Ezy Global Ltd v Miller Crescent P/L
[2019] VSC 815
•11 December 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2019 05128
Between:
| EZY GLOBAL LIMITED | Plaintiff |
| -and- | |
| MILLER CRESCENT PTY LTD (ACN 615 853 202) | First Defendant |
| -and- | |
| MEDPRO FINANCE CORPORATION PTY LTD (ACN 630 454 992) | Second Defendant |
| -and- | |
| REGISTRAR OF TITLES | Third Defendant |
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JUDGE: | Croucher J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26 November 2019 | |
DATE OF JUDGMENT: | 11 December 2019 | |
CASE MAY BE CITED AS: | EZY Global Ltd v Miller Crescent P/L & Ors | |
MEDIUM NEUTRAL CITATION: | [2019] VSC 815 | |
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REAL PROPERTY — Caveat — Application by plaintiff to restrain Registrar of Titles from registering mortgage lodged by second defendant on title of land owned by first defendant — Plaintiff loaned money to first defendant “solely for the purpose of the development of [the land]” — No charging clause in loan agreement and none intended — Whether prima facie case giving rise to serious question to be tried that plaintiff has caveatable interest in land — Whether balance of convenience requires order sought — No caveatable interest — Application refused — Transfer of Land Act 1958 (Vic), s 90(2).
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| Appearances: | Counsel | Solicitors |
| For the Plaintiff | Mr L P Wirth | Ascot Solicitors |
| For the First Defendant | Mr C Truong QC with Mr C Hender | Dentons Australia Limited |
| For the Second Defendant | No appearance | |
| For the Third Defendant | Submitting appearance |
HIS HONOUR:
Overview
This is an application by EZY Global Limited (“EZY Global”) for an order, pursuant to s 90(2) of the Transfer of Land Act 1958 (Vic) (“the TLA”), restraining the Registrar of Titles from registering a mortgage lodged by Medpro Finance Corporation Pty Ltd (“Medpro”) on the title of land in Mount Waverley (“Miller Crescent”) the registered proprietor of which is Miller Crescent Pty Ltd (“Miller”).
In the alternative, EZY Global applies for an order permitting the registration of the mortgage subject to funds advanced by Medpro being paid to EZY Global, or into Court, to the extent necessary to discharge Miller’s indebtedness to EZY Global in respect of the latter’s alleged interest in Miller Crescent.
EZY Global ultimately lodged a caveat on Miller Crescent, claiming it had an interest in the property. When notified by the Registrar that Medpro was seeking to register a mortgage on the same title, EZY Global brought the current application.
The application cannot succeed unless I am persuaded of two things. First, EZY Global must establish that there is a prima facie case giving rise to a serious question to be tried as to whether it has a caveatable interest in Miller Crescent. Secondly, EZY Global must show that the balance of convenience favours the maintenance of the caveat on the Register and the prevention of Medpro’s mortgage being registered (or that there should be an order of the type sought in the alternative).[1]
[1]See, for example, Piroshenko v Grojsman (2010) 27 VR 489 at 492[12]-495[23] (per Warren CJ).
On the evidence before me, I am not persuaded that EZY Global has established that there is a prima facie case giving rise to a serious question to be tried that it has the necessary interest in Miller Crescent. It therefore becomes unnecessary to determine where the balance of convenience might lie. Accordingly, the application must be dismissed.
My reasons for these conclusions follow.
Background
I turn first to the background to the matter.
EZY Global is in the business of importing, exporting and trading construction materials and general household and hardware supplies. Vishal Vora is a director of EZY Global.
Mr Vora became acquainted with Vijan Patel and others associated with the Pentagon Group Australia Pty Ltd (“Pentagon”). Pentagon acts as the development manager in relation to the development of properties and engages contractors to complete them. Mr Patel owns shares in, and is a director of, both Pentagon and the companies that are the registered proprietors of the properties that Pentagon develops.
