Andrew Garrett Wine Resorts v National Australia Bank Ltd (No. 6)

[2005] SASC 292

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

ANDREW GARRETT WINE RESORTS & ANOR v NATIONAL AUSTRALIA BANK LTD (NO 6)

Judgment of The Honourable Justice Gray

3 August 2005

MORTGAGES - MORTGAGES AND CHARGES GENERALLY - REMEDIES OF THE MORTGAGOR

REAL PROPERTY - GENERAL PRINCIPLES - REGISTRATION

PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - JURISDICTION AND GENERALLY

Application seeking directions pursuant to section 64 of the Real Property Act 1886 (SA) - proceedings commenced as an application pursuant to section 156 of the Law of Property Act 1936 (SA) by defendant for possession of real property - first mortgage discharged but not registered - whereabouts of duplicate memorandum of mortgage not known - defendant seeks order that the Registrar-General register discharge of memorandum of mortgage notwithstanding that the duplicate memorandum of mortgage has not been produced - consideration of interests of potential third parties - consideration of validity of subpoenae issued by Mr Garrett - all subpoenae found to be too broad, in non compliance with rules and set aside - consideration of Supreme Court's jurisdiction to make order pursuant to section 64 of the Real Property Act - held: Supreme Court has jurisdiction to make order - consideration of history of first mortgage - order made in terms of application - court further orders that all reasonable steps be taken to remove the duplicate mortgage from possible public circulation.

Law of Property Act 1936 (SA) s 156; Real Property Act 1886 (SA) s 64, s 143, s 221, s 222, s 223; Supreme Court Rules 1988 (SA) r 81.10; Supreme Court Act 1935 (SA) s 17(2); Real Property Act 1900 (NSW) s 138; Transfer of Land Act 1958 (Vic) s 103, referred to.
Andrew Garrett Wine Resorts Pty Ltd & Anor v National Australia Bank [2004] SASC 348; Evajade Pty Ltd v National Australia Bank Ltd (No 2) [2005] SASC 229 ; Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160 at 175; Rivers v Rivers [2004] SASC 295 ; The Commissioner for Railways v Small (1938) 38 SR (NSW) 564; National Employers’ Mutual General Insurance Assn Ltd v Waind [1978] 1 NSWLR 372 ; Santos Ltd v Pipeline Authority of South Australia (1996) 66 SASR 38 ; Hunt v Russell (1995) 63 SASR 402 ; R v Ran (1996) 16 WAR 447; R v Ridgeway [1998] SASC 6963 ; Rogers v Resi-Statewide (No 2) (1991) 32 FCR 344 ; Lipohar v The Queen (1999) 200 CLR 485 ; Re Biggs (1877) 11 SALR 43; Lallandsal Pty Ltd (in Liq) v REI Building Society (1993) 41 FCR 421; Re Charles White (1887) 21 SALR 6; Re Mallen (1892) 25 SALR 34; Elders Trustee and Executor Co Ltd v Bagot's Executor and Trustee Co [1946] SASR 306; Lank v Lank (1973) 21 FLR 384; Casella v Casella [1969] VR 49; Rogers v Resi-Statewide (No 2) (1991) 32 FCR 344, considered.

ANDREW GARRETT WINE RESORTS & ANOR v NATIONAL AUSTRALIA BANK LTD (NO 6)
[2005] SASC 292

Section 64 Application

GRAY J

Introduction

1. This is an application seeking directions pursuant to section 64 of the Real Property Act 1886 (SA).

2. These proceedings commenced as an application pursuant to section 156 of the Law of Property Act 1936 (SA) by National Australia Bank for possession of real property known as Springwood Park. Through consolidation with other proceedings the possession proceedings now include claims by the plaintiffs, Andrew Garrett Wine Resorts Pty Ltd (Resorts) and Averil Gay Garrett, to an alleged entitlement to limit the amount secured by a National Australia Bank mortgage as well as an alleged entitlement to set aside a further National Australia Bank mortgage over Springwood Park. The proceedings also include a counter-claim by the National Australia Bank in respect of a claimed indebtedness of the plaintiffs as well as Andrew Morton Garrett. Mr Garrett is a defendant by counterclaim. However, Mr Garrett does not have any legal or equitable interest in Springwood Park

3. Mr and Mrs Garrett are both undischarged bankrupts.  Mr Garrett’s bankruptcy order was made on 24 September 2004; Mrs Garrett’s on 22 December 2004.  

4. A possession order with respect to Springwood Park was made by a Judge of this Court on 26 July 2004.  An appeal against that order was dismissed by the Full Court.[1]  A further order for possession was made on 2 September 2004.  Vacant possession of Springwood Park was delivered to National Australia Bank in September 2004.

   [1] [2004] SASC 348.

5. National Australia Bank’s purpose in obtaining the orders for possession and the taking of vacant possession was to enable Springwood Park to be sold and the proceeds applied to reduce the debt said to be owed to the Bank by Resorts and Mrs Garrett.

6. At all material times there has been a first mortgage registered on the title of Springwood Park to N.M. Rothschild and Sons (Australia) Ltd.  The Rothschild debt has now been discharged.  A discharge of the Rothschild mortgage was executed in December 2002.  National Australia Bank holds the executed discharge of the Rothschild mortgage and wishes to register that discharge.  However, the duplicate memorandum of the Rothschild mortgage is not held by the National Australia Bank or Rothschild.  A letter dated 18 January 2005 to the solicitors for National Australia Bank from the solicitors for Rothschild included the following:

   On 11 November 2003, at Mr Garrett’s request, the duplicate Mortgage was delivered to Mr Garrett by Rothschild for the purpose of registering the Original Discharge and for no other purpose.  It was not provided for the purpose of any legal or equitable assignment of the Mortgage.  In fact, at that stage, assignment of the Mortgage had not been mentioned to Rothschild.

7. Mr Garrett has had possession of the duplicate mortgage.  He claims that the duplicate is now in the hands of a third party.  In a letter to Rothschild and its solicitors dated 20 December 2004 Mr Garrett advised:

   I believe you are aware that [National Australia Bank] held the First Deed of Discharge prepared by NMRA [Rothschild] in December 2002 and sent to them by one of my staff by accident in January 2003.

   [National Australia Bank] has lodged that discharge with the LTO (10077008) without the Duplicate mortgage 8909699 which has now been assigned to a new financier outside of the Garrett Interests. …

8. In a letter to the solicitors of National Australia Bank dated 25 January 2005 Mr Garrett advised:

   Rothschild Mortgage

   The mortgage remains on the title and has been assigned to a financier who has advanced funds against the same.  I refer to the confidential affidavit to Gray J of 27^th January 2005 to be lodged.

9. In these circumstances National Australia Bank seeks the following direction pursuant to section 64 of the Real Property Act:

   ... that the Registrar-General register the discharge of Memorandum of Mortgage No 8909699 on Certificate of Title Register Book Volume 5433 Folio 326, Volume 5348 Folio 15 and Volume 5324 Folio 475, notwithstanding that the duplicate Memorandum of Mortgage has not been produced to him and notwithstanding the provisions of section 143(3) of the Real Property Act 1886.

10. During a preliminary directions hearing it became apparent that a number of third persons may have a possible interest in the proceedings.  They included the Registrar-General, Rothschild, the Garrett interests and a number of corporate entities that Mr Garrett suggested at times had a possible interest in the duplicate mortgage.  Those entities included a number related to the Garrett interests – Resorts, J & W Holdings, Evajade Pty Ltd and Wineshare Pty Ltd.  One further entity identified as having a possible interest was Creditnet Bank Internationale.

