Bradley Mark Lum v MV Developments (Lane Cove) Pty Ltd (in liquidation)

These proceedings are concerned with disputes arising out of an apartment development in Finlayson Street, Lane Cove (the Development) undertaken by MV Developments (Lane Cove) Pty Ltd (the Company). The Company went into administration and subsequently into liquidation. Some of the apartments in the Development had been sold. However, disputes arose among lenders to the Company and putative purchasers of apartments from the Company concerning rights in relation to apartments in the Development.

The principal proceedings were commenced by a putative purchaser of one of the apartments. Five cross-claims were then filed by various lenders and putative purchasers. The principal proceedings have now been settled as have three of the cross-claims. It is therefore not necessary to say anything more about those disputes. However, the first cross-claim and the third cross-claim remain on foot. Ta Lee Investments Pty Ltd (Ta Lee) is the cross-claimant in the first cross-claim and Mr Alexander Antonios (Mr Antonios) is the cross-claimant in the third cross-claim. Both are now concerned only with apartment 34 (the Apartment).

While there were originally several other cross-defendants to the first cross-claim, the only cross-defendants remaining are the Company and Mr Antonios. Similarly, while there were originally several other cross-defendants to the third cross-claim, the only cross-defendants remaining are the Company and Ta Lee.

Following completion of the Development and registration of a strata plan in respect of the Development, Ta Lee lodged two caveats claiming an interest in the Apartment. The interest claimed in the first caveat was a “right to caveat”. The interest claimed in the second caveat was an “equitable charge”. A caveat was also lodged by Mr Antonios claiming an interest in the Apartment as purchaser of the Apartment under a contract with the Company. Ta Lee accepts that, if the rights in relation to the Apartment asserted by Mr Antonios in the third cross-claim are upheld, those rights take priority over any rights that Ta Lee may have in relation to the Apartment.

By the first cross-claim, Ta Lee seeks a declaration that it has an equitable charge over the Apartment securing the full payment of all moneys payable to Ta Lee by the Company under or pursuant to a “Deed of Loan and Guarantee” (the Ta Lee Deed) bearing date 17 October 2011. Ta Lee also seeks an order that Mr Antonios withdraw his caveat and consequential orders for the sale of the Apartment.

The parties to the Ta Lee Deed are Ta Lee, the Company, MV Developments (Aust) Pty Ltd (MV Aust) and Mr Victor Fong (Mr Fong). The Ta Lee Deed provided for the terms on which Ta Lee would make advances to the Company for the purposes of the Development. MV Aust and Mr Fong were parties to the Ta Lee Deed as guarantors. At all relevant times, Mr Fong was the sole director and shareholder of the Company and of MV Aust.

By the third cross-claim, Mr Antonios seeks a declaration that a contract for the sale of the Apartment between him and the Company dated 15 April 2015 is valid and enforceable. He also seeks an order for specific performance of that contract. He claims that the whole of the purchase price payable under the alleged contract, of $910,000, has been paid by him to the Company. He also seeks a declaration that Ta Lee does not have an equitable interest in the Apartment and an order that Ta Lee withdraw the caveat lodged on its behalf in respect of the Apartment.

It is somewhat unfortunate that the proceedings continued without pleadings. The parties were therefore directed to formulate a list of the issues to be resolved. The issue raised by the first cross-claim is relatively straight forward, being whether by the operation of the Ta Lee Deed and the lodging of caveats by Ta Lee, Ta Lee acquired an equitable charge over the Apartment. Since Ta Lee abandoned any claim to priority over any interest that Mr Antonios has in the Apartment, the only question arising under the first cross-claim concerned the construction of the Ta Lee Deed.

The liquidators of the Company have chosen to take no active part in either of the cross-claims either in their own names or in the name of the Company other than to say that the Company does not admit that Ta Lee has an equitable charge over the Apartment or that there is a binding and enforceable contract for the sale of the Apartment to Mr Antonios. The effect of the stance adopted by the liquidators is that Mr Antonios is the only effective contradictor of claims made by Ta Lee in the first cross-claim and Ta Lee is the only effective contradictor of claims made by Mr Antonios in the third cross-claim. Each contends that the other does not have standing to participate in that way.

Mr Antonios vehemently opposed Ta Lee being permitted to oppose his claim for specific performance. In the light of the conclusion that I have reached, it is unnecessary to deal with that question. I should say, however, that the Court was considerably assisted by having submissions from counsel for Ta Lee in circumstances where the Liquidators chose to take no part in the litigation other than to say that they neither consented to nor opposed the relief sought by both Mr Antonios and Ta Lee. Indeed, it has been of considerable assistance to the Court to have contradictors in circumstances where neither the liquidators nor the Company have participated in any active way in the proceedings.

