Collesie Pty Ltd v Rathdowney No 1 Pty Ltd
[2002] VSC 192
•23 May 2002
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 8592 of 2001
| COLLESIE PTY. LTD. | Plaintiff |
| v. | |
| RATHDOWNEY NO. 1 PTY. LTD. | Defendant |
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JUDGE: | BEACH J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 17 MAY 2002 | |
DATE OF JUDGMENT: | 23 MAY 2002 | |
CASE MAY BE CITED AS: | COLLESIE PTY. LTD. v. RATHDOWNEY NO. 1 PTY. LTD. | |
MEDIUM NEUTRAL CITATION: | [2002] VSC 192 | |
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CATCHWORDS: Mortgagor/Mortgagee – Whether mortgage to be in registrable form – Agreement of parties.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr. R. Cook | S.V. Winter & Co. |
| For the Defendant | Mr. M.A. Scarfo | Tan & Tan |
HIS HONOUR:
This is an appeal from the order of a Master of the Court made on 8 May 2002 whereby the Master granted leave to the defendant to defend the proceeding.
It is unnecessary to rehearse the detail of the dealings between the plaintiff and the defendant leading up to the institution of this proceeding in my reasons for judgment because the matter at issue in this appeal can be identified comparatively briefly.
The dispute relates to a two stage development of units at 223 Normanby Road, South Melbourne.
The plaintiff was involved in the development of the first stage – the defendant was not.
In December 1998 the defendant agreed to purchase from the plaintiff the land which was to be the subject of the second stage, other than for two of the spaces proposed to be used for two of the units, and to construct 12 units on the land of which it would own 10.
On 18 October 1999 the plaintiff, the defendant and a third company Access Self Storage Pty. Ltd. entered into a further agreement concerning the development. Clause 10.1 of that agreement reads:
"10.1Rathdowney (the defendant) agrees to execute in favour of Collesie (the plaintiff) by way of collateral security for the due performance by Rathdowney of its obligations pursuant to this agreement the Mortgage and to pay the relative stamp duty, registration fees and reasonable costs relative thereto."
"Mortgage" is defined as meaning the mortgage comprising Schedule hereto.
Attached to the agreement is a standard form of mortgage approved by the Victorian Land Titles Office. The mortgage is over the land purchased by the defendant from the plaintiff, is between Rathdowney No. 1 Pty. Ltd. as mortgagor and Collesie Pty. Ltd. as mortgagee and states that it is "by way of collateral security for the due compliance by the Mortgagor with the terms and conditions of an agreement bearing even date herewith made between the Mortgagor and the Mortgagee."
The commencing date of the mortgage is 18 October 1999.
On 18 October 1999 the plaintiff and the defendant executed the mortgage.
On or about 3 April 2000 the plaintiff registered a caveat against the property the subject of the mortgage.
Originally the state or interest claimed was specified in the caveat as "An equitable interest pursuant to a mortgage between Collesie Pty. Ltd. and Rathdowney No. 1 Pty. Ltd." However, on 30 May 2000 the caveat was amended by deleting the word "equitable" and inserting between the words "interest" and "pursuant" the words "as Mortgagee" so that the caveat now reads "An interest as Mortgagee pursuant to a Mortgage between Collesie Pty. Ltd. and Rathdowney No. 1 Pty. Ltd."
A dispute later arose between the parties concerning the development causing the plaintiff to lodge the mortgage for registration in the Land Titles Office.
However, the Registrar of Titles refused to register the mortgage because it was not executed in an approved form for registration pursuant to the Transfer of Land Act 1958.
The defect concerning the execution of the mortgage is that it is a three page document the second of which is entitled "Annexure Page." It is a requirement of the Land Titles Office that the second page be initialled by or on behalf of the mortgagor.
By letter of 22 October 2001 the plaintiff requested the defendant to sign the annexure page. The defendant refuses to do so.
On 5 December 2001 the plaintiff filed the writ in the proceeding whereby it seeks the following orders:
"A.Specific performance of the agreement insofar as the terms thereof are set forth in paragraph 3 hereof.