11. Service of the proceedings was effected on the office of the Crown Solicitor for South Australia, Rothschild, each of the other corporate entities, Mr and Mrs Garrett and the trustees of Mr and Mrs Garrett.  Mr Garrett appeared in person and at the time sought to represent other persons and other entities.  On at least one occasion Mrs Garrett was in Court.

12. In the course of proceedings Mr Garrett claimed to be in control of a number of companies in what has been described as the Garrett Group.  Those entities include Resorts, Garrett International, J & W Holdings and Evajade.  He also claimed to control the activities of a number of family trusts including the Andrew Garrett Family Trust, the Andrew Garrett Family Trust No 2 and the Holy Grail Trust.

    The Registrar-General

13. The Registrar-General has taken a neutral position with respect to the application.  In a letter put before the Court, the Registrar advised:

    I confirm that the Registrar has no objection to an order being made in terms of [the proposed amended direction].  However, I repeat the observation (made in all of my previous correspondence) to the effect that the proposed order contains what appears to be an incorrect title reference.  A search of the Register Book maintained by my client indicates that the reference to Volume 5433 Folio 326 should be amended to read Volume 5344 Folio 326.  Please ensure that the current draft minutes of order have been altered to include the correct reference.

    Consistently with the position that has been taken since December [2004], my client does not propose to make any submissions concerning whether or not the Court is empowered to make the order which is being sought under s 64 of the Real Property Act 1886, or (if the Court is so empowered) whether or not it should exercise its discretion to do so. Neither will any submission be made in relation to the proposed declaration. In my view, however, whilst the mortgage may have been effectively discharged as between mortgagor and mortgagee, the registered interest of the mortgagee is discharged at law only by the registration of an instrument of discharge under s 143 of the Real Property Act (and see also s 67).

14. Section 67 of the Real Property Act is in the following terms:

    No instrument shall be effectual to pass any land or to render any land liable as security for the payment of money, but upon the registration of any instrument in manner herein prescribed, the estate or interest specified in such instrument shall pass, or, as the case may be, the land shall become liable as security in manner and subject to the covenants, conditions, and contingencies set forth and specified in such instrument or by this Act declared to be implied in instruments of a like nature.

15. Section 143 of the Real Property Act provides:

    (1)A mortgage or encumbrance may be wholly or partially discharged by instrument in a form approved by the Registrar-General and signed by the mortgagee or encumbrancee.

    …

    (3)The discharge of a mortgage or encumbrance must not be registered without production of the duplicate mortgage or encumbrance.

    This section stipulates that a mortgage may be discharged by an instrument approved by the Registrar-General and approved by the mortgagee.  However, the discharge cannot be registered in the ordinary course without the production of the duplicate mortgage.  Without production, the duplicate mortgage could remain in public circulation.

    Rothschild

16. Rothschild supported the application.  In a letter from its solicitors, the Rothschild position was outlined:

    We act for N.M. Rothschild & Sons (Australia) Limited ...

    We have been instructed by Rothschild to reconfirm the following matters:

    (a)Rothschild’s position remains that it would like either the Original Discharge or Duplicate Discharge (both as defined in our letter of 18 January 2005) to be registered (with or without production of the duplicate mortgage), and for Rothschild’s involvement in this matter to cease. 

    (b)Rothschild does not, at this stage, wish to make submissions to the Supreme Court of South Australia in relation to this matter.

    The Garrett Interests

17. Mr Garrett sought generally to represent the Garrett interests and opposed the application.  Mr Garrett’s submissions are referred to later in these reasons.  The Garrett interests include the personal members of his family and the family trusts and at least the following entities: Garrett International, Andrew Garrett Wine Resorts, J & W Holdings and Evajade.

18. On 20 December 2004 this Court ordered that Mr Garrett bring the duplicate mortgage into Court by no later than 31 January 2005.  That order was made without objection.  The duplicate was not produced.

19. Mr Garrett had not been forthcoming as to the whereabouts of the duplicate Rothschild mortgage.  He acknowledged that he had held the duplicate at one time.  He claimed that the duplicate had been in the hands of a number of third parties.  His final assertion was that the duplicate was with Wineshare.

20. As earlier observed, both Mr and Mrs Garrett are bankrupt.  On 1 February 2005 the Court directed that notice of National Australia Bank’s amended application be given to Mr and Mrs Garrett’s trustees in bankruptcy.  Counsel for National Australia Bank wrote to Mr Garrett’s trustee in bankruptcy, Peter Macks, and Mrs Garrett’s trustee in bankruptcy, Stephen Duncan, giving notice of the application.  Mr Garrett’s trustee in bankruptcy advised the Court that he did not seek to take part in the proceedings.  The following correspondence was recounted in an affidavit of Scott Alexander Evans, instructing solicitor of National Australia Bank, sworn 12 April 2005:

    On Tuesday, 12 April 2005, I telephoned Ms Lisa Gamble, solicitor for the trustee in bankruptcy for Mr Garrett, and she informed me that her client did not wish to make any submissions on the Bank’s proposed further amended application.

21. Mrs Garrett’s trustee in bankruptcy took a similar position.  The following correspondence was recounted in an affidavit of Scott Alexander Evans, sworn 12 April 2005:

    On Tuesday, 12 April 2005, I telephoned Mr James Cudmore, solicitor for the trustee in bankruptcy for Mrs Garrett, and he informed me that his client did not wish to make any submissions on the Bank’s proposed further amended application.

    This position was confirmed when Mr Cudmore attended in court.

22. No proper basis has been established for Mr Garrett to represent any other entities or person in the proceedings.  I have considered a similar claim by Mr Garrett to represent his family members and entities in the Garrett group when dismissing appeals from a decision of a Master of this Court.  In Evajade Pty Ltd v National Australia Bank Ltd (No 2) I concluded:[2]

    The Master was correct to conclude that Mr Garrett was not within the class of persons identified in Rule 36.11(1).  Even assuming that Mr Garrett was within the class of persons who could be given, on application of the company, leave to act and appear for Evajade, it does not follow that leave should be granted.  Section 206A(1) of the Corporations Act provides that it is an offence for an undischarged bankrupt to make or participate in making decisions that affect the whole or a substantial part of the business of a corporation.  There is a possibility if not a probability that Mr Garrett, in representing Evajade, would participate in the making of decisions that would affect a substantial part of the business of Evajade.  That business is to act as a trustee for two Andrew Garrett Family Trusts.  Mr Garrett submitted that Evajade was in substance part of the Garrett interests and that he should be allowed to represent Evajade along with all other Garrett interests.  The terms of the power of attorney referred to earlier provide evidence, or suggest the involvement, of Mr Garrett in the general management of the affairs of Evajade.  The exercise of such powers may well lead to a breach of section 206A(1) of the Corporations Act.  It would be inappropriate to grant leave under Rule 36.11 where there was potential, that a person appointed, would or may commit a breach of section 206A(1).  Even if Mr Garrett was a person within Rule 36.11(1) a grant of leave should not be made in his favour on the material before this Court.

    …

    The Master was correct to refuse to exercise any inherent jurisdiction of the Court that may exist.  The reasons that militate against the exercise of any such assumed jurisdiction include the following:

    -the lack of any satisfactory evidence before this Court that Evajade has authorised Mr Garrett to represent it.

    -the absence of any satisfactory explanation before this Court as to why the person said to be the sole director of Evajade, Mr Sandow, should not represent Evajade.

    -Mr Garrett is an inappropriate person to represent Evajade by reason of his personal involvement in the underlying facts raised in the proceedings.  His personal credit is directly in issue in these proceedings.  Circumstances of a potential conflict arise.  This factor supports the conclusion that he is an inappropriate person to represent Evajade.

