National Australia Bank v Walter

[2005] VSC 376

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

PRACTICE COURT

No. 6607 of 2005

NATIONAL AUSTRALIA BANK & ORS	Plaintiffs
v
FRANZ JOSEPH WALTER & ORS	Defendants

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JUDGE:	CUMMINS J
WHERE HELD:	Melbourne
DATE OF HEARING:	28 June 2005
DATE OF JUDGMENT:	28 June 2005
CASE MAY BE CITED AS:	National Australia Bank & Ors v Walter & Ors
MEDIUM NEUTRAL CITATION:	[2005] VSC 376

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PRACTICE COURT – Removal of caveat – Consequence of prior Court judgment.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr N Mukhtar QC with Mr M Gurvich	Russell Kennedy
For the Defendants	In person

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HIS HONOUR:

1. This is a summons filed 15 June 2005 on behalf of the plaintiffs, being the National Bank and six members of the Christian family (Jean Ann Christian and five others) for an order under s.90(3) Transfer of Land Act 1958 that the Registrar of Titles remove caveat number AB011197L from Certificate of Title Volume 10289 Folio 289, and consequential orders. An originating motion seeking like relief was also filed on 15 June 2005.

1. An affidavit in support, of Mr A.J. Aldous, dispute resolution manager of the first plaintiff and sworn 8 June 2005, was filed on 15 June 2005.  In opposition, an affidavit of Ms Carmen Walter has been affirmed and filed today, 28 June 2005, on behalf of her parents, Mr Fritz and Mrs Ingrid Walter, the first and second defendants.  The third defendant, the Registrar of Titles, abides the Order of the Court. 

1. In a 21 day hearing from 15 May 2003 to 2 July 2003 Dodds-Streeton J heard the primary matter.  She gave judgment on 16 February 2004, finding wholly in favour of the plaintiffs.  This caveat, presently the subject of this summons, is a corollary of that proceeding.

1. In that proceeding, in paragraph 327 of her judgment of 16 February 2004, Dodds-Streeton J found as follows:

“Although the Walters subsequently requested that the property be registered in the name of the Walter Family Trust, they were registered as proprietors of the brewery land.  No caveat notifying the interests of the beneficiaries of the Walter Family Trust or beneficial interests under any other trust was lodged.  There is no evidence of a declaration of trust by Fritz and Ingrid Walter complying with the formalities required by the Statute of Frauds.  There is no evidence of any basis on which to conclude that the property was held on constructive or resulting trust.  I am not satisfied that the brewery land was held by its registered proprietors on trust.”

1. At paragraph 335 Her Honour found:

“In summary, there is no evidence that the brewery mortgage was unenforceable on any basis.  There is no evidence that the registered proprietors held the brewery land as trustees for the Walter Family Trust but, if they did, under the trust deed they had the power to mortgage it.  No breach of duty by Fritz and Ingrid Walter is alleged, but if it were established, that circumstance would not displace the indefeasibility of the registered mortgage”.

1. At paragraph 366 Her Honour continued:

“It follows that the Walters’ arguments based on trust issues failed.  There is no basis for the allegations that the NAB instigated the December 1998 restructuring of loans in order to perfect a hitherto invalid security”.

1. Her Honour made clear findings as to credibility in paragraph 362, which I consider it is not necessary to recite. 

1. Her Honour concluded at paragraph 373 with a brief analysis of the history of the Walters, which I again consider it is not necessary to recite.  Her Honour concluded:

“The financial and business misfortunes of the Walters cannot be attributed to any legal wrong or morally reprehensible conduct of the NAB.  There is no recognised legal or equitable ground on which to set aside the liability under the relevant loan agreements, guarantees, mortgages and debenture”. 

1. Accordingly, she found in favour of the plaintiff, the NAB, in proceeding no. 7407 of 2002 and in favour of the defendant, the NAB, in proceeding no. 4486 of 2001.

1. The reality is that the present caveat is a corollary of that judgment, seeking to sustain the substance of that which was rejected by Her Honour.  The Court of Appeal has refused a stay of execution pending appeal and has ordered the Walters to pay security for costs of that appeal.  The Walters have filed an application for special leave to the High Court against the Orders, which is to be heard yet.

1. In December last, when Hansen J removed the caveat lodged by Ms Carmen Walter over the family home, the situation then arose where one of the six registered owners, Mr Thomas Christian, transferred his one-sixth share to Monica Edgar.  The Bank made a new mortgage to replace the pre-existing mortgage.  The present caveat blocked that registration.

1. On 29 June 2004 the Registrar gave Ms Walter notice of those dealings under s.90(1) of the Act, triggering the lapse process which did occur, but in terms of s.90(1) only to the extent necessary to permit the registration of the transfer or dealing.  Thus the caveat would remain, unless today I order its removal, on title, and can affect future dealings of the Bank and the owners.

1. The history of the matter is, other than that pivotal material I have recited, set forth, as I say, in the affidavit of Mr A.J. Aldous sworn 8 June 2005.  It is unnecessary to rehearse it.  It is a matter of public record and essentially is reflected in the judgment of Dodds-Streeton J which I have briefly recited and the subsequent appellate process which I have also briefly recited. 

1. In paragraph 20 Mr Aldous deposes that the caveat is affecting the Bank’s interests in the brewery land, which would be self-evident in any event, and particularly in subparagraph (i) of paragraph 20 the prejudice to the Bank is set forth.  The affidavit in reply of Ms Walter sworn today essentially rehearses that which has been already the subject of extensive litigation, both before Dodds-Streeton J and other Judges of this Court.  Unfortunately for the defendants to this proceeding they have been unsuccessful before the courts on the numerous occasions in their contentions.

1. It is unnecessary to further recite the history of the matter save that it is, I consider, inevitable and demonstrable that the caveat is hopeless in law and in fact, that it is an unjustified corollary of failed proceedings, and that it ought be removed.  Accordingly, I order that the caveat be removed in the terms sought under paragraph 3 of the summons.