Andrews v Wilcox

Andrews v Wilcox - [2008] NSWSC 280 - NSWSC 2008 case summary — Zoe

[14]

17 By cross summons filed in Court today, Mr Wilcox sought a declaration that Ms Andrews does not have a caveatable interest in the property; alternatively that no money is owing under the loan. That relief is final and was not persisted in before me today. 18 However, also sought were orders in the following terms: "3. An order pursuant to section 74MA of the Real Property Act 1900 that the plaintiff withdraw caveat AC 49554 within three days of the date of this order. 4. Further, and in the alternative to order 3, an order pursuant to section 74MA of the Real Property Act 1900 that the plaintiff do all things required to consent to the registration of a mortgage to be granted by the defendant and Ms Kerrie Leslie Wilcox (collectively "Wilcox") to St George Bank Limited ABN 92055513070 ("proposed mortgage"), and to the discharge of the registered mortgage number AA852126 granted by Wilcox to GE Mortgage Solutions Limited (which mortgage was transferred to Perpetual Trustee Company Limited ("Perpetual") by dealing number AC 502859 ("current mortgage") within 48 hours of being given notice to do so, provided that: (a) the proposed mortgage secures a liability not exceeding $670,000; and (b) the proposed mortgage secures the liability which bears an interest rate no greater than the interest rate currently payable by Wilcox pursuant to the loan agreement secured by the current mortgage." 19 Order 4 in the form sought had inherent in it the difficulty that it left open for dispute whether the St George loan would bear an interest rate no greater than the Perpetual loan or GE loan as the case may be. For that reason alone, I would have declined to make it. 20 Section 74MA of the Act provides as follows: "(1) Any person who is or claims to be entitled to an estate or interest in the land described in a caveat lodged under section 74B or 74F may apply to the Supreme Court for an order that the caveat be withdrawn by the caveator or another person who by virtue of section 74M is authorised to withdraw the caveat.

[17]

22 It was put that the Court could not, under s 74MA, amend the provisions of the caveat defining the interest claimed. Reliance was placed on Depsun and Anor v Tahore Holdings Pty Ltd (1990) 5 BPR 11,314 in which at 11,320 McClelland J said this: "The Court has power under s74 MA (2) to order withdrawal of a caveat and to 'make such other or further orders as it thinks fit'. I would construe this provision as conferring on the Court power to make such other order as it thinks fit as an alternative to an order for withdrawal of the caveat, as well as power to make such further order as it thinks fit in addition to an order for withdrawal of the caveat. The second ground of the claim in the present case might arguably have justified an alternative order for amendment of the caveat so as to limit its prohibition to the registration of dealings by way of mortgage or transfer of the subject property to any person from or by whom execution of a deed corresponding to the deed of 1 July 1988 had not been procured. In my opinion the Court is empowered to make an order for amendment of the prohibitory provisions of a caveat (see Re The Victorian Farmers Loan and Agency Co (1987) 22 VLR 629; Queensland Estates Pty Ltd v Co-Ownership Land Development [1969] St R Qd 150), although not of the provisions defining the interest claimed (see Re Spencer (1904) 4 SR (NSW) 471; Midwarren Estates Pty Ltd v Retek [1975] VR 575)." 22 I was also referred to Mason and Porter v Merrett unreported Supreme Court of Western Australia 12/6/1989 in which Franklyn J ordered removal of a caveat which applied to an interest of a party to which it was not directed. 23 The caveat describes "the registered proprietor" as Mr Wilcox without reference to Mrs Wilcox or to the fact that Mr Wilcox's interest is as joint tenant. This is undoubtedly the origin of the difficulty. 24 A title search of the property is in evidence. The first schedule refers to Andrew William Wilcox and Kerrie Leslie Wilcox as joint tenants. The second schedule contains the following items:

[20]

