Warden v Mortgage House No 1 Pty Ltd & Anor [2006] NSWSC 1462

New South Wales Supreme Court

CITATION : Warden v Mortgage House No 1 Pty Ltd & Anor [2006] NSWSC 1462

HEARING DATE(S) : 5 October 2006 JURISDICTION : Equity Division

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 10/05/2006

DECISION : Order that caveat be withdrawn

CATCHWORDS : REAL PROPERTY - Torrens Title - Caveats against dealings - removal by court order - formal requirements - insufficiency of claim of "equitable interest" - whether application by borrower of funds to pay stamp duty gives lender equitable interest - held it does not - balance of convenience - where equity in property exhausted by higher priority claims

LEGISLATION CITED : Real Property Act 1900 (NSW), ss 74L, 74MA Real Property Regulation 2003 (NSW), reg 47; Sch 3, Item 1

Circuit Finance Pty Ltd v Crown & Gleeson Securities Pty Ltd (2006) NSW ConvR 56-143 CASES CITED : Hanson Construction Materials Pty Ltd v Vimwise Civil Engineering Pty Ltd [2005] NSWSC 880 Martyn v Glennan [1979] 2 NSWLR 344

Raymond Warden (plaintiff) PARTIES : Mortgage House No 1 Pty Ltd (first defendant) Insite Property Developments Pty Ltd (second defendant)

FILE NUMBER(S) : SC 5173/06

J R Young (plaintiff) COUNSEL : M Southwick (first defendant) M Sneddon (second defendant)

Veritas Legal (plaintiff) SOLICITORS : Macquarie Lawyers (first defendant) Barrak Lawyers (second defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRERETON J

Thursday 5 October 2006

5173/06 Warden v Mortgage House No 1 Pty Limited & Anor JUDGMENT (ex tempore) 1 HIS HONOUR: The defendants Mortgage House No 1 Pty Limited and Insite Property Developments Pty Limited are the registered proprietors of three lots situate at 343-347 Great Western Highway, Wentworthville, on which stands a Hungry Jacks outlet. In December 2004, following a telephone conversation between the plaintiff Raymond Warden and his cousin Raymond Sleiman, Mr Warden had a conversation with one Joseph Abboud, who is the sole director and shareholder of Insite. Mr Abboud was seeking short term funding for the purchase of the Hungry Jacks property at Wentworthville. As a result of the conversation Mr Warden agreed to advance to Mr Abboud the amount required to pay stamp duty on the purchase of the property. 2 On 22 December 2004, Mr Warden purchased a bank cheque in favour of the Office of State Revenue in the sum of $98,446.13. In his cheque book he described it as "Close loan to Joe Abboud". It appears that stamp duty on the transfer of the Wentworthville properties from Patricia Harmon McDowell to the defendants was paid on 23 December 2004, which is also the date of the two transfers, one of Lot 1 DP 658185 and Lot 9 DP 1037917, and the other of Lot 2 DP 658186, for a total price of $4 million. 3 The advance to Mr Abboud was not repaid in accordance with the terms on which Mr Warden insisted it be repayable. In due course he instructed solicitors who, on 12 October 2005, obtained a search of the properties and discovered that they were registered not in the name of Mr Abboud personally, but in the name of the defendants. On 18 November 2005, Mr Warden lodged a caveat, claiming an "equitable interest" said to arise by virtue of an instrument, unspecified but dated 22 December 2004, between the caveator Raymond Warden as lender, Joseph Abboud as borrower, and the registered proprietors, and by virtue of the fact that "the Caveator lent money to Joseph Abboud who used such monies to pay the stamp duty for the purchase of the property known as Folio Identifier 1/658185 by the Registered Proprietors". This caveat was registered on the title only of Lot 1 DP 658185, as dealing No AB923895.