Jordanlane Pty Ltd v Landeryou
[2005] VSC 340
•21 June 2005
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 6637 of 2005
| JORDANLANE PTY LTD | Plaintiff |
| v | |
| ANDREW JOHN CLYDE LANDERYOU and REGISTRAR OF TITLES | Defendants |
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JUDGE: | CUMMINS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 June 2005 | |
DATE OF JUDGMENT: | 21 June 2005 | |
CASE MAY BE CITED AS: | Jordanlane Pty Ltd v Landeryou and Registrar of Titles | |
MEDIUM NEUTRAL CITATION: | [2005] VSC 340 | |
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PRACTICE COURT – removal of caveat – s.90(3) Transfer of Land Act 1958.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L. Glick, S.C. with Mr Heath | Schetzer Brott and Appel |
| For the First Defendant | Mr C. Slidders | Jerrard and Stuk |
| No appearance by the Second Defendant |
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HIS HONOUR:
By summons on originating motion, the plaintiff, Jordanlane Pty Ltd, seeks orders for the removal of a caveat. Both summons and originating motion were filed on 16 June 2005. The first defendant is Mr Andrew John Clyde Landeryou and the second defendant is the Registrar of Titles. The Registrar of Titles, by letter to the Prothonotary dated 17 June 2005, stated that she did not intend to appear in the action and thus, by implication, abides the order of the Court.
In the motion, the relief sought, apart from formal matters, is that caveat no. AD677162UU recorded on Certificate of Title Vol. 9115 Folio 827 be removed forthwith, and that the Registrar of Titles be ordered pursuant to s.90(3) Transfer of Land Act 1958 to remove that caveat or, if it has not yet been recorded in the Register, to reject it. Facilitating and consequential orders are sought. The same relief is sought in the summons.
Supporting the summons is an affidavit of Mr S.M. Bond, partner of the plaintiff’s solicitors, affirmed 16 June 2005, which sets out conveniently the relevant history. Mr Bond deposed as follows. On 15 June 2005 he obtained a Lawpoint title search with respect to the property situate at 114 Park Drive, Parkville, Victoria. Exhibited as 1 to the affidavit is a copy of that title search. That revealed the following. First, Ms Kimberly Kitching, the wife of the first defendant but estranged from him, became the sole registered proprietor of the property on 12 April 2001. The Adelaide Bank is the first registered mortgagee, which bank registered a mortgage on 12 April 2001 being the first mortgage. On 23 December 2004 the plaintiff became the second registered mortgagee. On 10 June 2005 the first defendant lodged a caveat on the title to the property (“the Landeryou caveat”). By facsimile of 16 June 2005, the Adelaide Bank’s solicitors informed Mr Bond that the first mortgage secured Ms Kitching’s indebtedness to the Bank in the sum of $638,989.25, with interest on that sum continuing to accrue. On 6 November 2004, Ms Kitching executed a registrable mortgage on the property in favour of the plaintiff. That mortgage secured her indebtedness to the plaintiff in the sum of $3,000,000. On 23 December 2004 the plaintiff registered that second mortgage, which is exhibited as Exhibit 3 to the Bond affidavit.
In February 2005 the plaintiff commenced a proceeding against Ms Kitching in this Court, being No. 4309 of 2005, seeking an order for possession of the property. On or about 18 April 2005 Ms Kitching voluntarily declared herself bankrupt and Mr James Downey was appointed as her trustee.
On 12 April 2005 this Court gave judgment in favour of the plaintiff in the property possession proceeding. The judgment is exhibited as Exhibit 5 to Mr Bond’s affidavit and was a judgment by Master Evans on 19 April 2005 in proceeding commenced by writ, in which there was no appearance by or on behalf of the defendant. The judgment of the Court was that the plaintiff recover possession from the defendant (the plaintiff being the present plaintiff and the defendant being Ms Kitching) of the property described in Certificate of Title Vol. 9115 Folio 827, with consequential orders as to authentication and costs.
Mr Bond deposed that the solicitors for the trustee, Mr Downey, gave Mr Bond keys to the Park Drive property on 3 June 2005. On 10 May 2005 the plaintiff engaged Morley’s Licensed Real Estate Agents to sell the property by way of public auction. Exhibit 6 to the Bond affidavit is the sale authority to Morley’s. Morley’s have informed Mr Bond that they plan to auction the property at midday on 2 July 2005. In anticipation thereof, Morley’s commenced an advertising campaign in early June 2005, with an indicative price of $1,200,000. Since commencing the sale campaign, over a hundred people have inspected the property and a number of expressions of interest in the property have been made. In the few days before 16 June 2005, being the date of affirmation of the affidavit, a number of potential purchasers have queried the Landeryou caveat. In the opinion of Morley’s, and based upon experience, the existence of the Landeryou caveat is having a detrimental effect upon potential purchasers and the marketing of the property.
Mr Bond further deposed that the proceeds of the upcoming sale will go to satisfying the secured debts of Ms Kitching, being first the debt to the Adelaide Bank which I have stated and second the debt to the plaintiff which I have stated. Mr Bond notes that under s.77 Transfer of Land Act 1958 the sale proceeds must be applied as follows: first, in payment of the costs and expenses of the sale of the property; second, in payment of moneys which are due or owing on the first mortgage; third, in payment of the moneys which are due or owing on the second mortgage; fourth, by payment of the residue, if any, to the mortgagor, in this case the trustee in bankruptcy, Mr Downey, or into the Supreme Court under the provisions of the Trustee Act 1958.
