Westpac Banking Corporation v Murray Riverside Pty Ltd
[2013] WASC 433
•4 DECEMBER 2013
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: WESTPAC BANKING CORPORATION -v- MURRAY RIVERSIDE PTY LTD [2013] WASC 433
CORAM: BEECH J
HEARD: 20 NOVEMBER 2013 & ON THE PAPERS
DELIVERED : 4 DECEMBER 2013
FILE NO/S: CIV 2610 of 2013
BETWEEN: WESTPAC BANKING CORPORATION
Plaintiff
AND
MURRAY RIVERSIDE PTY LTD
First DefendantREGISTRAR OF TITLES
Second Defendant
Catchwords:
Real property - Caveats - Mortgagee exercising power of sale - Caveat lodged by proprietor mortgagor to prevent completion of sale - Whether caveat should be removed - Turns on own facts
Legislation:
Transfer of Land Act 1893 (WA), s 138
Result:
Order that caveat be removed
Category: B
Representation:
Counsel:
Plaintiff: Mr T O Coyle
First Defendant : Mr R A C Cullen
Second Defendant : No appearance
Solicitors:
Plaintiff: Lavan Legal
First Defendant : Cullen Babington Hughes
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd [2011] NSWCA 39
Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42
Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129
Gangemi v Gangemi [2009] WASC 195
Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161
Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419
KWS Capital Pty Ltd v Love [2013] WASC 294
McCourt v National Australia Bank Ltd (No 2) [2010] WASC 151
McCourt v National Australia Bank Ltd [2010] WASC 121
Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95; (2009) 40 WAR 150
BEECH J:
Introduction
This is an application by the registered mortgagee for the removal of a caveat lodged by the registered proprietor of three pieces of land near Pinjarra. For the reasons that follow, I order that the caveat be removed.
Background
The first defendant, Murray Riverside, is the registered proprietor of:
(a)lot 9010 on deposited plan 58019, being the land contained in certificate of title volume 2698 folio 697;
(b)lot 9006 on deposited plan 48305, being the land contained in certificate of title volume 2621 folio 422; and
(c)lot 9510 on deposited plan 56143 being the land contained in certificate of title volume 2698 folio 647.
The plaintiff, Westpac, is the successor to St George Bank's interest as mortgagee in these properties (the Properties).
In July 2011, St George provided Murray Riverside with a loan facility of more than $18 million. Murray Riverside's obligations were secured in various ways, including by mortgages over the Properties.
In February 2012, Westpac issued notices of demand asserting the default of Murray Riverside. Further letters were sent in April and May 2012.
Murray Riverside owes Westpac over $25 million. No payments have been made for more than a year.
In July 2012, Westpac appointed receivers and managers (the Receivers) over the property of Murray Riverside, including the Properties.
The Receivers have entered a contract to sell the Properties for $13.1 million.
Murray Riverside has lodged a caveat over the Properties.
The caveat
The caveat claims an interest as a registered proprietor to prevent the completion of a sale by the Receivers to a third party, and to prevent any improper dealings by the Receivers. That interest is said to be claimed by virtue of the facts set out in what is described as the attached statutory declaration. There was no statutory declaration attached to the caveat when it was lodged. Following the requisition by the Registrar of Titles, a statutory declaration of Mr Kasi K L Palaniappan, a director of Murray Riverside, was lodged dated 6 October 2013.[1]
[1] See affidavit of J E Haywood sworn 24 October 2013, JEH 1, page 12.
The statutory declaration deposes that:
(a)on 30 April 2012, a valuation by Knight Frank valued the land at $47,895,000;
(b)on 12 September 2012, the Receivers advertised the property for sale for $25 million;
(c)on 22 July 2013, his solicitors provided to him a copy of correspondence received from solicitors for the bank advising of the intention by the Receivers to enter into contracts for the sale of the land for the sum of $13.1 million; and
(d)the Receivers have breached s 420A of the Corporations Act 2001 (Cth) in that they 'may have failed to exercise all reasonable care' to sell the property for market value as demonstrated by advertising the land for an amount considerably less than the market value, and by advising that they were going to accept a contract for the sale of the land with a purchase price of $13.1 million.
The proceedings
On 23 October 2013, Westpac filed an originating summons seeking an order for removal of the caveat, and for other related orders.
