Yang Bai v Watson Elite Pty Ltd [2022] NSWSC 318

Supreme Court New South Wales

Medium Neutral Citation: Yang Bai v Watson Elite Pty Ltd [2022] NSWSC 318 Hearing dates: 28 February 2022 Date of orders: 23 March 2022 Decision date: 23 March 2022 Jurisdiction: Equity Before: Darke J Decision: Plaintiff entitled to judgment against second defendant but fails against third defendant. Funds in Court to be paid out to third defendant. Catchwords: REAL PROPERTY – securities – rights of a subsequent encumbrancer as against a prior encumbrancer – rights to enforce rights and equities of mortgagor against mortgagee – where plaintiff held an equitable charge over the property – where defendant held a registered mortgage over the property – whether the principle that a subsequent mortgagee can enforce the mortgagor's rights or equities against a prior mortgagee applies in the case of an equitable charge and a registered mortgage – plaintiff held to have standing to enforce mortgagor's rights and equities against the defendant MORTGAGES – equity of redemption – clogs on the equity of redemption – where mortgage contained an option for the mortgagee to purchase the mortgaged property following failure of mortgagor to repay – whether the option to purchase constituted a clog on the mortgagor's equity of redemption – whether the option to purchase was penal in nature – whether the option to purchase was unfair and unconscionable Legislation Cited: Real Property Act 1900 (NSW), s 74O, Div 3, Pt 7 Cases Cited: Bonanno v Finamore [2021] NSWSC 1558 Chang v Registrar of Titles (1976) 137 CLR 177 G & C Kreglinger v New Patagonia Meat & Cold Storage Company Ltd [1914] AC 25 Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd (2015) 89 NSWLR 237; [2015] NSWCA 100 King Investment Solutions Pty Ltd v Hussain (2005) 13 BPR 25,077; [2005] NSWSC 1076 Lift Capital Partners Pty Ltd (in liq) v Merrill Lynch International (2009) 73 NSWLR 404; [2009] NSWSC 7 Lysaght v Edwards (1876) 2 Ch D 499 Mainland v Upjohn (1889) 41 Ch D 126 Melbourne Banking Corporation v Brougham (1882) 7 App Cas 307 Paciocco v Australia and New Zealand Banking Group Ltd (2016) 258 CLR 525; [2016] HCA 28 Re Funds in Court; Application of Mango Credit Pty Ltd [2016] NSWSC 199 Re Modular Design Group Pty Ltd (Receiver and Manager Appointed) (in liq) (1994) 35 NSWLR 96 Sam Management Services (Aust) Pty Ltd v Bank of Western Australia Ltd [2009] NSWCA 320 Sun North Investments Pty Ltd v Dale [2014] 1 Qd R 369; [2013] QSC 44 Van Den Bosch v Australian Provincial Assurance Association Ltd (1968) 88 WN (Pt 1) (NSW) 357 Wallace v Evershed [1899] 1 Ch 891 Westfield Holdings Ltd v Australian Capital Television Pty Ltd (1992) 32 NSWLR 194 Westpac Banking Corporation v Daydream Island Pty Ltd [1985] 2 Qd R 330 Category: Principal judgment Parties: Yang Bai (Plaintiff) Watson Elite Pty Ltd (First Defendant) Liangjie Chen (Second Defendant) Brick International Pty Ltd (Third Defendant) Representation: Counsel: Mr D Edney (Plaintiff) Mr A J Macauley and Mr S J Murray (Third Defendant)