 14 Next, Mr Newlinds says that a letter from the plaintiff's solicitors of 14 May 2004 suggests that the plaintiff does not accept that it is bound to use withdrawals of caveats, relating to the other four lots which were the subject of my earlier orders, only for the purpose of permitting settlement of the contracts which are now on foot. It is to seek to limit the use which can be made of those four withdrawals of caveat that the defendant is foreshadowing the bringing of an application this coming Friday. However, Mr Newlinds informs me that that application is not one which will seek to limit the use of the caveats to effect settlement of sales the proceeds of which will be paid to the Commonwealth Bank in discharge of its mortgage. 15 If an order were made for withdrawal of the caveats relating to Lots 7 and 9, and if sales of other lots in the building took place, so that the Commonwealth Bank had been paid out, a circumstance might then arise when it would be appropriate for the defendant to make an application under section 74O of the Real Property Act 1900 to lodge a fresh caveat claiming the same interest as it has claimed in the two caveats now under consideration. That possibility can be dealt with when and if it happens. 16 I order pursuant to section 74MA of the Real Property Act 1900 that caveat registered number AA 58913 Y to the extent it affects the land contained in folio identifiers 7/SP70713 and 9/SP70713 be removed.

[submissions made] Costs 17 Application is made by the plaintiff for a variation of the costs order which I made on 10 May 2004, to make the costs of up to that time payable on an indemnity basis. I decline to vary the order as to costs I made on 10 May 2004. 18 The present application has been occasioned by reason of the failure to comply with the undertaking which was given on 10 May 2004. The firm of solicitors instructed to attend on that occasion is instructing Mr Newlinds today, and says, through him, that it would not oppose an order being made against it if I were minded to make it. 19 In my view, it is appropriate that those solicitors should pay the costs of today's application, and should pay them on an indemnity basis. I order Henry Davis York to pay the costs of today's application and the preparation incidental thereto, on an indemnity basis. 20 The order concerning removal of the caveat may be entered forthwith. The order for costs may be assessed and made payable forthwith. 21 I direct that the defendant notify the plaintiff by noon tomorrow, 20 May 2004 of the terms of any orders it proposes to seek relating to the use which is made of withdrawal of caveat documents, together with any affidavits proposed to be relied upon and I grant liberty for any such application to be made before me in the course of Friday 21 May 2004. **********

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