The matter came before me on 24 October 2013. At that hearing, the matter was programmed to a special appointment on 20 November 2013 and directions were made for the exchange of affidavits. Counsel appeared for Murray Riverside. In the course of the hearing, counsel said, with the concurrence of his instructor, that the only point sought to be raised by Murray Riverside was that it had not been demonstrated by the plaintiff that the charge and mortgages entered into by Murray Riverside with St George were validly assigned to Westpac.[2] Counsel agreed that if at any time the position of the first defendant in that regard were to change, the first defendant's solicitors would communicate that by letter to the plaintiff's solicitors.[3]
[2] ts 5.
[3] ts 5 ‑ 6.
By letter of 28 October 2013, the plaintiff's solicitors set out in detail their position in relation to the transfer of rights and interests in the securities from St George to Westpac, and in relation to the advertising necessary for that purpose. There was no response to that letter. By letter of 31 October 2013, the plaintiff's solicitors followed up on the matter.[4]
[4] Affidavit of G E Bevis sworn 14 November 2013, GEB 1 ‑ 2.
On 12 November 2013, an affidavit of Mr Kasi Palaniappan sworn 11 November 2013 was forwarded to the court by Murray Riverside's then solicitors under cover of an email which stated that:[5]
[O]ur instructions in this matter extend only to facilitating the filing of the affidavit, not in the preparation of the affidavit in itself. At this stage, we understand submissions will be provided and once again, our instructions extend only to the filing of those submissions. Our office has instructions to remain on record to facilitate this purpose and communication with the first defendant.
[5] GEB8.
It is not necessary, for the purposes of determining this application, to say anything about any question raised by the contents of that email. I proceed on the footing that the affidavit of 11 November 2013 is before the court.
Prior to the hearing that was listed for 20 November 2013, the first defendant's solicitors made an application under O 8 r 7 of the Rules of the Supreme Court 1971 (WA) to get off the record.
At the special appointment on 20 November 2013, new solicitors appeared for Murray Riverside for the purposes of applying for an adjournment. The purpose of the adjournment was said to be to enable Murray Riverside to put on an affidavit and submissions in support of the contentions that could be seen in the affidavit that had been sent to the court on 12 November 2013. For reasons given at the hearing, I refused the application for the adjournment.[6] I gave leave for the (new) solicitors for Murray Riverside to put in written submissions in opposition to Westpac's application for an order removing the caveat.
[6] ts 31 ‑ 33.
The parties filed submissions in accordance with the directions made on 20 November 2013.
Caveats: legal principles
The principles applicable when a registered proprietor applies to have a caveat removed under s 138(2) of the Transfer of Land Act 1893 (WA) were outlined by Murphy J in Gangemi v Gangemi[7] as follows:
Under s 138 of the Transfer of Land Act, the proprietor of land against which a caveat has been lodged may summon the caveator to show cause why the caveat should not be removed, and the court may, upon proof that the caveator has been summoned, make such order as to the court seems fit.
The onus is then on the caveator to establish the existence of an arguable caveatable interest in the land itself; by its nature a caveatable interest must be a proprietary interest in land: Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 50; Jandric v Jandric [1999] WASC 22.
The caveatable interest must exist at the time the caveat is lodged; it cannot be lodged to protect an interest in the future: Martin v Official Trustee in Bankruptcy [1990] Tas R 65, 69.
As a matter of form, the caveat must definitely, or explicitly, specify the estate or interest claimed. It must reveal to the registered proprietor the nature and extent of the claim: Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407, 422 - 423; Kerabee Park Pty Ltd v Daley [1978] 2 NSWLR 222, 231 - 232.
As Beech J observed in Bashford v Bashford [2008] WASC 138 [54], there are conflicting authorities on whether regard may be had to the statutory declaration in determining whether the caveat specifies the estate or interest claimed.
A claim in a caveat to 'an equitable interest', or an interest 'as the beneficiary of a resulting or constructive trust' is defective in form: Bashford v Bashford [56], [92].
Also, a caveat must not go beyond the legitimate claim necessary to protect the caveator's rights: Midland Brick Company Pty Ltd v Welsh [2006] WASC 122; (2006) 32 WAR 287 [342].
In the exercise of the court's discretion under s 138, the balance of convenience is a relevant factor. There is no rule of law that once an arguable case for a caveatable interest has been established, removal of the caveat will only be ordered if it is shown that the 'circumstances are so unusual' that the caveat should be removed. The discretion is to be exercised having regard to the particular circumstances of the case. Observations in cases to the effect that it would be unusual to discharge a caveat once an arguable caveatable interest has been shown, are general observations by reference to the particular facts of the case: see Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95 [20], [21] and [29].
