Commonwealth Bank of Australia v Kyriackou
[2003] VSC 175
•21 May 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
PRACTICE COURT
No. 5789 of 2003
| COMMONWEALTH BANK OF AUSTRALIA | Plaintiff |
| v | |
| MICHAEL KYRIACKOU AND ANOTHER | Defendants |
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JUDGE: | COLDREY J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 20 MAY 2003 | |
DATE OF JUDGMENT: | 21 MAY 2003 | |
CASE MAY BE CITED AS: | COMMONWEALTH BANK OF AUSTRALIA v KYRIACKOU & ANOR | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 175 | |
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Practice and Procedure – Application to remove caveat – Whether caveatable interest – Balance of convenience – Caveat removed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A. Schlicht | |
| For the Defendants | Mr W. Edwards |
HIS HONOUR:
This is an application for removal of a caveat pursuant to s.90(3) of the Transfer of Land Act 1958. The caveat was lodged by the first defendant over a block of land situated at 11-13 Mackie Street, Lalor. The land was subject to a mortgage entered into by the first defendant with the plaintiff on 14 June 2002.
On or about 29 August 2002 the first defendant failed to pay an instalment amount of $1,347.71 and hence was in default under the mortgage. A notice in writing pursuant to s.76(1) of the Transfer of Land Act was forwarded, requiring the payment of all money secured by the mortgage, being just over $398,000. No repayment was made, and on 16 October the first defendant vacated the land so as to hand back possession to the plaintiff.
On 8 February 2003 the plaintiff sold the land, as mortgagee in possession, to Bruank Investments Pty Ltd for some $254,000 (I have rounded off the figure). Settlement was to occur on 9 May 2003. However, on 5 May 2003 the first defendant lodged a caveat claiming an estate in fee simple and stating the grounds: “To prevent myself against fraudulent dealing as I do not have control of title.” The extent of the prohibition specified was: “Absolutely until such a day I am paid in full.”
On 9 May the purchaser, Bruank Investments, served a notice on the plaintiff stating that it would rescind the contract if the default of the plaintiff under the contract of sale was not remedied by 23 May. Hence this proceeding.
It was submitted on behalf of the plaintiff that in the circumstances of this case the caveator could not satisfy the onus of establishing that his claim to an interest in the land raised a serious question to be tried, nor could he establish that on the balance of convenience it was better to maintain the status quo. These were matters the first defendant was required to demonstrate: see Australian Natives Association Friendly Society v. Peball Pty Ltd.[1] In the first place, the first defendant had no equitable interest in the land and consequently no caveatable interest: see Swanston Mortgage Pty Ltd v. Trepan Investments Pty Ltd.[2]
[1](1993) V.Conv.R. 54-300 at 65,611.
[2][1994] 1 V.R. 672 at 682.
The gravamen of the case presented on behalf of the first defendant was, firstly, that there was an improper debiting of his account with stamp duty charged on the transfer of the land into his new legal name, which he had changed by deed poll. This debiting of the account was said to be not only improper but negligently or fraudulently done by the plaintiff. Secondly, it was argued that the plaintiff failed to disclose to potential purchasers that a plan of subdivision had been approved by the City of Whittlesea, enabling the land to be the subject of five double-storey residential lots. The plaintiff, in ignoring this factor and selling the land as one block, had sold it for the much under-value price of $282,500. The first defendant estimated its value at approximately $570,000. Accordingly, it was put, the sale was negligent or fraudulent.
In response, the plaintiff’s counsel contended that such matters as were advanced on behalf of the plaintiff - which were, I might say, a matter of considerable factual dispute – even if characterised as fraudulent, would at the most give rise to a mere equity. Whatever other remedy might be available to the first defendant on his version of the facts, including an action for damages, a mere equity was not sufficient to maintain a caveat.
On the authority of the Swanston Mortgage Pty Ltd Case to which I have earlier referred, this is clearly correct. It follows that I am of the view that the first defendant cannot maintain a caveatable interest and the caveat should be removed.
I am also inclined to the view that the balance of convenience in this case favours the plaintiff: see Commonwealth Bank of Australia Ltd v. Schierholter.[3] However, in light of my conclusion it is unnecessary to finally determine this aspect of the case.
[3][1988] V.R. 292 at 296.
The order sought by the plaintiff will be made.
(Discussion ensued re costs.)
HIS HONOUR: The order will be authenticated at this point.
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