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  • Unreported Judgment

In the Matter of “The Real Property Acts 1861 to 1976”

 

[1980] FC 85

IN THE SUPREME COURT OF QUEENSLAND

O.S. No. 554 of 1980

IN THE MATTER of “The Real Property Acts 1861 to 1976”

- and -

IN THE MATTER of an Application by the COMMONWEALTH SAVINGS BANK OF AUSTRALIA

JUDGMENT - WILLIAMS J.

This is an application by way of originating summons brought by the Commonwealth Savings Bank of Australia for an order that the respondent, Raymor (Brisbane) Pty. Limited do show cause why caveat no. G1160 lodged in the office of the Registrar of Titles at Brisbane by the respondent should not be removed.

The facts are in reasonably short compass and for the purpose of deciding this application there is no dispute upon theme by a contract dated 27th March 1980 T.F. & R.A. Sanders as joint tenants agreed to sell to J.H. & Y.G. Clark the land contained in Certificate of Title Volume 4963 Folio 221. The applicant agreed to advance to the purchasers moneys on the security of a Bill of Morgage to enable them to settle the sale. The date for completion of the contract of sale was 30th April 1980.

On 15th April 1980 the applicant bank searched in the office of the Registrar of Titles the relative Certificate of Title and found that there were no encumbrances save a registered Bill of Mortgage in favour of the Australian Guarantee Corporation Limited. On the day of settlement, namely 2nd May 1980 the applicant again searched the title and confirmed that there were no encumbrances save the mortgage above referred to. On that day then the parties to the contract of sale and the applicant bank took part in the completion of the sale, the bank taking the relative duplicate Certificate of Title, a Bill of Mortgage duly discharged by Australian Guarantee Corporation Limited, together with Memorandum of Transfer in registrable form.

On the next working day, namely 6th May 1980 the respondent lodged a caveat under s. 98 of the Real Property Act of 1861 against the land contained in the Certificate of Title claiming under and by virtue of a certain Instrument of Guarantee executed by T.F. Sanders, the male vendor, whereby Sanders gave an equitable mortgage to the respondent caveator for the following purpose in these terms:

“To secure payment of any moneys outstanding I charge all my property both real and personal with the amount of my indebtedness until discharged”.

The caveat was lodged by the respondent who claimed an estate or interest in the fee simple of Mr. Sanders' interest in the land. It seems clear that the respondent at no relevant time had possession of the duplicate Certificate of Title which had been held originally by Australian Guarantee Corporation Limited until its mortgage was redeemed, whereupon it came into the possession of the applicant bank.

On 14th May 1980 the applicant bank lodged the Memorandum of Transfer together with its mortgage in the office of the Registrar of Titles for the purpose of having both registered. This brought forth from the Registrar notice that the caveat had been lodged on 6th May 1980.

Arising out of those facts counsel before me agreed that for the purposes of this application I should proceed on the basis that the respondent caveator had an equitable interest in the land; that such equitable interest was not in registrable form and could not have been registered in the office of the Registrar of Titles; that such equitable interest as the caveator held, entitle it to lodge a caveat; and finally, that that equitable Interest was created prior to the creation of the applicant's interest in the land. It was further conceded that the applicant's interest, although capable of registration was at all relevant times an equitable interest in the land which carried with it the duplicate Certificate of Title, which certificate had been duly obtained from the previous registered mortgagee, Australian Guarantee Corporation Limited on the redemption of its mortgage. It was further conceded that there are presently proceedings before the Court between the respondent caveator and the original vendors of the land, T.P. & R.A. Sanders for a declaration that the caveator has a valid equitable interest over lands including the subject land.

Counsel further agreed that within the framework of the Real Property Act there were no steps vis à vis the Registrar of Titles which the caveator could have taken to compel the Registrar of Titles to act so as to notify by memorial note on the Certificate of Title the nature of such claim or interest which, had it been so noted, could have constituted notice to any searcher that a claimant of an unregistrable equitable interest in the land did exist.