Over the period from 2016 to 2018, Mr Vora caused EZY Global to invest in projects being run by Pentagon, which included the development of three separate properties in and around Melbourne. The first was a property in Basil Street, Dromana (“Basil Street”); the second was in Miller Crescent, Mount Waverley (which is the property the subject of this application); and the third was in Glenferrie Road, Hawthorn (“Glenferrie Road”). The registered proprietors of those properties respectively are Basil Street Property Pty Ltd (“Basil”), Miller Crescent Pty Ltd (i.e. Miller, the first defendant) and Glenferrie Road Pty Ltd (“Glenferrie”). Each company was set up for the purposes of developing the particular property and holds the legal title as trustee of a separate property trust.
Each advance of funds by EZY Global (which ran into several hundreds of thousands of dollars) was supported by a loan agreement with the company that was the registered proprietor of the property in question. As will be seen later, in the particular circumstances of this case, it is of particular significance that there were no charging clauses in respect of the loan agreements for both Basil Street and Miller Crescent, whereas there was such a clause in respect of the loan agreement for Glenferrie Road. All three agreements were otherwise in similar terms, including providing for handsome returns to EZY Global by way of interest.
It is alleged that there have been defaults on the loans. EZY Global has commenced action in the County Court seeking to enforce the various loan agreements and also seeking declarations that it has an interest in each of the properties, including Miller Crescent.
On 23 July 2019, solicitors lodged a caveat on behalf of EZY Global on the title of Miller Street. The interest claimed was a freehold estate based on an agreement between EZY Global and Miller dated 5 February 2017, which is when the applicable loan agreement was struck.
On 18 October 2019, the Registrar of Titles notified EZY Global that Medpro had lodged a mortgage for registration on the title of Miller Crescent.
EZY Global then brought the present application on in this Court.[2] The matter first came on before Cavanough J on 15 November 2019, but was adjourned until 26 November, to enable Miller and Medpro to consider EZY Global’s materials and to prepare their own materials in response.
[2]Mr Wirth, for EZY Global, explained that the application was not brought in the County Court because, based on inquiries at the Registry, it was thought that there may be insufficient capacity to hear the matter in time.
EZY Global’s case
Mr Wirth, who appeared for EZY Global, put his client’s case in the following way.
Prima facie case giving rise to serious question to be tried
EZY Global asserts by its caveat that it has an interest pursuant to an agreement. That agreement is the loan agreement between EZY Global and Miller. It contains a term, clause 2.2, that Miller “must apply the Loan solely for the purpose of the development of [Miller Crescent]”.
EZY Global’s case is that it advanced the funds in reliance on the representation contained in clause 2.2, which was also made in conversations with EZY Global’s representative Mr Vora. If the funds were to be used solely for the stated purpose, submits Mr Wirth, they have been used in a manner that is connected with the capital value of Miller Crescent. As I understood his submission, it is for this reason that, in its statement of claim filed in the County Court, EZY Global asserts that it is entitled to an equitable lien over Miller Crescent.
EZY Global also alleges that the effect of the loan agreement and the discussions between the parties was that it was their common intention that Miller held Miller Crescent on trust for itself and EZY Global in proportion to Miller’s indebtedness to EZY Global pursuant to the loan agreement. Accordingly, EZY Global claims a declaration that it has an interest in Miller Street under a constructive trust.
Mr Wirth submits that both Mr Vora and Mr Patel agree in their evidence that there was discussion about the express written grant of a security interest in the subject land. The effect of Mr Vora’s evidence, Mr Wirth submits, is that he relied on an assurance from Mr Patel that this was unnecessary, as well as his assurance not to insist on a written grant of security. Arguably, submits Mr Wirth, EZY Global is entitled therefore to a lien, arising from an estoppel resulting from these conversations.
