Field v Gaborit[2002] QSC 466

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

MULLINS J

No 10787 of 2000

BRISBANE

DATE 26/11/2002

JUDGMENT

HER HONOUR:  The record should note that there are no appearances but I will proceed to publish my reasons which I advised the parties yesterday I would be publishing today.

The plaintiffs seek interlocutory relief pending the determination of their claim for specific performance against the defendants Luc Bernard Gaborit and Leanne Tracey Ollett.  On 31 October 2000 the plaintiff signed a contract to purchase the property situated at 61 Grandview Drive, Coolum Beach and described as Lot 28 on RP 190990 in the County of Canning, Parish of Maroochy for $410,000 from the defendants.

The contract was signed by Ms Ollett on her behalf and as power of attorney for Mr Gaborit.  The settlement date was 30 days from the date of the contract.  The solicitors for the plaintiffs contacted the solicitors for the defendants on 17 November 2000 about the power of attorney and were told that it was not yet registered and that it would register on Monday.  The defendants then wished to terminate the contract and sought the plaintiffs' agreement to that course.  The plaintiffs refused, affirmed the contract and attended for settlement at which the defendants did not attend.

The plaintiffs had lodged a caveat on 24 November 2000 in respect of the property asserting their interest as purchasers pursuant to the contract.  This proceeding was commenced on 8 December 2000.  The claim and statement of claim were served on the solicitors McColm Matsinger who had been acting on behalf of the defendants in respect of the contract and who then advised that they had instructions to accept service on behalf of Ms Ollett only.  Ms Ollett filed her defence on 5 January 2001.

Steps were then taken on behalf of the plaintiffs to serve Mr Gaborit who was ultimately not served until 16 January 2002 in the United States.  A defence was filed on behalf of Mr Gaborit by Frangos Lawyers on 18 February 2002 alleging that Ms Ollett did not have any authority from Mr Gaborit to enter into the contract, there was no power of attorney capable of registration in Queensland and, if there were an operative power of attorney, Ms Ollett was precluded from entering into a contract to sell the property, as Mr Gaborit had expressly instructed Ms Ollett that the property was not to be sold.

Although the plaintiffs had commenced this proceeding within the time required to prevent the caveat lapsing, the plaintiffs' solicitors omitted through ignorance to give the notice of commencement of proceeding required by section 126 subsection 4 of the Land Title Act 1994.  The Registrar was therefore at liberty to remove the caveat.  That was not done.  On 27 September 2001 the solicitors for the plaintiffs checked that the caveat remained in place.

On 12 June 2002 Ms Ollett, without the knowledge of the plaintiffs or their solicitors, lodged a request with the Registrar that the lapsed caveat be removed which was done.  The plaintiffs' solicitors searched the title on 18 July 2002 and discovered that the caveat had been removed.  On 22 July 2002 the plaintiffs' solicitors lodged a second caveat in identical terms to the first without obtaining leave of the Court pursuant to section 129 of the Land Title Act 1994.  The plaintiffs' solicitor admits that he was not aware at that time of the effect of section 129 of the Land Title Act.

On 26 July 2002 Ms Ollett requested the Registrar, without notice to the plaintiffs' solicitors, that the second caveat be removed on the ground that the prior caveat had lapsed and been removed and this caveat was lodged on the same grounds.  On 21 August 2002 Ms Ollett requested the Registrar that her request for removal of the second caveat be withdrawn.

Ms Ollett claims to have then sent a letter to the plaintiffs on 28 August 2002 in which the defendants required the plaintiffs to start a proceeding to establish the interest claimed under the caveat.  The defendants overlooked the existence of this proceeding.  The plaintiffs did not receive that letter. 

On 5 September 2002 the plaintiffs filed an amended claim and statement of claim in which they sought alternative relief against Ms Ollett for damages for breach of warranty of authority.  On 10 September 2002 the second caveat was removed at the request of the defendants.  In February 2002 Ms Ollett had sought legal advice from another solicitor about her separation from Mr Gaborit and a property settlement.  As a result consent orders were registered in the Magistrates Court at Maroochydore pursuant to which Ms Ollett transferred her interests in the property to Mr Gaborit.  That transfer was registered on the title on 16 September 2002.

On 8 October 2002 an amended defence was filed on behalf of Mr Gaborit.  On 28 October 2002 the plaintiffs' solicitors searched the title again and ascertained that the second caveat had been removed and the transfer in favour of Mr Gaborit registered.

The plaintiffs' solicitors immediately lodged a third caveat on the same grounds and without leave pursuant to section 129 of the Land Title Act.  The application seeking an order that the Registrar correct the Register by cancelling the transfer to Mr Gaborit and reinstating the third caveat was filed on 30 October 2002.  An amended application was filed by leave at the hearing yesterday seeking leave nunc pro tunc for the lodgement of the second or third caveats or for an injunction restraining Mr Gaborit from disposing of his interest in the property.