[7] Gangemi v Gangemi [2009] WASC 195 [38] ‑ [45]; see also KWS Capital Pty Ltd v Love [2013] WASC 294 [32] ‑ [36].
Differing views have been expressed in the cases as to whether a registered proprietor can lodge a caveat.[8] It is not necessary to resolve that question because, for reasons explained below, I am satisfied that Murray Riverside has not demonstrated a serious question to be tried on the interest it claims, and further, I would order removal on discretionary grounds of balance of convenience.
[8] See McCourt v National Australia Bank Ltd [2010] WASC 121 [8] ‑ [12].
It is convenient to say something about the marketing and sale of the properties, and as to the correspondence between the parties, before addressing the question of whether there is a serious question to be tried as to the claimed caveatable interest.
The marketing and sale of the Properties
The following facts are established by the supplementary affidavit of Vincent Smith sworn 14 November 2013, which was not challenged or contradicted.
Before the Receivers were appointed to Murray Riverside, Murray Riverside had engaged Garlands International Pty Ltd (Garlands) as selling agent of one of the Properties. After the Receivers were appointed, they appointed Garlands as the selling agent for the Properties.
The Properties were marketed by an expressions of interest process. Marketing commenced on 12 September 2012. Expressions of interest closed on 9 November 2012.
A series of advertisements were placed in The West Australian and The Australian Financial Review between 12 September 2012 and 17 October 2012.
Garlands received enquiries from a number of parties, each of whom was issued with an information memorandum.
No formal offer was received following the expressions of interest process, although three parties orally expressed an interest.
After that process, further marketing and advertising of the Properties was done by Garlands. There were further discussions with the parties who had given oral expressions of interest.
Planning, engineering and environmental experts were engaged to provide short reports to interested parties. Valuations were obtained for the Properties. The directors of Murray Riverside were invited to meet with Garlands so that they could be introduced to parties who might be interested in purchasing the Properties.
On or about 9 July 2013, the Receivers received offers to purchase the Properties for a total of $13.1 million.
On 2 August 2013, the Receivers caused Murray Riverside to accept those offers.
Correspondence between the parties
In May and June 2013, the Receivers' solicitors wrote to Murray Riverside's solicitors. It is not necessary to detail the various topics of the correspondence. Among other things, the Receivers' solicitors requested or demanded that Murray Riverside withdraw various earlier caveats that had been lodged against the Properties. (These are not the caveats the subject of these proceedings.)
On 22 July 2013, the Receivers' solicitors wrote to Murray Riverside's solicitors. [9] The letter:
(a)advised that the Receivers had entered into a contract of sale on or about 2 April 2013, subject to a due diligence condition, and that that contract had not been completed;
(b)stated that the Receivers had received unconditional offers totalling $13.1 million for the Properties; and
(c)stated that the Receivers intended to accept the offers on 29 July 2013, but in the interim, were willing to consider any offer that Murray Riverside or its directors wished to make before that time.
[9] Affidavit of V A Smith sworn 24 October 2013, VAS 14.
By letter of 24 July 2013, the solicitors for Murray Riverside requested a copy of the offers.[10]
[10] VAS 15.
By letter of 24 July 2013, the Receivers' solicitors advised that the key terms to the offers were that settlement would occur within 60 days from acceptance, deposits totalling $750,000 would be paid within three days from acceptance, and there were no other material conditions.[11]
[11] VAS 16.
By letter of 26 July 2013, Murray Riverside's solicitors wrote to the Receivers' solicitors.[12] The letter:
(a)stated that, in their client's view, an expression of interest sale at $13.1 million was not the Receivers' best realisation strategy;
(b)stated that their client considered that the best realisation strategy was to give their client more time to respond and consider any alternatives;
(c)referred to the fact that there was a valuation dated 30 April 2012 valuing the estate properties at over $47 million, and that settlement of the contract for sale at $13.1 million would leave a shortfall of monies owed to Westpac; and
(d)asserted that the Receivers' solicitors had not disclosed various matters.
[12] VAS 17.
Murray Riverside's solicitors wrote a further letter to the Receivers' solicitors on 26 July 2013.[13] The letter stated that their client was willing to assist to refer interested parties but would need more time to do so. The letter asserted that foreign parties may be interested but that there would need to be an extension of time until 31 August 2013.
[13] VAS 18.
