Nguyen v Sage Consultant Group Pty Ltd; Dang v Nguyen (No 3)

1. [1]

   The Court published its principal judgment in these two related proceedings on 24 June 2021: Nguyen v Sage Consultant Group Pty Ltd; Dang v Nguyen [2021] NSWSC 753.

2. [2]

   The Court also published a second judgment on 5 August 2021 that dealt with a number of disputes between the parties concerning the orders that should be made to give effect to the principal judgment: Nguyen v Sage Consultant Group Pty Ltd; Dang v Nguyens (No 2) [2021] NSWSC 978. The second judgment contains a broad explanation of the effect of the principal judgment.

3. [3]

   The Court has before it two notices of motion. The first one I will consider was filed by the Nguyens on 1 December 2021. As I will explain in more detail below, it seeks orders against Mr Lam that he withdraw a caveat he has lodged that is preventing the Nguyens from executing on a judgment made by the Court in their favour against Mr Hoang. The second notice of motion was filed by Mr Hoang on 5 November 2021. It seeks an order setting aside a judgment of Ward CJ in Eq (as her Honour then was) entered by the Court in favour of the Nguyens.

4. [4]

   The two proceedings have been called the 2017 proceedings and the 2019 proceedings. In the 2017 proceedings, the Nguyens, as plaintiffs, obtained a judgment for $239,906 against Mr Hoang, the second defendant. The Nguyens then sought to enforce their judgment by having the Sheriff execute a writ for levy of property issued by the Court against the Smithfield property owned by Mr Hoang. The Sheriff was unable to execute the writ because Mr Hoang’s mother, Ms Dang, lodged a caveat against the title to the Smithfield property in which she claimed an equitable estate in that property. The 2017 proceedings then involved attempts by the Nguyens to obtain an order for the withdrawal of Ms Dang’s caveat.

5. [5]

   In the 2019 proceedings, Ms Dang, who was the plaintiff, sought a declaration as against the Nguyens, as the first three defendants, and Mr Hoang, as the fourth defendant, that the equitable estate that she claimed in the Smithfield property was valid. That claim failed, as the Court determined that the evidence did not establish that Ms Dang was entitled to the estate claimed.

6. [6]

   The issue at the heart of both proceedings arose out of the terms of s 74MA of the Real Property Act 1900 (NSW), which gives the Court power to order the withdrawal of caveats. The only persons authorised to apply for that relief are persons who are or claim to be entitled to an estate or interest in the land described in the caveat. Under the law of this State, judgment creditors to whom writs for levy of property are issued do not have an estate or interest in the land the subject of the writ. It therefore appeared that the enforcement of this Court’s judgment in favour of the Nguyens would be thwarted by reason of the lodgement by the judgment debtor’s mother of a caveat, irrespective of the validity of the caveat and whether or not the estate claimed by Ms Dang existed.

7. [7]

   For the reasons contained in the principal judgment I found that, notwithstanding that the Nguyens lacked standing to apply under s 74MA of the Real Property Act, as the Court had found on a contested hearing on the merits between Ms Dang and the Nguyens that the estate claimed by Ms Dang did not exist, the Court in its inherent jurisdiction had power to order Ms Dang to withdraw the caveat that sought to protect the non-existent estate and that an order to that effect should be made.

8. [8]

   However, the Nguyens discovered, before the Court was able to make final orders in their favour in the 2019 proceedings that would lead to the removal of Ms Dang’s caveat and the issue of a new writ for levy of property in favour of the Nguyens, that Mr Lam, who is a friend of Ms Dang, had lodged a new caveat against the title to the Smithfield property, in which Mr Lam claimed a different estate in that property than had Ms Dang. Mr Lam’s caveat had the effect of prohibiting the registration by the Registrar-General of the new writ for levy of property.

9. [9]

   The evidence on the hearing of the notice of motion was that Mr Lam was in court supporting Ms Dang during the hearing that led to the publication of the principal judgment. Mr Lam must have known that the whole purpose of the hearing on the part of the Nguyens was to obtain an order for the withdrawal of Ms Dang’s caveat. Mr Lam did not lodge his caveat until 13 August 2021, which was after the principal judgment was delivered on 24 June 2021, but before final orders were able to be made on 15 November 2021. As will be seen, Mr Lam has claimed that the estate in the Smithfield property upon which his caveat is based was created by an instrument dated 20 January 2018.

10. [10]

    The Nguyens’ notice of motion is the culmination of further steps by the Nguyens in the 2019 proceedings to cause Mr Lam’s caveat to be withdrawn, so that they will be able to register their new writ for levy of property and try again to enforce their judgment by means of the Sheriff executing that writ.

11. [11]

    This application raises the s 74MA standing problem again, although in a more acute form than in relation to Ms Dang’s caveat. As I have explained, the object of Ms Dang’s failed 2019 proceedings was to obtain a declaration on a final hearing binding the Nguyens that Ms Dang was entitled to the estate that was the basis of her caveat. In the case of Mr Lam’s caveat, he has neither sought to enforce the underlying estate that he claims against the Smithfield property, nor has he sought a declaration binding the Nguyens that the estate that he claims is valid. The Nguyens’ standing problem remains to be addressed.

12. [12]

    In these reasons I will use the same terms and abbreviations as I have used in the two earlier judgements.