In the course of pursuing disclosure against the parties and their solicitors the plaintiffs' solicitors obtained a copy of the letter from McColm Matsinger dated 22 July 2002 to Frangos Lawyers in which McColm Matsinger set out their instructions about the power of attorney which were:

"Our instructions are that in about July 2000 when our respective clients were living in the US your client signed a US Power of Attorney for our client for the purpose of handling specific financial transactions, banking etc. in the US.  It was made clear at the time the Power of Attorney was signed that our client was not to use it to do anything major like sell the house.  The Power of Attorney subsequently was sent to our client's solicitors (McColm Matsinger) in Maroochydore where it remained until 20 November 2000 when it was collected from the solicitors by our client at the insistence of your client.  The Power of Attorney has since been destroyed."

The plaintiffs have indicated their preparedness to give the usual undertaking as to damages.  At the hearing yesterday it was not in issue that there were serious questions to be tried about whether the plaintiffs would have been entitled to specific performance against the defendants and if so whether Mr Gaborit took the transfer of Ms Ollett's interest with notice of the fraud which the plaintiffs allege in their submissions tainted that transfer.

Although the statement of claim has not yet been amended by the plaintiffs to plead that allegation of fraud in respect of the transfer of Ms Ollett's interest in the property to Mr Gaborit, that allegation was raised by the affidavits filed on behalf of the plaintiffs for the purpose of this application.

The grounds on which the defendants opposed the plaintiffs obtaining either injunctive relief or relief that would facilitate the caveating of the property by the plaintiffs were delay, that it was the plaintiffs' solicitors' fault that the plaintiffs had not successfully caveated the property to protect their interests as purchasers and that damages were otherwise an adequate remedy.

Submissions were addressed on behalf of the plaintiffs as to whether leave could be granted nunc pro tunc under section 129 of the Land Title Act in respect of either the second or the third caveats.  It is not necessary to determine that question.  As I indicated during the course of the argument yesterday, I considered the preferable course at this stage, if the plaintiffs were to be successful on their application, was for leave to be granted for a fresh caveat to be lodged against the property on the same grounds as the first caveat, notwithstanding the transfer of Ms Ollett's interest to Mr Gaborit.

Matters relevant to whether leave should be granted to the lodgement of a fresh caveat include whether there is a serious question to be tried, the balance of convenience, whether there is a satisfactory explanation for why the earlier caveat lapsed, the delay in making the application for leave and whether the defendants would be prejudiced by the lodging of a further caveat.  See Landlush Pty Ltd v. Rutherford [2002] QSC 219 at para [18].

There has been an explanation for the delays in seeking relief.  The explanation does not reflect well on the plaintiffs' solicitors but there does not appear to be any fault attributable to the plaintiffs themselves in the lapsing of the first caveat and the delay before this application was brought.  Mr Conrick of counsel submitted that it was relevant that the plaintiffs' solicitors lodged two caveats without seeking leave and that leave to what would be the fourth caveat to be lodged against the property would be an indulgence which the plaintiffs do not deserve.

That consideration has to be balanced against the lack of prejudice to the defendants, that there are admitted serious questions to be tried and the balance of convenience at this stage, provided the proceeding is now prosecuted with expedition, still favours preserving the status quo until the plaintiffs' claims against the defendants can be determined.

In view of the address of the property and that the plaintiffs still wish to pursue their claim for the specific performance, I am not satisfied that damages are an adequate remedy.  On balance I have concluded that this is an appropriate case to grant leave under section 129 of the Land Title Act to the lodging of a further caveat on the same grounds as the first caveat and that an injunction should be granted against the male defendant restraining the defendant from dealing with the property pending the lodgement of the caveat.

Mr Conrick submitted that the injunction should be limited to a short period to enable the lodgement of the caveat to take place and the plaintiffs agreed to that limitation.  I therefore suggested to the parties that they prepare a draft order which reflected the orders I indicated at the hearing yesterday that I was prepared to make.

A facsimile dated 25 November 2002 incorporating copies of the draft order initialled by the parties' representatives was received by my associate.  That facsimile will be Exhibit 4.  The draft incorrectly referred to the property as Lot 26 when it is Lot 28.  I made an order this morning in terms of the draft amended to refer to Lot 28.

I indicated yesterday that I considered the appropriate order for costs was costs reserved.  That was included in the draft order.  There is substance in the argument that the plaintiffs, by their application, are seeking an indulgence and should bear the costs of the application.  I was persuaded, however, that the costs of the application would be better disposed of at the completion of the proceeding when all relevant matters could then be taken into account.