Handberg v Walter [2001] VSC 145

Supreme Court of Victoria|2001-05-07|Before: BEACH, J.

HIS HONOUR: This is the return of an originating motion filed in the court by the plaintiff, Geoffrey Niels Handberg, whereby the plaintiff seeks an order that caveat number X297906P lodged in the Office of Titles on behalf of the first defendant, Carmen Walter, be removed by the Registrar of Titles from Certificate of Title, Volume 10289 Folio 289.

The background to the application may be summarised as follows. The registered proprietors of the land in question are Fritz Joseph Walter and Ingrid Adelheid Walter. The first defendant is the daughter of Mr and Mrs Walter. The Walter family have established the Palatinat restaurant and brewery on the land, the land being situated at Lincoln Causeway, Wodonga. On 3 September 1997 Mr and Mrs Walter mortgaged the land to the National Australia Bank. On 24 November 2000 the bank made demand on Mr and Mrs Walter pursuant to the mortgage. The demand was not satisfied and on 21 December 2000 the bank appointed the present plaintiff receiver and manager of the property. The plaintiff determined at that time to sell the property at auction on 2 March 2001.

On 16 February the Walter family and the brewery commenced a proceeding in this court seeking to restrain the sale of the land. That matter came before me in the Practice Court on 27 February 2001 and the application for injunctive relief was dismissed. On 1 March the plaintiffs in that proceeding sought an order from the Court of Appeal staying the auction. However, on 2 March the Court of Appeal dismissed that application. Later on 2 March, the plaintiff sold the land at public auction for the sum of $1,030,000. Settlement under that contract is due to occur 90 days from auction date, which of course would be 2 June next.

What had occurred prior to the auction, however, was that on 5 February 2001 the first defendant, Carmen Walter, lodged a caveat over the property. The grounds of claim stated in the caveat read: "The registered proprietor holds the property upon trust for the Walker Family Trust and for the caveator pursuant to a constructive trust. Breaches of constitution by NAB, breaches of common law rights." it is that caveat which the present plaintiff now seeks to have removed from the title.

When the matter came before me this morning, the first defendant, who appeared unrepresented before me, submitted that as some of the judges and masters of the court who have previously been involved in this matter are freemasons, this present application should not proceed until such time as those judges and masters (whoever they might be) have sworn affidavits concerning their involvement, if any, with freemasonry. Nothing further was said as to the significance, if any, of such an involvement, but, as I stated at the time, I am not and never have been a freemason and, in my view, there is no good reason why I should not proceed to determine the present application, and I intend to do so.

The first ground that appears to be relied upon by the first-named defendant is that Mr and Mrs Walter hold the property upon trust for the Walter Family Trust, of which the first plaintiff is a beneficiary. In my opinion, that is no basis for the caveat in question. As nothing more than a beneficiary of the trust, the first defendant does not have any right or entitlement to a defined or ascertainable interest in the land. If there was any cause of action against the bank or the liquidator by reason of the fact that the property was held upon trust for the trust, then the appropriate plaintiffs to such a proceeding or the appropriate persons who might have taken any step in the matter would be Mr and Mrs Walter, who are the trustees of the trust.

The second basis upon which the first defendant relies, as set out in her affidavits in opposition to the plaintiff's application, is that she worked for the Walter Family Trust and actively contributed to the establishment of the building and the brewery. It would seem to me that the material relied on in support of that contention would demonstrate rather that anything the first defendant did in relation to the property was done for the brewery, which is the lessee of the land, rather than for the trust as such. But of more significance is the fact that the first defendant did not come to Australia until February of 1998; the mortgage to the bank was given by Mr and Mrs Walter in 1997. In that situation it is clear, as a matter of law, that the mortgage takes priority over any interest of the first-named defendant.

As I indicated during the course of discussion, I feel a deal of sympathy for the Walter family. From the material before the court it is clear that their life's dream of establishing the brewery and restaurant at Wodonga has been shattered, however, again, as I indicated during the course of discussion, I am required to administer the law as I find it to be and I can simply find no basis upon which the first-named defendant can lodge any caveat in relation to the property in question.

Accordingly, I make the following orders in the matter:

1. I grant leave to the plaintiff pursuant to order 45.05 to commence proceedings by originating motion in form 5C and dispense with the requirements of rules 5.031 and 8.02.

2. I order that caveat number X297906P, lodged in the Office of Titles on behalf of the first defendant, be removed by the Registrar of Titles from Certificate of Title Volume 10289 Folio 289.

3. I order that the first-named defendant pay the plaintiff's costs of this proceeding on an indemnity basis including any reserved costs.

I direct that the order be prepared by the solicitors for the plaintiff and brought to me within 48 hours for authentication.

I certify that this and the three preceding pages are a true copy of the reasons for judgment of Beach, J. of the Supreme Court of Victoria delivered on 7 May 2001.

I certify that this and the preceding pages are a true copy of the reasons for judgment of Beach, J. of the Supreme Court of Victoria delivered on .

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