Issa v Owens (No 2)

The case of Issa v Owens (No 2) involved a dispute concerning the validity of a mortgage over property and the consequences of fraudulent procurement of the mortgage. The matter was heard in the Supreme Court of Queensland. The central issue before the Court was whether the compensation order against the State for the deprivation of the plaintiff's interest in the land should be contingent on the plaintiff first seeking recovery of the judgment amount for damages for breach of contract from the mortgagees. The Court was also required to decide the allocation of costs among the multiple parties involved, including whether the purchasers should pay the plaintiff’s costs and whether the Registrar of Titles should pay the plaintiff’s costs.

The Court found that the mortgage was procured by fraud and that the mortgagees had no right to transfer the property. Consequently, the mortgagees were liable to the purchasers for damages for breach of the purchase contract. The Court determined that the purchasers were also entitled to compensation from the State under section 188 of the Land Title Act 1994 (Qld). However, upon payment of compensation to the purchasers, the State would be subrogated to the rights of the purchasers against the mortgagees. The Court ruled that the compensation order against the State should not be contingent on the purchasers first seeking recovery of the judgment amount for damages for breach of contract from the mortgagees.

The Court also addressed the issue of costs, allocating them among the parties based on their respective liabilities. The First to Seventh Defendants, the Twelfth Defendant, and the First Third Party were ordered to pay two-thirds of the plaintiff’s costs, while the Eighth and Ninth Defendants were ordered to pay one-third of the plaintiff’s costs. Similar divisions were made for the costs relating to the Eleventh Defendant’s claim and the third-party claim brought by the Eighth and Ninth Defendants. Additionally, the Court determined that a Sanderson order should be made in favour of the State.

In summary, the Court ruled that the compensation order against the State should not be contingent on the purchasers first seeking recovery from the mortgagees. The Court also provided detailed directions for the allocation of costs among the parties involved, including making a Sanderson order in favour of the State.