Hall v Richards

[1961] HCA 34

HIGH COURT OF AUSTRALIA

Dixon C.J., Kitto, Taylor, Menzies and Windeyer JJ.

HALL v. RICHARDS

(1961) 108 CLR 84

9 June 1961

Bankruptcy

Bankruptcy—Torrens Title land—Sequestration of estate of registered proprietor—Judgments obtained against registered proprietor—Caveats in respect of judgments lodged against land prior to commencement of bankruptcy—No security on land thereby obtained—"Secured creditor"—"Lien"—"Charge"—Sale of land after sequestration by mortgagee—Surplus proceeds of sale paid to trustee in bankruptcy—Caveators not entitled to surplus in priority to other creditors—Real Property Act, 1862 (Tas.), ss. 82, 83, 94—Real Property Act, 1886 (Tas.), s. 22—Bankruptcy Act 1924-1958 (Cth), ss. 4, 60, 92.

Decisions

June 9.
The following written judgments were delivered: -
DIXON C.J. I have had the advantage of reading the judgment of Kitto J. with which I agree. In my opinion the appeal should be dismissed. (at p86)

KITTO J. The order under appeal was made by the Supreme Court of Tasmania (Burbury C.J.) sitting in the exercise of federal jurisdiction in bankruptcy. By the order, the Court answered certain questions upon which the trustee in bankruptcy of one Homann had sought directions. The facts which gave rise to the questions were few. In 1956 the bankrupt, being the registered proprietor of an estate in fee simple in certain land in Tasmania under the provisions of the Real Property Acts of that State (the Act 26 Vict. No. 16 as amended), mortgaged the land to a first and a second mortgagee, and both mortgages were registered under the Act. Thereafter and before the commencement of the bankruptcy certain creditors of Homann, having obtained judgments against him for divers sums of money, entered caveats in respect of the mortgaged land. Each caveat forbade the registration of any memorandum of transfer or other instrument affecting the land until the caveat should be by the caveator or by order of the Supreme Court or a judge thereof withdrawn, or until the lapse of fourteen days from the date of service of notice of such intended registration. Each caveat was noted on the certificate of title by the Recorder of Titles. A sequestration order was later made against the judgment debtor, and then the second mortgagee, in exercise of his power of sale and (evidently) with the concurrence of the first mortgagee, sold and transferred the land. After payment of the expenses of sale and of the moneys owing to the respective mortgagees, a surplus remained. This surplus was paid to the trustee in bankruptcy; but the judgment creditors who had entered caveats, their respective judgments being still wholly or partly unsatisfied, claimed to be secured creditors in respect of it. (at p87)

2. The first of the questions submitted to the Supreme Court is whether the caveators have been secured creditors since the registration of the transfer by the second mortgagee. The other questions are consequential. The appellants were among the caveators who desired that the first question should be answered in the affirmative, and by an order of Burbury C.J. they were appointed to…