Walton v Blann [2004] NSWCA 316

New South Wales Court of Appeal

CITATION : Walton v Blann [2004] NSWCA 316 HEARING DATE(S) : 26 July 2004 JUDGMENT DATE : 13 September 2004

JUDGMENT OF : Sheller JA at 1; Hodgson JA at 5; Ipp JA at 27 DECISION : Appeal dismissed with costs.

CATCHWORDS : MORTGAGES - Term of mortgage that it be registered as a second mortgage - No first mortgage at time mortgage registered - Whether mortgagee obliged to afford priority to a later mortgage. CASES CITED : Codelfa Construction Pty. Ltd. v. State Rail Authority of NSW (1982) 149 CLR 337 PARTIES : Gillian Mary Walton - appellant Robert Frederick Blann - respondent FILE NUMBER(S) : CA 40958/03 COUNSEL : Mr. V. Gray for appellant Mr. B. Coles QC with Mr. M. Ashhurst for respondent SOLICITORS : Abbott Tout, Sydney for appellant Kosmin & Associates, Double Bay for respondent

LOWER COURT Supreme Court - Equity Division JURISDICTION : LOWER COURT ED4869/03 FILE NUMBER(S) : LOWER COURT Windeyer J JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40958/03 ED 4869/03

SHELLER JA HODGSON JA IPP JA

Monday 13 September 2004 WALTON V. BLANN Judgment 1 SHELLER JA: I have had the benefit of reading the judgment prepared by Hodgson JA. It is not necessary that I re-state the relevant terms of the contract and the mortgage attached to the contract, which was amended and executed and registered as a first mortgage. 2 In my opinion, cl 50 of the contract enabled the purchaser to secure an amount of up to $7 million by first mortgage in priority to the mortgage given to the vendor to secure the loan of $5.225 million. Clearly enough if that opportunity was taken up by the purchaser, it had to be taken up in a way which enabled the second mortgage to be registered on completion. That was a sensible and obvious requirement. Inevitably if this was not done, the mortgage securing the money lent by the vendor would be registered as a first mortgage. 3 The first sentence of cl 13 of the mortgage evidenced an acknowledgment by the parties of this arrangement. In fact by completion the purchaser had not borrowed money to be secured in accordance with the arrangement. Once completion had taken place, cl 50.2 and cl 50.3 of the contract and cl 13 of the mortgage had no more work to do. They do not speak in the event that on completion there was no other mortgage than that to the vendor which could only be registered as a first mortgage. 4 I agree that the appeal should be dismissed with costs. 5 HODGSON JA: On 16 September 2003, the appellant Mrs. Walton commenced proceedings by summons seeking a declaration to the effect that she was entitled to register a first mortgage in priority to a mortgage granted by her to the respondent Mr. Blann, and consequential relief. On 2 October 2003, Windeyer J dismissed this summons with costs. The appellant appeals from that decision.