33 This point is unsustainable. The consent order not only made it clear that it was without admission, it also embodied liberty to apply. Nothing was put as to any forensic course which the plaintiff took or did not take and in respect of which she otherwise might have acted differently but for the terms of the consent order. The lapsing notice was only received in February 2008 and it should be remembered that the plaintiff's proceedings in the Local Court were dismissed. 34 A submission about delay was properly abandoned. 35 The caveat is substantially defective and must be removed. The defect is not merely a formal one. 36 In the circumstances it is not necessary to deal with the application under section 74MA to allow registration of the mortgage to St George. 37 Notwithstanding the conclusion I have reached, I consider it appropriate to deal with it. 38 If the defendant had failed with respect to its primary application for removal of the caveat, I would nevertheless have exercised my discretion to grant relief to the defendant so as to permit registration of the St George mortgage. 39 The appropriate approach to such an application is that the Court is to consider whether the particular circumstances justify the caveator in insisting in maintaining the caveat in the circumstances which have arisen. 40 In Kerabee Park v Daley [1978] 2 NSWLR 222, Holland J considered the approach to be taken in such cases. At 228 His Honour said: "a caveator should have no right to prohibit registration of the dealing to which his alleged interest in the land would not entitle him to object, if he were to invoke the assistance of the Court. A subsequent encumbrancer, either registered or unregistered, has no right to interfere in or object to a proper exercise by a mortgagee of the mortgagee's power of sale and would have no ground on which to seek the intervention of the Court, notwithstanding the fact that registration of the transfer would discharge or defeat all of the mortgage interest in the land whether registered or not." 41 At 229, his Honour held that the power of the Court to "make such other or further orders as it thinks fit" enables the Court to consider whether the circumstances justified the caveator lodging the caveat and keeping it there.

[21]

42 The appropriate approach is to examine whether the particular dealing which the caveat would otherwise prohibit would have been restrained at the suit of the caveator. 43 The following was put on behalf of Ms Andrews why the St George mortgage should not be permitted: a firstly, there was no undertaking or offer to pay the monies into Court which are the subject of the disputed claim between Ms Andrews and Mr Wilcox; b secondly, there are two other caveats (which are referred to above) and there was no evidence what money, if any, is owed to those caveators. It was put that neither the plaintiff nor the Court knows whether there will be sufficient from the proposed new mortgage "to discharge those two caveats"; c thirdly, there was no evidence as to what the monthly payments under "the two loans" were; d fourthly, there was no explanation of where money is to be found to enable Mr and Mrs Wilcox to discharge the Perpetual mortgage, given that there is a shortfall of $7,000 between the amount owed to Perpetual and the proposed refinanced amount; e fifthly, there is no evidence of any special circumstances which would prevent Mr Wilcox from making satisfactory arrangements to meet the obligations secured by the equitable mortgage; f finally, there was no evidence of the value of the property to be mortgaged to St George. 44 In my view, none of the matters put assist Ms Andrews. The evidence establishes that the interest to be paid under the St George mortgage is more advantageous to Mr Wilcox and Mrs Wilcox than that which is payable under the Perpetual mortgage. The amount being borrowed is less. There is no basis, so far as I can determine, under which Ms Andrews could reasonably put that the caveat be maintained so as to prevent the substitution of an earlier mortgage on title for one not on less favourable terms. The existence of the other two caveats does not appear to me to affect the position as between the present parties. It is correct that there is no information about those caveats. That further diminishes the force of the submission. 45 There would be nothing to prevent Mr and Mrs Wilcox borrowing more money from Perpetual in any event. That is, if a further loan were entered into between Perpetual and the plaintiff, there is nothing to suggest that such a loan would in any event not be secured by the terms of the mortgage. 46 The value of the property which is to be mortgaged to St George, is to my mind, irrelevant. Whatever value there was before the registration of the new mortgage will be there after it. There was no suggestion, nor could there have been, that the value of the property is being eroded in any event. 47 I should also say that none of the matters which were put in the letter from the plaintiff's solicitors to the defendant's solicitors as justifying the refusal to consent, was a matter which amounted to justification. 48 In those circumstances, even had I not come to the conclusion that the caveat should be removed, I would have exercised my discretion in favour of the defendant to allow registration of the St George mortgage in place of the Perpetual mortgage. 49 The orders of the Court will be that the plaintiff is to withdraw caveat AC 49554 within three days of the date of this order. 50 As framed, part of the cross summons was bound to fail. The defendant, although having been successful, should for that reason nevertheless be not entitled to all of his costs. The plaintiff is to pay 80 percent of the defendant's costs of the cross summons.

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