Ta Lee and Mr Antonios had difficulty in agreeing on a formulation of the issues raised by the third cross-claim. As Mr Antonios forcefully disputed whether Ta Lee has standing to raise any issue with respect to the contractual arrangements between Mr Antonios and the Company, the question of whether Ta Lee has equitable charge in respect of the Apartment was, in effect, an issue in the third cross-claim.

Mr Antonios particularised his claim in a way that, on my understanding, may be re-stated as follows:

The proceedings were conducted on the basis that a delivery of casino chips is equivalent to a payment of money. Whether a tender of casino chips would constitute a tender of payment therefore does not arise.

Thus, Mr Antonios claims that on 15 April 2015 he entered into a contract with the Company to buy Lot 34 for the price of $910,000. He asserts that that price was paid by a series of transactions, including the conversion of earlier loans made by him to Mr Fong in the aggregate amount of $310,000. Subsequent payments were made by way of electronic funds transfer, cash and casino chips, such that, by 17 April 2015, the entire purchase price had been paid and released to the Company for its use in funding the Development.

Mr Antonios relies on a contract for the sale of land in the form of the 2005 edition approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales. The copy of a contract in evidence bears an endorsement from the Office of State Revenue of the NSW Treasury indicating that stamp duty of $38,837.26 has been paid in respect of that contract. The copy bears Mr Fong’s signature on behalf of the Company as well as the signature of Mr Nassif as witness.

The evidence as to the circumstances surrounding the placing of those signatures on a form of contract for sale casts some doubt on the precise form of any contract for sale that might have been entered into between Mr Antonios and the Company. Ta Lee contends that the evidence does not support a conclusion that, on the balance of probabilities, the requirements of s 54A of the Conveyancing Act 1919 (NSW) have been satisfied. That is to say, it contends that Mr Antonios has failed to prove that, on the balance of probabilities, there is a memorandum in writing signed on behalf of the Company, in that it is not clear precisely what constitutes the relevant memorandum in writing relied upon by Mr Antonios.

To put the contention in perspective, it is necessary to begin with the genesis of the idea that Mr Antonios might buy an apartment from Company. Mr Antonios gave evidence by affidavits, including one sworn on 7 April 2017. He was cross-examined at length by counsel for Ta Lee. I accept the evidence given by him as reliable. What follows is derived from the affidavits and cross examination, as well as relevant documents.

Mr Antonios is a professional poker player. He is generally known by his acquaintances as “AJ”. In December 2014, Mr Fong and Mr Antonios had a telephone conversation along the following lines about a possible loan:

On 11 February 2015, Mr Fong and Mr Antonios met at a cafe on Harris Street in Pyrmont where they discussed a property development at Pyrmont in which Mr Fong was involved. Mr Antonios said that he would like to put a deposit down on an apartment in the development if one was available although he understood the development was not going start for a few years.

On 17 February 2015, Mr Fong and Mr Antonios met at the site of the Development in Finlayson Street Lane Cove. Mr Fong showed Mr Antonios around the Development, which included showing him through completed apartments. On the same day, Mr Antonios asked Mr Fong whether he needed his bank account details again “for the $150,000”. Mr Fong told him that he would let him know “when the funds are ready”.

On 25 February 2015, Mr Antonios met Mr Fong at the casino. Mr Fong asked if he borrow a further sum of $50,000 and indicated that he would write Mr Antonios a cheque for $200,000 instead of $150,000. Mr Antonios handed Mr Fong $50,000 in casino chips. Mr Fong then wrote a cheque on the account of MV Aust for $200,000, made out to cash, and handed it to Mr Antonios. Mr Fong said that he would call Mr Antonios when funds were in the account and he could then cash the cheque.

On 31 February 2015, Mr Antonios asked Mr Fong “is it okay if I cash that cheque now? Are the funds available?" Mr Fong responded that he was “a bit tied up with things” and that he would let Mr Antonios know when it was ready. The cheque has never been presented.

On 24 March 2015, Mr Fong asked Mr Antonios if he could borrow a further $110,000 to pay lawyers to finalise a contract under which he was borrowing substantial sums of money for the proposed Pyrmont development. On 24 March 2015, Mr Antonios met Mr Fong at a café in the casino where they had a conversation to the following effect:

On 25 March 2015, Mr Antonios had a discussion with Mr Ayoub, a builder whom he knew to work with Mr Fong and his development companies. Mr Ayoub said that Mr Fong had told him that Mr Antonios was owed $310,000 and would like to use it as a deposit for a unit at one of the developments. Mr Ayoub told Mr Antonios that he should buy an apartment in the Development at Finlayson Street Lane Cove.