Mr Wirth submits that EZY Global’s unregistered equitable interest arose in time before Medpro’s. Prima facie, EZY Global’s interest takes priority over Medpro’s. The debts the loans secure are uncontested.
Balance of convenience
Turning to the balance of convenience, Mr Wirth submits that the lower risk of injustice lies with maintaining the status quo, because permitting the registration of Medpro’s mortgage will have the effect of destroying EZY Global’s priority.
Mr Patel asserts that the Medpro loan, for $650,000, is sought “to allow the completion of the projects at … Basil Street … and … Miller Crescent”. Mr Wirth submits that there are a number of problems with the credibility of this evidence. First, neither Miller nor Basil is the borrower, even though the loan is supposed to be for their benefit. Secondly, there is no evidence about the financial needs of the projects, including the state of the developments, or the adequacy of the proposed loan. Thirdly, there is no evidence of the inter-company loan arrangements or any other records to explain how this loan would be accounted for.
Also, Miller has led no evidence as to the consequences of the registration of the mortgage being restrained. Mr Patel does not even confirm the veracity of the content of his messages to Mr Vora set out in the latter’s affidavit or to explain why the developments are so far behind, both in terms of progress and financially.
Mr Wirth submits that it would have been a simple matter for Miller to adduce the foregoing evidence, and that it has not done so means it can be inferred that the evidence would not have assisted Miller’s case.
Mr Wirth also submits that, despite Mr Patel’s assertion (that the Medpro loan is “to allow the completion of the projects at … Basil Street … and … Miller Crescent”), the loan is in fact to FKS Investments Vic Pty Ltd (“FKS”), which suggests that the funds are to be used for its business purposes. Miller Crescent has been used as security, together with an “AllPAAP security”, presumably meaning a security interest in all present and after-acquired property of FKS — not Miller or Basil — within the meaning of the Personal Property Securities Act 2009 (Cth).
In Mr Wirth’s submission, the loan structure reinforces the inference that the real purpose of the loan is to support FKS’s financial needs, and not Miller’s, and the equity in Miller Crescent is simply being used for those needs in complete disregard of EZY Global’s rights and expectations of being repaid from the equity in that property.
Further, it is submitted that, if Medpro had been aware that the purpose of the loan was for development of the two sites, then presumably it would have required security over both of them. There is a guarantee from one but not the other, which, in Mr Wirth’s submission, is prima facie inconsistent with Mr Patel’s assertion about the purpose of the loan.
Thus, it is submitted that, in circumstances where (a) EZY Global’s (uncontested) loans were supposed to be used solely for the development of each of the properties, (b) there is no explanation about the needs of each project or for the unorthodox loan structure for the asserted purpose of the Medpro loan and (c) there is no evidence of the consequence of maintaining EZY Global’s caveat, the balance of convenience favours protection of EZY Global’s prima facie security interests. Moreover, in Mr Wirth’s submission, it appears that the proper course would be for the developers to cut their losses and sell the properties in whatever state the developments might be currently.
Undertaking
In accordance with the terms of s 90(2) of the TLA and the usual practice in relation to interlocutory injunctions, EZY Global, through Mr Vora on affidavit and Mr Wirth, proffered the usual undertaking as to damages.
Alternative relief
Mr Wirth points out that the Court may order under s 90(2) “such … order … as is just” and submits that the Court has a similar power in equity.
He submits that an alternative to the restraint of the registration of the mortgage is to permit its registration but instead order Medpro to direct payment of $550,000 to EZY Global.
In Mr Wirth’s submission, such an order would be just because (a) Miller was required to repay that amount to EZY Global by 5 August 2018, (b) EZY Global’s funds were to be used solely for the development of Miller Crescent and (c), presumably, Medpro’s funds are required for the same purpose.
Mr Wirth submits that, alternatively to payment to EZY Global, it may be appropriate to order payment of the funds into Court. If necessary and appropriate, either party may make a further application for payment out of Court at a later time.