    -any representation of Evajade is likely to involve Mr Garrett in participating in the making of decisions that could affect a substantial part of the business of Evajade.  If this were to occur, as Mr Garrett is an undisclosed bankrupt, he would be exposed to committing a breach of section 206A(1) of the Corporations Act.

    [2] [2005] SASC 229 at [29], [31].

23. These observations are apposite to Mr Garrett’s application to represent other entities and persons in these proceedings.  However, as appears later in these reasons, I have had regard to all submissions made by Mr Garrett.

24. On 13 April 2005 Mr Garrett made the following assertions during submissions:

    His HonourWho is the third party that has a bona fide commercial interest in this mortgage?

    Mr GarrettThere is a bona fide third party and that is Creditnet Bank Internationale.  They have dropped out of the action, but only in respect of one part of the action.

    His Honour[Creditnet] has been served with the papers and no doubt if they want to appear and claim an interest they will tell me.

    Mr GarrettIn my application for intervention, you will note that I am appearing for Creditnet, and I do so pursuant to the agency agreement that is in place between myself and Creditnet.  Creditnet have purchased 10% of the units in Holy Grail Properties Trust Units No. 2 which I say has bought the property already.  Settlement has occurred and while we might argue about the bills of exchange until we are blue in the face, the evidence is there in front of this affidavit today that gives weight and support to the valid drawing of those bills of exchange.

    His HonourSo your argument is that Creditnet is a bona fide third party who has an interest in this mortgage?

    Mr GarrettYes.

    His HonourIs there any other third party you claim has an interest?

    Mr GarrettAs I understand my previous appearances before you, there are related parties.  You refer to third parties I assume on the basis that they might be unrelated.  Creditnet is unrelated.

    His HonourWho are the related parties that you say have an interest?

    Mr GarrettJ&W Holdings, Evajade Pty Ltd both in its capacity as trustee of the Garrett Family Trust and as trustee of the Holy Grail Properties Trust No.2.  The other third parties that are related that have an interest are Wine Share Resorts Pty Ltd.  That company I have committed to purchase 50% of the issued capital –

    His HonourMr Garrett, anybody else?

    Mr GarrettYes, Nicholas Garrett, Tom Garrett and every other entity in the Andrew Garrett Group, and it is on the basis of that application for intervention that I seek to put the arguments of the respective interests of each of those parties independently.

25. Entities, asserted by Mr Garrett to have been possible holders of the duplicate Rothschild mortgage have been served with or have had notice of the application.  There is no acceptable evidence to establish that any arms-length entity has provided valuable consideration on the faith of the duplicate mortgage.  With the exception of Credinet Bank Internationale, all have elected to take no part in the proceedings.  No evidence has been filed to provide any basis for any entity resisting the Bank’s application.

    Creditnet Bank Internationale

1. Senior counsel appeared for Creditnet Bank Internationale at a directions hearing and challenged the Court’s jurisdiction.  Written submissions were made in support of that challenge.  However, when the matter came on for hearing, counsel advised that his instructions were that his client did not wish to be heard further:

   His Honour[Counsel], what’s the position as far as your instructions are concerned?

   [Counsel]... Upon the basis that the proceedings proceed regularly, my instructions now are that my client does not wish to be heard on the substantive application.  My client has given me instructions, however, to be present this morning because we raised the question of jurisdiction and to offer assistance to the court on that issue if your Honour wishes it.

   Creditnet Bank Internationale took no part in the proceedings other than to challenge the jurisdiction of the Court.

   The Evidentiary Material

   Affidavits and Submissions

2. On the hearing of the application, the following affidavits and exhibits, inter alia, were relied upon by National Australia Bank:

   -affidavit of Scott Alexander Evans sworn 5 August 2004 and exhibits;

   -affidavit of Andrew Morton Garrett sworn 12 August 2004;

   -affidavit of Andrew Morton Garrett sworn 31 August 2004 and exhibit;

   -affidavit of Scott Alexander Evans sworn 20 December 2004 and exhibits;

   -further affidavit of Scott Alexander Evans sworn 20 December 2004 and exhibits;

   -affidavit of Scott Alexander Evans sworn 31 January 2005 and exhibits;

   -affidavit of Andrew Morton Garrett sworn 23 February 2005 and exhibits;

   -affidavit of Scott Alexander Evans sworn 25 February 2005 and exhibits; and

   -affidavit of Scott Alexander Evans sworn 12 April 2005 and exhibits.

3. Letters from the Registrar-General and from Rothschild’s solicitors of 18 January 2005 and 15 February 2005 were also relied on without objection.

4. Mr Garrett referred to voluminous materials including submissions entitled:

   -written submission entitled Real Property Act 1886;

   -written submissions of Andrew Garrett consisting of 509 paragraphs;

   -written submissions entitled ‘High Court Summary of Argument’; and

   -affidavit of Andrew Morton Garrett of 13 April 2005 (put forward by Mr Garrett as both an affidavit and a pleading).

5. Much of this material was of marginal or no relevance.

   Subpoenae Duces Tecum

6. Mr Garrett issued subpoenae duces tecum to numerous entities.  The following are samples of the material sought:

   All information relating to discussions, correspondence of any form between [the party] and National Australia Bank Limited (its employees), Scott Evans, Phillip McNamara QC, David Proudman, Phillip Marshall, John Crosby, in respect of  Agwater Pty Ltd & Sunburst Properties Pty Ltd … and any other Garrett Related Matter from the 1^st of June 2003 until Today’s Date [12 April 2005]…

   Any & all advice, documents, diary notes and correspondence between the Defendant, JW&S, Alan Scott, Nick Cooper, Sims Partners & any other person in respect of or in respect of [sic] Communication of any kind with Freehills Solicitors, N.M. Rothschild & Sons (Australia) Pty Ltd or their representatives, in respect of Mortgage No 8909699, any Garrett Related Entity and the property known as “Springwood Park”. Pursuant to section 125 of the Evidence Act (1995), I advise that there is loss of Legal Privilege.

7. Counsel for National Australia Bank applied to set aside the subpoenae in their entirety.  Rule 81.10 of the Supreme Court Rules provides that a subpoena may be set aside by the Court where it is vexatious, oppressive or an abuse of the process of the Court.  It was submitted that the subpoenae issued by Mr Garrett were of this character.  It was further contended that the subpoenae: should be set aside on the grounds that they sought documents not relevant to any issue to be decided by the Court; were in terms too wide and therefore oppressive; constituted an impermissible “fishing expedition”; were not served personally on the recipients; were not accompanied by conduct money; and were issued by Mr Garrett, who has no standing to issue subpoenae in these proceedings.

8. It was said that no substantive basis had been established to show that any of the documents sought would materially assist the conduct of the proceedings or be of any evidentiary value.  It was contended that the subpoenae constituted an abuse of process and ought to be set aside.  In addition, it was contended that the subpoenae sought information and documents subject to legal professional privilege and that the production of such information would be objected to on the grounds of that privilege.  It was said that Mr Garrett failed to establish any grounds demonstrating relevance or waiver in relation to these documents.

9. As observed in Purnell Bros Pty Ltd v Transport Engineers Pty Ltd[3] and Rivers v Rivers,[4] a subpoena may be set aside as an abuse of process where the documents sought are not relevant to issues for determination by the Court or where the documents serve no real purpose in the litigation.  Mr Garrett failed to establish that the documents sought by the subpoenae were relevant to any outstanding issue awaiting determination in respect of the present application.

   [3] (1984) 73 FLR 160 at 175.

   [4] [2004] SASC 295 at [38].