On 31 March 2015, Mr Antonios had a conversation at the casino with Mr Ayoub and Mr Joe Nassif, a construction manager who worked with Mr Fong’s development companies. Mr Nassif said that they wanted to talk to Mr Antonios about getting about an apartment at Lane Cove. It was suggested that instead of just paying a deposit, he should pay the difference and purchase an apartment outright. Mr Antonios replied that that was what he was thinking of doing. Mr Ayoub said that they would meet within a couple of days to discuss the matter further.

On 2 April 2015, Mr Antonios met Mr Nassif and Mr Ayoub at the casino again. Mr Antonios said that they had a further conversation to the following effect:

Mr Antonios said that on 13 April 2015 he met Mr Fong in his office in Pyrmont and had a conversation to the following effect:

Mr Antonios said that, at that stage, Mr Nassif and Mr Ayoub entered the office and a conversation to the following affect occurred:

On 14 April 2015, Mr Antonios met Mr Fong in Mr Fong’s office in Pyrmont again and had a conversation to the following affect:

Mr Fong then typed and printed a letter on the writing paper of the Company addressed “To whom it may concern” and signed it as director of the Company. By the letter, Mr Fong confirmed that Mr Antonios had paid the Company the total sum of $910,000 for the purchase of the Apartment. Clearly enough, the statement that Mr Antonios had paid the total sum of $910,000 was false as at 14 April 2015. At that time, he had paid no more than $310,000. However, it is not disputed that the payments on 15 April 2015, 16 April 2015 and 17 April 2015 were in fact made subsequently.

On 15 April 2015, Mr Fong telephoned Mr Antonios and they had a conversation to the following effect:

Later that day, at around 11am, Mr Antonios and Mr Ayoub had a telephone conversation to the following effect:

At around 1:30pm on 15 April 2015, Mr Antonios went to Mr Fong’s office in Pyrmont where he was greeted by Mr Nassif and Mr Ayoub. Mr Ayoub said that the contract was not ready but Mr Massour should be ready soon. Mr Antonios waited in the office for approximately three to four hours.

At about 7.30pm, Mr Ayoub printed two copies of a document entitled “Contract for the Sale of Land - 2005 edition” and two copies of a document entitled “Deed of Agreement” and placed the four documents on the desk in Mr Fong's office in front of Mr Fong and Mr Antonios. Mr Nassif was also in the office at that time. Apart from glancing at the documents, Mr Antonios did not read them in any detail.

Mr Antonios signed each page of both copies of the Deed of Agreement as directed by Mr Fong. Mr Fong then signed each page of both copies of the Deed of Agreement. Mr Nassif then signed the back page of both copies of the Deed of Agreement as witness.

Mr Antonios then signed the front page of one copy of the contract for sale as directed by Mr Fong. Mr Nassif signed the front page of that copy of the contract for sale as witness. Mr Fong then signed the front page of the second copy of the contract for sale and Mr Nassif signed the front page of the second copy of the contract for sale as witness.

After the documents were thus signed, Mr Nassif handed to Mr Antonios one of the copies of the Deed of Agreement and the copy of the contract for sale signed by Mr Fong. The contract for sale consisted of many pages. Mr Nassif and Mr Antonios then had a conversation to the following effect:

Mr Antonios then removed $200,000 in cash from the paper bag that he had with him and placed it on the table. Mr Fong and Mr Antonios then had a conversation to the following effect:

Mr Antonios maintains an account at the Star Casino, described as a “Cage Account” whereby he is entitled to exchange casino chips for cash and cash for casino chips. The purpose of a Cage Account is to allow players to hold money at the casino. At any time a person with casino chips can go to the Cage and swap them for cash. A person with an account with a positive balance may obtain casino chips in that way.

On 16 April 2015, Mr Antonios took $50,000 in casino chips to the casino where he met Mr Ayoub and Mr Nassif. He withdrew a further $150,000 in casino chips from his Cage Account and handed to Mr Ayoub and Mr Nassif the $200,000 in casino chips. On the same day, Mr Antonios made an electronic transfer of $100,000 to MV Aust’s account. On the following day he made another electronic transfer of $100,000 to MV Aust’s account.