Mr Bond further deposed that the Landeryou caveat will “thwart and undermine” the Morley marketing campaign and the auction scheduled for 2 July 2005. He deposed that the plaintiff is willing to give an undertaking to the Court that, following the use of the sale proceeds to pay the secured creditors in accordance with the Transfer of Land Act 1958 if there is any residue, the plaintiff will deposit such residue into Court or other trust account. The residue will remain in the relevant account pending the determination of the proceedings dealing with the first defendant’s entitlement to share in such amount. Mr Bond finally deposed that there was no purpose served in the Landeryou caveat, which has an antipathetic consequence on the sale process. Mr Bond deposed that he wrote to the first defendant on 15 June 2005 requesting the removal of the caveat, in part stating:
“You are aware that Jordanlane is in the process of selling the property. Adelaide Bank holds a first registered mortgage over the property secured at approximately $650,000. The combined debts secured by mortgages over the property therefore exceeds $3.6 million. Our client as second ranking mortgagee holds a secured interest to the extent of $3 million. The purchase price for the property would exceed the secured indebtedness. Therefore, even if you hold a caveatable interest, your caveat is futile as none of the proceeds of sale could ever be expected to be provided to you in satisfaction of any interest. Moreover, the timing of the lodgement of your caveat portrays a desire to disrupt the process of sale of the property. Indeed, we are advised by our managing agent that the existence of your caveat on title is already hampering the marketing of the property and potentially causing loss and damage. We require you to withdraw your caveat within 24 hours, in the absence of which we will apply to the Supreme Court of Victoria on an urgent interlocutory basis to have the caveat removed and seek indemnity costs against you.”
Mr Landeryou replied by email, which is Exhibit 8 to the affidavit of Mr Bond, in which he replied, in part:
“One, I will not be withdrawing the caveat, although I would have considered any reasonable request to do so. Two, I require you to notify me of any interlocutory application which you intend to make so that I might obtain legal advice in order to defend the caveat. I absolutely deny your false accusation that the caveat I entirely properly lodged was designed to do anything other than to entirely properly protect my interests. I also dispute the sham deed you are relying on to assert your mortgage. We will survive any scrutiny whatsoever, meaning that your client’s claim to have a secured interest will be rejected and those responsible for it being investigated. It is with that in mind that I believe that it is entirely reasonable for me to lodge a caveat. It is very much in my interests that the property be ultimately sold for the highest price possible and it is indeed very clear that you and your real estate agents are acting in bad faith to ensure the lowest possible price is achieved. On that you will hear much later. There can be no question that your conduct has involved a series of very deliberate steps to minimise the price achieved, as you are well aware. Your incompetence, your client’s corruption, dishonesty, greed and contempt for the law have created this situation. I am perfectly entitled to act to protect my interests in this matter and will continue to do so at every opportunity.”
The letter proceeds to other matters.
Before me, no answering material has been filed on behalf of the first defendant. I have been most assisted by the submissions made by Mr Slidders on behalf of the first defendant; but no material of any factual sort has been deposed to before me.
It is apparent from the material before me that the Court has clear power to order the removal of the caveat under s.90(3) Transfer of Land Act 1958 which provides that any person who is adversely affected by any such caveat may bring proceedings in the Court against the caveat or for the removal of the caveat and the Court may make such order thereon as the Court thinks fit.
It is plain on the material before me that the caveat has, and has the potential to have, a deleterious effect upon the sale process. I proceed on the basis, without so finding, that the first defendant has an interest in equity under a constructive trust in the subject property. I do not make that finding. However, I proceed in this judgment with that beneficent view. Even so, I consider that this caveat is a wholly misconceived and inappropriate means of seeking to secure such an interest, if the first defendant has such an interest. It is clear that, as I have said, the caveat was lodged late, it has a deleterious effect upon the sale process, there is a lawful judgment in the Court on 19 April 2005 for the possession of the property in the hands of the plaintiff, and the plaintiff is lawfully entitled to sell it. If anything is ultimately made of the lurid assertions by the first defendant, that will happen in the fullness of time. However, for present purposes, there is a lawful judgment and the plaintiff is, by all appearances, acting lawfully. I am entirely satisfied that the existence of the caveat is an inappropriate mechanism to secure such claim as the first defendant may have, in accordance with the principles well established in this Court and most helpfully, if I may say so, adumbrated by Dodds-Streeton J in Goldstraw & Anor v Goldstraw and The Registrar of Titles[1].
[1][2002] VSC 491, particularly at [38] and [39].
In my view, the proper order is that the caveat be removed. The issues which Mr Landeryou seeks to litigate he may litigate. I do not consider that the sale process, which is a lawful process, ought be jeopardised by his having the caveat while he pursues his other rights and remedies, if he has any. Accordingly, I propose to direct that the caveat be removed or, if it has not yet been registered, that the Registrar refuse to register it.
I make those orders accordingly.
I also make the orders of the enabling and formal kind, that is:
1.I dispense with the requirements of Rule 5.01(3) and 8.02 of the Rules and authorise the plaintiff to commence proceeding by originating motion. The Court will hear that originating motion and the summons thereon forthwith and I have done so.
2.Caveat No. AD677162W recorded on Certificate of Title Vol. 9115 Folio 827 be removed forthwith.
3.The Registrar of Titles is ordered pursuant to s.90(3) Transfer of Land Act 1958 to remove that caveat or to refuse to register it and to reject it if it has not yet been registered.
4.Direct that the first defendant pay the costs of the plaintiff of these proceedings.
The plaintiff seeks indemnity costs. I have not heard counsel on the indemnity costs application. I would be minded not to grant the indemnity costs but if the plaintiff wishes to press me on that I of course will hear the plaintiff and hear counsel for the first defendant.
(Discussion ensued).
Mr Slidders, I do not propose to order indemnity costs against your client. I make the orders that I have announced.
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