CBA v Nabi

The Commonwealth Bank of Australia sought a vesting order in relation to a property that it had lent moneys for to be purchased by the second defendant from her mother, the first defendant. The loan was secured by a mortgage over the property. Before the transfer was registered, the transfer, together with the mortgage and the certificate of title, were lost. The second defendant fell into default, and no payments were made after that time. Despite this, the second defendant continued to receive rent from the property. The mortgage contained a power of attorney to the bank upon default. Judgment by default was entered against the second defendant. The bank applied for a vesting order, and sought to sell the property or appoint receivers. The second defendant contended that the bank was not entitled to a vesting order because the mortgage was not registered, and that even if it were, it would be void under the Personal Property Securities Act 2009.
The court was required to determine whether the bank was entitled to a vesting order in the circumstances, and whether it could sell the property or appoint receivers. The court found that the bank was entitled to a vesting order, because the evidence of the lost document was sufficient. The bank was not entitled to sell the property, because it had failed to register the mortgage. The bank was also not entitled to appoint receivers, because there were no assets available to be realised. The court found that the bank's power of attorney was void under the Personal Property Securities Act, because the mortgage had not been registered.
The court ordered that the property be vested in the second defendant, but that the bank was not entitled to sell the property or appoint receivers. The court ordered that the second defendant pay the costs of the proceeding.