Hi, Can you give me some advice please...I am employed in…

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Hi, Can you give me some advice please...I am employed in…

Hi, Can you give me some...

Hi,
Can you give me some advice please...I am employed in a business that has been adversely affected by the commodity down turn, the company has a consumer debt with a supplier that has extended over trading terms. The company has been paying instalments of the debt on a weekly basis, as cash flow determines, they have been accepting these payments over a period of 4 months without complaint. They have now processed a caveat on my property lodged by the supplier holding a direct interest on my property, The company was in the process of applying for a loan over the equity in this property to repay the supplier debt as I am married to the director of the company (thus has been denied as the caveat is held over it now.
I have been online reading material with regards XXXXX XXXXX (its a bit confusing)
I am trying to determine if they have processed the caveat correctly.

Do they have to formally notify you by law (written) that a caveat is to be lodged
prior to receiving the caveat from the lands dept.
Is the property directly of interest to their interest as these are unrelated.
I have signed a consumer credit guarantee for the credit application (as above) as I am only a employee of the company affected (not a director) does this hold me liable as I did not fully understand the liabilities when signing.

We want to repay the outstanding debt in full and was in the process of lending the money but cant now as they have lodged a caveat.
Once the caveat is removed we can try again.

Has the supplier followed the legal procedure with lodging the caveat, as we are looking at ways of having it removed so we can get finance to repay the debt.

Thanking you.
CG

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Answered in 1 minute by:

4/8/2014

Solicitor: James D. Ford, Solicitor replied 6 years ago

James D. Ford, Solicitor

Category: Australia Law

Satisfied Customers: 1,601

Experience: Lawyer | Founder & CEO at Blue Ocean Law Group

Verified

Brisbane.Lawyer : Hi, just reading your query ...

Brisbane.Lawyer : No notice is required before a caveat is lodged. Although all interested parties (including the bank who holds security over the property) must be notified by the Titles Office when the caveat is lodged.

Brisbane.Lawyer : In order to lodge a caveat on a property, the party who lodges must hold a caveatable interest.

Brisbane.Lawyer : The caveat has been lodged without your consent, and as such will lapse in 3 months. The other party must commence legal proceedings within this timeframe.

Brisbane.Lawyer : I need to see a copy of the caveat to understand whether they have made a mistake in describing their caveatable interest, and who has signed the caveat.

Brisbane.Lawyer : It will also depend upon the agreement between your company and the supplier ... and your guarantee.

Brisbane.Lawyer : The caveat must refer to what is known as a "charging clause" ...

Brisbane.Lawyer : And the "charging clause" needs to be contained within your agreement \guarantee with the supplier, and specifically referred to by the Caveat.

Brisbane.Lawyer : If there is no caveatable interest, you may apply to have the Caveat removed.

Brisbane.Lawyer : This chapter of the Land Titles Practice Manual discusses in detail how Caveats work in Qld.

Brisbane.Lawyer : https://www.dnrm.qld.gov.au/__data/assets/pdf_file/0003/97149/ltpm-part-11.pdf

Brisbane.Lawyer : I can assist you (as an additional service) to determine whether the interest is a caveatable interest, and if not to make an application to the Supreme Court to have it removed.

Brisbane.Lawyer : Pursuant to s 127 of the Land Title Act 1994 or 389H of the Land Act 1994, a caveatee may apply at any time to the Supreme Court for an order that a caveat be removed. The caveat remains in force until the matter is determined by the court or the caveat is withdrawn.

Brisbane.Lawyer : I have just working on another query. Please be patient if it takes me a few minutes to respond to you. Kind regards, James.

Customer:

Thank you, XXXXX XXXXX looked at a copy of the Guarantee, and it states the following..

Customer:

Each guarantor hereby charges with payment of the monies and the compliance with all obligations secured by this guarantee all beneficial interests (freehold and leasehold) in real property held now or in the future by the guarantor. each guarantor agrees that if demand is made upon him or her or it by the company, the guarantor will immediately execute a mortgage (the terms of such mortgage as determined by the company) or other instrument of security, or consent to a caveat, as requested by the company to better secure the obligations of the guarantor under this guarantee and against the event that he, she or it fails to do so within a reasonable time from being so requested, that guarantor hereby irrevocably appoints the company and any agent or solicitor of the company to be the guarantor 's true and lawful attorney to execute and register such instrument.

