EA and S Plaster Company Pty Ltd v The Registrar of Titles
[2000] QSC 14
•9 February 2000
SUPREME COURT OF QUEENSLAND
CITATION: EA & S Plaster Company Pty Ltd v The Registrar of Titles & Ors [2000] QSC 014 PARTIES: EA & S PLASTER COMPANY PTY LTD
ACN 009 819 416
(Applicant)
v
THE REGISTRAR OF TITLES
(First Respondent)
and
GREGORY ROBERT CREE
(Second Respondent)
and
BANK OF QUEENSLAND LIMITED ACN 009 656 740
(Third Respondent)FILE NO: 756 of 2000 DIVISION: Trial Division DELIVERED ON: 9 February 2000 DELIVERED AT: Brisbane HEARING DATE: 8 February 2000 JUDGE: White J ORDER: 1. The first respondent Registrar of Titles register the applicant’s caveat Dealing Number 703729860 in respect of the share owned by the second respondent in land described as Lot 45 on RP 44256 in the County of Stanley Parish of Bulimba Title Reference 11728066.
2. The first respondent pay the applicant’s costs of and incidental to this application to be assessed.
CATCHWORDS: SECOND CAVEAT – whether substantially the same grounds – s 129 Land Titles Act 1994 – equitable charge – equitable mortgage.
Land Titles Act 1994, s 129
Anford Pty Ltd v GCI Properties Pty Ltd BC 9906630 unreported decision of Muir J 29 July 1999
Clark v Raymor (Brisbane) Pty Limited [No 2] [1982] Qd R 790COUNSEL: Mr FLH Harrison QC for the applicant
Mr M Daubney for the first respondent Registrar of Titles
No appearance for second and third respondentsSOLICITORS: Tobin Lawyers for the applicant
Crown Solicitor for the first respondent Registrar of Titles
WHITE J: The applicant seeks a direction pursuant to UCPR 11 that the Registrar of Titles register a caveat on land of which the second respondent is joint tenant with his wife. The Registrar of Titles declined to register the caveat because he contended that the grounds were the same or substantially the same as a previous caveat which the applicant/caveator had withdrawn.
The applicant seeks in the alternative that it be given leave to lodge the caveat pursuant to s 129 of the Land Titles Act 1994.
The applicant is in the business of supplying building product, inter alia, to the building trade. On 3 August 1999 the second respondent signed an application for credit account to the applicant agreeing to be bound by the terms and conditions contained therein. In reliance on the second respondent’s execution of the application the applicant supplied goods and services to the second respondent. In breach of the terms of the agreement the second respondent did not pay the invoices as obliged and was therefore in default. Clause 10 of the terms and conditions of the agreement relevantly provides
“The Customer charges as a fixed charge with the payment of all moneys now or in the future becoming owing hereunder all his property both real and personal … with the payment of all moneys now or in the future becoming owing hereunder … and further, the Customer, if requested by the Supplier [the applicant], will execute a mortgage and/or charge or other like instrument … in the form prepared by the Supplier’s Solicitor over any or all of the Customer’s property; … PROVIDED THAT the Customer shall not be obliged to execute any such instrument unless and until default has been made by the Customer in the payment of any moneys now or in the future becoming owing hereunder …”
On 9 November 1999 the applicant lodged a caveat Dealing Number 703682932 in respect of the second respondent’s interest in the land. The interest being claimed was
“as mortgagee of an estate in fee simple of the share owned by …”
The grounds on which the caveat was lodged were
“Pursuant to Clause 10 of the Application for Credit Account dated 3 August 1999 between [second respondent] as customer and the Caveator securing payment of moneys owing thereunder by [second respondent] to the Caveator.”
The applicant withdrew that caveat to allow registration of a mortgage executed by an officer of the applicant pursuant to a power of attorney contained in cl 10 after the second respondent had declined to do so as obliged by cl 10. The Registrar of Titles declined to register the power of attorney because the second respondent’s signature on the Credit Application Account had not been witnessed by a relevantly qualified person.
