New South Wales Supreme Court CITATION : EXPRESS LOANS AND FINANCE PTY LTD v HUNTER & ORS [2004] NSWSC 142 HEARING DATE(S) : 03/03/2004 JUDGMENT DATE : 3 March 2004 JURISDICTION: EQUITY JUDGMENT OF : Bryson J at 1 DECISION : Leave to lodge caveat and immediate injunction are refused. CATCHWORDS : TORRENS SYSTEM - contract authorised lodging caveat but did not expressly or by implication create interest in land - ex parte application for leave to lodge further caveat (after lapse of earlier caveat) refused. LEGISLATION CITED : Real Property Act 1900 - s.74O(2)(a) CASES CITED : Troncone v Aliperti (1994) 6BPR 13, 291, NSWConv.R 55-703 Murphy v Wright 5 BPR 11734, (1992) New South Wales Conveyancing Reports, 55 - 652 Express Loans & Finance Pty Ltd - Plaintiff PARTIES : Wendy Heather Hunter - First Defendant Mark Cummins - Second Defendant Registrar-General of New South Wales - Third Defendant FILE NUMBER(S) : SC 1758/2004 COUNSEL : M. Cashion SC - Plaintiff - ex parte SOLICITORS : Deacons Lawyers - Plaintiff IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BRYSON J. WEDNESDAY 3 MARCH 2004 1758/2004 EXPRESS LOANS AND FINANCE PTY LTD v HUNTER & ORS JUDGMENT 1 HIS HONOUR: I have been asked, in an ex parte application which is the first step taken by the plaintiff in the proceedings, to make one or other of these orders: first, an order granting leave to the plaintiff pursuant to section 74O(2)(a) of the Real Property Act 1900 to lodge a caveat over land in register folio 1/SP67311, of which the first defendant is the registered proprietor; alternatively, to make an injunction restraining the Registrar General from registering any unregistered dealing relating to the land. 2 The plaintiff's claim arises out of a document called Service Agreement and Irrevocable Authority dated 24 March 2003 between the plaintiff and the first defendant. The short effect was that the first defendant retained the plaintiff to assist her in obtaining a loan within terms specified in the document; the document set out material identifying the loan amount and a number of properties which were the security to be offered for the proposed loan. There are seven such properties and the property which I have mentioned is one of them. 3 The document is difficult to follow with respect to what it provides about what has to be done and what conditions have to be fulfilled and what has to happen before the plaintiff becomes entitled to payment of the fee for its endeavours. There appear to me to be internal inconsistencies between clauses 3 and 4 of the document, and overall it is not easy to follow in this respect. 4 However there is evidence prima facie that services were in fact performed and the plaintiff located a loan from an intending mortgagee; and did so several times and made the business opportunities available to the first defendant. 5 The claim to lodge a caveat turns on clause 10 which says, as far as I can read it: "I/we authorise Express Loans and Finance to lodge a caveat on the above security property if the fees as agreed are not paid on demand and will sign all documents as required by Express Loans and Finance to facilitate same." 6 There is no evidence that any supplementary document was signed. The document does not, internally or elsewhere, in any express terms create or purport to create an interest in land or charge any land with the amount of the plaintiff's fees, and the view that the document overall complies with the statutory requirement in section 54A of the Conveyancing Act, 1919 for writing turns not on anything expressed in the document, but on implication from its terms overall. 7 There have been instances where such implications have been made, particularly in the Court of Appeal in decisions in Troncone v Aliperti (1994) 6BPR 13, 291, NSWConv.R 55-703 and its predecessor, Murphy v Wright 5 BPR 11734, (1992) New South Wales Conveyancing Reports, 55 – 652. Both those decisions turn on the view that, with the aid of implication, the documents there under consideration showed an intention to create an interest in land, that is an equitable interest and a charge over land. 8 Troncone v Aliperti proceeded, as each case must, on the construction of the document under consideration, and on the implications which ought to be made when reading it. In that case clause 5 provided: "The debtor authorises the creditors to lodge a caveat on any property owned by the debtors to protect his interest." 9 The judgments in the Court of Appeal show that the document was given a construction in which the grant to creditors of an authority to lodge a caveat on the property carried with it, by implication, such an estate or interest in land as was necessary to enable that authority to be exercised. As Mahoney JA observed, there was no indication of an intention to the contrary. His Honour's view must have been dominated by the terms of clause 5, which were set out in the opening passages of his Honour's judgment, and the statement in clause 5 that the caveat was to protect the creditor's interest. 10 In that case, as in Murphy v Wright, there was not simply a concession of a contractual entitlement to lodge a caveat. There were, with the assistance of implications, indications of an intention to create an interest in land. Mahoney JA's judgment recognises the lack of effect of a simple contractual agreement to allow a caveat to be lodged as the basis for lodging a caveat; that is not within the authorisation for lodging caveats granted by section 74F(1) of the Real Property Act, 1900. 11 The plaintiff's counsel has urged on me that the burden confronting the plaintiff at this stage is to show that there is a reasonably arguable case worthy of interlocutory protection to the effect that the document, on its true meaning and effect, creates an interest in land. 12 In my opinion no such view is reasonably available. In clear and express terms the agreement authorises lodgement of a caveat; nothing else, not the maintenance of the caveat and not a charge over the land or any other means of enforcement; lodgement simpliciter, nothing else. 13 There is no supporting indication in the document, of which the plaintiff was the profferor, of any matter which might support the view that compliance with section 54A and creation of an interest in land were intended. It is contended on behalf of the plaintiff that the agreement would be futile and ineffective if it did no more than it literally provides for. In my mind, this is incorrect. An impediment is placed in the way of a registered proprietor if a caveat is lodged, whether or not the caveat is effective, as its lodgement confronts the registered proprietor with problems and difficulties, whether or not it can be removed. To my mind the correct understanding of clause 10 is that its purpose was to enable the plaintiff to impede and obstruct the defendant's path as registered proprietor, without going any further. 14 There are other aspects of the application which have disposed me against granting immediate interlocutory relief. The caveat proposed would be the third caveat to be lodged by the plaintiff in support of its supposed interest. Service of the lapsing notice for the first caveat was effected by its being sent by registered post to the address specified in the caveat, which was also at that time the registered office of the plaintiff. The plaintiff's evidence is that by the time the notice was posted the plaintiff no longer carried on business at its registered office and had some arrangement, which it appears has failed as well it might, to pick up mail from time to time from the persons who were there. 15 That is to say, according to the plaintiff's case, delivery of the notice miscarried because the plaintiff was not available at the address notified in the caveat, that being its registered office. These circumstances meet with my disapproval, and have disposed me against granting any immediate interlocutory relief. 16 A further matter against immediate interlocutory relief is that the plaintiff, after the lapse of it first caveat, lodged caveat 442940 without obtaining the leave of the Court and contrary to the provisions of section 74O of the Real Property Act, 1900. According to its own case it appears to me that the plaintiff has abused the caveat system, and this too has disposed me against the grant of the application. 17 For the same reasons I am unprepared to make any order restraining the Registrar General from taking any action to register an unregistered dealing. Indeed, I rather think that if it is his statutory duty to take such action, no injunction of that kind should be made. 18 The order is that leave to lodge a caveat and an immediate injunction are refused. I appoint Monday, 8 March 2004 at 10 am before me for return of the summons. I abridge time for service to 4 March 2004. I return the exhibit and the authorities ********** Last Modified: 03/23/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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