Kyabram Property Investments Pty Ltd & Anor v Murray [2005] NSWSC 1202

New South Wales Supreme Court

CITATION : Kyabram Property Investments Pty Ltd & Anor v Murray [2005] NSWSC 1202

HEARING DATE(S) : 23 and 24 November 2005

JUDGMENT DATE : 24 November 2005

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Rectification ordered

CATCHWORDS : CONTRACT – MORTGAGE – RECTIFICATION – When common intention of parties miscarried in terms of document executed.

Conveyancing Act 1919 (NSW) – s.88K LEGISLATION CITED : Real Property Act 1900 (NSW)

- Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] Ch 171 CASES CITED : - Leda Holdings Pty Ltd v Oraka Pty Ltd [1999] FCA 444 - Pukallus v Cameron (1982) 180 CLR 447

Kyabram Property Investments Pty Ltd – First Plaintiff PARTIES : Banksia Securities Ltd – Second Plaintiff Wendy Jill Murray - Defendant

FILE NUMBER(S) : SC 5219/05

D.R. Conti SC, P.G. Bolster – Plaintiffs COUNSEL : J.R. Wilson SC – Defendant

Kell Moore – Plaintiffs SOLICITORS : McKells – Defendant

LOWER COURT JURISDICTION :

1 The Plaintiffs are the first and second mortgagees respectively under mortgages given by the Defendant in July 1997. The Plaintiffs seek rectification of the mortgages so as to include the titles to certain land owned by the Defendant which the Plaintiffs say were not included in the mortgages by mistake. The Defendant denies that there was any operative mistake justifying rectification. 2 There is no dispute as to the essential facts. 3 By a contract dated 10 November 1993, the Defendant acquired from companies controlled by her parents a property at Breeza near Gunnedah. There were twenty-four separate lots comprised in the sale, forming one large parcel of land. The title to twenty-one of the lots, representing by far the major part of the land sold, was under the Real Property Act 1900 (NSW) and title to three small lots was Old System land. The property is described in the contract as having a total area of approximately 733 hectares. The description of the area of the property varies slightly in various documents which are relevant in the case but it is clear enough that the total area of the property which was the subject of the sale is slightly more than 730 hectares, which is the area of the twenty-four lots under both Real Property Act title and Old System title. 4 Part of the property transferred under the contract was the right to a bore licence number BL 130617. That licence conferred the right to extract water to supply the land the subject of the contract. The bore was situated on one of the small portions of the land under Old System title. 5 The property the subject of the contract had formerly been owned by a company called Boala Pty Ltd. After the Defendant completed the purchase of the property from her parents' companies pursuant to the contract in November 1993, she and her husband registered the business name "Boala Station". The Defendant says in evidence that she intended that name to describe the property which she had acquired under the November 1993 contract, that is, the Real Property Act land and the Old System title land. 6 In October 1994, the Defendant wished to borrow money from the National Australia Bank on the security of Boala . By a letter to her solicitors dated 4 October 1994, she instructed them to send, "my 'Boala' title deeds" to the National Australia Bank. In compliance with that instruction, on 7 October 1994 the Defendant's solicitors sent to the National Australia Bank the documents of title relating to all of the lots which the Defendant had purchased under the November 1993 contract, that is, the certificates of title for the Real Property Act land and the Deeds of Conveyance of the Old System title land. The National Australia Bank prepared a mortgage. For some reason, which is not explained, the mortgage referred only to the Real Property Act land. 7 In 1997, the Defendant wished to borrow further funds for the acquisition of another property. She instructed finance brokers to seek finance. 8 On 30 May 1997 the finance brokers wrote to the Plaintiffs seeking a loan of $2M. The security offered was over two properties. One was to be a registered mortgage over the new property to be purchased. The other security was described thus, "1st registered mortgage over 'Boala'" and then followed this statement: "Bob & Wendy Murray are the son-in-law and daughter of Ross Duddy (brother of Eric Duddy) and currently operate a dryland farm on Breeza Plains called 'Boala' which was formerly part of 'Breeza Station'.