National Australia Bank Ltd v Sayed

Judgment (3 paragraphs)

[1]

Judgment - Ex tempore

HER HONOUR: This is an application that has come before me in the duty list. The plaintiff, the National Australia Bank Ltd, filed a summons in Court on 29 July 2020, when the matter was before me on an ex parte basis. The summons seeks an order pursuant to s 74MA of the Real Property Act 1900 (NSW) (Real Property Act) that the defendant, Mr Sayed, withdraw a particular caveat that has been lodged on land situated in Woonona by 10am on Friday, 31 July 2020.
The urgency of the matter is that the property is the subject of a contract for sale entered into by the bank as mortgagee in possession, and the date for completion of the sale is scheduled for 3 August 2020. At the ex parte hearing on 29 July 2020, I abridged time for service of the summons, the notice of motion (also filed in court that day) and the relevant documents, to 6pm that day. Those documents were served on Mr Sayed, who has appeared in person (in the virtual court room) on the application before me today.
The matter has had a relatively lengthy history. The dispute concerns a particular property at Woonona (the Property). In 2015, Harrison AsJ determined in favour of the bank an application for, amongst other things, possession of the Property (see National Australia Bank Ltd v Sayed (No 4) [2015] NSWSC 420). There have been various applications since then both in the Common Law Division and in the Court of Appeal in relation to the Property.
Relevantly, Mr Sayed has commenced proceedings in the Court of Appeal seeking leave to appeal against her Honour's 2015 decision (see proceedings 2019/253854). An extension of time is required for the filing of the application for leave to appeal. Relevantly, there was also a notice of motion filed on 27 August 2019 which came before Harrison J in the Common Law Division on 6 September 2019, by which Mr Sayed sought an order staying, or alternatively setting aside, a writ of possession in respect of the Property. At that time, Harrison J noted that a similar application to stay the writ of possession had been dismissed by Ierace J on 22 August 2019 (see National Australia Bank Limited v Sayed [2019] NSWSC 1164). There has been also a further decision by McCallum J, as her Honour then was, which is now the subject of an application before the Court of Appeal (see National Australia Bank Limited v Sayed [2019] NSWSC 653; in proceedings 2019/204489). In that decision, her Honour, then sitting in the Common Law Division, dismissed a cross-claim by Mr Sayed relating to the exercise by the bank of a power of sale in respect of another property in Corrimal.

Determination

On the present application, the starting point is that the authorities make clear that it is not a sufficient description of a caveatable interest simply to describe the interest in land as an "equitable interest". In Hanson Construction Materials v Vimwise Civil Engineering [2005] NSWSC 880, Campbell J, then sitting at first instance, was dealing with a caveat that identified the nature of the estate or interest in the land claimed by the caveator as "an equitable interest" - much as the caveatable interest in these proceedings is described. His Honour observed that an "equitable interest" could relate to a "multiplicity of types of interest", and that such a caveat failed to comply with the fundamental requirements that a caveator must fully and properly describe the interests claimed (see at [29]-[30]) so as to notify someone who searches the register of what interest the caveator claims. His Honour considered that the defect could not be remedied by s 74L of the Real Property Act as the "failure to specify the nature of the interest, in as fundamental a way as happened in the present case, is more than a defect of form" (at [34]).
That decision has been cited as authority in a number of subsequent decisions, including Warden v Mortgage House No 1 Pty Ltd [2006] NSWSC 1462 at [15], by Brereton J (as his Honour was); and Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260, at [15], a decision of White J (as his Honour then was).
The difficulty I have here is that, on its face, the caveat does not claim, and does not set out fully and properly, the particulars of an equitable interest in the land that would constitute a caveatable interest. What is being asserted is that there are claims that, if successful in the appeal proceedings, would have the result that the caveator would have a claim for damages against the bank; but a claim for damages does not give rise to an equitable interest in land per se (see, for example, Day v Munday [2019] NSWSC 452 at [18], per Kunc J).
In the circumstances, I am satisfied that the caveat is bad on the face of it and should be withdrawn.
The bank has sought its costs to be assessed on an indemnity basis. The bank puts its claim for indemnity costs in circumstances where it is said that the caveat claims no equitable interest, as such, and it should be inferred that it has been lodged for an ulterior or collateral purpose in order to frustrate the mortgagee's sale. The bank says it is not necessary for it to establish bad faith in that respect.
It seems to me likely to be a moot point whether or not the indemnity costs should be ordered on that basis, since the bank will presumably be in a position under its security documents to claim the costs in full of enforcement of its rights under the mortgage, but in any event it is clear that what has happened is that the caveat was lodged in circumstances where an application to restrain the exercise of the power of sale was before the Court of Appeal (that being the motion filed on 29 June 2020), and where Emmett AJA had refused to make orders restraining the sale in advance of the next listing of the matter (and was aware that the next listing of the matter would be after the time for completion of the sale). Given these circumstances it can readily be inferred that the lodging of the caveat was for the purpose of frustrating the ability of the bank to complete the sale and, in those circumstances, it is appropriate, having regard to decisions such as Martin v Carlisle [2008] NSWSC 1276, to order that costs be awarded on an indemnity basis in favour of the bank.
I will reserve for later consideration, as the plaintiff has requested, whether or not there should be any further or other order as to costs including an order that its costs be awarded as a specified gross sum. Any such application would need to be made within 14 days of these orders because it would be an application to vary the orders made today.
I therefore make orders in accordance with the short minutes of order that have been provided and that I will initial. That has the effect that the defendant, Mr Sayed, is obliged to withdraw the caveat in question by 10am tomorrow. The orders are to be entered forthwith.

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Judgment (3 paragraphs)

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Legislation Cited (1)

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