Nguyens’ notice of motion

1. [13]

   The following extract from the principal judgment provides the starting point for an understanding of the background against which the two notices of motion have been filed:

Caveat filed by Mr Lam

1. [14]

   On 5 October 2021, before the Court’s orders could be made on 15 November 2021 in the two proceedings, the Nguyens’ solicitor conducted a search of the title to the Smithfield property and discovered that Ms Dang’s friend, Mr Lam, had lodged a caveat against the title to the Smithfield property on 13 August 2021.

2. [15]

   Caveat AR331007 lodged on behalf of Mr Lam by Victor Lawyers Pty Ltd prohibited the recording in the Register against the title to the Smithfield property of any dealing other than a plan affecting the estate or interest claimed by the caveator. The estate or interest claimed was an estate in fee simple pursuant to a loan agreement dated 20 January 2018 between Mr Lam and Mr Hoang.

3. [16]

   The effect of the Lam caveat was to prohibit the registration of the new writ that was finally issued on 15 November 2021.

Nguyens’ cross summons

1. [17]

   Following the discovery by the Nguyens of the caveat lodged by Mr Lam, on 28 October 2021 they filed a cross summons in the 2019 proceedings, whereby they sought the following relief:

2. [18]

   It is sufficient for the purposes of these reasons to note in relation to prayer 1 that the Court has made and extended orders in terms of that prayer until further order of the Court to protect the Nguyens pending the delivery of this judgment.

3. [19]

   While it is not necessary to explain the detail in these reasons, the Court has previously indicated that it would not make an order in terms of prayer 3, because an order to that effect would give the Nguyens priority over another party who has lodged a caveat against the title to the Smithfield property that may protect an interest validly granted by Mr Hoang to that party. The priority of the claim of the Nguyens and that of the other party is an open question that is not relevant to the issue the subject of these reasons.

Orders made in 2017 proceedings and 2019 proceedings

1. [20]

   Following attempts by the parties to the two proceedings to agree the orders that the Court should make to give effect to the two judgments, the Court made the following orders on 15 November 2021:

Procedural orders in 2019 proceedings

1. [21]

   Given the possibility that steps had been taken to frustrate the orders of the Court that were imminent when Mr Lam’s caveat was lodged, on 19 November 2021 I made the following further orders in the 2019 proceedings:

Nguyens’ cross claim

1. [22]

   The Nguyens filed their cross claim in accordance with the leave granted by order 1 on 24 November 2021. The relief claimed was as follows:

2. [23]

   The Nguyens do not seek by the prayers in their cross claim the same relief as they sought in their cross summons. As they applied for and were given leave to file their cross claim they have implicitly abandoned or amended their cross summons except to the extent that they have incorporated its prayers by reference.

3. [24]

   The first form of the relief sought by the Nguyens against Mr Lam is a declaration that he does not hold an equitable interest in the Smithfield property, or if he does, it is no more than a ‘mere equity’. By seeking this declaration, the Nguyens are effectively attempting to achieve the same outcome as they achieved against Ms Dang in the 2019 proceedings. The difference is that while Ms Dang sought a declaration in the 2019 proceedings that she had the estate in the Smithfield property that she claimed, in the Nguyens’ cross claim against Mr Lam they seek a declaration that Mr Lam does not have the equitable estate that he claims.

4. [25]

   The second form of the relief sought by the Nguyens, by means of the reference in prayer 2 to prayer 1 of the cross summons, is an injunction against Mr Hoang prohibiting him from dealing with the Smithfield property until the judgment granted by the Court to the Nguyens against Mr Hoang plus interest has been paid in full.

5. [26]

   The third form of the relief sought by the Nguyens, by means of the reference in prayer 2 to prayers 5 to 7 of the cross summons, is orders against Mr Lam that would have the effect that the form necessary to cause Mr Lam’s caveat to be withdrawn, whether prepared by Mr Lam or the Registrar, will be signed, and an injunction will be issued against Mr Lam preventing him from lodging a further caveat against the title to the Smithfield property or taking any other step that hinders the Sheriff in the execution of the new writ for levy of property.

Relief sought in notice of motion

1. [27]

   The Nguyens’ notice of motion filed on 1 December 2021seeks the following relief:

2. [28]

   Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 13.1 relevantly provides:

3. [29]

   The effect of prayers 1 and 2 of the notice of motion is in substance that the Nguyens seek a summary declaration binding Mr Lam and Mr Hoang that Mr Lam does not have any estate or interest in the Smithfield property.

4. [30]

   Rules 25.14(4) and (5) of the UCPR provide:

5. [31]

   It appears that the Nguyens rely upon the freezing order rule to support the claim in prayer 1 of the cross summons for an order that Mr Hoang not dispose of or deal with the Smithfield property in a manner that prevents the Nguyens executing on their writ for levy of property to recover the judgment debt owed by Mr Hoang.

6. [32]

   The Nguyens appear to rely upon the Court’s inherent jurisdiction to support their claims in prayers 5 to 7 of their cross claim for injunctive relief to cause Mr Lam’s caveat to be withdrawn and to restrain him from lodging a further caveat against the title to the Smithfield property.

Service on Mr Lam and Mr Hoang

1. [33]

   The evidence of service that has been filed satisfies me that Mr Hoang and Mr Lam were served with all documents required by the Court’s orders to be served in the manner authorised by those orders. In any event, both parties have communicated with my Associate in a way that demonstrates that in fact they have had notice of the Nguyens’ application.

