Collins v Marinovich

Collins sought a declaration that a debt secured by a mortgage was forgiven upon the death of the mortgagee. The dispute was heard in the Supreme Court of Queensland. The critical issue was whether the terms of the mortgage were testamentary and overridden by the deceased mortgagee's will, or whether the debt was forgiven upon the death of the mortgagee in accordance with the mortgage terms. The second respondent had the running of the critical issues at the hearing, and the first respondent acted as a contradictor on the question whether it ought to be bound by the court’s declaration.

The court found in favour of Collins, declaring that the debt secured by the mortgage was forgiven upon the death of the mortgagee. The court held that the terms of the mortgage were not testamentary, and therefore the will of the deceased mortgagee did not override them. The court also held that the second respondent was to pay Collins’ costs of the proceeding, and that the first respondent was to pay Collins’ costs of paragraph 1 of the originating application filed on 12 June 2019. The court further held that it was appropriate to order that the parties’ costs be paid out of the estate, on the indemnity basis, by analogy with estate litigation.

The court made several declarations, including that the debt secured by the mortgage was forgiven upon the death of the mortgagee, and that the second respondent was to execute and deliver a discharge of the mortgage within 14 days of the date of the declaration. The court also ordered that the second respondent was to pay Collins’ costs of the proceeding, and that the first respondent was to pay Collins’ costs of paragraph 1 of the originating application. The court further ordered that if the second respondent failed to deliver the duly executed discharge by the due date, the Registrar of Titles or the Registrar of this Court may execute on behalf of the second respondent the discharge upon request by Collins or her solicitors and deliver the discharge to Collins’ solicitors.