Conclusion
Mr Wirth submits, in conclusion, that EZY Global’s prima facie right to priority to the security of Miller Crescent for the moneys advanced to Miller should be protected pending the resolution of the County Court proceedings, whether by restraining registration of Medpro’s mortgage or by directing payment to EZY Global (or into Court) of $550,000 of the funds to be advanced by Medpro.
Miller’s case
Mr Truong QC, who appeared with Mr Hender for Miller, put his client’s case in the following way.
Background
Over the course of October and November 2016, Mr Vora and Mr Patel discussed EZY Global’s involvement in the property developments. During these discussions, various documents were provided to Mr Vora, including a sample loan agreement and deed of priority. That sample loan agreement included a clause providing for a charge over the property. Mr Patel also informed Mr Vora, among other things, that:
[a] bank will fund approximately 70% of land and construction cost and [contingencies]. So approximately we will have to come up with 540K and rest bank will fund.
The bank in question was the National Australia Bank, which secured its loan with a mortgage over Basil Street.
As indicated earlier, however, the loan agreement that was ultimately executed in relation to Basil Street did not include any clause providing for any charge or other security interest to EZY Global. But guarantees were provided in support of the loan.
Mr Truong submits that both Mr Patel’s and, upon close examination, Mr Vora’s evidence is consistent with EZY Global being an unsecured creditor in respect of Basil Street. First, Mr Patel said that there was no intention to confer a charge over or other security interest in Basil Street, and that this had been expressly discussed between the parties. Secondly, Mr Vora said that the crux of the discussions was that “Pentagon Group would develop the property site and the investment would be in the form of monies being advanced and applied solely for the purpose of the development of the property and that [his, i.e. EZY Global’s] interest in the property would be protected by way of a loan agreement”. Consistent with the literal provisions and objective effect of the Basil Street loan agreement and Mr Patel’s evidence, Mr Vora’s evidence does not disclose any intention to confer any interest beyond that of an unsecured creditor.
In the early part of 2017, a loan in relation to Miller Crescent was arranged between Miller and EZY Global. That loan agreement was in effectively and relevantly the same terms as that for Basil Street. There is in the agreement no mention of any right to lodge a caveat, let alone the conferring of any security interest on EZY Global. Again, guarantees were provided in support of the loan. The lender has potential recourse against the borrower, and the guarantors, in the usual way.
Like Basil Street, the purchase of Miller Crescent was funded via a bank mortgage, which was secured by the property.
Mr Vora said that he was told that “any investments made would be on the same and identical terms as … Basil Street … and that [his] interest would be protected by way of a loan agreement”. But, in Mr Truong’s submission, there is nothing in the provisions of the loan agreement which confer any interest beyond that of an unsecured creditor. In a similar vein, Mr Patel’s evidence is that the arrangements were to be the same as those with Basil Street, and in particular that “as with … Basil Street …, it was never intended that any security interest in or charge over [Miller Crescent] be granted in respect of any non-bank loan entered into”. In this way, submits Mr Truong, there is a degree of consistency in the evidence of both Mr Vora and Mr Patel.
Sometime later, around May 2018, a third loan agreement was entered into, this time in relation to Glenferrie Road, between Glenferrie and EZY Global. Unlike the first two loan agreements, in this agreement there is an express security interest conferred on the lender. Mr Patel explained that, unlike the previous loans, this loan was intended to be secured by that property, and this was specifically provided for in the loan agreement.
In this way, submits Mr Truong, it can be seen that the terms of each loan agreement were separately negotiated and objectively reflected what was agreed in respect of each particular property.
No prima facie case giving rise to serious question to be tried
In those circumstances, submits Mr Truong, EZY Global has not discharged the onus of establishing that there is a prima facie giving rise to a serious question to be tried as to whether it has a caveatable interest in Miller Crescent.
