Bradley Hancock v Impresario Enterprises Pty Ltd (No 3)
[2013] NSWSC 556
•12 April 2013
Supreme Court
New South Wales
Case Title: Bradley Hancock v Impresario Enterprises Pty Ltd (No 3) Medium Neutral Citation: [2013] NSWSC 556 Hearing Date(s): 12 April 2013 Decision Date: 12 April 2013 Jurisdiction: Equity Division - Duty List Before: Justice Rein Decision: Orders the plaintiff to provide to the second defendant a withdrawal of caveat in registrable form in respect of caveat number AF 805835 recorded in folio identifier 11/3/979242 within 48 hours of this order being made, on the undertaking by the second defendant to the Court that the second defendant will hold the withdrawal of caveat pending completion of the sale of the property as mortgagee in possession. Orders the plaintiff to pay the second defendant's cost of this motion.
Catchwords: PROPERTY - Withdrawal of caveat by plaintiff in order for the bank to exercise their power of sale Category: Principal judgment Parties: Bradley Hancock (plaintiff)
Impresario Enterprises Pty Ltd (first defendant)
St George Bank - A Division of Westpac Banking Corporation (second defendant)Representation - Counsel: Counsel: No appearance (plaintiff)
No appearance (first defendant)
Mr Newton (second defendant)- Solicitors: Solicitors: Kemp Strang (second defendant) File Number(s): 2011/33867
EX TEMPORE JUDGMENT
REIN J: In this matter the second defendant seeks an order for the plaintiff to provide a withdrawal of caveat, or alternatively an order that the caveat be withdrawn by the plaintiff. The first defendant has communicated to the second defendant that it supports the grant of the orders sought by the second defendant and consents to them: see Annexure "H" to affidavit of Mr Addy Pong of 9 April 2013.
The circumstances briefly are these:
(1)The plaintiff was the registered owner of a property at Pitt Town New South Wales.
(2)The plaintiff sold the property to the first defendant.
(3)The first defendant then sought a loan from the St George Bank ("the Bank"), which has become part of Westpac Banking Corporation, which loan was granted on condition that the first defendant provide a mortgage to St George, which it did. The mortgage was provided on 25 July 2008.
On 11 October 2010 the plaintiff lodged a caveat, caveat AF 805835, which I shall refer to as "the caveat", on the property. The principal affidavit of the solicitor for the bank, Mr Pong of 28 March 2013, sets out the history of the matter and attaches documents relating to that history.
The first defendant did not repay the monies due under the loan. The caveat which the plaintiff lodged was a caveat by which he claimed that he had conveyed the property to the first defendant for a total of $1.1M and received only a partial payment of that amount, the balance of approximately $350K being unpaid to him.
On 9 July 2009 the bank obtained judgment for possession of the property. The plaintiff commenced proceedings against the first defendant and the bank, but in the course of those proceedings orders were made as between the plaintiff and the bank which included the following order:
2. Parties to do all things to execute all documents reasonably necessary to sell the subject property by auction expeditiously, and the monies remaining after payment of agent's commission and advertising, legal fees and disbursements and any mortgage/or charge upon the property and reasonable expenses of such sale and ownership of such property, and shall be paid into the trust account of MBBF and paid as agreed or court order.
The reference to MBBF is a reference to the first defendant's solicitors. At the time it was apparently envisaged that the property would be sold by the first defendant. Indeed, subsequently orders were made on 11 November 2011 as between the plaintiff and the first defendant in respect of the proposed sale.
Issues arose as between the plaintiff and the first defendant in respect of the contract which was arranged by the first defendant with third party purchasers. It is not necessary to descend into the detail of that dispute, determined by White J on 9 November 2012, but the first defendant's attempt to have the plaintiff withdraw his caveat was unsuccessful. His Honour notes on that occasion that the contract that had been entered into by the first defendant with those third parties might very likely come to an end, and which could lead to the consequence that the bank would exercise its power of sale as a mortgagee.
On 3 December 2012 the bank obtained possession of the property. It has, as his Honour foreshadowed, sold the property to other third parties. That sale is at a price of $1.085 million. That sale is due to settle on 29 April. It is clear from correspondence between the bank and Mr Hancock that he does not wish to provide a withdrawal of the caveat so that that sale can be settled. The bank wishes the settlement to take place without the caveat in place so that the purchasers can be provided with clear title to the property. The bank's solicitors have sought Mr Hancock's agreement to withdraw the caveat which, as I say, has not been forthcoming.
In the circumstances the bank has had little alternative but to approach the Court for orders. The plaintiff has, by his correspondence, including the letter which he sent to the Supreme Court (see annexure C to the affidavit of Mr Pong of 9 April 2013) contended that the matter should not be heard at this time, as he has difficulties in appearing, and that the matter should await a date in May when he indicates that he will be in Sydney.
It was suggested to the plaintiff through correspondence that a court phone link could be arranged but there is nothing to indicate he accepted that proposal and I was informed by Mr Newton, through my Associate, that no phone link was required to be set up because no response had been received from the plaintiff. The plaintiff did attend the directions hearing on Wednesday being the first return date of the notice of motion, and he has not appeared today. I am satisfied that the matter is urgent and that it is appropriate for the bank to proceed with its motion. I am also satisfied that the plaintiff has had notice of the proceedings. He was advised by email on Wednesday that the matter would be listed for hearing today.
The agreement which was reached by the plaintiff through his legal representative and the bank through its representative makes it clear that the bank is entitled to proceed with the sale and that it was always recognised by the plaintiff that the bank would be paid out any money due to it. I am informed by Mr Newton, counsel for the bank, that it is likely that there will be a surplus. The provisions in relation to surplus are found in two places. Firstly, in the orders made on 8 April to which I have earlier referred, there was to be a payment into the trust account of the first defendant's solicitor. In further orders made as between the plaintiff and the first defendant there was an order that there was to be payment of the surplus proceeds into a joint account. I think that it is appropriate that net proceeds of sale after payment of all relevant disbursements and sale costs and the mortgage should be held in the trust account of the solicitors for the bank, Kemp Strang. After advice has been given to plaintiff and the first defendant as to the remaining funds, should there be an inability as between the plaintiff and the first defendant to work out how those funds are to be disbursed, it will be open to the bank to organise for those surplus monies to be paid into court.
I should also mention that Mr Newton submitted, correctly in my view, that the orders made as between the plaintiff and the first defendant on 11 November contemplated that the bank would be paid out its debt. It follows from what I said earlier that the bank should be able to provide clear title to the purchasers and that the failure of the plaintiff to provide the withdrawal of the caveat is a threat to the completion of settlement on the due date.
Of the two alternatives that have been proposed as orders in the notice of motion, the second alternative, which is found in order three, does, Mr Newton submits, more closely approximate the arrangements that have previously been made between the plaintiff and the first defendant, and he seeks an order in those terms, which I think should be granted.
Accordingly, I order that the plaintiff provide to the second defendant a withdrawal of caveat in registrable form in respect of caveat number AF 805835 recorded in folio identifier 11/3/979242 within 48 hours of this order being made, on the undertaking by the second defendant to the Court that the second defendant will hold the withdrawal of caveat pending completion of the sale of the property as mortgagee in possession. I also order that the plaintiff pay the second defendant's costs of this motion.
I should also note that by exhibit A the second defendant has undertaken to the bank to draw to the attention of the Chief Commissioner the existence of the contract of sale for stamp duties purposes. The orders that I have just made can be taken out forthwith.
I order that the orders to be taken out are to be served on the plaintiff by email by 5pm this afternoon.
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