CBA v Hurst

[1999] NSWSC 827

CITATION:	CBA v Hurst [1999] NSWSC 827
CURRENT JURISDICTION:	Commercial
FILE NUMBER(S):	50124/1994
HEARING DATE(S):	13 August 1999
JUDGMENT DATE:	18 August 1999
PARTIES :	Commonwealth Bank of Australia - Plaintiff Helen Ann Hurst - Sixth Defendant
JUDGMENT OF:	Rolfe J

COUNSEL :	Mr M. Walton SC - Plaintiff Mr J.J. Loofs - Sixth Defendant
SOLICITORS:	Abbott Tout - Plaintiff Weatherly & Bartram - Sixth Defendant
CATCHWORDS:
DECISION:	I order that:-; (a) leave be granted to the plaintiff to issue a Writ with respect to the property referred to in paragraph 3(b) of the judgment entered on 12 October 1998, being the whole of the land contained in Certificate of Title Reference 6/2/758544 and known as Creek Street, Jindera in the State of New South Wales; (b) the sixth defendant pay the plaintiff's costs of the Notice of Motion; (c) the sixth defendant's Cross-Claim stand over for mention to Friday, 20 August 1999

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

ROLFE J

WEDNESDAY, 18 AUGUST 1999

50124/1994 - COMMONWEALTH BANK OF AUSTRALIA v HURST & ORS

JUDGMENT

HIS HONOUR:

Introduction

1    On 18 September 1998 the Court ordered that the plaintiff, Commonwealth Bank of Australia, for which Mr M. Walton of Senior Counsel appeared, should, relevantly for present purposes, have judgment against the fifth defendant, Cade Hurst Enterprises Pty Limited, (“Cade Hurst”), for possession, inter alia, of all the land contained in Certificate of Title Reference 6/2/757544 being the land at 79 Creek Street, Jindera in the State of New South Wales, (“the property”). That order flowed from Cade Hurst’s having mortgaged the property to the plaintiff by a mortgage, which is dated 9 January 1980, and which is registered on the title. The correct reference to the title is Certificate of Title Reference 6/2/758544, which was corrected pursuant to the slip rule and without objection.

2    By a Notice of Motion filed on 6 July 1999 the plaintiff sought leave to issue a Writ of Execution forthwith to obtain possession of the property and, subject to a matter to which I shall refer in a moment, it is not suggested that the plaintiff is not entitled to that order.

3    By a Notice of Motion filed in Court on 16 July 1999, Mrs Helen Ann Hurst, who was not a party to the original proceedings and for whom Mr J.J. Loofs of Counsel appeared, sought orders that she be granted leave to intervene in these proceedings and be added as the sixth defendant, that the plaintiff’s Notice of Motion seeking leave to issue the Writ of Execution be stayed:-

“pending the outcome of the proceedings commenced by Helen Ann Hurst in the Family Court of Australia at Melbourne on 11 May 1999 numbered 4881 of 1999”,

and for ancillary relief. The Notice of Motion was supported by an affidavit she swore. The plaintiff consented to her being added as the sixth defendant and, at that time, it was envisaged that she would file a Cross-Claim. The plaintiff made it clear that it reserved its right to object to the form of any Cross-Claim.

4 Mrs Hurst is married to the fourth defendant, Mr Roger Cade Hurst. Divorce proceedings between Mr and Mrs Hurst are presently pending in which she seeks, inter alia, a settlement of property. Her claim is that Mr Hurst transfer all his right, title and interest in the property to her; that pursuant to s.85 of the Family Law Act the disposition by Mr Hurst of the property be set aside; and alternatively, pursuant to s.78 of that Act, it be declared that either she or she and Mr Hurst are the owners of the property.

5    In her affidavit of 14 July 1999 Mrs Hurst deposed that she resides with her son at the property in which she has lived since it was purchased in 1980. She set forth that she is the wife of Mr Hurst and certain particulars about their relationship and, in paragraph 3, that she did not seek legal advice in relation to the present proceedings until about April 1999, because until then she considered she was unable to do “anything”. She continued:-

“It was only after I sought advice that I became aware of my right to bring an application with respect to my home.”

6    She referred to the orders sought in the Family Court and, in paragraph 9, deposed to her belief that Cade Hurst, which is apparently now in receivership, holds the property on a constructive or resulting trust for her “subject to the amount outstanding on loan number 22939501”.

7    She stated that if a Writ of Possession is issued:-

“.. the Family Court application will be nugatory and I will have no opportunity to prove my interest in the property”.

The Cross-Claim

8    By a Cross-Claim, filed in Court on 30 July 1999, Mrs Hurst pleaded that Cade Hurst is the registered proprietor of the property, and that between late 1979 and 8 January 1980 Mr Hurst represented to her that she and he were purchasing the property as their matrimonial home for $70,000, and that in reliance on the representation she agreed to borrow $30,000, by way of a home loan, to assist with the purchase. She alleged that in about January 1980 the plaintiff advanced $30,000 to her and Mr Hurst, and represented to her that the advance was a home loan to be used for the purpose of the purchase of the property “as a home”. Mrs Hurst pleaded that in reliance on that representation she borrowed $30,000 and directed its disbursement for use in the purchase of the property, and that the property was purchased in the name of Cade Hurst with the funds she and Mr Hurst had borrowed.

