Barrett v Barrett
[2001] NSWSC 877
•17 September 2001
CITATION: Barrett v Barrett [2001] NSWSC 877 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): SC 4249/97 HEARING DATE(S): 17/09/01 JUDGMENT DATE:
17 September 2001PARTIES :
State Bank of NSW Ltd (Cross Claimant)
Clarence Frederick Barrett (1st Cross Defendant)
Registrar-General (D)JUDGMENT OF: Young CJ in Eq
COUNSEL : L J Aitken (Cross Claimant)
A Booth (S)(R-G)SOLICITORS: Abbott Tout (Cross Claimant)
CATCHWORDS: MORTGAGES [14]- Covenant by mortgagor to acquire land- Expedient to perfect security- Scope- Mortgagee appointed attorney to carry out covenant- Mortgagor becomes incapable. LEGISLATION CITED: Conveyancing Act 1919, ss 161, 162B
Protected Estates Act 1983, s 76
Real Property Act 1900, ss 123, 124CASES CITED: Re O'Hara; Re M (1999) 9 BPR 17103 DECISION: Orders made.
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
4249 of 1997
Monday 17 September 2001
YOUNG CJ IN EQ
BARRETT & ORS v BARRETT & ANOR
Judgment
: By mortgage R735352 the first cross defendant mortgaged rural lands at Young to the cross claimant. At the time when the mortgage was entered into, there was a Crown enclosed road traversing the property. After the mortgage was entered into the mortgagor purchased the enclosed road from the Crown and a separate certificate of title was issued in respect of it.
2 The mortgagee wishes to sell both the mortgaged property and the road but has been checked because it has no title to the road. Thus, the cross claimant, a mortgagee, by notice of motion, seeks an order that the Registrar-General register a mortgage over the former road, which mortgage it will execute on behalf of the mortgagor because of a provision in mortgage R735352 in respect of adjoining lands.
3 The surviving mortgagor is now under the care of the Protective Commissioner. The Protective Commissioner has been served with the proceedings but has not appeared. The Registrar-General has been added as a defendant and has expressed disquiet about registering the document executed by an attorney when he knew that the affairs of the mortgagor were under the care of the Protective Commissioner.
4 I have some reserve about dealing with a matter in which the motion asks the Registrar-General to register the document because arguably the Court's powers under ss 123 and 124 of the Real Property Act 1900 are not plenary. However, the solicitor for the Registrar-General said he would be happy in this case to do anything that is fair because his only concern was as I have just indicated.
5 The relevant clause in the mortgage is, so far as is relevant, as follows:
- "That the Mortgagor doth hereby irrevocably appoint the Bank and also the assigns of the Bank severally to be the true and lawful Attorney of the Mortgagor ... And without limiting the generality of the foregoing provisions and at the cost and charge of the Customer to acquire such further or other property whether real or personal as to the Bank or the said Attorney shall seem expedient to be added to the property herein comprised for the purpose of more perfectly securing the repayment of the moneys hereby secured.”
6 The mortgage was given in 1966. Accordingly, by operation of s 162B of the Conveyancing (Powers of Attorney) Amendment Act which was introduced in 1983, s 161 of the Conveyancing Act 1919, as it applied in 1966 is applicable. That section provided that where a power of attorney is expressed to be irrevocable, then an act done by the donee is valid, notwithstanding the mental disability of the donor and the power is not revoked by the mental disability of the donor.
7 Section 76 of the Protected Estates Act 1983 provides a regime whereby powers of attorney are suspended whilst the estate of a person is under management under that Act, but the Court is given power to restore the power of attorney on terms and conditions, and an attorney may, subject to the Court's exercise of that power, validly do an act under the scope of the power of attorney.
8 Section 76 of the Protected Estates Act is expressly made subject to s 160 of the Conveyancing Act. I analysed the relations between the two in Re O'Hara;Re M (1999) 9 BPR 17103. That decision does not quite touch the instant point. However, it leans in the direction of the Court exercising its powers under s 76 in accordance with the legislative framework of sections such as s 161 and s 162B of the Conveyancing Act.
9 Thus, if the power is suspended it should be restored under s 76 sufficiently for it to be exercised in accordance with the mortgage.
10 There appears to be little learning on the operation of a clause such as the one I have cited, though it is a common enough clause in mortgages. As Mr Aitken of counsel for the mortgagee bank has submitted, if ever the clause can apply in a benign form, it is the present case because the former Crown road in the middle of the property is, for all commercial purposes, part of the property. It accreted to the mortgagor by him purchasing it from the Crown without the bank's knowledge. The property can really only be sold as one parcel and the only effect that the road may have would be some greenmail value in the case of the mortgagor or a third person.
11 Accordingly, in my view, the bank is entitled under its power of attorney to execute a mortgage to itself over the closed road. The Registrar-General should register that document, and then the sale of the whole parcel to a purchaser can proceed.
12 The formal orders are:
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I make orders 5, 7A, 7B, and 8 in the amended notice of motion of 14 September 2001. The costs will, of course, be part of the mortgagee's charge. Liberty to apply.
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