On 23 May 2015, Mr Fong handed to Mr Antonios the keys to the Apartment. By that stage, the Development was largely complete. Mr Antonios said that when the keys were handed to him, he had a conversation with Mr Fong as follows:

On 14 July 2015, Cluff & Associates Solicitors wrote to Rodgers Reidy Forensic Accountants, who were then the Administrators of the Company. Cluff & Associates acted for the parents of Mr Antonios and it appears that they were instructed by them. In the letter, Cluff & Associates said that they were acting for Mr Antonios in relation to the purchase of the Apartment. The letter said that the full purchase price had been paid by Mr Antonios as evidenced by the letter of 14 April 2015, a copy of which was attached. Cluff & Associates said that Mr Antonios was seeking the execution by the Company of a transfer to enable the transaction to be completed. Rodgers Reidy responded by email on 16 July 2015 saying that they had previously been provided with a copy of the signed front page of the contract for sale in relation to the Apartment. They asked for a copy of the full contract for sale for their review.

Mr Antonios agreed in cross-examination that his mother asked him for a full copy of the contract for sale in relation to the Apartment. He understood that she had spoken to Cluff & Associates. He subsequently asked Mr Fong to send the contract to him. On 21 July 2015, Mr Fong sent an email to Mr Antonios saying:

A copy of a contract for the sale of land was attached to the email consisting of a front page and some 122 further pages. Somewhat curiously, the front page of the contract attached to the email was not the front page that had been signed on 15 April 2015. It was different in a number of respects. First, the signed contract stated that the vendor was acting for itself whereas the attachment of 21 July 2015 named a firm of solicitors. The description of the subject matter differed in so far as the signed contract referred to “Unit 2.06/3-9 Finlayson Street, Lane Cove” whereas the attached contract referred to “Lot 34/3-9 Finlayson Street, Lane Cove”. There are also differences in the title reference. While the signed contract simply specified “Reuben Mansour” as the purchaser’s solicitor, the attachment specified “Reuben George Lawyers” together with details of their address. Most significantly, the price and deposit differed. The signed contract provided as follows:

Mr Antonios said that following receipt of the email of 21 July 2015, he attached the signed front page that he had received on 15 April 2015 to the balance of the contract that was emailed to him. On 23 July 2015, Cluff & Associates wrote to Rodgers Reidy again, attaching a copy of a contract for sale, which they said was “executed on or shortly after 14th April, 2015 pursuant to previous consideration acknowledgment”. Cluff & Associates said that they were instructed to lodge a caveat protecting the interests of Mr Antonios as equitable owner unless confirmation was received within the next 10 days that a registrable transfer would be executed and forwarded by way of settlement.

Mr Antonios said that his counterpart of was stamped by the Office of State Revenue. He paid stamp duty on the contract of $38,837.26, which included interest of $2,377.26 as well as duty of $38,480. Mr Antonios said that he dated the front page of the contract with “15.4.15” so that the Office of State Revenue would accept it for stamping.

Mr Antonios accepted in cross-examination that he cannot say what was attached to the front page of the copy of the contract for sale that he signed on 15 April 2015 or what was attached to the counterpart signed by Mr Fong. He had not seen any drafts of the contract prior to 7.30 pm on 15 April 2015. He accepted that he only glanced at the documents placed in front of him by Mr Ayoub and that there were a lot of documents laid out on the desk when he came to sign them. Further, Mr Nassif cannot say what was attached to the front page of the contract that he signed as witness.

Ta Lee points to the fact that neither Mr Fong nor Mr Mansour or Mr Ayoub was called on behalf of Mr Antonios to give evidence. It asserts, therefore, that an inference should be drawn that their evidence would not have assisted the case advanced by Mr Antonios.

Mr Fong had in fact sworn affidavits in support of the case advanced on behalf of Mr Antonios. It was said on behalf of Mr Antonios that a decision was taken not to call him so that the hearing could be concluded in the time allotted, in circumstances where Mr Fong’s evidence was not necessary to prove Mr Antonios’ case. An explanation was proffered as to why those affidavits were not read for a limited purpose. In the circumstances, it would be appropriate to have regard to the affidavits before drawing an adverse inference. The content of the affidavits as sworn unambiguously supports the case advanced on behalf of Mr Antonios.

Further, as Mr Antonios contends, there is no proper basis for concluding that Mr Fong was in his “camp”. He was the only director of the Company and one might have expected that he would give evidence on behalf of the Company. Ta Lee, as will be explained below, in effect acted as contradictor on behalf of the Company. There is no justification for a conclusion that any adverse inference should be drawn from the failure of Mr Antonios to call Mr Fong to give evidence.