The caveat lodged on 23 July 2019 asserts a freehold interest in Miller Crescent on the grounds of an agreement with Miller dated 5 February 2017, yet EZY Global now appears to resile from this asserted interest. EZY Global’s case, as Mr Truong understood it, now appears to be that it has an equitable interest in the property, despite there being no reference to such an interest in the caveat. But, he submits, it is well established that an amendment of a caveat to adjust and ‘fix up’ the interests claimed will not usually be permitted.[3]
[3]Yamine v Mazloum [2017] VSC 601 at [34]-[37].
EZY Global appears to acknowledge this difficulty, and has sought to circumvent it by seeking relief, in the alternative, in the form of an injunction in effectively the same terms as the order that it seeks pursuant to s 90 of the TLA, in reliance on TL Rentals.[4] In Mr Truong’s submission, however, unlike TL Rentals, where it was conceded that there was a prima facie case of an equitable mortgage, there is no concession, or satisfactory evidence, of any claimed equitable interest in the present case.
[4]TL Rentals Pty Ltd v Youth On Call Pty Ltd [2018] VSC 105.
In Mr Truong’s submission, the critical component which underlies both an equitable lien and constructive trust is unconscionable conduct. In the present case, there is simply no evidence of any unconscionability. In that respect, there is no basis whatsoever for asserting the existence of either an equitable lien or a constructive trust. Further, in the case of the claimed constructive trust, there is simply no evidence of any intention to confer such an interest on EZY Global.
Had the parties intended for EZY Global to have a secured proprietary interest in Miller Crescent, the loan agreement could have and should have expressly said so. It did not. Objectively, EZY Global was intended to be a mere unsecured lender.
Only in his second affidavit did Mr Vora suggest that he was assured that registering a mortgage or charge over Miller Crescent was unnecessary because there was sufficient equity and his investment would produce good returns. No such suggestion was made in Mr Vora’s first affidavit, being the principal affidavit relied on by EZY Global.
In any event, submits Mr Truong, even taking the affidavit material at its highest, while it could be suggested that certain statements were made to EZY Global which it relied on as part of its decision to lend money in respect of the developments, there is still no evidence to support a claimed equitable interest or constructive trust in respect of any property.
In particular, the affidavit material (even if accepted) does not assist EZY Global in discharging its onus because, objectively, the parties did not intend to confer a security interest or mortgage on EZY Global as part of the terms of its advance. EZY Global does not resile from the terms of the loan agreement. To the contrary, it is relying on the terms of the loan agreement in proceedings in the County Court against the borrower and the guarantors. There is no reason for equity to intervene where the parties have agreed to particular terms of a loan agreement.
Further, in Mr Truong’s submission, to the extent that Mr Vora (and EZY Global) suggest some form of misrepresentation, this also falls short. The representation alleged is that there would be equity left and that the investment was safe. But, even if that representation were found to have been made, there is no evidence to suggest that there were no reasonable grounds for the representation and/or that it was false or misleading. Nor is there any evidence of detrimental reliance (as there is no evidence of what Mr Vora would have done had he known the representation to be false or misleading as alleged). Accordingly, there is nothing to suggest that there is even a prima facie case that would give rise to the equitable interest claimed (being an equitable lien or constructive trust).
In summary, Mr Truong submits that it is evident that EZY Global was merely an unsecured creditor. EZY Global advanced the funds on the promise of repayment, in accordance with the terms of the loan, and not on the basis of some promised interest or equity in the property. There is nothing to suggest that it would be unconscionable for Miller to dispose of Miller Crescent without the consent of EZY Global or without the actual or potential liability having been discharged. Accordingly, there is no basis for equity to intervene.
If equity were to intervene in this case, the practical consequence of its doing so would be to elevate EZY Global from its position as an unsecured creditor to a secured creditor. In Mr Truong’s submission, there is no sound or justifiable reason why EZY Global’s position ought be improved in this way to the detriment of other creditors (both secured and unsecured), when it could have ensured it was a secured creditor at the time, but chose not to do so.