2. [34]

   Neither Mr Hoang nor Mr Lam filed defences or affidavit evidence in response to order 6 made by the Court on 19 November 2021 before the hearing that took place on 20 January 2022.

3. [35]

   Mr Hoang appeared in person by telephone at the hearing on 20 January 2022. Mr Hoang did not address the Nguyens’ notice of motion filed on 1 December 2021 and he only made submissions in support of his notice of motion for an order setting aside the judgment made against him by Ward CJ in Eq.

4. [36]

   Mr Lam did not formally appear, but he was informally represented by a barrister who advised the Court that he had been requested at the last moment by Mr Lam’s daughter, who is a lawyer holding a practising certificate but who could not formally brief him because she is employed as a corporate counsel, to make a request on Mr Lam’s behalf that the hearing of the motion be adjourned. That application was rejected for reasons set out in the transcript of the hearing on 20 January 2022. I am satisfied that Mr Lam had notice of the hearing, and I do not accept the reasons given on behalf of Mr Lam to the Court as to why Mr Lam did not comply with the orders that were served upon him.

Mr Lam’s affidavit

1. [37]

   On 13 November 2021, Mr Lam apparently sent an email to my Associate (with the assistance of a person who gave their name only as Tammy) which attached a copy of an affidavit of Mr Lam affirmed on 12 November 2021. Relevantly, the affidavit says:

2. [38]

   I note that Mr Lam’s email was witnessed by a person with the first name Tammy who describes herself as a solicitor.

Promissory Note

1. [39]

   On 14 November 2021, my Associate received a further email from Mr Lam, this time attaching a document called a Promissory Note. The document is in the following terms:

2. [40]

   Mr Lam did not produce to the Court an original of the document, notwithstanding that he was served on 19 November 2021 by the Nguyens with a notice to produce that required him to do so. Consequently, neither the Nguyens nor the Court have had the opportunity to inspect the original document for the purpose of making a judgment as to its authenticity.

Email exchange with witness to Promissory Note

1. [41]

   As the Nguyens were not privy to the creation of the Promissory Note or the alleged events referred to in it, they were not in a position to give any direct evidence in support of their claim that the Promissory Note was a fabrication. Although Mr Lam did not read his affidavit at the hearing, the Nguyens relied upon the content of the affidavit and the Promissory Note in support of their application for summary judgment against Mr Lam.

2. [42]

   The Nguyens also relied upon an exchange of emails between their solicitor and the Justice of the Peace who appears to have witnessed the execution of the Promissory Note, Ms Carol Yin. The emails were tendered into evidence as annexures to an affidavit of the Nguyens’ solicitor.

3. [43]

   As Mr Lam did not appear to contest the Nguyens’ application, no objection was made to the tender of the email exchange. The solicitor’s email to Ms Yin explained that the Nguyens had obtained a judgment against Mr Hoang and that for some time they had been attempting to enforce their judgment. The email then stated:

4. [44]

   The email then sets out seven questions to which Ms Yin was requested to respond.

5. [45]

   Although the solicitor’s affidavit annexed a copy of the Promissory Note in the form in which it was provided by Mr Lam to my Associate, it did not separately annex what was referred to in the email to Ms Yin as “two attached documents (page 3 and Page 4) bearing your alleged signatures”. I infer that the documents that were attached to the email were the pages of the Promissory Note headed “NOTARY ACKNOWLEDGEMENT – BORROWER” and “NOTARY ACKNOWLEDGEMENT – LENDER”.

6. [46]

   Ms Yin’s email reply dated 17 November 2021 said:

7. [47]

   The handwriting on the two pages of the Promissory Note on which Ms Yin’s signature appears consists of “Smithfield”, Ms Yin’s full name apparently in Chinese characters, her registration number as a Justice of the Peace, and her signature.

8. [48]

   I accept that the handwriting appears to be identical in both places.

9. [49]

   However, Ms Yin did not provide evidence in affidavit form, her email responses are truncated responses to the questions asked, and those questions were manifestly leading questions.

10. [50]

    In their written submissions in support of their notice of motion, the Nguyens relied upon documents provided to my Associate by Mr Hoang, being an unsworn statement dated 19 October 2021 and a sworn affidavit of 5 November 2021. I consider that the Nguyens are entitled to rely upon that information in support of their claim for a continuation of the freezing order against Mr Hoang, but as it has not been read into evidence by Mr Hoang, it is not admissible on the Nguyens’ claims against Mr Lam. Admissions made by Mr Hoang out of court do not bind Mr Lam.

Should summary judgment be entered in favour of the Nguyens?

1. [51]

   It will now be convenient to address the Nguyens’ claim for a declaration that Mr Lam has no estate or interest in the Smithfield property.

2. [52]

   The Nguyens accepted that they are not entitled to summary judgment against Mr Lam unless they satisfy the test in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 (Barwick CJ); [1964] HCA 69, which requires that it be demonstrated that any defence to the claim is so obviously untenable that it cannot possibly succeed, or put another way, it is manifestly groundless or so manifestly faulty that it does not admit of argument.

3. [53]

   The Nguyens’ case is that it is clear beyond argument that the Promissory Note was fabricated in order to create an illusory foundation for Mr Lam’s caveat to frustrate the Nguyens’ attempts to enforce their judgment against the Smithfield property.