Brisbane.Lawyer : OK, that would be the "charging clause". Has this clause been referred to in the Caveat?

Customer:

it does state charges in the above, but does no refer to a clause (Chargeable clause), on the back sheets of the guarantor forms is a list of clauses , the charge clause runs through from 20.1 to 21.7 but does not specify.

Customer:

Hope this helps

Brisbane.Lawyer : The law regarding personal guarantees is complex, and a small mistake can void the personal guarantee.

Brisbane.Lawyer : It is hard for me to advise specifically without seeing the actual documents.

Brisbane.Lawyer : Does the Caveat refer to the "charging clause" as the basis on the caveatable interest?

Brisbane.Lawyer : Did all guarantors who were supposed to sign, for example, actually sign? If one did not, then all of the personal guarantees are void.

Customer:

My wife has the copies of the caveats , but she is in Brisbane for a couple of days and I work away so I cant refer as yet, I don't think by memory it did state the chargable clause, but I cant be sure.

Brisbane.Lawyer : You can ask her to email a copy of everything to me [email protected] with subject: attention - brisbane.lawyer.

Brisbane.Lawyer : I will await the email, and can get back to you tomorrow.

Brisbane.Lawyer : Just stepping away for a few minutes ...

Brisbane.Lawyer : I am back.

Brisbane.Lawyer : Now on another query again. I will refer back shortly, as I see you are typing ...

Customer:

sorry I do have the actual copy of the document guarantee it is unsigned, I have tried to contact my wife with who's signatories are on the documents she will get back to me in 5 she has just landed in Brisbane.

Customer:

I have emailed that document to you

Brisbane.Lawyer : Great. I await the further information from you, and we can continue tomorrow, if that is OK with you?

Customer:

Both myself and my wife have received caveats, but I am the only signatory on the guarantee.

Brisbane.Lawyer : Was your wife supposed to sign the guarantee as well ?

Brisbane.Lawyer : If your wife is a co-owner of the property, this is why she will have received a copy of the caveat.

Brisbane.Lawyer : Chat tomorrow. Cheers, James.

Brisbane.Lawyer :

I confirm I received your email, however will need to chat with you about it tomorrow as I have other commitments this afternoon.

Brisbane.Lawyer :

I will look at it overnight, and post to this chat tomorrow. Cheers, James.

Brisbane.Lawyer : Hi, it appears that the guarantee is defective. Regardless the Caveat having been lodged on 17 Jan (assuming it was not consented to) will automatically expire after 3 months; i.e., 17 April in less than a week.

Brisbane.Lawyer : As the guarantee has both your names, but only has 1 signature constitutes grounds that it is defective, and insufficient to support a caveat.

Brisbane.Lawyer : I await your response so we can determine next steps.

Brisbane.Lawyer : Please let me know if you want me to assist with an application to have the Caveat removed, if another one is lodged once the current one lapses.

Brisbane.Lawyer : Kind regards, James

Customer:

Morning James,

Brisbane.Lawyer : Good morning ...

Brisbane.Lawyer : Just stepping away for 2 minutes ...

Brisbane.Lawyer : I am back ...

Customer:

sorry james I have had a run of customers in the shop,

Brisbane.Lawyer : All good, I am multi-tasking as well.

Customer:

We are a little confused to what happens now we are just awaiting their response to see what we do from here, the caveat expired yesterday.

Customer:

Have you found a problem with the guarantee

Brisbane.Lawyer : Yes, it has both your names at the top, and only 1 signature.

Customer:

sorry yes the caveat expires next week

Brisbane.Lawyer : I need to look more closely at the guarantee, to be sure ... as it may be drafted in such a way to address this situation.

Brisbane.Lawyer : I will do so, if they lodge another Caveat, and you request my assistance to apply to have the Caveat removed.

Customer:

so we can act to have the caveat removed, we just want to clear the debt by borrowing from the bank, my wife has spoken to the NAB and there are saying this will be difficult now to borrow with these circumstances

Brisbane.Lawyer : Yes, best to talk with them.. and explain that the Caveat is making it difficult for you to sort out finance to pay them back ... and request they cease any attempt to lodge another Caveat for a certain time period to allow you the opportunity to pay them what they are owed.

