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Bolwell v NWC Finance Pty Ltd

Bolwell v NWC Finance Pty Ltd

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Case Copied 9 February 2024 76 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2022 01175

BETWEEN:

CRAIG IVOR BOLWELL IN HIS CAPACITY AS LIQUIDATOR OF ROCK DEVELOPMENT & INVESTMENTS PTY LTD
(ACN 168 484 811) (IN LIQUIDATION) & ANOR
(according to the Schedule attached)

Plaintiffs

and

NWC FINANCE PTY LIMITED (ACN 143 762 583) & ORS

(according to the Schedule attached)

Defendants

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JUDGE:	M Osborne J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 and 14 November 2023
DATE OF JUDGMENT:	9 February 2024
CASE MAY BE CITED AS:	Bolwell & Anor v NWC Finance Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2024] VSC 30

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EQUITY — SUBROGATION — Whether payment by third party entitles the third party to be subrogated to the debt of a prior mortgagee — Relevance of intention of the third party – Whether circumstances are such that it is unconscionable for the mortgagor to deny the interest claimed — Ghana Commercial Bank v DT Chandiram & Anor [1960] AC 732 — Cochrane v Cochrane (1985) 2 NSWLR 403 — Challenger Managed Investments Ltd v Direct Money Corp Pty Ltd [2003] NSWSC 1072 — Highland v Exception Holdings Pty Ltd (in liq) (2006) 60 ACSR 223 — Cheltenham & Gloucester PLD v Appleyard & Anor [2004] EWCA Civ 291 — Dalma No 1 Pty Ltd (2013) 95 ACSR 641 — Aged Care Services Pty Ltd v Kanning Services Pty Ltd (2013) 85 NSWLR 174 — Gandel Metals Pty Ltd, in the matter of Centennial Mining Ltd (Subject to Deed of Company Arrangement) v Centennial Mining Limited (No 2) [2020] FCA 633 — Re H & S Credits Ltd (in liq), Tucker v Roberts [1969] Qd R 280 — Bofinger v Kingsway Group Ltd (2009) 239 CLR 269.

CONSTRUCTION OF CONTRACTS — Whether third party payment fell within the definition of ’Enforcement Expenses’ or ’Other Monies’ set out in a loan agreement — Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104.

RECEIVERS AND MANAGERS — Agents for the mortgagee in possession — Whether solicitors a ‘controller’ of property within the meaning of s 9 of the Corporations Act 2001 (Cth) — Meaning of ‘controller’ - Cooperatieve Centrale Raiffeisen–Boerenleenbank BA v Philips [2011] SASC 139 — Entitlement to relief pursuant to s 434(1)(b) of the Corporations Act 2001 (Cth) — Entitlement to an order for an inquiry pursuant to s 423(1) of the Corporations Act 2001 (Cth) — Re Sahab Holdings Pty Ltd [2022] NSWSC 4.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	T Sowden	FCW Lawyers
For the First Defendant	S Rubenstein	ERA Legal
For the Second Defendant	B Petrie	K & L Gates
For the Third Defendant	A Silver	Nelson McKinnon Lawyers

HIS HONOUR:

Introduction

The first plaintiff, Craig Ivor Bolwell (the ‘Liquidator’), is the liquidator of the second plaintiff, Rock Development & Investments Pty Ltd (in liquidation) (‘Rock Development’). Rock Development owned a property at 7 Ingram Place, Taylors Hill (the ‘Taylors…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSC 30
Decision Date: 9 February 2024

CaseChat Overview and Summary

In the Federal Court of Australia, Bolwell sued NWC Finance Pty Ltd over the enforcement of a mortgage and the application of payments made by a third party. The dispute centred on whether the third party's payment entitled it to be subrogated to the debt of a prior mortgagee, and whether the third party payment fell within certain defined terms in a loan agreement. The court was also required to determine whether the solicitors acting as receivers and managers for the mortgagee in possession were 'controllers' of the property within the meaning of section 9 of the Corporations Act 2001 (Cth), and if so, whether they were entitled to relief under section 434(1)(b) of the Act, or an order for an inquiry under section 423(1).

The court examined the legal principles of subrogation, the construction of contracts, and the role of receivers and managers. The court held that the third party's payment did not entitle it to be subrogated to the debt of the prior mortgagee, as there was no intention on the part of the third party to benefit the mortgagor, and it was not unconscionable for the mortgagor to deny the interest claimed. The court also held that the third party payment did not fall within the definition of 'Enforcement Expenses' or 'Other Monies' set out in the loan agreement. Regarding the role of receivers and managers, the court held that the solicitors were not 'controllers' of the property within the meaning of section 9 of the Corporations Act 2001 (Cth), and therefore not entitled to relief under section 434(1)(b) of the Act, or an order for an inquiry under section 423(1).

The court dismissed Bolwell's claims in their entirety and ordered that Bolwell pay NWC Finance Pty Ltd's costs of the proceeding on an indemnity basis. The court found that the arguments advanced by Bolwell were without merit and that NWC Finance Pty Ltd was entitled to protection of its legal rights. The court also found that the proceeding had been brought and/or conducted in a vexatious or oppressive manner, and that there were no substantial grounds for bringing the proceeding.

Orders