Citigroup Pty Ltd (ACN 004 325 080) v Wernhard [2019] NSWSC 132

Supreme Court New South Wales

Medium Neutral Citation: Citigroup Pty Ltd (ACN 004 325 080) v Wernhard [2019] NSWSC 132 Hearing dates: 7 and 21 June 2018 Date of orders: 01 March 2019 Decision date: 01 March 2019 Jurisdiction: Equity Before: Slattery J Decision: Declarations made that the plaintiff is entitled to an equitable mortgage over the Watanobbi property and that the mortgage secures all monies owing to the plaintiff under the Second Loan Agreement. The defendants ordered to execute a first Mortgage over the Watanobbi property to secure the defendants' obligations under the Second Loan Agreement; or if in default, that the Registrar in Equity execute the Mortgage in their stead. Plaintiff ordered to give an account to the defendants. The defendants/cross-claimants' Cross-Claim is dismissed. The costs of the proceedings are reserved for further argument. Catchwords: REAL PROPERTY – equitable mortgage – discharge of mortgages – three properties owned by the defendants – defendants enter into loan agreement with plaintiff bank for a line of credit – loan agreement secured by three mortgages over the three properties – defendants request plaintiff to discharge one mortgage, so one of the properties can be sold – plaintiff delivers a Discharge of Mortgage for that property to the defendants – plaintiff also mistakenly delivers to the defendants the two other Discharges of Mortgages – defendants register all three Discharges of Mortgages – one of the properties is sold by the defendants without the plaintiff's knowledge or consent – whether the plaintiff is entitled to equitable relief to have the mortgage reinstated over the remaining property owned by the defendants. Legislation Cited: Associations Incorporation Act 2009 Australian Securities and Investment Commission Act 2001 (Cth), ss 28, 29 Contracts Review Act 1980 National Consumer Credit Protection Act 2009 (Cth) Real Property Act 1900, ss 41, 42 Cases Cited: Bahr & Anor v Nicolay & Ors (No 2) (1988) 164 CLR 604 Beneficial Finance Corporation Limited v Karavas (1991) 23 NSWLR 256 Breskvar v Wall (1971) 126 CLR 376 Chillingworth v Chambers [1896] 1 Ch 685 Dixon v Barton [2011] NSWSC 1525 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Forsyth v Blundell (1973) 129 CLR 477 Grundy v Ley [1984] 2 NSWLR 467 Hanson v Keating (1844) 4 Hare 1 Lipkin Gorman v Karpnale Ltd [1991] 3 WLR 10 Perpetual Trustee Company Limited v Albert and Rose Khoshaba (2005) 14 BPR 26,639; [2006] NSWCA 41 Perpetual Trustees Victoria Limited v Burns [2015] WASC 234 State Bank of New South Wales v Berowra Waters Holdings Pty Ltd & Ors (1986) 4 NSWLR 398 Stefanetto v Forestry Commission of New South Wales [1975] 1 NSWLR 332 Stern v Macarthur (1988) 165 CLR 489 Taylor v Johnson (1983) 151 CLR 422 Tidd v Lister (1852) 10 Hare 140 Tutt v Doyle (1997) 42 NSWLR 10 Texts Cited: JD Heydon, MJ Leeming, PG Turner, Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) Category: Principal judgment Parties: Plaintiff: Citibank Pty Ltd (ACN 004 325 080) First defendant: Guy Davey Wernhard Second defendant: Eunice Maree Wernhard Representation: Counsel: Plaintiff: P Newton Defendants: In person