4. [54]

   I set out below in paraphrased form the argument put by the Nguyens in par 34 of their written submissions:

5. [55]

   I am not satisfied that the Nguyens have established to the requisite degree of certainty that the Promissory Note is a fabrication and that, on the evidence that is now before the Court, Mr Lam cannot possibly succeed at a final hearing in proving that the Promissory Note is a genuine document.

6. [56]

   As appears from the summary of the Nguyens’ submission that I have set out above, they have assumed that the Court would treat the information provided by Mr Hoang and Ms Yin as evidence in their application against Mr Lam. As I have explained, I have not admitted the information provided by Mr Hoang against Mr Lam, and I have treated the email exchange between the Nguyens’ solicitor and Ms Yin as being of doubtful probative value because it has not been sworn or affirmed and Ms Yin’s responses were to leading questions.

7. [57]

   The strongest point in the Nguyens’ favour is the disparity between the statement in par 4 of the Promissory Note that it was given to secure the payment of the purchase price of the Smithfield property and the evidence given by Mr Lam in his affidavit that the whole of the money that was allegedly advanced was advanced for a number of different purposes concerning the operation of the restaurant by Mr Hoang and for payment of Mr Hoang’s legal costs of his criminal proceedings.

8. [58]

   While the Court is entitled on the evidence on this summary judgment application to doubt that Mr Lam will be able to support the validity of the Promissory Note at a final hearing, I do not consider that the Nguyens’ claim is so unarguable as to justify the entry of summary judgment against Mr Lam.

Should injunctive relief be granted against Mr Lam?

1. [59]

   I now turn to the question of whether the Court should at this stage of the proceedings grant the injunctions sought by the Nguyens in prayers 5 to 7 of their cross claim filed on 28 October 2021.

2. [60]

   Although prayer 5 is drawn on the basis that the claim for the injunction is predicated upon the Court having found that Mr Lam “holds only a mere equity or holds no equitable interest in” the Smithfield property, I am satisfied that the Nguyens have made it sufficiently clear that they seek the injunctive relief if the circumstances justify those orders being made even if, as has happened, they did not succeed in obtaining on a summary basis a declaration that Mr Lam had no estate or interest in the Smithfield property.

3. [61]

   It is trite law that the filing of a caveat has the effect of a statutory injunction restraining the registration by the Registrar-General of any dealing that is prohibited by the caveat. Where a party has standing under the Real Property Act to seek the withdrawal of the caveat, whether by means of the lapsing notice procedure under s 74J or by application for an order for withdrawal of the caveat under s 74MA, the burden will ultimately fall on the caveator who wishes to sustain the lodgement of the caveat to demonstrate by evidence that it is seriously arguable that the caveator is entitled to the estate or interest in the land claimed in the caveat and that the balance of convenience warrants a continuation of the caveat.

4. [62]

   As the writ for levy of property issued by the Court in favour of the Nguyens does not give them an estate or interest in the Smithfield property, they do not have standing under s 74MA of the Real Property Act to institute any process for the withdrawal of Mr Lam’s caveat. I will consider below the question whether the Court nonetheless has power, on the application of the Nguyens, to grant the injunctions that they seek. I will first, however, consider whether the evidence demonstrates on an interlocutory basis that Mr Lam’s caveat should be extended or withdrawn.

5. [63]

   The following factors would be relevant to the continuation of Mr Lam’s caveat, if the Nguyens have standing to apply for the injunctions that they seek:

6. [64]

   These considerations satisfy me that, if the Court has power on the application of the Nguyens to order the withdrawal of Mr Lam’s caveat, it should do so.

7. [65]

   The legal question that arises is whether the Court has power to grant the injunctions sought by the Nguyens, given that there is no mechanism in the Real Property Act for the Nguyens to make an application under that Act to achieve that result.

8. [66]

   The answer to the question depends upon whether the Real Property Act was intended to be exhaustive of the means whereby caveats may be ordered to be withdrawn from the Register.

9. [67]

   For the following reasons, that question should be answered in the negative and the Court does have power in its inherent jurisdiction to grant the injunctions sought by the Nguyens.

10. [68]

    Since the decision of McLelland CJ in Eq in Stocks & Holdings (Imperial Arcade) Ltd v Fink [1965] NSWR 504; (1965) 82 WN (Pt 1) (NSW) 386, there has been authority that the Court has jurisdiction to grant an injunction restraining the lodgement of a caveat, at least in cases where it appears that an order under s 74P of the Real Property Act for the payment of compensation will not be adequate to compensate the applicant for the consequences of a wrongly lodged caveat. This proposition has been accepted by the learned editor of Butt’s Land Law (7th ed, 2017, Thomson Reuters) at [12.1150]; see also Williams v Marac Australia Ltd (1985) 5 NSWLR 529 at 533-4 (Hodgson J, as his Honour then was); Halaga Developments Pty Ltd v Grime (1986) 5 NSWLR 740 at 747-9 (Waddell CJ in Eq); Milne Feeds Pty Ltd v Bride (Supreme Court (WA), Murray J, 7 May 1996, unrep; BC9601733 at 17); Crown Developments Australia Pty Ltd v Ginger Development Enterprises Pty Ltd [2003] NSWSC 593; (2003) 11 BPR 21,565 at [57] (Palmer J); Gangemi v Gangemi [2009] WASC 268 at [9]-[10] (Murphy J, as his Honour then was); and O’Neill v Kwon [2016] NSWSC 1706 at [51] (Davies J); see also in a different context Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd [2014] VSC 217; (2014) 285 FLR 267 at [109]-[115] (Robson J).

