MARONIS HOLDING LTD v NIPPON CREDIT AUSTRALIA LTD [1996] NSWCA 340

MARONIS HOLDING LTD v NIPPON CREDIT AUSTRALIA LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MAHONEY, SHELLER and COLE, JJA 12-13 December 1995, 21 February 1996

[1996] NSWCA 340

MORTGAGE — application of s512 Companies (NSW) Code — whether it renders mortgage void — whether new grounds can be argued in later proceedings. Held: res judicata applies — proceedings relating to mortgage to be permanently stayed

On 1 June 1989, Nippon Credit Australia Ltd (Nippon) entered into a facility agreement with Girvan Corporation Ltd (Girvan Australia). Pursuant to that agreement, Maronis Holdings Ltd (Maronis) gave a registered mortgage, over certain property it owned, to Nippon. The land, known as "Cross Roads", was located at Liverpool, New South Wales. The mortgage was executed on | June, and registered with the number Y434669. Nippon also held a guarantee by Maronis and Girvan Corporation (New Zealand) Ltd (Girvan NZ) as security.

On 14 February 1990, Nippon gave notice pursuant to s57(2)(b) of the Real Property Act 1900 (NSW) to Maronis that it was intending to exercise its power of sale under the mortgage because there had been default on the facility agreement. On 26 March, Maronis's then solicitors, Freehill Hollingdale and Page, wrote to Nippon and asserted that the mortgage was void by reason of the operation of s512 Companies (NSW) Code.

On 28 March 1990 Maronis lodged a caveat over the land subject to the mortgage registered number Y434669, and this was registered the following day. On 29 March, Maronis began proceedings seeking, inter alia, a declaration that the mortgage dated 1 June 1989 was void.

Nippon filed a cross-claim on 7 May 1990 seeking to have the caveat removed from the register, and a notice of motion seeking a separate hearing, pursuant to Pt31 Supreme Court Rules, on the question whether the mortgage was void under s512(1) Companies (NSW) Code.