9    Mrs Hurst pleaded that she did not authorise Mr Hurst or Cade Hurst to purchase the property in the latter’s name; that she was not aware that they had done so; that the plaintiff knew or should have known that she reposed trust and confidence in Mr Hurst; and that it believed that she was purchasing a matrimonial home to be enjoyed by her beneficially.

10    She continued that the plaintiff knew that the property was purchased in the name of Cade Hurst, and was not a matrimonial home owned beneficially by her but property acquired by Cade Hurst; that at all material times it was held upon a resulting or constructive trust for her, or for her and “the fifth defendant”, which I think should read “the fourth defendant”; and that by reason of the matters pleaded the plaintiff has known that the property has been held on constructive or resulting trust for her and/or for her and Mr Hurst.

11    Mrs Hurst pleaded that a mortgage was granted over the property to secure the repayment of $30,000 advanced by the plaintiff to her; and that unbeknown to her, the plaintiff also procured Mr Hurst and Cade Hurst to grant a further mortgage to secure advances and financial accommodation to Cade Hurst, each of such mortgages being pleaded as in breach of the resulting or constructive trusts upon which Cade Hurst held the property.

12    In paragraph 21 she pleaded that the plaintiff knew, or should have known, that the purport and effect of the mortgages were not known to her; that the mortgages were over property in which she had a beneficial interest; that there was no consideration to her for the granting of the mortgage (presumably the second mortgage) in respect of the property; that the mortgages were of no benefit to her; that the mortgage (presumably the second mortgage) involved a dealing with her property by Cade Hurst; and that the mortgages were in breach of the resulting or constructive trusts upon which Cade Hurst held the property.

13    It was pleaded that by reason of the plaintiff’s knowledge or implied consent to Cade Hurst’s breach of trust, the plaintiff holds its interest in the property the subject of the first or second mortgages on constructive trust for Mrs Hurst; or that by procuring the purchase of the property and its and the subsequent registration of a transfer of it to Cade Hurst, the plaintiff acted “unconscionably”.

14    In the alternative it was pleaded that the plaintiff is estopped from denying that the property is and has been at all material times owned beneficially by Mrs Hurst, or by her and Mr Hurst “subject to the repayment of the housing loan from asserting any interest in the property by way of charge or mortgage”.

15    In paragraph 26 it was pleaded that there is a matrimonial cause between Mrs Hurst and Cade Hurst “by reason of which the Family Court of Australia has exclusive jurisdiction to determine the rights of” Mrs Hurst and Cade Hurst.

The Present Situation

16    Mr Walton submitted that:-

(i) as between the plaintiff and Cade Hurst, the plaintiff has a judgment which remains enforceable until it is set aside;
(ii) there is no application by any party to set that judgment aside;
(iii) there is no submission that, subject to the alleged interests of Mrs Hurst, the plaintiff is not entitled to have leave to issue a Writ of Execution for possession of the property; and
(iv) by her Cross-Claim Mrs Hurst does not assert any entitlement, as against the plaintiff, to possession and, perhaps more significantly, she does not plead as against the plaintiff that it acquired its interest in the property by way of fraud.

17    On behalf of Mrs Hurst, Mr Loofs submitted that her Cross-Claim clearly pleaded an entitlement to an interest in the property, and that until such time as that entitlement had been litigated the plaintiff should not be allowed to exercise its rights to take possession. He did not submit that the Cross-Claim asserted other than an equitable interest in the property or fraud.

Conclusions

18 In my opinion Mrs Hurst’s Cross-Claim pleads sufficient to establish on the necessary prima facie basis, and accepting the truth of the facts pleaded for present purposes, that she may have an equitable interest in the property. If, in due course, she can establish such an interest and that it has been adversely affected by the actions of the plaintiff it may be, and I put the matter no higher than that, that she is entitled to some relief against the plaintiff. However, the position is that the plaintiff is seeking to enforce the rights it has under a registered mortgage against the registered proprietor of the property, Cade Hurst, which gave the plaintiff the mortgage. Even allowing, for present purposes, that the plaintiff had knowledge of Mrs Hurst’s interest in the property, in the absence of any allegation of fraud it has the benefit of the provisions of s.43 of the Real Property Act 1900 and, accordingly, is not affected by any such asserted knowledge.

19    In these circumstances it does not seem to me that there is any basis for not entitling the plaintiff to enforce its legal rights against Cade Hurst. A further relevant matter is that there is no allegation that any conduct on the part of the plaintiff estops or otherwise disentitles it from obtaining possession as against Mrs Hurst.

20    No submissions were addressed to me that this matter could only be determined by the Family Court of Australia or that the enforcement of the judgment could only be effected in that Court. In my opinion, as there is a judgment of this Court in the plaintiff’s favour against Cade Hurst, which is the only judgment the plaintiff is seeking, relevantly for present purposes, to enforce the Family Court proceedings raise no impediment in relation to that. It may be, and I put the matter no higher, that the matters raised in the Cross-Claim should be determined by the Family Court in assessing, as between the relevant parties to that Court’s determination, the various rights.

Orders

21    I order that:-

(a) leave be granted to the plaintiff to issue a Writ with respect to the property referred to in paragraph 3(b) of the judgment entered on 12 October 1998, being the whole of the land contained in Certificate of Title Reference 6/2/758544 and known as Creek Street, Jindera in the State of New South Wales;

(b) the sixth defendant pay the plaintiff’s costs of the Notice of Motion;
(c) the sixth defendant’s Cross-Claim stand over for mention to Friday, 20 August 1999.

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