11. [69]

    In Halaga Developments Pty Ltd v Grime, which concerned an application for an order restraining the Registrar-General from processing a primary application after a caveat preventing the Registrar-General from bringing the land under the provisions of the Real Property Act had lapsed, Waddell CJ in Eq said at 747-749:

12. [70]

    In Milne Feeds Pty Ltd v Bride, Murray J said at 17-18:

13. [71]

    In Wickham Hill Investment Pty Ltd v Ding [2019] NSWSC 631, Parker J was concerned with an application for an injunction to restrain the defendant from registering any further financial statements under the Personal Property Securities Act 2009 (Cth). This was the same issue that Robson J dealt with in Sandhurst Golf Estates Pty Ltd v Coppersmith Pty Ltd. Parker J analysed the authorities referred to above at [216]-[229], and then said:

14. [72]

    The effect of this reasoning is to uphold the Court’s general law power to grant an injunction restraining a party from lodging a caveat in cases where the Court has decided that the party proposing to lodge the caveat does not have the estate or interest to be claimed in the caveat, as the Court has power deriving from its general law jurisdiction to determine title to property to grant an injunction in aid of its determination on the question of title. That suggests that the power to grant an injunction restraining the lodgement of the caveat is dependent upon the Court first having determined the question whether the proposed caveator has the estate or interest to be claimed.

15. [73]

    The circumstances of the present case give rise to the following questions which must be answered in a way positive to the Nguyens’ position before the Court would have power to grant an injunction requiring Mr Lam to withdraw his caveat:

    1. (1)

       Does the power to restrain a proposed caveator from lodging a caveat extend to a power to order a caveator to withdraw a caveat that has already been lodged?

    2. (2)

       If Question (1) should be answered in the affirmative, may the power only be exercised to protect the interests of the party with an estate or interest in the subject land (as opposed to some other interest that the applicant for the injunction may have), as may appear to be required by the reasoning of Waddell CJ in Eq in Halaga Developments Pty Ltd v Grime?

    3. (3)

       If Question (1) should be answered in the affirmative, may the power only be exercised after the Court has decided that the proposed caveator does not have the estate or interest that would be claimed in the caveat, so that the power is only exercisable in aid of the order determining the title issue, as may appear to be required by the reasoning of Parker J in Wickham Hill Investment Pty Ltd v Ding?

    4. (4)

       If Question (1) should be answered in the affirmative and Questions (2) and (3) in the negative, in what circumstances and subject to what conditions should the Court exercise the power to order that a caveat be removed from the Register?

16. [74]

    These questions arise because Mr Lam lodged his caveat without notice to the Nguyens, so they were unable to seek an order restraining the lodgement. As the issue of the writ for levy of property to the Nguyens as judgment creditors does not give them an estate or interest in the Smithfield property, their application for injunctive relief is not in support of their title to an interest in the property but is in support of their interest in executing on their judgment in the effective implementation of the due process of the Court in ensuring that its orders are effective. As I have declined to enter summary judgment against Mr Lam in favour of the Nguyens’ application for a declaration that Mr Lam has no estate or interest in the Smithfield property, the Court cannot grant the injunctions sought by the Nguyens in support of a determination by the Court concerning the title to that property. That consideration requires the Court to direct attention to the issue of whether, the lodgement of the caveat being in effect a statutory interlocutory injunction preventing the registration of dealings against the title to the subject land, the Court has power to grant an injunction that undoes the statutory interlocutory injunction, even before questions of title have been determined.

17. [75]

    So far as my research discloses, the questions set out above must be answered in the absence of relevant direct authority.

18. [76]

    In my view, Question (1) should be answered in the affirmative. In a situation where the Court may grant an injunction to restrain the lodgement of a caveat, it should have power to order that the caveat be withdrawn, although the discretionary considerations that apply in each case may differ because of the different circumstances. As the learned authors of Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies (5th ed, 2014, LexisNexis Butterworths) say at [21-440] (footnote omitted): “Nowadays, in theory at least, the courts recognise that no separate principles apply to mandatory injunctions; they are granted or declined on the same principles as prohibitory injunctions.” The Court’s power to make an order protecting the rights of the claimant should not be exhausted if the caveat is lodged without the claimant’s notice. The considerations that justify the making of a pre-emptive order require that the Court has power in principle to order that the injury caused by the lodgement of the caveat be reversed where that is possible.

19. [77]

    That being the case, Question (2) should be answered in the negative. Although it may generally be the case that the determination of whether the Court should permit a caveat to be filed or should order that one be withdrawn will concern the protection of an estate or interest in the relevant property asserted by the claimant – as the usual business of the Real Property Act is to regulate claims to interests in real property – the references to the protection of the rights of a claimant to property in authorities such as Halaga Developments Pty Ltd v Grime and Wickham Hill Investment Pty Ltd v Ding should not be understood as being intended to exclude the protection of all other rights. Reference was made to the power to protect rights in property because those rights were the subject of the applications.

