Commonwealth Bank of Australia v. Nick Frisina Pty. Limited & Ors. [1999] NSWSC 907

New South Wales Supreme Court CITATION : Commonwealth Bank of Australia v. Nick Frisina Pty. Limited & Ors. [1999] NSWSC 907 CURRENT JURISDICTION : Equity Division Commercial List FILE NUMBER(S) : No. 50142 of 1998 HEARING DATE(S) : 26 August 1999 JUDGMENT DATE : 2 September 1999

PARTIES : Commonwealth Bank of Australia - P Nick Frisina Pty. Limited 1D, Nicola Frisina 2D, Julianna Frisina 3D, Anna-Maria Frisina 4D, Sandra Frisina 5D JUDGMENT OF : Hodgson CJinEq at 1

COUNSEL : R.G. Forster SC for plaintiff D. Raphael for 1, 2 & 3 defendants SOLICITORS : Corrs Chambers Westgarth, Sydney, for plaintiff Smith Monti Costa, Fairfield, for defendants CATCHWORDS : CONVEYANCING - LAND TITLES UNDER THE TORRENS SYSTEM. MORTAGES. TRUSTS AND TRUSTEES. Trustees purport to appoint company, of which they are sole directors, trustee of a family trust. The appointment is ineffectual, because not registered. The purported trustee mortgages trust property to Bank (which has notice of the trust), the mortgages are registered, and the Bank advances money to the purported trustee. On default, the Bank seeks possession of the mortgaged property. On behalf of the trust, it is contended that the Bank's title is subject to the trust. HELD that (assuming the participation of the true trustees in the grant of the mortgages did not bind the trust) the Bank's title to the mortgages was indefeasible; that the advances of money to the purported trustee effected pro tanto purchases of charges over the property, which were not indefeasible; that (assuming the participation of the true trustees in the reciept of the advances by the purported trustee did not bind the trust) the Bank could rely on the legal title unless and until it was shown that the advances were applied otherwise than in accorance with determinations of the true trustees and that there was loss of the beneficiaries; that Section 66B of the Conveyancing Act (assuming it applied otherwise than to sales properly so called) did not give a cause of action without proof of loss and causation of loss ACTS CITED : Conveyancing Act 1919 (NSW) ss.7, 66B. DECISION : See page 11 of judgment