The Supreme Court's recent decision in Taleb v National
Australia Bank Ltd  NSWSC 1562 (Taleb v
NAB) is a reminder for banks and financial institutions to
move promptly to register Real Property Act 1900 (NSW)
(RPA) dealings. In this case, had NAB registered
sooner it would have avoided costly litigation.
The dispute arose from loans by NAB and Mr Taleb to Hock A Car
Investments Pty Ltd (the Company). The key events were as
28 January 2010 - The Company and Mr Taleb entered into a Deed
of Acknowledgment (Deed) recording a substantial debt owing to Mr
Taleb. Under clause 1.3 of the Deed, the Company granted Mr Taleb
the right to register a Caveat over its land (Property).
15 October 2010 - NAB provided the Company with a Bill
Facility, secured by a mortgage over the Property which was
intended to be registered. Searches by NAB revealed no caveats on
26 November 2010 - Mr Taleb recorded a Caveat in respect of the
07 December 2010 - NAB lodged the mortgage for registration.
The Registrar General raised a requisition requiring removal of the
Caveat before registration.
20 December 2010 - the Company defaulted under the Bill
Facility. NAB sought removal of Mr Taleb's Caveat.
Competing Unregistered Interests - Who Won and Why?
NAB's interest took priority.1 Mr Taleb's
delay in lodging his Caveat was unreasonable and fostered NAB's
belief that his interest did not exist when they granted the Bill
However, Bryson JA was scathing as to NAB's delay in
registering their documents. Bryson JA stated that NAB's delay
of seven weeks3 meant that it had not acted prudently in
its own interests, adding that "Registering a mortgage to
secure $1,500,000 should be an urgent project for any
Had NAB registered sooner, it would have avoided the expense of
this litigation. It also would have been able to immediately seek
possession of the Property when the Company defaulted in December,
instead of having to wait until the Caveat was removed.
Bryson JA also queried whether clause 1.3 of the Deed created an
equitable interest in the land in favour of Mr Taleb. His Honour
considered the deed as a whole did not support the creation of an
equitable charge. Hence there was no interest capable of protection
Lessons to Take Away
Be prudent in registering dealings - do not let side issues
clog up the process;
Creditors who seek to rely on clauses in loan or facility
agreements granting a right to caveat should ensure that
the agreement expressly provides the creditor with an interest
to caveat; orthe agreement as a whole clearly provides for the
implication of an interest which can be caveated,
and that stamp duty is paid on the transaction, to be
The assistance of Alec Bombell, Graduate, of Addisons in the
preparation of this article is noted and greatly
1Taleb v NAB at . 2J & H Just (Holdings) v Bank of New South
Wales (1971) 125 CLR 546 at 555. 3The reasons for the delay were largely difficulties
with refunds of stamp duty on the discharge of an earlier
registered mortgage by Hock A Car in favour of Westpac and other
internal delays at NAB. 4Taleb v NAB at .
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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