Mr Antonios gave evidence in cross-examination that he no longer speaks to Mr Ayoub. The reasons for a breakdown in relations were not explored in cross-examination. That is a sufficient explanation for failure to call Mr Ayoub.

Mr Mansour was appointed by the Company at Mr Ayoub’s suggestion, to assist Mr Antonios in the purchase of the apartment. There is no evidence that Mr Antonios ever met Mr Mansour or that Mr Mansour gave advice to him. Mr Mansour was not involved in the exchange of the contracts for sale. The only communication between Mr Antonios and Mr Mansour involved Mr Antonios sending him an email forwarding documents and later paying an invoice for services rendered. In the circumstances, it is difficult to see what Mr Mansour could have contributed. In any event, he was the brother-in-law of Mr Ayoub with whom Mr Antonios had had a falling out. It is doubtful whether either Mr Mansour or Mr Ayoub could be treated as being within Mr Antonios’ “camp”.

The drawing of an inference that none of those witnesses would have given evidence favourable to the case advanced by Mr Antonios does not advance the matter further. There is no dispute as to the circumstances surrounding the signature on the first page of the contract for sale. There is basis for some lack of certainty as to the 122 pages that might have been attached to the front page of the contract for sale. It is clear that Mr Antonios did not give any consideration to the pages behind the front page. Ultimately, however, it appears to be common ground as between the Company and Mr Antonios that the contract was constituted by the pages sent with the email of 21 July 2015 plus the front page that had been signed on behalf of both the Company and Mr Antonios.

That the Company and Mr Antonios intended to enter into a binding contract for sale is corroborated by the Deed of Agreement, a copy of which was in evidence. The Deed of Agreement itself exhibits some deficiencies. It is not dated apart from “2015”. The parties were Mr Antonios, the Company and Mr Fong. It recited that the Company had agreed to sell the “Property” to Mr Antonios who had agreed to purchase it from the Company. It then recited that the Company “directs” Mr Antonios to make payment of “the Price” in cash to Mr Fong and that Mr Antonios had made payment of “the Price” to Mr Fong in accordance with the Company’s directions. Finally, the Deed of Agreement recited that, in consideration of the payment of “the Price” by Mr Antonios to Mr Fong, Mr Antonios and the Company had entered into the “Contract” at a discounted purchase price.

The following terms were defined in the Deed of agreement as indicated:

Clauses 3, 4 and 5 of the Deed of Agreement relevantly provided as follows:

The reference in cl 4 to a release and discharge of Mr Antonios from any claim in respect of the balance of the Purchase Price over $910,000 is anomalous. That tends to suggest that the price specified in the contract for sale was something in excess of $910,000. For example, it may have been the sum of $1,250,000 specified in the front page of the form of contract for sale that was sent by the email of 21 July 2015. One might conjecture that there was a proposal that a contract would be entered into for the sale of the Apartment for the sum of $1,250,000 and that Mr Antonios and the Company then agreed that upon Mr Antonios paying the sum of $910,000 as provided for in the Deed of Agreement, the Company would accept that in full satisfaction of the payment of the price.

Ta Lee contends that Mr Antonios has not discharged the onus of proving the agreement on which he relies, namely, proving that a contract in writing was signed by the Company and proving the terms of that contract. Mr Antonios no longer has the whole of the contract that he says Mr Fong signed on 15 April 2015 since he took with him only the front page. Ta Lee asserts that the balance of the contract that Mr Antonios says was signed on that evening has not been produced. Rather, it says, Mr Antonios has reconstructed a contract using the front page that he took with him together with a different contract sent by Mr Fong some three months later. Ta Lee contends that the Court should not accept that the reconstructed contract is the same as the contract signed on 15 April 2015. Indeed, Ta Lee suggests that it may be open to conclude that Mr Fong simply signed the front page and the Deed of Agreement.

In response to a request for particulars “the Contract”, Mr Antonios propounded several alternative formulations of the contract on which he relied in circumstances where, unfortunately, there were no pleadings. By the third cross-claim, Mr Antonios claimed a declaration that:

The Contract was particularised in the alternative as one or other of the following:

In the final analysis the primary contention on behalf Mr Antonios is that “the Contract” was the first alternative listed above, being Annexure “A” to the affidavit of Mr Antonios sworn on 31 October 2017. That contract consisted of the front page signed by Mr Fong and Mr Nassif on 15 April 2015 plus the pages other than the first page that were annexed to the email of 21 July 2015.

Mr Antonios asserted that any one of those four alternative formulations was sufficient to satisfy s 23C and s 54A of the Conveyancing Act and to be capable of an order for specific performance. Ta Lee relies upon the uncertainty as to the particularisation of “the Contract” in respect of which specific performance is sought as raising such doubt as to what constituted the Contract that the Court cannot determine what is to be the subject of an order for specific performance.