Brisbane.Lawyer : If they persist, and lodge another Caveat to replace the lapsing one. Please contact me immediately, and I will look at the guarantee more closely to confirm whether there is a ground to use to request the Caveat be removed.

Brisbane.Lawyer : Kind regards, James

Brisbane.Lawyer : The guarantee does have an issue, as I have identified. However closer analysis is needed to determine whether the issue is fatal for them or not.

Customer:

We have asked them to remove the caveat to obtain finace but their wont move with this and are threatning to force a sale of our property.

Customer:

I see what you mean, my wife has place her name on section 5 the guarantee, but has no signature, do we have a discpency

Brisbane.Lawyer : Yes, and the guarantee MUST be specifically worded to cover the situation where not all the guarantors who are named have signed. Their next move may be to institute proceedings in Court, and this may happen before the Caveat expires.

Brisbane.Lawyer : I will not spend the time to analyse the guarantee in detail yet ... but if they take further steps, I will do so and we can work out whether it is worth making an application to have the Caveat removed.

Customer:

Thanks James, I have just spoken to my wife and she has eased up a little (She is a bit stressed) I might be able to go fishing this weekend.

Customer:

Do we wait for their response, and then move from here.

Brisbane.Lawyer : I assume that you want the business to continue into the future; is that correct?

Brisbane.Lawyer : If so, as I have advised above; you need to talk to them and reach an agreement that they stop all actions against you so you can organise finance to pay them out.

Brisbane.Lawyer : If they do not agree, then we can work out if you have grounds to remove the Caveat, or lodge a defence against any legal proceedings they may commence.

Brisbane.Lawyer : You do not want to start applying for finance again, and just before approval have them lodge another Caveat or start proceedings against you which would cause the finance to fall over again.

Brisbane.Lawyer : I hope I have made the situation a little clearer for you.

Brisbane.Lawyer : If you need, I could also attempt to reason with them. However, I suggest you try again yourselves first. You need to be clear aboiut exactly how much time you need to organise the new finance, and be able to convince them that you will make an application and that it has a good chance of being successful.

Brisbane.Lawyer : Kind regards, James.

Customer:

thanks James, I will need some fire power to try and negotiate with them as they have been firm in the past, if there is a possibility the guarantee is void this may be enough for me to start the ball rolling, when you have had a closer look at the signed guarantee to see if it is inaccurate can you let me know and we will get you to represent us for removal if this is OK.

Customer:

I will await your reply.

Customer:

Kind regards, Craig

Brisbane.Lawyer : Craig, please allow me some time ... as I will obtain a second opinion before I come back to you with a proposal. Cheers, James

James D. Ford, Solicitor

Category: Australia Law

Satisfied Customers: 1,601

Experience: Lawyer | Founder & CEO at Blue Ocean Law Group

Verified

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Customer reply replied 6 years ago

Hi M,

I was talking to you a couple of weeks ago with regards to a Caveat being placed on my property from a supplier that we have a 30 day credit account with. Just wanting to know what we do from here as we now have a court letter been sent to us with regards to this matter.

As you had found a problem with the signed Guarantee with only the one signature but two guarantee's, also there may be some other issues we would like to ask you with the set up and processing of the account and Guarantee.

We were never sent a signed copy of the agreement from their behalf.

They have never discussed or liaised with our accounts dept with this matter.

They initiated the Caveat back in January this year, back when the account was in errors but at a manageable amount, but still allowed us to purchase stock on the account after the Caveat was placed.

My employees used the stock that was on consignment at our premises not knowing the account was in errors, thus blowing out the account beyond control.

we were in the process of re-financing . re structuring with the banks to make payment but the Caveat dismissed any Business loan for the company.

we have email correspondence allowing us to pay the debt off with instalments until the bank refinancing came available , that we were paying $500 a week and are still paying this amount with their acceptance.

At the end of the day, we want to pay the outstanding debt to the supplier, but feel the processing of this account and the way it was managed has adversely now affected our business.

Can you help.

Thanks

CG

Customer reply replied 6 years ago

Thanks James,

can you give me some idea on costing and fee's we would like to use yourself for this issue.

Customer reply replied 6 years ago

Thanks James,

I will email the court letter to you now to [email protected]

I don't fully understand the judgment, but at this stage it looks like they are proceeding with selling the land under the Caveat.