20. [78]

    As the present Chief Justice of this Court said in submissions when appearing for the respondent in PT Bayan Resources TBK v BCBC Singapore Pte Ltd (2015) 258 CLR 1 at 5; [2015] HCA 36: “The entry and enforcement of judgments is central to the administration of justice.” The Court must in principle have the power to issue injunctions where that is necessary to preserve the integrity and effectiveness of the Court’s processes and judgments. As was said by French CJ, Kiefel, Bell, Gageler and Gordon JJ in that case (footnotes omitted):

21. [79]

    This statement of the power of the Court to issue injunctions in order to prevent the frustration of the Court’s process is in principle of general application and not limited to the power to issue freezing orders. It extends in an appropriate case such as the present, where the Court has entered a judgment in favour of the Nguyens and issued to them a writ for levy of property, to issue an order against a caveator over property of the judgment debtor to require that the withdrawal of the caveat where the continuation of the caveat is frustrating the Court’s process. Whether such an order should actually issue will depend upon the application of conventional principles to the particular circumstances. The protection of the administration of justice is even more fundamental than the preservation of interests in property as the former is a necessary condition of the latter.

22. [80]

    Although there may be occasions where the Court finds it necessary to issue an order prohibiting the lodgement of a caveat in aid of a finding that the caveator does not have the interest in the property that the threatened caveat claims to protect, or to protect the title to property that the Court has found resides in the claimant for the injunction, the correct answer to Question (3) does not always require that the injunction only be granted following a final determination of the title to property. The fact that a caveat acts as a statutory injunction which can be lodged by the unilateral act of the caveator means that the caveator can pre-empt the power of the Court to supervise the proper maintenance of the Register unless the Court has power to order the withdrawal of a caveat in the period between its lodgement and the final determination by the Court of the validity of the interest in the land claimed in the caveat. If the Court is to supervise the maintenance of the Register in that interval of time it will have to do so on the basis of interlocutory findings concerning the title claimed by the caveator. Either the Court has power to issue an injunction requiring the caveator to withdraw the caveat in an interlocutory context or the Court is powerless to protect rights that are injured by the lodgement of the caveat until the Court can make a final determination of relevant claims to interests in the property. The Court must have power to issue an injunction to neutralise the effect of the statutory injunction created by the unilateral act of the caveator in cases where it is appropriate to exercise that power.

23. [81]

    As the Court must issue a mandatory injunction where that is necessary to neutralise the statutory injunction created by the lodgement of the caveat before all relevant questions of title can finally be determined, the Court must recognise that the injunction is inherently interlocutory, even though its form will necessarily be final. Depending upon the Court’s consideration of the balance of convenience, the Court must make ancillary orders to ensure that the Court will be able to do justice between the parties when the issues of title are able to be determined. That is, in my view, the proper answer to Question (4).

What orders should be made in the present case?

1. [82]

   The consideration of the strength of the interest in the Smithfield property claimed by Mr Lam and the balance of convenience that I have undertaken above justifies a conclusion on balance that Mr Lam should be ordered to withdraw his caveat and should be ordered not to lodge any further caveat against the title to the Smithfield property without the prior order of the Court.

2. [83]

   However, as the Court has rejected the Nguyens’ summary claim for a declaration that Mr Lam has no estate or interest in the Smithfield property, it remains open for Mr Lam to prove that he has a prior estate or interest in the Smithfield property to the claim made by the Nguyens based upon their judgment against Mr Hoang and the issue of the new writ for levy of property in their favour.

3. [84]

   The fact that the judgment entered by Ward CJ in Eq on 29 January 2018 has not yet been executed, and the Dickensian history of the proceedings since that date, cry out for the Court to take all steps available to remove all possible impediments to the Sheriff executing on the writ for levy of property if that can be done. As I have noted above, the complex issues that arise when the Sheriff is asked to execute on a writ for levy of property have been considered in the principal judgment. All the Court can do is to try to ensure that unwarranted impediments to the process are removed.

4. [85]

   If the Sheriff is able to execute on the writ for levy of property that has been issued to the Nguyens, then until the validity of Mr Lam’s claim to an estate or interest in the Smithfield property has been determined on a final basis, it will be necessary for the Sheriff to pay any net proceeds of sale of the property into court.

5. [86]

   In the meantime, Mr Lam cannot be allowed to sit on his caveat but if he wishes to establish that he has the estate or interest in the Smithfield property that he claims it will be necessary for him to file a cross claim in the 2019 proceedings seeking appropriate relief and to prosecute that claim with due expedition. It is an unwarranted imposition on the Nguyens that they be required to prosecute prayer 1 of their cross claim that will require them to prove a negative.

6. [87]

   I will therefore include in the orders made at the end of these reasons case management orders that will require Mr Lam to commence and prosecute his cross claim with expedition.

7. [88]

   Given the centrality of the Promissory Note upon which Mr Lam relies, the orders will include an order that Mr Lam produce the original Promissory Note to the Court and, failing that, that Mr Lam file an affidavit that explains in detail why the original document has not been produced.

8. [89]

   The orders will also grant leave to the Nguyens to apply to me on short notice for an order: (1) in terms of prayer 1 of their cross claim if Mr Lam does not file a cross claim in accordance with the orders that I will make; or (2) an order for summary dismissal of Mr Lam’s cross claim for want of due dispatch if Mr Lam files the cross claim but then does not prosecute it in accordance with the orders.

9. [90]

   Although I understand that it will disappoint the Nguyens, it is premature for the Court to make any order for costs against Mr Lam at this stage of the proceedings other than that the costs of their notice of motion be the Nguyens’ costs in the cause. That is the conventional order made in favour of plaintiffs on a successful application for interlocutory relief. I will otherwise reserve the costs of the proceedings as between the Nguyens and Mr Lam.

