Permanent Custodians Ltd v Nadrak Pty Ltd [1996] NSWCA 426

Permanent Custodians Ltd v Nadrak Pty Ltd

SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

MEAGHER JA, GILES and SANTOW AJJA 6 November 1996

[1996] NSWCA 426

Waiver of interest under mortgage — alternatively estoppel against claiming interest — no appeal against finding of estoppel, so appeal in relation to interest failed. No point of principle.

Discretion as to costs - Pt 52 r 65 mortgagee's costs out of property unless acted unreasonably - found acted unreasonably and should pay costs on indemnity basis - no grounds to interfere with exercise of discretion.

Discharge of mortgage - mortgagee demanded too much - alleged delayed discharge and caused loss to mortgagor by payment of interest at higher rate than if refinanced - whether mortgagee owed duty to mortgagor - unnecessary to decide because mortgagor refused to pay proper amount so any breach of duty did not cause loss.

Giles AJA. Permanent Custodians Ltd (Permanent) lent $2,080,000 to Nadrak Pty Ltd (Nadrak) repayable on 15 April 1993. Payment was secured by a mortgage dated 8 March 1990 registered Y273349 given by Kendan (NSW) Pty Ltd (Kendan). The amount to be paid on discharge of the mortgage was disputed. By a summons filed in the Equity Division on 29 November 1993 Nadrak and Kendan claimed a declaration as to the proper amount due and unpaid from Nadrak to Permanent, an order that upon payment of the proper amount Permanent discharge the mortgage, and damages.

On 8 December 1993 an arrangement was put into effect by which Nadrak and Kendan paid to Permanent the amount demanded by it and received a discharge of the mortgage (but not a release of the personal covenants under the mortgage), and $127,327.20 part of the amount paid was retained by Permanent charged with repayment of any money found to be repayable in the proceedings. Theproceedings were heard by Bryson J on 3 and 4 March 1994, and his Honour delivered reasons on 16 March 1994. There was an appeal and a cross-appeal, and hereafter I refer to Permanent as the appellant and to Nadrak and Kendan as the respondents.