New Galaxy Investments Pty Ltd v Thomson & Ors [2017] NSWCA 153

New Galaxy Investments Pty Ltd v Thomson & Ors [2017] NSWCA 153

NGI did not acquire a caveatable interest by paying $6 million to the Vendors, as the payment was neither requested nor procured by the Vendors or GDI, and no contractual, equitable, or subrogated right arose. On the evidence, the majority found the caveats were not lodged without reasonable cause: the Vendors and GDI did not discharge the onus of proving NGI lacked an honest belief on reasonable grounds that it had a caveatable interest, particularly as NGI and its solicitor acted on legal advice. Accordingly, NGI was not liable in compensation under s 74P of the Real Property Act 1900 (NSW); claims against it for such compensation were dismissed. Avondale Lawyers, lacking a proprietary...

Parties
Appellant/third Defendant/thirteenth Respondent: New Galaxy Investments Pty Ltd; First Respondent/first Plaintiff: David Alan Thomson; Second Respondent/second Plaintiff: Tracy Spencer; Third Respondent/third Plaintiff: Joseph Alonso; Fourth Respondent/fourth Plaintiff: Kaye Alonso; Fifth Respondent/fifth Plaintiff: John Wolfe; Sixth Respondent/sixth Plaintiff: Janyce Wolfe; Seventh Respondent/seventh Plaintiff: Malcolm Smith; Eighth Respondent/eighth Plaintiff: Katherine Smith; Ninth Respondent/ninth Plaintiff: Pera Webb; Tenth Respondent/tenth Plaintiff: Maureen Theobald; Eleventh Respondent/first Defendant: Golden Destiny Investments Pty Ltd (GDI); Twelfth Respondent/second Defendant: MV Golden Destiny Development (Turramurra) Pty Ltd (MVGDD); Thirteenth Respondent/party: Yun "Louise" Lin; Fourteenth Respondent/party: Kristjan Geering; Fifteenth Respondent/appellant: Francisco Gutierrez trading as Avondale Lawyers
Jurisdiction
Australia
Judgment Date
23 June 2017
Procedural Posture
Civil Appeal and Application for Leave to Appeal / Judgment on Appeal From Primary Judge in Equity Division, Supreme Court of New South Wales
Outcome
NGI's appeal allowed in part; Avondale's application for leave to appeal dismissed.
Legal Topics
Caveats Under Torrens System, Equitable Liens and Interests, Compensation for Wrongful Caveat, Novation of Contracts, Cross Claims and Restitution, Priority of Claims to Funds Held in Court
Real Property Equity Trusts Civil Procedure Caveats Under Torrens System Equitable Liens and Interests Compensation for Wrongful Caveat Novation of Contracts +2 more

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Parties

New Galaxy Investments Pty Ltd

Appellant/third Defendant/thirteenth Respondent

David Alan Thomson

First Respondent/first Plaintiff

Tracy Spencer

Second Respondent/second Plaintiff

Joseph Alonso

Third Respondent/third Plaintiff

Kaye Alonso

Fourth Respondent/fourth Plaintiff

John Wolfe

Fifth Respondent/fifth Plaintiff

Janyce Wolfe

Sixth Respondent/sixth Plaintiff

Malcolm Smith

Seventh Respondent/seventh Plaintiff

Katherine Smith

Eighth Respondent/eighth Plaintiff

Pera Webb

Ninth Respondent/ninth Plaintiff

Maureen Theobald

Tenth Respondent/tenth Plaintiff

Golden Destiny Investments Pty Ltd (GDI)

Eleventh Respondent/first Defendant

MV Golden Destiny Development (Turramurra) Pty Ltd (MVGDD)

Twelfth Respondent/second Defendant

Yun "Louise" Lin

Thirteenth Respondent/party

Kristjan Geering

Fourteenth Respondent/party

Francisco Gutierrez trading as Avondale Lawyers

Fifteenth Respondent/appellant

Procedural Posture

Civil Appeal and Application for Leave to Appeal / Judgment on Appeal From Primary Judge in Equity Division, Supreme Court of New South Wales

Legal Issues

  1. 1 Did New Galaxy Investments Pty Ltd have a caveatable interest in the properties by reason of its $6 million payment?
  2. 2 Did NGI have an honest belief on reasonable grounds that it had a caveatable interest?
  3. 3 If the caveats were lodged without reasonable cause, are the Vendors and GDI entitled to compensation under s 74P of the Real Property Act 1900 (NSW)?

Ratio Decidendi

NGI did not acquire a caveatable interest by paying $6 million to the Vendors, as the payment was neither requested nor procured by the Vendors or GDI, and no contractual, equitable, or subrogated right arose. On the evidence, the majority found the caveats were not lodged without reasonable cause: the Vendors and GDI did not discharge the onus of proving NGI lacked an honest belief on reasonable grounds that it had a caveatable interest, particularly as NGI and its solicitor acted on legal advice. Accordingly, NGI was not liable in compensation under s 74P of the Real Property Act 1900 (NSW); claims against it for such compensation were dismissed. Avondale Lawyers, lacking a proprietary...

Court Disposition

NGI's appeal allowed in part; Avondale's application for leave to appeal dismissed.

Orders

  • Grant leave to NGI to appeal to the extent required.
  • Allow appeal (NGI) in part; set aside orders 2, 3, 5 and 7 (20 Nov 2015); set aside orders 1, 5 and 6 (21 Apr 2016).