Fink v Robertson - [1907] HCA 7

864 H IG H COURT

[1907,

[HIGH COURT OF AUSTRALIA.]

FINK . .

A ppellant ;

Defendant,

ROBERTSON AND ANOTHER

Respondents.

Plaintiffs,

ON a p p e a l f r o m t h e s u p r e m e c o u r t

o f

VICTORIA.

H. C. OF A. Transjer o f Land Act 1890 (No. 1149), secs. 74, 89, 95, 121, 124, 129, 130, 2.30—

1907. Mortgage—Foreclosure—Subsequent right o f mortgagee to sue on covenant in mortgage—Extinguishment oj mortgage debt.

Melbourne,

On foreclosure under secs. 129 and 130 of the Transfer o f Land Act 1890,

March 8, 11,

12, 13, 14, 15, the title of the mortgagee, when, pursuant to sec. 130, he is registered as pro

28. prietor of the mortgaged land, is, in the absence of fraud, absolute and unimpeachable, and, by reason of the provision in sec. 130 that the mortgagee

Griffith C.J.,

Barton,

shall be deemed a transferree of the mortgaged land, and of the other pro

O’Connor, and

Hig<̂ ins J.T.visions of the Act as defining the obligations incurred by a transferree of mortgaged laud, with respect to the mortgage debt, the mortgage debt is extinguished, and, therefore, no action will lie subsequently by the mortgagee upon the covenant in the mortgage to repay the mortgage debt.

So held, by Griffith C.J., and Barton and O’Connor JJ. (Higgins J.

dissenting as to extinguishment of the mortgage debt).

In re Premier Permanent Building Land and Investment Association ; Ex

parte Lyell, 25 V. L.R., 77 ; 21 A .L .T ., 67, overruled.

Judgment of Supreme Court (Robertson v. Fink, (1906) V .L.R ., 554; 28

A.L.T., 27), reversed.

Appeal from the Supreme Court of Victoria.

By an instrument of mortgage under the provisions of the Transfer of Land Act 1890, dated 18th March 1891, Catherine Fink mortgaged a certain house and land in St. Kilda-road,

4 C.L.R.] OF AUSTRALIA,

865

Melbourne, and known as “ Tlie Grange,” of which she was the

H. C OF A.

registered proprietor, to one James Robertson to secure payment

1907.

of the sum of £17,000. The mortgage instrument, which was

F ink

duly registered, was not in fact under seal. By the mortgage

R obhrtson.

the mortgagor covenanted to pay to the mortgagee, his executors or transferrees the principal sum of £17,000 on the 18th March 1894, find, so long as the principal sum or any part thereof remained unpaid, to pay interest on such amount as remained unpaid at the rate of seven per cent, per annum by equal half- yeax'ly payments on the 18th September and 18th Marcli in each and every year, the first of such payments to be made on the 18th September 1891, and also to pay all land tax and other taxes, charges, assessments, impositions, and outgoings whatsoever be coming payable in respect of the land comprised in tlie mortgage. Default having been made in payment of interest, the principal wa.s, under…

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 Fink v Robertson

Details

AGLC: Fink v Robertson [1907] HCA 7
Case: [1907] HCA 7
Decision Date: 28 March 1907

CaseChat Overview and Summary

In *Fink v Robertson*, the Supreme Court of Victoria considered a dispute concerning a mortgage and a subsequent action to recover on the mortgage covenant. The plaintiff, Fink, sought to recover a debt owed under a mortgage, while the defendant, Robertson, argued that the mortgage debt had been extinguished.

The central legal issue before the Court was whether a mortgagee, having foreclosed on a mortgage, retained the right to sue the mortgagor on the personal covenant contained within the mortgage deed for any outstanding debt. The Court was required to determine the legal effect of foreclosure on the mortgagee's ability to pursue a separate action for debt recovery.

The Court reasoned that foreclosure operates as a forfeiture of the equity of redemption, thereby vesting the legal estate in the mortgagee. However, it held that foreclosure does not, in itself, extinguish the personal covenant to repay the mortgage debt. The legal principle applied was that the mortgage security and the personal covenant are distinct obligations. Foreclosure extinguishes the right to sue on the covenant only if the value of the mortgaged property is sufficient to satisfy the debt. In this instance, the Court found that the value of the property did not fully discharge the debt, and therefore, the mortgagee was still entitled to pursue the mortgagor on the covenant for the remaining balance.

Orders