Customer reply replied 6 years ago

Sorry James,

Its a little confusing, we have what I think is a lodgement to the Court to proceed with a Claim.

I have sent the doc's through to you to have a look.

Cheers

Customer reply replied 6 years ago

Hi James.

It was the 23rd of this month.

Cheers

Craig

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Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 1

Craig, OK... you have an arguable position (in some cases the Court has accepted the argument that only one party has signed, when two were supposed to sign, and therefore the guarantee is not enforceable against either party); and, there is nothing in the guarantee to specifically overcome this scenario, so your best strategy going forward is the following:

1. wait until the Caveat expires;

2. make an application to have the expired Caveat removed (I will send you a quote to assist with this. The fee from the Titles office is approx $157.40 from memory);

3. confirm Caveat has been removed by a Title Search;

4. apply for refinance;

5. if they apply for leave to re-lodge another Caveat, or lodge proceedings against you ... you raise the above as your defence and hope the Court accepts it (I can assist with this as well, if required);

6. either refinance is approved and you pay them out; or you defeat their application to re-lodge the Caveat/ start proceedings in Court and this allows you the time required to refinance and pay them out;

7. you fail in your attempts to stop them and they take steps to obtain a judgement and enforce the payment of the debt using your property as security. I must advise that whilst we will be doing everything to avoid this outcome, it is a possibility.

Kind regards, James.

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 2

Hi Craig,

Yes, I can help.

Are you able to accept my offer of additional service, so we can exchange details and I can assist you more easily. Via phone/ direct email. Please let me know if you have any difficulty, or queries regarding this.

If not, we really need to start another query so I can assist you further... and I would need you to send a copy of the Court letter so I can understand the current position.

I await your response, cheers, James.

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 3

Craig, can you see you reply above... Kind regards, James

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 4

Craig, I had previously sent you an offer of additional service with a quote.. can you see this? Please request help from customer service if you cannot.

If you accept this offer, we can then exchange details and I can start assisting you further. The offer was based on the task of removing the caveat.

However, if that has now changed due to the Court letter, I need to see the letter before being able to quote, and I do not yet know what exact help you will require until I see the letter.. does that make sense... you can email the letter to [email protected] subject: attention brisbane.lawyer (james),

Cheers, James

PS - Sorry it is this complicated...

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 5

Craig.. did they start court proceedings without your knowledge ???? I am confused.. it does not sound like a Court Letter, it sounds like a Court judgement.. which means it may be too late to challenge the personal guarantees... Were you served with Court proceedings, you did not mention this previously...?

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 6

OK. great. It is not a judgement then.

I will get back to you once I have reviewed - likely tomorrow.

Cheers, James

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 7

Craig, what date were the claim and statement of claim served on you?

I have received your email, and am currently reviewing. Will hopefully get back to you later today. Cheers, James

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 8

Craig, thanks for that. Please bear with me, and I will get back to you later today hopefully... if not it will be tomorrow morning at the latest. Cheers, James

Solicitor: James D. Ford, Solicitor replied 6 years ago · Answer 9

Craig, we can assist you to prepare and lodge a defence to the claim and statement of claim, and would only do this on the basis that a barrister is engaged to review and approve the defence before it is lodged with the Court, which would put you in the strongest position.

Once the defence is lodged, ideally this will place you in a position to negotiate a reasonable outcome with the other side.

If the Barrister is confident regarding the strength of your defence you may wish to take the matter further, and actually continue the Court proceedings with a view to have the Personal Guarantee declared void, which would mean the other side would loose their leverage, and be forced to sue the company instead, effectively saving your house. Choosing, this option however will incur substantial legal fees, and is a decision not to be taken lightly, and runs risks regarding the other sides legal fees if unsuccessful.

I cannot recall the detail of the additional service that I sent you originally, however you need to accept that offer in order for us to exchange details and discuss the above in more detail.

The estimated total fixed price for the work would be $500 plus GST for our professional services, plus an estimate of $1,000 - $1,500 plus GST for the Barrister (subject to an actual quote from a Barrister).

Given you were served with the papers on 23 April, you have 28 days from that date to lodge your defence.. or the other side will obtain a default judgement against you, and proceed to sell the house to obtain the money owed.

Please let me know if you have any further queries.

Kind regards, James

Hi, Can you give me some advice please...I am employed in…

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