10. In addition, the subpoenae were in terms that were too wide and described too broadly the documents sought.  In order to comply with the subpoenae, the recipients would have had to trawl through a voluminous amount of documentation.  In such circumstances, the courts have held that a subpoena sought without any particularity, that does not convey to the recipients in clear language the documents or class of documents sought, should be set aside.[5]  As observed by Jordan CJ in The Commissioner for Railways v Small:[6]

    A writ of subpoena duces tecum may be addressed to a stranger to the cause or to a party.  If it be addressed to a stranger, it must specify with reasonable particularity the documents which are required to be produced.  A subpoena duces tecum ought not to be issued to such a person requiring him to search for and produce all such documents as he may have in his possession or power relating to a particular subject matter.  It is not legitimate to use a subpoena for the purpose of endeavouring to obtain what would be in effect discovery of documents against a person who, being a stranger, is not liable to make discovery.  A stranger to the cause ought not to be required to go to the trouble and perhaps to expense in ransacking his records and endeavouring to form a judgment as to whether any of his papers throw light on a dispute which is to be litigated upon issue of which he is presumably ignorant: Lee v Angus; Burchard v Macfarlane; A-G v Wilson; Newland v Steer.  And if a subpoena duces tecum is issued to such a person in an objectionable form, the witness may apply to the Court to have it set aside.

    [5] See for example National Employers’ Mutual General Insurance Assn Ltd v Waind [1978] 1 NSWLR 372 at 382; Santos Ltd v Pipeline Authority of South Australia (1996) 66 SASR 38 at 55; The Commissioner for Railways v Small (1938) 38 SR NSW 564 at 573.

    [6] (1938) 38 SR (NSW) 564 at 573 (footnotes omitted).

11. It has also been held that a subpoena ought to be set aside if its terms are so broad that it amounts to a mere “fishing expedition”.  As Perry J observed in Hunt v Russell:[7]

    In my view, consistent with the dicta to which I have referred in Alister, a mere “fishing” expedition should not be allowed, and before a court should proceed to inspect the documents sought to be produced, it must be “on the cards” that the documents “will materially assist the defence”, or, having regards to the terms of s 25 of the District Court Act, it must be “on the cards” that the documents sought to be produced will be of “evidentiary value” in the proceedings.

    If that test is satisfied, the subpoena is not to be characterised as “fishing” and will not be struck out as bad.

    If the subpoena is bad as a mere “fishing” exercise, the court does not have to deal with any objection based on public interest immunity, legal professional privilege or statutory immunity from production.  The subpoena is struck out before the stage is reached at which any such objection falls to be considered.

    [7] (1995) 63 SASR 402 at 409.

12. It is not enough for the party issuing the subpoena to raise a speculative possibility that the documents sought would assist the resolution of the dispute.[8]  The party supporting the subpoena must demonstrate that the documents sought in the subpoena are of real relevance to the issues in the case.  It must be more than an outside chance that something useful might turn up in the documents.[9]

    [8] R v Ran (1996) 16 WAR 447.

    [9] R v Ridgeway [1998] SASC 6963 at [174].

13. In the present case, the subpoenae are far too broad.  They seek irrelevant material.  They, in effect, seek discovery and production at large and generally fit the description of a “fishing expedition”.  In addition, the subpoenae do not meet the procedural requirements provided in the Supreme Court Rules.  All the subpoenae are set aside. 

    Jurisdiction

14. Section 64 of the Real Property Act provides:

    In any proceeding in the Court respecting any land, or any transaction, contract, or application relating thereto, or any instrument, caveat, memorial, or other entry affecting any such land, it shall be lawful for the Court to direct the Registrar-General to cancel, correct, record, substitute, issue, or make any certificate, or any memorial or entry in the Register Book, notwithstanding that the relevant duplicate certificate has not been produced to him, or otherwise to do such acts and make such entries as may be necessary to give effect to any judgment, decree, or order of such Court given or made in such proceeding, and the Registrar-General shall obey every such direction.

15. Counsel for Creditnet Bank Internationale submitted that an order under section 64 was not available except as consequential upon “a judgment, decree or order” finally determining rights between the parties. It was contended that National Australia Bank was seeking an order pursuant to section 64 without seeking any final determination of rights that might arise from the discharge of the Rothschild mortgage. It was said that section 64 did not of itself create a cause of action. It was argued that the section could only be invoked to give effect to a judgment, decree or order. It was then contended that the court did not have jurisdiction to make the direction sought in the present proceeding.

16. Counsel for Creditnet Bank Internationale further submitted that a separate statutory procedure was available which enabled a challenge to be made to the exercise of, or the refusal to exercise, a discretion by the Registrar-General. Attention was drawn to the provisions of sections 221 to 223 of the Real Property Act.[10]  It was said that these provisions enabled a summary determination of questions concerning the proper exercise of discretion by the Registrar General and addressed the dispensation of the production of any duplicate instrument. 

    [10]  221.  If, upon the application of any proprietor to have land brought under the provisions      of this

17. The application of National Australia Bank was amended to include a claim for declaratory relief in the following terms:

    A declaration that Memorandum of Mortgage No 8909699 granted by the plaintiffs to NM Rothschild & Sons (Australia) Ltd is discharged.

    Counsel for National Australia Bank drew attention to the observations of von Doussa J in Rogers v Resi-Statewide (No 2):[11]

    [A] mere declaration … is sufficient ground for the court to direct the Registrar-General pursuant to section 64 of the Real Property Act …

    The application for a declaration was advanced as an alternative basis for jurisdiction in the event that the challenge to jurisdiction by Creditnet Bank Internationale was otherwise successful.

    [11] (1991) 32 FCR 344 at 351.

18. In Lipohar v The Queen[12] Gaudron, Gummow and Hayne JJ discussed the generic nature of the term “jurisdiction”. It was pointed out that the Supreme Court of South Australia was a superior court of record with the jurisdiction conferred by section 17(2) of the Supreme Court Act 1935 (SA).[13]  It was also observed that the Court has inherent jurisdiction to do what was necessary to assert its authority.  The Supreme Court may exercise its inherent powers on matters otherwise regulated by statute providing the statute is not contravened.[14] 

    [12] (1999) 200 CLR 485 at 515-517.

    [13] There shall be vested in the court—

    (a)the like jurisdiction, in and for the State, as was formerly vested in, or capable of being exercised by, all or any of the courts in England, following:

    (i)      The High Court of Chancery, both as a common law court and as a court of

    equity:

    (ii)     The Court of Queen's Bench:

    (iii)    The Court of Common Pleas at Westminster:

    (iv)    The Court of Exchequer both as a court of revenue and as a court of common law:

    (v)     The courts created by commissions of assize:

    (b)such other jurisdiction, whether original or appellate, as is vested in, or capable of being exercised by the court:

    (c)     such other jurisdiction as is in this Act conferred upon the court.

    [14] Lallandsal Pty Ltd (in liq) v REI Building Society (1993) 41 FCR 421.

19. Section 64, its various progenitors and its interstate counterparts, have been the subject of considerable judicial comment.

20. In Re Biggs[15] the Full Court of South Australia considered an application under section 137 of the Real Property Act (an early progenitor to section 64). The petitioner sought cancellation of an old certificate of title and the issue of a new certificate. The petition was heard as “a summary application”. There were no extant proceedings respecting land. The Full Court was not prepared to determine the petitioner’s title to the land on a summary application where there were no proceedings at law to prove his title. This decision reflects the Court’s reluctance to resolve a question regarding the title of an unregistered proprietor on a summary application. Although the Court concluded that section 137 “does not give the Court jurisdiction in such a matter” the real question was not jurisdiction but the circumstances in which the Court should exercise its jurisdiction.

