Hancock v Impresario Enterprises [2013] NSWSC 556

The borrower had defaulted on his mortgage and the bank had taken possession of the security property, and then sold the property to a third party. However after the borrower had first purchased the property, the vendor in that transaction had lodged a caveat on the property on the basis that some of the sale price remained outstanding. That prior vendor was refusing to withdraw the caveat even though the bank were trying to complete the sale of the security property. The bank were concerned that completion of the sale might be jeopardised and asked the Court for an order that the prior vendor withdraw the caveat.

The prior vendor did not come to court, even though he had been told about the court hearing. The judge ordered that the prior vendor provide to the bank a withdrawal of caveat in registerable form within 48 hours, stating:

“ the bank should be able to provide clear title to the purchasers and … the failure of the [previous owner] to provide the withdrawal of the caveat is a threat to the completion of settlement on the due date.”

The judge decided that this was not unfair to the prior vendor, because an earlier agreement reached between he and the bank made it clear that the bank was entitled to proceed with the sale and would be paid any money due to it out of that sale.

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