CHALLENGER MANAGED INVESTMENTS LTD v DIRECT MONEY CORP. P/L [2003] NSWSC 1072

Reported Decision : 59 NSWLR 452

New South Wales Supreme Court

CITATION : CHALLENGER MANAGED INVESTMENTS LTD v DIRECT MONEY CORP. P/L [2003] NSWSC 1072 HEARING DATE(S) : 05 & 06/11/2003 JUDGMENT DATE : 28 November 2003 JURISDICTION: EQUITY JUDGMENT OF : Bryson J at 1 DECISION : Plaintiffs entitled to subrogation: plaintiffs and 7 & 8D entitled to compensation from Torrens Assurance Fund: other orders: [88]

CATCHWORDS : TORRENS SYSTEM - the Friels (7&8D) owned house in Paddington - fraudsters impersonating the Friels obtained new Certificates of Title for many parcels of land owned by the Friels on false applications under s.111 RPAct 1900 - then borrowed $500,000 from RHC (5D) which registered its mortgage over Paddington house - plaintiffs advanced $816,000 on fraudulent application for loan by persons claiming authority from the Friels and paid $515,000 of advance to RHC for discharge of registered mortgage - RG (9D) refused to register mortgage to plaintiffs as it was forged: held, plaintiffs entitled to rely on RHC mortgage by subrogation for $515,000: Friels entitled to compensation from Torrens Assurance Fund under s.129 of RPAct 1900: consideration of effect of amendments to RPAct Pt 13 & 14 by Real Property Amendment (Compensation) Act 2000 - subsidiary claims to recover other parts of plaintiffs advance of $816,000 which were not paid towards discharge of any mortgage. Local Government Act 1993 LEGISLATION CITED : Managed Investments Act 1998 (Cth) Real Property Act 1900 Australia & New Zealand Banking Group Ltd v. Westpac Banking Corporation (1988) 164 CLR 662 Banque Financière de la Cité v. Parc (Battersea) Ltd [1999] 1 AC 221 Boscawen v. Bajwa [1996] 1 WLR 328 Cochrane v. Cochrane [1985] 3 NSWLR 403 Consolidated Trust Co. Ltd v. Naylor (1936) 55 CLR 423 David Securities Pty Ltd v. Commonwealth Bank of Australia (1992) 175 CLR 353 CASES CITED : Diemasters Pty Ltd v. Meadow Corp Pty Ltd [2001] 52 NSWLR 572 Ghana Commercial Bank v. Chandiram [1960] AC 732 P T Ltd v. Maradona Pty Ltd [1991] 25 NSWLR 643 Porter v. Associated Securities Ltd (1976) 1 BPR 9279 Registrar General v. Gill (NSW CA 14 August 1994 unreported) Rosenberg v. Percival [2001] 75 ALJR 734; 205 CLR 434 Travinto Nominees Pty Ltd v. Vlattas (1973) 129 CLR 1 Challenger Managed Investments Limited - First Plaintiff Permanent Trustee Australia Limited - Second Plaintiff Direct Money Corporation Pty Limited - First Defendant Jacqueline Unity Stumer - Second Defendant Neville Stumer - Third Defendant PARTIES : Trevor John Brown - Fourth Defendant Residential Housing Corporations Pty Limited - Fifth Defendant The Mortgage Professionals Pty Limited - Sixth Defendant Manus Michael Friel - Seven Defendant Kevin Patrick Friel - Eight Defendant Registrar-General - Ninth Defendant FILE NUMBER(S) : SC 4850/2002 I. Wales SC & M. Ashhurst - P COUNSEL : J. Conomos 6D G.A. Sirtes (7&8Ds) I. Harrison SC (9D) Sunman & Walker Solicitors (P) Ryan & Boscher Lawyers (Pl ) (C-d); (2&3Ds) SOLICITORS : Bolzan & Dimitri Solicitors (D5) MD Nikolaidis & Co. (D6) Peter R. Murphy (7&8Ds) K C Hall (9D)