S v Tasmania Bank - [1991] TASSC 48

Serial No 20/1991
List "A"

COURT: SUPREME COURT OF TASMANIA

CITATION: S v Tasmania Bank [1991] TASSC 48; (1991) Tas R 38; A20/1991

PARTIES:  S
  v
  TASMANIA BANK

FILE NO/S:  149/1990
DELIVERED ON:  11 April 1991
JUDGMENT OF:  Wright J

Judgment Number: A20/1991
Number of paragraphs: 50

Serial No 20/1991
List "A"
File No 149/1990

S v TASMANIA BANK

REASONS FOR JUDGMENT WRIGHT J

11 April 1991

The applicant, PPS, is the widow of the late LAS, deceased. During his lifetime Mr S borrowed $140,000 from the applicant, who took as security for that loan, a mortgage over land comprised and described in folio of the Register Vol 4221, Fol 71. Mr S was the registered proprietor of an estate in fee simple in that land.

The mortgage was executed on 14 November 1986 in a form which was registrable under the Land Titles Act 1980 but which was neither registered nor lodged for registration. Instead, a caveat forbidding registration of dealing with estate or interest was lodged with the Recorder of Titles by Mrs S's solicitors, in which notice was given that she was "claiming estate or interest as equitable mortgagee by virtue of memorandum of mortgage dated the 14th day of November 1986 and made between the Caveator as Mortgagee of the one part and LAS as Mortgagor of the other part."

The land comprised in the relevant folio of the Register was subdivisional land. On or about 2 April 1987, without the applicant's knowledge or consent, her caveat was partially withdrawn insofar as it related to several of the lots in the subdivision. This withdrawal was signed and lodged by her solicitors who had been induced to do so by fraud on the part of the deceased. It is accepted by the applicant that, notwithstanding absence of actual consent on her part, she cannot now maintain her caveat over this portion of the property.

On 30 November 1987 the deceased borrowed approximately $80,000 from the Tasmania Bank. He executed a mortgage in the Bank's favour and forged his wife's signature to a letter of instruction to her solicitors requesting them to consent on her behalf to the registration of this dealing. As a consequence the applicant's solicitors signed a consent endorsed on the mortgage in the following terms:

"I PPS as Caveator persuant [sic] to Caveat Registered Number B82003 hereby consent to the registration of this dealing".

Mrs S did not authorize her solicitors to give this consent on her behalf and she was unaware that it had been given. The mortgage to the Tasmania Bank was registered on Mr S's title on 18 May 1988.

The applicant accepts that the Bank was not a party to, and had no knowledge of, Mr S's fraud and consequently it is conceded that the registration of the mortgage cannot be impeached. (See Frazer v Walker [1967] AC 569).

However, it is maintained that notwithstanding registration of this instrument the applicant's caveat confers priority upon and preserves the equitable…

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 S v Tasmania Bank

Details

AGLC: S v Tasmania Bank [1991] TASSC 48
Case: [1991] TASSC 48
Decision Date: 11 April 1991

CaseChat Overview and Summary

In the case of S v Tasmania Bank, the widow of a deceased man, PPS, who had borrowed money from the Tasmania Bank, sought to establish that her prior equitable mortgage over certain land had priority over the Bank's registered mortgage. The key issue before the Supreme Court of Tasmania was whether the Bank's mortgage took effect subject to the interest notified in Mrs S's caveat. The court had to determine the nature and effect of a caveat under the Land Titles Act 1980 and whether it could be considered a "dealing" affecting an estate or interest in land. The applicant argued that her registered caveat conferred priority upon her equitable interest, but the court held that a caveat is not a dealing affecting an estate or interest in land within the meaning of the Act. Instead, a caveat is a notice of a claim and does not create a new right but protects existing rights if any. The court found that the Bank's mortgage achieved priority over the applicant's equitable interest, and the application was dismissed. The Tasmania Bank was awarded costs.

Orders