CEG Direct Securities Pty Ltd v Wang

Case [2021] NSWCA 76

Court of Appeal


Supreme Court


New South Wales

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Medium Neutral Citation: CEG Direct Securities Pty Ltd v Wang [2021] NSWCA 76
Hearing dates: 10 March 2021
Date of orders: 7 May 2021
Decision date: 07 May 2021
Before: Bathurst CJ at [1]
Meagher JA at [2]
Brereton JA at [3]
Decision:

(1) Grant leave to appeal;

(2) Direct that the applicant within seven days file a Notice of Appeal in the form of the Draft Notice of Appeal;

(3) Dismiss the appeal;

(4) Remit the balance of the proceedings to the Common Law Division; and

(5) Order that the applicant pay the respondents’ costs.

Catchwords:

LAND LAW – Torrens title – Indefeasibility of title – Effects of indefeasibility – Construction of third party mortgages – Where executed pursuant to forged Powers of Attorney – Identification of secured money – Where no money advanced to or at the request of mortgagors – Where no acknowledgement of receipt – Mortgages held to have secured no money – Appeal dismissed – Balance of matter remitted

MORTGAGES AND SECURITIES – Mortgages – Duties, rights and remedies of mortgagee – Possession

CIVIL PROCEDURE – Court of Appeal – Leave to appeal – From separate questions – Practical effect of resolving claims finally and adversely to applicant – Leave granted

Legislation Cited:

Real Property Act 1900 (NSW), ss 41(1), 42, 57(1)

Supreme Court Act 1970 (NSW), s 103

Cases Cited:

Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70

CEG Direct Securities Pty Ltd v Shining Pty Ltd [2020] NSWSC 858

CEG Direct Securities Pty Ltd v Shining Pty Ltd (No 2) (2020) 19 BPR ¶40,671; [2020] NSWSC 1213

English Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302; [1937] HCA 6

Ippin Textiles Pty Ltd v Winau Aust Pty Ltd [2021] NSWCA 9

Mitchell Morgan Nominees Pty Ltd v Vella (2011) 16 BPR ¶30,189; [2011] NSWCA 390

Partridge v McIntosh & Sons Ltd (1933) 49 CLR 453; [1933] HCA 38

Perpetual Trustees Victoria Ltd v Cox (2014) 17 BPR ¶33,313; [2014] NSWCA 328

Perpetual Trustees Victoria Ltd v English (2010) 14 BPR ¶27,339; [2010] NSWCA 32

Perpetual Trustees Victoria Ltd v Tsai (2004) 12 BPR ¶22,281; [2004] NSWSC 745

Printy v Provident Capital Ltd (2007) 13 BPR ¶24,603; [2007] NSWSC 287

PT Ltd v Maradona Pty Ltd (1992) 25 NSWLR 643

Pyramid Building Society (in liq) v Scorpion Hotels Pty Ltd [1998] 1 VR 188

Small v Tomasetti (2001) 12 BPR ¶22,253; [2001] NSWSC 1112

Story v Advance Bank Australia Ltd (1993) 31 NSWLR 722

Travinto Nominees Pty Ltd v Vlattas [1972] 1 NSWLR 24

Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1; [1973] HCA 14

Yazgi v Permanent Custodians Ltd (2007) 13 BPR ¶24,567 [2007] NSWCA 240

Texts Cited:

J Stoljar, “Mortgages, Indefeasibility and Personal Covenants to Pay” (2008) 82 ALJ 28

Category:Principal judgment
Parties: CEG Direct Securities Pty Ltd (Applicant)
Xihai Wang (First Respondent)
Hai Rong Li (Second Respondent)

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Details
AGLC
CEG Direct Securities Pty Ltd v Wang [2021] NSWCA 76
Case
[2021] NSWCA 76
Decision Date

CaseChat Overview and Summary

CEG Direct Securities Pty Ltd (the applicant) appealed to the Court of Appeal of New South Wales against a decision concerning the validity of third-party mortgages executed under forged powers of attorney. The dispute centred on whether these mortgages secured any money, given that no funds were advanced to or at the request of the registered proprietors, nor was there any acknowledgement of receipt of funds by them.

The primary legal issues before the Court of Appeal were whether the mortgages, which were registered on the Torrens title land, secured any money in circumstances where the mortgagors had not received any advance and had not acknowledged receipt of such an advance. This involved considering the effect of indefeasibility of title under the Torrens system in relation to mortgages that did not secure any actual debt owed by the registered proprietor.

The Court of Appeal, comprising Bathurst CJ, Meagher and Brereton JJA, reasoned that for a mortgage to secure money, there must be an underlying debt or obligation owed by the mortgagor to the mortgagee. In this case, as no money was advanced to the mortgagors or at their request, and they had not acknowledged receipt of any funds, no debt was created. Consequently, the mortgages did not secure any money, notwithstanding their registration on the Torrens register. The principle applied was that indefeasibility of title does not create a debt where none exists; it protects the registered interest subject to the terms of the registered instrument, and in this instance, the instrument did not secure any money.

The Court granted leave to appeal, directed the applicant to file a Notice of Appeal, but ultimately dismissed the appeal. The balance of the proceedings was remitted to the Common Law Division, and the applicant was ordered to pay the respondents' costs.

Orders

Orders of the court

(1) Grant leave to appeal;

(2) Direct that the applicant within seven days file a Notice of Appeal in the form of the Draft Notice of Appeal;

(3) Dismiss the appeal;

(4) Remit the balance of the proceedings to the Common Law Division; and

(5) Order that the applicant pay the respondents’ costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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