We acted for 2 elderly beneficiaries under a will bequeathed interests in land of an estate which was transferred to the wife of the executor that died intestate by a Transmission Application. The wife and her daughter then obtained loans against the property (unbeknown to our clients whom were the only surviving children of the testator and had lived in the property and built on the land for many years).
The property was refinanced several times, for the sole benefit of the wife’s daughter. The mortgagee commenced possession proceedings and there were many cross claims consisting of 14 parties, including 3 major lenders, 5 lawyers, insurance companies, mortgage brokers, and various extended family members of our clients.
We sought to bring proceedings for breach of trust against the wife and professional negligence claim against her then lawyer. Several defences were applicable against the successive lenders such as under the Contracts Review Act, but the biggest hurdle was the clients were not a party to the contracts or on title.
We argued the lenders had constructive notice of our client’s proprietary interests by way of the Transmission Application; this also required that the executor had completed the executorial duties so that our clients had a vested interest in the land pursuant to the will. After thrashing many ideas with Counsel and researching a plethora of cases to support our arguments we finally commenced a joinder application in the Supreme Court and submitted that our clients had a right to be joined to the proceedings and defend the claim by the lender on the following grounds:
1) Personal equities,
2) Unconscionable Conduct,
3) Contracts Review Act ,
We were unsuccessful at first instance in the Supreme Court Joinder application. However, we sought and were successful with the leave application, to the Court of Appeal. After the Court of Appeal heard the matter it was obvious that we would succeed on judgment.
This Court of Appeal judgment would have had a devastating effect to many mortgages in NSW and been a huge benefit to many people in the community. As a result the bank decided to count its losses to avoid the judgment thus the handing down of the Court of Appeal judgment was adjourned 3 times to allow a settlement which was reached to be finalised, and the clients were able to retain their interests in the property.
Since then we assisted the clients further with the necessary steps and they are now registered on title to the property.