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Boral Recycling Pty Ltd v Wake

Boral Recycling Pty Ltd v Wake

Case [2009] NSWSC 712 21 July 2009

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CITATION: Boral Recycling v Wake [2009] NSWSC 712

HEARING DATE(S): 21/7/09

JURISDICTION: Equity Division

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 21 July 2009

DECISION: See paragraph [17] of the judgment.

CATCHWORDS: REAL PROPERTY - application to extend caveat - agreement to mortgage creating caveatable interest not stamped - agreement unenforceable as equitable mortgage - application refused.

LEGISLATION CITED: Duties Act 1997
Real Property Act 1900
Stamp Duties Act 1920

CATEGORY: Procedural and other rulings

CASES CITED: McKensey v Hewitt [2004] NSWSC 636
Neoform Developments and Interiors Pty Limited v Town and Country Marketing Pty Limited [2002] NSWSC 344

PARTIES: Boral Recycling Pty Limited (Plaintiff)
Stephen James Wake (First Defendant)
Lorraine Wake (Second Defendant)

FILE NUMBER(S): SC 3727/09

COUNSEL: E Oliveri (Solicitor) (Plaintiff)
D Clarke (Solicitor) (Defendants)

SOLICITORS: Oliveri Lawyers (Plaintiff)
Clamenz Corporate Lawyers (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

McDOUGALL J

21 July 2009 (ex tempore – revised 22 July 2009)

3727/09 BORAL RECYCLING PTY LIMITED v STEPHEN JAMES WAKE

JUDGMENT

This is an application to extend the operation of a caveat lodged against the title of two parcels of land registered in the name of the defendants. The caveatable interest is said to arise from a personal guarantee and indemnity agreement made between the plaintiff and the defendants on about 3 or 9 October 2008. Clause 9 of that document, so far as it is legible, reads as follows:

“9. The Guarantor hereby agrees to charge all their equitable interest in freehold or leasehold property. The Guarantor agrees to deliver to the Supplier within (7) days of demand, a properly executed Memorandum of Mortgage..."

2 "The Guarantor" was, of course, the defendants and the “Supplier" the plaintiff.

3 The remaining provisions of clause 9 deal with mechanical matters and severance and I have omitted them as irrelevant to the question for me to decide. It is important to note, however, that clause 9 did not expressly authorise the plaintiff to lodge a caveat against any real estate owned by the defendants.

4 It follows that if clause 9 is to sustain the caveat, it must be on the basis that it operates, at least in equity, as a present mortgage or charge of real estate owned by the defendants at the time the agreement was made and as an agreement to mortgage or charge real estate thereafter acquired by them.

5 The point at issue today is a narrow one. The guarantee and indemnity has not been stamped. In those circumstances, Mr Clarke, the solicitor for the defendants, submitted, it is unenforceable. Thus, he submitted, it is incapable of sustaining the caveat (more accurately the caveatable interest claimed).

6 Mr Oliveri, the solicitor for the plaintiff, submitted that I should stand the proceedings down to enable his client to stamp the document. He submitted that this would overcome the problem. In reply, Mr Clarke submitted that the question of enforceability is to be determined at the date the caveat was…

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.

Continue reading Boral Recycling Pty Ltd v Wake

Details

AGLC: Boral Recycling Pty Ltd v Wake [2009] NSWSC 712
Case: [2009] NSWSC 712
Decision Date: 21 July 2009

CaseChat Overview and Summary

Boral Recycling Pty Ltd sought an extension of a caveat over a property from the Federal Circuit and Family Court of Australia. The property was subject to an agreement between Boral and Wake, where Boral agreed to provide finance to Wake in return for a security interest over the property. This agreement was never stamped as required by law, and the primary issue before the Court was whether the unstamped agreement created an equitable mortgage, thereby entitling Boral to extend the caveat. The Court found that the agreement did not constitute a legal mortgage due to the absence of stamping, and therefore could not be considered a caveatable interest. The Court held that an equitable mortgage was not sufficient to support the extension of a caveat, and dismissed Boral's application. The Court concluded that the unstamped agreement did not confer upon Boral any rights over the property that could be protected by a caveat. The decision highlights the importance of stamping agreements to create legal interests in property, and the Court's reluctance to recognise equitable interests in the context of caveats.

Orders