Lambden & Anor v Merrotsy & Anor [2005] NSWSC 278

New South Wales Supreme Court

CITATION : Lambden & Anor v Merrotsy & Anor [2005] NSWSC 278

JUDGMENT DATE : 8 April 2005

JURISDICTION : Common Law

JUDGMENT OF : Cooper AJ at 1

DECISION : See paragraph 106 - Orders 1 - 7

CATCHWORDS : Joint Tenancy Agreement - Property Transfer - Mortgage Repayment

LEGISLATION CITED : Contracts Review Act 1980

Wayne Richard Lambden & Anor PARTIES : Donald Leslie Merrotsy & Anor

FILE NUMBER(S) : SC 20466

Eric Petersen (Plaintiffs) COUNSEL : Douglas Knaggs (Solicitor) (Defendant)

SOLICITORS : Sautelle White Lawyers (Plaintiffs)

LOWER COURT JURISDICTION : District Court

LOWER COURT FILE NUMBER(S) : No 8 of 2002

LOWER COURT JUDICIAL OFFICER : D Regan (Acting Registrar)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION COMMON LAW LIST

Acting Justice Cooper

8 April 2005

20466 of 2004 WAYNE RICHARD LAMBDEN & ANOR v DONALD LESLIE MERROTSY & ANOR

JUDGMENT

THE BACKGROUND 1 COOPER AJ: The two plaintiffs are husband and wife. Around June 1987 they purchased as joint tenants one-half share of land at Devils Hole Road, Wyndham being Lot 90 in DP 750240. This block of land will hereafter be referred to as the land. 2 The Certificate of Title shows that in June 1987 the plaintiffs were registered as proprietors as joint tenants of a half share and Peter John Cumming and Kathrynn Ann Cumming as joint tenants of the other half share. The two couples held their respective half shares as tenants in common. 3 In about June 1991 Peter John Cumming and Kathrynn Ann Cumming transferred their shares to the first defendant Donald Leslie Merrotsy and Terri Vera Ryan. 4 On about 13 September1994 Terri Vera Ryan transferred her one-quarter share in the property to the plaintiffs. 5 Thus, by this stage the plaintiffs were registered as proprietors as joint tenants of a three-quarter share in the land and the defendant, Mr Merrotsky, was registered as the proprietor of a quarter-share. As between the plaintiffs of the one part and Mr Merrotsy of the other part they were tenants in common. 6 According to the Grant (Annexure A to the affidavit of Mr Lambden) the land had an area of 100 acres. 7 The evidence establishes that there were discussions between the plaintiffs of the one part and Mr Merrotsy (who will be referred to as the defendant) of the other part under which, in due course, they hoped to sub-divide the property so that the defendant would have a parcel of land equivalent to about one-quarter of the total area located in approximately the south-east corner of the land. This proposal never reached finality because there were differences of opinion as to who should pay for the costs of surveying necessary to achieve the registration of the sub-division of the land. However, the defendant did in fact occupy an area roughly equivalent to the south-east corner of the land and the parties kept to their respective sections. 8 In about October or November 1994 the defendant contacted the first plaintiff and told him that he wished to borrow $13,000 from the Bank, that the Bank had asked for security and the only security he had was his interest in the land. The defendant then asked the first plaintiff if he would be agreeable to allowing the Bank to take some form of security over the property. The plaintiff replied that he and his wife were prepared to assist the defendant to raise the loan but they needed to protect their own interest in the property and indicated that they would seek legal advice as to how they could best do so. 9 The Bank concerned, National Australia Bank, also required the plaintiffs to guarantee the loan to the defendant such guarantee being secured by a Mortgage over their interest in the land. 10 In about November 1994 the plaintiffs consulted their solicitor, Mr White, telling him that they were prepared to assist the defendant but they required some form of security in the event that the defendant defaulted in repaying the loan to the Bank. 11 The defendant had advised the plaintiffs that his solicitor was Mr Michael Britten of Merimbula. This information was passed on to Mr White. 12 On about 24 November 1994 Mr White contacted Mr Britten, told him that he was acting for the plaintiffs and that they were concerned to arrange a form of security in the event that there was a default by the defendant resulting in their becoming liable under the guarantee. 13 On 24 November 1994 Mr Britten wrote to Mr White saying:- "I refer to the telephone conversation with you and would advise that I have the loan approval from the National Australia Bank for $13,000 and would appreciate your advice as the way in which your clients, Mr & Mrs Lambden, wish to arrange their security as previous discussion by phone." (See Annexure A to Exhibit C.) 14 By letter dated 2 December 1994 Mr White forwarded to Mr Britten a draft Deed for his client's consideration. 15 On 7 December 1994 Mr Britten replied referring to the draft Deed and seeking amendments to be made as shown in the attached copy. He added that the finalisation of the matter by 9 December 1994 would be appreciated. 16 On 14 December Mr White wrote to Mr Britten a letter the relevant parts of which are:-