    [15] (1877) 11 SALR 43.

21. In Re Charles White[16] the applicant claimed that a first registered mortgage had been discharged in error. There was no extant proceeding respecting land. The application came on before a Judge of the Supreme Court of South Australia in chambers relying on affidavit evidence. The second registered mortgagee and the Registrar-General took issue with the claim. The summons was dismissed. The Judge reasoned that section 48 (another progenitor of section 64) only applied when proceedings had been issued, and then only to give effect to the decree or order by which questions in issue were determined. The Judge concluded that if the applicant had rights “he must take proper proceedings to establish his rights”. Section 48 of the Real Property Act 1878 was differently worded to section 64 of the current Act. The current section is broader. There is now a reference to “notwithstanding that the relevant duplicate certificate has not been produced”.

    [16] (1887) 21 SALR 6.

22. In Re Mallen[17] the petitioner argued before a Judge of the Supreme Court of South Australia that the registered proprietor had mistakenly included a second allotment when he transferred land to the respondent.  The respondent claimed that “he meant to purchase that lot”.[18]  The Court did not accept the respondent’s assertion.  The Court held that the land in dispute was erroneously included in the transfer and certificate.  The Registrar-General was authorised to make such entries cancelling the certificate as were necessary to give effect to the order of the Court.  This decision demonstrates that the Court was prepared to exercise the statutory power without a full hearing regarding the parties’ rights.  The petitioner’s registered title was not in dispute.

    [17] (1892) 25 SALR 34.

    [18] There was no extant proceeding respecting land.

23. In Elders Trustee and Executor Co Ltd v Bagot’s Executor and Trustee Co[19] mortgagees applied to the Supreme Court of South Australia for a declaration that moneys secured by mortgage were due and owing.  They sought an order directing the Registrar-General to cancel registration of a discharge of the mortgage.  There appeared to be no dispute that registration of the discharge occurred in error. The mortgagees had not been repaid.  Counsel for a third party claimed the action was a “fiction” designed to overcome Re White.  Re Mallen does not appear to have been cited.  Mayo J held that an application would only be considered if proceedings were taken in which facts in issue were determined.  However, the Judge reasoned that the use of the soubriquet “fiction” did not bring in any legal ground for disallowing the application.  He concluded that an error had occurred and should be rectified.  Mayo J observed:[20]

    No person should be allowed to gain any advantage from that error, nor should any person suffer detriment by reason of its rectification.

    [19] [1964] SASR 306.

    [20] [1964] SASR 306 at 306.

24. The Judge ordered that the Registrar-General cancel the registration of the discharge.

25. In Lank v Lank[21] the New South Wales Supreme Court was concerned with the provisions of section 138 of the Real Property Act1900 (NSW). Allen J described the effect of section 138 as follows:[22] 

    Section 138 of the New South Wales Real Property Act entitles the court, “upon the recovery of any land, estate, or interest by any proceeding at law or in equity from any person registered as proprietor thereof”, to direct the Registrar-General “to take such action in respect of the Register, including the cancellation or amendment of any folio thereof, or of any recording therein, and the issue of such new certificate of title, or the substitution of such new recording as the circumstances of the case may require, and the Registrar-General shall give effect to such order”.

    [21] (1973) 21 FLR 384.

    [22] (1973) 21 FLR 384 at 387.

26. An abandoned wife sought cancellation of certificates of title in her husband’s name.  Attempts to serve the husband were not successful.  He had apparently returned to Canada and breached orders for the payment of maintenance.  The purpose of the order was to place the petitioner in the position of being able to deal with the land as the sole registered proprietor.  The Registrar-General declined to issue a new certificate and submitted that the Court should ensure maintenance of the system of Torrens title and protect the integrity of the Register.  It was submitted that an order should not be made unless the Court considered the risk of a claim against the assurance fund as being minimal.  The Court reviewed various decisions and concluded that the Court’s earlier decree and orders in favour of the petitioner would be “frustrated unless some drastic step now be taken”.  The Court found that the risk of any substantial loss from the respondent dealing with a certificate was remote.  The following observations were made:[23]

    It is clear, therefore, that in an appropriate case the court has a wide discretion to effect changes in the register.  But conveyancing practice has since its institution placed reliance upon the integrity of the registration system and “Torrens Title” has become a by-word.  It is perhaps title by registration rather than registration of title, but no order should lightly be made which would compel a change in the register which the Registrar-General opposed.

    [Counsel] for the Registrar-General made it clear at the outset of his submissions that the purpose of his appearance was not to attack the merits of the applicant’s case but to ensure that due regard was paid to the importance of maintaining the system established by the Real Property Act. The court should, he submitted, be concerned to protect the integrity of the registration system and of the register; to avoid, if possible, the highly inconvenient situation which might arise from the existence of two duplicate certificates in respect of the same parcel of land, a situation which might lead to an unauthorized borrowing by one joint tenant on the security of the certificate wrongfully held; and to assist the registrar in his duty to protect the assurance fund from claims under s. 127. An order under s. 138 should not be made, counsel submitted, unless the court considered that on the facts established such a risk is minimal.

    …

    There seems to have been no doubt that the defendant, who appeared in person, was in a position to deliver the relevant Crown grant, and the orders made by the learned judge required the defendant to execute an appropriate instrument of transfer and produce and deliver the Crown grant for registration.

    …

    In the result, the order made directed the registrar to dispense with the production of the duplicate certificate of title and that upon lodgement of an instrument of transfer of the land comprised therein the registrar should register the instrument and draw up a new certificate of title covering the land in question and further to issue a duplicate of such new certificate.

    [23] (1973) 21 FLR 384 at 387-389.

1. In Casella v Casella,[24] the Victorian Supreme Court had occasion to consider the extent of its jurisdiction under section 103 of the Transfer of Land Act 1958 (Vic). That section represents the Victorian counterpart to section 64 of the Real Property Act.  As McInerney J observed:[25]

   Section 103 (1) of the Transfer of Land Act 1958 was first enacted in Victoria as s. 103 (1) of the Transfer of Land Act 1954 (Act No. 5842).  The sidenote of the latter subsection suggests that it is derived from the provisions of ss. 233 and 245 of the Transfer of Land Act 1928 (Act No. 3791), from s. 64 of the Real Property Act of South Australia and s. 12 (d) of the Real Property Act of New South Wales.

   [24] [1969] VR 49.

   [25] [1969] VR 49 at 55.

2. The question in Casella was whether the words in section 103:

   in any proceedings in the Court relating to any land or an instrument or dealing in respect thereof

   were wide enough to include proceedings under the Matrimonial Causes Act 1959 (Cth) for the enforcement of that part of decree nisi directing the transfer of land.  The Court took the view that the proceedings did enliven the jurisdiction conferred by the Transfer of Land Act.  McInerney J then considered whether the jurisdiction should be exercised: [26]

   [26] [1969] VR 49 at 55-59.

   [T]he powers of the court under s. 103 … may be exercised only in relation to and in some existing proceedings in the court relating to land or any instrument or dealing in respect thereof, and that s. 103 does not authorize the issue of a summons standing independently of such proceedings.

   …

   In relation to s137 of the Real Property Act 1861 of South Australia, it was held in Re Biggs (1877), 11 SALR 43, that the section does not authorize the Court to cancel a certificate of title on the petition of a person claiming to be entitled to such land unless and until the title of such claimant has been established by proceedings at law. The report does not expressly identify who was "the respondent" to that petition, but I assume it was the Registrar-General. The same construction was put upon s48 of the Real Property Act (Amendment) Act 1878: see Re Charles White (1887), 21 SALR 6, where Boucaut, J., on a summons to the Registrar-General to show cause why the registration of a discharge of mortgage should not be cancelled, held that the section applies only when proceedings at law or in equity have been taken, and then only to give effect to the decree or order by which the questions at issue in such proceedings have been determined. He held that the applicant must first take proper proceedings to establish his rights before the Court will act under s48 of the Real Property Act (Amendment) Act 1878.

