Huizhong Investment Group Pty Ltd v Westpac Banking Corporation Ltd and Ors [2019] NSWSC 524

Supreme Court New South Wales

Medium Neutral Citation: Huizhong Investment Group Pty Ltd v Westpac Banking Corporation Ltd and Ors [2019] NSWSC 524 Hearing dates: 6 December 2017, with written submissions; and 4 and 19 September 2018 Decision date: 10 May 2019 Jurisdiction: Equity Before: Lindsay J Decision: Upon a determination of separate questions adversely to the plaintiff, order that the proceedings be dismissed. Catchwords: EQUITY – Subrogation – Ghana Bank principle – Mortgages of Torrens title land – First mortgage paid out by second mortgagee pursuant to statutory right – Conveyancing Act 1919 NSW, sections 94-95 – Registration of transfer of mortgage – Real Property Act 1900 NSW, sections 51-52 – Second Mortgagee claimed to be subrogated to rights of first mortgagee under securities collateral to first mortgage – No formal assignment of rights under collateral securities – No subrogation

MORTGAGES AND SECURITIES – Mortgages – Duties, rights and remedies of mortgagee – Power of sale – Sale by second registered mortgagee after acquisition by transfer of first mortgage – Appropriation of sale proceeds exclusively towards payment of second mortgage debt – First mortgage discharged – Second mortgagee not entitled to disregard first mortgage debt in claim to be subrogated to rights under securities collateral to first mortgagee – Any entitlement to subrogation lost on receipt of sale proceeds in excess of first mortgage debt and discharge of first mortgage Legislation Cited: Conveyancing Act 1919 NSW Land Title Act 1994

Real Property Act 1900 NSW Supreme Court Rules 1970 NSW Uniform Civil Procedure Rules 2005 NSW Uniform Civil Procedure Rules 2005 NSW Cases Cited: Adams v Bank of New South Wales (1984) 1 NSWLR 285 ATCO Controls Pty Ltd (In Liq) v Stewart [2013] VSCA 132 Barry v Heider (1914) 19 CLR 197 Batthyany v Walford (1887) 36 Ch D, 269 Baxter v Obacelo Pty Ltd (2001) 205 CLR 635 Bofinger v Kingsway Group Ltd (2009) 239 CLR 269 Breskvar v Wall (1971) 126 CLR 376 Buchanan Borehole Collieries Pty Ltd v NSW Coal Compensation Review Tribunal (1997) BPR [97708] Burston Finance Ltd v Speirway Ltd (In Liq) [1974] 1 WLR 1648 Butler v Rice [1910] 2 Ch 277 C2C Developments Pty Ltd v Commonwealth Bank of Australia [2012] NSWSC 1162; 16 BPR [98586] Challenge Bank Ltd V Hodgekiss (1995) 7 BPR [97, 561]; [1996] ANZ Conv R 364; (1995) NSW Conv R 55-756; BC 9505293 Challenger Managed Investments Ltd v Direct Money Corporation Pty Ltd [2003] NSWSC 1072 Charles v Jones (1887) 35 ChD 544 Cochrane v Cochrane (1985) 3 NSWLR 403 Consolidated Trust Company Limited v Naylor (1936) 55 CLR 423; BC 3600017 Croft v Kennaugh [1945] VLR 40 Cuckmere Brick Co v Mutual Finance [1971] Ch 949 Edwards v McDowell (1933) 50 WN (NSW) 24 English and Scottish Australian Bank Ltd v Phillips (1937) 57 CLR 302 Farrar v Farras Ltd (1888) 40 Ch D 395 Forsyth v Blundell (1973) 129 CLR 477 French v Queensland Premier Mines Pty Ltd [2006] VSCA 287 Geitonia Pty Ltd t/as Trustee for the Annandale Unit Trust v Westpac Banking Corporation [2015] NSWSC 419 Ghana Commercial Bank v DT Chandiram [1960] AC 732 Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 Groongal Pastoral Company Ltd (In Liq)v Falkiner (1924) 35 CLR 157 Henry Roach (Petroleum) v Credit House (Vic) [1976] VLR 309]". Highland v Exception Holdings Pty Ltd (In Liq) [2006] NSWCA 318; 60 ACSR 223; 24 ACLC 1576 King Investment Solutions Pty Ltd [2005] NSWSC 1076; 13 BPR [98296] King Investments Solutions Pty Ltd v Hussain [2005] NSWSC 1076; 13 BPR [98296] Ley v Scarf (1981) 146 CLR 56 Manser v Dix (1857) 8 De GM & G 703; 44 ER 561