Reference no: EM134021081

Question

On 3 July 2021, Sanam Amir became the registered proprietor of the fee simple in 12 Wilcox St, Preston. Sanam was an artisan jeweller, working on individual commissions from her home studio. Sanam had contributed $200,000 of her own savings to the purchase and borrowed the remaining $1 million of the purchase price from the Australian Ethical Bank (AEB), assuming liability for repayment of the loan plus interest. The mortgage was registered. The property comprised two bedrooms, plus a separate studio space in the garden. The studio was well appointed, containing a bathroom and kitchenette. Sanam spent most of her time in the studio and was increasingly using it as her primary place of residence. Sanam's good friend, Grace Khan, had recently begun a new job nearby and lamented the difficult rental market in Melbourne. To defray the ongoing costs associated with her property investment and fledgling business, Sanam decided to offer Grace the opportunity to use 12 Wilcox St as her place of residence. Grace agreed, on the proviso that she would be allowed to remain in occupation for at least 24 months. On 3 September 2021, Sanam agreed to this proviso and gave Grace a key to 12 Wilcox St on the same day. Grace moved in and began to pay monthly rent. The arrangement began well. Sanam was pleased to have the additional income and content to leave Grace to her own devices. The weather was fine and Sanam began to open the studio windows each morning, to enjoy the spring sunshine. The peace was disturbed, however, when Sanam noticed her neighbour, Tom Matthews, making frequent use of the driveway adjoining the studio at 12 Wilcox St and the back laneway. Tom was a motorcycle mechanic and was parking his motorbikes in Sanam's driveway, in various states of disrepair. Tom was the registered fee simple owner of 14 Wilcox St, but his principal place of business, which he also owned in fee simple, was a short distance down the street. His repair work was often noisy, and one afternoon Sanam approached him to raise concerns about his use of the driveway. Tom explained that he had been using the driveway for this purpose since 2001, and no one had ever complained. Unfortunately, Sanam's jewellery exhibitions did not yield many commissions and she found it increasingly difficult to manage her financial commitments. On 12 May 2022, Sanam 7 defaulted in making a loan repayment to AEB when it was due and made no further repayments. On 16 June 2022, AEB gave Sanam notice in writing of the default and of its intention to sell the mortgaged land, if the default was not remedied within one month. The default on the mortgage repayments was not remedied. On 20 July 2022, AEB had the property expertly valued, which suggested a market value of $1 million - 1.1 million. Since Sanam's initial purchase, the property market had slumped. The valuer suggested delaying the auction until the market improved, or at the very least waiting until the spring. AEB did not wait for a market improvement but did arrange an auction for the spring and advertised the property in reputable real estate outlets. Prior to the auction, a private investor made an offer of $950,000, but AEB decided to proceed to auction. The auction was held on Saturday 27 August 2022, and Iris Jones snaffled the property for the winning (and only) bid of $900,000. The private investor had found another property in the intervening period and did not bid. On 1 October 2022, Iris became the registered proprietor of 12 Wilcox St. The price for the sale is insufficient to discharge the mortgage. Sanam is disappointed that AEB did not accept the initial offer of the private investor or wait until the property market improved, and would like to have the mortgagee's sale set aside. Iris's purchase of the property was intended for her elderly mother, Agnes, and Iris is keen to ensure the property is ready for her. On 10 October 2022, Iris executed a memorandum of transfer of 12 Wilcox St in registrable form, with Agnes named as transferee. Iris gave Agnes the transfer and the certificate of title. But Agnes is not in a hurry to leave her present residence, so did not immediately lodge the transfer for registration. The transfer remains, along with the certificate of title, in the possession of Agnes. Iris now refuses to honour the rental arrangement between Sanam and Grace, and has taken steps to stop Tom from using the driveway to park his motorbikes.

Answer the following questions

1) Does Grace have an interest which is enforceable against Iris?

2) Can Iris prevent Tom from parking his motorbikes in the driveway?

3) Was the sale to Iris proper? Is Sanam entitled to have the sale to Iris set aside?

4) What interest, if any, does Agnes have in 12 Wilcox St?