I am persuaded that it is more likely than not that, on 15 April 2015, Mr Antonios and the Company, through its sole director, Mr Fong, intended to enter into a binding contract for the sale and purchase of the Apartment. It is more likely than not that, apart from the cover page, the pages attached to the email of 21 July 2015 were the pages of the contract laid out on Mr Fong’s desk, having been prepared by Mr Mansour. Mr Antonios and the Company, through Mr Fong, intended that the contract would be constituted by the front page and those other pages. That is the document that constituted Annexure “A” to the affidavit of Mr Fong sworn on 30 October 2017. That is the primary contention advanced on behalf of Mr Antonios.

In any event, all of the obligations of Mr Antonios under that contract have been performed or performance has been waived by the Company. The only obligation remaining under the Contract so formulated is for the Company to deliver to Mr Antonios a duly executed transfer in registrable form together with relevant certificate of title in respect of the Apartment.

Ta Lee contended that such a contract was not capable of specific performance because of the failure by Mr Antonios to comply strictly with the terms of cl 2 of the printed form forming part of Annexure A. Clause 2.1 provided that Mr Antonios, as purchaser, must pay “the deposit” to “the depositholder as stakeholder”. Clause 1 of the printed form provides that “depositholder” means the vendor’s agent or if no vendor’s agent is named in the contract, the vendor’s Solicitor. The signed front page provides that the contract was made “without the intervention of an agent” and that “vendor acts for itself”. Thus, Ta Lee says, that provision has not been complied with. Clause 2.2 of the printed form provides that the purchaser must pay the deposit on the making of a contract and that time is essential. Clause 2.5 provides that if any of the deposit is not paid on time or a cheque for any of the deposit is not honoured on presentation, the vendor can terminate but that that right to terminate is lost as soon as the deposit is paid in full. I consider that the evidence of the Deed of Agreement and the curious letter of 14 April 2015 demonstrates clearly that the Company accepted that the deposit has been paid. Accordingly, there can be no residual right to terminate on the part of the Company.

Mr Antonios contended, in the alternative, that by handing over the keys to the Apartment, Mr Fong on behalf of the Company, had waived any entitlement to terminate. That question does not arise in the light of the conclusion that I have reached. In any event, while Mr Fong suggested that it may not be appropriate to move in, he clearly agreed that, if he wished to, Mr Antonios could move into the Apartment and that Mr Antonios effectively took possession.

Mr Antonios also contended that the Company is estopped from denying that there was a contract. I have had some difficulty with the contention and, in the light of the conclusion that I have reached, it is unnecessary to express a final view on the matter. I have set out above the way in which the estoppel was formulated.

As a fall back, Mr Antonios claimed a declaration that if there is no contract enforceable by way of specific performance, he is entitled to a charge or lien over the Apartment for the amount of the deposit and purchase price paid and accepted by the Company, being the sum of $910,000. However, the lien is said to arise under the alleged contract. If there is no contract, there would be no lien. For reasons indicated above, the question does not arise.

In the circumstances, I am satisfied that Mr Antonios is entitled to an order for specific performance of the Contract for Sale entered into with the Company on 15 April 2015. Mr Antonios should be directed to bring in short minutes to give effect to that conclusion. As I have indicated, it is my understanding that the only steps required are for the delivery by the Company to Mr Antonios of a transfer in registrable form and the relevant certificate of title.

Ta Lee accepted that even if it has or had an equitable charge over the Apartment, the charge would not take priority over the entitlement and rights of Mr Antonios if the Court concludes that there is a binding contract for the sale and purchase of the Apartment between Mr Antonios and the Company that is capable of specific performance. I have concluded that there is. Accordingly, since the whole of the purchase price has been paid, there is nothing upon which the equitable charge contended for could operate. Nevertheless, I shall deal with that question.

The parties to the Ta Lee Deed were Ta Lee, as “the Lender”, the Company as “the Borrower” and MV Aust and Mr Fong as guarantors. The Ta Lee Deed recited that the Company, MV Aust and Mr Fong had requested Ta Lee to lend to the Company $1.5 million (the Loan Facility) required by the Company to acquire and develop the Development and that Ta Lee had agreed to lend the Loan Facility to the Company “by way of the Preliminary Advance and Further Advance”. Preliminary Advance was defined as the sum of $900,000 and Further Advance was defined as the sum of $600,000.

