Edwards v Australia and New Zealand Banking Group Ltd

[1992] HCATrans 119

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B34 of 1991

B e t w e e n -

TOM EDWARDS

Applicant

amd

THE AUSTRALIA AND NEW ZEALAND

BANKING GROUP LIMITED

Respondent

Application for special

leave to appeal

DEANE J

DAWSON J

MCHUGH J

Edwards 1 10/4/92

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 10 APRIL 1992, AT 12.03 PM

Copyright in the High Court of Australia

MR P.H. MORRISON, QC:  I appear with my learned friend,

MR D.B. FRASER, for the applicant. (instructed by

Gadens Ridgeway)

MR W. SOFRONOFF, OC:  I appear with my learned friend,

MS A.I. PHILIPPIDES, for the respondent.

(instructed by MacDonnells)

DEANE J: Yes, Mr Morrison?

MR MORRISON:  Thank you, Your Honour. Your Honours, the

application for special leave is for leave to

appeal against the judgment of Mr Justice Byrne,

which was entered as a consequence of the Full

r:':)Urt' s determination of a case stated. There has

:hus been no trial or decision by a primary judge,

2erely the Full Court's decision which was

delivered on 8 August 1991.

In the case before the Full Court, the applicant here today contended that it had an

equitable interest in land over which the

respondent is the registered mortgagee.	The land
is Torrens Title land.	The applicant's contentions

were that it held that interest by virtue of,

amongst other things, his being an unregistered

lessee for a term of years -

DEANE J:  Mr Morrison, you can assume we have worked out the

facts and come straight away to the statute and

what you want to say about it.

MR MORRISON:  Thank you, Your Honours. May I make, if I

may, a couple of points about the decision? Two of

the judges, Mr Justices McPherson and Ryan, held

that there was no contrary intention disclosed

which would displace the definition of "mortgagor"
in section 4 of the Property Law Act, from applying

to section 84 of the Property Law Act, which

governs the giving of notice and to whom prior to a
sale by mortgagee.	Mr Justice Ryan expressed it in

this way, that he thought the same fact applied,

that is to say, there was no contrary intention,

but it was unnecessary to decide.

Mr Justice Dowsett, for his part, expressed general agreement and, therefore, may be taken to have

joined in that though he did not deal with it

specifically.

Their Honours also took the same view about a

number of points, namely, that a Torrens System

mortgagor has a personal right to redeem, even if

that is understood as meaning no more than a right

to have the mortgage cleared from the title once

Edwards 2 10/4/92

the obligation was satisfied. They all took the

view, at least Mr Justices McPherson and Ryan took

the view, that section 44 of the Real Property

Act 1861 had the effect that the registered

mortgagee took and held its interests free from any

equitable interests created by the lease, and free

from any equity of redemption which the general law

would recognize as an incident of that interest.

Can we pause to note this, Your Honours, that

though they did not deal with it in terms

Their Honours also assumed, as it were, in the

applicant's favour that its equitable interests

otherwise were legitimately made out but held,

notwithstanding those interests, section 44 had the

same effect, that is to say that the mortgagee held

its interest free of any such equitable claims, and

thereby free from any claim to an equity or an

interest in the equity of redemption. Where I call

it an equity of redemption or a right to redeem,

perhaps does not matter for the purposes of this

application.

Your Honours, in our submission, I should say

one more thing if I may, Mr Justice Dowsett did not

determine the case on that basis, though expressed

general agreement. He determined it on a different

basis which seems, with respect to His Honour, to

have been precipitated by notions of the resultant

inconvenient result that might follow, as a matter

of practice, if mortgagees had to give lessees

notice. Now, Your Honours, can see that at page 34

of the appeal book, where His Honour started out

with that observation.

The actual basis upon which he decided the case appears at page 36 and seems to be predicated

on the footing that whatever estate or interest a

lessee or tenant gets by contract from a

Torrens Title proprietor, no part of that

comprehends any interest in the entitlement to

redeem, the proprietor possessing only, at line 30,
and passing only part of his title, "but not part

of the equity of redemption".

Your Honours, we would submit, that seems a

curious matter, dependent in each case upon the

contract, but surely could not be applicable to all
cases. His Honour seems to, with respect, have

ignored the questions attaching to the additional

bases for the equitable interest that the applicant

contended for, that is to say, as beneficiary and

so forth.

