KENMUR Holdings Pty Ltd v Grubb

[2002] WADC 37

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   KENMUR HOLDINGS PTY LTD -v- GRUBB & ORS [2002] WADC 37

CORAM:   DEPUTY REGISTRAR HARMAN

HEARD:   19 FEBRUARY 2002

DELIVERED          :   1 MARCH 2002

FILE NO/S:   CIV 2160 of 2000

BETWEEN:   KENMUR HOLDINGS PTY LTD

Plaintiff

AND

BRUCE GRAEME GRUBB
First Defendant

GRAEME CLIFFORD GRUBB
Second Defendant

MARGARET ANN ELIZABETH GRUBB
Third Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application for leave to amend defence - Plaintiff pleads a case founded upon indefeasibility of title conferred by registered mortgage - Defendant seeks to plead mutual mistake

Legislation:

Nil

Result:

Application refused

Representation:

Counsel:

Plaintiff:     Mr D H Solomon

First Defendant             :     Mr K E Yin

Second Defendant         :     No appearance

Third Defendant           :     No appearance

Solicitors:

Plaintiff:     Solomon Brothers

First Defendant             :     Leonard Cohen & Co

Second Defendant         :     Not applicable

Third Defendant           :     Not applicable

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Atkinson v Fitzwalter [1987] 1 WLR 201

Breskvar v Wall (1971) 126 CLR 376

Consolidated Trust Co Ltd v Naylor (1936) 55 CLR 423

Holt v Deputy Federal Commission of Land Tax (1914) 17 CLR 720

Hooker Corporation Limited v Commonwealth (1986) 65 ACTR 32

IAC (Finance) Pty Ltd v Courtenay (1963) 110 CLR 550

Knowles v Roberts (1888) 38 Ch D 263

Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133

Conlan v Registrar of Titles [2001] WASC 201

PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643

Sinclair v James [1894] 3 Ch 554

Zafiropoulos v Recchi (1978) 18 SASR 5

1. DEPUTY REGISTRAR HARMAN:  The plaintiff seeks to recover the balance outstanding under a mortgage subsequent to foreclosure and sale.

2. The defendant seeks to amend his defence to plead common mistake.  The onus in the application is upon the applicant.  The plaintiff opposes the application. 

3. By par 1 of the statement of claim the plaintiff pleads the mortgage by reference to the title of the relevant land and the registration of the mortgage identified by its registration number.  The pleading refers to the principal sum secured, the rate of interest payable on that sum and the costs associated with the security and any reliance upon its provisions.  The defendants admit that part of the pleading which I would characterise as amounting to a claim founded upon the indefeasibility of the title of the registered Mortgagee.

4. The significant proposed pleading of the defendant is at par 2 wherein he admits the execution of the mortgage but seeks to plead that the parties entered into the mortgage under a common mistake. 

5. The particulars of that allegation being that the parties believed that the principal sum was advanced by the plaintiff to the first defendant when in fact the advances made by the plaintiff were to a third party.  Thereafter the third party made advances to the defendant.

6. The consequence of the alleged mistake contented for by the defendant is that the security is void alternatively liable to be set aside.  The thrust of the plaintiff's opposition to the application is that the proposed attack on its case is unsustainable. 

7. The plaintiff submits that even if the particulars of mistake did sustain that allegation, the context within which the mistake occurred could not lead to the consequence that the instrument is rendered void or ought be set aside.  The significant feature of that context is the statutory scheme which would provide for indefeasibility upon registration. 

8. There is evidence in support of the application in the form of the mortgage which comprised part of the papers in an earlier interlocutory application.  That document reveals registration of the mortgage under the statutory scheme. 

9. The effect of the doctrine of mutual mistake is such as to render the bargain sought to be enforced as void.  The context in which it is pleaded that it ought to have that result is one where the plaintiff paid funds to the trust account of the third party and the third party provided the funds from that account to the defendant.  It is contended that the mistake lay in the parties entering into the mortgage.  The mortgage is defined in the pleading as the executed document.  The mortgage is in usual form and does not indicate any involvement by the plaintiff in its execution by the defendant.  It is my opinion that if the execution of the mortgage was the mistake complained of it is difficult to apprehend it as being one made in common with the plaintiff.  At least, for the purposes of the current exercise no such involvement is either pleaded or particularised. 

10. The same observations can be made in relation to the prospect that the term entering into the mortgage is intended to cover the event of settlement.

11. In the circumstances it is my opinion that the allegation cannot be sustained on the particulars provided.

12. In the circumstances it is not appropriate to allow for the defendant to amend the pleading to that extent that he seeks to amend par 2.