Angels v Hairis [1994] QCA 112

IN THE COURT OF APPEAL [1994] QCA 112 SUPREME COURT OF QUEENSLAND Appeal No. 26 of 1994 Brisbane Before Fitzgerald P. Davies J.A. Kiefel J. [Hairis v. Angels] BETWEEN: CONSTANTINO MICHAEL HAIRIS (Applicant) Respondent AND: ANGELOS ANGELS (Respondent) Appellant REASONS FOR JUDGMENT - THE COURT Judgment delivered 13/05/1994 These are reasons for the judgment of this Court given on 28 March in an appeal against an order that the appellant's caveat be allowed to remain only on condition that he pay into court the sum of $75,000. By its judgment this Court, in effect, reduced the amount required to be paid as a condition of allowing the caveat to remain to the sum of $25,000. The appellant was formerly the registered proprietor of the land over which the caveat is registered. He mortgaged the land to Custom Credit Corporation Limited in 1989 as security for a loan. By 1991 he was unable to meet his loan repayments and the mortgagee sold the property at auction. The respondent was the purchaser. Prior to the sale, the -- 1 of 7 -- 2 respondent, who was then friendly with the appellant, had agreed with the latter to buy the property. The arrangement between the parties in this respect was the subject of dispute before the chamber judge although it was common ground that it involved an arrangement pursuant to which the respondent would buy the property and the appellant would buy it back from him at some later time. The appellant caveated on the basis of an interest in the land pursuant to an agreement. Before the learned primary judge and in this Court the claim was made on alternative bases. They were: 1. The whole beneficial interest in the fee simple in the land subject to the payment of the caveatee's holding costs of the land (including the moneys expended in acquisition of the land) as beneficiary of a trust created on the acquisition of the land by the caveatee; or, alternatively, 2. The whole beneficial interest in the fee simple in the land as purchaser under a contract made in or about November 1991 between the parties for the purchase of the land for a sum equal to the caveatee's holding costs of the land (including the moneys expended in the acquisition of the land). The caveat was lodged on 26 October 1993. The respondent, with notice of its lodgment, signed an unconditional -- 2 of 7 -- 3 contract to sell the land to a third party for $70,000 on 24 November 1993. The learned chamber judge said that he thought the caveator's claim to title was shadowy but that sufficient had been shown to deter him from ordering removal of the caveat. However, he went on to impose two conditions of its remaining; the first that the caveator give the usual undertaking as to damages, and the second that the amount claimed by the respondent as the amount which would be due to him on the transfer by him of the land to the appellant be brought into court. That sum, he said, was roughly $75,000. His Honour imposed the second condition because he thought there was a very close analogy between the relationship of these parties and that of a mortgagee and mortgagor where, in the ordinary case, the mortgagor was attempting to restrain a sale of land by the mortgagee pursuant to the latter's power of sale. His Honour was, of course, thinking of the case of Inglis v. Commonwealth Trading Bank of Australia (1972) 126 C.L.R. 161. There is, it is true, some similarity between the two cases. In that case and in this the person seeking to prevent sale of the land is not entitled to the land except on payment of a sum of money, the amount of which, in the present case, was not greatly disputed; the appellant said it was in the vicinity of $65,000 rather than $75,000. However the so- called "ordinary rule" applied in Inglis has no operation -- 3 of 7 -- 4 beyond the case where there is no doubt that the mortgagee has the power to sell; the only question being the amount due or the mode in which the power of sale is proposed to be exercised or whether the mortgagor should be allowed to redeem. Here the appellant asserts a prior right, either pursuant to a trust or a contract which, if it exists, derogates from the respondent's power of sale. The question before his Honour was whether, the appellant having asserted a right to a prior legal or equitable interest and the respondent, with knowledge of the assertion of that right having entered into a contract to sell to a third party, the balance of convenience required that the appellant pay into court the whole of the amount which he would be required to pay to have the land transferred to him. There are two aspects of that question. The first is how that requirement would affect the appellant; and the second is whether it was necessary to protect the respondent. Its effect on the appellant was effectively to preclude him from obtaining finance, upon the security of the land, in order to obtain a transfer of the land from the respondent. So common is that practice in contracts for sale of land that it was plainly a factor which needed to be taken into account. On the other hand, the price in the respondent's contract -- 4 of 7 -- 5 with the third party and, perhaps also, the fact that the purchaser under that contract appears to have been prepared to grant extensions of time prior to the hearing before the learned chamber judge in order to keep the contract on foot, are some evidence that, if the caveat remained on the land but the appellant ultimately failed to purchase, any action by the third party against the respondent would be limited to the expenses which he had incurred in respect of the purchase. There was evidence that the respondent had incurred holding charges in the period since he purchased the land, amounting in all to a little over $17,000. Although there was no evidence of the third party's expenses in respect of the purchase, the total of those and the respondent's holding charges are unlikely to exceed $25,000. There was no evidence that, in the events postulated, the respondent's loss would be any greater than that. In those circumstances, we do not think that a payment of more than $25,000, in addition to the undertaking as to damages, was justified as a condition of allowing the caveat to remain. For that reason, we ordered that the amount be, in effect, reduced to $25,000. -- 5 of 7 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 26 of 1994 Brisbane [Hairis v. Angels] BETWEEN: CONSTANTINO MICHAEL HAIRIS (Applicant) Respondent AND: ANGELOS ANGELS (Respondent) Appellant ____________________________________________________________ _____ FITZGERALD P. DAVIES J.A. KIEFEL J. ____________________________________________________________ _____ Judgment delivered 28/03/1994 Reasons delivered 13/05/1994 REASONS FOR JUDGMENT - THE COURT ____________________________________________________________ _____ APPEAL ALLOWED. ORDER OF PRIMARY JUDGE VARIED BY DELETING CONDITION 2(a) AND SUBSTITUTING A CONDITION THAT IN ADDITION TO THE AMOUNT ALREADY PAID INTO COURT, THE APPELLANT PAY INTO COURT THE FURTHER SUM OF $5,000 BY 4 P.M. ON THE DAY FALLING 14 DAYS FROM 28/03/1994. COSTS TO BE RESERVED TO A JUDGE OF THE DISTRICT COURT AT CAIRNS. ____________________________________________________________ _____ CATCHWORDS: TORRENS SYSTEM - CAVEAT - condition imposed on caveat remaining - balance of convenience - whether condition that appellant pay into court the amount he would be required to tender to have the land transferred to him justified. Counsel: B. Clarke for the Appellant R. Hansen Q.C. with him Mr Varitimos for the Respondent -- 6 of 7 -- 7 Solicitors: Messrs Hill & Taylor for the Appellant Messrs. Amarandos & Company for the Respondent Date(s) of Hearing: 28 March 1994 -- 7 of 7 --