REGISTRAR GENERAL v GILL and ANOR [1994] NSWCA 261

REGISTRAR GENERAL vy GILL SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, MAHONEY and PRIESTLEY JJA 12 July 1994, 16 August 1994 [1994] NSWCA 261

REAL PROPERTY — Real Property Act 1900 s127 — Legal Practitioners Act 1898 s61.

A fraudulent solicitor borrowed money on the security of a client's land and forged a mortgage over the land. The mortgage was registered. The Solicitors Fidelity Fund paid out the mortgagee. It was common ground that, prior to such payment, the client had a claim against the Registrar General under s127 of the Real Property Act. The question was whether, following the payment, the Law Society was subrogated to the client's claim - HELD - It was so subrogated.

ORDERS

Appeal dismissed with costs.

Gleeson CJ and Priestley JA This appeal, which is brought from a decision of Young J in the Equity Division, raises questions as to the meaning and effect of s127 of the Real Property Act 1900, and s61 of the Legal Practitioners Act 1898. (Following the decision of Young J, s128 of the Real Property Act was amended in such a way as to reverse the effect of that decision in relation to actions commenced on or after 19 March 1992. However, the amendment is irrelevant to this appeal.)

The facts of the case were not in dispute. The first respondent, Mrs Gill, was a client of a solicitor, Mr Hawkins. Mrs Gill was the registered proprietor of certain real estate. She left her Certificate of Title in the possession of Mr Hawkins, who, in fraud of his client, borrowed money from Fairstar Deposit and Securities Pty Ltd ('"Fairstar") upon the security of the land, and forged and uttered a mortgage purportedly signed by Mrs Gill. Fairstar lodged the mortgage for registration, and it was duly registered, thereby attracting the benefit of the indefeasibility provisions of the Real Property Act. In due course, when the solicitor's dishonesty was discovered, Mrs Gill found that there was a registered mortgage over her land, and that the mortgage secured a debt which, by that time, amounted to approximately $199,000. Mrs Gill made a claim against the Solicitors' Fidelity Fund, pursuant to s57 of the Legal Practitioners Act 1898. The claim was accepted, and the Law Society of New South Wales, the second respondent, paid out the debt that was owing to Fairstar. Fairstar gave a discharge of mortgage which was duly registered. Thereafter, the Law Society commenced the present action against the Registrar General in the name of Mrs Gill, and in its own name, relying upon s61 of the Legal Practitioners Act. The action was successful, and the Registrar General now brings this appeal.