   The decision in Re Charles White (1887), 21 SALR 6, was considered by Mayo, J., in Elder's Trustee & Executor Co Ltd v Bagot's Executor & Trustee Co Ltd,[1964] SASR 306. In that case, in anticipation of the payment of the moneys secured by a registered mortgage, a discharge of the mortgage was executed by the mortgagees. By a mistake the discharge was registered at the Lands Titles Office before the moneys had been paid. The mortgagees applied to the Supreme Court for (1) a declaration that the moneys secured by the mortgage were still due and owing, and (2) an order directing the Registrar-General to cancel the registration of the discharge of the mortgage. The Registrar-General was made a party to the proceedings. Mayo J, stated, without comment, the effect of the decision in Re Charles White, supra, and made an order directing the Registrar-General to cancel the registration of the discharge of mortgage.

   In New Zealand, the view adopted as to the corresponding section (Land Transfer Act 1885, s73, now s85 of the Land Transfer Act 1952) has been that the power of the Court to cancel or correct the register is subsidiary to the recovery of the land or some stated interest in it from the registered proprietor by a judgment of the Court: see Assets Co Ltd v Mere Roihi, [1905] AC 176, at p. 195.

   In Assets Co Ltd v Mere Roihi, [1905] AC 176, at p. 195, the Privy Council, discussing s73 of the Land Transfer Act 1885, observed that "There does not, moreover, appear to be any power conferred on the Supreme Court to cancel or correct any certificate of title or entry on the register unless applied to by the registrar or on appeal from him, except where land or some state or interest therein is recovered by some proceeding in that Court from a registered proprietor. In such a case, if the proceeding is not expressly barred...the Supreme Court or Judge can direct the registrar to cancel a certificate or entry and substitute another for it (sec 73)."

   The course of authority in Victoria in relation to the section is curious and by no means uniform. In Gunn v Harvey (1875) 1 VLR (E) 111, at pp. 116 and 121, Molesworth, J., expressed the view that the way in which he had relieved from the inequitable effect of certificates was to order the holders of them to transfer. In Campbell v Jarrett (1881) 7 VLR (E) 137; 3 ALT 49, Holroyd, J., likewise expressed (at VLR p. 145) the view that he had no power to correct a certificate of title. In neither of these cases, however, were the provisions of s139 of the Transfer of Land Statute 1866 (Act No. 301) referred to. In Ogle v Aedy (1887) 13 VLR 461, Webb, J., refused to order the cancellation of a certificate of title obtained by fraud, because the Registrar of Titles had not been made a party. In Messer v Gibbs (1887), 13 VLR 854, where an attorney had forged the plaintiff's signature to a mortgage and had later absconded with the proceeds of the mortgage, Webb, J, considered (at p. 873) that the facts of the case brought it within s139 of the Transfer of Land Statute 1866, and, accordingly, made an order directing the defendant Gibbs, the Registrar of Titles, to cancel the two certificates of title issued in the name of the fictitious person, Hugh Cameron, and to substitute therefor two certificates of titles for the same land respectively in the name of the plaintiff, subject, however, to the mortgage executed in Cameron's name by the fraudulent attorney (Cresswell) to the McIntyres: see 13 VLR, at p. 874. Both the Full Court (13 VLR 876) and the Privy Council (sub nom. Gibbs v Messer, [1891] AC 248) appear to have assumed the validity of the view adopted by Webb, J., although the judgment of Webb, J., was varied in the Privy Council by directing the defendant Gibbs (the Registrar of Titles) to cancel not only the two certificates of titles issued in the name of Hugh Cameron but also the mortgages entered as an encumbrance on the certificates of title.

   In the light of these authorities, therefore, I conclude that s103(1) of the Transfer of Land Act 1958 may be regarded as part of the law of Victoria"relating to the enforcement of judgments of the Supreme Court" of Victoria, and, therefore, as being comprehended by those words as used in r. 259(1) of the Matrimonial Causes Rules.

   …

   The powers of the Court to make orders under s. 103 … are obviously to be exercised with very great care. The registrar has power in his discretion to dispense with the production of a duplicate certificate of title: see s. 104 (5). Where a discretion is committed by the Act to the registrar and the registrar declines – as he has done in this case – to exercise his discretion in the manner sought, the court should be slow to override the officer charged with the administration of the Torrens system of title in this State. To make an order cancelling a duplicate certificate of title, while at the same time leaving that duplicate in existence and capable of giving rise to unregistered dealings or transactions in which a person may advance money on the face of a supposed subsisting duplicate certificate of title, would be destructive of the objects of the Transfer of Land Act. I do not feel disposed, therefore, to make any order under s. 103 unless and until every other means has been exhausted of securing the production of the duplicate certificates of title now held by or at the direction of the respondent unless, indeed, it is “necessary to give effect to” the decree pronounced by Monahan, J.

3. In Rogers v Resi-Statewide (No 2),[27] von Doussa J reviewed the earlier authorities and concluded:

   Section 64 is a statutory conferral of jurisdiction on “the Court” to entertain a proceeding respecting, among others, “any land, or any transaction … relating thereto or any instrument … memorial, or entry affecting any such land …” and gives statutory powers which include the power to cancel a memorial; see Assets Co Ltd v Mere Roihi [1905] AC 176 at 195. The power so granted is, however, carefully circumscribed. It is not a power exercisable at large, but one limited to cases where such proceeding is not expressly barred by s 69 of the Real Property Act. “The effect is that the power of the Court to cancel or correct does not extend beyond those cases in which adverse claims against registered proprietors are admitted by the Act”: see Frazer v Walker [1967] AC 569 at 581. Before the power to correct or cancel will be exercised, there must be a proceeding in the Court to determine that it is a proper case to admit an adverse claim against the registered proprietor.

   [27] (1991) 32 FCR 344 at 351.

4. It is to be observed that the jurisdiction invoked by section 64 arises in any proceedings before the Court respecting any land; in regard to any proceedings respecting an application relating to any land; and also in respect to any instrument affecting any such land. In the present proceedings, all three of the alternative preconditions to the existence of statutory jurisdiction are satisfied. This action concerns a proceeding in respect of land - Springwood Park. It also concerns an application for possession of Springwood Park. The current application is in respect of a mortgage affecting the title to Springwood Park.

5. The Court has jurisdiction pursuant to the provisions of section 64 of the Real Property Act to direct the Registrar-General in the terms sought.  However, the powers of the Court are limited with respect to the nature of the direction that can be given. 

6. A relevant duplicate certificate has not been produced to the Registrar-General.  A direction may be necessary to give effect to orders of this Court.  Relevant to these proceedings, the Court has power to direct the Registrar-General to make an entry in the Register Book (the discharge of the Rothschild mortgage) notwithstanding that the relevant duplicate memorandum of mortgage is not produced to the Registrar.  The question to be resolved is whether the Court should give any direction and, if so, in what terms.

   The Discharge of the Rothschild Mortgage

7. Rothschild has been a past financier of the Garrett interests.  Rothschild secured its advance by a first registered mortgage over Springwood Park.  Later it agreed to discharge the mortgage on payment of all amounts secured.  The Rothschild mortgage was discharged on or about 24 December 2002.

