Commonwealth Bank of Australia v Duggan [2003] FCAFC 64

FEDERAL COURT OF AUSTRALIA

Commonwealth Bank of Australia v Duggan [2003] FCAFC 64

MORTGAGES – whether two mortgagees of adjoining property can agree in good faith to jointly sell secured property and as to allocation of proceeds of joint sale without agreement of common mortgagor. BANKRUPTCY – expungement of proof of debt of bank – debt proved as balance outstanding after accounting for proceeds of realisation of security – security realised jointly with another secured property mortgaged to different financiers – arrangement between bank and financier as to application of proceeds of joint sale – whether security holders could agree in advance of sale on how value of two secured properties would be allocated – whether arrangement in fact represents bona fide attempt to allocate respective values of two properties to proceeds of joint sale.

Bankruptcy Act 1966 (Cth) ss 86, 99 Real Property Act 1900 (NSW) s 58(3) Tooth & Co Ltd v Lapin (1936) 53 WN (NSW) 224 cited Yorkshire Bank Plc v Hall [1999] 1 WLR 1713 cited Medforth v Blake [2000] Ch D 86 cited Taylor v Bank of NSW (1886) 11 App Case 596 referred to Artistic Builders Pty Ltd v Elliott & Tuthill (Mortgages) Pty Ltd [2002] NSWSC 16 referred to Jeogla Pty Ltd v Australia and New Zealand Banking Group (1999) 150 FLR 359 referred to Forsyth v Blundell (1973) 129 CLR 477 followed Pendlebury v Colonial Mutual Life Assurance Society (1912) 13 CLR 676 distinguished A L Underwood Ltd v Bank of Liverpool [1924] 1 KB 775 distinguished Associated Midland Corporation Ltd v Bank of New South Wales [1983] 1 NSWLR 533 distinguished COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) v WILLIAM JOSEPH DUGGAN & GAVIN THOMAS AS OFFICIAL TRUSTEE IN BANKRUPTCY OF THE BANKRUPT ESTATE OF WILLIAM JOSEPH DUGGAN N 723 of 2002 MANSFIELD, CONTI & ALLSOP JJ 9 APRIL 2003 SYDNEY