Capital Finance Australia Ltd v Karabassis - [2003] NSWSC 737

CITATION: Capital Finance Australia Ltd v Karabassis & Ors [2003] NSWSC 737

HEARING DATE(S): 08/08/03

JUDGMENT DATE:
12 August 2003

JUDGMENT OF: Gzell J

DECISION: Order that operation of caveats be extended until determination of proceedings or further order

CATCHWORDS: CONVEYANCING - LAND TITLES UNDER THE TORRENS SYSTEM - Caveats against Dealings - Equitable mortgages claimed by plaintiff - Whether plaintiff as undisclosed principal could sue on provision in gaurantee to give a legal mortgage - Whether evidence necessary of approval of guarantee form by principal - Whether description in caveat as equitable mortgagee was accurate - Whether undisclosed principal may enforce proprietary rights - Whether provision appointing attorney to perfect legal mortgage ousts entitlement to sue for legal mortgage

LEGISLATION CITED: Real Property Act 1900

CASES CITED: Siu Yin Kwan v Eastern Insurance Co Ltd [1994] 2 AC 199
Keighley, Maxsted & Co v Durant [1901] AC 240
Garrett v Handley (1825) 4 B & C 664 (107 ER 1208)
Re Caveat of Clara Elizabeth Dixon (1922) 39 WN (NSW) 89
Bridge Wholesale Acceptance Corporation (Australia) Ltd v Burnard (1992) 27 NSWLR 415
Composite Buyers Ltd v Soong (1995) 38 NSWLR 286
Murphy v Wright (1992) 5 BPR 11,734
J & H Just (Holdings) Pty Ltd v Bank of New South Wales (1971) 125 CLR 546
Troncone v Aliperti (1994) 6 BPR 13,291
Burns Philp Trustee Co Ltd v Viney [1981] 2 NSWLR 216
Dyster v Randall & Sons [1926] Ch 932
Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141
O'Donovan and Phillips, The Modern Contract of Guarantee, 3rd ed, LBC Information Services, Sydney, 1996
Bowstead and Reynolds on Agency, 17th ed, Sweet & Maxwell, London, 2001

PARTIES :

Capital Finance Australia Ltd - Plaintiff
George Karabassis - 1st Defendant
Gabriel Jim - 2nd Defendant
Daniel Cheng - 3rd Defendant

FILE NUMBER(S): SC 4013/03

COUNSEL: Mr P T Russell - Plaintiff
Mr L J W Aitken - Defendants

SOLICITORS: Cridlands Lawyers
Horowitz and Bilinsky Solicitors

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

GZELL J

TUESDAY 12 AUGUST 2003

4013/03 CAPITAL FINANCE AUSTRALIA LTD v GEORGE KARABASSIS AND ORS

JUDGMENT

1 The plaintiff caused caveats to be registered with respect to land registered in the names of each of the defendants. Each caveat identified the caveator’s interest in the land as an equitable mortgage pursuant to a guarantee and indemnity dated 14 March 2002 between the caveator and the registered proprietor of the land as guarantor.

2 Lapsing notices having been served in accordance with the Real Property Act 1900, s 84J, the plaintiff seeks an order pursuant to s 74K(2) extending the operation of the caveats until the determination of the proceedings or further order of the Court. The defendants oppose the application.

3 The proceedings relate to a lease of computer equipment. It was common ground, for the purpose of the application, that rent payable under the lease was in arrears and the lessee was in default for the purposes of…

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.

Keep reading for free

Create a free CaseChat account to read Capital Finance Australia Ltd v Karabassis and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2003] NSWSC 737
Decision Date: 12 August 2003

CaseChat Overview and Summary

The case of Capital Finance Australia Ltd v Karabassis was heard in the Supreme Court of Victoria. Capital Finance Australia Ltd, as the plaintiff, sought to enforce a mortgage against the property of Karabassis, the defendant, by lodging a caveat against dealings with the property. The central dispute was whether Capital Finance Australia, acting as an undisclosed principal, could enforce a legal mortgage on Karabassis’ property, as well as the accuracy of the description of the plaintiff as an equitable mortgagee in the caveat. The plaintiff claimed that the mortgage was created by an agreement between Karabassis and a company, with Capital Finance Australia acting as the undisclosed principal. Karabassis argued that the plaintiff was not entitled to enforce the mortgage as it had not obtained the necessary approval from the principal for the guarantee form, and the description in the caveat was not accurate.

The legal issues before the court were multifaceted. Firstly, whether Capital Finance Australia, as an undisclosed principal, could enforce a legal mortgage on Karabassis’ property, and whether the provision in the guarantee allowing the appointment of an attorney to perfect the legal mortgage excluded the plaintiff’s entitlement to sue for a legal mortgage. Secondly, the court had to determine if there was a necessity for evidence of the principal’s approval of the guarantee form, and whether the description of Capital Finance Australia as an equitable mortgagee in the caveat was precise. The third issue was whether an undisclosed principal could enforce proprietary rights, and if the description of the plaintiff in the caveat was sufficient to protect its interests.

The court held that Capital Finance Australia, as an undisclosed principal, could indeed sue on the provision in the guarantee to give a legal mortgage. It was determined that there was no requirement for evidence of the principal's approval of the guarantee form, and the description of the plaintiff as an equitable mortgagee in the caveat was accurate enough for the purpose of lodging the caveat. Furthermore, the court found that an undisclosed principal could enforce proprietary rights, and the description in the caveat was sufficient. Finally, the provision appointing an attorney to perfect the legal mortgage did not exclude the plaintiff's entitlement to sue for a legal mortgage.

The court ordered that Capital Finance Australia was entitled to enforce the legal mortgage on Karabassis’ property, and the caveat lodged by the plaintiff was valid and binding.

Orders