Uniting Church v Hill [2005] NSWSC 665

The mortgagee in possession applied for the removal of a caveat over secured land. The lender’s mortgage was registered. It obtained possession by order of the Court and entered into a contract for sale. The caveat prevented the completion of the sale.

The interest claimed in the caveat was a “proprietary interest”. The space in which to state the instrument that gave rise to the interest was left blank. In the space to fill out the facts that gave rise to the interest it stated, “interest granted”.

Justice Campbell stated the test for removal of a caveat

Whether a caveat should be ordered to be removed depends upon, at the time the Court comes to consider the question, whether an interlocutory injunction would be granted to protect the interests claimed in the caveat: Kerabee Park Pty Limited v Daley [1978] 2 NSWLR 222; Martyn v Glennan [1979] 2 NSWLR 234; Gay v Gooden (1989) NSW ConvR 55-445; 70 Pitt Street Sydney v McGurk [2004] NSWSC 413 at [15], Ruxan Pty Limited v Peachme Pty Limited [2004] NSWSC 122.

The caveator did not appear to defend the caveat. The caveator bears the onus of establishing whether an interim injunction (preventing sale) would be justified.

The amount of the mortgage to be recovered from the sale of the land would have exhausted the proceeds of sale. There was no evidence that the lender had notice of any competing interest in the land at the time of registration of the mortgage.

The defendant had not discharged the onus of proof and so Justice Campbell ordered that the caveat be removed. His Honour expressed the Court’s disfavour at people who lodge caveats and make themselves un-contactable.

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