B.Orders that the defendant take such steps as are necessary to enable the document referred to in paragraph 4 hereof to be registered at the Victorian Land Titles Office pursuant to the provisions of the Transfer of Land Act 1958.
C.Such other orders or directions as, in default of the defendant complying with the orders of the Court sought, will enable the plaintiff to obtain registration of the 'Mortgage of Land' document referred to in the Victorian Land Titles Office.
D. Costs on an indemnity basis."
By its defence the defendant admits the agreement of October 1999 but contends that its only obligation under the agreement was to provide the plaintiff with an unregistered mortgage which it has done. The defendant specifically denies that it was required to provide to the plaintiff a Mortgage of Land "in an approved form for registration at the Victorian Titles Office."
In an affidavit sworn by a director of the defendant Dale Howard Robertson on 5 April 2002 in opposition to the plaintiff's application for summary judgment, Robertson has stated:
"13.In the same period, in or about mid to late 1999, and following, a Mr. Mark William Hardgrave ('Hardgrave') was a Director of Rathdowney, and conducting negotiations for and on behalf of Rathdowney with the Plaintiff's Director, Wilcocks, concerning the day to day development of stage 2.
14.In this period, as I recall, I was informed by Hardgrave, and I believe, inter alia, that:
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(c)An agreement between Hardgrave for Rathdowney, and Wilcocks for Collesie was then reached in terms, inter alia, that Rathdowney would execute a mortgage, but that Wilcocks, for Collesie, would only use the document for the purposes of lodging caveats over each of the units being subdivided and sold as shells, and that he (Wilcocks) for Collesie, would provide Withdrawals of Caveats on, and for, each unit (for which separate Certificates of Title would issue) as and when they (each unit) were settled.
I cannot recall whether Hardgrave advised me in these terms as a result of their discussions in October 1999, or whether they had reached this position after (the execution of documents in) October 1999. Unfortunately, Hardgrave is presently overseas and will not be returning for a period of two weeks – in the interim, I have been unable to speak with him concerning these matters."
The plaintiff's appeal came before me on 17 May 2002. No application was made by the defendant to rely on an affidavit of Hardgrave in relation to the matter although if the content of paragraph 14(c) of Robertson's affidavit is correct Hardgrave would have returned to Australia almost a month ago; nor was any explanation offered to me by the defendant's counsel for the defendant's failure in that regard.
Had any such application been made I have no doubt that I would have given the defendant special leave to rely on the affidavit.
In my opinion the contention of the defendant is untenable.
It is clear from the wording of clause 10.1 of the 18 October 1999 agreement that the mortgage in question was to be capable of registration in the Land Titles Office. If that had not been the intention of the parties why did the defendant agree to pay the stamp duty and registration fees in respect of the mortgage.
It was said on behalf of the defendant that the plaintiff's conduct following the execution of the agreement on 18 October 1999 supported the defendant's contention that there was no requirement that the mortgage provided by the defendant be in registrable form. In that regard counsel for the defendant pointed to the caveat lodged by the plaintiff and the original wording of the caveat.
I can not be persuaded that that in any way alters the situation. A person having an interest in land in circumstances where it may never be necessary to formally register the interest often will choose to protect the interest by the simple expedient of lodging a caveat rather than taking any more formal step in the matter.
The appeal will be allowed and the orders of the Master of 8 May 2002 are set aside.
There will be judgment for the plaintiff for specific performance of the agreement entered into by the plaintiff and the defendant on 18 October 1999 insofar as the terms thereof are set out in paragraph 3 of the Statement of Claim.
I order that within 7 days of service of a copy of this order upon the solicitors for the defendant, the defendant take such steps as are necessary to enable the Mortgage of Land referred to in paragraph 4 of the Statement of Claim to be registered in the Victorian Land Titles Office pursuant to the provisions of the Transfer of Land Act 1958.
I order that the defendant pay the plaintiff's costs of the proceeding including the costs of the application for summary judgment, the costs of this appeal and any reserved costs.
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