8. Prior to the discharge of the Rothschild mortgage, National Australia Bank made advances to the Garrett interests.  On 11 June 2002 an advance of $1.5 million was made to Mr and Mrs Garrett in their personal capacities and as trustees of the Andrew Garrett Family Trust No 1.  As part of this financing transaction, on 21 June 2002 National Australia Bank, the Garrett interests and Rothschild entered into a deed of priority in respect of the $1.5 million advance.  By that deed, Rothschild granted National Australia Bank a priority over the Rothschild mortgage of $1.5 million, with respect to Springwood Park.

9. In the latter months of 2002, negotiation continued between the Garrett interests and Rothschild with a view to finalising the Rothschild debt.  In December 2002, Mr Garrett foreshadowed the complete repayment of that debt. 

10. During December 2002, the Garrett interests sought further finance of $600,000 from National Australia Bank.  The advance was sought with the provision of “the Springwood Park property as security”. 

    On 30 December 2002, the Garrett interests wrote to the National Australia Bank confirming the request for further finance.  The letter was on Braidwood Group letterhead but apparently sent by Braidwood Management Pty Ltd.  The letter was signed by Mr Sandow, a director of a number of entities in the Garrett Group, including Braidwood Management.  Mr Sandow was also an advisor to Mr Garrett.  The letter provided, inter alia:

    Dear Simon

    Attached please find

    ·Reviewed and updated financial forecasts for Sunburst Properties Pty Ltd ATF The Sunburst Property Trust and Sunburst Holdings Pty Ltd, Braidwood Management Pty Ltd and Braidwood Operations Pty Ltd and a consolidation of the two entities.

    ·Board report for December 2002.

    ·Memorandum of understanding for sale of Pipe line at Lake Alexandrina

    ·Discharge of the charge held by Rothschild’s over the Springwood Park Property.

    On the basis of these reports and the accompanying assumptions and explanations we ask that you consider the following:

    ·The provision of an additional temporary loan facility of $600,000 with the Springwood Park property as security.  The term of which would be until the end of January 2003 or if the Pipeline sale is settled earlier then at the time of that settlement.

    ...

    I must emphasise the urgency of these approval [sic] which would not have been required if the pipe line sale and settlement had taken place as indicated to us.

    ...

    I ask that you consider our submission favourably and promptly so that we can fulfil the task ahead of us and develop a substantial business in the wine industry.

    Yours Faithfully,

    Andrew Sandow

11. The executed discharge of the Rothschild mortgage was delivered to National Australia Bank by the Garrett interests with this letter.  It was the “charge held by Rothschild” referred to in the letter.  National Australia Bank made a further advance of $600,000. 

12. Evidence given by Mr Sandow in the other proceedings involving the Garrett interests[28] was exhibited to an affidavit in these proceedings.  That evidence included the following:

    [28] Supreme Court action no. 1767/2003.

    Q.After receiving this letter [letter of 30 December 2002], the bank considered the application for finance, didn’t it.

    A.    That’s correct, yes.

    Q.    The bank, in fact, enabled a draw down of funds on about 6 January 2003.

    A.    That sounds about right.

    Q.In your letter of 30 December 2002 where you refer to the discharge of the charge held by Rothschilds, do you see that.

    A.Yes, on the first page.

    …

    Q.Just so we are clear about it:  are you saying that you saw, on the facsimile, in the offices of the Braidwood Management Company fax, a discharge of mortgage.

    A.Yes.

    Q.From whom had that fax been received.

    A.From Freehills.

    Q.Is that the document that you say you saw.

    A.Yes, I believe so, yes.

    ...

    Q.Was that the document that you provided at the request of the National Australia Bank by this letter.

    A.The document I received I provided a copy to the National Bank, yes.

    Q.The document that came in on the facsimile, you copied with your letter of 30 December 2002.

    A.Yes, I haven’t got the attachments obviously.

    Q.Just so we are clear about it:  the document you say you saw on the fax was a document that came from Freehills.

    A.That’s correct.

    Q.You took a copy of that document and attached it to your letter of 30 December 2002.

    A.That’s my memory, yes.

    …

    Q.Your understanding was that the bank would acquire the discharge so that it could consider providing further funding and taking further security over Springwood Park.

    A.That’s my understanding.

    Q.So that it would be assured that there was no longer another financier standing behind it as second mortgagee on the title that’s at Springwood Park.

    A.So they could be sure that there was no other financier in the property.

13. National Australia Bank sought to register the discharge of the Rothschild mortgage.  The Registrar-General declined to register the discharge without the production of the duplicate mortgage.  This impasse led to these proceedings.

14. During the course of the proceedings, Mr Garrett asserted that there had been an assignment of the Rothschild mortgage to Garrett International Investments.  This was a critical step in his case that there had followed further assignments of the duplicate mortgage to other Garrett entities, to Creditnet Bank Internationale and, it was said, finally to have been assigned to Wineshare.

15. The contention that there was an assignment to Garrett International Investments should be rejected.  No document purporting to be an assignment has been produced.  Rothschild denies having executed or agreed to any such assignment.  As earlier observed, Rothschild delivered the duplicate mortgage for the sole purpose of registration.  Mr Sandow’s evidence of the events of December 2002 included the following:

    Q.There is no suggestion there of any involvement with Garrett International, is there?

    A.Not at that particular sentence, no.  It was on the document though.

    Q.You say there was a document, do you.

    A.Yes, there was a document.  I saw it.

    Q.When did you first see a document.

    A.It would have been just before Christmas 2002 when the discharge took place.

    Q.So you say you saw a document just before 25 December 2002.

    A.    Yes, it was a subject of that discussion at that time, yes;  Andrew Garrett Vineyards Estates.

    …

    Q.It’s right to say, isn’t it, that you saw no document between Christmas 2002 and the date of this letter, 30 December 2002, involving Garrett International and Rothschilds mortgage.

    A.I wouldn’t have seen very many documents in that period anyway simply because –

    Q.Please answer the question.

    A.I didn’t.

    Q.Is it right to say also that Mr Garrett did not suggest to you that there had been any transaction involving the Rothschilds discharge of Garrett International between 25 December and 30 December 2002.

    A.Sorry, could you start that again?

    Q.What I’m putting to you is that Mr Garrett didn’t suggest to you that there had been any transaction involving Rothschilds discharge of mortgage and Garrett International.

    A.    There was no indication of any transaction taking place.

16. Mr Sandow’s evidence, the Rothschild material and the lack of any evidence to the contrary, allows the conclusion to be drawn that no assignment was made by Rothschild of the Rothschild mortgage.  The evidence establishes that the Rothschild mortgage was to be discharged and, to that end, the executed discharge and duplicate mortgage were forwarded to the Garrett interests for that purpose.

17. Evidence before the Court establishes that on 30 December 2002, in connection with a proposed advance of additional finance from National Australia Bank to the Garrett interests, Springwood Park was offered as security free of the Rothschild mortgage.  On 6 January 2003 National Australia Bank advanced further monies in consideration of the security of Springwood Park clear of the Rothschild mortgage to the intent that the National Australia Bank was to be the holder of the first registered mortgage over Springwood Park.  Correspondence earlier discussed evidenced the delivery of the discharge of the Rothschild mortgage to National Australia Bank to allow the Rothschild mortgage to be discharged and removed from the Springwood Park title.  However, the duplicate mortgage was not forwarded.

18. As earlier observed, all entities with a possible interest in the application have been served with the proceedings.  No evidence in opposition to the application has been advanced by any of those entities. 

