Miranda Builders' & Businessmen's Club, Application [2003] NSWSC 676

New South Wales Supreme Court

CITATION : Miranda Builders' & Businessmen's Club, Application [2003] NSWSC 676 HEARING DATE(S) : 18 July 2003 JUDGMENT DATE : 18 July 2003 JURISDICTION: Equity JUDGMENT OF : Austin J DECISION : Declaration made

CATCHWORDS : CORPORATIONS - charges - old registered charge - whether company's property released from charge LEGISLATION CITED : Limitation Act 1969 (NSW) s 65 PARTIES : Miranda Builders' & Businessmen's Club Ltd (A) FILE NUMBER(S) : SC 3723/03 COUNSEL : Mr P Walsh (P) SOLICITORS : Bransgroves (P)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

AUSTIN J

FRIDAY 18 JULY 2003

3723/03 MIRANDA BUILDERS' & BUSINESSMEN'S CLUB LTD (APPLICATION OF) JUDGMENT (ex tempore; revised 24 July 2003) 1 HIS HONOUR: In this unusual application, the plaintiff, a businessmen's club, wishes to raise money because it has received a statutory demand from a person who claims to be a creditor. The club has discovered, in the course of making arrangements for providing security for a borrowing to meet the claim, that the Register of Charges maintained under the Corporations Act in respect of the plaintiff contains an entry dated 10 June 1955 with respect to a debenture trust deed and a series of debentures securing an amount of 4,000 pounds. 2 All of the directors have sworn an affidavit in which they say they only became aware of the charge when they were told about it in the context that I have described, and that none of them has any knowledge in respect of the charge at all. The accountant of the plaintiff has provided an affidavit saying that there is no record of any debt secured by any such charge in the books of the company. 3 The trustees for debenture holders, named in the Register of Charges, are James Blackburn, Leslie William Harman Lawrence and Leslie Lionel Gander. There is evidence that each of these men has died. Two of them died in the 1980s. In respect of the third, Mr Gander, there is an affidavit from his widow saying that she has no knowledge about whether the charge has been paid out. 4 An employee of the plaintiff's solicitor has provided an affidavit saying that she caused searches to be carried out to determine whether any of the three deceased was the subject of an application for probate or the grant of probate, and the results of the search were negative. I was informed by counsel that the solicitor repeated that search today with the same negative result. She said in her affidavit that she had done extensive searches for the surviving families of the deceased in the Yellow Pages and White Pages and was only able to discover the widow of Mr Gander. 5 The application is for an order for the proceeding to continue in the absence of any representation by the three deceased, and for a declaration that the property of the plaintiff that was charged by that charge is now released from the charge. The application for the first order is made under Pt 8 r 16. The foundation for an order under that rule is present, because it appears from the evidence that the three trustees for debenture holders are deceased and that they have no personal representatives. 6 The declaratory order is based upon provisions of the Limitation Act 1969 (NSW), especially s 65. According to that section, on the expiration of the limitation period fixed for a cause of action specified in column 1 of Schedule 4, the title of a person formerly having the cause of action to the property specified opposite the cause of action in column 2 of that Schedule is extinguished, as against the person against whom the cause of action formerly lay and as against the person's successors. Schedule 4 lists causes of the action for recovery of land, enforcement of an equitable interest in land, redemption of mortgaged property, recovery of principal money secured by a mortgage, recovery of possession of the mortgaged property, foreclosure of an equity of redemption and recovery of trust property. There is a definition of "mortgage" in section 11 according to which a mortgage includes a charge on property. 7 In my opinion, the evidence establishes, in light of s 65, that any title arising out of the security to which I have referred has been extinguished by the operation of that section, and any claim for recovery of money secured by the registered charge is likewise extinguished. I shall, therefore, make the declaration sought. I have given some thought to whether some further order should be made by way of advertisement or notification, but I cannot think of any practical reason for doing so and there is no legal requirement. 8 I make the orders in paragraphs 1 and 2 of the amended summons. I stand the proceedings over to the Registrar's 9.30am list on 7 August with liberty to apply. **********