Should the freezing order be continued against Mr Hoang?

1. [91]

   In par 33 of Mr Hoang’s 5 November 2021 affidavit that he sent to my Associate by email, he states that he has agreed to sell the Smithfield property to Mr Lam because he has not been able to repay to Mr Lam the money that he claims to owe to him. It is not clear from the affidavit whether this is a reference to a separate agreement or only to the Promissory Note.

2. [92]

   I am satisfied in the circumstances that the interlocutory injunction that has already been granted by the Court should continue until further order to ensure that Mr Hoang does not take any step that puts the Smithfield property beyond the reach of the new writ for levy of property.

Application to set aside judgment of Ward CJ in Eq

1. [93]

   The second notice of motion has been filed in what has been called the 2017 proceedings by Mr Hoang, the second defendant in those proceedings.

2. [94]

   Although Ward CJ in Eq struck out Mr Hoang’s defence for want of prosecution, she did not enter judgment against him solely on the basis of the absence of a defence. Her Honour considered the evidence that was before the Court on the application and decided that it warranted the entry of summary judgment against Mr Hoang.

3. [95]

   Mr Hoang was not legally represented on the hearing of the application, but he was represented at the call over at which the application was fixed for hearing.

4. [96]

   Mr Hoang filed a notice of motion on 5 November 2021 in which he sought the following orders:

5. [97]

   If these orders were made, they would undermine the judgment entered by her Honour in favour of the Nguyens for $239,906, which is the foundation of the whole of the 2017 and 2019 proceedings that led to the two judgments that I have published.

6. [98]

   Mr Hoang relied in support of his application on an affidavit affirmed by him on 5 November 2021. In substance, Mr Hoang claimed that he was unable to file a defence or defend the summary judgment application because he had insufficient funds to retain legal representation and he was under stress and suffered from depression whilst on bail following criminal charges concerning taking a fee in respect of the preparation of migration applications whilst he was an unregistered migration agent and for fraud. Mr Hoang was ultimately convicted and incarcerated between 22 August 2019 and 5 January 2021.

7. [99]

   The evidence given by Mr Hoang in his affidavit in support of his defence involved assertions in inadmissible form of criminal activity on the part of the Nguyens that had the result, he claimed, that he did not become indebted to them as alleged in the 2017 proceedings. The allegations, in the form in which they were made, are scandalous and should not be repeated in these reasons.

8. [100]

   As noted above, Mr Hoang was given the opportunity to make oral submissions in support of his application at the audio hearing on 20 January 2022.

9. [101]

   The judgment entered by Ward CJ in Eq was not a default judgment. It was a judgment on the merits, albeit on an application for summary judgment. Mr Hoang did not lodge an appeal against her Honour’s orders. Although Mr Hoang did not cite the source of the Court’s authority to set aside the orders made by her Honour, I agree with the observation made in the written submissions of counsel for the Nguyens that a possible source of power is UCPR r 36.15(1), which provides:

10. [102]

    However, as Pembroke J explained in Dimitrovski v Australian Executor Trustees Ltd [2013] NSWSC 337 at [3], for a judgment to be found to have been made “irregularly”, which is the only possibility in the present case from the alternatives “irregularly, illegally or against good faith”, it must be shown that there was an “irregularity in the process by which the judgment was obtained, not with the correctness of the decision.” The rule is not concerned with the situation that there may have been a different outcome if the case had been defended or the applicant wishes to reverse the judgment on the basis of a different defence.

11. [103]

    In the present case, Mr Hoang has not identified any arguable irregularity in the manner in which the hearing determined by Ward CJ in Eq was conducted or her Honour entered judgment against him. Accordingly, the rule does not apply.

12. [104]

    Furthermore, even where the rule is otherwise satisfied, it is necessary for the applicant to demonstrate “sufficient cause” to justify the judgment being set aside. As Pembroke J explained at [11], this is a discretionary consideration founded substantially on the principle of finality of justice. In the present case, Mr Hoang delayed in making his application until after both the 2017 and 2019 proceedings had been heard and finally determined. On his own evidence, he learned of the orders made against him in around March 2019, when the Sheriff’s officers attended the Smithfield property to serve him with the initial writ for levy of property. As appears from the explanation of the history of the proceedings in the principal judgment, that was relatively early in the course of the 2017 proceedings and before the 2019 proceedings were commenced. In the circumstances, it would be entirely unjust to all the other parties to these proceedings to permit Mr Hoang to challenge the judgment of the Court that is the foundation upon which the two proceedings have been conducted.

13. [105]

    An alternative source of power in the Court to set aside the judgment made by Ward CJ in Eq is UCPR r 36.16(2)(b) which provides:

14. [106]

    Mr Hoang’s application satisfies this rule in that the judgment was made in his absence even though his legal representatives had notice of the hearing. However, the power is discretionary. The judgment will not usually be set aside unless, where the applicant is a defendant, the applicant demonstrates that the proposed defence is genuine and reasonably arguable: see Magnate Projects Pty Ltd v Youma Constructions (No 2) Pty Ltd [2005] NSWCA 331 at [48]-[52] (Hodgson JA, Campbell AJA agreeing at [77]); Ibrahim v Ayoubi [2013] NSWCA 405 at [26] (Emmett JA and Sackville AJA). In the present case, Mr Hoang has not demonstrated that his proposed defence is either genuine or reasonably arguable.