By email of 29 July 2013, the Receivers' solicitors said that the Receivers were prepared to extend the time for Murray Riverside or its directors to provide an offer for the Properties until close of business the next day, 30 July 2013.[14]
[14] VAS 19.
On 30 July 2013, the Receivers' solicitors wrote to Murray Riverside's solicitors responding to the two letters of 26 July 2013.[15] The letter stated that the Receivers would allow Murray Riverside until close of business on 1 August 2013 to provide the Receivers with a better offer for the purchase of the Properties, or to obtain an order of the court preventing the Receivers from accepting the offer, failing which the Receivers would accept the current offer at any time from 10.00 am on 2 August 2013.
[15] VAS 20.
On 1 August 2013, the Receivers' solicitors sent an email to Murray Riverside's solicitors. [16] The email:
(a)referred to a conversation in which Murray Riverside's solicitors had advised that Murray Riverside intended to put an offer, and had said that details could not be provided as to price, conditions, likely settlement period, or the purchaser's identity or financial capacity; and
(b)stated, in light of those matters, the Receivers were not prepared to extend the time period referred to in the letter of 30 July 2013.
[16] VAS 21, page 89.
On 2 August 2013, the solicitors for Murray Riverside wrote to the Receivers' solicitors by email.[17] The email:
(a)stated that the solicitors had instructions from a separate Malaysian based company, not related to Murray Riverside or any of its shareholders, to submit an offer to the Receivers;
(b)stated that the solicitors had instructions to prepare an offer for $14.5 million with a due diligence period of 60 days; and
(c)said that it was expected that a contract would be prepared by 1.00 pm and sought a delay in the execution of contracts.
[17] VAS 21, page 88.
At 11.48 am the Receivers' solicitors responded to that email.[18] The response:
(a)referred to the 60 day due diligence period, saying that there was no guarantee that process would be successful, and that it might result in a reduction of the purchase price, as had occurred with the current offer;
(b)stated that the proposal did not refer to questions of Foreign Investment Review Board approval;
(c)stated that the proposal did not contain details about the timing of settlement;
(d)stated that the Receivers were not prepared to further delay accepting the current offer in order to enable the unnamed potential purchaser to provide the Receivers with a highly conditional offer that would have a number of issues, as referred to above;
(e)stated that the Receivers considered that there was a very real risk that the purchaser would withdraw the current offer if it was not accepted today; and
(f)recorded their understanding that the current offer had been signed, or was then in the process of being signed.
[18] VAS 21, page 87.
At 1.15 pm Murray Riverside's solicitors, and solicitor for the prospective purchaser, responded in relation to the Receivers' concerns.[19]
[19] VAS 21, page 86.
At 2.19 pm the Receivers' solicitors sent an email stating that, as had been set out in the earlier email, the Receivers had already accepted the other offer.[20]
[20] VAS 21, page 86.
Caveatable interest: is there a serious question to be tried?
In its written submissions dated 25 November 2013, Murray Riverside did not contend that there is any question about the legal efficacy of the transfer from St George to Westpac of the rights as mortgagee of the Properties. In any event, I am satisfied that there is no triable issue in that regard, for the reasons in Westpac's written submissions dated 14 November 2013.
Murray Riverside submits that it has a caveatable interest in the Properties in that it has a right in equity because the bank has not satisfied its equitable duty to act in good faith in the sale, or because the Receivers have breached the statutory requirement to take reasonable care in the sale of the estate Properties: s 420A Corporations Act. For the purposes of these proceedings, it can be assumed, favourably to Murray Riverside, that a breach of either of these duties is capable of giving rise to an equity in favour of Murray Riverside to set aside the sale by the Receivers, and that such an equity is capable of constituting a caveatable interest and thus supporting a caveat.
Murray Riverside submits that there is a serious question to be tried that the Receivers have not acted in good faith or taken reasonable care in exercising the power of sale in that:
(a)they contracted to sell the Properties at significantly under their true value;
(b)they did not offer the Properties at auctions; and
(c)they did not adequately consider whether a greater return was likely to be obtained by selling the Properties as smaller lots, rather than in their entirety.[21]
[21] First defendant's written submissions dated 25 November 2013 [3].
For the reasons that follow, I am not satisfied that these matters, individually or taken together, establish a serious question to be tried of any breach of duty by the Receivers.