Finally, EZY Global asserts that the debts secured by the caveat are uncontested. Mr Truong made clear that that is not the case: the debts are contested by Miller. The proceedings commenced by EZY Global in the County Court were only served on Miller on or around 19 September 2019.
Accordingly, submits Mr Truong, there is no prima facie case that EZY Global has an equitable interest in Miller Crescent, and its application must fail.
Balance of convenience
As indicated earlier, if no such prima facie case is made out, then it is unnecessary to consider the balance of convenience.
Nevertheless, Mr Truong submits that, if a prima facie case were made out, the balance of convenience would not favour maintaining the caveat and/or the grant of an order restraining the registering of Medpro’s mortgage.
In his submission, if the caveat is maintained and/or an order were made restraining the registering of Medpro’s mortgage over the property, there would be clear prejudice to Medpro, a third-party secured creditor who had no knowledge of or dealing with EZY Global.
Medpro’s mortgage over the property secures the obligations of Miller as guarantor of the loan provided by Medpro. Medpro is, in effect, a bona fide purchaser (of its mortgageable interest) for value and without notice. The consequence of restraining the registration of its mortgage over Miller Crescent would be to relegate Medpro from its position as a secured creditor to that of an unsecured creditor.
Moreover, if the Medpro mortgage were not registered, it is unclear what effect that would have on the loan agreement with Medpro and on Miller.
On the other hand, submits Mr Truong, there is no evidence of any real prejudice to EZY Global if the caveat is not maintained. EZY Global is an unsecured creditor, and its remedy (if any) lies in a claim for damages or debt, which it is currently pursuing in the County Court. There is no evidence to suggest that the removal of the caveat and/or allowing of the mortgage to be registered over Miller Crescent would have the consequence of depriving EZY Global of that remedy (to the extent it has any entitlement to that remedy).
In the circumstances, submits Mr Truong, the balance of convenience does not justify the orders sought being made.
Alternative relief — payment of money into Court
As pointed out earlier, EZY Global seeks, by way of alternative remedy in the event that the Court does not make an order maintaining the caveat and/or restraining the registration of the mortgage, an order permitting the registration of the mortgage subject to funds advanced by Medpro being paid to EZY Global (or into Court), to the extent necessary to discharge Miller’s indebtedness to EZY Global in respect of its interest in Miller Crescent.
In Mr Truong’s submission, this is a remarkable form of relief for EZY Global to seek. There is no adequate factual or legal basis for such relief. The proposed order is, in its practical effect, tantamount to security for EZY Global’s claims or a freezing order, pending the resolution of the proceedings commenced in the County Court.
In Mr Truong’s submission, the first difficulty with this proposed order is a practical one, in that it seeks for funds to be held on trust by this Court pending the outcome of proceedings in a different court, namely the County Court.
The second, and more fundamental, problem, Mr Truong submits, is that there is no basis for granting an order in the nature of a freezing order. EZY Global cannot demonstrate that there is a “good arguable case”; that, unless the order is granted, there is a reasonable apprehension that assets will be dissipated so as to frustrate the action or execution; or that the balance of convenience requires that such an order be made.
Accordingly, in Mr Truong’s submission, there is no basis upon which the Court ought to make the proposed order for funds to be paid into Court.
Discussion
I turn now to my reasons for concluding as I have foreshadowed at the outset of this judgment.
No prima facie case giving rise to serious question to be tried
In substance, I accept the submissions of Mr Truong concerning whether there is a prima facie case giving rise to a serious question to be tried that EZY Global has a caveatable interest in Miller Crescent.
In my view, putting the evidence for EZY Global at its highest, it is simply not open to conclude that there is a prima facie case giving rise to a serious question to be tried that EZY Global has any equitable interest in the property. The loan agreement contains no charging clause, just like the loan agreement for Basil Street, but in contrast to the loan agreement for Glenferrie Road. Both Mr Patel and Mr Vora’s evidence makes it plain that there was to be no written security interest in favour of EZY Global over Miller Crescent.
