McMillan v Dunoon - [2005] VSC 440

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 8326 of 2005

JODY ANNE McMILLAN	Plaintiff
v
ANDREW DUNOON	First Defendant
and
THE REGISTRAR OF TITLES	Second Defendant

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JUDGE:	GILLARD J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 September 2005
DATE OF JUDGMENT:	21 September 2005
CASE MAY BE CITED AS:	McMillan v Dunoon and Anor
MEDIUM NEUTRAL CITATION:	[2005] VSC 440

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APPLICATION FOR REMOVAL OF CAVEAT – Section 90(3) Transfer of Land Act 1958 – Loan agreement between parties – Default by plaintiff – Caveat lodged by first defendant – Whether loan agreement constituted equitable charge amounting to caveatable interest – Intention to constitute security could be inferred from instrument – First defendant entitled to maintain caveat – Proceeding dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A.P. Dickenson
For the First Defendant	Mr C.J. Nettlefold
For the Second Defendant	No appearance

HIS HONOUR:

This is an application by the plaintiff who is the registered proprietor of a residential property seeking an order, pursuant to s.90(3) of the Transfer of Land Act 1958, that a caveat lodged by first defendant on the title of the property be removed.

The land is situated at and known as 3 Grover Street, Pascoe Vale, and is more particularly described in Certificate of Title Vol. 06916 Folio 019.

The plaintiff, Jody Anne McMillan is the registered proprietor of the property. The property is mortgaged to the Australian and New Zealand Banking Group Limited by an instrument dated 25 August 2000. The first defendant, Andrew Dunoon, apparently lends money. The second defendant is the Registrar of Titles.

On 23 December 2002 Ms McMillan and Mr Dunoon executed a loan agreement. The latter lent Ms McMillan the sum of $20,000 to be repaid by 23 February 2003. Ms McMillan agreed to pay a substantial sum of fixed interest, namely $6000, on or before 23 February 2003, and thereafter agreed to pay penalty interest at the rate of 15 per cent per month until payment. Her partner, Gregory Nichols, signed a guarantee. The loan was not repaid.

On 8 January 2003 Mr Dunoon through his solicitor lodged a caveat with the registrar of titles. The estate or interest claimed was expressed to be “an interest as chargee” and the grounds of claim were expressed as follows: “Charge given 23 December 2002 between the caveator and Jody Anne McMillan.” It is obvious that Mr Dunoon is claiming an interest in the property pursuant to a charge apparently arising out of the loan agreement.

By contract of sale dated 23 July 2005 Ms McMillan sold the property for the sum of $421,000. Settlement is due this Friday, 23 September 2005. Hence the urgency of this application. Ms McMillan seeks an order that the caveat be removed no doubt to facilitate the settlement. This is a summary procedure. The onus is on the caveator to maintain the caveat and establish that he has a caveatable interest in the property. See Lewenberg and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading McMillan v Dunoon

Details

AGLC: McMillan v Dunoon [2005] VSC 440
Case: [2005] VSC 440
Decision Date: 21 September 2005

CaseChat Overview and Summary

The matter before the Court involved McMillan, the plaintiff, and Dunoon, the first defendant, with the second defendant being the registered proprietor of a property. The plaintiff sought the removal of a caveat lodged by the first defendant, who claimed to have a caveatable interest in the property as a result of a loan agreement with the plaintiff. The loan agreement stipulated that the plaintiff would not dispose of the property without first offering it to the first defendant. The first defendant argued that the agreement constituted an equitable charge, thereby granting it a caveatable interest.

The central legal issue was whether the loan agreement between the parties constituted an equitable charge that would entitle the first defendant to maintain the caveat. The Court had to determine whether the intention to create a security interest could be inferred from the terms of the loan agreement, and if so, whether this constituted a caveatable interest under the relevant legislation. Additionally, the Court needed to consider the effect of the plaintiff's default on the loan agreement on the first defendant's rights.

The Court held that the intention to create a security interest could indeed be inferred from the terms of the loan agreement, even though the agreement did not explicitly state that it was intended to be a charge. The Court found that the first defendant's right to be offered the property before the plaintiff could dispose of it indicated a security interest. Consequently, the first defendant was entitled to maintain the caveat as it held a caveatable interest under the Transfer of Land Act 1958. The application for the removal of the caveat was dismissed, affirming the first defendant's rights as established by the loan agreement.

Orders