By cl 3 of the Ta Lee Deed, the Company acknowledged having received the Preliminary Advance on 11 August 2011 and confirmed that Ta Lee may make the Further Advance in accordance with the direction of Mr Fong. Ta Lee promised to make available to the Company the Further Advance on 12 October 2011 or such later date as the Company may require.

Clause 4 dealt with the date for repayment and interest payments. Clause 4.1 provided that the Company may make payment to Ta Lee of the Guaranteed Amount and repayment of such part of the Loan Facility as remains unpaid at any time no later than the Repayment Date. The Guaranteed Amount was defined as $750,000. Repayment Date was 10 June 2013. Clause 4.2 provided that, where the Company makes full repayment in accordance with cl 4.1, the Company would not be required to make any further payment. That is to say, there would then appear to be no interest payable in respect of the Loan Facility.

The question of interest is dealt with by cll 4.3 and 4.4. Where the Company does not make full payment of the Guaranteed Amount or full repayment of such part of the Loan Facility as remains unpaid by no later than the Repayment Date, interest was to be payable at a specified rate from the Repayment Date to the Facility Terminating Date. The Facility Terminating Date was 9 December 2013. Clause 4.4 then provided for a higher rate of interest in respect of any unpaid amount of the Loan Facility after the Facility Terminating Date, where the Company does not make full repayment by 5pm on the Facility Terminating Date.

The regime for repayment has some bearing on the scheme of the Ta Lee Deed in dealing with default. Clause 1.2 defined some eleven circumstances as constituting an Event of Default. The first Event of Default, defined as “Payment Default” was failure by the Company to repay the loan on the Facility Termination Date or failing to pay any instalment of interest on the relevant Interest Payment Date. Clause 7.1 then added as an Event of Default the failure by the Company to:

Clause 7.2 then dealt with “Consequences of Default” and provided that, at any time after an Event of Default has occurred, whether or not it subsists or continues, Ta Lee could also:

Clause 8 deals with covenants by MV Aust and Mr Fong as guarantors. By that clause, each of them agreed and promised unconditionally and irrevocably to guarantee payment to Ta Lee of the Secured Monies. Secured Mon[ies] is defined as:

There is no express reference in the Ta Lee Deed to the grant of security in the nature of a charge. Indeed, the final recital to the Ta Lee Deed is an acknowledgment by the Company that the relationship between Ta Lee and the Company is “simply that of a lender (creditor) and borrower (debtor)”. I shall refer to that recital below.

Prior to 12 November 2015, the Company had made no payments under the Ta Lee Deed. An Event of Default first occurred when the Company failed to pay interest on the unpaid proportion of the Loan Facility on 20 June 2013. No part of the Loan Facility was repaid by 10 June 2013, the Repayment Date.

On 15 December 2014, the four lots that constituted the Aurora Site were consolidated into a single title. On 16 April 2015, that lot was subdivided by the registration of a strata plan consisting of 56 lots. On 23 June 2015 and 4 August 2015, Ta Lee lodged caveats in respect of title to the Apartment. The interest claimed in the first caveat was a “right to caveat” by virtue of cl 7.2 of the Ta Lee Deed. The interest claimed in the second caveat was an “equitable charge” by virtue of the Ta Lee Deed.

Ta Lee claims that, by the combination of cl 7.2 of the Ta Lee Deed and the lodgement of the caveats, it has an equitable charge over lot 34 to secure payment to it of the monies unpaid in respect of the Loan Facility under the Ta Lee Deed. It contends that the equitable charge arose on the date on which it lodged the caveats, being 23 June 2015 or alternatively, 4 August 2015. There is no dispute as to the existence of the obligation of the Company to pay the amount of the Loan Facility to the extent that it remains unpaid.

Ta Lee contends that the effect of cl 7.2 was to authorise Ta Lee to create an equitable charge over the Aurora Site caused by lodging a caveat upon default by the Company. Under s 74F of the Real Property Act 1900 (NSW), Ta Lee’s entitlement to lodge a caveat depended upon whether it had a legal or equitable interest in the Aurora Site. A contractual right to lodge a caveat must be taken to be intended to have some effect. If it was not intended to create a legal or equitable interest in the Aurora Site, the caveat would be capable of being removed by order.

Next, Ta Lee says, the right conferred by cl 7.2 was exercisable on the occurrence of an event of default. The caveat could be maintained until payment in full had been made. That, it says, suggests that the purpose was to enable Ta Lee to have a security in respect of the Aurora Site, being an equitable charge. If the purpose was not to create an equitable charge, Ta Lee says, cl 7.2 had no purpose.