15. [107]

    In stating that conclusion, I have had careful regard to the affidavit of the second plaintiff affirmed on 13 January 2022, which provided comprehensive objective evidence to support the Nguyens’ original claim in the 2017 proceedings, and which refuted the unsubstantiated claims made by Mr Hoang in support of his application. Although the refutation has not been tested at a hearing, I am satisfied that it is entirely plausible and that there would be no point in the Court making the orders sought by Mr Hoang.

16. [108]

    Further, the Court will not usually exercise its discretion to set aside a judgment that was regularly obtained where the applicant had notice of the hearing and chose not to appear: see Northey v Bega Valley Shire Council [2012] NSWCA 28 at [13], [29] (Barrett JA); Pham v Gall (2020) 102 NSWLR 269; [2020] NSWCA 116. As was stated by Emmett JA and Sackville AJA in Northey at [13] and [29]:

17. [109]

    I would in any case upon this application exercise my discretion to refuse relief because of Mr Hoang’s delay in making the application, for the reason I have given above. As Payne JA (Leeming and McCallum JJA agreeing at [1] and [156] respectively) stated in Pham v Gall at [112]:

18. [110]

    Accordingly, the Court will order that Mr Hoang’s notice of motion is dismissed with costs.

Orders

1. [111]

   I set out below the orders that I propose to make. The parties have leave to provide my Associate within 3 days with any suggestions that they may wish to make concerning the wording of the proposed orders. It will be necessary for the Nguyens to give to the Court the required usual undertakings as to damages if they wish the Court to make the associated orders against Mr Lam and Mr Hoang.

2. [112]

   The Court:

   1. (1)

      Orders that Van Dung Lam (Mr Lam) is to cause to be prepared and to lodge with the Registrar-General and to serve on the cross claimants (the Nguyens) within seven days of the making of these orders a “Form 08WX Withdrawal of Caveat” to cause the withdrawal of Caveat AR 331007.

   2. (2)

      Orders that in the event that Mr Lam fails to lodge a Form 08WX Withdrawal of Caveat for the withdrawal of Caveat AR 331007 with the Registrar-General, in accordance with Order 1, within seven days of the making of these orders, the Registrar in Equity, pursuant to s 94 of the Civil Procedure Act 2005 (NSW), is to prepare and execute a Form 08 WX Withdrawal of Caveat for the Caveat AR 331007 under the seal of the Court and lodge the completed Form 08 WX Withdrawal of Caveat for the Caveat AR 331007 with the Registrar-General within seven days of being notified by the Nguyens’ solicitor that Mr Lam has failed to comply with Order 1.

   3. (3)

      On the Nguyens giving to the Court the usual undertaking as to damages orders that Mr Lam is by himself his servants and agents restrained forthwith without the leave of the Court from lodging any further caveat on the title to the land referred to in Caveat AR 331007 (the Land).

   4. (4)

      Orders the Sheriff of New South Wales to pay into court the net proceeds of sale (if any) that are received upon the execution of the writ for levy of property renewed by order 8 made by the Court on 15 November 2021 in proceedings in this Court No 2017/60096 if that writ for levy of property is executed by the Sheriff by the sale of the Land.

   5. (5)

      Orders that if Mr Lam wishes to claim an interest in the Land, he do so by filing and serving a statement of cross claim in these proceedings by 13 May 2022 seeking a declaration as to the existence of the interest claimed that fully alleges the material facts and gives proper particulars of the claim.

   6. (6)

      Orders that if Mr Lam files and serves a cross claim in accordance with order 5 he shall at the time of filing produce to the Registry the original of the Promissory Note a copy of which was attached to an email dated 14 November 2021 sent by Mr Lam to the Associate to Robb J, and if Mr Lam is unable to produce the original of the Promissory Note he shall file and serve an affidavit that provides a full explanation of why the original document has not been produced.

   7. (7)

      Grants to the Nguyens the right to inspect the original Promissory Note if produced to the Registry.

   8. (8)

      Orders that if Mr Lam files and serves a cross claim in accordance with order 5 the Nguyens shall file and serve a defence to the cross claim by 27 May 2022.

   9. (9)

      Orders that these proceedings be listed before Robb J at 9:15am on 3 June 2022 for further directions.

   10. (10)

       Grants leave to the Nguyens to apply to the Court on five days’ notice to Mr Lam on a date to be arranged with the Associate to Robb J to apply:

   11. (11)

       Orders that the Nguyens’ costs of the 1 December 2021 notice of motion insofar as it seeks relief against Mr Lam be the Nguyens’ costs in the cause as against Mr Lam.

   12. (12)

       On the Nguyens continuing the usual undertaking as to damages given to the Court orders that Quoc Dung Hoang by himself his servants and agents be restrained from selling, transferring, encumbering or in any other way dealing with the Land until the writ for levy of property referred to in order 4 has been executed in respect of the land or the Sheriff finally declines to execute the writ for levy of property, or further order of the Court.

   13. (13)

       Reserves all other questions of costs including as to the basis upon which costs orders should be assessed.

   14. (14)

       Otherwise dismisses the 1 December 2021 notice of motion.

   15. (15)

       Dismisses the 5 November 2021 notice of motion.

   16. (16)

       Orders Mr Hoang to pay the Nguyens’ costs of the 5 November 2021 notice of motion.