In support of their contention that the Properties were sold at significantly under their true value, Murray Riverside points to earlier valuations of the Properties. One of these was in March 2008, one in March 2009 and the latest on 30 April 2012. The valuation dated 30 April 2012 valued the Properties at $47.895 million. Murray Riverside submits that the Receivers have not provided valuation evidence to establish that the valuation dated 30 April 2012 does not accurately reflect the true value of the Properties.
In my view, the valuation of 30 April 2012, more than 15 months before the sale, does not sustain a serious question to be tried on a claim that the sale was at an undervalue. The valuation was expressed in terms that emphasised that it applied only to the date of the valuation. Condition 8 of the valuation was in the following terms:[22]
This valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of 3 months from the date of the valuation.
[22] Affidavit of K Palaniappan sworn 11 November 2013, KP 5, page 128.
Further, the valuation contained specific statements about the prospect of substantial weakening in the relevant market. Condition 9 of the valuation provided as follows:
The credit crisis within the global financial sector, together with the subsequent severe negative re‑rating of the [Australian real estate investment trust] sector and emergence of economic issues, heavily impacted upon the broader investment markets resulting in significantly reduced investor confidence, creating both a softening bias on yields and illiquidity in the investment property market. At present there appears to be some disparity between vendor and purchaser pricing expectations. Should such market conditions continue, it is possible that property values may continue to be negatively impacted upon, especially where vendors are forced to reduce debt by selling assets. This may require vendors to adjust their pricing expectations resulting in a further softening in yields and deteriorating property values. These market forces should be closely monitored and may lead to a more material impact upon value than many may be currently speculating and we draw your attention to this fact.
Moreover, the valuation was done on the assumption that one of the properties, lot 9010, had been subdivided into super lots and separate certificates of title had been created in accordance with the outline development plan and indicative yield plan provided to them.[23] Thus, the valuation was done on an assumption contrary to the facts. There is no evidence about the extent to which that assumption affects the value of the Properties. As a matter of ordinary experience and common sense, the assumption is capable of materially affecting value.
[23] See conditions 10 and 11 of the valuation, page 128.
Murray Riverside submits that the Receivers have refused to provide evidence that they have taken reasonable steps to ascertain the value of the Properties before entering into the contract for sale. There is no onus on the Receivers to provide evidence to Murray Riverside or its directors about any valuations that it obtained. In any event, the uncontradicted evidence is that the Receivers obtained valuations before entering into the contracts.[24]
[24] Affidavit of V A Smith sworn 14 November 2013, [15.4].
Murray Riverside submits that letters were written to the Receivers' solicitors advising that companies wished to purchase the Properties for amounts greater than the price obtained. That contention does not reveal any arguable case. The proposals relied on by Murray Riverside came after the Receivers had accepted the offer of $13.1 million. That in turn came after a long marketing process that had been on foot for more than 10 months. On the evidence before me, I am not satisfied that there is an arguable case that any duty of the Receivers required them, in the circumstances on 2 August 2013, to defer acceptance of the offer for $13.1 million pending any further offers being made by Murray Riverside, its directors or by any party introduced by them.
Murray Riverside submits that the Receivers failed to act in good faith or exercise reasonable care, in that they did not test the market by putting the Properties to a public auction.
There is no rule or presumption of law that the only means of discharging a duty of reasonable care or of good faith in the sale of property is through sale by auction. To the contrary, what is required by reasonable care and the duty of good faith will depend upon the nature of the property, market conditions and many other circumstances.
There is no evidence to provide any support for an assertion that in this case the failure to sell at auction constituted a breach of any relevant duty.
Murray Riverside submits that 'to [its] knowledge the plaintiff has not progressed the application for subdivision' of one of the Properties.[25] Murray Riverside submits that 'based on' this, the Receivers did not adequately consider the probability that if the estate Properties were sold as ten subdivided super lots, there would have been a greater return.[26]
[25] First defendant's submissions 25 November 2013 [12].
[26] First defendant's submissions 25 November 2013 [13].
The evidence falls well short of providing any foundation for the conclusion invited by Murray Riverside. The fact that as far as Murray Riverside is aware, the Receivers have not progressed the application for subdivision, says nothing about the extent to which the Receivers considered, in the course of selling the Properties, whether a better return would be obtained through progressing a subdivision.
For these reasons, Murray Riverside has not established a serious question to be tried in relation to any breach of duty on the part of the Receivers, or by Westpac as mortgagee.
