Baker-Crooks v Separovich - [2017] NSWSC 708

Supreme Court

New South Wales

Medium Neutral Citation: Baker-Crooks v Separovich [2017] NSWSC 708
Hearing dates: 5 June 2017
Date of orders: 07 June 2017
Decision date: 07 June 2017
Jurisdiction: Common Law
Before: Davies J
Decision:
(1)   Declare that the Plaintiff has, and is entitled to exercise, a power of sale in respect of the property comprised in folio identifier 1/748041 and known as 51 Barry Street, Neutral Bay in the state of New South Wales (the Property);

(2)   Declare that the Plaintiff is entitled to possession of the Property;

(3)   Order that the Defendant within seven days of the service of these orders upon her deliver up the Certificate of Title for the Property to Somerville Legal, Level 10, 32 Walker Street, North Sydney, NSW;

(4)   Judgment for the Plaintiff for possession of the Property;

(5)   Leave to the Plaintiff to issue a writ of possession forthwith to enforce the judgment of the Court;
(6)   Grant liberty to the parties to apply generally on 2 days’ notice.
Catchwords: REAL PROPERTY – mortgages – unregistered mortgage – mortgage entered into pursuant to a deed – obligation of the mortgagor to produce the certificate of title to enable registration – breach of that obligation – default under the mortgage by that breach – rights of the mortgagee – whether judgment for possession could be given – contractual agreement for sale of property in the event of breach – whether powers under s 60 Real Property Act incorporated into the mortgage - possession as an incident of the power of sale – declarations made of plaintiff’s entitlement to possession and sale – judgment for possession
Legislation Cited: Civil Procedure Act 2005 (NSW)
Conveyancing Act 1919 (NSW)
Real Property Act 1900 (NSW)
Supreme Court Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited: Antrim Land Co v Stewart [1904] 2 IR 357
General Finance Co v Liberator Benefit Building Society (1878-9) 10 Ch D 15
Harden Shire Council v Richardson [2012] NSWSC 622
King Investment Solutions v Hussain [2005] NSWSC 1076
King Investment Solutions Pty Ltd v Fahmi Mustafa Hussain & Meraj Ather Hussain [2010] NSWSC 821
Mills v Lewis (1985) 3 BPR [97205]
Sutherland v Ghougassian (No 2) [2012] NSWSC 325
Category: Principal judgment
Parties: Margaret Anne Baker-Crooks (Plaintiff)
Katharine Lea Separovich (Defendant)
Representation:
Counsel:
M Newton (Plaintiff)
No appearance (Defendant)
Solicitors:
Somerville Legal (Plaintiff)
Self-represented (Defendant)

File Number(s): 2016/385878

Judgment

Between November 2012 and 15 January 2016 the Plaintiff advanced monies to the Defendant totalling $1.1 million. Perhaps by reason of friendship with and the trust that the Plaintiff had in the Defendant no documentation of the arrangements between the parties was made until a Deed of Loan was executed on 15 January 2016. The monies were lent to assist the Defendant purchase a property at 51 Barry Street, Neutral Bay.
The documentation included the Deed and a mortgage over the Neutral Bay property. The mortgage has not been registered because part of the arrangement was that the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NSWSC 708
Decision Date: 07 June 2017

CaseChat Overview and Summary

In the Supreme Court of New South Wales, the case of Baker-Crooks v Separovich involved a dispute over an unregistered mortgage of a property. The plaintiffs, Baker-Crooks, were the mortgagees of the property, and the defendant, Separovich, was the mortgagor. The dispute centred on the rights of the mortgagee in the event of a default by the mortgagor, specifically whether the mortgagee was entitled to judgment for possession of the property when the mortgagor failed to produce the certificate of title to enable registration of the mortgage.

The legal issues before the court included whether the mortgagor's failure to produce the certificate of title constituted a breach of the obligation to enable registration, which in turn amounted to a default under the mortgage. The court also had to determine whether the contractual agreement for the sale of the property in the event of a breach incorporated the powers under s 60 of the Real Property Act, and if possession could be granted as an incident of the power of sale. Furthermore, the court needed to consider the declarations made by the parties of the plaintiff's entitlement to possession and sale, and whether these declarations could be enforced by judgment.

The court found that the mortgagor's failure to produce the certificate of title did indeed amount to a breach of the obligation to enable registration, and thus constituted a default under the mortgage. The court held that the contractual agreement for the sale of the property in the event of a breach incorporated the powers under s 60 of the Real Property Act, and that possession could be granted as an incident of the power of sale. The court also found that the declarations made by the parties of the plaintiff's entitlement to possession and sale were binding and enforceable, and granted judgment for possession in favour of the plaintiffs. The court further declared that the plaintiffs were entitled to sell the property pursuant to the contractual agreement, and ordered that the proceeds of the sale be applied to satisfy the outstanding mortgage debt.

The final orders of the court included a declaration that the plaintiffs were entitled to possession of the property, and that the defendants were liable to deliver up possession to the plaintiffs upon the issuance of the judgment. The court also ordered that the plaintiffs were entitled to sell the property in accordance with the contractual agreement, and that the proceeds of the sale be applied to satisfy the outstanding mortgage debt. The court further ordered that the defendants pay the costs of the proceedings.

Orders