Wells Corporation Pty Limited v Akkari [2012] NSWSC 323

Supreme Court New South Wales

Medium Neutral Citation: Wells Corporation Pty Limited v Akkari [2012] NSWSC 323 Hearing dates: 14 March 2012 Decision date: 14 March 2012 Jurisdiction: Equity Division - Duty List Before: White J Decision: 1. Order that the defendant pay the plaintiff's costs of the proceedings. 2. Exhibits are to be dealt with in accordance with the practice note. Catchwords: REAL PROPERTY - caveats - application for further extension of caveat - caveator entitled to equitable mortgage - no evidence of detriment suffered by caveat's remaining lodged over the title - risk that security could be reduced or defeated by dealings in favour of a third party - summons did not require a claim for final relief where caveator did not seek to enforce mortgage and no dispute that a mortgage was given Legislation Cited: Contracts Review Act 1980 Cases Cited: Waco Kwikform Ltd v Jabbour [2010] NSWSC 1379 Category: Principal judgment Parties: Wells Corporation Pty Limited (Plaintiff) Joumana Akkari (Defendant) Representation: Counsel: P Finch (Plaintiff) M Dulhunty (Defendant) Solicitors: Lawson Plowes Lawyers (Plaintiff) File Number(s): 2012/58766

Judgment 1HIS HONOUR: This is an application for a further extension of a caveat. 2In the caveat the plaintiff claims an interest as mortgagee under a mortgage dated 11 May 2011 between it as mortgagee and the defendant as mortgagor. The defendant is the registered proprietor of the property in respect of which the caveat has been lodged. 3There does not seem to be an issue that on or about 11 May 2011 the defendant signed an instrument of mortgage over her home in [xxxxx xxxxxx], Punchbowl. 4The issue raised in relation to the mortgage is that it is said that the defendant is entitled to have the mortgage set aside either on principles of unconscionability, or the statutory provisions which give relief against unconscionable transactions, or pursuant to the Contracts Review Act 1980. 5The defendant deposed that her former husband looks after her financial affairs and those of their family. She said that she had heard nothing about the transaction which led to the giving of the mortgage over her home. 6The evidence of the defendant's former husband is to the effect that representations were made by the director of the plaintiff to him in November 2010 that induced him to cause a company called Capama Group Pty Ltd to enter into a contract for the purchase of land at [xxx xxxxxxx xxxx], Dulwich Hill. 7It is said that the plaintiff's director made representations to the effect that the adjoining owner of two properties was willing to transfer those properties so that a block of units could be built on the combined titles on the basis that the adjoining owner would take five units after construction of the development. 8The defendant's former husband says, in substance, that he relied on that and associated representations in arranging for Capama Group Pty Ltd to enter into a contract to purchase the property. The making of the representations is disputed. 9The sale to Capama Group Pty Ltd did not proceed. 10At a time which is clearly after the defendant's former husband became aware that the adjoining owner was not prepared to proceed in the way allegedly represented, the contract with Capama Group was rescinded. A new contract was entered into with Rockland Property Group Pty Ltd which is a company of which the defendant is a director and shareholder. 11The contract with Rockland Property Group was entered into on 11 May 2011. 12Vendor finance was provided to the extent of $150,000. That vendor finance is secured not only by a second, and apparently unregistered, mortgage over the Dulwich Hill property, but also over the unregistered mortgage over the defendant's home which is the subject of the caveat with which I am now concerned. 13The mortgage produced by the plaintiff shows a signature of a witness being the solicitor who acted for the purchaser on the purchase of the property. The plaintiff also produced a statutory declaration apparently signed by the defendant and apparently witnessed by the solicitor declaring that she was the mortgagor and making declarations in relation to there being no rates or other sums due in respect of the property and no specified matters that affected it. 14I understand from the submissions of counsel for the defendant that it may be contended that the solicitor did not, in fact, witness either the mortgage or the statutory declaration. 15Copies of a mortgage and statutory declaration in the same terms have been tendered signed by the defendant which are unwitnessed. Presumably it would be the defendant's evidence that she signed those documents at the request of her husband. She deposes that he told her that "It is okay for you to sign this. George has assured me that everything would be okay" or words to that effect; "George" being the plaintiff's director. 16However, the defendant does not say that the solicitor did not witness her signature. Nor does she say in her affidavit that she received no explanation about the transaction from a solicitor or anyone else. 17There is no evidence on this application that the plaintiff was aware of any disability under which the defendant might have suffered. Nor is there any evidence on this application that the plaintiff took unconscionable advantage of any such disability if it existed. 18On an application for extension of caveat, the question is, first, whether there is a serious question to be tried that the caveator is entitled to an interest in the property. 19Clearly, there is such a serious question in the present case. 20The prima facie position is that the plaintiff is a mortgagee of the property. 21The materials presented on this application do not raise a serious question that the mortgage is liable to be set aside, although it is possible if further evidence were adduced that there may be a serious question about that matter. 22Even if such a serious question were raised by additional evidence not adduced on this application, the question would still be where the balance of convenience lies. There is no evidence from the defendant that she would suffer any detriment by the caveat's remaining lodged over the title. 23On the other hand, if the caveat is not extended the plaintiff would be at risk that its security as an unregistered mortgagee could be reduced or defeated by any dealings in favour of a third party. 24For these reasons, the caveat should continue. 25Orders were made by Nicholas J on 24 February 2012 that the caveat be extended until further order. That order was made by consent. A timetable was laid down for the defendant to file evidence and the plaintiff to file evidence in reply in respect of the plaintiff's claim to extend the caveat. 26In those circumstances I have proceeded on the basis that the plaintiff has the onus of showing why the caveat should be extended. That onus is comfortably discharged. 27Having regard to the order made on 24 February 2012, no further order in that respect is required. 28The summons does not seek any substantive final relief other than an order extending the caveat until further order. 29In many cases a plaintiff seeking extension of a caveat is required to make a claim for the final relief to make good the interest which is the subject of the caveat. However, in the present case when there is no issue but that an instrument of mortgage was given by the defendant to the plaintiff over the property, and where the plaintiff is not seeking to exercise any powers as mortgagee, I do not think that it was incumbent on the plaintiff to claim other final relief (Waco Kwikform Ltd v Jabbour [2010] NSWSC 1379 at [60]-[62]). 30In the circumstances I think the appropriate course is simply to make no further order save any order that might be made as to costs. [Counsel addressed.] 31Order that the defendant pay the plaintiff's costs of the proceedings. 32The exhibits are to be dealt with in accordance with the practice note. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 April 2012