Commonwealth Bank v MacDonald - [2000] NSWSC 791

CITATION: Commonwealth Bank -v- MacDonald [2000] NSWSC 791

CURRENT JURISDICTION: Equity Division
Commercial List

FILE NUMBER(S): SC 50053/00; 50055/00

HEARING DATE(S): 14.7.00, 20.7.00

JUDGMENT DATE: 10 August 2000

PARTIES :

Commonwealth Bank of Australia -v- Ian Harley MacDonald & Helen Elizabeth MacDonald

JUDGMENT OF: Hunter J

COUNSEL : Plaintiff: R G Forster SC & R S Hollo
First and Second Defendants: M J Watts

SOLICITORS: Plaintiff: Abbott Tout
Second Defendant: Searle & Associates

CATCHWORDS: Practice and procedure - default judgment - variation of judgment - enforcement of covenant for vacant possession - appropriateness of writ for possession of company title unit - s 19 Supreme Court Act 1970 - Pt 42 r 4 Supreme Court Rules - whether right of occupation of company title unit vested in registered holder of shares over trustee in bankruptcy of registered holder's estate - s 58 Bankruptcy Act 1966 (Cth) - whether right of occupation vested in registered holder over chargee of shares.

LEGISLATION CITED: Bankruptcy Act 1966 (Cth)
Contracts Review Act 1980 (NSW)
Conveyancing Act 1919 (NSW)
Supreme Court Act 1970 (NSW)

CASES CITED: Brimaud -v- Honeysett Instant Print Pty Ltd (Unreported 19 September 1998)
Danzey and Others -v- Nevada Pty Ltd (Unreported 22 May 1997)
Douglass -v- Gillman (1990) 19 NSWLR 570
Garcia -v- National Australia Bank Ltd (1998) 194 CLR 395
Yerkey -v- Jones (1939) 63 CLR 649

DECISION: Default judgments for possession to be varied by discharge and further orders for delivery of possession of subject premises and otherwise by orders in accordance with prior default judgments. Plaintiff to bring in short minutes of orders to give effect to reasons for judgment.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

HUNTER J

THURSDAY 10 AUGUST 2000

50053/00 COMMONWEALTH BANK OF AUSTRALIA LIMITED -V- IAN HARLEY MACDONALD & ELIZABETH HELEN MACDONALD

50055/00 COMMONWEALTH BANK OF AUSTRALIA LIMITED -V- IAN HARLEY MACDONALD & ELIZABETH HELEN MACDONALD

REASONS FOR JUDGMENT

1    In these proceedings nobody disputes that the plaintiff lent the first defendant a considerable sum of money several years ago, nor that repayment of those moneys was secured by several equitable charges, nor that a substantial sum of money remains unpaid. Yet, in proceedings instituted in 1997, the plaintiff finds itself unable to enforce its security in order to facilitate satisfaction, at least in part, of the outstanding indebtedness.
2    In order to gain some insight into this situation it is useful to trace the history of the proceedings between the parties.
3    On 19 August 1997 the plaintiff brought proceedings in the Common law division by way of default statement of claim (the 97 proceedings) seeking enforcement of two equitable charges, each dated 26 November 1990, by which, in one, the first defendant (MacDonald) charged in favour of the plaintiff (the bank) shares known as group A shares held by him in the capital of 82-84 Bower Street Pty Limited (the corporation), and in another, MacDonald and the second defendant (Elizabeth MacDonald), charged the shares known as…

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.

Continue reading Commonwealth Bank v MacDonald

Details

AGLC: Commonwealth Bank v MacDonald [2000] NSWSC 791
Case: [2000] NSWSC 791
Decision Date: 10 August 2000

CaseChat Overview and Summary

The Commonwealth Bank of Australia sought a variation of a default judgment in the Supreme Court of New South Wales. The judgment was originally entered against a bankrupt individual, who was the registered holder of shares in a unit trust. The bank had obtained a writ for possession of a company title unit, which was subject to a covenant for vacant possession. The dispute centred on whether the right of occupation of the unit was vested in the registered holder of the shares or in the trustee in bankruptcy of the registered holder's estate, as well as whether it was vested in the registered holder over the chargee of the shares.

The central legal issues the court had to address were the interpretation of section 19 of the Supreme Court Act 1970 and Part 42 Rule 4 of the Supreme Court Rules, in the context of section 58 of the Bankruptcy Act 1966. Specifically, the court had to determine whether the right of occupation was held by the registered holder of the shares, the trustee in bankruptcy, or the chargee of the shares. The court also had to consider whether the writ for possession was an appropriate remedy in this context.

The court held that the right of occupation of the company title unit was vested in the registered holder of the shares, rather than in the trustee in bankruptcy or the chargee of the shares. The court found that the writ for possession was not an appropriate remedy in this case, as it did not address the underlying issues of ownership and occupation rights. Instead, the court ordered that the default judgment be varied to reflect the correct ownership of the unit, and that the matter be remitted for further proceedings to determine the appropriate remedy for enforcement of the covenant for vacant possession.

The final orders of the court were to vary the default judgment to reflect the correct ownership of the unit, and to remit the matter for further proceedings to determine the appropriate remedy for enforcement of the covenant for vacant possession. The writ for possession was set aside, and the matter was to be relisted for further directions.

Orders