That conclusion is sufficient to sustain an order for removal of the caveat. Consideration of the balance of convenience reinforces the conclusion that the caveat should be removed. If, contrary to my conclusion, there were a serious question to be tried in relation to a breach of duty in the sale of the Properties, I would nevertheless exercise my discretion under s 138 of the Transfer of Land Act to order the removal of the caveat on grounds of balance of convenience. My reasons for that opinion are set out in the next section of these reasons.
The balance of convenience
Murray Riverside submits that once a caveator establishes an arguable caveatable interest, the court should be slow to order the removal of the caveat, referring to Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd.[27] However, what was said in that case must be understood in the light of what has been subsequently said by the Court of Appeal in Navarac Pty Ltd v Moondancer Holdings Pty Ltd.[28] There is no rule of law that once an arguable case for a caveatable interest has been established that removal of the caveat will only be ordered if circumstances are sufficiently unusual. The discretion must be exercised by reference to the circumstances of the particular case.
[27] Custom Credit Corporation Ltd v Ravi Nominees Pty Ltd (1992) 8 WAR 42, 48 ‑ 50.
[28] Navarac Pty Ltd v Moondancer Holdings Pty Ltd [2009] WASCA 95; (2009) 40 WAR 150 [20], [21], [29].
Murray Riverside submits that Westpac's interest will be protected in that it will continue to be secured as mortgagee. As far as it goes, that may be accepted. However, the bank has been attempting to realise its security in the Properties for more than a year. Although there is no specific evidence in this regard, it is to be inferred that if the caveat is not removed, there is a risk that the contract for sale of the Properties would fall over.
Murray Riverside also points to the protection of Westpac's interest provided by s 140 of the Transfer of Land Act. That section makes a person lodging a caveat without reasonable cause liable to pay compensation to a person who thereby suffers damage. That section does not provide the same protection as an undertaking as to damages, in that a claim for damages only arises if the claimant establishes that the caveat was lodged without reasonable cause. If ultimately the claim to an interest or an estate made in a caveat is not made out, it does not necessarily follow that the caveat was lodged without reasonable cause. A claim based on reasonable grounds will be lodged with reasonable cause.[29] Further and in any event, the financial circumstances of Murray Riverside mean that the potential of a claim against it would provide very little comfort to Westpac. The evidence reveals that Murray Riverside has debts of at least $35 million. There is no evidence of any significant assets apart from the Properties.
[29] Kuper v Keywest Constructions Pty Ltd (1990) 3 WAR 419, 433 ‑ 434; Deputy Commissioner of Taxation v Corwest Management Pty Ltd [1978] WAR 129, 141 ‑ 142.
It is relevant to the balance of convenience that there will be a considerable shortfall in the debt owed by Murray Riverside to Westpac. That means that the delay in the exercise of the power of sale will prejudice the mortgagee by reducing the amount of the debt able to be recovered under the security by the mortgagee.[30]
[30] Bayblu Holdings Pty Ltd v Capital Finance Australia Ltd [2011] NSWCA 39 [39] ‑ [41].
Further, Murray Riverside has not brought to court, or offered to bring to court, an amount sufficient to meet what is owed to the mortgagee, or any sum. Murray Riverside's written submissions of 25 November 2013 contend that the mortgagee's power of sale has been exercised in breach of duty. There is no contention attacking the question of whether the power of sale arises at all. In circumstances where there is no dispute about the validity of the mortgage, the default, and that the power of sale has become exercisable, and the sole dispute is about the manner of exercise of the power of sale, the fact that the mortgagor has not brought the money the subject of debt into court is a factor, often a powerful or perhaps overwhelming factor, against the grant of an injunction or the extension of a caveat.[31]
[31] Bayblu [57] applying Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161.
Further, the claims made by Murray Riverside are, in essence, that Westpac has sold the Properties at an undervalue. If the caveat is removed, it will remain open to Murray Riverside to pursue that claim. It could obtain relief in the form of equitable proceedings to hold the mortgagee to account on the footing of wilful default or to have equitable compensation brought to account between mortgagee and mortgagor.[32] There is no basis to expect any difficulty in executing any resultant judgment against Westpac. Thus, the removal of the caveat will not, in substance, defeat or extinguish the claims the caveat seeks to protect.
[32] See, for example McCourt v National Australia Bank Ltd (No 2) [2010] WASC 151 [74].
Taking into account the matters I have referred to, in my view, the balance of convenience overwhelmingly favours the removal of the caveat.
Conclusion
For these reasons, I would order the removal of the caveat.
7
13
1