Your Honours, in our submission, the decision

is impermissible in terms of its application of

section 44 of the Real Property Act, to govern

Edwards 3 10/4/92

section 84 of the Property Law Act. Section 44 is

one which, I am sure, is common in Your Honours'

recollection, which provides that:

the registered proprietor of land or of any

estate or interest in land shall except in the

case of fraud hold the same subject to such

mortgages liens estates or interest as may be

recorded in the register ..... but absolutely

free from all other mortgages, liens estates

or interests whatsoever -

Your Honour, in our submission, the power of sale

is really an incidental power and one conferred not

by that Act but by another Act. Your Honours will

see section 57 of the Real Property Act provides

that:

The mortgagee shall have and may exercise the

power to sell -

but it only provides that it is the power to sell -

conferred by the Property Law Act 1974. So, in our submission, it expressly recognizes that

the power is conferred by, and we would submit

regulated by, a different Act and, in our

submission, if one looks at the Property Law Act

itself, having seen section 57 of the Real Property

Act, section 83 of the Property Law Act refers to the power of sale as being a powers incident to the estate of a mortgagee, and then section 84 goes on

to provide expressly for regulation of how that is

to be exercised.

And the point that we make, Your Honour, and

we make it in relation to our principal argument,

is that all that section 84 of the Property Law Act

does, and was intended to do, is to regulate the

exercise of the power. When the Property Law Act

came into force, it relevantly repealed those

sections of the Real Property Act, as they then

stood, which governed the exercise of the power of

sale. Our submission is that the proper way to

view the Property Law Act then, in this respect, is

that it provides a code for the regulation of the

power of sale.

Your Honours, we make the submission that the

requirement to give notice under the Property Law

Act in no way impacts adversely on the title which

the registered mortgagee might have. That seems to

be the nub of the position which attracted the Full

Court. That is to say that section 44, providing

that a registered mortgagee held free of all the

States whatsoever, then held free of the right to

Edwards 4 10/4/92

redeem in any equitable assignee or any equitable

lessee or purchaser; any sort of equitable state at

all.

In our submission, that was an impermissible

way to view it because section 84 of the Property

Law Act should not be governed by section 44 since

there is no inconsistency between them. Section 84

merely regulates the way in which the power is

exercised.

The entitlement to receive the notice is not a

recognition of the paramountcy of the recipient's

interest over that of the mortgagee. We would

submit quite the contrary. It is a recognition of

it because what it seeks is the right to satisfy

the obligation which gave rise to the mortgagee's entitlement in the first place. So it in no way
conflicts with section 44 which is concerned with

paramountcy of title and keeping one free from

attack as a matter of title. The source of the

power of sale, in our submission, arises either

from the contract, that is to say the mortgage, or

alternatively, the Property Law Act, or maybe both.

But it does not arise merely because of the

mortgagee's title as such.

In our submission, there is no compelling

reason why the Real Property Act would regulate the

operation of section 4 of the Property Law Act.

Can we draw Your Honours' attention to section 57,

which we have already done, which recognizes the power as having been conferred by the other Act.

In our submission, the Full Court's approach had

this effect, that is to say, equitable estates or

interests, unless derived directly from the

mortgagee, do not as a matter of statutory

definition comprise any right to redeem. That, we

would apprehend on an extension of what the Full

Court said, would encompass a purchaser.

DAWSON J: Is it not a little simpler than that? Under the

general law where a mortgagor grants a lease, he

grants an interest in his equity of redemption

because the land is conveyed to the mortgagee, and

that is why the lessee has an interest in the

equity of redemption and hence a right to redeem.

But a tenant under the Torrens system is not in the

same position as a tenant under the general law.

His unregistered interest does not prevail against

the interest of the registered mortgagee, and it is

for that reason that they said there was no right

to redeem. The land remains with the mortgagor.

MR MORRISON:  I am sorry, Your Honour was fading out a

little bit there, but I think I understood what

Your Honour was saying. Your Honours, that is what

Edwards 5 10/4/92

the Full Court said, but in our submission, they

derived that solely from section 44. What we

submit is this, and wish to submit on appeal: the

interests of the lessee, that being the interest

that the Full Court centred on here, in terms of

title is certainly submissive to and not paramount

to that of a registered interest. But that is

different from considering the interest of a lessee or any equitable holder of an interest in its right to participate in the redemption.

DAWSON J: Let us just confine ourselves to tenants. When a

mortgagor leases land to a tenant he has not got
the land. That has been conveyed to the mortgagee.

All he can lease is his equity of redemption, and

that is why there is a right to redeem in the

tenant because he has got part of the equity of

redemption. But that situation is not duplicated

in the Torrens System.

MR MORRISON:  We would submit, Your Honour, there is no

compelling reason why it should not be considered

the same way - - -

DAWSON J: Because the land remains with the mortgagor, and

what he leases is not the equity of redemption but

he leases the land, and for an interest in the land

to prevail it has to be a registered interest.

That is the way it is put, anyway.

MR MORRISON:  Yes, I understand that that is the way it is

put, Your Honour, and one of the difficulty that I

have is, whilst Your Honour would like to confine

it and as no doubt the Full Court did, confine the

question - - -

DAWSON J: Well, can we deal with tenants first, because

that was what was predominant in this case.

MR MORRISON: Well, no, with respect. That is what the

Full Court centred upon, but the applicant's

interest it contended for was also as a purchaser,

because the contract required the reconveyance of

two lots to the purchaser by the vendor and,

indeed, that was decreed to be performed

specifically by the supreme court, so that its

interest was wrongly centred upon as lessee by the

Full Court.

It has to be said, as I have submitted

already, that they dealt the same way with the

purchaser's interest by saying, accepting such an

interest it fails for the same reason, so whilst

what Your Honour says may be right in the sense

that that is what the Full Court centred on, it is

wrong, in our submission, to determine the case on

that basis, which is why I submitted to

Edwards 6 10/4/92

Your Honours a minute ago that the extension of

what the Full Court says is that even a purchaser

from the proprietor, unregistered, on this view,

has no right to redeem and that, we would submit,

would be a surprising result and one not intended.

DEANE J:  Do you put any gloss on your submission. I mean,

has the mortgagee got to have the means of knowing

that the person with an equity to redeem exists?

MR MORRISON:  I am sorry, Your Honour, does he have to have

the means of knowing?

DEANE J: Yes. If your argument be correct and quite

unknown to the mortgagee there is some arrangement

between the mortgagor and a third party, which

gives that third party an equitable interest which

would entitle him to redeem, has the mortgagee got

to give notice to somebody he has got no means of

even knowing exists.

MR MORRISON:  Your Honour poses a difficult question. If

you accept, as part of Your Honours proposition,

that there is no means of knowing, then it is a

difficult position for the mortgagee to be in, but

we would submit it is simply - that is not an

answer.

DEANE J: Well, it may not be, but I was just wondering if

you had a gloss that somehow covered that position.

MR MORRISON:  No, I cannot propose a gloss to Your Honour.

That is the sort of proposition that seemed to

attract His Honour Mr Justice Dowsett. There

are - - -

DEANE J: Well, except one can assume that it was not the

legislative intent to make it impossible for a

mortgagee to redeem in any circumstances where the

mortgagor, without telling him, created an equity

in the mortgagor's estate.

MR MORRISON:  And in circumstances where he could not know.

I accept what Your Honour says. That would be a

difficult proposition to argue against. One avenue

that does occur in relation of that, and I cannot

say to Your Honours that I have seen it tested by

authority, because I have not been able to find

any - that is not to say there is not any, but I
certainly cannot find them - is that, in relation

to the provision of the notice, if the mortgagor,

assuming - whatever he is defined as - is known,

then you serve him, either personally or at his

abode and so forth. If he is not known then the

mortgagee can go to the court to get an order as to

how he should serve.

Edwards 7 10/4/92

In our submission the legislation then

contemplates that, perhaps, a prudent mortgagee or however you might put it, reasonable mortgagee, if

he was concerned, might go to the Court and say,

"Let me serve this way. Let me post the notice on

the land for 28 days", and the court might, in its

discretion, say, "In those circumstances we will
declare", or "we will hold, that you have met your

obligations under section 84".

So, in our submission, whilst the problem is a

practical one - and it may only be solved on a

case-by-case basis - that should not be

determinative because it would seem that there are

avenues that a mortgagee can take. The difficulty

that Your Honour the presiding Judge poses will

always be there; that is to say, if there are, as

it were, secret arrangements that no reasonable

mortgagee could ever know about then that

difficulty will always be there.

But it may simply be that the answer to that is that the court, under its power under

section 257, regulates the way in which notice in

such a circumstance is given. The secondary answer

may be that, as thorny a problem as that is, it

does not lie for the court to resolve, it really
lies for the legislature to resolved.

DEANE J: Yes, except those difficulties are relevant to the question whether it was the legislative intent that the word "mortgagor" in the section have its

defined meaning?

MR MORRISON:  I accept that, Your Honour. What we would

submit, though, is that this is an appropriate case

to determine the question, in any event, because
the interest here was known and was known at a time

that the power was exercised; indeed, the material

shows that it was, as it were, advertised on the
occasion of the exercise of the power.	The

interest is not confined to that of mere lessee or

tenant, which was the primary attack; it is much

greater than that.

I, perhaps, should articulate the bases: it

not only is purchaser of the two lots to come

back - and that was an equitable interest to be
protected, it is clear, from the decree of specific
performance which my client got but also as a unit

holder in the trust upon which the property was

held by the proprietor and also as the lessee and

tenant.

So, Your Honours, in our submission, the

facts, though they were stated to the court and not

Edwards 8 10/4/92

the product of a trial, none the less raise in a

suitable way the questions which might be

determined here. The questions are of utility and

importance to all Torrens States in Australia,

there being similar provisions in all States.

Your Honours, the second attack that we make

is that - - -

DEANE J:  Mr Morrison, when you say questions, if you were

to fail on the question whether there is a contrary

intent to be discerned to giving "mortgagor" in

section 84(a) its defined meaning, would that be

the end of any appeal?

MR MORRISON:  No, it would not, Your Honours, because our

contention before the Full Court was that the

definition in the document, in the contract, was

wide enough to comprehend it, and also that

insufficient weight was given to the definition of

"mortgagor" in section 3 of the Real Property Acts,

which defines "mortgagor" to include assigns, a

term which we would submit clearly comprehends a

person in our position.

So, Your Honour, it would not be the end though perhaps I should say that is certainly the

substance or might be seen as the substance of the

main attack.

Your Honours, the second point that we wish to

make about the Full Court's decision is, if we may

say so, with respect, its dismissive treatment of

the previous Full Court decision in Coroso Pty

Limited v Westpac Banking Corporation (No 2),

(1988) 2 Qd R 481.

The way in which it was dealt with appears in

Mr Justice McPherson's reasons and perhaps I should not say too much about why His Honour approached it

in this way, but His Honour decided that, because

it was not apparent that section S(l)(b) was

referred to the court in Corozo's case, that being

the side wind, as it were, which brought in

section 44 of the Real Property Act, but

effectively the Full Court decided Corozo

per incuriarn. And yet, the decision in Corozo, was

given, if we may say with respect, quite firmly by the court. Mr Justice de Jersey, speaking for the

court at page 482 there in relation to an

unregistered purchaser, which we say, applies to

us, at about lines 38 to 53:

Corozo's interest in the land -

and the fact that it was not registered, did not

deny its status of a mortgagor. Section 94, there

Edwards 9 10/4/92

being 3e section under consideration, applied and

its terms were -

plainly apt to include those whose interests

are unregistered.

Plainly apt, the court thought. If I may say,

perhaps not strongly by way of submission, it would

have been an astonishing thing if the likes of

Mr Robin, as he then was, and Mr Fitzgerald, as he

then was, delvers of facts and law, did not in fact
twig to this point, but.we cannot say to

Your Honour that they were referred specifically to

this. As His Honour Justice McPherson said, it

certainly does not appear on the face of the

report. In any event that was r.:he only basis upon

which Their Honours were able to, as it were,

dispose of Corozo and, in our submission, that is

an unsatisfactory basis to let the matter proceed.

Their Honour also, as it were, distinguished

the New South Wales decision of Van Den Bosch v

Australian Provisional Assurance Association,

(1968) 88 WN (Part 1) (NSW) 357. And the basis

upon which they did that was to say, as is perhaps

frequent, that that case considered a different

section. That is true. There it was an

unregistered interest that was being considered and

the question was whether there was a right to

redemption.

At the bottom of page 360 to the top of

page 361, His Honour Mr Justice Else-Mitchell dealt

with the general question. The passage which we

wish to take you to, Your Honours, is at page 362,

the bottom, to page 363, because, in our

submission, notwithstanding that the section was,

as His Honour Mr Justice McPherson said, that

passage demonstrates that that was not

determinative of the view taken in Van Den Bosch.

The section applied only to the effect that flowed

once a foreclosure order was put in the register

book by the registrar and once it was put in there,

it applied to defeat, as it were, any claim by,

through or under, a mortgagor; that is a claim to a

right to redeem. But His Honour, at page 363, went

on, having made that point, in terms which, in our

submission, make it clear that he would have

determined the question the same way, regardless of

that section.

So that, in our submission, there is a

question as to whether Van Den Bosch was

legitimately distinguishable on that ground and

that is the only ground upon which it was, and we

make the submission, Your Honours, that a section

dealing with merely the effect of entering an order

Edwards 10 10/4/92

in a register is hardly determinative of the right

to redeem and whether it applies to a mortgagor and

who that is. It is, as it were, corning at the

question by the back door.

Your Honours, the Full Court also accepted

below that, at general law, a lessee or tenant was

an assignee of an interest in the equity of

redemption or right to redeem and, for reasons

which I have touched on, there is no compelling

reason why that should be so, that should be
different from the position under the Real Property
Act, and we refer again to the effect of the Full

Court's approach here to deny the right to redeem

to any holder of any equitable interest which, we

would submit, is an extraordinary thing.

Your Honours, I have mentioned to Your Honours

the fact that the Full Court, it seems, in one

sense, tended to ignore the fact that our interest

was as purchaser of the two lots. That was dealt

with only in terms of section 44. It was not dealt

with by the Full Court at all in terms of working

out whether it gave an entitlement in the interest

to redeem, or an entitlement or an interest in the

right to redeem.

Might we say, lastly, Your Honours - well,

perhaps not quite lastly - that Their Honours in

the Full Court also, as we apprehend it at least
from the reasons, completely ignored section 51 of

the 1877 Real Property Act, which provides that -

and if I may read the part to Your Honours:

And the intention of this Act -

this Act being defined to mean the 1861 Act as

amended, so it comprehends the full legislation -

is that ..... equities may be enforced against

interest in or security upon land .... in	..... proprietors of land or of any estate or
respect of their estate interest or security -

that is to say, those who are enforcing them -

in the same manner as equities may be enforced

against proprietors in respect of land not

under the provisions of this Act.

Your Honours, "proprietor" is defined to

include a mortgagee; not in terms, it includes

someone who has merely a charge on the land, but

clearly, a mortgagee. So that the express

provision of section 51 of the 1877 Act is that the

Act recognizes that equities which, in our

submission, would comprehend the right to redeem,

Edwards 11 10/4/92

may be enforced against a mortgagee, registered, in

the same way that it could have been enforced

against a mortgagee under the general law. And one

of the things that flows from the acceptance of the Full Court of these propositions is that, under the general law, a person in my client's position did

have an interest in the right to redeem and, relying particularly on cases such as Tarn v

Turner.

Their Honours were pressed with that point by

my client. None of Their Honours refers to it at

all. That, of course, is not to say that

Their Honours did not consider it and dismiss it but, on the face of their reasons, Their Honours did not take that provision into account at all. And we would submit, then, that that causes

difficulty with the decision and it is a matter

that should be determined by this Court.

Your Honours, the effect of the order, the

ruling below, is that my client, with all his

interests and the assistance of a supreme court

order for specific performance to give him back
land, loses the lot on the basis that S(l)(b) of
the Property Law Act brings in section 44 and its

only by that section that the Full Court decided

section 44 would be imported to govern the Property

Law Act. It is only by that section, he loses the

lot.

Your Honours, that piece of vox humana aside,

the other States of Australia have similar

legislation to that which was under consideration

here. All States have legislation regulating the

provision of notices to a mortgagor and similar definitions, and so a decision in this case has

very wide utility and, as pointed out in our

material, it has pretty much universal utility

within Queensland itself, applying to almost 90 per

cent of mortgagees cases.

Might we say lastly that most of the texts

that we have had regard to and the Full Court had

regard to, most of the learned authors of text take

a contrary view to that expressed here by the Full

Court. Your Honours, unless there are matters upon

which I can dwell those are our submissions.

DEANE J	hank you, Mr Morrison. Yes, Mr Sofronoff?
MR SOFRf	~F:  Thank you, Your Honours. We resist this
9plication on two grounds.  The first is that the

dppeal, if there be an appeal, would be entirely

hypothetical because the material before the Court

shows that the notice has either been served or

Edwards 12 10/4/92

will be served. Do Your Honours have the affidavit

of John Bruce Sawyer?

DEANE J: Yes.

MR SOFRONOFF: Mr Sawyer is a process server. If

Your Honours would go to the first exhibit, JBSl,

that is a copy of a letter that was left at the

premises, along with a Notice of Exercise of Power

of Sale on 7 April, a couple of days ago.	In the
applicant that notwithstanding the decision of the	letter the respondent's solicitors say to the and without prejudice to the respondent's
contention that th at is correct, here is a notice.
However, if the applicant wishes to redeem by
payment of the sum specified in the notice, a sum a
little in excess of $1 million, then he is at
liberty to do that. The sum that is referred to
there is the same sum that was referred to in the
original notice served on the mortgagor proper.
So there has been no increase, notwithstanding the passing of time. There is no suggestion in any of the material before the Court that the applicant
wishes the notice, because he wishes the 30 days
within which to remedy the default, or that he can
or will pay the money in order to redeem, the application is in those circumstances, in our
submission, entirely a hypothetical one. There is
no substantive right that the applicant wishes to
vindicate by a successful appeal and if there were
one, then if the notice has not already been served
by leaving it on the premises, then no doubt in due
course and before an appeal can be heard, it will
have been served in the ordinary course.
Your Honours, could I turn then to the second ground upon which we resist the grant of special
leave and it is that the Full Court is plainly
right. Could I take just four or five minutes to
endeavour to persuade Your Honours of that being
so. The contention for which the applicant
contends ignores the system of title by
registration and would import into that system that
jealously guards against any such importation the
interference of unregistered, and perhaps
unregistrable, interests which would conflict with
the right of a mortgagee under a prior registered instrument to sell upon giving notice to the
mortgagor proper, and no one else.

Moreover, not only, we would submit, does

common sense for those reasons suggest that the Full Court must be right, but principle, in our

submission, suggests that the Full Court is right.

The equity of redemption which a tenant or other

Edwards 13 10/4/92

assignee of a part of the old equity of redemption

exercised under the jurisdiction of the courts of

equity is something that was needed in order to

protect whatever interest such a person had in the

unregistered land.

The position under the Torrens System is

entirely different. If one takes, just to keep the

matter specific, a tenant, a registered lessee has

the protection that registration affords him,

subject to the consent of the mortgagee first

obtained, as the statute provides. An unregistered lessee for a term of less than three years, has the

protection that statute affords him, subject to

cases like Friedman v Barrett which limit his

protection and, otherwise, an unregistered lessee

is not intended by the statute to have any interest

worthy of protection against a prior registered

interest of a bona fide third party at all.

The Act does not intend, on its face, to

afford any extra protection beyond that specific

provisions do provide, and it would be odd if one

imported considerations that were born, in the

desire of equity, to give such protection where it

was necessary into a sphere where that protection

is not necessary. In addition, the basis for the

existence of an interest in an equity of redemption

by a tenant under the general law just does not

exist here.

The Full Court adverted to the two respects in

which the expression "equity of redemption" is

used. The first is the right to have the mortgage

discharged and the second is the interest that the

former owner of land retains as an interest in that

land, and it is only with respect to that latter
that the general law said, "A piece could be carved

out of it and passed on to another person, be it a

tenant or be it some other arrangement".

It is with respect to that piece of the second

type of equity of redemption that the protection
was afforded by the courts, and the Full Court

recognized that that was so. Here, those

considerations just do not arise. Under the

Torrens System the interest that is passed on to

somebody else is passed on by the full owner of

land who is an owner of land notwithstanding the

mortgage, who is the owner of land subject to a

mortgage and subject to the liabilities and burdens

existing because of the mortgage, because of

registration and because of the statute. And there

is simply no room for a consideration in what will

have become an artificial sense, a carving out of

something called an equity of redemption, which

Edwards 14 10/4/92

simply cannot exist as a matter of principle under

the Torrens System.

That leaves, of course, untouched the right of

a particular person, the registered mortgagor, to

redeem; that remains an equity of redemption. But

it is his by virtue of statute and by virtue of

contract, not otherwise.

For those reasons, in our submission, the Full

Court was correct in its conclusion that the equity

of redemption when used in the sense of an interest
in a piece of land passed to another person, which

attached to it gave a right to resist a foreclosure

action by an offer to redeem, simply has no

application to land under the Torrens System.

