Guardian Loans Pty Ltd v FTFS Holdings Pty Ltd & Ors [2009] NSWSC 1163

New South Wales Supreme Court

CITATION : Guardian Loans Pty Ltd v FTFS Holdings Pty Ltd & Ors [2009] NSWSC 1163

HEARING DATE(S) : 21 October 2009

JUDGMENT DATE : 3 November 2009

JURISDICTION : Equity Divisioin

JUDGMENT OF : Palmer J

DECISION : Operation of caveat extended.

CATCHWORDS : REAL PROPERTY – CAVEAT – Plaintiff is second unregistered mortgagee – Second Defendant is registered first mortgagee – whether caveat protecting second unregistered mortgage bad in form because prohibits "any dealing" – effect and construction of s 74H(5)(g) Real Property Act – whether caveat should be extended – discretion.

LEGISLATION CITED : - Real Property Act 1900 (NSW) – s 74F(1), s 74F(5), s 74H(1), s 74H(5), s 74J, s 74K, s 74M

CATEGORY : Principal judgment

CASES CITED : - Business Australia Capital Mortgage Pty Ltd v Randwick Nominees Pty Ltd [2004] NSWSC 643 - Tadrous v Tadrous [2009] NSWSC 407

Guardian Loans Pty Ltd (Plaintiff) PARTIES : FTFS Holdings Pty Ltd (R&M App) (First Defendant) Suncorp-Metway Ltd (Second Defendant) Abeeda Khan a.t.f. Khan Family Trust (Third Defendant

FILE NUMBER(S) : SC 4732/09

COUNSEL : M.J. Bleasel (Plaintiff) N.J. Kidd (First & Second Defendants)

SOLICITORS : The Law Company Pty Ltd (Plaintiff) Allens Arthur Robinson (First & Second Defendants)

4732/09 Guardian Loans Pty Ltd v FTFS Holdings Pty Ltd & Ors

JUDGMENT

3 November, 2009

1 This is an application under s 74K Real Property Act 1900 (NSW) for an order extending the operation of a caveat. 2 The Plaintiff ("Guardian") is the unregistered second mortgagee of a commercial property in Ramsay Road, Fivedock. The First Defendant ("FTFS") is the registered proprietor of the property. The Second Defendant ("Suncorp") is the registered first mortgagee of the property. 3 The facts relevant to this application are not in dispute. 4 On 14 April 2004 FTFS executed a mortgage over the property in favour of Suncorp, together with a fixed and floating charge, securing an advance in excess of $7M. The mortgage and charge were duly registered. 5 On 8 March 2006, FTFS executed a mortgage over the property in favour of Guardian, securing a loan of $214,000. FTFS consented to the lodgement by Guardian of a caveat against the title to the property and a caveat was lodged shortly afterwards. 6 On 29 June 2006, Suncorp and Guardian entered into a Deed of Priority. The Deed gave priority to Suncorp's securities over Guardian's securities for the whole of Suncorp's debt and interest, together with any further advances to be made in order to complete "the Project" being developed on the property. 7 Clause 11.2 of the Deed of Priority relevantly provides: "Notwithstanding anything to the contrary contained elsewhere in this Deed the Mortgagee and the Bank agree as follows: