Sanwick v Wily as Trustee of the Bankrupt Estate of Peter Robert Finn & Anor [2009] NSWSC 86

New South Wales Supreme Court

CITATION : Sanwick v Wily as Trustee of the Bankrupt Estate of Peter Robert Finn & Anor [2009] NSWSC 86

HEARING DATE(S) : 5 February 2009

JUDGMENT DATE : 27 February 2009

JURISDICTION : Equity

JUDGMENT OF : Bryson AJ

At paragraph [35] Orders: (1) On the plaintiff's claim give judgment for the defendants with costs. DECISION : (2) On the Second Cross-claim declare that no money and no obligation to pay any money is secured to the cross-defendant Sanwick Pty Ltd by Mortgage AD 432 195T over the land in Certificate of Title Folio Identifiers 1/711399 and 11/SP53906. (3) Order that the mortgage be delivered up and cancelled under the further directions of the Court. (4) Declare that Peter Robert Finn, a bankrupt and his bankrupt estate are not liable to the cross-defendant, Sanwick Pty Ltd under the mortgage in any respect. (5) Declare that the mortgage is void against the cross-claimant under s 120(1) of the Bankruptcy Act 1966 (Cth). (6) Order that the cross-defendant pay the cross-claimant's costs of the Second Cross-claim.

CATCHWORDS : MORTGAGE – construction of mortgage – irregular drafting – held that the mortgage according to its terms did not secure any money to the mortgagee. BANKRUPTCY – avoidance of preferences – consideration of operation of s 120, s 122 and s 123 on irregularly drafted mortgage, granted shortly before bankruptcy to secure debt owed by person other than the mortgagor – HELD – the mortgage was a transfer of property. It was not void under s 122 because the mortgagee was not a creditor of the mortgagor. It was void under s 120

Bankruptcy Act 1966 (Cth) LEGISLATION CITED : Conveyancing Act 1919 (NSW) Real Property Act 1900 (NSW)