On those facts and concessions, it seems clear to me that this application must fail. As has been said so many times, the effect of a caveat is nothing more than a statutory injunction to keep property in statu quo until the Court has the opportunity of discovering what are the rights of the parties. (See Owen J. in Re Hitchcock 17 W.N. N.S.W. 62.) It was somewhat faintly argued that the conduct of the caveator disentitled it to the advantage of priority in time which its equitable Interest had taken over the competing equitable interest of the applicant. It was contended that it had an obligation to inform the Australian Guarantee Corporation Limited of its interest so that on the discharge of the debt to that company, that company would not hand over the duplicate certificate of title without notifying the respondent. It was further argued that it is the duty of the a mortgagee once its debt has been redeemed to deliver the duplicate Certificate of Title to any second mortgagee. Authority for this proposition was said to be contained in the passage in Hanbury and Waldock's Law of Mortgages at p. 229 and in Corbett v. National Provident Institution (1900) 17 T.L.R. 5. Examination of that text and the authority in question would have considerably more bearing on the present case had there been any notice given to the Australian Guarantee Corporation, Limited of the existence of the respondent's equitable interest. No such notice had been given or could be imputed.

There was in my view no obligation on the respondent to lodge a caveat in order thereby to give notice of its interest in the land to persons dealing subsequently with the land. Clear authority for this proposition appears in J. & H. Just (Holdings) Pty. Limited v. The Bank of New South Wales & Ors. 125 C.L.R. 546 at 556 and at 558. It is there clearly stated that the purpose of a caveat is protective and not to give notice and the failure to lodge a caveat cannot be converted into a representation or as a basis for a conclusion that no equitable interest in the land existed in any person. (See Barwick C.J. at p. 556.)

It was contended that nothing turns upon the delay of the applicant bank from 6th to 14th May in lodging its documents for registration. What practical effects that had may well be demonstrated by the words of Lilley C.J. in In Re Scanlan 3 Q.L.J. 43 at p. 45 where he said:—

“The plain practical precaution for a purchaser is to have the Certificate of Title and Memorandum of Transfer deposited in the registry by the vendor, and to ascertain that there is no caveat there before he pays his purchase money. The same care should be observed in mortgage and other transactions under the Act. People cannot learn too soon that dealings outside and without reference to the registry are hazardous.”

I can see nothing in the facts as they have been presented to me which would justify a finding that the respondent has done anything to forfeit the priority it obtained by being first in time. As Dixon J. said in Lapin v. Abigail 44 C.L.R. 166 at 204, a passage cited with approval by Barwick C.J. in the Just (Holdings) Case (supra) at p. 552:—

“There was no act or default to make it inequitable as between the plaintiff (respondent) and the defendant (applicant) that it should retain its initial priority.”

As was said many years ago in Ex parte: Hodgson 3 S.C.R. (Q) 158 by Cockle C.J.:—

“The onus probandi is upon those who seek to withdraw (i.e. to remove) a caveat, but this onus must not be confused with the burden of proving a title. If a caveator's title is displaced the person who takes out the summons must succeed. There must be a colourable title shown by the caveator, that is a fairly arguable title such a title as the Court or a Judge will not undertake to dispose of summarily.”

On the facts as stated and as conceded, the respondent caveator at this point of time must be taken to have “a fairly arguable title”, which should be tested in the pending action between the caveator and T.F. & R.A. Sanders. In my view the application should be refused.

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Editorial Notes

  • Published Case Name:

    In the Matter of “The Real Property Acts 1861 to 1976”

  • Shortened Case Name:

    In the Matter of “The Real Property Acts 1861 to 1976”

  • MNC:

    [1980] FC 85

  • Court:

    QSC

  • Judge(s):

    Williams J.

  • Date:

    01 Jan 1980

Litigation History

No Litigation History

Appeal Status

No Status