Perpetual Nominees v Springfield Retail [2009] NSWSC 188

In this case the lender loaned to a company owned by a self-described “property developer” on the strength of two leases, which the lender alleged were fraudulent. The property developer guaranteed the loans. At the time of the hearing the debt on the property was over $4 million and the value of the property was less than $1 million. The lender told the court that it anticipated a shortfall of $3.1 million.

The lender sought a freezing order and in the meantime placed caveats over two properties owned by the property developer. The freezing order was refused on the grounds that the complaint against the property developer was based on past action rather than any evidence he was planning to frustrate the court’s Judgement in the future. So far as the caveats were concerned the court held that the instruments executed by the property developer did not give the lender an equitable interest in the caveated properties. There was a weak argument that perfection clauses in the mortgage and guarantee could be construed as being equivalent to the famous Bransgroves’ charging clause, however the court gave the claim short shrift and refused to extend the operation of the caveats.

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