Dixon & ors v Barton & ors [2011] NSWSC 1525

Supreme Court New South Wales

Medium Neutral Citation: Dixon & ors v Barton & ors [2011] NSWSC 1525 Hearing dates: 17 November 2011 Decision date: 12 December 2011 Jurisdiction: Equity Division Before: Ward J Decision: First defendant obliged to re-execute mortgages discharged by mistake of plaintiffs' solicitor. Orders made for restoration of plaintiffs' position as holders of registered mortgage security vis a vis second to fourth defendants as holders of unregistered equitable mortgages. Catchwords: TORRENS SYSTEM - indefeasibility of title - mortgages - discharge in approved form - registration of discharge by mistake of mortgagees' solicitor - whether mistaken discharge falls within personal equity exception to indefeasibility of title - consideration of unconscionability - whether mortgagor has been unjustly enriched by mistaken discharge and restitution should be granted to mortgagees - HELD - mortgages mistakenly discharged in circumstances giving rise to personal equity exception to indefeasibility of title - mortgagees entitled to be restored to their position prior to discharge - unconscionable for mortgagor to benefit from mistaken discharge - CONTRACT - construction - whether terms of deed entered into between mortgagees and mortgagor released mortgagees from prior security interests and any covenants contained in mortgage agreements - HELD - terms of deed did not operate to release mortgagor from covenants contained in mortgage agreements - REAL PROPERTY - whether, if deed operates to release prior security interests, equitable mortgage arises due to permitted retention of certificate of title by mortgagees - HELD - had deed operated to release prior security interests, equitable mortgage arose by reason of implicit acknowledgement that certificate of title and discharge of mortgage not to be delivered until payment of debt under terms of deed - SUBROGATION - if deed did operate to release earlier debts and security interests, whether mortgagees can be subrogated to the rights of first and second mortgagees under discharged mortgages due to notional payment out of earlier debt - HELD - no entitlement to subrogation - LIENS - whether mortgagees have possessory lien over certificate of title - HELD - no possessory lien in circumstances where equitable mortgage by retention of certificate of title established - SPECIFIC PERFORMANCE - whether mortgagor should be obliged specifically to perform its payment obligations under deed - HELD - specific performance not appropriate as damages an adequate remedy Legislation Cited: Contracts Review Act 1980 (NSW) Conveyancing Act 1919 (NSW) Corporations Act 2001 (Cth) Duties Act 1997 (NSW) Farm Debt Mediation Act 1994 (NSW) Real Property Act 1900 (NSW) Cases Cited: Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99 Bank of New South Wales v O'Connor (1889) 14 AC 273 Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221; [1998] 1 All ER 737 Barry v Heider [1914] HCA 79; (1914) 19 CLR 197 Barton v Atlantic 3 Financial (Aust) Pty Limited (deregistered) & Anor [2010] QCA 223 Barton v Atlantic 3 Financial (Aust) Pty Ltd (in liq) [2004] QSC 376; (2004) 212 ALR 348 Bellissimo v JCL Investments Pty Limited [2009] NSWSC 1260 Black v S Freedman & Company [1910] HCA 58; (1910) 12 CLR 105 Boral Recycling Pty Ltd v Wake [2009] NSWSC 712 Boscawen and others v Bajwa and another; Abbey National plc v Boscawen and others [1995] 4 All ER 769 Brunker v Perpetual Trustee Company Ltd (1937) 57 CLR 555 Burston Finance Ltd v Speirway Ltd [1974] 3 All ER 735 CH Giles & Company Ltd v Morris [1972] 1 All ER 960; 1 WLR 307 Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd [2003] NSWSC 1072; (2003) 12 BPR 22,257 Cheltenham & Gloucester Plc v Appleyard [2004] EWCA Civ 291 Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 71 FCR 550; 141 ALR 667 Clark v Raymor (Brisbane) Pty Ltd [1982] Qd R 790 Cochrane v Cochrane (1985) 3 NSWLR 403 Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1 Cowper v Green (1841) 7 M & W 633; 151 ER 920 Dashwood v Dashwood (1927) 71 Sol Jo 911 Diamond Hill Mining Pty Limited v Huang Jin Mining Pty Limited [2011] VSC 288; (2011) 84 ACSR 616 Double Bay Newspapers Pty Limited v AW Holdings Pty Limited (1996) 42 NSWLR 409 Duke Finance Ltd (in liq) v Commonwealth Bank of Australia (1990) 22 NSWLR 236 Elder's Trustee and Executor Company Limited v Bagot's Executor and Trustee Company Limited [1964] SASR 306 Elderly Citizens Homes of South Australia Inc v Balnaves (1998) 72 SASR 210 Ex