Commonwealth Bank of Australia v Gao and Registrar of Titles

[2002] VSC 424

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 7013 of 2002

COMMONWEALTH BANK OF AUSTRALIA	Plaintiff
v
PENG YUAN GAO AND REGISTRAR OF TITLES	Defendant

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JUDGE:	Bongiorno, J.
WHERE HELD:	Melbourne
DATE OF HEARING:	1 October 2002
DATE OF JUDGMENT:	1 October 2002
CASE MAY BE CITED AS:	Commonwealth Bank of Australia v Peng Yuan Gao and Registrar of Titles
MEDIUM NEUTRAL CITATION:	[2002] VSC 424

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M. L. Sifris	G. S. Ray
For the Defendant	In person

HIS HONOUR:

1. I have before me an application brought by the Commonwealth Bank of Australia against Peng Yuan Gao and the Registrar of Titles, seeking an order that the caveat lodged by the first defendant in dealing No. AB121719S in the Office of Titles be removed by the second defendant from Certificate of Title Volume 8938 Folio 042.  That caveat was lodged on 6 March 2002 and claims an interest by the first defendant which is described as "pursuant to a constructive trust".

1. The bank is a registered first mortgagee in respect of the property, its mortgage having been registered prior to the lodging of the caveat.  The mortgagor being in default, on 10 August 2002, the bank sold the property pursuant to its power of sale.  The sale is due to be completed by settlement in 60 days from that date, namely, on or about 10 October.  Thus, the bank, in effect, calls upon the caveator to justify the caveat or to have it removed.

1. Mr Gao has filed an affidavit in which he has set out a history of a relationship between him and the registered proprietor, Yu Jing Zhu.  It includes a history of proceedings which relate to that person, including proceedings in bankruptcy in which she was the subject of a sequestration order in the Federal Court rendering her bankrupt.

1. The principal complaint of Mr Gao is that the bank sold the property at an under value.  He also says that the matter is really a matter that ought to be in the Bankruptcy Court.  He produced material upon which he submits that the bank sold the property at an under value, and he refers to s.176 of the Bankruptcy Act.  The material does not establish that proposition (even if it was relevant to do so.)

1. The fact of the matter is that the bank was a registered mortgagee in priority to any claim made by Mr Gao, such mortgage having been registered prior to the notification of his claim to being in some way the beneficiary of a trust.  That means that as a matter of law the bank has the right to sell the property in accordance with the law relating to the rights of mortgagees, both probably by the instrument of mortgage and also by the law generally.  That is what it has done.  Mr Gao has no basis for opposing the bank's sale or seeking any relief in respect of it.  I note that he seeks relief in the nature of the setting aside of the contract between the bank and the purchaser.  He has no legal standing to make such a claim.  Even if he did, such an order could never be made in the absence of service of process upon that person.

1. Mr Gao's defence of the bank's application is, unfortunately, completely misconceived.  It may well be that he has a very good claim against Ms Zhu for all sorts of reasons, but that claim will have to be pursued now against her and in effect against her trustee in bankruptcy.  It is not a claim in respect of which the bank is in any sense whatsoever required to take cognisance. 

1. Accordingly, there having been no justification at law for the caveat, the bank is entitled to the order which it seeks.  An order will be made that the caveat lodged by the first defendant in dealing No. AB121719S in the Office of Titles be removed by the second defendant from Certificate of Title Volume 8938 Folio 042.  [I should add that the Registrar of Titles, who was served in this case, has, as usual, indicated that he did not wish to take any part in the proceeding.]

1. Accordingly there will be an order in the form which I have indicated. 

1. I further order that the first defendant pay the plaintiff's costs of the originating motion and that this order be drawn up by the solicitor for the plaintiff and signed by a judge. 

1. The order being in appropriate form, I will sign the copy which you have submitted, Mr Sifris.

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