1. Mr Garrett appeared for himself and asserted a right to represent the Garrett interests.  He opposed the application.  As earlier observed, Mr Garrett’s entitlement to represent or make submissions on behalf of the Garrett interests is questionable.[29]  In the event, Mr Garrett made submissions without restriction.  There was no formal acknowledgment that Mr Garrett had any right to audience.  Mr Garrett also sought to speak for Resorts and Mrs Garrett.  Again, he was not prevented from making submissions on behalf of those parties.  Consideration has been given to Mr Garrett’s submissions in reaching a decision in these proceedings.

   [29] See Evajade Pty Ltd v National Australia Bank Ltd [2005] SASC 229 at [29], [31].

2. As earlier observed, the Rothschild debt secured by the Rothschild mortgage has been discharged.  Rothschild executed the discharge of mortgage.  Rothschild has no further interest in the matter.

3. In the event, nothing put forward by the Garrett interests provided any proper basis for resisting the declaration or directions sought by the application.  National Australia Bank advanced the amount of $600,000 on the basis that the Rothschild mortgage would be discharged.  The Garrett interests forwarded the Rothschild discharge of mortgage to National Australia Bank to enable National Australia Bank to discharge the Rothschild mortgage. 

4. I am satisfied that Mr Garrett sought to frustrate the Bank’s entitlement to have first mortgage security over Springwood Park by asserting that the duplicate Rothschild mortgage had been transferred through various third party entities.  With the possible exception of Creditnet Bank Internationale, it has not been shown that any of the parties were at “arms length” to the Garrett interests.  The evidence suggests the contrary.  There is no evidence that any valuable consideration has been given by any third party on the basis or on the faith of the duplicate Rothschild mortgage.  I am not prepared to find on the balance of probabilities that any assignment of the Rothschild mortgage occurred.

5. In light of the foregoing reasons, the following is a summary of my findings and conclusions.  In making the following findings I have done so, where the facts are in dispute, on the balance of probabilities.

   -The within proceedings include an application for an order of possession of real property known as Springwood Park.  An order for possession has been made and complied with.  The mortgagee, National Australia Bank, is in possession of the property.

   -The objective of National Australia Bank in obtaining possession was to sell Springwood Park and to use the proceeds to meet an indebtedness owed by the mortgagees to the Bank.

   -It has been acknowledged by the mortgagees that at least the amount of $1.5 million is owed by the mortgagees to the Bank.  The Bank claims a greater indebtedness.

   -National Australia Bank seeks to be in a position to transfer clear title on the intended sale of Springwood Park.

   -An undischarged first mortgage to Rothschild remains on the title to Springwood Park.

   -The debt secured by the Rothschild mortgage has been fully repaid.  Rothschild has executed a discharge of the mortgage.  Rothschild wishes the discharge to be registered.

   -Rothschild has not assigned the mortgage to any third party.  In particular I am satisfied that there was no assignment to Garrett International Investments.

   -In December 2002, Rothschild delivered the discharge of mortgage and the duplicate mortgage to the Garrett interests for the sole purpose of registration.

   -On 30 December 2002, the Garrett interests sought further finance from National Australia Bank.  In seeking finance, the Garrett interests offered further security over Springwood Park and in particular first mortgage security.  To that end the Garrett interests forwarded a copy of the discharge of the Rothschild mortgage to National Australia Bank.  However, the Garrett interests did not forward the duplicate mortgage.

   -National Australia Bank advanced further funds on the basis that it would be in a position to discharge the Rothschild mortgage and be the first mortgagee over Springwood Park.  This accorded with the representation of the Garrett interests.

   -The Garrett interests claim that Garrett International Investments Pty Ltd assigned rights attaching to the Rothschild mortgage to Evajade Pty Ltd, the trustee of trusts associated with the Garrett family.  No satisfactory evidence of such an assignment has been produced.  I am unable to conclude that any such assignment took place.

   -It is claimed that Evajade assigned its interests in the Rothschild mortgage to another Garrett entity, J & W Holdings Pty Ltd.  Documents purporting to record that transaction were put before the Court.  I am not satisfied of their authenticity or that this purported transaction took place.

   -It is claimed that J & W Holdings assigned its interests in the Rothschild mortgage to Creditnet Bank Internationale.  Documents purporting to record this transaction were put before the Court.  However, I am not satisfied as to the authenticity of the transaction.  In particular, I am not satisfied that Creditnet Bank Internationale provided any consideration to J & W Holdings.

   -Then it is said that Creditnet Bank Internationale assigned its interests in the Rothschild mortgage to Wine Share Pty Ltd, another Garrett-related entity.  I am not satisfied that any such transaction took place.

   -Creditnet Bank Internationale was said by Mr Garrett to be the third party holding the beneficial interest in the Rothschild mortgage.  Creditnet Bank Internationale has not supported this assertion.  Creditnet Bank Internationale has not sought to place any evidence before this Court, and declined to make any submission other than to challenge the jurisdiction of the Court.  This was the position put by senior counsel acting for Creditnet Bank Internationale. 

   Later in the proceedings Mr Garrett claimed to be acting for Creditnet Bank Internationale pursuant to an unidentified agency agreement.  I reject the suggestion that Mr Garrett had any authority to represent Creditnet Bank Internationale.

   -It is not possible to make any finding as to the present whereabouts of the duplicate mortgage.

   Conclusion

6. I am satisfied that it is appropriate to make an order dispensing with the need for the production of the duplicate mortgage.  The purpose of the Court’s order for possession was to enable National Australia Bank to sell the property.  That order is being frustrated.  The Registrar-General requires this direction to give effect to the order for possession made by this Court. 

7. It is appropriate, however, that the direction should be conditioned on National Australia Bank taking further steps to locate the duplicate mortgage.  All reasonable steps should be taken to remove the duplicate mortgage from possible public circulation with a view to preventing any inappropriate action being taken in reliance on the duplicate mortgage.  To this end, National Australia Bank should serve a subpoena duces tecum on Evajade, J & W Holdings, Wineshare and Creditnet Bank Internationale requiring the production to this Court of the duplicate mortgage and any documents that may disclose directly or indirectly the whereabouts of the duplicate mortgage.

8. National Australia Bank should also place public notices in the Advertiser, the Australian and the Financial Review newspapers at times and in a form to be approved, giving notice of the declaration to be made and the directions proposed to be given to the Registrar-General.

9. These proceedings are adjourned to enable draft minutes of order to be submitted to the Court.

   
   

Act, or to have any dealing or transmission registered or recorded, or to have any instrument or foreclosure order issued, or to have any act or duty done or performed which by this Act is prescribed to be done or performed by the Registrar-General, the Registrar-General shall refuse so to do, or, if such proprietor shall be dissatisfied with the direction upon his application given by the Registrar-General such proprietor may require the Registrar-General to set forth, in writing under his hand, the grounds of his refusal, or the grounds upon which such direction was given, and such proprietor may, if he think fit, at his own cost, summon the Registrar-General to appear before the Court to substantiate and uphold the grounds of his refusal or of such direction as aforesaid.

222.  Such summons shall be issued under the hand of a Judge, and shall be served upon the Registrar-General six clear days at least before the day appointed for hearing; and upon such hearing, the Registrar-General, or his counsel, shall open and have the right of reply, and the Court may, if any question of fact be involved, direct an issue to be tried to decide such question, and may make such order in the premises as the circumstances of the case may require, and the Registrar-General shall obey such order. All expenses of and incidental to any such proceedings shall be borne and paid by the person instituting the same, unless the Court shall certify that there were no reasonable grounds for such refusal or direction as aforesaid.

223.  The Registrar-General may, whenever any question shall arise with regard to the performance or exercise of any of the duties by this Act conferred or imposed upon him, state a case for the opinion of the Court, and it shall be lawful for the Court to give judgment thereon, and such judgment shall be binding upon the Registrar-General.