However, a commercial purpose might be gleaned in the sense that, by lodging a caveat, Ta Lee would be assured of being notified if there were any intended dealings with the Aurora Site. For example, cl 7.1 also provided that it would be an Event of Default if the Company took any action to sell or assign the Aurora Site to any third party. Clearly enough, Ta Lee was prepared to make funds available to the Company on the terms of the Ta Lee Deed but only so long as the Company was itself engaged in the Development on the Aurora Site.

A registered proprietor cannot, by contract, confer a right to lodge a caveat where no caveatable interest exists. If a contract confers a right to do so it will be ineffective. The existence of such a right, however, may suggest that the person entitled to lodge a caveat was intended to have an interest that would support a caveat. Thus, it is a general principle of construction of a grant that cuicunque aliquis quid concedit concedere videtur et id sine quo res ipsa esse non potuit. That is to say, whoever grants something is taken also to grant that without which the grant itself would be of no use. Thus, a caveat in relation to a title cannot stand unless the caveator has a relevant proprietary interest in the property that is the subject of the title. Accordingly, the grant to a creditor of an authority to lodge a caveat may carry with it, by implication, such an estate or interest as would be necessary to support the lodgement of a valid caveat. Of course, that would not be the case if an intention to the contrary can be gleaned from the instrument [1] .

In order to determine whether the Ta Lee Deed conferred a right to create a proprietary interest, it must be construed in the light of the whole of its terms including its objects. There can be no general principle that an instrument granting authority to lodge a caveat in connection with an obligation to pay money must be construed as conferring a proprietary right in relation to the property that is to be the subject of a caveat. It may be that, in some circumstances where there is a debt between two parties and the debtor agrees that the creditor may lodge a caveat in relation to a property owned by the debtor, the possibility that the debt was intended to be protected by a charge might arise. However, even if, in such circumstances, one of the parties intended that that be the consequence, unless the intention is expressed in or implied from the terms of the instrument in question, there would be no equitable interest. Authorisation to lodge a caveat does not of itself by necessary implication lead to the conclusion that there must have been an intention to create an equitable interest. An intention to create an interest that was to constitute a charge over the relevant property must be capable of being gleaned from the language of the instrument.

The commercial reason for a provision such as that under consideration is not necessarily limited to the advantage of having an equitable interest such as a charge. There may be perceived to be a real advantage in having a caveat in operation, thereby impeding the registered proprietor’s dealings with the property without notice to the creditor. Once a caveat is lodged, steps must be taken for it to lapse. Those steps involve notification to the caveator. The conclusion that contractual authorisation to lodge a caveat means what it says and no more is not irrational. A registered proprietor may be prepared to put up with an inconvenience as a term of dealing with a creditor [2] .

The Ta Lee Deed speaks of “security” in the guarantee provisions, which involve the provision of guarantees by both Mr Fong and MV Aust. It would have been very simple for the author of the Ta Lee Deed to include an express provision for the grant of security in the form of a charge over lots in the proposed strata plan if that was intended. I have referred above to the acknowledgment in the recitals to the Ta Lee Deed that the relationship between Ta Lee and the Company was to be simply that of creditor and debtor. While that provision may have been intended to negate the possibility that the Company and Ta Lee were engaged in a joint venture or the possibility that Ta Lee had any beneficial interest in the Development, it also tends to negate any suggestion that security in the nature of a charge might have been intended. Having regard to the somewhat unusual terms of the arrangement between Ta Lee and the Company, I do not consider that the Ta Lee Deed, coupled with the lodging of the caveats, created an equitable charge in favour of Ta Lee.

A further objection taken on behalf of Mr Antonios is that the scheme and language of the Ta Lee Deed makes it clear that the right to lodge a caveat was limited to the title in respect of the Aurora Site and was not intended to extend to a right to lodge caveats in respect of titles to individual lots in a proposed strata plan that was to be registered in respect of the four original titles that made up the Aurora Site. That contention tends to support the previous conclusion that there was no intention to create an equitable charge or interest over any part of the Aurora Site. On the other hand, if the better view were that the intention was to create an equitable charge, it would be curious that the right would not extend to the lots in a strata plan registered in respect of the proposed development on the Aurora Site.

It follows from what I have said above that the first cross claim should be dismissed. In addition, Mr Antonios is entitled to orders for specific performance. I propose to direct Mr Antonios to bring in short minutes of order to give effect to the above conclusions. Nobody has asked for an order for costs against the Liquidators or the Company. In the circumstances, Ta Lee should be ordered to pay Mr Antonios’ costs of the first cross claim and the third cross claim in so far as they related to the Apartment. As I have