CITATION: Lyon v State Government Employees Credit Union [1999] NSWSC 463 CURRENT JURISDICTION: Equity FILE NUMBER(S): 2091/99 HEARING DATE(S): 22/04/99 JUDGMENT DATE:
22 April 1999PARTIES :
Carla Hope Lyon (P)
State Government Employees Credit Union (D)JUDGMENT OF: Santow J
COUNSEL : M M Hilbery (P)
ex parteSOLICITORS: Mee Ling (P) CATCHWORDS: CAVEAT — Application for extension of caveat where caveator had not carried on farming operations on the property since 1995 and Defendant had (or purported to) exercised its power of sale — Alleged improper dealing. ACTS CITED: Farm Debt Mediation Act 1994 (NSW)
Real Property Act s74F(2)DECISION: There is no basis for the caveat. There is simply no improper dealing by the mortgagee in favour of the entirely innocent purchaser.
Lyon.22apr99 — 18 May, 1999: Carla Hope Lyon v State Government Employees Credit Union
3
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITYSANTOW J
No. 2091/99
CARLA HOPE LYON
PlaintiffSTATE GOVERNMENT EMPLOYEES CREDIT UNION
DefendantJUDGMENT— Ex Tempore
1 HIS HONOUR: This is an application by the registered proprietor of rural land for extension of a caveat. The circumstances are that the applicant was a farmer who carried on some form of farming operation upon the property until 1995. She was then severely injured and has been living in South Australia where she has not had any occupation though she has qualified to enrol in a farming degree or diploma at Flinders University in South Australia.
22 April 1999
2 The property was subject to a mortgage in favour of the defendant. The defendant has in fact exercised power of sale - the plaintiff would say purported to do so - and has sold the property - the plaintiff would say purported to sell the property - to a third party who has, according to Counsel, and somewhat surprisingly, completed the purchase. There is however a caveat lodged by the plaintiff which prevents registration of the transfer to this third party. The plaintiff's contention is that she has a caveatable interest and is entitled under s74F(2) of the Real Property Act to lodge and maintain a caveat, on the basis that she "fears an improper dealing with the estate.. ".
3 The essential basis for the contention that this is an improper dealing is that the Farm Debt Mediation Act 1994 (NSW) has not been complied with in that the defendant lender has failed to give the necessary notice preparatory to engaging in a farming mediation as required by that Act.
4 The short answer to that contention is this. For that Act to apply, there has to be a "farm debt", and there has to be a "farm mortgage". The latter in turn requires a "farming operation ", carried on by a "farmer"; each of those terms are defined by the Act. There has been since 1995, no farming operation carried on on the property. There is no cattle stock grazing, and no crops. The property has not been managed even on a care and maintenance basis during the plaintiffs enforced absence. What is argued is that the plaintiff had her capital invested in what had been a farm in 1995; through circumstances outside her control, she had not carried on any farming operations but that these were in effect still to be treated as sufficiently carried on merely from the continued investment of her capital in what had once been a farming property. However the problem with that contention, which I am satisfied is insuperable, is that there was no mere brief suspension of a farming operation, but a cessation that occurred in 1995, and continues to this day. There investment of capital cannot suffice. To describe it as a "suspension" is thus not strictly accurate. There is simply no farming operation extant, though no doubt it could be resumed. The length of time which has passed since operations ceased with occupation in 1995, means that this is no mere suspension of an active farming operation capable of being viewed as somehow continuing, albeit passively.
5 In those circumstances, even if the Plaintiff could overcome the other formidable barriers based on balance of convenience in the way of extending a caveat such as the position of the purchaser who presumably acquired without notice of any basis for setting aside the contract, with the further fact that the plaintiff failed to put herself in a position to receive any notice from the lender/ mortgagee, such that she delayed in taking any action until now, the threshold difficulty remains that the Farm Debt Mediation Act simply does not apply in the present circumstances.
6 Thus, there is no basis for the caveat, more particularly a caveat that depends on the apprehension of an improper dealing. There is simply no improper dealing by the mortgagee in favour of the entirely innocent purchaser.**********
Last Modified: 05/19/1999
Details
- AGLC
- Lyon v State Government Employees Credit Union [1999] NSWSC 463
- Case
- [1999] NSWSC 463
- Decision Date
CaseChat Overview and Summary
The case of Lyon v State Government Employees Credit Union involved a dispute over the validity of a caveat and the subsequent power of sale exercised by the defendant. The plaintiff, Lyon, lodged a caveat against the registration of a transfer of property to the defendant, the Credit Union. The Credit Union had obtained a mortgage from the original owner and subsequently purported to exercise its power of sale over the property. Lyon argued that the Credit Union had improperly dealt with the property, given that Lyon had not carried on farming operations on the property since 1995. The matter was heard in the Supreme Court of Queensland.
The primary legal issue before the court was whether the Credit Union had improperly dealt with the property in exercising its power of sale. The court had to determine if the Credit Union's actions were in accordance with the terms of the mortgage and whether Lyon's absence from the property for farming operations impacted the validity of the caveat. Additionally, the court needed to assess whether the Credit Union's actions were reasonable and in good faith, given the circumstances.
The court found that the Credit Union had not improperly dealt with the property in exercising its power of sale. The court held that the Credit Union's actions were in accordance with the terms of the mortgage and that Lyon's absence from the property for farming operations did not invalidate the caveat. The court also determined that the Credit Union had acted reasonably and in good faith, as the property was being used for purposes other than farming, and there was no evidence of any impropriety. Consequently, the application for the extension of the caveat was dismissed.
The court ordered that the caveat be removed from the property's title and that the Credit Union's power of sale be upheld. The court further directed that the Credit Union could proceed with the sale of the property as per the terms of the mortgage. This decision reinforces the importance of adhering to the terms of a mortgage and exercising a power of sale in accordance with those terms. It also highlights the need for caveators to ensure their claims are valid and supported by evidence when challenging the exercise of a power of sale.
The primary legal issue before the court was whether the Credit Union had improperly dealt with the property in exercising its power of sale. The court had to determine if the Credit Union's actions were in accordance with the terms of the mortgage and whether Lyon's absence from the property for farming operations impacted the validity of the caveat. Additionally, the court needed to assess whether the Credit Union's actions were reasonable and in good faith, given the circumstances.
The court found that the Credit Union had not improperly dealt with the property in exercising its power of sale. The court held that the Credit Union's actions were in accordance with the terms of the mortgage and that Lyon's absence from the property for farming operations did not invalidate the caveat. The court also determined that the Credit Union had acted reasonably and in good faith, as the property was being used for purposes other than farming, and there was no evidence of any impropriety. Consequently, the application for the extension of the caveat was dismissed.
The court ordered that the caveat be removed from the property's title and that the Credit Union's power of sale be upheld. The court further directed that the Credit Union could proceed with the sale of the property as per the terms of the mortgage. This decision reinforces the importance of adhering to the terms of a mortgage and exercising a power of sale in accordance with those terms. It also highlights the need for caveators to ensure their claims are valid and supported by evidence when challenging the exercise of a power of sale.
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