On 1 December 1999 the applicant lodged a second caveat under Dealing Number 703729860. The interest was described as in the first caveat but the grounds were
“As equitable mortgagee of an estate in fee simple pursuant to Clause 10 of the Application for Credit Account dated 3 August 1999 between [the second respondent] as Customer and the Caveator, and a request to execute a mortgage dated 30 November 1999.”
On 3 December 1999 the Registrar of Titles issued a Requisition in respect of the second caveat requiring that it be withdrawn from registration because it was based on the same grounds as the first caveat. The Registrar of Titles, I conclude from exhibit 1, had for his consideration the terms of cl 10. Section 129 of the Land Titles Act 1994 provides
“If a caveat lapses or is withdrawn, cancelled or removed for a lot, or is rejected by the registrar under s 157, the person who was the caveator may lodge another caveat for the lot on the same, or substantially the same, grounds only with the leave of court of competent jurisdiction.”
Mr Daubney for the Registrar submits that the grounds in each caveat being “pursuant to Clause 10” were substantially the same and it was, in effect, onerous to compel the Registrar to “second guess”, as it were, what was intended in the grounds of the first caveat. It is conceded by Mr Harrison QC for the applicant that the grounds could have been more expansive.
The first caveat, the applicant contends reflected the first part of cl 10 charging the second respondent’s property in respect of the payment of all moneys. Such a charge was described by Thomas J in Clark v Raymor (Brisbane) Pty Limited [No 2] [1982] Qd R 790 at 795 as
“… an equitable general charge securing … and capable of attaching to the male owner’s moiety in the subject land.”
When the applicant made the request to the second respondent to execute the mortgage pursuant to cl 10 an equitable mortgage came into being by means of what Professor Sykes described as
“… substantially an unperformed agreement, express or implied, to execute a legal mortgage” Sykes and Walker The Law of Securities 5th ed (1993) p 149.
The learned authors identify this as a separate and distinct security interest from a charge
“Arising from the pages of the law reports, however, in close association with the equitable mortgage, we find a far more shadowy security known as the equitable charge. When we enquire further we find that this latter security does not give a right of foreclosure. This important difference in remedy has not been accompanied by any attempt at a clear analysis of the difference in subject or mode of creation between the two. Even terminology has been confused” at p 148.
And again at p 192
“Although common law was very inactive in the field of land hypothecation, equity was far more prolific, and its activity resulted in the creation of those securities which are known as equitable charges and equitable liens. … The real difficulty in the view of the authors is the difficulty of distinguishing between equitable charges and equitable mortgages. There is a very important practical distinction in result which is in short that the equitable mortgagee is, and the equitable chargee is not, entitled to foreclosure on default.”
The learned authors discussed the difference between the two at p 197
“Turning to the difference in essential nature, we discussed previously the impossibility of regarding the equitable mortgage as belonging to the type of mortgage stricto sensu by virtue of conveying the full equitable title. It is certainly not a conveyance of such equitable title. On the other hand, it certainly does involve some splitting or division of ownership rights. The equitable charge does nothing of the kind; it is a pure hypothecation whereas the equitable mortgage is a mixed hypothecation. This seems to be the essence of the distinction. The most important result, so far as difference in substance is concerned, is that the equitable mortgagee has the potentiality of full beneficial ownership through the process of foreclosure; the equitable chargee as such can never attain the position of full beneficial onus. The chargee has the hypothec remedy of judicial sale, it is true, but that is a jus in re aliena.”
Mr Daubney submits that even accepting the distinction between the two securities the expressions used in the two caveats were not apt, at least in the case of the first caveat, to reflect the difference. Whilst the first could have been more clearly expressed when the two are examined together with cl 10 the first falls into the category of an equitable charge and the second that of an equitable mortgage. They therefore are based on two separate grounds and the second caveat was entitled to be registered, see Anford Pty Ltd v GCI Properties Pty Ltd BC 9906630 unreported decision of Muir J 29 July 1999.
The orders are
1. The first respondent Registrar of Titles register the applicant’s caveat Dealing Number 703729860 in respect of the share owned by the second respondent in land described as Lot 45 on RP 44256 in the County of Stanley Parish of Bulimba Title Reference 11728066.
2. The first respondent pay the applicant’s costs of and incidental to this application to be assessed.
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