Nor is there anything in the evidence that gives rise to a prima facie case that some sort of constructive trust or equitable lien might have arisen as a result of the funds being advanced in reliance on clause 2.2 of the loan agreement — that Miller “must apply the Loan solely for the purpose of the development of [Miller Crescent]”. As Mr Truong submits, the evidence falls short in that regard. Clause 2.2 is no more than a term of the loan agreement. On no sensible construction of that agreement, or of the circumstances surrounding its creation, can it be said that the term gives rise to some form of equitable interest in Miller Crescent in favour of EZY Global.
Further, I can see no prima facie basis for a constructive trust or an equitable lien arising from EZY Global acting in reliance on Mr Patel’s assurances concerning the absence of any need for a written grant of a security interest in the property. In fact, far from supporting EZY Global’s case, I consider Mr Vora’s evidence in his second affidavit to provide conclusive support for Miller’s position. Mr Vora said this:
Between about November 2016 and February 2017, I had discussions with [Mr Patel] and the other representatives of Pentagon Group in relation to the loan for [the] Basil Street and Miller Crescent properties. During the discussions, I had asked [Mr Patel] how I can guarantee my interest or my monies that I invest over and above the personal guarantees that were offered. He told me that there would be equity left in the project after the loan was paid to the bank and that my investment was therefore safe. [Mr Patel] further said to me that he could offer me a second mortgage or charge over [the] Basil Street or Miller Crescent properties. However, [Mr Patel] assured me that this was unnecessary because there was sufficient equity and my investment would produce good returns. On the basis of that assurance, I did not take up the offer of the second mortgage or charge. Being inexperienced in lending, I did not understand the significance of obtaining security in writing or registering a mortgage.
By the time I was invited to invest in the development project for Glenferrie Road, I had been disappointed with the failure of the Pentagon Group … to keep their promises in terms of development timelines and time for repayment of my investment and return on investment. For this reason, I insisted that the loan agreement for this third project include a written term to secure my loan.
Thus, on Mr Vora’s account, he acted on the assurance that a second mortgage or a charge was unnecessary because there was sufficient equity and his investment would produce good returns. While Mr Vora also said that he “did not understand the significance of obtaining security in writing or registering a mortgage”, and while it might not have been the wisest decision, it is nevertheless clear that he chose not to take up Mr Patel’s offer of a second mortgage or a charge over either Basil Street or Miller Crescent.
The foregoing evidence also makes it plain that, at the time of entering the loan agreement and advancing funds concerning that property, there was no common intention that Miller would hold Miller Crescent on trust for EZY Global in any way. Mr Vora’s later insistence on a charging clause in the Glenferrie Road agreement — “a written term to secure my loan” — is also consistent with that view.
I also accept Mr Truong’s submissions to the effect that there is no evidence of any unconscionability, misrepresentation by Mr Patel or detrimental reliance by EZY Global.
As Mr Truong submits, had the parties intended for EZY Global to have a secured proprietary interest in Miller Crescent, the loan agreement could have and should have expressly said so. It did not. On any view of the evidence, objectively, EZY Global was intended to be a mere unsecured lender in respect of Miller Crescent.
It is for these reasons that EZY Global has failed to establish a prima facie case giving rise to a serious question to be tried that EZY Global has a caveatable interest in Miller Crescent.
Balance of convenience
As I indicated earlier, in those circumstances, it is unnecessary to determine the balance of convenience issue. Given the submissions made in this Court and the nature of the allegations presently before the County Court, I think it is also preferable that I steer clear of making any findings on this issue.
Conclusion and orders
Accordingly, EZY Global’s application will be dismissed.
I shall hear counsel on the precise form of orders and on costs.
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