Westpac Banking Corporation v Adelaide Bank Limited [2005] NSWSC 517

Reported Decision : (2006) NSW ConvR 56-133

New South Wales Supreme Court

CITATION : Westpac Banking Corporation v Adelaide Bank Limited [2005] NSWSC 517

HEARING DATE(S) : 01-02/12/04

JUDGMENT DATE : 30 June 2005

JUDGMENT OF : White J

DECISION : See Para 91 of judgment.

CATCHWORDS : MORTGAGES - Priorities - First registered mortgage and later unregistered mortgage - Unattended refinance - Second mortgagee took mortgage without notifying first mortgagee - Money deposited in account with the first mortgagee to close account - Second mortgagee had notice that authority to close the account was not in conformity with first mortgagee's procedures - Where correspondence handled by junior clerk - Mortgagors made further drawings - Whether subsequent advances can be tacked to first mortgagee's security - Whether second mortgagee can be subrogated to first mortgagee's rights - Whether constructive notice, actual notice, or knowledge attributable to the first mortgagee is required for the rule to be applicable - Held that there was no actual notice prior to letter revealing second mortgage - The rule in Hopkinson v Rolt is based on equitable fraud and actual notice of the second mortgage is required.

LEGISLATION CITED : Trade Practices Act 1974 (Cth)

Hopkinson v Rolt (1861) 9 HL Cas 514; 11 ER 829 Matzner v Clyde Securities Ltd [1975] 2 NSWLR 293 Ghana Commercial Bank v Chandiram [1960] AC 732 Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] AC 221 Chetwynd v Allen [1899] 1 Ch 353 Butler v Rice [1910] 2 Ch 277 Sibbles & Anor v Highfern Pty Ltd (1987) 164 CLR 214 Chase Corporation (Aust) Pty Ltd v North Sydney Brick & Tile Co. Ltd (1994) 35 NSWLR 1 Wilson v Holland (1915) 21 ALR 35 In the matter of Dehy Fodders (Australia) Pty Limited; Winter v Bank of Adelaide (1973) 4 SASR 538 West v Williams [1899] 1 Ch 132 Commonwealth Bank of Australia v Grubic (27 August 1993, unreported on this point; BC9300359) Deeley v Lloyds Bank Limited [1912] AC 756 Mercantile Credits Limited v Australia New Zealand Banking Group (1988) 48 SASR 407 Central Mortgage Registry of Australia Ltd v Donemore Pty Ltd [1984] 2 NSWLR 128 CASES CITED : Re O'Byrne's Estate (1885) 15 LR(IR) 373 Pierce v Canada Permanent Loan & Savings Co (1894) 25 OR 671 Bradford Banking Co Ltd v Henry Briggs & Son Co Ltd (1886) 12 AC 29 R&I Bank of Western Australia Ltd v Cash Resources Australia Pty Ltd (1993) 11 WAR 536 Nia v Phuong (1993) 6 BPR 13,141; (1993) NSW Conv R 55-671 Oversea-Chinese Banking Corporation v Malaysian Kuwaiti Investment Co SDN BHD [2003] VSC 495 Vane v Vane (1873) 8 Ch App 383 In re Montagu's Settlement Trusts [1987] Ch 264 at 283 El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685 K & S Corporation Ltd v Sportingbet Australia Pty Ltd (2003) 86 SASR 312 Motor Auctions Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 8 BPR 15,565 St Kilda Road Pty Ltd v Parker Simmonds Securities Ltd [2002] V Conv R 54-652 Butt, Mortgagor Entitled to Have Second Mortgage Registered (2002) 76 ALJ 478