Their Honours were also correct in concluding

that Corozo, in so far as it suggested to the

contrary, was wrongly decided. Could I ask

Your Honours to look, briefly, at Corozo, at the

second page of the reasons, at line 40. The

submission, that was being considered by His Honour

there, was whether an unregistered transferee of

the fee simple was a person entitled to redeem, and

one can see the contentions that were set up, and one after the other knocked down in the paragraph

beginning at line 40:

Now the circumstance that Corozo's

interest in the land is not registered does

not deny it status as a mortgagor of the land

"because", if I could interpose that word there,

where the full stop appears, because -

Section 94 does not in terms refer only to

registered mortgagors; the inclusive

definition of "mortgagor" ins 77(2)(c) does

not import such a limitation into s 94 -

and we do not contend that that is wrong -

and the terms of the definition of "mortgagor"
ins 4 of the Act are plainly apt to include

those whose interests are unregistered.

Your Honours, that sentence is the only

authority in the case for the contention raised in

this case that the holder of an unregistered

interest can be a person entitled to redeem and

that is, with respect, a sentence that was not

spoken as a result of any analysis and certainly

not as a result of the benefit of the submissions

that the Full Court had here.

Edwards 15 10/4/92

The third submission that was considered and

rejected is the next one, that there could only

ever be one mortgagor entitled to redeem and that

was rejected. In our submission, there is no

difficulty in having, side by side, Corozo on the

one hand, limited as its consideration was, and the

later full consideration of precisely this point in

issue by a unanimous Full Court.	Those are our
submissions, Your Honours.

DEANE J: Thank you, Mr Sofronoff. Yes, Mr Morrison.

MR MORRISON:  Your Honours, may I confine myself in reply to

the new material relied upon to demonstrate that

this is a hypothetical case, that is to say, the

notice to which you have been referred.	In our
submission, it is not hypothetical.	No doubt the

Bank would love to retain the Full Court's decision

in its favour by the tactic of having taken us

there on its own motion, having stated the case to

the Full Court, obtained a favourable decision and

now delivered that which they have refused to

deliver up to this point, denying any chance of

reviewing that decision.

All that aside, it is not hypothetical for

these reasons and it is still of utility. Firstly
the amount stated in the notice is not the amount
which would get the mortgage off the title. It is
simply the amount that would remedy the particular

default. My client may well be faced with this

prospect that it pays that amount and the mortgagee
then says, "But we have incurred costs of the

auction", which is referred to in the material, and

surveyors' costs and valuation costs, and extra

charges we have added to the mortgagor's debt,

there is more money and no doubt they would have to

give another notice in respect of that.

So that it is not correct to say that that sum

would redeem it. My client would then be faced

with the prospect that to accommodate acceptance

and compliance with the notice it would be paying
more than it would have had to pay before the

mortgagee took all the steps to try and auction the property in defiance of having given a notice which

we contend should have been given.

Lastly, that does not preclude, that is to

say, the giving of the notice, does not avoid the

chance that tomorrow or the day after, but before

the 28 days of the new notice run, the mortgagee

might sell and because leave has been refused here,

it will do no with impunity other than with the

support of the Full Court, but without the benefit

of this having been tested and my client's rights

would therefore be denied utterly by that tactic.

Edwards 16 10/4/92

Lastly, Your Honours, might we make this

submission, as it were, that if Your Honours are

against us and find that there should be no grant

of leave on the basis of its hypothetical nature

now, we would like to make a submission about

costs. That is to say, having brought us this

far - we being the applicant for leave, but having

taken us to the court and through to the

Full Court, we should not be denied the costs of

today merely by their now giving the notice which
they have refused to give up to this point. Those

are out submissions, Your Honour.

DEANE J: Thank you, Mr Morrison. In this case the Court is

of the view that the actual decision of the

Full Court of the Supreme Court is not attended by

sufficient doubt to warrant a grant of special

leave to appeal. Special leave is therefore

refused.

MR SOFRONOFF:  Your Honours, I would ask for costs because

the notice that has been served has not had any

effect upon the outcome of the application.

MR MORRISON:  Your Honours, if that is truly the ground, I

cannot say anything about costs.

DEANE J: Well, if you like, we will exclude the costs

involved with that notice but I do not think -

MR MORRISON:  I will take any benefit I can at this point,

Your Honour.

DEANE J: Very well, the application is refused with costs,

but the order for costs will exclude the costs

involved in relation to the notice annexed to the

affidavit of Mr Sawyer.

AT 12.47 PM THE MATTER WAS ADJOURNED SINE DIE

Edwards 17 10/4/92