ACN 077 991 890 Pty Limited & Ors v National Australia Bank Limited & Ors [2007] NSWSC 358

New South Wales Supreme Court

CITATION : ACN 077 991 890 Pty Limited & Ors v National Australia Bank Limited & Ors [2007] NSWSC 358

HEARING DATE(S) : 8 February 2007

JUDGMENT DATE : 19 April 2007

JURISDICTION : Equity Division

JUDGMENT OF : Windeyer J at 1

DECISION : Plaintiffs may marshal against rights of the first defendant under mortgages given by the second and third defendant to the first defendant.

CATCHWORDS : EQUITY – MORTGAGES – Marshalling of securities – No common debtor – Exception to common debtor rule – Where company gave first ranked charge to defendant creditor as security for loan to company and to secure guarantee of debts of company directors – Where company directors gave mortgages to defendant creditor to secure loans to them – Where company gave second ranked charge to plaintiff creditors as security for loan to company – Where defendant creditor used company assets to repay company loan and directors' debts – Where company had right of subrogation against directors – Whether plaintiff creditors could be marshalled to defendant creditors' mortgages given by directors – Plaintiff creditors entitled to marshalling – Company directors could not rely on company's rights of subrogation as defence to marshalling claim

Law Reform (Miscellaneous Provisions) Act 1965 LEGISLATION CITED : Real Property Act 1900 Fisher and Lightwood Law of Mortgages Aust Ed, para 30.11 Meagher Gummow and Lehane, 4th Ed para 11-045

Bondi Securities Pty Limited v AGC (Advances) Limited (unreported 31 August 1990) Brown v Canadian Imperial Bank of Commerce (1985) 50 OR (2d) 420 Cadima Express Pty Ltd v Deputy Commissioner of Taxation (1999) 33 ACSR 527 Ex parte Kendall (1811) 17 Ves 514; 34 ER 199 CASES CITED : Leichhardt Emporium Pty Ltd v AGC (Household Finance) Ltd [1979] 1 NSWLR 701 Neff v Miller (1848) 8 Barr 347 New Zealand Loan and Mercantile Agency Co Ltd v Loach (1912) 31 NZLR 292 Sarge Pty Limited v Cazihaven Homes Pty Ltd (1994) 34 NSWLR 658 South v Bloxham (1865) 2 Hem & M 457; 71 ER 541