parte Langston (1810) 17 Ves 227; 34 ER 88 Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22; (2007) 230 CLR 89 FNCB-Waltons Finance Limited v Crest Realty Pty Limited (1977) 10 NSWLR 621 GE Commercial Corporation (Australia) Pty Limited v L&B Enterprises Pty Limited [2009] NSWSC 770 Ghana Commercial Bank v Chandiram [1960] AC 732 Grundy v Ley [1984] 2 NSWLR 467 Gye v McIntyre [1991] HCA 60; (1991) 171 CLR 609 Hammonds v Barclay (1802) 2 East 227 Heid v Reliance Finance Corporation Pty Limited [1983] HCA 30; (1983) 154 CLR 326 Heperu Pty Ltd v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230 Hewett v Court [1983] HCA 7; (1983) 149 CLR 639 Lapin v Abigail (1930) 44 CLR 166 Latec Investments Ltd v Hotel Terrigal Pty Limited (in liq) (1965) 113 CLR 265 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548; [1992] 4 All ER 512 Majeau Carrying Company Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48 Mercantile Credits Ltd v Jarden Morgan Australia Ltd [1991] 1 Qd R 407 Minister for Education and Training v Canham [2004] NSWSC 274; (2004) NSW ConvR 56-080 Moffett v Dillon [1999] 2 VR 480 MPS Constructions Pty Ltd (in liq) v Rural Bank of New South Wales (1980) 4 ACLR 835 Nathanial Kelburn Dunbar Barton v Atlantic 3 Financial (Australia) Pty Limited & ors (unreported 28 October 2009) Nearhaze Pty Ltd v The Official Trustee [1999] NSWSC 959 Paul v Speirway Ltd [1976] 2 All ER 587 PC Developments Pty Ltd v Revell (1991) 22 NSWLR 615 Performance Capital Mortgage Pty Ltd v Motive Finance & Leasing Pty Limited [2010] NSWSC 429 Peters v Lithgow Forge Pty Limited & Ors [2010] NSWSC 283 Pratt v Vizard (1833) 5 B & Ad 808; 110 ER 989 Protean Enterprises (Newmarket) Pty Ltd v Randall [1975] VR 327 Queensland Premier Mines Pty Ltd v French [2007] HCA 53; (2007) 235 CLR 81 Re St George Bank - A Division of Westpac Banking Corporation [2011] NSWSC 730 Registrar General v Gill (unreported, NSWCA, 16 August 1994) Saffron Sun Pty Ltd v Perma-Fit Finance Pty Ltd (in liq) [2005] NSWSC 1317; (2005) 65 NSWLR 603 Scallan v Registrar-General (1988) 12 NSWLR 514 Schultz v Corwill Properties Pty Ltd (1969) 90 WN (NSW) 529 Shawyer v Amberday Pty Limited (In Liq) [2001] NSWSC 399 Shiloh Spinners Ltd v Harding [1973] AC 691 State Bank of New South Wales v Berowra Waters Holdings Pty Limited & Ors (1986) 4 NSWLR 398 State Bank of New South Wales v Geeport Developments Ltd (1991) 5 BPR 11,947 State Bank of South Australia v Rothschild Australia Ltd (1990) 8 ACLC 925 Stein v Blake [1996] AC 243; [1995] 2 All ER 961 Stern v McArthur [1988] HCA 51; (1988) 165 CLR 489 Swiss Bank Corporation v Lloyds Bank Limited & Ors [1982] AC 584 Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 Tresize v Bilato Nominees Pty Ltd & Northern Gold NL (1986) 83 FLR 44 Turner v Bladin (1951) 82 CLR 463 Tutt v Doyle (1997) 42 NSWLR 10 UTC Ltd (in liq) v NZI Securities Australia Ltd (1991) 4 WAR 349 Re Wallis & Simmonds (Builders) Ltd [1974] 1 All ER 561; [1974] 1 WLR 391 Webster v Southwark London Borough Council [1983] QB 698; 2 WLR 217 Whiteley v Delaney [1914] AC 132 Wilkie v Gordian Runoff Limited [2005] HCA 17; (2005) 221 CLR 522 Young v Matthew Hall Mechanical & Electrical Engineers Pty Ltd (1988) 13 ACLR 399 Texts Cited: Butt, Land Law (3rd edn) Carter, Carter on Contract (online edn) Halsbury's Laws of Australia (online edn) Meagher, Gummow & Lehane, Equity: Doctrines and Remedies (4th edn) Morgan et al, Fisher & Lightwood's Law of Mortgage (2nd Australian edn) Young, Croft & Smith, On Equity (2009) Category: Principal judgment Parties: John Dixon as Trustee for the Seingensund Unit Trust, Yalbell Pty Ltd, Christopher Mark Hookham and Sharon Hookham as Trustees for the Kayak Superannuation Fund, Christopher Mark Hookham as Trustee of the Gilder Unit Trust, Peter Clark and Lyn Clark as Trustees for the Brigadoon Unit Trust, Penelope Wickham, Geoffrey Robert Chadwick and Heather Quenthlyn Chadwick, Laragh Investments Pty Ltd, James Shaw and Cynthia Fisher as Trustees of the Blunt Family Trust (First Plaintiffs) Ian Richard Lewis and Moya Anne Lewis (Second Plaintiffs) Nathanial Kelburn Dunbar Barton (First Defendant) Roberts Fund Pty Ltd (Second Defendant) Kerrie Lardner-Smith and Trent Lardner-Smith (Third Defendant) Malcolm Nelson Johns as executor of the estate of the late Edith Pearl Welsh (Fourth Defendant) Representation: Counsel M Einfeld QC with J Horowitz (Plaintiffs) N A Cotman SC with E Hyde (Defendants) Solicitors Osbornes Lawyers (Plaintiffs) Malcolm Johns & Company (Defendants) File Number(s): 11/353160