NAB v New Road Holdings Pty Ltd

[2010] VSC 184

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 2105 of 2010

NATIONAL AUSTRALIA BANK LTD	Plaintiff
v
NEW ROAD HOLDINGS PTY LTD & ORS	Defendants

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JUDGE:	OSBORN J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 April 2010
DATE OF RULING:	30 April 2010
CASE MAY BE CITED AS:	NAB v New Road Holdings Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2010] VSC 184

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PROPERTY LAW – Onus on caveator – Plaintiff’s interest established lawfully pursuant to mortgage – Balance of convenience favours caveat removal - Maintenance of caveat would prevent realisation of plaintiff’s security – Plaintiff’s repeated and reasonable attempts to remove caveat by consent – First defendant’s conduct unreasonable – Costs awarded on solicitor/client basis.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms K Hamill	Thomas Playford Cutters
For the Defendants	No appearance

HIS HONOUR:

1. In this matter the plaintiff (‘the Bank’), as mortgagee in possession, seeks the removal of caveats.  The second defendant has now consented to the removal of its caveat and despite service of the relevant material, the first defendant does not appear. 

1. The background to the matter is set out in the written submissions of counsel, which I will direct be placed on the court file.  Those submissions also summarise the relevant principles of law, in particular the onus is on the caveator to establish that:

a)        there is a serious question to be tried;  

b)       it has the interest in land claimed in the caveat; and  

c)        the balance of convenience favours the maintenance of the caveat until trial. 

1. I am satisfied that that onus has not been discharged.  In particular it seems to me that even if the first defendant had some interest in the land, there is no evidence that the Bank acquired its interest in the land pursuant to the mortgage, or affected registration of the mortgage in circumstances where there was any fraud on the Bank’s part.

1. Further, I am satisfied for the reasons set out in counsel's submissions that the balance of convenience would not favour maintenance of the caveat in any event, but would unfairly prevent the realisation of the Bank’s security.  Accordingly, I propose to make the substantive orders sought.  I turn then to the question of costs.

1. On 11 February 2010, the plaintiff's solicitors forwarded a letter to the caveator foreshadowing the sale of the property subject to mortgage.  By letter dated 19 February 2010, R. M Ambrose, a solicitor, responded to the Bank to the effect that satisfactory arrangements had been agreed between the defendants to withdraw the caveat at settlement ‘of the purchase of the property’.  On 25 February 2010 the Bank’s solicitors wrote to R. M Ambrose to advise the solicitor that any surplus proceeds from the sale of the property would be paid into court and requested a withdrawal of the first defendant's caveat.  R. M Ambrose responded by letter dated 25 February 2010 in combative terms stating, amongst other things, that the first defendant would not withdraw the caveat and claiming a constructive trust in respect of any proceeds of sale arising from the proposed mortgagee's sale.  R. M Ambrose wrote again on 2 March 2010 in terms which did not resolve the dispute. 

1. On 5 March 2010 the Bank’s solicitors wrote to R. M Ambrose seeking quantification of the amount claimed by the first defendant and a withdrawal of caveat.  The Bank’s solicitors again confirmed that any surplus from the proceeds of the sale of the property would be paid into court.

1. The matter did not resolve and two further requests in writing to effect withdrawal of the caveats were unsuccessful.

1. No appearance has been entered on behalf of the first defendant to these proceedings and when a copy of the originating motion, summons and principal supporting affidavit were forwarded to R. M Ambrose, he responded by letter dated 22 April 2010 to the effect that he no longer acts as the first defendant's solicitor.

1. In my view the failure to respond sensibly to the repeated requests of the Bank’s solicitors does constitute special circumstances in the requisite sense and I propose to order that the defendant pay the plaintiff's costs of the proceeding, including reserved costs, on a solicitor/client basis.